UPM Annual Report 2019

Products

LIFELONG PRODUCT STEWARDSHIP

Product stewardship must cover the entire value chain, from the sourcing of raw materials to the end products and their recycling or disposal. Bio-based and recyclable products, as well as innovations based on these, are an essential part of the bioeconomy. Open and transparent communication about products, supported by ecolabels, certificates and product declarations increases consumer awareness. UPMproducts help to mitigate climate change by replacing fossil-based products with bio-based renewable alternatives. Carbon bound from the atmosphere remains in our products over its lifetime, even if they’re recycled several times. Sustainable management of forests and plantations — the main sources of our raw materials — allows them to continue functioning as carbon sinks. UPM also actively develops solutions based on the circular-economy model, in which materials circulate and products generate added value. Our target is to provide solutions that improve our customers’ business processes — creating mutual benefit and societal value. Biomedical products, as well as our pharmaceutical and healthcare labelling solutions, are examples of where we create direct societal value. UPM’s Rafcycle® programme for label-paper waste and the recycling of recovered graphic paper are examples of the added value created by a circular economy. Continuous dialogue and collaboration with customers UPM’s businesses offer a variety of products and services. Each business has its own customer-management process and way of interacting with customers. A comprehensive understanding of each market, knowledge of the end uses of products and an appreciation of the needs of our customers all underpin our approach to customer relationship management. Our dialogue with customers is continuous. We are also engaged in various development projects with our customers. Many of these projects are linked to product development and supply-chain efficiency. Our businesses conduct regular customer-satisfaction surveys. Based on these results, overall satisfaction with UPM as a supplier is 86% (86%). These surveys also help us to define our areas for development. Product safety, forest Mitigating climate change and creating value for society

Declarations, provide information on rawmaterials, emissions and other environmental features. Product safety profiles show how products comply with relevant product and chemical regulations. Wood-origin statements provide information on the species and country of origin of the wood. Ecolabels help customers make responsible choices. UPM is the world’s largest producer of EU ecolabelled graphic papers. The EU Ecolabel is available for all UPM graphic papers in Europe. In 2019, UPM renewed its EU Ecolabel application and received certification in accordance with the tightened EU Ecolabel criteria. We also give our customers the opportunity to use well-known local ecolabels, such as the German Blue Angel or the Nordic Ecolabel. All UPM businesses have FSC® and PEFC™ chain of custody certification. In 2019, UPM Raflatac’s label-grade RAFNXT+ was the world’s first label material verified by the Carbon Trust to help mitigate climate change. The range uses less rawmaterials, energy and water, and generates less waste during its life cycle, compared to standard labels. This results in a concrete positive impact on the climate.

certification, resource efficiency and recyclability are some of the most important factors for our customers. Climate actions and mitigating climate change have become increasingly important topics. The ecodesign approach Ecodesign is integrated into our product development in all businesses. We are committed to minimising the environmental impact of our use of materials and our manufacturing processes across the entire value chain and whole product lifecycle. We’re also developing a way to integrate UN Sustainable Development Goals into our product development process. Life cycle assessments (LCAs) are an important part of the ecodesign tool box. environmental impacts of our materials and production processes. The results are also used for UPMRaflatac’s Label Life service, UPMPlywood’s Environmental Product Declarations and to calculate the carbon footprint of pulp and paper products, biofuels or naphtha. We use LCAs to provide reliable, documented information on the Product safety Since its launch in 2010, the UPM Restricted Substances List has been our main tool for communicating product safety requirements to our chemical and raw-material suppliers, as well as our customers. Since 2018, we have participated in a Pulp & Paper Value Chain Information System development project with several chemical suppliers. The aim is to increase transparency in the supply chain and accelerate the exchange of information. The ISO 9001 quality and ISO 22000 food safety management systems provide a framework for continuously improving our performance. All UPMproduction sites are ISO 9001-certified. All of our pulp mills, and the European UPMRaflatac and UPM Specialty Papers sites have a certified ISO 22000 food safety management system. In 2019, the UPMChangshu paper mill was licensed to produce papers for food contact. This means we can offer a number of products that are designed and produced to meet food packaging requirements. Ecolabels and product declarations UPM’s product declarations provide customers with transparent information about products and the supply chain. Product profiles, such as Paper Profile or UPMPulp’s Environmental Product

As the population grows and consumption increases, renewable raw materials and recycling must increasingly be used to replace fossil materials and other non-renewable natural resources. This is an opportunity for both UPM and its customers.

Sustainable and safe products on page 8 Circular economy on page 96 upm.com/responsibility

PULP AND BIOFUEL BASED MATERIALS

SIGNIFICANCE • Global megatrends are driving demand for sustainable and safe solutions • Renewable wood and recyclable products reduce the world’s dependency on fossil-based and other non-renewable raw materials TARGETS • Innovating renewable and responsible solutions for a future beyond fossils • Taking care of the entire life cycle • Creating value for customers OUR WAY • Recyclable products made from renewable and biodegradable raw materials • Strong commitment to long-term customer relationships • Co-operating across the value chain • Ecodesign approach, which includes circular-economy thinking • Using the Restricted Substances List and improved chemical management to enhance product safety • Open and transparent communication about products • Focus on 2030 responsibility targets

Products eligible for ecolabelling %

LABEL MATERIALS

100

90

WOOD MATERIALS

80

70

60

OFFICE PAPERS

50

Target

16

17

18

19

SPECIALTY PAPERS

TARGETS 2030 100% of applicable products eligible for ecolabelling

83% achieved

ELECTRICITY

82

83

OUR WAY

OUR WAY

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS