UPM Annual Report 2021

RESPONSIBILITY

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2021

party screening procedures demonstrated in the illustration on the right. Voicing concerns It is an important part of our culture of integrity that employees feel comfortable voicing any concerns they have and that they can trust UPM to take the appropriate action. If we are worried about anything, we must speak up and act. We do not tolerate retaliation against any person who, in good faith, reports suspected misconduct or participates in an investigation to resolve suspected misconduct. In 2021, we published our first internal Integrity Report, the purpose of which is to communicate to our employees examples of misconduct cases and how they have been handled within the company (right). The table below summarises the num ber of cases recorded in our misconduct case management system in 2021 and provides examples of cases handled. The misconduct case management system was renewed in 2020 and the increase in number of reported cases seems to imply that the new system captures potential cases more efficiently. 18 cases led to disciplinary action, including warnings and terminations of employment. The miscon duct investigations include a root cause analysis that aims to identify whether improvements of compliance programme are necessary.

COMPLIANCE MONITORING

REGULAR DISCUSSIONS WITH MANAGEMENT , monitoring significant projects, training rate monitoring, implementation of risk mitigation plan

REGULAR COMPLIANCE REVIEWS based on group

UPM BUSINESS AREAS AND OTHER OPERATIONS

company risk matrix

CASE

REGULAR DISCUSSIONS WITH EMPLOYEES , third party due diligence and risk monitoring, reports through UPM Report Misconduct channel, EES and other employee surveys

BUILDING TRUST WITH THE FIRST INTEGRITY REPORT

Although we have published the statistics of the misconduct cases, we had not systemat ically communicated internally about them. Therefore, we published our first Integrity Report for our employees. It builds upon the work of the past and sheds light on miscon duct reporting and handling. Corporate transparency is an important part of our organisational culture and employees should be able to express their concerns, see their concerns being addressed, and trust that we will implement the necessary actions, if required. With the Integrity Report, we take a closer look at misconduct statistics and how many cases there were in the previous year, where they occurred, and how they were reported. The report also provides anonymous examples of misconduct cases, and describes the consequences of each case, as well as the lessons learned. Con flict of interest misconduct was the largest reported area in 2020. Corporate transparency is a critical tool around issues like anti-corruption and cor porate governance. The information shared with personnel strengthens the perception of organisational justice and drives the com pliance within the company. One of the key messages in the UPM Code of Conduct is ‘Speak up’. The up dated Report Misconduct channel seems to have lowered the threshold of raising concerns.

COUNTERPARTY SCREENING PROCEDURES

•Business partner screening against public sources •Business integrity (trade sanctions, anti-corruption, anti-money laundering, competition law, fraud)

•Human rights •Environment •Supply chain risk assessments

Low risks

UPM business partner portfolio

Mitigating identified risks

Avoiding high risks

PREVENT •Supplier qualification •Supplier and Third-Party Code •Specific requirements •Enhanced due diligence on selected business partners •Onboarding and contracting process

MONITOR •Supplier audits and corrective action plans •Supplier assessments

REACT •Incident analysis and investigation •Blocking procedure •Contract termination

The reports related to e.g. alleged discrimina tion or harassment, inappropriate behaviour, breach of safety rules and alleged breach of labour laws in connection with recruitment or termination of employment.

ALLEGED MISCONDUCT CASES UPM Code of Conduct section Our commitment on integrity Our people and operations Respect people and human rights

2021

2020

1

1

Employee had not declared a conflict relating to a customer that the employee was responsi ble for and that was owned by a person close to the employee. The employee had caused loss to UPM by approving sales to the customer under market price. Termination of employment.

19

4 1

Taking care of the environmental impact and product safety

2

COMPLIANCE TRAINING FOR SPECIFIC TARGET GROUPS IN 2021

COMPLETION RATES AS OF 31 DECEMBER 2021

SIZE OF TARGET GROUP

Business integrity Zero-tolerance for corruption and bribery

98 97 96 98 95 96 96

16,300 6,800 6,800 6,800 2,900

Code of Conduct e-learning

0 8 5

3 7 2 3

Personal data protection e-learning

Avoid conflicts of interest

Anti-Corruption e-learning Confidentiality e-learning Competition law e-learning Insider Policy e-learning

Compliance with competition laws Protect assets and information

Protect assets and information: Investigation revealed that employee had submitted tens of falsified invoices as business expenses. The employee admitted having bypassed internal controls knowingly. Termination of employment.

23

Our stakeholders Know with whom you trade

www.upm.com/compliance

110 490

8

2

66

23

Total

Association participation e-learning

78

79

UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021