Impact, risk and opportunity management

[ESRS 2 IRO-1]

For information on the general double materiality process, please see the “Double materiality analysis” section in the “ESRS 2 General disclosures” chapter.

Policies

[ESRS E2-1; GRI 3-3c]

Group Environmental Policy and Standard

Lenzing’s production sites adhere to national legislative requirements and are ISO 14001 certified. The Group Environmental Policy and Standard, which was rolled out in 2023 and approved by the Chief Technology Officer (CTO), plays a crucial role in the company’s environmental management system, serving as the foundation for Lenzing’s environmental program and long-term targets. By 2025, all Lenzing production sites will operate in alignment with this standard, regardless of their location. Furthermore, this internal standard is designed to reflect the industry best practice and emission thresholds for the best available techniques for industrial pulp and fiber production (see section on the third-party initiative EU BAT below). In addition, Lenzing adopted the Zero Discharge of Hazardous Chemicals (ZDHC) MMCF Guidelines. These guidelines, from this third-party initiative, are dedicated to enabling safer choices of fiber products. The ambitious framework is aimed at the continuous improvement of pollution parameters, particularly relating to the pollution of air and water. In its Group Environmental Policy and Standard, Lenzing commits to eliminate hazardous chemicals (include SoCs and SVHCs) along the supply chain and to select, evaluate and develop the chemicals used in the production process. The standard and the associated actions are monitored through the environmental management system under the responsibilities of the Global HSE department via audits at group companies and sites, in order to evaluate the status of implementation and assess corrective action plans if needed. In addition, the Vice President (VP) Global HSE is the most senior level accountable for the overall implementation of the process as well as compliance.

EU Best Available Techniques (BAT)

All Lenzing sites in the EU, including one viscose plant, two lyocell plants, and two pulp plants, continuously met the applicable EU BAT performance criteria for emissions in 2024, which are set out in several EU Best Available Techniques Reference Documents (BREFs). Compliance with EU BATs forms the basis for the issuance and review of environmental and operating permits for the plants in the EU and is continuously monitored by the competent authorities of the Member States. Compliance monitoring, as well as requirements relating to management, the monitoring program, and reporting, etc. are also carried out in accordance with the EU BATs.

The EU BATs are applicable exclusively within the EU and do not have jurisdiction outside the EU. All fiber products manufactured at Lenzing sites outside the EU, therefore, carry the EU Ecolabel for best-in-class performance. In 2023, the Lenzing production site in Purwakarta (Indonesia) was successfully awarded the EU Ecolabel and became the latest facility in the Group to produce fibers with this label.

The Group Environmental Policy and Standard covers the following impacts, risk and opportunities: Negative impact on air pollution and emissions with potential negative effects on human health and environment; Risk of regulatory changes and consequent business loss potential; Opportunity for Lenzing as sustainability leader in pulp and fiber manufacturing; Negative impact on water pollution and emissions with potential negative effects on human health and environment; Potential for severe negative health and environmental impacts in the event of accidents or leakage related to SoCs and SVHCs; Opportunity by developing and implementing industry benchmarks.

Policy for Safety, Health and Environment (SHE)

The aim of the Policy for Safety, Health, and Environment (SHE) is to ensure that protecting people from harm and preserving the environment are fundamental prerequisites for doing business, with safety, health, and environment anchored as corporate values. This policy, available on Lenzing’s website applies to the entire Lenzing Group and was approved by the Executive Committee in 2022. The VP Global HSE is the most senior person accountable for the overall implementation of the policy, while at site level, the site directors are responsible for the local roll-out and implementation. The monitoring process regarding compliance with this policy is conducted within the framework of the Global HSE management system, in accordance with ISO 14001 and ISO 45001, to ensure conformity with and the assessment of any necessary corrective measures.

The key elements of SHE Policy include:

• Protecting the environment in which the company operates by minimizing emissions, waste and pollution, as well as by improving resource efficiency. Corresponding objectives and targets are set and monitored.
• Developing and maintaining a safety culture, as well as corresponding standards and systems in order to continuously improve HSE performance.
• Complying with all applicable legislation and regulations in the countries of operation and going beyond compliance with relevant industry standards.
• Training and involving all employees in hazard identification, risk assessment, and control.
• Consulting employee representatives and encouraging them to participate in the decision-making processes for occupational health and safety management.
• Empowering all employees to stop any task or activity if it cannot be carried out in a safe manner.

