UPM Annual Report 2022

RESPONSIBILITY

UPM

BEYOND FOSSILS

BUSINESSES

GOVERNANCE

ACCOUNTS FOR 2022

SUSTAINABLE PRODUCT LIFECYCLE ACTIONS FOR ENVIRONMENT

els, ISCC (International Sustainability and Carbon Certification) for UPM Biofuels, UPM Formi and UPM Pulp, ISCC Plus for four UPM Raflatac production sites. UPM Raflatac also offers CarbonNeutral® certified RAFNXT+ labelling material, and UPM Communication Papers established a carbon offset service, certified by the Gold Standard. All UPM businesses have FSC and/ or PEFC chain of custody certification. It verifies the origin of wood and guarantees that all wood used in our products is legally harvested from sustainably managed for ests and does not originate from controver sial sources. Innovation for the future on page 26 Ensuring responsible supply chain on page 78 Climate-positive forestry on page 82 Advancing a circular bioeconomy on page 92

Cycle Assessments (LCAs) to support the concept. LCAs provide reliable, docu mented information on the environmental impacts of used materials and production processes. Product safety requirements renewed The ISO 9001 Quality and ISO 22000 Food Safety management systems provide a framework for continuously improv ing our performance. All our production sites are ISO 9001 certified. All UPM pulp mills, UPM Raflatac sites, UPM Specialty Papers production lines in Europe and UPM Kymi paper mill have a certified ISO 22000 Food Safety management system. UPM Changshu paper machine 3 in China has both a certified ISO 22000 Food Safety management system and a certified FSSC 22000 Food Safety management system. This allows us to offer several products that are designed and produced to meet food packaging requirements. We have developed the way in which we communicate our product safety require ments to our chemical and raw material suppliers, as well as to our customers. Together with several paper and chemical companies, we have increased transparen cy in the supply chain and accelerated the exchange of information. A harmonised questionnaire and tool enable us to pre-as sess the chemicals used in products and to ensure the compliance of our products with legal requirements and additional commitments, such as ecolabel criteria. For customer communications, we have created Product Safety Profiles and Non-Use War ranty documents. In 2022, we modernised our chemical database to improve access to advanced reporting and control features (right). We offer product declarations and environ mental data for most of our products. They tell our customers about the environmental performance of our products and help cus tomers to make sustainable choices. Most of our products are certified with widely recognised ecolabels, such as the EU Ecolabel and national ecolabels for graphic paper, RSB (Roundtable on Sustainable Biomaterials) certification for UPM Biofu Ecolabels and product declarations increase transparency

Products eligible for ecolabelling %

100

90

80

70

Our products help to mitigate climate change by replacing fossil-based products and materials with renewable alternatives.

60

50

18

19 20

21

22

Target

We actively develop solutions where sus tainability of the whole product lifecycle from raw material sourcing to circularity is considered. Our target is to provide prod ucts that improve our customers’ business processes and performance, creating mutu al benefit and societal value. Our innovative and sustainable wood based biomedical products, as well as our pharmaceutical and healthcare labelling solu tions, are examples of where we create direct societal impact. In the future, our wood-based biochemicals will offer renewable alternatives for many consumer products in packaging, au tomotive, textiles and various industrial seg ments. Many of our products are made from side streams and residues or from materials recovered after product use, thus supporting circular bioeconomy (pages 92-95). Continuous dialogue and collaboration with customers UPM’s businesses offer a variety of products

IMPACT • Bio-based and recyclable raw materials and products reduce the world’s dependency on fossil-based raw materials and contribute to climate change mitigation • We offer sustainable everyday products to customers and consumers TARGETS • Creating innovative renewable and responsible solutions for a future beyond fossils • Taking care of the entire lifecycle

OUR WAY • Use of a sustainable product design concept in product development • Improved chemical management to enhance product safety • Strong commitment to long-term customer relationships • Co-operation across the value chain • Open and transparent product communication supported by ecolabels, certificates and product declarations • Focus on 2030 responsibility targets

TARGETS 2030 100% of applicable products eligible for ecolabelling achieved 87%

Based on these results, overall satisfac tion with UPM as a supplier is 84% (86%). The surveys also help us to define our areas of improvement. Actions to mitigate climate change and enhance biodiversity remain the highest priorities of our cus tomers. Product safety, sustainable forest management, recyclability, circularity and ecolabels are also highly valued. Sustainable product design Our Sustainable Product Design concept, developed in 2021, enables us to further develop the environmental and societal aspects of our products. We have been working on several product development cases with businesses in 2022 and have tested this concept and defined solid sustainability value propositions. As an example, UPM Specialty Papers used the concept successfully in its packaging paper development (left). According to our assessments, our new products have had significant positive im pacts on the UN Sustainable Development Goals (SDGs). For example, when we use less material, replace fossil raw material with renewable material or when recy clability is improved, we promote SDG 12. We have also increased the use of Life

CASE

UPM CHEMICAL DATABASE RENEWED

and services. Each business has its own customer relationship management process and way of interacting with customers. A comprehensive understanding of each market, as well as knowledge of the end uses of products and the needs of our customers,

underpins our approach. We maintain a continuous dialogue with our customers, and we engage in various product-related development projects with them. Our businesses conduct regular customer-satisfaction surveys.

In 2022, we adopted a new global chem ical database tool and process to manage our production, laboratory and mainte nance chemicals in a standardised way. The chemical database enables the safe use of chemicals in all stages of the lifecy cle, from delivery and reception to use and waste disposal. This new way of working will help to ensure that we meet all safety targets and regulations. The information requirements regarding chemical use from our customers and end users are increasing. With this new process, we will be able to fulfil the requirements of the authorities and the expectations of our customers. Co-operation becomes easier when the availability of chemical informa tion improves. The project involved 34 mills in eight countries. www.upm.com/about-us/for-suppliers/ requirements/general-and-category specific-requirements

CASE

NEW RECYCLABLE PAPERS FOR FOOD PACKAGING

result of intensive development work. They are suitable for food end-uses. They are safe to use and designed to be recycled in existing fibre recycling streams. The papers have been developed based on the needs of UPM’s customers. Testing, analysis and piloting of the technically demanding pa per properties, in particular its heat sealability, was carried out at the UPM research centre. The product development is based on UPM’s own

sustainable product design concept. During the development process, UPM ex panded its collaboration with external partners. The papers were developed in a co-creation process to ensure that the end result was a renewable paper easy to use in packaging processes and able to keep the quality of food products until their best before date.

The packaging industry is experiencing an unprecedented change as consumers and leg islators call for renewable and easily recyclable packaging alternatives. This drives development in the entire packaging value network. UPM Specialty Papers has introduced heat-sealable barrier papers which are the

www.upmspecialtypapers.com

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UPM ANNUAL REPORT 2022

UPM ANNUAL REPORT 2022