UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

BASIS FOR PREPARATION

Coverage of the value chain The sustainability information disclosed is based on UPM's double materiality assessment (DMA) of impacts, risks and opportunities, which covers both the upstream and downstream value chain. The policies, actions and targets also cover aspects of the whole value chain, depending on the relevance of the aspect in the different parts of the value chain. ESRS standard S4 “Consumers and end-users” is omitted from UPM's disclosure. The majority of UPM's products are further processed by UPM's customers and, consequently, UPM does not have direct control of the products provided to consumers and end-users. Therefore, based on the DMA, UPM's impact on consumers and end-users is not considered material. Customer-related aspects such as product safety, ecolabels or products-related aspects like carbon storage in products are covered by other standards where appropriate. Information about time horizon, estimation and reporting errors in previous periods The reporting period covered by the Sustainability Statement is the same as the Financial Statements. For information on time horizon » Refer to ESRS 2, SBM-3, Material impacts, risks and opportunities For information on value chain estimation » Refer to E1-6, Reporting principles for metrics, Scope 3 In case estimations have been used, in case there are uncertainties related to the metrics disclosed or in case of errors in the previous year’s reporting, this is disclosed in the context of the relevant disclosure. As this is the first year of reporting based on the ESRS standards, UPM does not report any changes in preparation or presentation of the Sustainability Statement. Where metrics have been reported previously, comparative information is presented. Changes in the preparation of sustainability information The implementation of the CSRD has significantly changed UPM’s previous approach to integrating and presenting its sustainability information in its Annual Report. For the reporting year 2024, UPM reports its sustainability information for the first time in accordance with the requirements from the European Sustainability Reporting Standards (ESRS). The content of the Sustainability Statement has been subject to a limited assurance engagement. Scope 1 and 2 emissions has been subject to reasonable assurance. The assurance reports can be found on pages 339-349 in the Annual Report. This Sustainability Statement covers the disclosures according to the Task Force on Climate-related Financial Disclosure (TCFD) and to the Task Force on Nature-related Financial Disclosure (TNFD), which are included in its assurance scope. Information on how UPM reports on other sustainability reporting standards, such as technical material issued by the International Sustainability Standards Board or the Global Reporting Initiative, is ESRS 2 BP-2

The previous experience of the Board of Directors as described above, as well as the experience of the President and CEO from his previous positions in UPM, provides the relevant skills and expertise in UPM's operations and business model and the related impacts, risks and opportunities. In addition, the Board of Directors and the President and CEO are provided with information on relevant and topical sustainability issues, both regularly and as required. Board diversity UPM's Board of Directors comprises five nationalities (Finnish, Norwegian, Dutch, German, Swiss). The age of the Board members vary between 49 and 66 years. 56% of the Board members have been members of the Board for 1-4 years, 22% have been members of the Board for 5-9 years and 22% have been members of the Board for more than 10 years. All Board members hold a university degree. When it comes to gender identity, 44% (4/9) of UPM Board members are female and 56% are male. The President and CEO is an Italian citizen, born in 1969, holds a Master of Science (engineering) degree and his gender identity is male. The overall aim of diversity is to ensure that the Board has a broad range of skills, experience and perspectives, as well as knowledge of UPM and other relevant industries, so that the Board can effectively carry out its responsibilities, particularly those related to strategy and risk management. Regarding other factors relevant to Board diversity, the Board’s objective is to include an appropriate number of directors of different nationalities, ages, genders and length of service. The Board's diversity principles are included in the Board and Committee Charters and, more specifically, in the Board's Diversity Policy . See www.upm.com/governance. More information about the diversity of UPM's Board of Directors, related objectives and the results is available in the Corporate Governance Statement 2024 . See www.upm.com/governance. Board independence 100% of the Board members are independent of the Company and the Company's significant shareholders as assessed by the Board with the assistance of the Nomination and Governance Committee. All Board members are independent of the Company's significant shareholders, as the Company has no controlling shareholder, and no shareholder of the Company has announced a holding of 10% or more of the Company's shares or votes. The Board has also concluded that all directors, including Piia-Noora Kauppi and Kim Wahl, who have been non-executive directors of the Company for ten consecutive years or more, are independent of the Company. Based on the Board's overall evaluation of the independence of these directors, their long-standing service does not compromise their independence, and no other factors or circumstances have been identified that could affect their independence.

