UPM Annual Report 2018

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

Summary of our societal impacts

UPM

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.

RAW MATERIALS

Paper 9.1m t PRODUCTS

PEOPLE

Nitrogen oxides 9,300 t EMISSIONS TO AIR

Number of b-to-b suppliers 24,000

Wood 27.6m m 3

Employee engagement index 71% favourable Training hours per employee 12 Total recordable injury frequency incl. contractors 6.6 Lost-time accident frequency incl. contractors 2.9

Number of customers 12,600

Recovered paper 2.5m t

Chemical pulp 3.5m t

54 production sites in 12 countries

Sulphur dioxide 1,200 t

DIRECT UPSTREAM

People using UPM products over 230 million

INDIRECT UPSTREAM Forest owners in Finland supplying wood to UPM 18,500

Minerals 2.3m t

Converting materials 0.6m t

Particulates 920 t VOC 420 t Fossil CO 2 (scope 1) 3.0m t

Our activities and products have impacts on society. Understanding these impacts is a prerequisite to develop

DIRECT DOWNSTREAM

Market pulp 1.9m t

Plywood and veneer 1.0m m 3

INDIRECT DOWNSTREAM

Value of products eligible for ecolabelling EUR 9.0 billion

Supplier and Third Party Code qualified supplier spend 83%

emissions

Purchased paper for converting 0.4m t Plastics, adhesives, resins, films 0.2m t Co-mingled domestic waste 0.2m t Costs, raw materials EUR 4.8 billion

Sawn timber1.8m m 3

our operations. The evaluation covers

Electricity and heat 11,000 GWh

Virgin materials replaced 3.5m t Carbon stored in UPM products 18m t

Certified wood 81%

our value creation from economic, social and environmental perspective.

840,000 ha forests and plantations

Percentage of wood origin known 100%

By-products 1.0m t

EMISSIONS TO WATER

Seedlings planted 70 million

Process wastewater 210m m 3

Fossil CO 2 emissions (scope 3 downstream) 3.5m t Biofore Share and Care donations and sponsor- ships EUR 2.1m distributed to 340 groups

Cooling water 200m m 3

UPM forests available for free recreation use 587,000 ha

Biological oxygen demand (7days), 7,300 t Chemical oxygen demand 64,000 t

19,000 employees

Sales EUR 10,483m

Ecosystem services EUR 430m

Comparable EBIT EUR 1,513m

Approx. 93,600 shareholders

WATER UPTAKE

Adsorbable organic halogens 250 t

Fossil CO 2 emissions (scope 2 & 3 upstream) 6.7m t Water intensive production sites located in water abundant areas 100%

Surface water 460m m 3

Comparable ROE 12.9%

Ground water 17m m 3

Dividend distribution EUR 613m

Communal water 4m m 3

Employee wages and benefits EUR 1,193m Corporate income taxes paid and property taxes EUR 283m

SOLID PROCESS WASTE

Restricted chemical substances in UPM screening 6,000

Capital employed EUR 10,575m

To landfills 102,000 dry t

ENERGY

To temporary storage 7,500 dry t

New hires 2,600

Renewable fuels 27,500 GWh

Net debt EUR –311m

To incineration without energy recovery 1,500 dry t Hazardous waste for special treatment 6,000 t

Payments to providers of loans EUR 35m 370 granted patents and patents validations

Fossil fuels 11,600 GWh

Market cap EUR 11,813m

Purchased electricity and heat 13,600 GWh

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 ( * ) . In 2018, UPM piloted a new approach for net impact analysis. Read more on page 25.

Purchase power of workforce and share- holders EUR 1.8b Multiplicative effects of value added EUR 3.0 billion

Increasing knowledge and quality of life through our products

Vitality and prosperity for sphere of influence

Climate change mitigation through UPM's climate actions

Biodiversity enhanced

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

Impact valuation of recreational use of UPM forests EUR 80m*

Health impact on employees and contractors

Impact valuation of net carbon binding of UPM forests EUR 13m*

Impact valuation of landfilled waste EUR –16m*

Enhanced business practices in the value chain

OUTCOME & IMPACTS

Employee skills enhanced

Impact valuation of GHG emissions EUR –200m*

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CONTENTS

UPM ANNUAL REPORT 2018

UPM ANNUAL REPORT 2018