Austria's Lenzing rated 'sustainability champion' by MSCI

“We strongly believe that the fiber industry will have to change in order to meet the ecological and social demands of the future. The issue of sustainability has been firmly anchored in our strategy for many years and is fundamental to our commercial success. Lenzing is an absolute pioneer in this field and we will continue to be a role model in future,” said Thomas Obendrauf, chief financial officer of the Lenzing Group.

The upgrade to the MSCI environmental, social and governance (ESG) rating will also lead to a reduction in Lenzing’s interest expense. Lenzing placed a bonded loan worth €500 mn in November 2019, which is linked to its sustainability performance. In accordance with its commitment under the bonded loan placement, the company will donate the full amount of the interest expense saved thanks to the rating revision to a project it supports, Lenzing said in a press release.

The rating agency MSCI, whose rating determines the interest rate for the bonded loan, cited the company's ambitious climate targets, its approach to promoting a circular economy and exceptionally good governance structure as the main reasons for the upgrade.

Lenzing is actively involved in tackling the problems arising from climate change by implementing its science-based targets. In 2019, Lenzing set the strategic goal of halving its greenhouse gas emissions per ton of product by 2030. Its vision for 2050 is to achieve climate neutrality. The implementation of two key projects in Brazil and Thailand is an important milestone in this process, while the investments in its existing locations in Asia are also consistent with Lenzing’s decarbonisation targets.

Another milestone in Lenzing’s push to implement its ambitious climate and sustainability targets is its collaboration with Swedish pulp producer Södra. Both of these global market leaders, which have proactively engaged in promoting a circular economy in the fashion industry for many years, are pooling their resources to drive this issue forward and make a vital contribution to solving the problem of global textile waste.

Lenzing has received multiple awards for its performance in 2021, especially in the field of sustainability. Its rating from EcoVadis with regard to corporate social responsibility is particularly outstanding. Having achieved platinum status for the first time, Lenzing ranks among the world’s top 1 percent of companies evaluated based on their approach to the environment, fair working conditions and human rights, as well as ethics and sustainable procurement.

Fibre2Fashion News Desk (RR)