UPM Annual Report 2018

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UPM AT A GLANCE

STRATEGY

BUSINESSES

SOCIETY AND ENVIRONMENT

GOVERNANCE AND COMPLIANCE

REPORT OF THE BOARD OF DIRECTORS

FINANCIAL STATEMENTS

AUDITOR’S REPORT

OTHER FINANCIAL INFORMATION

Total recordable injury frequency and lost-time accident frequency, UPM workforce

Absenteeism due to sickness and accidents at work, UPM employees % absence hours/ theoretical working time

CONTINUOUS SAFETY IMPROVEMENTS

We have adopted a systematic approach to health and safety management. Our proactive safety culture is based on company values, the UPMCode of Conduct and our health and safety policy, UPM Safety Rules. The Safety Rules, which connect UPM’s safety vision to everyday activities, were updated in 2018. We have communicated the key messages, such as UPM safety principles explaining our expectations for employee and contractor priorities and accountability. In 2018, our OHS focus areas were risk management and contractor safety. We have continued our work on the six life-saving standards and identification of the top five risks, as well as OHS auditing. Annual safety audits are an integral part of our OHS management system. Cross-functional auditing provides valuable feedback about selected OHS processes and daily activities. Strengthening a proactive safety culture We actively use the global One Safety tool for proactively reporting safety incidents. All employees of UPM and our contractors are required to report all near-misses and to make safety and environ mental observations. This open and transparent tool supports us in achieving the objectives we have set and allows us to proactively share the insights gained from incidents across the company. The UPMOne Safety tool also supports effective safety steering and OHS risk management. In 2018 we developed safety competencies and strengthened OHS processes, and a new e-learning module “Day 1 Safety Challenge” was introduced for new UPM employees. The module explains what is meant by the UPM safety mindset and what is expected of every UPM employee when it comes to safety. Incident investigation training was also organised for every business area. Promoting employees’ health and wellbeing We are working closely with employees and external occupational health organisations to support the wellbeing of our personnel. Our aim is to support the continuous improvement of employees’ health, quality of life and ability to perform. We continued our quarterly global health and safety themes throughout 2018. These focused on how to stay vigilant and alert at work, how to take care of your personal mental and physical recovery, and how to avoid accidents at home and during your free time. Based on local need, we also launched several health and wellbeing initiatives at various UPM sites and in various businesses, with positive results. Nearly all UPM sites promote wellbeing and offer gym facilities, with external fitness activities frequently supported. In Finland, Germany and Malaysia, we organised major health and wellbeing campaigns during 2018. In Finland, activities covered topics ranging from physical and mental wellbeing to health and nutrition. More than 20% of UPMpersonnel participated in these activities in 2018, across all business areas and from almost every site. Zero-accident target In 2018, UPM’s lost-time accident frequency (LTAF, the number of lost-time work accidents per one million hours of work) was 2.7 (3.3). The total recordable injury frequency (TRIF) improved, reaching 6.9 (8.2). The TRIF includes LTA cases as well as cases of modified duties and accidents requiring medical treatment. A similar positive development was achieved in contractor safety. The frequency of accidents involving UPM’s contractors was 2.9 (LTAF) and 6.6 (TRIF) in 2018. Despite our efforts for continuous improvement, there were two serious accidents in 2018. The accidents were thoroughly investigated and corrective actions were taken. Key learning points were also shared in order to prevent serious accidents in the future. Our permanent target is to have zero accidents, with good safety performance recognised through company-wide safety awards. In 2018, the UPMAugsburg paper mill in Germany received the UPM Safety Award for making long-term improvements (read more on page 43).

15 16 17 18

18 17 16

UPM Energy

UPM Raflatac

UPM Plywood

UPM Biorefining

UPM Specialty Papers UPM Communication Papers

■ Total recordable injury frequency* ) ■ Lost-time accident frequency** ) * ) Total injuries/one million hours worked ** ) Number of lost-time accidents/ one million hours worked

■ Accidents at work ■ Sick leave

2.7 2.9

Lost-time accident frequency for UPM workforce only and UPM workforce including contractors

TARGETS 2030

EXEMPLARY CONTRACTOR SAFETY MANAGEMENT IN URUGUAY The comprehensive contractor system in Uruguay covers contractor wages, working hours, safety and overall wellbeing. It is an example of working collaboration and open dialogue between UPM and its contractors. There are more than 200 contractors working at the nurseries, plantations, harvesting, transportation and pulp mill, with more than six million working hours per year. Close collaboration, safety inductions and regular trainings and feedback discussions with contractors play a key role in enhancing safety culture and practices. UPM’s safety requirements also apply to contractors. Similarly, UPM needs contractors’ support and feedback in developing work safety practices. Awareness of safe working practices and risks is at the core of security trainings. The performance has been audited regularly already for the past five years.

OUR WAY • Developing a preventive safety culture • Training personnel and contractors on safe working practices and safety requirements • Regular audits and evaluations of all safety processes • Quickly correcting identified safety issues or vulnerabilities • One Safety – a global UPM OHS tool • Close co-operation with employees and external occupational health organisations • Quarterly health-related themes • Focus on 2030 responsibility targets for preventive safety culture, LTAF, TRIF, health promotion programmes and absenteeism rates

SIGNIFICANCE • People are at the core of our business. Ensuring the health and safety of employees, visitors and all people who are impacted by our operations is of paramount importance • Employee wellbeing is founded upon a supportive working environment, a healthy lifestyle and work-life balance • Safety and wellbeing have a direct impact on employee engagement and UPM’s business success TARGET • To ensure a safe and healthy working environment and the wellbeing of employees and contractors