Management approach

Material topic: Workers in the value chain

[GRI 3-3]

Lenzing’s business activities are linked to the textile and nonwovens industry as well as the chemical and forestry industry. The company understands the importance of an empowered workforce in the value chain and recognizes its responsibility to contribute to a positive impact wherever possible. Lenzing is dedicated to lead by example and tries to ensure compliance with laws, human right principles, and environmental standards not only within its own operations, but also among its suppliers and supply chains. Through regular audits regarding these topics and corrective actions taken by Lenzing in case of non-compliance, Lenzing continually strives to only engage with suppliers who adhere to international and national human and labor rights.

Actual and potential negative and positive impacts, risks and opportunities

Positive

• Opportunity as a role model for industry regarding human and labor rights

Negative

Own activities:

• Risk of sourcing from suppliers who violate human and labor rights

Business relationships:

• The textile industry, which is part of Lenzing’s value chain, is widely known to have ongoing issues with human and labor rights such as: adequate wages, health & safety, collective bargaining and child labor

Policies and commitments

• 17 Sustainable Development Goals of UN
• 10 principles of the UN Global Compact
• “Better Growth” strategy
• Policy on Human Rights and Labor Standards
• Global Supplier Code of Conduct
• Wood and Pulp Policy
• Sustainability Policy
• Global Whistleblower Directive
• Modern Slavery Act Transparency Statement (UK only)

Actions taken

• Supplier screening and engagement (EcoVadis) to avoid cases of human and labor rights violations in upstream value chain
• Wood & Pulp Policy, FSC^® and PEFC certification also include labor rights
• Suppliers are required to sign the Lenzing Supplier Code of Conduct
• Lenzing conducted 8 audits through the Together for Sustainability (TfS) network in 2023
• Lenzing has implemented a minimum acceptable score for the EcoVadis sustainability ratings of its suppliers; a corrective action plan is automatically demanded if a supplier drops below a minimum score in EcoVadis
• Quarterly Supply Chain Sustainability Risk Management was established

Sustainability targets, measures and progress

• “Supplier engagement” target: To engage suppliers, covering more than 80 percent of spend, to improve sustainability performance
• Progress: Around 600 of Lenzing’s key suppliers are rated by EcoVadis
• The increasing importance of social topics led to the implementation of a dedicated Social Sustainability unit within the Corporate People Development departmen

Stakeholders

• Suppliers
• EcoVadis
• Together for Sustainability (TfS)
• Direct customers

Responsible

• CEO
• SVP Corporate Human Resources (Social Sustainability Team)
• SVP Global Supply Chain/Purchasing
• SVP Commercial Pulp, Biorefinery & Co-Products, Wood

Supporting

• Corporate Communications & Public Affairs
• Corporate Sustainability