Raw material security

Material topic: Wood and pulp sourcing

Importance for Lenzing

• Wood is the most important raw material for Lenzing

Opportunities

• Wood as a natural and renewable raw material offers expanded business perspectives
• As a replacement for fossil-based products
• Due to its contribution to climate change mitigation through carbon sinks in forests and wood products, and substitution of fossil-based product
• Wood is an alternative to agricultural products (e.g. cotton)
• Using wood from sustainably managed forests supports biodiversity

Risks

• Sourcing of environmentally and socially controversial wood and pulp
• Can be linked to deforestation
• Loss of biodiversity in poorly managed forest ecosystems
• Potential reputation loss is a threat to business
• Sourcing can be impacted by climate change
• Climate and market impact on wood and pulp availability, price and quality

Guiding principles

• Centrally managed wood and pulp procurement
• Strict Wood and Pulp Policy
• CanopyStyle Initiative
• Global Supplier Code of Conduct
• Preference for long-term contracts and direct contacts

Due diligence processes and (ongoing) measures

• Regular audits on forest certification standards (FSC^®, PEFC)¹³
• Internal audit management system
• Wood and Pulp certification according to FSC^® and PEFC standards
• Additional third-party verification as part of the CanopyStyle Initiative and through internal supplier audits

Objectives

• Ensure compliance with customer sourcing policies
• Assessment of sustainability performance of the Lenzing Group’s most relevant suppliers
• Partnership with pulp suppliers on sustainability
• Sustainable management of plantations in the LD Celulose joint venture

Achievements/activities in the reporting year

• 100 percent of wood suppliers assessed according to the FSC^® Controlled Wood criteria
• CDP Forests “A” rating
• EcoVadis Platinum status for the Lenzing Group
• Continuation of afforestation and social impact project in Albania
• Dark green shirt for the second time in Canopy’s Hot Button Report
• PEFC Chain of Custody certificate for fiber production sites in SPV (Indonesia), Nanjing (China), Mobile (USA)
• Sustainability performance of pulp suppliers was surveyed in a comprehensive questionnaire
• Integration of plantations managed by LD Celulose (Brazil) into the Lenzing Group
• Transportation of some inbound materials changed from road to rail to improve carbon footprint

Responsible

• Member of the Managing Board (Pulp)

Supporting

• Corporate Sustainability
• Global QESH