UPM Annual Report 2020

RESPONSIBILITY ACROSS PRODUCT LIFECYCLE

Ecodesign integrated into our product development We are committed to contributing to the recyclability of our products. We also aim to minimise the environmental impact of the whole product lifecycle, including the use of materials and manufacturing processes across the entire value chain. In 2020, we renewed our sustainable product design concept. One step was the updating of our ecodesign questionnaire to cover the UN Sustainable Development Goals (SDGs). We carried out a pilot case in the development of sustainable lignin products. In 2021, the work will continue with sustainable packag ing and other business areas. Special focus in sustainable product development will be put on circularity. Life cycle assessments (LCAs) are an important part of the ecodesign toolbox. We use LCAs to provide reliable, documented information on the environmental impacts of our materials and production processes. The results are also used for UPMRaflatac’s Label Life service, UPM Plywood’s Envi ronmental Product Declarations and to calculate the carbon footprint of pulp and paper products, biofuels and naphtha. Product safety requirements renewed The ISO 9001 quality and ISO 22000 food safety management systems provide a framework for continuously improving our performance. All our production sites are ISO 9001 certified. All our pulp mills, UPM Raflatac sites and UPM Specialty Papers production lines in Europe and UPM Changshu PM3 have a certified ISO 22000 food safety management system. In 2020, UPMChangshu paper machine 3 received FSSC 22000 certification and passed the audit for the Chinese food safety standard QS. This allows us to offer a number of products that are designed and produced to meet food packaging requirements. In 2020, we developed the way in which we communicate our product safety requirements to our pulp, paper, chemical and rawmaterial suppliers as well as to our customers. As a result of collaborating with a number of paper and chemical companies to increase transparency in the supply chain and to accelerate the exchange of informa tion, a new “Pulp & Paper Harmonized Ques tionnaire” was introduced. The question naire enables us to pre-assess the chemicals

As the population grows and consumption increases, fossil materials and other non-renewable natural resources are to be increasingly replaced by renewable or recycled raw materials.

used in the products andmaterials and, thus, to ensure the compliance of our products with legal requirements and additional commitments, such as ecolabel criteria. To improve our customer communication, we have created Product Safety Profiles and updated Non-UseWarranty documents. We offer product declarations and environ mental data for most of our products. They tell our customers about the environmental performance of our products and help them make sustainable choices. The product pro files provide information on the rawmateri als used, emissions and other environmen tally relevant data. Product safety profiles show how products comply with relevant product and chemical regulations. Wood-or igin statements provide information on the species and country of origin of the wood. Most of our products are certified with widely recognised ecolabels. The EUEcolabel can be used for all UPMgraphic papers in Europe. We also give our pulp and paper customers the opportunity to use well known local ecolabels, such as the German Blue Angel or the Nordic Ecolabel. Our biofuel production has certification from RSB (Roundtable on Sustainable Biomateri als) and ISCC (International Sustainability and Carbon Certification). Also, UPMFormi production in Finland and four of UPM Raflatac’s production sites have ISCC PLUS certification (readmore on page 50). UPM Raflatac’s label grade RAFNXT+ was the world’s first label material verified by the Car Ecolabels and product declarations increase transparency

Products eligible for ecolabelling %

Product stewardship covers the entire value chain, from rawmaterial sourcing to 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 transpar ent product communication, supported by ecolabels, certificates and product declara tions, increases consumer awareness. Mitigating climate change and creating value for society Our products help to mitigate climate change by replacing fossil-based products with bio-based renewable alternatives. The products store carbon for the entire duration of their lifecycle, especially when recycled multiple times. We actively develop solutions based on the circular economy model. Our target is also to provide solutions that improve our customers’ business processes and per formance — creating mutual benefit and societal value. Our innovative and sustain able wood-based biomedical products, as well as our pharmaceutical and healthcare labelling solutions, are examples of where we create direct societal value. Many of our products are made from our side streams and residues or frommaterials recovered after product use, thus supporting circular economy (read more on page 94). Continuous dialogue and collaboration with customers UPM’s businesses offer a variety of products and services. Each business has its own cus

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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 • Creating innovative renewable and responsible solutions for a future beyond fossils • Taking care of the entire lifecycle • Enabling consumers to make more sustainable choices OUR WAY • Focus on recyclable products made from renewable or recycled raw materials • Strong commitment to long-term customer relationships • Co-operation across the value chain • Commitment to ecodesign and UN Sustainable Development Goals in product development • Improved chemical management to enhance product safety • Open and transparent product communications • Focus on 2030 responsibility targets

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50

16

17

18

19 20

Target

TARGETS 2030

100% of applicable products eligible for ecolabelling by 2030 82% achieved

bon Trust to helpmitigate climate change. All UPM businesses have FSC® and PEFC chain of custody certification. It verifies the origin of the wood and guaran tees that all wood used in our products is legally harvested from sustainably managed forests and does not originate from contro versial sources. Innovating for the future on page 32 Responsible sourcing on page 80 Sustainable forestry on page 86 Circular economy and resource efficiency on page 94

tomer-relationshipmanagement process and way of interacting with customers. A com prehensive understanding of eachmarket, knowledge of the end uses of products and an appreciation of the needs of our customers all underpin our approach to customers. We have a continuous dialogue with our customers and also engage in various devel opment projects with them. Many of these projects are linked to product development and supply-chain efficiency.

Our businesses conduct regular cus tomer-satisfaction surveys. Based on these results, overall satisfaction with UPM as a supplier is 86% (86%). They also help us to define our areas of improvement. Product safety, forest certification, origin of wood and environmental topics such as ecolabels and carbon footprints are some of themost important factors for our customers. Fur thermore, actions tomitigate climate change have become increasingly important topics.

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UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020