Strategy

Managing social sustainability

[S1 ESRS 2 SBM-3 13a]

Managing impacts, risks and opportunities for Lenzing’s workforce is closely tied to the company’s corporate strategy, which is built on premiumization, excellence, innovation and sustainability. The following elements are interconnected: diversity drives innovation, work-life balance supports excellence, and social sustainability strengthens overall performance.¹ For additional context on the overarching double materiality process, please see the “Double materiality analysis” section in the “ESRS 2 General disclosures” chapter.

[S1 ESRS 2 SBM-3 14a]

Lenzing is committed to conducting business with respect for human rights and dignity. Members of Lenzing’s own workforce who could be materially impacted include employees and non-employees. Non-employees constitute a small fraction of leased personnel and self-employed individuals.

Impacts

[S1 ESRS 2 SBM-3 14b, 15]

The potential negative impact on the health and well-being of Lenzing’s workforce in the case of accidents is incidental (individual incidents). As a manufacturing company, blue-collar workers face higher health and safety risks compared with white-collar workers. Please see the “Impacts, risks and opportunities” section of this chapter for a short description of the impacts, risks and opportunities.

[S1 ESRS 2 SBM-3 14c]

Lenzing’s employees are positively impacted by the work-life balance that is provided. For details of actions that result in the positive impact, please see the corresponding action in the “Actions” section of this chapter.

Risks and opportunities

[S1 ESRS 2 SBM-3 13b, 14d, 16]

Lenzing depends on maintaining employee trust and morale, particularly during periods of workforce reductions and economic uncertainty. Insufficient transparency and ineffective communication can undermine trust and reduce employee motivation. If not addressed, this may contribute to a deteriorating working climate, which in turn can increase unwanted turnover and lower productivity. Such developments would adversely affect operational performance, weaken knowledge retention, reduce innovation capacity and hinder the execution of strategic priorities. This represents a material risk to Lenzing’s strategy and business model, both of which rely on workforce well‑being, engagement, and productivity. Training and skills development is one of Lenzing’s strategic key areas. Failing to provide development opportunities for employees could lead to a shortage of qualified personnel and gaps in succession planning. Last but not least, Lenzing sees diversity as a driver of innovation, supported by studies showing that a diverse workforce enhances innovative capacity. This opportunity applies to all individuals contributing to workforce diversity.

[S1 ESRS 2 SBM-3 14f, 14g]

Lenzing does not tolerate child or forced labor, in line with ILO Convention, the UN Guiding Principles on Business and its Policy on Human Rights and Labor Standards. Country-level risk assessments indicate that regions such as parts of Asia, South America, Eastern Europe, and Eurasia carry higher systemic risk of child and forced labor. This does not indicate any identified cases within Lenzing’s own operations.

To mitigate potential risks, Lenzing has implemented preventive measures such as its Global Child Labor Remediation Procedure and annual assessments using the Higg Facility Social & Labor Module (FSLM). In 2025, all production sites completed the full verification process. Seven sites had already successfully completed it in previous years, while two sites were verified for the first time. The process included both self-assessment and third-party audits. This marks a significant step in strengthening social due diligence and transparency across the company’s global operations. For more information, please refer to the “Policies” and “Social Audits” sections of this chapter.

1The underlying studies and further details supporting this statement can be found in the Lenzing Sustainability Report 2022, chapter Diversity