Value creation at the Lenzing Group

[ESRS 2 SBM-1; GRI 2-6, 201-1]

The Lenzing Group is committed to the ecologically responsible production of fibers made from the renewable raw material of wood grown in sustainably managed forests and plantations. As an innovation leader, Lenzing partners with global textile and nonwoven manufacturers and drives many new technological developments.

Value chain

The Lenzing Group is part of the chemical industry and serves the fiber market with regenerated cellulose fibers. Lenzing fibers are used primarily for clothing, home textiles, technical textiles, and hygiene products. Lenzing’s product portfolio also includes dissolving wood pulp, which is the basic raw material for producing fibers, innovative specialty fibers as well as energy, biobased biorefinery products, and co-products. The significant product groups according to ESRS are regenerated cellulose fibers and dissolving wood pulp.

Lenzing’s own pulp production at its sites in Lenzing (Austria), Paskov (Czech Republic) and Indianópolis (Brazil) is based on the biorefinery concept, completely utilizing the raw material of wood.

Lenzing combines comprehensive expertise in operating pulp and biorefinery processes with decades of experience in three major fiber process technologies:

• Viscose (rayon)
• Modal
• Lyocell

Further developments and technologies have resulted from the above-mentioned processes. For more information on significant products (which are also related to Lenzing’s sustainability targets), please see the “Net-benefit concept” section in the “Sustainable innovations” chapter and the Lenzing website.

The Lenzing Group’s value chain is depicted above and described below.

Supply and sourcing

The principal raw materials for producing Lenzing’s fibers are wood, process chemicals, water and energy. Lenzing has procurement contracts for those raw materials. Wood is sourced mostly from suppliers under long-term supply contracts as well as from Lenzing’s own plantations. Chemicals are mostly sourced regionally.

Lenzing focuses on sustainable sourcing. Supplier selection and evaluation are based on economic, quality, environmental, social and governance (ESG) criteria.

The identified (potential) impacts, risks and opportunities within Lenzing’s upstream value chain take forestry and the chemical industry into account.

Dissolving wood pulp and cellulose fiber production

Production takes place in two stages: first, the production of dissolving wood pulp, and second, the production of fibers based on dissolving wood pulp. Lenzing’s own dissolving wood pulp is produced in three biorefineries at sites in Lenzing (Austria), Paskov (Czech Republic) and Indianópolis (Brazil). Lenzing aims to use state-of-the-art sustainable production technology.

This entails high resource efficiency, high chemical recovery rates and, where possible, closed loops for process chemicals and water.

Bioenergy, biorefinery products and co-products are generated as well. Lenzing combines its comprehensive expertise in pulp and biorefinery technologies with decades of experience in cellulose fiber production.

Downstream manufacturing

As shown in figure “Value chain” under “Manufacturing steps”, the customers in Lenzing’s downstream value chain use the fibers to manufacture textile, nonwovens, or industrial products.

Lenzing works closely with value chain partners ranging from direct customers to the retail level in the textile and nonwovens sector and for industrial applications – to provide expertise in processing as well as in developing innovative applications.

The identified (potential) impacts, risks and opportunities within Lenzing’s downstream value chain take the processes of the textile and nonwoven industries into account. For more information on the impacts, risk and opportunities, please see the “Material impacts, risks and opportunities” section of this chapter.

Distribution and use phase

Finished products are distributed after manufacturing and enter the consumer use phase.

End of life

As the name suggests, TÜV certified biodegradable and compostable LENZING™¹ fibers are compostable and biodegradable. However, the compostability and biodegradability of final consumer textile and nonwoven products depend on the material composition (e.g. fiber blend) of the product and processing in the value chain.

For more information about geographies, stakeholders and products in relation to sustainability targets, please see the target description in the “Sustainability targets, measures and progress” section of this chapter.

Expected outcomes for customers, investors and nature

Lenzing’s responsible practices and innovative products enable its customers and value chain partners to improve their environmental and social performance and achieve their sustainability targets and commitments.

Lenzing AG offers its shareholders a sustainable investment in a global market leader on the growth market for regenerated cellulose fibers. For further information for investors, please see Lenzing’s equity story on the website.

Nature is also Lenzing’s silent stakeholder. Lenzing has a particular responsibility and an ambition to help raise the bar for sustainability in the textile and nonwovens industries. Nature is represented by many NGOs and multi-stakeholder initiatives that Lenzing partners for collaboration.

1 LENZING™ fibers which are TÜV certified biodegradable (soil, fresh water & marine) and compostable (home & industrial) include the following products: LENZING™ Viscose Standard textile/nonwovens, LENZING™ Lyocell Standard textile/nonwovens, LENZING™ Modal Standard textile, LENZING™ Lyocell Filament, LENZING™ Lyocell Dry and LENZING™ Nonwoven Technology. There is an exception for the TÜV certified biodegradable & compostable fiber LENZING™ Lyocell Filament, which fulfils the above-mentioned conditions except biodegradability in marine environments.