Impact, risk and opportunity management
[ESRS E4 ESRS 2 IRO-1; GRI 304-2]
Assessment: the state of Lenzing’s influence and dependencies on biodiversity and ecosystems
For a description of the assessment of the resilience of its business model and strategy, as well as the scope, key assumptions, time horizons, results and involvement of stakeholders, please the “Nature-related risk assessment according to TNFD” section in the “ESRS 2 General disclosures” chapter.
Policies
[ESRS E4-2; GRI 3-3c]
New Biodiversity Policy
The new Biodiversity Policy that was adopted in 2024, addresses all identified material impacts, risks, and opportunities both within Lenzing’s own operations and across its upstream value chain. The value chain aspects of the “Negative impact of Lenzing and its value chain by contributing to climate change and consequential biodiversity loss” are partly covered by the Biodiversity Policy within its sphere of influence.
The policy outlines the principles of Lenzing’s biodiversity approach based on frameworks such as TNFD and SBTN. The goal is to transform the Lenzing Group into a nature-positive enterprise1 by partnering within and beyond the value chain for systemic change. Lenzing Group is committed to high-level frameworks, most notably the Global Biodiversity Plan under the Kunming-Montreal Protocol, which aims to halt and reverse nature loss by 2030. In addition, Lenzing supports the global objectives outlined in frameworks such as the EU Green Deal and the EU Clean Industrial Deal. By engaging in knowledge-building, academic research and collaborative associations Lenzing aims to bring collective action for nature to life. The policy, approved by the members of the Managing board in 2024, applies to all consolidated subsidiaries and operational sites of the Lenzing Group. The policy was communicated to all site managers, who are the most senior level accountable for its implementation. As it is valid for all consolidated subsidiaries and operational sites, the policy also covers the operational sites owned, leased, or managed in or near a biodiversity-sensitive area. The full policy is available at Lenzing’s website.
Lenzing’s business model is based on the natural raw material wood, creating a material dependency on natural resources and primarily on forests. This dependency implies a responsibility to maintain healthy ecosystems and protect biodiversity and related ecosystem services. To identify, prioritize and manage impacts, risks and opportunities, impact drivers such as climate change, direct exploitation, invasive alien species, and change of land use, were assessed and taken into consideration when establishing the policy. For more information on the management and prioritization of impact drivers and the methods and processes used, please see the “Biodiversity Approach and Action Plan” section in this chapter.
To protect and enhance nature and ecosystems as well as to create positive effects on related communities, Lenzing is committed to promoting sustainable forest management with integrated biodiversity protection and a network of protected nature reserve areas for tree plantations, while respecting indigenous rights, especially land rights, where applicable.
Lenzing has pledged to implement several measures to avoid and reduce significant drivers of biodiversity loss in its sphere of influence. For climate change, this includes following a science-based climate action plan to significantly reduce GHG emissions by 2030 and having a net-zero goal (scope 1, 2 and 3) by 2050, as well as working on further reductions of process emissions at our sites. Complementing Lenzing’s Water policy, the Biodiversity Policy addresses the active management of Lenzing’s water footprint. Regarding direct exploitation, Lenzing is committed to sourcing wood and pulp from sustainably managed forests, which do not contribute to deforestation, as defined in the Wood and Pulp Policy. Finally, Lenzing avoids the introduction of invasive species and does not use genetically modified organisms in its operations.
The policy strengthens Lenzing’s commitment to the protection, regeneration and restoration of ecosystems and making a positive impact on the supply chain and beyond. Lenzing engages in suitable projects for ecosystem regeneration and restoration, starting with the conservation of biodiversity-sensitive areas near operations or in sourcing areas. Additionally, to address impacts on the state of species, Lenzing is committed to managing ecosystems in its own planted forests in Brazil to maintain or enhance biodiversity conditions. This is demonstrated by regular monitoring and reporting of biodiversity status and gains or losses.
