UPM Annual Report 2019

Stakeholders

Customers

Communities

Our Biofore strategy forms the foundation of our stakeholder dialogue. The key focus areas and activities vary locally and according to stakeholder needs. OUR MOST IMPORTANT STAKEHOLDERS

Media

Employees

Researchers

Investors

CASE

NGOs

CONSISTENT STAKEHOLDER ENGAGEMENT IN URUGUAY When UPM announced in 2016 that we were considering alternatives for long-term development in Uruguay, local stakeholder engagement gained new momentum. Throughout the planning phase, we have regularly met with numerous stakeholders. Authorities and decision-makers, local communities, UPM employees, potential employees, contractors, plantation owners, NGOs and the media have been informed about the company’s plans and the dialogue has provided the company with valuable insights into local conditions and views. Discussions, info sessions, mill visits and public hearings have been held both in Montevideo – the capital – and in Paso de los Toros, which is the location of the new mill site. Public hearings in Uruguay are part of the legal permitting process. They have been held for both the new mill and the export port to be built in Montevideo. The events provide an opportunity for open discussion and feedback to be expressed. Between 60–350 people have actively attended each of the hearings. During the design phase, the environmental and socioeconomic impacts of the mill were carefully assessed in independent studies. The results were communicated openly at meetings and on the website. Public opinion has also been regularly surveyed since 2016 and the majority of Uruguayans have expressed their support for the project. Stakeholders have been particularly interested in employment and training opportunities. Concerns were also raised regarding the environmental impact and possible social problems during the construction period. The development plan, created in co-operation with local authorities, enables the management of both environmental and social impacts. UPM’s position in the free-trade zone has also been criticised. During our 30 years in Uruguay, we have built up our stakeholder relations with local communities and parties in areas where we operate. Consistent and transparent communication is a prerequisite for success in this kind of large investment project.

Governments and regulators

Suppliers

SIGNIFICANCE • Stakeholder engagement provides UPM with predictability and a competitive advantage • Continuous dialogue with stakeholders improves understanding of key risks, challenges and opportunities in the operating environment TARGET • We aim to understand stakeholders’ needs for information and expectations for UPM and consider them in strategic development and decision-making processes OUR WAY • We engage in active dialogue with our stakeholders to discuss our operations and targets • The UPM Code of Conduct sets the standards for responsible behaviour and collaboration • Stakeholder engagement is measured by several indicators • Stakeholder relations are coordinated globally at Group level, while businesses are responsible for continuous dialogue with customers and business partners as well as the local communities

The impact of UPM’s operations extends from the local level to society at large. We aim to provide a balanced view of the economic, environmental and social aspects of our business activities. Stakeholder feedback as a tool for development Our goal is to provide our stakeholders with a clear picture of what our future course is, how we implement our Biofore strategy in practice, and how we create long-term value for our stakeholders. We disclose relevant and accurate information in accordance with market regulations to all participants in the market. During 2019, we arranged investor events, participated in industry conferences and met widely with investors in all our main markets in Europe, North America and Asia. As many of our stakeholders view UPMprimarily as an economic operator, financial success, stability, good governance, future outlook and growth were key themes discussed. Stakeholder mapping and the systematic gathering of feedback and views from different sources play an essential role in our stakeholder relations work. We analyse the feedback carefully to understand the expectations of our stakeholders and take them into consideration in our development work and decision-making. The level of stakeholder engagement is measured by several indicators, such as customer enquiries, contacts with the mills, investor relations, wood sourcing as well as number of job applications. As an example, we received more than 250 enquires or concerns from general public. Every year, we conduct a materiality analysis that highlights the most important responsibility issues for us and our

stakeholders. The analysis is based on several surveys, customer enquiries and feedback from an open web-based tool (page 65). Climate change high on the policy agenda Through public affairs work, UPM aims to foster the necessary prerequisites for its operations, particularly in Finland, Uruguay, Germany and China. Active influencing at the EU level is also important. UPM co-operates with a number of trade associations, the most important being the Finnish Forest Industries Federation (FFIF) and the Confederation of European Paper Industries (CEPI). As we enter new businesses, we also need to find new ways and forums for co-operation. UPM is a founding member of Leaders of Sustainable Biofuels (LSB), which is an EU association representing the producers and developers of sustainable biofuels with the aim of decarbonising traffic. 2019 was an exceptional year, with parliament elections both in Finland and the EU. We were active in discussions on the Finnish operating environment and the focus areas of the new government. In particular, we emphasised competitiveness, predictability, innovations and climate change solutions. Sustainable forest management and the positive climate impact of forestry were high on our agenda in 2019. Discussions on forestry were carried out with environmental organisations, certification bodies, authorities and decision-makers. Climate impact of forests is linked to the policies on land use, land-use change and forestry (LULUCF). The regulation on LULUCF has been approved at EU level and

VALUE FROM

Understanding the views and expectations of our stakeholders plays a crucial role in the success of our company and the acceptability of our operations. Active and open dialogue with our stakeholders provides valuable input for our development efforts. STAKEHOLDER ENGAGEMENT

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OUR WAY

OUR WAY

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

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