Metrics and targets

[ESRS S1-6 – S1-17 2 MDR-M 77b]

The metrics in the S1 Own workforce chapter are not validated by an external body other than the assurance provider.

[ESRS S1-5; GRI 3-3e]

See “Sustainability targets” in the management approach at the beginning of this chapter. All of Lenzing’s sustainability targets and the process of setting and monitoring (ESRS 2 MDR-T 80j) can be found in the “Sustainability targets, measures and progress” section in the “ESRS 2 General disclosures” chapter.

The “Social standard” target as well as the “Equity, Diversity and Inclusion” target directly align with Lenzing’s Global Equity, Diversity and Inclusion Policy and Human Rights Policy by promoting an inclusive work environment, gender equality and upholding human rights across all levels of the organization.

Social standard target

The Facility Social Labor Module (FSLM) is crucial for mitigating negative impacts and risks on employees through ensuring that social standards are consistently upheld across all Lenzing production sites. By implementing and annually updating the FSLM assessments, Lenzing commits to fair labor practices, safe working conditions, and respect for workers’ rights. This proactive approach helps to prevent labor violations and promotes overall employee wellbeing. Regular audits and sharing verified modules with customers also increase transparency and accountability, further protecting employees from potential social risks. In 2020 (baseline year), the “Social standard” target was set for the first time, starting from a baseline of zero, with none of the pulp and fiber production sites having FSLM verification. The target is based on internationally recognized third-party social certifications (SLCP) and ensures continuous compliance through independent audits at all Lenzing Group production sites. It aligns with international frameworks such as the OECD Due Diligence Guidance, UNGPs, contributing to SDGs 8, and 12 by promoting fair labor conditions. Local labor laws, regional challenges, and stakeholder engagement are considered to ensure a context-specific and sustainable approach to social responsibility. The Corporate Sustainability team, Human Resources, the Management Board and operational units were involved in target setting. Additionally, Lenzing engaged directly with site HR leaders and the works council to list initiatives at each location, which served as the basis for setting targets, tracking performance, and identifying lessons for continuous improvement.

Equity, Diversity and Inclusion target

The “Equity, Diversity and Inclusion” target aims to create an empowering work environment for all of Lenzing’s own workforce by upholding human rights, prioritizing employee wellbeing, and fostering diversity and inclusion. Lenzing set this target for the first time in 2020 (baseline year), starting with a diversity concept (baseline value) in that year. The target aligns with international frameworks such as the OECD Due Diligence Guidance and UNGPs, contributing to SDGs 3, 5, and 10 by promoting good health and wellbeing, gender equality and reduced inequality. Local labor laws, regional challenges, and stakeholder engagement are considered to ensure a context-specific and sustainable approach to social responsibility. Human Resources, Corporate Sustainability and the Managing Board were instrumental stakeholders in setting the target. Additionally, the expectations and perspectives of employees were actively incorporated through direct consultation with the works council when setting the target. Human Resources is responsible for tracking performance and identifying any opportunities for improvements.

Health targets

Lenzing has set a target in January 2025 (baseline year) at Group level to reduce the Total Recordable Injury Frequency Rate (TRIFR) per 200,000 working hours to 0.8 by 2025 for its employees. The current Frequency Rate is 1.1 (baseline value). The target is aimed at addressing the SHE policy´s goal to protect people from harm, which is a fundamental prerequisite for Lenzing doing business. The previous target aimed at 0.3 by 2025, which was deemed too unrealistic after a review of the target. The site directors and the responsible member of the Managing Board were involved in the target setting process. The works council was not directly engaged in target setting, performance tracking, or identifying improvements of the “Health” targets.

There are also site targets that are based on the Group target and actual performance, taking into consideration the size of a site. Building on the TRIFR targets, sites set goals for leading indicators, breaking them down to the departmental level and develop site-specific safety programs that they coordinate with Global Occupational Health and Safety (OHS). The target is based on the commonly used metric TRIFR which measures injury occurrences. The target aims to improve the wellbeing of Lenzing employees and address the SDG 3 (good health and wellbeing).

Other targets

For the risk “Insufficient quality in succession planning can lead to a recline in productivity”, there is no measurable time-bound outcome-oriented target at present. A target was established for “Getting closer to 50 percent of successors identified for mid-senior leadership roles by the end of the 2026 talent management cycle”. The target is not tied to quantitative metrics but is expected to have two main benefits: identifying more talent with practical development discussed through 180° feedback and enhancing cross-functional visibility of potential successors.

For the ”Risk of a potential poor working climate leading to employee turnover or reduce their productivity” (mental health), there is no measurable time-bound outcome-oriented target at present. However, the general objective is to prevent and mitigate cases to the largest extent possible. The effectiveness of actions is measured by means of the Lenzing Climate survey which asks two questions related to the topic: “Do I have enough time doing my work? Do I have enough recovery time?”. For more information, see “Lenzing Climate survey” paragraph in the “Health promotion” section of this chapter.

At present, Lenzing has no target regarding the following impacts, risks and opportunities: Negative impact on the workforce if there is a lack of work-life balance; Positive impact on the workforce through various working time models, benefits and leaves; Risk and opportunity for being an attractive employer through (non-)transparent communication; Negative impact on gender equality and equal pay for equal work. Lenzing`s current resource constraints have made it challenging to fully address these important topics.