UPM Annual Report 2022

RESPONSIBILITY

UPM

BEYOND FOSSILS

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2022

ACTIVE DIALOGUE WITH STAKEHOLDERS CREATING VALUE FOR PEOPLE AND SOCIETY

Our Biofore strategy forms the foundation of our stakeholder dialogue. The key focus areas and activities vary locally and according to stakeholder needs. Key stakeholders are defined on the basis of materiality: either UPM's operations have a significant impact on stakeholders or vice versa. OUR MOST IMPORTANT STAKEHOLDERS

Understanding the views and expectations of our stakeholders plays a crucial role in the success of our company and the acceptability of our operations.

Customers

Communities

Current and future employees

The impact of UPM’s operations extends from the local level to wider society. We aim to provide a fact-based, balanced view of the economic, environmental and social aspects of our business activities. Active and open dialogue with our stakeholders provides valuable input for our develop ment efforts. Providing stakeholders with a clear picture of our future Our goal is to provide our stakeholders with a clear picture of what our future course is, how we implement our Biofore strategy and how we create long-term value for our stakeholders. We disclose relevant and accurate information in accordance with market regulations. Many stakeholder events were or ganised in 2022. Because many of our stakeholders view UPM primarily as

Media

TARGET • We understand stakeholders’ needs for information and expectations for UPM, and consider stakeholders in strategic development and decision-making processes IMPACT • Stakeholder engagement provides predictability and a competitive advantage • Continuous dialogue improves the understanding of key risks, challenges and opportunities in the operating environment

OUR WAY • We engage in active dialogue with our stakeholders to discuss our operations and targets • The UPM Code of Conduct sets the standards for responsible behaviour and collaboration • Stakeholder engagement is measured by several indicators • Stakeholder relations are coordinated globally at Group level, while businesses are responsible for continuous dialogue with customers and business partners, as well as the local communities

CASE

Researchers

MAKING YOUNG PEOPLES' VOICES HEARD

Investors

The three-year partnership between UPM and the Guides and Scouts of Finland created a dialogue around sustainability and climate. We want to contribute to the discussions and offer solutions as a response to young people's growing con cerns about climate change and sustainable development. The Erätauko dialogues provided a space for constructive dialogue on sustainable forests where young people's voices could be heard. At the Johtajatulet Leadership Seminar, Scouts engaged in a dialogue with Finland's leading deci sion-makers. In the Climate Backpack project, social media influencers gathered young people's ideas on how everyone can contribute to a more sustainable future. The messages gathered during the project, including from websites and social media, were packed in a backpack which was handed over to Finland’s Prime Minister in February. The co-operation culminated in the Finn jamboree Kajo camp that took place in July in southern Finland, which attracted more than 120,000 visitors. Campers and visitors were able to learn about UPM's activities at the partner village and in recreational orienteering activities. UPM donated all the timber used in the camp.

NGOs

Governments and regulators

Suppliers

an economic operator, financial suc cess, stability, good governance, future outlook and growth were the key themes

erations, particularly in Finland, Uruguay, Germany and China. Active influencing at the EU level is also important. We co-operate with a number of trade asso ciations, the most important being the Finnish Forest Industries Federation (FFIF) and the Confederation of European Paper Industries (CEPI). As we enter into new businesses, we also need to find new ways and forums for co-operation. For example, UPM is a founding member of the Advanced Biofuels Coalition in the EU and also a member of the European Chemical Industry Council (CEFIC). For decision-makers and politicians, 2022 was challenging because of the Rus sia's war in Ukraine. The war has impacted especially on the supply and price of energy in Europe. Many political decisions have been taken under the context of RE PowerEU and several temporary market measures have been considered. As UPM is an active energy market participant, both

discussed. Numerous discussions were focused on forests and the current energy crisis in Europe.

Stakeholder mapping, active dialogue and the systematic gathering of feedback play an essential role in our stakeholder relations’ work. We analyse the feedback carefully to understand the expectations of our stakeholders. Then, we take these expectations into consideration during our development work and decision-making. We received approximately 300 (400) enquiries or concerns from the general public in 2022. Every year, we conduct a materiality analysis (page 62) that highlights the topics UPM has a significant impact on or which have a significant impact on the company. The analysis is based on internal assess ments as well as interests and concerns of stakeholders. Green recovery high on the policy agenda Through public affairs work, we aim to fos ter the necessary prerequisites for our op

CASE

THE NEW WAY FOR COLLECTIVE BARGAINING ATTRACTED INTEREST FROM STAKEHOLDERS In 2022, the Finnish forest industry moved away from sector-specific to company-specific collective labour agreements. Our goal was to negotiate agreements that were specific to each business and thus improve the prerequisites for the development of the units. As the set-up of negotiations was completely

new, we organised background briefings for several stakeholder groups, explaining UPM’s thinking on the new way of negotiations. Repre sentatives for the media, political parties, labour market organisations, think tanks and different corporations attended the briefings. UPM Plywood and UPM Timber signed busi ness-specific collective labour agreements with the Industrial Union in December 2021. UPM Com munication Papers, UPM Specialty Papers, UPM Raflatac, UPM Pulp and UPM Biofuels reached

agreements with the Paperworkers’ Union on 22 April 2022, after an almost four-month strike. The strike and the consecutive order backlog required intensive customer and supplier communications and co-operation during the spring. We published all seven business-specific agreements on our website to increase trans parency. We aim to be an attractive employer, providing competitive offerings for all employees.

www.upm.com/responsibility

www.scouts.fi

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UPM ANNUAL REPORT 2022

UPM ANNUAL REPORT 2022