UPM Annual Report 2020

RESPONSIBLE WATER USE Water has a crucial role in our business, from sustainable forestry to production. It is also an important source of renewable energy.

As a signatory of the UN Global Compact’s CEOWater Mandate, we follow recognised principles in water stewardship. We aim to use water in a way that is environmentally sustainable, socially equitable and econom ically beneficial. CDP recognised UPM as one of the only ten Triple A List companies globally for its significant actions to enhance water stewardship. Thewater we need for our pulp and paper production processes is circulated and reused asmuch as possible. Only a small proportion eventually leaves the process as effluent and needs to be replacedwith freshwater. Approx imately 95%of thewater we use in our paper mill processes is internally recirculated, and thus only 5% is replaced by freshwater. Using less water alsomeans using less electricity, fewer chemicals and less thermal energy. All effluents from our pulp and paper mills are cleaned in both mechanical and biological effluent treatment processes. We operate a global water specialist network to share best practices and get the best possi ble treatment results. We continued testing several potential sources of recycled nutrients and mapping opportunities for cooperation across all UPM sites. For example, UPMKymi started to use biogas plant reject water with the tar get of replacing 50% of the urea used as the nutrient. In Germany, UPMHürth started to replace 100% urea with chemical industry side stream ammonium sulphate. Testing will continue at several mills in 2021. Continuous improvement in water management

All pulp and paper mills have prepared a roadmap in order to reach their targets for reducing water use and effluent load by 2030. The exceptional year 2020 caused challenges at several mills, but there is also positive development in sight. For exam ple, at UPM Pietarsaari an improved pulp line and better washing efficiency resulted in a 9% reduction in specific wastewater volumes per tonne of pulp. Optimisation of UPM Changshu’s operations continued and process waste water volumes decreased further by 14% per tonne of paper. The mill received the Water Efficiency Front Runner award in October for the second time. Addition ally, several mills started to use advanced process controls or predictive analytic models to further optimise the operation of the treatment plant. Exploring new ways of working, new technologies and new partnerships with potential chem ical and machinery suppliers continued in 2020 and some of these technologies were piloted in 2019–2020. The work will continue in 2021. Collaboration with stakeholders Our responsible water use highlights the importance of water resources and good water management all over the world. For example, UPMRaflatac is collaborating with WWF Poland in the Rivers for Life project. In Finland, UPM is actively co-op erating with the Baltic Sea Action Group to find new sources of recycled nutrients. This collaboration promotes our 2030 responsi bility target to use only recycled nutrients in our wastewater treatment plants.

Process waste water volumes

m 3 /t

50

40

30

20

10

SIGNIFICANCE • Water resources around the world are scarce and each watershed is unique • Forests play a crucial role in the water cycle • Water is an essential resource in pulp and paper production TARGETS • Use water responsibly • Minimise the negative impact of our operations on water resources OUR WAY • Water-intensive operations in areas with sufficient water resources • Efficient water use with appropriate recycling techniques • Treatment of used water according to the Best Available Techniques • Returning water to its original watershed when possible • Cooperation with local stakeholders to minimise negative impacts and ensure the availability of water for everyone • Focus on 2030 responsibility targets

0

16

17

18 19

20

Target

08

Per tonne of paper Per tonne of chemical pulp

30% reduction of wastewater volume by 2030 from 2008 level

TARGETS 2030

10% reduction achieved

for the UPM average product

TARGETS 2030

40% reduction in effluent load (COD) from 2008 level by 2030

impacts, we work closely with authorities and other stakeholders. In 2020, our migratory fish programme continued in Finland. The Saimaa land locked-salmon breeding and nursery area in Pielisjoki was inaugurated and the old mill and mill damn at the Sapsokoski rapids were dismantled. We are participating in a research programme and evaluating new restoration locations.

Minimising the impact of hydropower facilities UPM has been a hydropower producer for over a century, and UPMEnergy is the second-largest electricity producer in Finland. While hydropower is a cost- effective, renewable and CO 2 -free way to generate electricity, it can also have an adverse impact on watercourses and their surroundings. In order to minimise these

33% reduction achieved for the UPM average product

92

93

UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020