UPM Annual Report 2017

Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

Diving deeper into the societal impacts

Chemical pulp 3.6m t Converting materials 0.6m t

Employee wages and benefits EUR 1,265m Corporate income taxes paid and property taxes EUR 251m Plywood and veneer 0.8m m 3 Sawn timber 1.7m m 3

Payments to providers of loans EUR 83m Approx. 360 patent applications Electricity and heat 10,000 GWh By-products 1.0m t

PRODUCTS

Paper 9.2m t

UPM

Our activities and products have impacts on society. Understanding these impacts is a prerequisite to develop our operations. The evaluation covers our value creation from economic, social and environmental perspective.

RAW MATERIALS

Comparable ROE 11.9% Dividend distribution EUR 507m

Sales, unconsolidated EUR 11,059m

Plastics, adhesives, resins, films 0.2m t

Recovered paper 2.6m t

Wood 27.4m m 3 Purchased paper for converting 0.5m t

Minerals 2.3m t

Comparable EBIT EUR 1,292m

Market pulp 1.8m t

54 production sites in 12 countries

Co-mingled domestic waste 0.2m t

Costs, raw materials EUR 4.3 billion

900,000 ha forests and plantations

EMISSIONS TO AIR

19,100 employees

Fossil CO 2 emissions (scope 1) 3.2m t

Nitrogen oxides 9,000 t

Sulphur dioxide 1,000 t

Particulates 670 t

VOC 300 t

Approx. 90,000 shareholders

WATER UPTAKE

ENERGY

EMISSIONS TO WATER

Capital employed EUR 9,777m

Surface water 450m m 3 Ground water 17m m 3

Renewable fuels 28,000 GWh

Process wastewater 210m m 3

Biological oxygen demand (7days), 7,700 t

Chemical oxygen demand 66,900 t

Adsorbable organic halogens 320 t

Net debt EUR 174m

Fossil fuels 12,000 GWh

SOLID PROCESS WASTE

Market cap EUR 13,818m

Communal water 4m m 3

Purchased electricity and heat 13,000 GWh

To landfills, 104,000 dry t

To temporary storage 12,000 dry t

To incineration without energy recovery 1,500 dry t

Hazardous waste for special treatment 6,000 t

PEOPLE

Employee engagement 71%

Training hours per employee 13

Total recordable injury frequency incl. contractors 8.5

Lost-time accident frequency incl. contractors 4.3

Indirect inputs and outputs provide a more comprehensive picture of the value chain. Together with the direct inputs and outputs they form the basis for impact evaluation.

INDIRECT UPSTREAM

Fossil CO 2 emissions (scope 2 & 3 upstream) 6.8m t Water intensive production sites located in water abundant areas 100%

Number of b-to-b suppliers 25,000 Forest owners in Finland supplying wood to UPM 25,000 Supplier and Third Party Code qualified supplier spend 82%

Percentage of wood origin known 100%

Seedlings planted 70 million

INDIRECT DOWNSTREAM

UPM forests available for free recreation use 645,000 ha

Restricted chemical substances in UPM screening 5,600

Carbon stored in UPM products 20m t

Biofore Share and Care donations and sponsorships EUR 1.9m distributed to about 390 groups

Number of customers 12,000

Value of products eligible for ecolabelling EUR 8.5 billion

Ecosystem services EUR 390m

Fossil CO 2 emissions (scope 3 downstream) 3.6m t

People using UPM products over 250 million

Virgin materials replaced 3.6m t

Certified wood 85%

New hires 2,500

Impact evaluation is a continuous process for UPM. In 2017, UPM initiated a pilot study to assess the monetary value of certain impacts. This study provided us with examples * ) shown on the right.

Vitality and prosperity for sphere of influence

Climate change mitigation through UPM's climate actions Impact valuation of net carbon binding of UPM forests EUR 13m*

Biodiversity enhanced

Impact valuation of ash used as raw material EUR 20m*

Purchase power of workforce and shareholders EUR 1,772m

Increasing quality of life through product use and Biofore Share and Care programme

OUTCOME & IMPACTS

Impact valuation of recreational use of UPM forests EUR 85m*

Health impact on employees and contractors

Impact valuation of landfilled waste EUR –16m*

Multiplicative effects of value added EUR 2.8 billion

Enhanced business practices in the value chain

Employee skills enhanced

Impact valuation of GHG emissions EUR –73m*

Read more: www.upm.com

CONTENTS

UPM Annual Report 2017 74

UPM Annual Report 2017 75