Business value creation with climate action

Creating traction for climate change target implementation has to be linked to business value via measures such as creating new revenue streams, launching new products, and attracting new investors and long-term impact investors who will ensure sustainable growth and resilience for the company. The following initiatives have been accomplished.

Launch of new premium product – carbon-zero TENCEL™ fibers

In 2020, Lenzing successfully launched two specialty (lyocell and modal) fibers with low climate change impacts. These carbon-zero TENCEL™ branded fibers provide a reduced CO2 footprint thus will help Lenzing’s customers, especially brands and retailers to reduce their Scope 3 emissions from raw material production and fulfill their Scope 3 science-based target commitments. In 2021, this product portfolio has been expanded with two more new products (TENCEL™ x REFIBRA™ and VEOCEL™ lyocell) to address the growing industry demand for “circular fashion” and carbon neutrality. The first carbon-zero TENCEL™ branded lyocell and modal fibers have continued to gain momentum among industry partners including fashion brands and mills. In the reporting year, this fiber portfolio was expanded with one more production site Prachinaburi in Thailand. Lenzing flame retardant fibers (LENZING™ FR) and TENCEL™ Modal micro fibers were also become part of carbon-zero portfolio. For more information, please see the “Net benefit concept” chapter.

After launching the first carbon-zero fibers in Nonwovens in 2021, Lenzing expanded its product range at the end of 2022 and now also offers carbon-zero VEOCEL™ branded lyocell fibers from the US specialty production site, located in Mobile (Alabama). For this purpose, Lenzing invested in solar power, use of renewable electricity from wind power and technology upgrades to maintain and pursue ways to reduce its carbon emissions.

In terms of footprint, Lenzing has been further able to reduce the footprint of carbon-zero fibers (cradle to gate) through measures such as supplier engagement (green caustic, pulp with lower CO2 footprint), expansion of the product range through its new plant in Thailand as well as the development of renewable energies (e.g. photovoltaic system at Lenzing site (Austria)).

Attracting new and impact investors

According to our evaluation, more than half of the shares owned by institutional investors are held by investors with an ESG focus. In 2019, Lenzing successfully positioned a bonded loan bound to its sustainability performance (MSCI rating). In 2022, Lenzing maintained its “AA” rating issued by MSCI. The amount saved by obtaining a more beneficial interest rate in the previous year was donated to a biodiversity conservation project in DR Kongo and to the Red Cross in Ukraine. A higher MSCI rating results in a more beneficial interest rate and therefore more will be donated. For more information, please see the “Social responsibility” focus paper.

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