UPM Annual Report 2021

RESPONSIBILITY

BEYOND FOSSILS

STRATEGY

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2021

UPM

CREATING VALUE WITH PEOPLE

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 forumorganises regular meetings for employee representatives from business units in Europe. There are also co-operative bodies inUPMcountries, which operate in accordance with country-specific rules, regulations and company practices. The aim is to promote employee participa tion and dialogue: dialogue between the busi ness areas and country-level management, and between employee representatives and employees on a national level. After the Finn ish Forest Industries Federation resigned fromcollective bargaining, the terms of em ployment are agreed between forest products companies and trade unions (page 65). We measure our progress regularly. The annual Employee Engagement Survey (EES) has invited all employees across the company to evaluate different aspects of their work every year since 2007. The sur vey was renewed in 2021. The high participation rate of 83% (83%) indicates that UPMers are keen to improve their workplace. The new average engage ment score was 68. Aligned with the global trend, engagement decreased compared to the previous year. Outside Finland, it was close to the global benchmark of 77, while in Finland it was significantly lower. 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 invest in the growth of our people and expect individuals to develop. All employees are encouraged to create an individual devel opment plan and keep it up to date. In 2021,

ENABLING THE PERFORMANCE OF OUR PEOPLE

IMPACT • Improved performance, engagement and professional growth TARGETS • Aim higher in performance • Lead with passion • Create the future beyond fossils • Raise the bar in our safety performance OUR WAY • Lead according to our values and with integrity • Develop an inclusive and diverse working environment • Engage employees to create active dia logue and a future beyond fossils • 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

Our culture of Aiming Higher encourages all UPMers to grow, as individuals and as a company. Our values—Trust and be trusted, Achieve together and Renew with courage—guide us along the way.

CASE

DIALOGUE ON PURPOSE AND VALUES ACROSS UPM

We are determined to be a responsible and attractive employer now and in the future. Developing UPMExperience is an import ant focus area for the future. We want to make an impact that strengthens employ ees’ sense of belonging and the feeling that they are doing meaningful work; promotes productivity; increases engagement and wellbeing; and enables meaningful collabo ration as well as diversity and inclusion. According to the OHI (Organizational Health Index) survey, which measures overall organisational health, we are in the top decile of this global benchmark. The fact that our organisational health has been strengthened further since the last survey in 2017 is a sign of a job well done across the company. The OHI results also show that efforts put into people performance management have paid off. Our values remain the foundation of who we are. Building a culture of Aiming Higher is essential to our success in today’s rapidly changing world. We are accountable and performance driven, and we want to maintain these strengths while developing new ones. We have set the additional goal of becoming more human-centric and eager to learn and grow. Our aim is to increase employeemotiva tion to drive performance. We want to have fair compensation while differentiating and rewarding high performance. Our Enabling Performance approach encompasses fre quent and forward-lookingmanager-employ ee discussions, agile goal setting and regular feedback from relevant stakeholders.

In early 2021, we redefined our visionary purpose to We create a future beyond fossils. It describes why we do our work and how we can create a unique, positive impact. All UPMers play an important role in making our purpose and values come to life. To ensure that everyone has a chance to make a personal connection with the company purpose and values, and to discuss these topics with colleagues, we launched a company-wide process to initiate a dialogue on the subject. Every UPMer has received a printed guide on UPM’s purpose and values. To ensure inclusivity across UPM units and locations, the materials were produced in 18 languages. Team discussions started in late 2021 and will continue in 2022. Team lead ers received training and support materials, including a digital workbook for running the team dialogue, to help promote an inspiring and meaningful conversation. Furthermore, dozens of facilitators were trained in 2021. The aim of the dialogue on company pur pose and values is to create internal cohe sion and a feeling of belonging by creating a stronger sense of meaningful work and value-based behaviours. In addition, we aim to strengthen the UPM community and the joy of working together. During 2022, we will share and highlight the experiences of both teams and individuals around the world. Progress will also be tracked in the 2022 employee engagement survey.

TARGETS 2030

68 Employee engagement clearly above benchmark by 2030

average score achieved, which is 9 points below global benchmark

Goal setting discussions and development plans for employees, 100% completion rate by 2030

TARGETS 2030

of employees had completed individual goal setting or annual discussion

88% 70%

of employees had a development plan documented

www.upm.com/responsibility

68

69

UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021