UPM Annual Report 2023

ACCOUNTS FOR 2023

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

GOVERNANCE

Template 3 Taxonomy-aligned economic activities (numerator)

Amount and proportion

Amount and proportion

Climate change mitigation (CCM)

Climate change adaptation (CCA)

Row

Economic activities

Climate change mitigation (CCM)

Climate change adaptation (CCA)

CCM + CCA

CCM + CCA

Row

Economic activities

Amount

%

Amount

%

Amount

%

Amount

%

Amount

%

Amount

%

1.

4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies 4.28. Electricity generation from nuclear energy in existing installations 4.29. Electricity generation from fossil gaseous fuels 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system Amount and proportion of other taxonomy aligned economic activities not referred to in rows above in the numerator of OpEx Total amount and proportion of taxonomy aligned economic activities in the numerator of the OpEx 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels

1.

4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies 4.28. Electricity generation from nuclear energy in existing installations 4.29. Electricity generation from fossil gaseous fuels 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system Amount and proportion of other taxonomy aligned economic activities not referred above in the numerator of turnover Total amount and proportion of taxonomy aligned economic activities in the numerator of the Turnover

2.

2.

16

12 %

16

12 %

—

— %

136

14 %

136

14 %

—

— %

3.

3.

41

29 %

41

29 %

—

— %

198

20 %

198

20 %

—

— %

4.

4.

5.

5.

6.

6.

7.

7.

660

66 %

660

66 %

—

— %

84

59 %

84

59 %

—

— %

8.

8.

995

100 %

995

100 %

—

— %

141

100 %

141

100 %

—

— %

In 2023 and 2022, the numerator of the turnover KPI is defined as the turnover derived from products and services associated with Taxonomy-aligned economic activities: 1.3. “Forest management” generates turnover from the sale of wood and wood-based biomass such as logs, pulpwood and forest residues from UPM’s own and leased forests to third party customers (other sources of wood excluded from the eligible turnover). 4.5. “Electricity generation from hydropower” generates turnover from the sale of electricity generated by UPM’s own or co-owned hydropower plants. 4.13. “Manufacture of biogas and biofuels for use in transport” generates turnover on sale of wood-based renewable diesel and naphtha for transport and petrochemicals. “4.20. “Cogeneration of heat/cool and power from bioenergy” generates turnover from the surplus sale of heat and power generated from biomass in combined heat and power plants that is not consumed in own production. Regarding the power plants, the portion of the fossil fuels has been excluded from the turnover. Turnover from sale of forestry services to private forest owners (1.3. “Forest management”) and sale of logistic services from leased vessels (6.10 “Sea and coastal freight water transport, vessels for port operations and auxiliary activities”) are Taxonomy-eligible but not Taxonomy-aligned. CapEx UPM has included in CapEx, as defined in Disclosures Delegated Act, additions to tangible and intangible assets, before any depreciations, impairments, amortisation charges and fair valuations during the financial year, as accounted for in accordance with IAS 16 Property, Plant and Equipment, IAS 38 Intangible assets, IAS 41 Agriculture and IFRS 16 Leases. CapEx corresponds to cash payments to acquire fixed assets in the Consolidated cash flow statement adjusted with amounts accrued but not paid at the end of reporting period, acquisition of businesses and subsidiaries (intangible rights) and additions to leased

Accounting Policy UPM consolidated financial statements are prepared in accordance with IFRS Accounting Standards as adopted by the EU and IFRIC Interpretations. UPM has calculated the KPIs using the financial information presented in group consolidated financial statements 2023. In determining the eligible and aligned turnover any specific fragments of production inputs, such as use of sustainable raw material or energy, have not been included in the eligible turnover if the main activity is not included in the Taxonomy. However, for activities that are used both internally and, to some extent, to generate external turnover, the CapEx and OpEx is not split in relation of internal and external use, but fully allocated to economic activity that leads to revenue. The definitions of CapEx and OpEx key performance indicators are based on definitions set out in the Disclosures Delegated Act. CapEx and OpEx related to assets or processes that are associated with Taxonomy-aligned economic activities are counted only once. Whenever an individual investment is considered Taxonomy-aligned, this proportion of CapEx is not further allocated to a Taxonomy-aligned economic activity, to avoid double counting. Similarly, OpEx related to purchased outputs that are already considered under OpEx associated with Taxonomy-aligned activities is not further counted. The group has no economic activities contributing to multiple climate or environmental objectives. Turnover UPM has calculated turnover, as defined in Disclosures Delegated Act, based on the same accounting principles that apply for revenue in IFRS Accounting Standards, i.e., covering all amounts derived from the sale of products and services in the course of ordinary activities. Total turnover corresponds to total sales as reported in group consolidated financial statements. Refer to Accounting policy in consolidated financial statements Note 2.2. Sales. Taxonomy-eligible and -aligned turnover include only revenue from sales of products and services generated from activities that are included in the Taxonomy.

Amount and proportion

Climate change mitigation (CCM)

Climate change adaptation (CCA)

Row

Economic activities

CCM + CCA

Amount

%

Amount

%

Amount

%

1.

4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies 4.28. Electricity generation from nuclear energy in existing installations

2.

3.

4.

4.29. Electricity generation from fossil gaseous fuels

5.

4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels

6.

4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system Amount and proportion of other taxonomy aligned economic activities not referred to in rows above in the numerator of CapEx Total amount and proportion of taxonomy aligned economic activities in the numerator of the CapEx

7.

460

100 %

460

100 %

—

— %

8.

460

100 %

460

100 %

—

— %

152

153

UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023

UPM FINANCIAL REPORT 2023

152

UPM FINANCIAL REPORT 2023

153