UPM Annual Report 2019

People

developing their skills. We aim for all employees to have an individual development plan. In 2019, 65% of employees had such a plan. UPM applies the 70-20-10 learning and development framework: 70% of the learning takes place on the job, 20% comes from sharing with and learning from colleagues, and 10% comes from off-the-job training. An increasingly popular learning method is digital learning. Digital learning content can be created and shared flexibly in UPM’s learning platform. It is offered more and more to develop commercial and financial skills, compliance, safety, and manager onboarding, for example. Our apprenticeship programmes are ways to ensure the required level of expertise for future employees. The programmes are typically targeted at shop-floor positions in production or maintenance. UPM conducts the programmes with regional vocational schools. In Finland and Enabling renewal through recruitment programmes

Germany, approximately 100 people join the programmes annually. Most of the graduated apprentices have continued to work at UPM. Being the employer of choice has become crucial when recruiting new employees and especially younger professionals. We have organised several successful graduate programmes in recent years and will continue to do so annually. We continuously develop our employee experience using a design thinking approach. In 2019, the focus was on creating a smooth and engaging onboarding experience for people joining UPM. Following our systematic employer branding work, our position among students and professionals has been recognised by external parties in Finland and China. Leading by example Achieving our ambitious targets requires the committed input of skilled people and teams, empowered by inspiring leaders.

97% Full time 21% Women 88% Permanent 60% Shop-floor

3% Part time 79% Men 12% Fixed term 40% Salaried

Employee engagement and enablement index

100

90

80

ENABLING PEOPLE GROWTH

70

60

50

15

16

17

18

19

Response rate (%) Employee Engagement Index Employee Enablement Index

Engagement and enablement favourable responses above external high performance norm

TARGETS 2030

Our people and their capabilities, integrity and drive set UPM apart and drive our success. Our culture of Aiming Higher sets the tone for everything we do and encourages all UPMers to develop, as individuals and as a company. Our values –Trust and be trusted, Achieve together and Renew with courage – guide us along the way.

71% achieved for engagement index. 3%-points below external norm. 74% achieved for enablement index. On par with external norm.

issues related to our business environment and changes within the company. The forum organises regular meetings for employee representatives from business units operating in Europe. There are also cooperative bodies in UPM countries, operating based on country-specific rules, regulations and UPMpractices. The aim is to promote employee participation and dialogue between UPM business areas and country management, and employee representatives and employees on a national level. We continuously measure our progress, and the results illustrate successful development in engaging our people. The annual UPMEmployee Engagement Survey (EES), which invites all employees across the company to evaluate distinct aspects of their working environment every year, has a high participation rate of 84% (84%). This indicates that UPMers are keen to improve their workplace. The survey shows that employee engagement has improved steadily over the last ten years, from 55% in 2010 to 71% in 2019. Encouraging learning In the changing and increasingly complex business environment, enhancing employees’ capabilities and wellbeing is important for both business success and sustained employability. Ensuring high performance and continuous professional development is UPM’s long-term goal. We are determined to be a responsible and attractive employer, now and in the future. We encourage our employees to pursue professional growth and support them in

Continuously aiming higher Building a culture of Aiming Higher is essential to our success in today’s rapidly changing world. While it sets our tone, our values remain the foundation of who we are. Our strengths are our accountability and performance-driven approach. In the future, we want to focus more on innovation and being more outward looking, as well as agility and co-operation across boundaries. Our aim is to increase employee motivation to drive performance. We also want to better differentiate and reward high performance. As a result, we introduced the Enabling Performance approach, which encompasses frequent and forward-looking manager-employee discussions, agile goal setting and regular feedback from relevant stakeholders. The results have been good and according to the annual UPMEmployee Engagement Survey (EES), all these aspects have improved from the previous year. In 2019, Enabling Performance has expanded to cover most salaried employees. Engaging employees We are committed to active employee participation and consultation, organised in accordance with international and national rules and regulations. We offer various forums to facilitate continuous dialogue between employees and business management, and there are new communication tools and channels that ease and enhance dialogue within and across teams. UPM continues its cooperative body, the UPMEuropean Forum, which focuses on

SIGNIFICANCE • The capabilities, integrity and drive of our people make us unique

TARGETS • Aim higher in performance • Lead with passion • Embrace the limitless opportunities • Raise the bar in our safety performance

OUR WAY • Lead according to UPM values and with integrity • Develop an inclusive and diverse work environment • Engage employees • Enable performance with agile goal-setting and feedback • Invest in the growth of our people and develop new competences • Provide a safe and healthy working environment and foster the wellbeing of employees and contractors

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OUR WAY

OUR WAY

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS