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

Business model and value chain Business model and value chain

up companies to international corporations. UPM also buys wood from around 14,500 private forest owners. Product stewardship UPM is actively developing solutions that consider the sustainability of the whole product life cycle, from raw material sourcing to circularity. Based on UPM's identified material topics, product stewardship has been established as a focus area with Company-wide sustainability 2030 targets and key performance indicators. » Refer to E5-3 Resource use and circular economy, Targets UPM ensures that its products are safe for their designed use. Most of UPM's products are certified with widely recognised international and regional ecolabels such as the EU Ecolabel. All UPM businesses which are using wood have FSC™ and/or PEFC Chain of Custody certification. This verifies the origin of wood and guarantees that all wood used in UPM's products is legally harvested from sustainably managed forests and does not originate from controversial sources. UPM Biofuels has both ISCC EU and ISCC PLUS certification, and UPM Biochemicals and four UPM Raflatac factories have ISCC PLUS certification. UPM Biofuels has also had the Roundtable of Sustainable Biofuels (RSB) certification. These sustainability-related targets and commitments cover all UPM products and all markets and customer groups and are implemented based on legal requirements and expectations from customers and other stakeholders. approximately 10,000 B2B customers worldwide. The majority of the products are intermediary products that are further processed into final products by UPM's customers or their customers. UPM captures the opportunities presented by growing consumer demand for sustainable choices and stricter regulations to mitigate climate change and related to plastic use, for example. Products and customers UPM's products are sold directly and through distributors to

With higher living standards and an ageing population, a growing number of urban, middle-class people are consuming more over a longer period. At the same time, the world still depends heavily on fossil raw materials and energy sources that cause climate change. Consumers, businesses and regulators alike are seeking solutions that enable a more sustainable way of life. UPM's offering meets these challenges and opportunities today and in the future. In 2024, the main destination countries for UPM's sales were Finland, Germany, the United States and China. The majority of UPM's revenue came from sales of graphic and specialty papers to publishers, retailers, printing houses, merchants and distributors, converters and label stock manufacturers; sales of self-adhesive label materials to label printers and brand owners and sales of pulp products to tissue, board, specialty and graphic paper producers. » Refer to Note 2.1 Business areas in the consolidated financial statements for information on sales by destination country and Note 2.2 Sales for information on external sales by major products. Engagement with customers UPM's businesses offer a wide range of products 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 the knowledge of the end-uses of the products and the needs of the customers, underpins this approach. Continuous dialogue is maintained with customers, and UPM engages in various product-related development projects with them. UPM's businesses conduct regular customer satisfaction surveys. The surveys help identify potential areas of improvement. Actions to mitigate climate change and enhance biodiversity remained the high priorities for UPM's customers in 2024. Product safety, sustainable forest management, recyclability, circularity and ecolabels are also highly valued.

» Refer to SBM-2 Interest and views of stakeholders

UPM's offering

SUSTAINABLE PRODUCTS FOR EVERYDAY USE

REPLACING FOSSIL-BASED MATERIALS

LOW-EMISSION ENERGY AND FUELS

• Fibres for hygiene and tissue products • Safe food packaging materials • Information labelling and sustainable packaging for e-commerce • Papers for communication • Personalised medicine

• Materials for various consumer products such as textiles, PET bottles, packaging, cosmetics and pharmaceuticals • Replacing fossil-based plastics • Renewable construction materials • Carbon-storing buildings

• CO 2 -free electricity • Renewable energy

• Reliable and adjustable energy • Decarbonising traffic and aviation

*Including the company UPM Raflatac acquired in February 2025

Suppliers UPM sources its main raw materials – wood and wood-based materials – from sustainably managed forests and transforms them into renewable products that help customers achieve their sustainability goals. Responsible and ethical practices create long-term value for the Company and its stakeholders. UPM does not compromise its standards of integrity in any circumstances and expects the same of its suppliers and third-party intermediaries. Suppliers are an essential part of UPM's value chain. The main sourcing categories are fibre, chemicals, other raw materials, logistics, energy and indirect purchases such as services. In terms of expenditures, pulp and energy suppliers are among the largest.

When selecting suppliers, the most important priorities include reliable long-term deliveries, cost-competitiveness, product and service quality, suppliers' financial stability, social and environmental responsibility, product safety, and the product’s carbon footprint. Suppliers also play an important role in UPM's business-specific growth projects. Supplier management, with the required competencies and digitalisation, boosts product development and the commercialisation of new products. UPM buys products, materials and services from some 23,000 B2B suppliers worldwide. The sourcing network includes suppliers from start

UPM FINANCIAL REPORT 2024

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UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024