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

TARGETS

Actions in 2024 • UPM's Santana nursery in Uruguay implemented improvements to its water recycling system. The improvements are related to increasing the collection and recovery capacity of irrigation and rainwater and improving sludge management. • UPM Changshu paper mill, China, invested in the recycling of its wastewater to be used as cooling water at the power plant, resulting in a water reduction of 0.3 m3 per tonne of paper. • UPM Jämsänkoski paper mill, Finland, managed to reduce the freshwater usage of one of their paper machines by 20 litres per second by utilising a separate filtering process of save-all super clear filtrate. Planned actions • Also in 2025, UPM will continue to develop and implement measures to reach its 2030 targets. • The primary clarifier at UPM Jämsänkoski paper mill in Finland will be renewed in 2025, which is essential for the efficiency and effectiveness of the entire wastewater treatment process • Improvements to the water recycling system at UPM's San Francisco nursery in Uruguay will be implemented in 2025. Water risk assessments Key action UPM has carried out a water risk assessment study using the WWF Water Risk Filter tool. According to the assessment, none of UPM's production sites is located in areas of high physical water risk, but in areas of low or medium water scarcity. The tool also provides scenarios for water risks related to climate change for 2030 and 2050. The scenarios show that, with one exception, UPM's main production sites are in areas with a low to

medium future basin risk. The UPM Changshu paper mill near Shanghai in China is expected to face the highest increase in water risk by 2050. However, the mill has made significant improvements in water efficiency in recent years, leading to a 15% reduction of process wastewater volume over the last five years. Measures have included wastewater recovery and reuse. » Refer to ESRS 2 IRO-1 Materiality assessment process for more information about the water risk assessment. Actions in 2024 • Annual review of UPM's water risk assessment for its production sites with the WWF Water Risk Filter version 1.0. Results are incorporated in this chapter. • UPM participated in the Science Based Targets Network (SBTN) Corporate Engagement Programme to develop methods, tools and guidelines for setting science-based targets for maintaining and enhancing biodiversity. Fresh-water-related biodiversity pressures were assessed and target-setting tested according to the Initial Target Validation Pilot methodology. Planned actions • Water risk evaluation with the new version 2.0 of the WWF Water Risk Filter which was published in October 2024, and evaluation of water risks with alternative tools in 2025. • Continuation of participations in the Science Based Targets Network (SBTN) Corporate Engagement Programme (see Actions in 2024) in 2025. Resources In general, activities related to water management are included in UPM's overall operational expenditures, investment and resource planning. » Refer to E2-2 Resources for more information on environmental costs and investments.

E3-3

Targets related to water To manage its sustainability activities, UPM has set several targets and key performance indicators for its sustainability focus areas covering production and the supply chain. These targets support UPM's policy objective of minimising water use at all UPM production sites (UPM Sustainability Policy Statement) and, for example, efficient water use of

suppliers (UPM Supplier and Third-Party Code). UPM's sustainability targets are developed taking the views, wishes and perspectives of external stakeholders from UPM's constant multi-stakeholder dialogue into account.

SUSTAINABILITY FOCUS AREA AND KEY PERFORMANCE INDICATOR

BASE YEAR

BASE YEAR VALUE

2030 TARGET

TARGET FOLLOW-UP 2024 (2023)

Water Wastewater volume for an average UPM product *

2008

100% **

-30%

-16% (-7%)

Responsible sourcing UPM total spend covered by UPM Supplier and Third-Party Code

2015

79%

>80% (continuous)

91% (89%)

* Relevant for pulp and paper production ** Calculation: minus 30% target for weighted average of reductions to be achieved for specific emissions of Pulp and Paper, with base year as 100%

UPM's main production sites are in areas with low to medium basin risk, with one exception, the UPM Changshu paper mill for the 2050 scenario. » Refer to E3-2 Water risk assessments. UPM's Group-level targets cover all pulp and paper mills for wastewater volume and quality. However, UPM Changshu mill is making extra efforts to reduce its water use and wastewater load to minimise any potential long-term risk. UPM's targets do not cover the management of impacts, risks and opportunities related to marine resources, as they are not material for UPM. » Refer to E3-1 Policies, last paragraph. The targets are voluntary and additional to legal requirements.

UPM's sustainability targets for 2030 are followed up and reported at Group level at least annually. The target parameter chosen for water management is the wastewater volume of UPM's pulp and paper mills, which are UPM's water-intensive production sites. The target has been evaluated and set based on the historical development, known investment projects and technological developments, and potential local impacts. It aims to go beyond actual permit values set by the authorities and to consider the local circumstances. EU Ecolabel criteria and BAT reference values (best available techniques) were also taken into account when setting targets. The Group-level targets are allocated to business areas and sites. Progress towards the Group-level target for 2030 on wastewater volume is behind the schedule since 2022, but 2024 shows good developments for pulp and paper mills. » Refer to E3-2 Water management, Key action

» Refer to G1-2 Responsible Sourcing for the sourcing-related target.

UPM FINANCIAL REPORT 2024

186

UPM FINANCIAL REPORT 2024

187

186

187

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024