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

Forests and biodiversity

Stream waters and biodiversity

Production sites and biodiversity

Resources

Key actions UPM safeguards biodiversity in its own forests and land and continues to carry out biodiversity activities as part of the Company's global Forest Action Programme. Forest certification plays an important role in managing biodiversity, both in UPM's own forests and plantations and in external wood sources. This includes FSC™ and/or PEFC certification for UPM's own forests and plantations and Chain-of-Custody certification, controlled wood programmes or other fibre sourcing standards for the supply chain. UPM has set a target, with dedicated key performance indicators to measure progress towards a net-positive impact on biodiversity in UPM's forests. The target for Finland was set in 2018, for Uruguay in 2022, and the target for the USA is planned to be launched in 2025. Development work for measuring biodiversity is ongoing. UPM has also set a target of 100% certified fibre by 2030. In the USA, UPM is working to improve communication and cooperation with local indigenous communities to better integrate indigenous knowledge and interests into forest management strategies and biodiversity-related actions. UPM uses existing forest industry stakeholder groups and direct communication with representatives to exchange information. Actions in 2024 • In Finland, UPM continued to participate in a project led by FSC™ to better understand and quantify the positive impact of forest certification on biodiversity. • In the USA, UPM implemented its Smart Forestry™ method, which uses plant communities and ecological principles as the basis for silvicultural practices and maintaining biodiversity. Using ecological classification as a guide, forest complexity and diversity are promoted along with quality and value. For example, this means that harvesting sites are managed to keep deadwood at a sustainable level. • 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. • As part of its Forest Action Programme, UPM launched the UPM Habitat Restoration Programme in February. By 2030, at least 3,000 hectares of peatland habitats will be restored, and management plans will be carried out on at least 100 other sites in UPM-owned forests in Finland. The other sites include habitats with a high potential to support or increase biodiversity, such as groves and esker slopes. • A new spider species was discovered on UPM land in Uruguay as part of a biodiversity research project sponsored by UPM. • About 800 people visited UPM's largest Biodiversity Reserve in Uruguay (EARU), taking advantage of the visitors centre inaugerated at the end of 2023. This confirms the public's interest in UPM's biodiversity conservation activities. Planned actions • The global UPM Forest Action Programme will continue with further measures and actions. • The implementation of the Smart Forestry™ method will continue in the USA with further measures and actions. • Implementation of new and revised biodiversity indicators for UPM's forests in Finland which were developed during 2024. » Refer to E4-5 Metrics, Biodiversity indicators - Finland • Ongoing development work for measuring biodiversity.

Key actions UPM's stream water programme aims to remove obstacles to fish migration, restore fish stocks throughout Finland and improve living conditions for all stream fauna. The target is to open 500 kilometres of obstacle-free streams in Finland by 2030. The target steers the activities and monitoring of their impact on biodiversity. Actions in 2024 • Two obstacle removal projects with UPM's participation were initiated and carried out: Rutajoki Seinäkoski (25 km) and Kelvänjoki (44 km). • Studies related to eDNA started in Finland and Uruguay. In Finland, UPM joined the EU-funded NorthDIVeRSITY led by the Natural Resource Institute Finland (LUKE). In Uruguay, a pilot project using eDNA technique was launched through an agreement with the Clemente Estable Institute in aquatic ecosystems at UPM's EARU Biodiversity Reserve. • Participation in SBTN development. » See above paragraph “Forests and biodiversity” Planned actions • There are several dam removal projects at various stages in Finland. UPM aims to participate in at least one dam removal or restoration project every year as part of its Stream Water programme. • Testing of eDNA continues (see above)

Key actions UPM continuously monitors its emissions to air and water and its impact on waterbodies. Baseline studies are carried out for investment projects. In addition, sites take measures to enhance local biodiversity. Actions in 2024 • UPM continued to reduce emissions to air and water in accordance with its environmental targets for 2030, thus enhancing local living conditions for flora and fauna. » Refer to E2-2 Action • Measures were taken at the creek impacted by the accidental spill in UPM Paso de los Toros in Uruguay, resulting in sustained natural recovery since the incident in August 2023. • Sites continued their efforts to manage invasive species in accordance with local plans. • Participation in SBTN development. » See above paragraph “Forests and biodiversity” Planned actions • Further emissions reductions in line with UPM's environmental targets for 2030 • Development of means to measure enhancement of biodiversity on production sites Key actions Biodiversity protection has been identified as one of the key issues in UPM's Sustainable Supply Chain Programme. The issue is promoted in those sourcing categories where it has been identified as particularly relevant. These include commodities derived from the production of living natural resources, such as natural and plantation forestry or agriculture. Actions in 2024 • In the spring, UPM Forest launched a new service package, UPM Nature Management Services, to provide Finnish forest owners with more options to enhance biodiversity. Planned actions • UPM continues its efforts to increase the share of certified fibre in its wood sourcing. Supply chain and biodiversity

In general, forest-related actions are included in UPM's overall investment and resource planning. In addition, four green bonds issued since 2020, the latest one in 2024, have a strong focus on climate, as well as forest-related activities. The green bond portfolio of EUR 2,350 million uses eligible assets and projects from the following categories of UPM's Green Finance Framework: • Sustainable forestry and plantation management • Climate-positive and circular bioeconomy-adapted products and solutions • Renewable or CO 2 -free energy Actions for biodiversity enhancement have been integrated into categories. » Refer to E1-3 Resources for details of UPM'’s Green Finance Framework. In addition, a revolving credit facility is linked to long-term sustainability targets, including the target for UPM's forests in Finland to have a positive impact on biodiversity. » Refer to E1-1 Investment and funding, Climate-positive forestry , for key performance indicators for both operational and capital expenditures of the EU Taxonomy and notes to the financial statements. During 2024, no significant capital expenditures for forest-related new projects were announced.

Biodiversity offsets

UPM does not use biodiversity offsets.

UPM FINANCIAL REPORT 2024

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UPM FINANCIAL REPORT 2024

193

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UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024