UPM Annual Report 2021

RESPONSIBILITY

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2021

OUR SOCIETAL AND ENVIRONMENTAL IMPACTS

Our activities and products have impacts on society. Understanding these impacts is a prerequisite to develop our operations. Direct and indirect inputs and outputs provide a comprehensive picture of the value chain and form the basis for the impact assessment. Environmental, social and economic aspects are considered. In 2021, we further developed our assessment of impacts in monetary terms. We looked at the different steps in the process, the choices that need to be made in terms of impact valuation objectives and the challenges in the calculation. We are also studying the potential benefits of the method and how it could be applied in decision-making.

UPM's detailed material balance is available at www.upm.com/responsibility

INDIRECT UPSTREAM

DIRECT UPSTREAM Raw materials

DIRECT DOWNSTREAM Products

DIRECT DOWNSTREAM Emissions to air

INDIRECT DOWNSTREAM

IMPACTS

Increasing knowledge and quality of life through our products

20,000

Number of b-to-b suppliers

7,700 t

Nitrogen oxides

7.4m t

Paper

11,400 in 120 countries

26m m 3

Wood

Number of customers

820 t

Sulphur dioxide

3.8m t

Chemical pulp

Vitality and prosperity for area of influence

Private forest owners supplying wood to UPM

23,000

1.7m t

Market pulp

1,100 t

Particulates

0.6m t

Converting materials

over 200 million

Increased social capital and skills of employees

390 t

VOC

People using UPM products

0.7m m 3

Plywood and veneer

1.7m t

Recovered paper

50 million

Seedlings planted

2.7m t

Fossil CO 2 emissions (Scope 1)

Wellbeing and safety of employees and contractors

1.7m m 3

Sawn timber

9,8m t

Biogenic CO 2 emissions (Scope 1)

2.0m t

Minerals

EUR 1.3m distributed to about 171 groups

Supplier spend covered by UPM Supplier Code

12,000 GWh

Electricity and heat

86%

Biofore Share and Care donations and sponsorships

Emissions to water

Biodiversity enhanced in managed forests and through conservation 2)

EUR 9,814m

Sales

190m m 3

Process wastewater

0.5m t

Purchased paper for converting

84%

Certified wood

Ecosystem services secured through sustainable forest management

EUR 1,471m

Comparable EBIT

190m m 3

Cooling water

0.2m t

Plastic, adhesives, resins, films

2.5m t

Virgin materials replaced

Biological oxygen demand (7days)

Granted patents and patents validations

Percentage of wood origin known

7,300 t

Climate change mitigation through UPM´s carbon actions 3)

329

100%

EUR 5.4 billion

Costs, raw materials

59,000 t

People and society

Chemical oxygen demand

Fossil CO 2 emissions (Scope 2 upstream)

Value added EUR 2.7 billion

Water uptake

2.3m t

EUR 8.2 billion

17,000

Value of products eligible for ecolabelling

Employees

280 t

Absorbable organic halogens

390m m 3

Surface water

Process waste and by-products

Societal value of carbon sink of UPM own and leased forests EUR 380m 4)

123,300

Shareholders

Fossil CO 2 emissions (Scope 3 upstream)

4.0m t

615,000 dry t

Material recycling

7

Training hours per employee

20m m 3

Ground water

Societal cost of GHG emissions (Scope 1-3) EUR -1,130m 5)

192,000 dry t

Energy recovery

Fossil CO 2 emissions (Scope 3 downstream)

2.3m t

Water intensive production sites located in water abundant areas

100%

Total recordable injury frequency incl. contractors

7.2

6,600 dry t

Composting

4m m 3

Communal water

Societal cost of other air emissions EUR -133m 6)

93,000 dry t

Landfilling

Energy

EUR 693m

2,200

Dividend distribution

New hires

Carbon content in UPM products

8,300 dry t

Temporary storage

17m t

Recreational value of UPM forests EUR 80m 7)

26,000 GWh

Renewable fuels

Employee wages and benefits

EUR 1,094m

Restricted chemical substances in UPM screening

Incineration without energy recovery

5,600

2,300 dry t

Value of ash used as raw material EUR 15m 7)

11,000 GWh

Fossil fuels

Carbon sink in UPM own and leased forests

3.8m t CO 2 eq 1)

Corporate income taxes paid and property taxes

Own and leased forests and plantations

Hazardous waste for special treatment

EUR 306m

Purchased electricity and heat

Impact of paid taxes on social capital EUR 327m 8)

1,057,000 ha

5,600 t

13,600 GWh

1) Based on study by Luke Finland: 5-year average of carbon sink and sources in UPM own and leased forests in Finland and Uruguay. 2) Read more on pages 84-85 3) Read more on pages 30-31 4) Calculated using societal cost of carbon EUR 100/tCO 2 (average damage cost per tonne of CO 2 ). Source: EEA. Using European emissions allowance price would result in EUR 300m.

5) Calculated using societal cost of carbon EUR 100/tCO 2 (average damage cost per tonne of CO 2 . Source: EEA. Using European emissions allowance price would result in EUR -900m. 6) Calculated using societal cost of each air pollutant. Source: EEA 7) Based on pilot study by Gaia. Read more on upm.com/responsibility 8) Calculated using corporate income and property taxes, and health utility of taxes. Source: Vionnet et al. (2021) The Health Utility of Income and Taxes. Part B.

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UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021