available on the UPM webpage and on pages 358-359 in the UPM Annual Report. Incorporation by reference The following information is incorporated by reference: • ESRS 2 SBM-1: Employees by geographical area • E1-9: Anticipated financial effects from physical and transition risk and potential climate-related opportunities • E4-6: Anticipated financial effects from material biodiversity risk and opportunities

ESRS 2 BP-1

This Sustainability Statement has been prepared in accordance with the EU Corporate Sustainability Reporting Directive (CSRD) and the underlying European Sustainability Reporting Standards (ESRS). Scope of consolidation This Sustainability Statement has been prepared on a consolidated basis. All UPM subsidiaries, joint ventures, and associates that are fully consolidated or proportionately consolidated are included in the Sustainability Statement. In the double materiality assessment (DMA) the entire value chain is in the scope of assessment and consolidation of information for material impacts, risks and opportunities. The primary subsidiaries and joint operations included in UPM's financial reporting are listed in the Annual Report » Refer to Note 8.2 Principal subsidiaries and joint operations in the consolidated financial statements. In financial reporting, UPM consolidates acquired entities from the acquisition date, which is when UPM gains control. For social disclosures, the same list of subsidiaries, including any non-controlling interests, is relevant unless otherwise stated in connection with the respective disclosure. In the case of acquisitions and divestments, the approach to social data disclosure may vary and is detailed within the relevant context. For environmental disclosures, the consolidated data covers the production units and forestry operations of the main subsidiaries. All production units are included unless otherwise stated in the context of the relevant disclosure. An overview of production units is available on pages 8-9 of the Annual Report. For jointly operated on-site power plants, UPM includes fuel, air emissions and waste data corresponding to UPM's energy supply. Environmental investments include the share corresponding to UPM's ownership of the on-site power plant. For divestments or acquisitions, environmental data is included from the month of acquisition or until the month of divestment, provided the production unit has been part of UPM for more than half the year. For new production units under construction, environmental data is considered from the start of production. Figures presented in this Sustainability Statement are rounded and therefore the sum of individual figures might deviate from the presented total figure. In July 2024, UPM Raflatac acquired the Belgian-based company Grafityp with a production site in Belgium and a distribution centre in the UK. These are excluded from the environmental disclosure and partly included in the social disclosure for 2024, such as the headcount figure, though not in all employee-related disclosures or in OHS-related disclosure. Information about exclusions is stated in connection with the relevant disclosures. At the end of August 2024, UPM permanently closed its UPM Hürth newsprint mill, and in December 2024, one paper machine at UPM Nordland. The environmental and social data for these sites is included in the consolidated data until the end of production. By the end of 2024, UPM had closed its biocomposite business, which remains in the sustainability data for 2024, but is not covered in the qualitative information. No information relating to intellectual property, know-how or the results of innovation has been omitted from the Sustainability Statement. No exemptions have been used for disclosure of impending developments or matters in negotiation.

Sustainability governance

GOV-1

UPM has a one-tier governance model consisting of the Board of Directors and the President and CEO, in addition to the Annual General Meeting of shareholders. All nine members of the Board of Directors are non-executive. To enhance the Board's decision-making process, the Board has established three committees composed of its members: the Audit Committee; the Remuneration Committee; and the Nomination and Governance Committee. The President and CEO of UPM-Kymmene Corporation leads the day to-day operations of the Company in accordance with the instructions and orders given by the Board of Directors. In the operational management of the Company, the President and CEO is assisted by the Group Executive Team (GET), consisting of the executives heading the business areas and global functions, and by the Business Area Boards and the Strategy Team. The President and CEO chairs the GET, the Business Area Boards and the Strategy Team. UPM's Board of Directors does not include any representatives of the employees. Experience and expertise in sustainability and business conduct matters Members of the Board of Directors and the President and CEO have versatile experience and skills in the field of sustainability, for example in sustainability reporting and assurance, including double-materiality processes, ESG governance (including corporate governance), energy and climate policies, labour laws, contributing to ESG-related regulations and lobbying, human rights, diversity, green transition, stakeholder management, supply chain management and circular economy. In addition, the President and CEO has access to UPM's resources regarding the aforementioned skills. The Board members and the President and CEO have experience from all sectors and products relevant to UPM, such as pulp and paper, packaging, forestry, energy, chemicals, R&D as well as finance and accounting. In addition, UPM Board members and the President and CEO have experience from all geographies relevant to UPM, i.e. Europe, Middle East, Asia and Americas. They also have experience from the field of business conduct matters relevant to UPM.

UPM FINANCIAL REPORT 2024

130

UPM FINANCIAL REPORT 2024

131

130

131

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024