Traceability of raw materials, especially wood, is ensured by due diligence systems, Chain of Custody certifications and compliance with relevant regulations in the countries in which Lenzing operates. Lenzing is also preparing for upcoming regulations (e.g., the EU Deforestation Regulation).
The future Biodiversity Strategy will further explore both the social consequences of biodiversity loss and the social benefits of positive impacts on biodiversity and ecosystems. However, the social criteria of the forest certificates act as a starting point.
Wood and Pulp Policy
In its Wood and Pulp Policy, Lenzing is committed to procuring wood and dissolving wood pulp exclusively from non-controversial sources. The current version of the policy was approved by the Managing Board in 2022, and the Senior Vice President (SVP) Commercial Pulp, Biorefinery and Co-Products, Wood, is the most senior person accountable for its implementation across the organization. It is applicable to all Group companies and pulp and fiber production sites, especially regarding procurement from the upstream value chain. The Wood and Pulp Policy is available at Lenzing’s website.
In order to protect the world’s remaining ancient and endangered forests as well as the biodiversity and ecosystems’ integrity within these forests, Lenzing is committed to avoiding the use of wood and pulp containing wood sourced from regions such as the Canadian and Russian Boreal Forests, Coastal Temperate Rainforests, tropical forests and peatlands of Indonesia, the Amazon and West Africa. Lenzing states in its Wood and Pulp Policy that it does not procure wood from plantations established after 1994 through the significant conversion of natural forests, wood derived from conversions to non-forest use or through forestry operations introducing genetically modified organisms. Lenzing also avoids procuring wood from illegal logging or from the trade in illegal wood or forest products.
Lenzing operates its own internal due diligence mechanisms, which include region-specific evaluations on site and stakeholder involvement. This is complemented by a variety of certification schemes, such as FSC® and PEFC. Together with national laws and the Lenzing Code of Conduct, they also ensure that Lenzing only works with suppliers who comply with traditional, community and human rights as well as the core conventions of the International Labour Organization (ILO) as set out in the ILO Declaration on Fundamental Principles and Rights at Work.
Regular risk assessments, the implementation of metrics, audits and on-site visits, and independent third-party certification of sustainable forest management programs ensure compliance with the policy and Lenzing’s commitment to no deforestation. If Lenzing discovers that it has sourced wood or dissolving wood pulp from controversial sources, it will first engage with its supplier to encourage practices consistent with the policy and if the response is unsatisfactory, the supplier will be removed from Lenzing’s supply chain with a reasonable lead time. Three suppliers were delisted in 2020, compared to one in 2021 and none since 2022.
Lenzing strives to establish and maintain long-term partnerships with its wood and pulp suppliers, and seeks to do business personally and directly with forest owners and pulp producers. This improves insight into and control of its supply chain, while supporting the traceability of raw materials and the monitoring of potential impacts on biodiversity and ecosystems.
The Lenzing Group’s Wood and Pulp Policy covers the following impacts, risks and opportunities as well as their upstream value chain aspects: Risk of wood scarcity & high wood prices resulting from biodiversity loss; Positive impact on biodiversity by sustainable wood sourcing and engagement in afforestation projects; Potential negative impact on ecosystems due to suppliers potentially performing land-use change; Opportunity through positive positioning with best practice wood sourcing from sustainably managed forests and plantations; Negative impact on threatened species in case of a lack of monitoring and management; Potential negative impact on ecosystem services due to impacts on biodiversity.
Sustainability Policy
Lenzing’s Sustainability Policy addresses the negative impact of Lenzing and its value chain on climate change and biodiversity loss by promoting decarbonization across its entire value chain and supporting the conservation of natural resources, energy and biodiversity. For more information on the ESRS 2 MDR-P of the Sustainability Policy, please see the “Sustainability Strategy” section of the “ESRS 2 General disclosures” chapter.
1 Nature Positive – World Business Council for Sustainable Development (WBCSD)