UPM Annual Report 2020

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

The rules for sponsorships, donations and employee volunteering were also updated in 2020. Employee volunteering emphasises local commitment and impact. UPM’s employees can spend up to eight hours per year on local volunteering work during their working hours. In 2020, volunteer ing took also virtual forms. For example, UPMers participated in several reading

and learning projects in different coun tries. In addition, UPM spent approxi mately EUR 1.3 million (1.2 million) on local sponsorships and other contributions aiming to support the vitality of UPM’s production locations. The figure includes support for the Uruguayan UPM Founda tion which continued with a contribution of USD 465,000 (USD 400,000). The foun dation supports and encourages training,

entrepreneurship, employment, healthy living and entertainment in local com munities in the Uruguayan countryside. EUR 499,500 (474,000) was donated to charities or other non-profit causes such as the Children and Youth Foundation, Finnish Forest Association, China Green Foundation, Baltic Sea Action Group and the education initiative Polku of the Uni versity of Jyväskylä.

Customers

Communities

Media

Employees

UPM’S MATERIALITY ANALYSIS 2020

Researchers

regularly. A web-based tool enables stakeholders to answer anonymously. The surveys can also be targeted to specific stakeholder groups and topics. The most recent survey was carried out in 2019. Results of the survey are gathered and analysed by an independent third party and used to support UPM’s wider evaluation. Most material econom ic, environmental and social responsibility topics identified in the analysis are presented below. UPM’s responsibility focus areas and targets (pages 22–23) reflect these material aspects. We do not distinguish between topics within the section and consider them all equally material.

The materiality analysis of UPM’s responsibility issues covers topics that directly or indirectly influence the ability to create, maintain or acquire eco nomic, environmental or social value for UPM, its stakeholders and society. Analysis is carried out annually, based on a follow-up of the interests and concerns of various stakeholder groups, including communities, employees, NGOs, customers, suppliers, government and regulators, investors, research ers and media. All customer questions and stakeholder concerns received during the year are taken into consideration. We also conduct specific stakeholder surveys

Investors

NGOs

Governments and regulators

We play a significant societal role in many countries, and our operations impact econo my, employment and environment. Therefore, it is important to continuously engage in dialogue with our stakeholders and discuss about our plans and hear thoughts and concerns. In 2020, we announced several measures to ensure our competitiveness. The rationale for the decisions and the concern for the development of the business environment were brought up in many discussion forums and through the media in Finland. Our aim is to draw attention to the external factors affecting companies’ investments and the opportunities to develop a long-term indus trial policy. We have engaged in continuous dialogue with our stakeholders about topics such as competitiveness, taxation, regulations and labour market issues. Other important forums for discussion include local forest industry trade associations. Whether it be Finland, Uruguay, Germany or the UK, we want to be part of societal discussion as part of our corporate responsibility. SOCIETAL ROLE REQUIRES GOOD DIALOGUE CASE

Suppliers

permit authorities. In 2020, we collabo rated with different parties to integrate our responsibility targets into the company’s long-term financing and published a new Green Finance Framework, rated with the highest-grade, CICERO Dark Green. Emphasis on local communities and impacts Our mills in Europe, China and Uruguay can be among the biggest employers and tax payers in the locations where they operate. In Uruguay, we have been building a second pulp mill since 2019. Stakeholder engage ment around the project has been active (page 45). All in all, we aim for engagement and open dialogue with local communities. For example, our Kymi and Kaukas mills have their own forums for local dialogue. We co-operate with local schools and education networks, organising virtual events, for example. In addition, it is crucial for us to have active dialogue with local forest own ers, neighbours of harvesting sites and other individuals involved in forest management. Our EMAS (EU Eco-Management and Audit Scheme) statements cover societal

impacts in addition to environmental per formance, providing more detailed infor mation on the local impacts of our pulp and paper mills. The EMAS statements also include information on co-operation with local stakeholders, such as sponsorship of local organisations or co-operation with educational institutions. These mill-spe cific statements complement UPM’s cor porate responsibility reporting. They are compiled annually and published on the UPMwebsite. Biofore Share and Care programme continues UPM’s Biofore Share and Care programme demonstrates our dedication to respon sibility through sponsorships, donations and employee voluntary work. We share our resources with causes that respect sustainable development and work in line with our purpose and values. In 2020, we directed support to our focus areas: reading and learning, responsible water initiatives, bio-innovations and community engage ment. UPM does not financially support political parties or individual candidates.

Significance for stakeholders MEDIUM HIGH MEDIUM

ECONOMIC • Competitiveness • Compliance, ethics and values

• Corruption and bribery • Responsible sourcing

ECONOMIC • Regulatory environment • Risk and opportunity management • Selling ethics • Taxation

SOCIAL • Decent work • Diversity and inclusion • Responsible restructuring • Health and safety

ENVIRONMENTAL • Circular economy and resource efficiency • Climate change • Product stewardship • Responsible forest management and biodiversity

ENVIRONMENTAL • Sustainable land use • Third-party verified management systems

SOCIAL • Local engagement • People development and talent attraction • Employee engagement • Child and forced labour

HIGH

Significance for UPM

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UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020