Lenzing (VIE: LNZ) is a publicly traded global producer of wood-based specialty fibers – including TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ – that has long prioritized sustainability as a core business strategy rather than a standalone initiative. As Thomas Matiz, product sustainability manager at Lenzing Group, explained on a Cascale “Source of Good” podcast episode, standardized sustainability data helps the company collaborate more effectively with customers while demonstrating environmental performance across its operations.

Lenzing’s Annual and Sustainability Report 2025 was prepared in accordance with the European Sustainability Reporting Standards (ESRS), in preparation for reporting obligations under the Corporate Sustainability Reporting Directive (CSRD) and in line with Austria’s Sustainability and Diversity Improvement Act (NaDiVeG). Within that report, Lenzing formally discloses its Higg Facility Environmental Module (Higg FEM) target and environmental performance across all production sites, demonstrating how standardized environmental data supports both regulatory reporting and customer transparency.

Key Takeaways

• Uses the Higg Facility Environmental Module (Higg FEM) across all nine production sites to monitor, track, and manage environmental performance.
• Integrates standardized environmental data into ESRS-aligned sustainability reporting.
• Responds to growing customer demand for verified Higg FEM data to support sourcing and supply chain transparency.
• Advances circular manufacturing through renewable cellulose fibers, responsible sourcing, and fiber recycling partnerships.
• Supports customers with verified environmental data and traceable fiber solutions.

Sustainable Approach

Lenzing combines responsible raw material sourcing, low-carbon manufacturing, digital traceability, and standardized environmental measurement to help customers meet evolving regulatory and market expectations. The company’s 2025 sustainability report aligns with ESRS requirements, strengthening transparency while providing investors, customers, and other stakeholders with consistent environmental information.

Challenges to Opportunities

Global apparel brands increasingly require suppliers to provide credible, verified environmental data alongside high-performance materials. At the same time, new sustainability reporting requirements, including ESRS under the CSRD, raise expectations for companies to disclose standardized environmental information supported by robust governance and consistent methodologies.

For manufacturers operating multiple production facilities, collecting comparable environmental data while driving continuous improvement requires a common framework that supports operational management, customer reporting, and regulatory compliance.

Leveraging the Higg FEM

Lenzing has long depended on the Higg Facility Environmental Module (Higg FEM), which is stewarded and governed by Cascale and implemented globally through the Worldly sustainability and supply chain intelligence platform, to monitor, track, and manage environmental performance across its manufacturing operations.

Through the tool, Lenzing is able to monitor environmental performance, reduce environmental risks, and identify opportunities to improve operational performance across production sites.

Lenzing formally discloses a continuous target to periodically update the Higg FEM across all nine pulp and fiber production sites. During 2025, the company completed both annual Higg FEM self-assessments and third-party verification at production sites, keeping the target on track.

The company also identifies customer expectations as an important driver of adoption. As Lenzing notes in its 2025 Sustainability Report, growing use of standardized environmental methodologies across the textile value chain has led many customers to request implementation of the Higg FEM and verified supplier environmental data.

“Reformation is known to provide sustainable clothing [and] they want to know where the products and the materials they use for the products come from…and how they are processed,” Thomas Matiz, product sustainability manager at Lenzing Group, explained on a Cascale “Source of Good” podcast episode. “By having this holistic perspective on the value chain and product creation, the basis was therefore for a good collaboration.”

Driving Results

Lenzing’s integrated approach to environmental measurement and transparent reporting helps customers better understand manufacturing performance while supporting continuous improvement across its global operations.

Key outcomes include:

• Completes periodic Higg FEM self-assessments and third-party verification across all fiber production sites.
• Formally discloses Higg FEM implementation and targets within its ESRS-compliant sustainability report for the second consecutive year.
• Uses standardized environmental data to support monitoring, tracking, and management of environmental performance.
• Responds to customer demand for verified environmental data that supports sourcing decisions and supply chain transparency.
• Continues progress toward science-based climate targets while advancing circular fiber innovation, responsible sourcing, and traceable material solutions.
• Achieving 21 percent absolute GHG emissions reduction (scope 1, 2 & 3) while growing 40 percent output volume since 2021 and investing <€200 million in facilities to improve environmental sustainability performance.

Together, these efforts demonstrate how standardized environmental measurement can strengthen operational performance, meet evolving regulatory requirements, and provide customers with trusted sustainability data that supports more informed sourcing decisions.

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