Impact, risk and opportunity management

[ESRS E3 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.

Water stewardship

[GRI 303-2]

The Lenzing Group considers water-related issues in the upstream and downstream value chain of its products. Life Cycle Assessment (LCA) is the basis for identifying hot spots and supports strategic decision-making. Lenzing aims to contribute to the sustainable use of water wherever it can exert a direct or indirect influence. This includes the withdrawal and consumption of fresh water, which are the subject of Lenzing’s Group Environmental Standard and the Water Policy. These presuppose continuous monitoring and reporting according to the Environmental Management System ISO 14001, GRI, ESRS, CDP and other water-related standards and guidelines. Figure “Lenzing's carbon footprint” illustrates Lenzing’s contribution in this context at different stages of the value chain.

Lenzing considers water to be an extremely valuable resource, enabling the production of dissolving wood pulp and cellulose fiber products. Continuous water stewardship is therefore key to carefully interacting with this natural resource. Since water is a precious resource, increasing water scarcity in many parts of the world poses a threat to people, the environment, and sustainable economic development. For example, poorly managed wood plantations can put pressure on the regional water balance. Lenzing procures certified wood from sustainably managed forests and therefore mitigates the potential impacts of water stress. On the other hand, some materials used in textile supply chains create high water impacts through water consumption and water pollution. Key issues in water stewardship are the efficient use of water in production and the use of state-of-the-art wastewater treatment technologies.

Lenzing provides fibers with a lower water footprint than generic cellulose fibers in order to satisfy growing future demand for sustainable fibers and innovates products that omit downstream value chain steps. This contributes to the reduction of water impacts in the textile industry, which often operates in water-scarce regions. The lyocell facility in Prachinburi (Thailand) is the Group’s only site in a region of water risk and high-water stress. Its water-efficient lyocell technology and constant measures to improve water use at the site are critical to Lenzing’s commitment to water stewardship. Monitoring and optimization programs aim to reduce water consumption in different process steps such as washing, recovery, and sprinkler systems.

Policies

[ESRS E3-1; GRI 3-3c]

Water Policy

Lenzing’s Water Policy was approved by the Managing Board and published in 2022 and is available on Lenzing’s website. The production of dissolving wood pulp and fiber entails water withdrawal from, as well as emissions to water bodies, thereby creating dependencies and potential impacts on water availability and quality in the relevant regions of operations. Lenzing actively manages and assesses water use relating to its own operations and products, which is governed by a Group-wide performance standard for water-related topics and is applicable to all production sites. This standard, which is based on industry best practices such as EU-BAT and ZDHC, is regularly reviewed and updated. Compliance with the Water Policy is ensured through regular internal audits as part of the Global Environment Management process in accordance with ISO 14001. The Vice President (VP) Global HSE is the most senior person accountable for the overall implementation of the Water Policy, while at the site level, the site directors and the site Safety, Health and Environment (HSE) managers are responsible for the local roll-out and implementation of the policy.

• The Water Policy can be summarized by five key elements: Lenzing recognizes and aligns its efforts with leading practices such as ensuring the availability and sustainable water management of water and sanitation for all (SDG 6).
• Lenzing engages value chain partners and other key stakeholders by fostering wider water stewardship and programs based on sustainability principles in order to reduce water-related impacts and benefit all members of the community.
• Lenzing pledges to comprehensively monitor, control and report direct and indirect interactions with water resources. Lenzing continuously assesses the risks and opportunities relating to climate change and other global environmental issues and addresses them in its business strategy.
• Lenzing optimizes and improves its performance in terms of its water use and product water footprint through its alignment with industry best practice, as well as continuous efforts in the fields of technology and management innovations.
• Lenzing aims to continuously reduce its water consumption and water-related emissions after wastewater treatment to a level above and beyond the legal requirements in order to ensure water quality and availability wherever Lenzing operates, thereby meeting its stakeholders’ expectations.

Lenzing recognizes the growing global issue of water stress and quality, which significantly impacts millions of lives. As part of its sustainability strategy, Lenzing has prioritized water stewardship, committing itself to the responsible management and conservation of water resources for the benefit of communities, future generations, and the company itself. For more information on areas of high-water stress, please see the “Water stewardship” section of this chapter.

The Water Policy covers the following impact and opportunity: Negative impact on water resources through water withdrawal by Lenzing and its value chain; Opportunity by helping value chain partners meeting their targets through products with improved water footprint.

Water stewardship