UPM Annual Report 2017

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Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

Product stewardship

Ecolabels and product declarations as a sign of transparency

UPM provides sustainable and safe solutions to growing global consumer demand.

UPMprovides product declarations to grant customers easy access to information concerning the responsibility of products and the supply chain. They are developed for various customer needs; for instance, to verify that products do not contain harmful chemicals. Ecolabels help customers make responsible choices and provide stakeholders with important information. UPM is globally the largest producer of EU ecolabelled newsprint, office papers and graphic papers and as of 2017, the EU Ecolabel has been available for all UPM graphic papers in Europe. UPM also provides its customers with the opportunity to use well-known local ecolabels, such as the German Blue Angel or the Nordic Ecolabel. All UPM businesses have FSC® and PEFC™ chain of custody certification. In 2017, UPMBiofuels received a RSB (The Roundtable on Sustainable Biomaterials) certificate for both UPMBioVerno renewable diesel and naphtha, as well as production side streams turpentine and pitch. RSB verifies the sustainability and reliability of feedstock sourcing and production. UPM Specialty Papers introduced UPM’s Responsible Fibre™ concept to Asian markets. The trademark combines environmental and social responsibility criteria into one entity. UPM products create societal value Most of UPM’s businesses today and in the future are based on efficient use of sustainably sourced, renewable forest biomass. The fact that UPM’s products replace products made of non-renewable raw materials adds to their value. Wood is a versatile construction material with many beneficial properties. The excellent indoor air quality of wood buildings is due to the natural ‘breathability’ of timber walls and the acoustic properties are also of high quality. In addition, wood has been proven to have positive effects on wellbeing and is an outstanding material to mitigate climate change, because it stores a large amount of carbon. In 2017, UPMPlywood introducedWISA BioBond, a new lignin- based gluing technology in plywood manufacturing. With the new technology, 50% of the fossil-based phenol can be replaced with lignin obtained as a by-product of chemical pulp production. UPMBiofuels is developing a new feedstock concept by growing Brassica carinata as a sequential crop in South America. The Carinata crop produces non-edible oil suitable for biofuels' feedstock and protein for animal feed. Carinata will provide additional income to local farmers, who do not normally have their fields in productive use during winter. UPMRaflatac launched new labels for authenticating products and preventing counterfeit products from entering the market in order to ensure consumer safety. During the year, UPMRaflatac also extended its range of film face materials for the European market, providing a sustainable alternative to fossil-based films for a wide variety of end- uses. UPMpaper businesses continue to develop lightweight papers where less material is used to produce the same printing area. The Nordic Bioeconomy Panel under The Nordic Council of Ministers chose two UPMproducts (UPMBioVerno and GrowDex®) for the “Nordic bioeconomy – 25 cases for sustainable change” catalogue, as products that create a large amount of societal value and promote the Sustainable Development Goals of the UN.

ELECTRICITY for lighting and heating

SIGNIFICANCE • Global megatrends are driving demand for sustainable and safe solutions • Renewable wood and recyclable products reduce the world’s dependency on fossil-based and other non-renewable raw materials TARGETS • Sustainable and safe solutions • Taking care of the entire lifecycle • New wood-based businesses OUR WAY • Products are made of renewable and biodegradable raw materials and are recyclable • Ecodesign approach, that covers the entire value chain from the procurement of raw materials to end products and their afterlife, for all products • Restricted Chemical Substances List and certified management systems • Open and transparent product communication through ecolabels, certificates and product declarations • Focus on 2030 target: all applicable products eligible for ecolabelling

TIMBER for indoor air quality

Sustainable and safe products for everyday use

PULP-BASED MATERIALS for packaging, transport, storage, and hygiene products

PUBLICATION PAPERS for reading and advertising

LABEL MATERIALS for food packaging, drinks bottles and for communicating information

SPECIALTY PAPERS for food packaging

WOOD MATERIALS for construction and design features

OFFICE PAPERS for printing