UPM Annual Report 2016

Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

Certified management systems help UPM to control and improve the performance of the company’s production facilities in matters related to the environment, quality and health and safety.

The company uses rawmaterials, water, energy and other resources in a responsible manner and continuously improves its energy, production and cost efficiency. Cost and material efficiency and good environmental performance helps UPM to contribute towards achievement of several UN’s Sustainable Development Goals (SDGs). Almost all of UPM’s production plants, as well as its wood sourcing operations, are covered by environmental, quality and occupational health and safety systems, which are certified in accordance with the ISO 9001, ISO 14001 and OHSAS 18001 standards. Additionally, several production plants have an ISO 22000 food safety management system. In order to improve energy efficiency, UPMhas introduced the ISO 50001 certification system in Central Europe and a national energy efficiency system (ETJ+) in Finland. In 2016, UPM’s pulp business area developed a joint integrated management system for its four pulp mills. A similar project has started for UPM’s paper mills in Finland. UPMhas certified all its European pulp and paper mills, the UPMFray Bentos pulp mill in Uruguay, and the UPMChangshu paper mill in China in accordance with the EU Eco-Management and Audit Scheme (EMAS). EMAS requires participants to have an Environmental Management System and to publish a third-party verified Environmental Statement, which increases the credibility and reliability of local environmental data. Investments in environmental performance UPM’s investments in environmental performance are part of the Group’s investment programme. In 2016, the company’s environmental investments totalled EUR 22 (28) million. The single largest investment was UPM Schongau power plant retrofit to achieve lower air emissions. UPM’s environmental protection costs totalled EUR 120 (129) million, including depreciation. The main cost items were effluent treatment, waste management, and air pollution control. Effluent treatment amounted to EUR 48 (49) million, waste management to EUR 28 (34) million, and air pollution control to EUR 5 (5) million. Steady decline in number of environmental non-conformances There has been a significant decrease in the number of environmental non-conformances since UPM’s internal Clean Run programme was launched in 2012. Over 2,300 preventive environmental observations were reported in 2016. The goal is to improve UPM’s environmental performance, share best practices and promote environmental awareness. In 2016, UPM introduced a global reporting tool, One Safety, for all UPMers and contractors. The aim is to have a common, UPMway of managing and reporting safety and environment-related operations. One Safety tool covers environment, health and safety, product and process safety as well as security. The tool was successfully implemented at most UPM sites during the year. No major environmental incidents occurred at UPMproduction plants in 2016, and UPMwas not required to pay any significant fines due to non-conformances. A total of 22 (28) temporary deviations from permit limits or major deviations from the environmental limits set by UPM occurred at the company’s pulp and paper mills over the course of the year. The most significant single deviations were related to bio­ logical sludge losses from effluent treatment plants or occasional odours from pulp mills. UPM immediately reported deviations to local stake­ holders and authorities, and undertook corrective measures to normalise the situation and prevent similar situations from occurring in the future.

Resource- efficient production

2,300 preventive environmental observations

The number of environmental deviations at UPM pulp and paper mills

100

80

60

40

20

0

13

14 15 16

CONTENTS

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UPM Annual Report 2016

UPM Annual Report 2016