UPM Annual Report 2017

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Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

Resource-efficient production

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 and are certified in accordance with the ISO 9001, ISO 14001 and OHSAS 18001 standards. Additionally, the ISO 22000 management system is in use at all production plants in which food safety management is required. In order to improve energy efficiency, UPMhas introduced the ISO 50001 energy management system in Central Europe and Uruguay and a national energy efficiency system (EES+) in Finland. The UPMPaper ENA and UPM Specialty Papers paper mills in Finland moved to a shared management system certification in 2017 (read more on the left). 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). In 2017, four of the company’s mills completed their EMAS Environmental Performance reports with locally relevant information on societal aspects and impacts. After piloting the approach, the scope will be expanded in 2018. Investments in environmental performance UPM’s investments in environmental performance are part of the Group’s investment programme. In 2017, the company’s environ mental investments totalled EUR 21 (22) million. The single largest investment was effluent treatment plant improvements at the UPMFray Bentos pulp mill. UPM’s environmental costs, which are mainly attributable to effluent treatment and waste management, totalled EUR 125 (120) million, including depreciation. The main cost items were effluent treatment with EUR 49 (48) million, waste management with EUR 26 (28) million, and air pollution control with EUR 6 (5) million. Steady decline in number of environmental non-conformances There has been a significant decrease in the number of environ mental non-conformities since UPM’s internal Clean Run programme was launched in 2012. No major environmental incidents occurred at UPMproduction plants in 2017 and UPMwas not required to pay any significant fines due to non- conformities. However, a total of 33 (33) temporary deviations from permit limits or major deviations from the environmental limits set by UPM occurred at the company’s mills over the course of the year. The most serious single incident was related to the rupture of a wastewater pipeline at the UPMKaipola paper mill. The rupture led to a short-term leak of untreated wastewater into Lake Päijänne. No harmful impacts were identified afterwards in studies completed in co-operation with the local authorities. Occasional odours from pulp mills have caused some criticism. UPM responded to stakeholder feedback locally and organised feedback meetings for the surrounding community, for example, in Lappeenranta, Finland. In all cases, UPM immediately reported deviations to relevant stakeholders and undertook corrective measures. The global One Safety reporting tool supports a common, UPMway of managing and reporting safety and environment-related operations. In 2017, nearly 2,600 (2,300) preventative environmental observations were reported. The goal of this reporting is to improve environmental performance, share best practices and promote environmental awareness.

MULTISITE BRINGS TRANSPARENCY AND EFFICIENCY

UPM’s Finnish paper mills have moved to a shared manage ment system certification. This covers the activities, methods and guidelines shared by the two businesses and complies with the requirements of assured occupational health and safety, energy efficiency, quality and environmental standards. The multisite audit of the paper mills' new way of working and the mill audits were conducted in autumn, to ensure they met the requirements. The project required close collaboration between the mill and function representatives. The most significant change is that the descriptions and guidelines for shared functions have been centralised. This change makes it easier to learn from one another and share best practices. This new way of working improves efficiency and also reduces costs.

UPM uses raw materials, water, energy and other resources in a responsible manner and continuously improves its energy, resource and cost efficiency.

2,600 preventive environmental observations