UPM Annual Report 2016

Contents

UPM Group

2 UPM in brief 4 Year 2016 in brief 6 Review by the President and CEO 8 UPM in transformation

Strategy 10 Grow with Biofore – UPM’s strategic focus areas 12 Performance improvement and transformation continued in 2016 14 Responsibility is good business 16 UPM as an investment

17 UPM renewed its long-term financial targets 18 Operations are guided by the Biofore strategy 20 Changing operating environment 22 Risks and opportunities

Businesses 24 UPM Biorefining

28 UPM Energy 30 UPM Raflatac 32 UPM Specialty Papers 34 UPM Paper ENA 36 UPM Plywood 38 Innovation and R&D

Stakeholders

40 Our people 44 Driving continuous improvement in safety 46 Our stakeholders

52 Continuous dialogue and collaboration with customers 54 UPM’s value creation also generates tax revenues 56 Product stewardship 58 Sustainable forestry 59 Responsible sourcing throughout the entire supply chain 62 Resource-efficient production 64 Responsible water use 66 Climate actions and energy efficiency 68 Circular economy at UPM 70 Value creation

Governance 72 Our governance 82 Board of Directors 84 Group Executive Team 86 GRI content index – short version 88 Independent Practitioner’s Assurance Report

Accounts for 2016 89 Contents

166 Financial information 2007–2016 168 More on resposibility 170 Competitive businesses, strong market positions 173 Addresses 175 Annual General Meeting