Management approach
Material topic: Sustainable innovations & products
Importance for Lenzing
- Sustainable innovations are at the heart of Lenzing’s sCore TEN strategy and ensure the future success of the company
Opportunities
- Meeting market and stakeholder expectations
- Differentiating factor
- Being prepared for new challenges
- Being a pioneering company
- Building new cooperation and networks
- Challenge the status quo
Risks
- Loss of leadership in innovation carries potential regulatory, financial, market and corporate reputational risks
Guiding principles
- sCore TEN strategy
- “Naturally positive” sustainability strategy with “Sustainable innovations” focus area
- Life cycle thinking
- Net-benefit concept
Due diligence processes and (ongoing) measures
- Project management system PRO2 (product & application innovation and process & technology innovation) as part of Lenzing business processes
- Management review (ISO 9001:2015)
Objectives
- Securing economic growth
- Leadership in technology, innovative net-benefit products and applications and new business models
- Differentiation from competitors and competing products
- Networking and cooperation with relevant partners (companies, associations, NGOs and academia)
Achievements/activities in the reporting year
- Launch of hydrophobic LENZING™ Lyocell Dry fibers for sustainable nonwoven solutions
- Launch of TENCEL™ Modal with Indigo Color Technology and TENCEL™ Lyocell Matte as sustainable fibers for the denim industry
- Cooperation with Orange Fiber – TENCEL™ Limited Edition fibers containing a certain share of orange pulp
- Cooperation between Södra and Lenzing started in the field of textile recycling
- Further scientific proof of the marine biodegradability of LENZING™ fibers by Scripps Institution of Oceanography
- Advancing the renewable carbon concept as a member of the Renewable Carbon Initiativea
- 1,487 patents and patent applications filed across 190 patent families and 52 countries
- Close cooperation between innovation centers and other internal departments
- Numerous R&D partnerships with customers, companies, universities, and institutes (national and international)
- Partner of new Christian Doppler Laboratory for a recycling-based circular economy
Responsible
- CEO
- VP Research & Development
Supporting
- Global Business Management Nonwovens and Textiles
- Global Strategy and M&A
- Performance.Improvement.Technology (including Head of Global Technology)
- Global Engineering
- Operations
a) Home – Goals and Vision of the Renewable Carbon Initiative (renewable-carbon-initiative.com)
Sustainable innovations represent one of the strategic focus areas of Lenzing’s “Naturally positive” sustainability strategy. Lenzing is committed to bringing cellulose based solutions to the market that offer consumers sustainable alternatives without compromising on quality and performance. These innovations constitute a cross-functional issue that intersects with most of the other strategic focus areas and is therefore reflected in many of Lenzing’s activities.
Sustainable innovations include substantial efficiency improvements in existing technologies and technological breakthroughs that lead to net-benefit products. Lenzing innovation also includes driving systemic change through forward-looking solutions, future-proof business models, and a multitude of collaborative activities.
The central hub and innovation center at Lenzing is the Research and Development (R&D) department at the company’s headquarters in Lenzing (Austria). At the end of the reporting year, 222 staff (2020: 212; 2019: 213) were working here on various innovation projects, in most cases in close cooperation with other departments. This interconnectedness is also reflected by the fact that staff from R&D regularly transfer to other departments and often follow the R&D projects to their conclusion. Another distinctive feature is the extensive infrastructure. The center includes pilot plants and laboratories that use small-scale processes to better understand the landscape of the subsequent value chain.
R&D expenditures, calculated according to the Frascati method (minus funding received), decreased from EUR 34.8 mn in 2020 to EUR 31.6 mn in 2021 (2019: EUR 53.2 million). The reason for this overall decrease is that the investment in new pilot plants has been largely completed, resulting in only minor CAPEX costs. However, the operative R&D expenditures increased, underlining Lenzing’s commitment to driving sustainable innovation. The R&D expenditure corresponds to 1.5 percent of the Group’s revenue. The 1,487 patents and patent applications (in 190 patent families) that Lenzing holds in 52 countries worldwide are another indication of the Lenzing Group’s innovativeness. The focus for new patents is clearly on sustainable innovations such as the forward-looking solutions of LENZING™ Web Technology and TENCEL™ Luxe or textile recycling.