The SHE Policy covers the following impacts, risk and opportunities: Negative impact on air pollution and emissions with potential negative effects on human health and environment; Risk of regulatory changes and consequent business loss potential; Opportunity for Lenzing as sustainability leader in pulp and fiber manufacturing; Negative impact on water pollution and emissions with potential negative effects on human health and environment;

Chemical Management Group Standard

A Group-wide chemical management standard was rolled out in 2023 and approved by the VP Global HSE, who is the most senior level manager accountable for the overall implementation of and compliance with the process.

The Head of Global Environmental Management is responsible for developing the standard together with the Group Chemical Management specialist. Each site has a responsible person in charge of implementing the chemicals management principles defined by this standard. The scope of the Chemical Management is part of the Integrated Management System cross cutting environment, occupational health and safety, process and product safety. To ensure conformity, internal audits and management reviews are conducted to check whether daily operations are consistent with the Group SHE Policy and the Chemical Management Group Standard as well as the management systems for ISO 14001 and ISO 45001. Furthermore, the review of the Chemical Management Group Standard is part of the Global HSE monitoring process, to ensure that any necessary corrective measures are taken. Its features include comprehensive chemical inventories and approval processes with customization provided by an external IT consultant. It includes a hazard and exposure assessment for each chemical in order to demonstrate its safe use for workers, the environment, and the use of the products. The chemical management transition process was established in 2020 and has been gradually rolled out to all sites to ensure all Group sites follow the same approach.

Being prepared for emergencies is vital for Lenzing. This involves establishing clear emergency procedures, installing necessary hardware equipment, and conducting regular drills. In the event of an incident, the emergency procedures will be followed. These procedures are registered with relevant authorities and communicated to employees. The equipment needed to mitigate emergency situations, such as firefighting tools, must be well-maintained. Regular drills are crucial to ensure that employees know how to respond in emergencies, such as chemical incidents. Detailed emergency plans and procedures can be found in site-specific documents and the Safety Data Sheet (SDS), which also includes information on suitable Personal Protective Equipment (PPE), first aid, firefighting measures, and accidental release measures. Additional crisis management information is available in the Group Guideline on HSE Crisis Management.

The Chemical Management Group Standard addresses the following impacts, risk and opportunities: Negative impact on air pollution and emissions with potential negative effects on human health and environment; Risk of regulatory changes and consequent business loss potential; Opportunity for Lenzing as sustainability leader in pulp and fiber manufacturing; Negative impact on water pollution and emissions with potential negative effects on human health and environment; Potential for severe negative health and environmental impacts in the event of accidents or leakage related to SoCs and SVHCs; Opportunity by developing and implementing industry benchmarks.

Water Policy

Lenzing’s Water Policy addresses water pollution in terms of reducing water related emissions after wastewater treatment, going beyond legal requirements to ensure water quality and availability in the areas where Lenzing operates.

It covers the “Negative impact on water pollution and emissions with potential negative effects on human health and environment” and partly the aspects of the downstream value chain regarding the “Negative impact of Lenzing’s downstream textile value chain on water pollution”.

For more information on the ESRS 2 MDR-P of the Water Policy, please see the “Policies” section in the “E3 Water and marine resources” chapter.

Sustainability Policy

In its Sustainability Policy, Lenzing strives to improve both its eco-footprint and that of its partners along the value chain. Lenzing’s Sustainability Policy addresses the “Opportunity for Lenzing as sustainability leader in pulp and fiber manufacturing” by respecting the environment in its activities and business decisions.

For more information on the ESRS 2 MDR-P of the “Sustainability Policy”, please see the “Sustainability Strategy” section in the “ESRS 2 General disclosures” chapter.

Lenzing has no policies regarding the value chain aspects of the “Potential for severe negative health and environmental impacts in the event of accidents or leakage related to SoCs and SVHCs”, Lenzing has been prioritizing and working on key topics in a step wise manner. Lenzing has no policies regarding the “Positive impact on microfiber pollution as Lenzing fibers can offer an alternative and replace plastic fibers,” as Lenzing fibers do not release microplastics and act as an alternative to plastic fibers.