UPM Annual Report 2020

ENABLING PEOPLE GROWTH

sources of learning. As the global pandemic has changed our ways of working, we have introduced new e-learning content and pro grammes. These materials provide support to leaders in managing their teams remotely and encourage individuals to strengthen their self-leadership skills and resilience. Launched in 2017, our learning platform enables employees to share digital learn ing content flexibly. Additional e-learning content is offered to develop commercial and financial skills, compliance, safety and leadership, for example. Developing employee experience and enabling renewal 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. We carry out the programmes with regional vocational schools. In Finland and Germany, approx imately 100 people join the programmes annually. Most of the graduate apprentices have continued to work at UPM. Being the employer of choice has become crucial when recruiting new employees and especially younger profes sionals. We have organised several success ful graduate programmes in recent years. We have extended our employer brand to new areas with growth initiatives. Developing UPM employee experience is an integral aspect in developing UPM as a workplace. We use a design-thinking approach and enable employees to contrib ute to projects. We created a smooth and engaging onboarding experience for people joining UPM and fixed targets for UPM career experience in 2020. Following our systematic employer branding work, our position among stu dents and professionals was 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. We continuously invest in developing leadership capabilities and management teams. Our development programmes sup port the three cornerstones of leadership at UPM: leading oneself, leading people and

Full time 97% Women 22% Permanent 91% Shop-floor 59%

Part time 3%

Employee engagement and enablement index

100

90

Men 78% Fixed term 9% Salaried 41%

80

70

60

50

16

17

18

19

20

Response rate (%) Employee Engagement Index Employee Enablement Index

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 to journey beyond fossils and active dialogue • Enable performance with agile goal setting and feedback • Invest in the growth of our people and develop new capabilities • Provide a safe and healthy working environment and foster the wellbeing of employees and contractors regular meetings for employee repre sentatives from business units in Europe. There are also co-operative bodies in UPM countries, which operate in accordance with country-specific rules, regulations and UPM practices. The aim is to promote employee participation and dialogue: dialogue between the business areas and country management, and between employee representatives and employees on a national level. We continuouslymeasure our progress, and the results illustrate successful devel

Engagement and enablement favourable responses above external high-performing norm 71% achieved for engagement index. 2 pp below external high-performing norm. 75% achieved for enablement index. 2 pp above external high-performing norm.

TARGETS 2030

opment in engaging our people. The annual UPMEmployee Engagement Survey (EES) invites all employees across the company to evaluate distinct aspects of their working environment every year. The high participa tion rate of 83% (84%) indicates that UPMers are keen to improve their workplace. The survey shows that employee engagement has improved from55% in 2010 to 71% in 2020. Encouraging learning In a changing and increasingly complex business environment, enhancing employ ees’ capabilities and wellbeing is important for both business success and sustained employability. Our long-term goal is to ensure high performance and continuous professional development. We are deter mined to be a responsible and attractive employer now and in the future. We invest in the growth of our people and expect development from individuals. All employees are encouraged to create an individual development plan and keep it up to date. In 2020, 63% of employees had development plans. UPM applies the 70-20-10 learning and development framework: 70% of the learn ing takes place on the job, 20% comes from sharing with and learning from colleagues, and 10% comes from off-the-job training. Digitalisation is enriching our ways and

Our people and their capabilities, integrity and drive set UPM apart and drive our success. Our culture of Aiming Higher 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.

UPM’s personnel by business area 2020

Other operations 4% UPM Plywood 13% UPM Biorefining 15% UPM Specialty Papers11% UPM Raflatac 17% UPM Energy 0%

UPM Communi cation Papers 40%

Building a culture of Aiming Higher is essen tial to our success in today’s rapidly changing world. While it sets our tone, our values remain the foundation of who we are. We are accountable and performance driven. In the future, we want to focus more on innovation, cooperation across boundaries and becoming more outward-looking and agile. Our aim is to increase employee motiva tion to drive performance. We also want to better differentiate and reward high perfor mance. Our Enabling Performance approach 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. 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 manage ment, and there are new communication tools and channels that ease and enhance dialogue within and across teams. Our co-operative body, the UPMEuro pean Forum, focuses on issues related to our business environment and changes within the company. The forum organises

TARGETS 2030

95% favourable responses in the Diversity and inclusion index 71%

favourable in Employee Engagement Survey 2020

70

71

UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020