2017 Engagement Case Study:
Lenzing has several manufacturing facilities around the world that make a variety of wood-based cellulosic fibres that are used in the apparel and other industries. One facility in West Java was identified in a June 2017 report as contributing to local water pollution and compromising the health of local communities.
Local pollution around company’s factory in West Java.
The engagement objective was to encourage the company to respond to the issues raised in the report and to set out a clear road-map for resolving them. We were also keen to see the company use their response to underline their commitment to sustainability in their operations.
Scope and process
We initially spoke to the authors of the report to ensure we had a full understanding of the concerns being directed at Lenzing.
We then engaged directly with the company through email correspondence initially with the Head of Investor Relations (IR) and subsequently spoke with the Chairman, the Head of IR and the Head of Corporate Sustainability on several occasions. Various company documents and correspondence were also shared with us as part of the engagement process.
The company was very quick to respond to the allegations raised in the report and acknowledged that there had been some issues at the facility in West Java which could be improved. They spoke directly to the authors of the report as well as to their customers and committed to producing a road-map to ensure that all their facilities meet the highest standards in the industry.
An internal team led by the company’s Chief Commercial Officer and Chief Technology Officer was appointed to develop the road-map and was supported by an independent consultant.
This road-map was agreed in September and shared with us in October. The focus of the programme is on implementing a ‘closed loop process’ for viscose manufacturing, delivering a reduction in local air and water emissions, further developing responsible raw material sourcing and launching initiatives for community well-being.
The company has begun to implement the road-map including through reductions in SO2 emissions and also through action to ensure all suppliers and agents are in compliance with their policies.