UPM Annual Report 2019

Production

2,900

100% Production sites with certified environmental management system

Preventive environmental observations and near-misses reported

Management systems are supporting our continuous improvement process and resource efficiency efforts. Since 2018, all of our production sites have a certified ISO 14001 environmental management system. And almost all of our production sites and wood-sourcing operations have integrated management systems for environmental protection, quality management and occupational health and safety in accordance with ISO 14001, ISO 9001 and OHSAS 18001 standards. To improve energy efficiency, many of our mills have energy management systems certified under ISO 50001 or the Finnish ETJ+ system. All European pulp and paper mills, as well as the UPMFray Bentos pulp mill in Uruguay and the UPMChangshu paper

mill in China, adhere to the EU’s Eco- Management and Audit Scheme (EMAS). In 2019, all UPM business areas updated their plans for achieving our 2030 environmental targets regarding water, waste and air. This guarantees continuous improvement efforts towards our common targets. We invest in maintenance and process improvements in order to continually optimise the environmental performance of our production. In 2019, environmental investments totalled EUR 17 (16) million. The single largest investment was at Jämsä River Mills, where an urea feeding system was installed to two boilers to reduce NO X emissions. UPM’s environmental costs, which are mainly attributable to effluent treatment and waste management, totalled EUR 123 (121) million, including depreciation. Minor environmental non- conformances No major environmental incidents occurred at our production plants in 2019 and no significant fines were paid as a result of non-conformances. However, a total of 20 (26) temporary deviations from permit limits or environmental limits set by UPM occurred at the mills over the course of the year. Most deviations were related to minor contraventions of air- and water-emission limits (6 and 12, respectively). UPM immediately reported any deviations to the authorities and, where relevant, to local stakeholders. Appropriate measures were taken to normalise the situation and prevent similar occurrences. All sites systematically follow up any deviations, proactively report observations and near misses, carry out walks and discussions, and compile detailed risk assessments. Since 2016, UPMhas used a global One Safety reporting tool for the management and reporting of both safety and environment-related operations. Investments in environmental performance

IMPROVING RESOURCE EFFICIENCY

We are using materials, water and energy in a responsible and efficient manner, and aim to continuously reduce our environmental impact.

SIGNIFICANCE • Global megatrends such as population growth lead to resource scarcity and competition for natural resources • Resource efficiency eases the pressure on resources and the environment and brings competitive advantages

CASE

OUR LONG-TERM CLEAN RUN PROGRAMME SUPPORTS CONTINUOUS IMPROVEMENT We launched the company-wide Clean Run programme in 2012 to improve our environmental performance. In the past eight years the progress has been excellent; environmental awareness has significantly improved and the number of deviations from the programme has decreased from 93 in 2013 to 20 in 2019. Compared to 2018, the number decreased by a fifth. The severity of deviations has also decreased. In spite of the results, there is still room for improvement, as our ultimate goal is zero deviations. Internal processes, such as audits, environmental walks and reporting of results play an important role in this progress. In 2019, we carried out approximately 40 internal Clean Run audits at our production sites and terminals, organised 1,900 environmental walks and reported 1,940 observations and 960 near misses. The Clean Run programme has developed from reporting and best- practice-sharing to a holistic process to manage environmental issues. Certified environmental management systems are in place at production sites, and the Clean Run programme helps to bring environmental issues to the forefront of everyday work. We are continuing to develop the programme, with the aim of creating a stronger link to achieving our 2030 environmental targets.

The number of environmental deviations at UPM production sites

TARGETS • Continuous improvement of efficiency • Excellent environmental performance • Accountability and compliance • Minimising negative impacts of operations OUR WAY • Certified management systems • UPM’s Clean Run programme • Use of Best Available Techniques (BAT) • Credible and transparent reporting • Focus on 2030 responsibility targets

50

40

30

20

10

0

15

16

17

18

19

Environmental performance on page 136 (Report of the Board of Directors) and at upm.com/ responsibility Responsible water use on page 94 Reducing energy use and emissions to air on page 90

92

93

OUR WAY

OUR WAY

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS