Climate & energy

Material topic: Climate

Importance for Lenzing

• Global warming presents risks to society and material risks to companies all over the world
• Being a role model and innovation driver secures Lenzing’s business success
• Combating global warming is important for Lenzing to secure raw materials

Opportunities

• Driving the transition to a fossil-free production through circular business model and innovation along the whole value chain
• Offering end consumers a truly sustainable option: textiles and nonwovens made from wood-based cellulosic fibers
• Future-proofing Lenzing’s growth with the implementation of carbon neutral technologies and low-carbon products
• Becoming more resilient to the changing regulatory (e.g. tax) and business environment
• Strengthening credible sustainability leadership among all stakeholders, securing product differentiation and price premiums
• Collaborating with stakeholders and supply chain partners
• Attracting new and long-term impact investors

Risks

• Risks of wood unavailability due to forest degradation (diseases, pests, etc.) as a direct consequence of higher average temperatures
• Potential regulatory, technology, market and corporate reputational risks
• Lenzing cannot contribute to its customers’ CO₂ targets if Lenzing’s fibers no longer meet customers’ definition of sustainable raw materials
• Any climate-related disruption in one of the production sites will influence the business model and its success

Guiding principles

• “Naturally positive” sustainability strategy with “Decarbonization” and “Partnering for systemic change” as focus areas
• Implementation of science-based target (SBT)
• Commitment to UN Fashion Industry Charter for Climate Action
• ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 system certifications for the Lenzing Group
• Group Environmental Standard

Due diligence processes and (ongoing) measures

• Environmental management system according to ISO 14001:2015 (incl. risk assessment and internal audits to ensure effectiveness of the measures implemented)
• TCFD reporting framework
• Establishment of governance and steering committee
• Definition of roadmaps for group-level and site-level targets

Objectives

• Reduction of specific CO₂ emissions by 50 percent until 2030
• Net-zero CO₂ emissions by 2050

Important achievements/activities the reporting year

• Development and progress of group-level and production site-level roadmaps
• CDP Climate “A” rating
• Two additional new products have been launched with climate benefits
• Four production sites in the Lenzing Group use 100 percent renewable electricity from the grid (Lenzing, Heiligenkreuz, Paskov, and Mobile)
• Implementation of an internal carbon price

Responsible

• Chief Executive Officer
• Board member (commercial)

Supporting

• Corporate Communications
• Corporate Sustainability
• Global Controlling
• Global Purchasing
• Corporate Audit & Risk
• Global QESH
• Global Strategy and M&A
• Performance.Improvement.Technology
• Site Managers

Material topic: Energy

Importance for Lenzing

• Fiber and dissolving wood pulp production are energy-intensive processes, part of the carbon strategy and a cost factor

Opportunities

• The biorefinery concept enables Lenzing to produce surplus renewable energy
• Reducing primary energy consumption by increasing energy efficiency
• Substituting fossil-based energy sources

Risks

• Fossil-based energy and energy-intensive technologies carry potential regulatory, technology, market, and corporate reputational risks
• Implementation of regional and national emission trading schemes
• Energy shortage could compromise Lenzing’s operations
• Financial impacts of potential cost increases in energy prices
• Inefficient energy conversion technologies have a potential impact on CO₂ emissions

Guiding principles

• “Naturally positive” sustainability strategy with “Decabonization” focus area
• Lenzing Group sustainability targets

Due diligence processes and (ongoing) measures

• Environmental management system based on ISO 14001:2015 (including risk assessment and internal audits to ensure effectiveness of the measures implemented)
• TCFD reporting framework
• Higg FEM
• EU BAT

Objectives

• Switching from fossil-based to renewable energy sources
• Energy consumption reduction
• Energy mix optimization by optimizing fiber production portfolio
• New technology development

Achievements/activities the reporting year

• Successful completion and commissioning of an air purification and sulfur recovery plant at the Lenzing site (Austria)
• Construction of the dedicated gas pipeline has started at the Nanjing site (China)
• Continuous improvement of energy consumption
• Large-scale photovoltaic project at the Lenzing site (Austria) is in development

Responsible

• Board members (for wood and pulp as well as operations)

Supporting

• Global Engineering – Utility and Infrastructure Engineering
• Global Purchasing
• Global QESH
• Performance.Improvement.Technology
• Site Managers