Climate & energy

Material topic: Climate & energy

[GRI 3-3; ESRS E1-2, E1-3]

Dissolving wood pulp and fiber production are energy-intensive processes that present a challenge for Lenzing. Where possible, the company has eliminated fossil-based energy or replaced it with renewable sources. Investments in state-of-the-art technologies and low-carbon production processes at all Lenzing sites have helped to increase energy efficiency and positively influence the company’s carbon emissions. Climate risks present opportunities for innovation and investment that make Lenzing more resilient to the changing regulatory landscape. The company demonstrates industry leadership as recognized in 2022 by the environmental non-profit organization CDP, which awarded Lenzing a triple ‘A’ rating for climate, water and forestry for the second time. This sustained environmental effort has kept the company on track to meet its reduction target of 50 percent by 2030 (baseline 2017), which also supports the bigger goal of achieving a net-zero future by 2050 in line with the Paris Agreement.

Actual and potential negative and positive impacts

Positive

• 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

Negative

Own activities:

• 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 would impact the business model and its success
• Not meeting new regulations, technological problems with regard to transition to renewable energy sources (eg. green hydrogen)
• Fossil-based energy and energy-intensive technologies carry potential regulatory, technology, market, and corporate reputation risks
• Inefficient energy conversion technologies have a potential impact on CO₂ emissions

Business relationships:

• 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
• Any climate-related disruption in one of the production sites (eg. severe weather events, supply chain disruptions)
• Implementation of regional and national emission trading schemes
• Energy shortage could compromise Lenzing’s operations
• Financial impacts of potential cost increases in energy prices

Policies and commitments

• “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

Actions taken

• Development and progress of group-level and production site-level roadmaps
• CDP Climate ‘A’ rating
• Two more new products with climate benefits have been launched
• 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
• Environmental management system in accordance with ISO 14001:2015 (including risk assessment and internal audits to ensure the effectiveness of the measures implemented)
• Task Force on Climate Related Financial Disclosure (TCFD) reporting framework
• Governance and steering committee in place
• Definition of roadmaps for group-level and site-level targets
• Continuous improvement of energy consumption
• Large-scale photovoltaic project at the Lenzing site is in operation

Sustainability targets, measures and progress

For more information, please see the “Sustainability targets, measures and progress” chapter.

Stakeholder

• UN Fashion Charter
• Roadmap to Zero
• Renewable Carbon Initiative

For more information, please see the “Stakeholder engagement” chapter.

Responsible

• CEO
• Board member (Commercial)
• Senior Manager Carbon Strategy

Supporting

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