UPM Annual Report 2016

Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

To ensure long-term engagement, UPM continuously works with its diverse range of stakeholders to understand their specific expectations. It is equally important to communicate and discuss the company’s targets, operating principles, values and the challenges it faces within the business environment. Well-functioning stakeholder engagement is bringing stability, predictability and competitive advantage to the company. Our stakeholders

Ensuring local commitment, enhanced co-operation, stakeholder engagement and sustainability initiatives

TARGETS 2030

Stakeholder engagement brings stability to operations

UPM SUPPORTS REGIONAL TECHNICAL EDUCATION IN URUGUAY A brand new regional technological university, the first of its kind in Uruguay, has been established in Fray Bentos. The technological institute will have the capacity to accommodate 2,000 students from the south-western coastal region of Uruguay. UPM signed an important co-operation agreement with the Technological University of Uruguay (UTEC) in February 2015. The aim is to advance technical skills and engineering, particularly in mechatronics, renewable energy, transport and logistics. By 2017, UTEC plans to expand its educational courses in biomedical engineering and IT. With the co-operation, UPM will significantly increase the competence pool of qualified workforce and provide training opportunities for UPM professionals to expand their experience as well as improve the recognition of mechatronics. Uruguay’s education system is concentrated in the capital. Montevideo offers three times more educational opportunities than other areas. Investment in regional education creates further development opportunities, enhancing the overall competitiveness and pool of skilled people within Uruguay’s forest industry in the future. Students will be able to participate in internships and hands-on training in the agro-industrial sector. Both parties encourage UPM technicians and professionals to participate in the courses. Research projects and product development in co-operation with companies is a key area for this university and for UPM. This co-operation also includes student lectures led by UPM experts. The founding of the Technological University of Uruguay is part of UPM’s Biofore Share and Care programme. The programme focuses on projects that are relevant to both UPM’s business and responsibility goals. The focus areas are: Reading and learning, Engaging with communities, Responsible water use and Boosting bioinnovations.

As stakeholders view UPMprimarily as an economic operator, financial success, stability, future outlook and growth are fundamental themes for most stakeholders. In addition, UPM’s environmental performance and social responsibility play a significant role in UPM’s licence to operate and affect the long-term success of its businesses. UPM aims to provide a balanced view of the economic, environmental and social aspects of its business activities, recognising, however, the varying focus of expectations of different stakeholders. Stakeholder engagement is part of the strategy process For all businesses, stakeholder mapping is an essential part of stakeholder relations, along with the systematic gathering of feedback and views from different sources. This way, UPM aims to ensure that sufficient consideration is given to stakeholder needs during the strategic development and decision-making processes. Every year, UPMupdates a materiality analysis (page 14) that highlights the most important responsibility issues for UPM and its stakeholders. The analysis is based on stakeholder feedback and the company’s risk mapping. The Stakeholder Relations function, which is represented in all businesses, is responsible for the global leadership and co-ordination of activities, while UPM’s businesses are responsible for local activity (read more on the business activities on p. 51). Best practices are regularly shared. UPM’s most important stakeholders are customers, investors and financiers, employees, suppliers, local communities, authorities and key decision makers, the media and non- governmental organisations. The approach to each varies based on business focus, region and individual stakeholder groups. The UPMCode of Conduct sets the standards of responsible behaviour towards stakeholders for each and every UPM employee. The standards cover topics relating to legal compliance and disclosure, conflicts of interest, anti-corruption and anti-bribery, HR practices, human rights questions and environmental matters. Dialogue with stakeholders helps identify risks and improves understanding of key challenges and opportunities in the company’s operating environment. All businesses carry out customer surveys. The level of stakeholder engagement is also measured by several indicators and enquiries such as the number of customer enquiries, contact with the mills, forest department or investor relations, number of job applications and share price development.

Read more: www.upm.com/responsibility, www.upmbiofore.com

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UPM Annual Report 2016

UPM Annual Report 2016