Impacts, risks and opportunities management
[ESRS S1 ESRS 2 SBM-3]
Impacts, risks and opportunities management in relation to Lenzing’s own workforce is firmly connected to its “Better Growth” business strategy, which comprises the elements of sustainability, innovation, excellence and premiumization. For example, there is proof that diversity fosters innovation, a good work-life balance contributes to excellence and (social) sustainability efforts contribute to a trustworthy brand. For information on the general double materiality process, please see the “Double materiality analysis” section in the “ESRS 2 General disclosures” chapter.
The Lenzing Group is committed to conducting business in a manner that respects the rights and dignity of all people. This is supported by an internal risk and opportunity assessment based on Lenzing’s materiality analysis. All members of Lenzing’s own workforce, who could be materially impacted by its undertakings are included in the analysis. Lenzing’s own workforce includes its employees and a small fraction of leasing personnel and self-employed people as non-employees.
Impacts
Most material negative impacts are incidental, and only three material negative impacts are systemic. The results of the materiality assessment show that diversity, harassment and inclusion of people with disabilities are systemic negative impacts. Please see the “Management Approach” of this chapter for a short description of the impacts, risks and opportunities.
Lenzing’s own workforce is positively impacted by Lenzing’s working conditions, particularly by work-life balance and health and safety measures. Lenzing’s focus on “equal treatment and opportunities for all” also has positive impacts on Lenzing’s employees, by providing opportunities for training and skills development as well as encouraging the employment and inclusion of persons with disabilities in Lenzing’s own activities and celebrating diversity. For details of activities and actions that result in the positive impacts, please see the respective sections in the “Health and safety management”, “Actions learning and development”, “Actions Equity”, “Diversity & Inclusion” chapters.
Risks and opportunities
Offering good working conditions to employees is linked to several opportunities for Lenzing. Putting the health and safety of Lenzing’s workforce at the forefront is an opportunity for Lenzing to have an engaged and productive workforce, generate more customers through social standards and certificates as well as a good reputation for the company. On the other hand, if health and safety is not taken seriously, Lenzing risks losing its good company climate.
Lenzing emphasizes the equal treatment of all employees and offers opportunities for all employees through training and skills development. Training and skills development is one of Lenzing’s priorities. Not driving the equal treatment of all employees and offering opportunities for all employees through training and skills development can result in a risk of a lack of qualified employees and to employee retention as well as succession planning. Lenzing also recognizes that diversity is an opportunity for innovation as several studies suggest that a more diverse workforce leads to higher innovative power.
Lenzing’s sites in Asia, South America, Eastern Europe and Eurasia are generally exposed to an increased risk of child labor and forced labor at the country risk level. Preventive measures are taken, as shown by Lenzing’s Policy of Human Rights and the Global Child Labor Remediation Procedure. Lenzing consequently ensures annual audits by the Higg Facility Social & Labor Module (FSLM) to minimize this risk. Due to a lack of available auditors verified by SLCP, the Paskov (Czech Republic), Lenzing (Austria) and Heiligenkreuz (Austria) sites carried out the self-assessment in 2024, but were not able to complete the entire verification process. For information on the Human Rights policy, please see the “Policies” section of this chapter. For more information on FSLM, please see the “Social audits" section of this chapter.
As Lenzing is a manufacturing company, blue-collar workers are exposed to higher health and safety risks than white-collar workers, which is reflected in the injury rate. Therefore, the material opportunity of having a good reputation regarding health and safety is related to blue-collar workers. The “diversity drives innovation and performance” opportunity addresses people who contribute to a diverse workforce.