UPM Annual Report 2021

RESPONSIBILITY

BEYOND FOSSILS

STRATEGY

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2021

UPM

CREATING VALUE WITH PEOPLE

CREATING A DIVERSE AND INCLUSIVE WORKING ENVIRONMENT

We are committed to developing an organisational culture and local conditions that ensure a diverse and inclusive working environment.

We value diversity and strive for an inclu sive culture and working environment. We respect the privacy of our employees and promote equal opportunities and objectivi ty in employment and career development. All UPMemployees are treated as individ uals regardless of gender, age, ethnic origin or nationality, and we welcome the talent of people with various skills and backgrounds to our global team. Promoting diversity and inclusion in the workplace is not only the right thing to do, but also a prerequisite for our business success. The richness of points of view improves decision-making and busi ness success. Diversity and inclusion is part of our Aiming Higher mindset and thus part of our cultural development plan. We also want to develop our future ways of working. Three action areas Our Diversity & Inclusion initiative consists of three action areas: commitment to di versity and inclusion, creating and leading inclusive culture, and regular reviews of our data and processes. We signedanEUDiversity charter in2016. Wehave set social responsibility targets and communicateour progress towards them regularly. We carried out a gender pay equity review in 2021, closing the gender pay gap that cannot be explained by the factors that typically determine a person’s salary and its development (right). We continue to mon

itor this development annually and make corrections if needed. To further develop inclusive leadership and culture, we started a dialogue with management teams in 2019, and this work continued in 2020 and 2021 across the com pany. Over 1,600 people had participated in the dialogue by the end of 2021. Inclusive behaviours are integrated into our leader ship development programmes and includ ed in the UPMCode of Conduct training. In 2021, we set a new target for the sense of belonging where we compare ourselves to the top 10%of benchmark companies. Our Employee Engagement Survey (EES) mea sures also authenticity, i.e. feeling comfort able being oneself, and fair treatment which are important strengths for us. We continu ously follow up on themand the 2021 results are along the lines of the global benchmark. Regular monitoring We regularly reviewour diversity status and data. Ourmanagement teams conduct self-as sessments that include diversity and inclu sion.Managers andHRhave dashboards with diversity data. Processes such as rewarding and recruitment are followed up regularly. We also regularly report progress to sev eral external indices. We have been includ ed in the Bloomberg GEI (Gender-Equality Index) for a fourth consecutive year. The index awards the publicly traded companies that are most committed to disclosing their efforts to support gender equality.

Women 22% Shop-floor 58%

Men 78% Salaried 42%

countries 46 79 in Nationalities

Women leaders 21%

Multinational teams 22%

Age-diverse teams 54%

CASE

CLOSING THE UNEXPLAINED PAY GAP

within the company. Very encouragingly, we found that annual salary reviews, promotions and also bonus decisions were free of any gender-related disparities. Approximately 2.3% or 400 UPMers received a pay adjustment in 10 countries on 1 January 2022. Yet the work continues. We will monitor the situation annually using a rigorous process and take corrective actions if needed. We will also address the root cause by ensuring equita ble starting salaries. Our long-standing efforts to balance gender representation and offer equal career opportunities continue. This initiative is exceptional among our peer companies. It shows our strong commitment to the fair treatment of all UPM employees.

One cornerstone of our Aiming Higher mindset is to ensure a diverse and inclusive working environment. To live that mindset, we need to make sure that our employees are also fairly rewarded. In 2021, we carried out a company-wide initiative to close the unexplained gender pay gap. It was triggered by the observation that we have a small pay gap that disadvantages women. This gap persisted after we had adjusted for example by performance, work experience, job and location, the typical drivers of pay. The gap stemmed from minor disparities in starting salaries, and not from how men and women were treated

Authenticity score 78

Fair Treatment score 75

TARGETS 2030 UPM is among top 10% companies by 2030 on employees' sense of belonging at UPM 67 average score on EES question. This is 13 points below benchmark of top 10% companies

72

73

UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021