Management approach

Negative actual and potential impacts

• Corruption and bribery – incidents: While a compliance program is in place, incidents may still occur if individuals are given the opportunity to engage in non-compliant behavior (own operations, value chain)

Negative potential impacts

• Corporate culture: Potential negative impact on the morale of employees and stakeholder trust if there is a lack of transparency (own operations, value chain)
• Protection of whistleblowers: Potential negative impact on business conduct efforts regarding whistleblowers in the absence of ongoing efforts, training, reaction and clear procedures (own operations, value chain)
• Corruption and bribery – prevention and detection including training: Potential negative impact on business conduct efforts regarding corruption and bribery in the absence of ongoing efforts, training, reaction and clear procedures (own operations)

Positive actual impacts

• Corporate culture: Positive impact on the prevention of corruption, bribery and conflicts of interest by maintaining transparency (own operations, value chain)

Risks

• Management of relationships with suppliers including payment practices: Risk of non-compliance with the Corporate Supply Chain Due Diligence Directive (CSDDD) if internal processes are not implemented (own operations)

For a more detailed description of the impacts, risks and opportunities, please see the “Material impacts, risks and opportunities” section of the “ESRS 2 General disclosures” chapter.

Policies

• Lenzing Global Code of Business Conduct
• Lenzing Global Supplier Code of Conduct
• Policy on Human Rights and Labor Standards
• Policy for Wood and Pulp
• Anti-Bribery and Corruption Directive (ABC Directive) (including Austrian Local Guidance Document)
• Antitrust Directive
• Whistleblower Directive
• Investigation Directive
• Anti Money Laundering Directive (AML Directive)
• Know-How Protection Directive

Actions taken [ESRS 2 MDR-A 68a]

• Offering the possibility to report incidents via BKMS^® (Business Keeper Monitoring System) whistleblower system (“Tell us”)
• Compliance training for employees
• Start of implementation of compliance cockpit: Improving whistleblower tool, gift and hospitality tool, conflict of interest registration tool, policy manager (– receiving, reading and acknowledging policies)

Sourcing

• 100 percent of wood-for-pulp-production suppliers assessed according to the FSC^® Controlled Wood criteria
• The sustainability performance of pulp suppliers was surveyed in a comprehensive questionnaire
• Wood and pulp certification according to FSC^® and PEFC standards, including regular audits on forest certification standards (FSC^®, PEFC)¹

Further actions

(not described in more detail in G1-3 or Sourcing)

• Follow up procedure for reported incidents
• Yearly transparent reporting within Lenzing’s Corporate Governance Report
• Implementation of Conflicts of Interest Directive in 2024
• Internal audit management system

Sourcing

• Additional third-party verification of Lenzing’s wood and pulp supply as part of the CanopyStyle Initiative and through internal supplier audits
• Lenzing was awarded for the 5^th time with a “dark green shirt” in Canopy’s Hot Button Ranking
• CDP Forests “A-” rating

Sustainability targets

• “Supplier engagement” target
• No corruption incidents

Stakeholders

• Employees
• Suppliers
• Governments
• Customers
• Membership associations
• Austrian Code of Corporate Governance
• Together for Sustainability (TfS)
• EcoVadis

Responsible

• Managing Board
• SVP Global Legal, IP & Compliance
• Local Compliance Manager
• SVP Global Supply Chain/Purchasing
• VP Wood & Pulp Procurement
• SVP Corporate Human Resources
• VP Global Health, Safety & Environment
• VP Corporate Sustainability

Supporting

• Corporate Communications & Public Affairs
• Corporate Human Resources
• Corporate Audit & Risk
• Corporate Sustainability
• Global Process Information Technology
• Site directors