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

Microplastics The quantification of microplastics generated and used by UPM is still impossible. Active research is done in the area covering both incoming material and unintentional releases. From 2021 to 2023, UPM joined the “Circular economy of water in industrial processes” project. As a result, a laboratory measurement method for microplastics in forest industry waters was developed with universities at UPM's research centre in Lappeenranta, Finland. However, this and other standardisation and methodology developments are still insufficient. Both testing and development and validation work must continue to be able to receive reliable and consistent results. UPM will continue research in this area by joining projects, through its own method development work and by evaluating cooperation with external laboratories, for example. In 2024, UPM participated in preparing the application for the Finnish “Pro Water Project” which will start in 2025 when approved. Changes over time UPM has identified COD as the most relevant parameter for its wastewater quality and acidifying flue gases (NOx and SO 2 ) as the most relevant parameter for air emissions. For both parameters, targets are set for 2030 from the 2008 or 2015 level respectively, and the performance is followed up at Group level. Emissions to air UPM reports the total amount of emissions to air of NO X , SO 2 and Particulates as its main performance indicators. These are calculated based on site-level data from sampling or continuous monitoring. These indicators include the emissions from UPM's own power plants and the respective share of jointly operated on-site power plants corresponding to UPM's energy supply. External power plants or boilers are considered for heat supply. In addition to energy-related air emissions, UPM reports production-related non-methane volatile organic compound (NMVOC) emissions from UPM Raflatac, UPM Biofuels and UPM Plywood, which are calculated using emission factor and/or mass balance methods. As required by ESRS E2-4, UPM also reports the consolidated amounts which include only the emissions from sites for which the applicable threshold value as specified in Annex II of Regulation (EC) No 166/2006 (E-PRTR) is exceeded. For non-EU sites the same principle is applied but only for already measured emission parameters. All UPM production sites enter their data into a common database where the data is checked and consolidated. Emissions to water UPM reports the total amounts of COD, BOD and AOX from its pulp and paper mills as its main performance indicators. These are calculated based on mill-level data from sampling or continuous monitoring. If the wastewater is treated at municipal or external effluent treatment plants, the values included in the total sums are the loads before effluent treatment. These mills are excluded from the calculation of the average load per product unit. Conversions are made in the case of different measurement scopes: BOD7 and BOD5 (adjustment due to number of days, either 5 or 7), COD and TOC (TOC as COD/3 in accordance with ESRS E2-4). » Refer to E2-2 Actions for the follow-up on relevant parameters. Reporting principles for metrics

Substances of concern, including substances of very high concern

As required by ESRS E2-4, UPM also reports the consolidated amounts which include only the emissions from sites for which the applicable threshold value as specified in Annex II of Regulation (EC) No 166/2006 (E-PRTR) is exceeded. For non-EU sites the same principle is applied but only for already measured emission parameters. All UPM production sites enter their data into a common database where the data is checked and consolidated. In general, emissions are reported to the relevant local authorities in accordance with the site permits. For UPM's pulp and paper mills in Europe, China and Uruguay, the relevant emissions are verified and reported in accordance with the EU's Eco-Management and Audit Scheme (EMAS) by EMAS-accredited auditors. Substances of concern and of very high concern UPM does not produce any substances of concern, nor are UPM's main raw materials classified as such. In some cases, substances of concern can be found as components or more often as impurities in chemical additives used in production or in chemicals used for mill maintenance or as laboratory agents. When present in an additive used in production, substances of concern react chemically. This is because UPM products are typically solid articles such as paper or plywood. However, UPM's products may contain small amounts or impurities of substances of concern. Small amounts may also leave the sites as emissions to water or air. Quantitative information about substances of concern leaving UPM's production sites is still unavailable. In 2024, UPM developed the reporting for substances of concern contained in purchased production chemicals. Substances of concern (SoCs) include also substances of very high concern (SVHCs). Like SoCs, SVHCs present in production chemicals react chemically during production. SVHCs have been found mainly in the following chemical groups: biocides, pigments and resins. The reporting will be developed further during the next years. All pulp mills and the European paper mills comply with the relevant EU Ecolabel criteria, e.g. for graphic paper, with its strict requirements for the use of chemicals. » Refer to E2-1 Policies for information about UPM's policies on the use of substances of concern. E2-5

Reporting principles for metrics

TONNES PER CHEMICAL GROUP

2024

Substances of concern are listed in UPM's global chemical database for the majority of UPM's production sites. Only a few sites report based on their own databases. UPM's reporting scope are the procured process chemicals. The information about the share of substances of concern is provided by the chemical supplier in the material safety data sheet, usually as a range. UPM uses the maximum of this range for its calculation, which multiplies the share of a particular substance of concern in a chemical by the quantity of the chemical procured. The information is consolidated at Group level. For 2024, due to the current complexity of the data gathering and calculation, the reported whole year data is estimated based on the actual data of at least the first three quarters of 2024. Data for UPM Raflatac was estimated based on data of 7 of its 12 sites.

Bleaching chemical

5,000

Biocide

900

Adhesive

100

Coating hardener

100

PVA

100

Resins

100

Washing chemical

100

Water, sludge treatment

100

Other process chemicals *

100

Total

6,700

* Includes e.g. pigments, silicones or paints

E2-6

Substances of very high concern

Anticipated financial effects from material pollution-related risks and opportunities In 2024, no major incidents happened at UPM's operations and no major deposits were made. Thus, there were no operating and capital expenditures in conjunction with major incidents and deposits.

TONNES PER CHEMICAL GROUP

2024

Biocide

30

Pigment

10

Resin

10

Other process chemicals *

10

Total

60

* Includes e.g. adhesives, silicones, coating hardeners or washing chemicals

UPM FINANCIAL REPORT 2024

182

UPM FINANCIAL REPORT 2024

183

182

183

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024