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

METRICS

Reporting principles for targets

E4-4

E4-5

Net-positive impact on forest biodiversity UPM's approach comprises a set of biodiversity indicators contributing to the positive development of living conditions for flora and fauna on a specified land area. Indicators have been and new indicators are developed in co-operation with research institutes and other stakeholders. There is currently no scientific way to evaluate whether the total impact on biodiversity is positive or negative. Thus, UPM proceeds towards "net-positivity" having more indicators with positive than negative development, with the single indicators compared to the previous year. The annual positive development target is achieved when the majority of the biodiversity indicators shows a positive development compared to the previous year. The target is followed-up separately for UPM's forest in Finland and UPM's land areas in Uruguay. » Refer to E4-5, Metrics, Biodiversity indicators for information and follow-up on the specific indicators for Finland and Uruguay. routes by 2030. The verification and monitoring of released and restored stream waters is based on the Finnish Environment Institute's geospatial data, i.e. river network data ("uomaverkosto" in Finnish). In 2024, the monitoring of the target was improved and adjusted. Firstly, another dataset called Jokiviiva10 has been included in the monitoring to better capture the number of streams in Finland. This has let to a higher number of kilometres being counted in the target follow up. Secondly, UPM's funding share of the projects was added to the calculation of kilometres which lowered the amount of kilometres. Consequently, the achieved kilometres for 2023 had to be adjusted to 263 km, rather than the earlier reported figure of 186 km in the UPM Annual Report 2023. Obstacle-free streams UPM aims to release or restore 500 km of stream waters and waterway

Targets related to biodiversity To steer its sustainability activities, UPM has set several targets and key performance indicators covering the areas of biodiversity impacts relevant to UPM: forestry; stream waters; emissions from production sites; and the supply chain. These targets support UPM's policy objective of mitigating the impact of UPM's operations on biodiversity (UPM Code

UPM's impact metrics focus on biodiversity; the Company’s forest operations are not related to land-use change. Forest and land areas

of Conduct) and even of enhancing biodiversity (UPM Sustainability Policy Statement). Sustainability targets are developed by UPM by taking the views, wishes and perspectives of external stakeholders from UPM's constant multi-stakeholder dialogue into account.

Forest and land areas owned and leased by UPM

HECTARES

2024

2023

SUSTAINABILITY FOCUS AREA AND KEY PERFORMANCE INDICATORS

BASE YEAR VALUE

2030 TARGET

TARGET FOLLOW-UP 2024 (2023)

BASE YEAR

Finland

522,000

523,000

Biodiversity Net-positive impact on forest biodiversity and developing a monitoring system *

Uruguay

318,000

304,000

Since 2018 (Finland)/ 2022 (Uruguay)

Always the previous year

Continuous improvement

Overall positive development measured

USA

76,000

76,000

Total owned

916,000 903,000

Uruguay, leased

174,000

170,000

Obstacle-free streams **

2015

0 km 500 km

287 km (263 km)

Total owned and leased

1,090,000 1,073,000

Forestry Share of certified fibre ***

2015

84 %

100 %

88% (87%)

This includes forest land for Finland and the USA, and eucalyptus plantations, grasslands and conservation areas for Uruguay. In addition, UPM manages about 1,600,000 hectares of privately owned forests in Finland. » Refer to Note 4.2 Forest assets in the consolidated financial statements for information about hectares of productive forest land and forested land. Forest certification

Climate Fossil CO 2 emissions from UPM's own combustion and purchased electricity (Scopes 1 and 2)

2015

6.80 mt

-65 %

-50% (-45%)

Acidifying flue gases (NOx/SO 2 ) for a UPM average product

2008

100 %

-20 %

-19% (-17%)

Water Chemical oxygen demand (COD) for a UPM average product **** Responsible sourcing UPM total spend covered by UPM Supplier and Third-Party Code

2008

100 %

-40 %

-44% (-39%)

2015

79 %

>80% (continuous)

91% (89%)

Certification of forest land owned by UPM

CO 2 emissions from materials and logistics (Scope 3)

2018

6.08 mt

-35 %

-22% (-23%)

%

2024

2023

* Covers UPM's own forests in Finland since 2018 and UPM's land in Uruguay since 2022 ** Relevant for Finland

FSC™ and PEFC double certified

90.2%

91.4%

PEFC certified

8.3%

8.4%

*** Forest management certification **** Relevant for pulp and paper mills

In the process of being certified

1.5%

0.2%

Total

100.0%

100.0%

The targets are followed up and reported at least annually, both at the relevant unit and Group level. UPM's target is to have a net-positive impact on biodiversity in its own forests in Finland since 2018, and on its land in Uruguay since 2022, with specific key performance indicators to measure progress. In Uruguay, most plantations grow on grasslands formerly used for cattle grazing. The area's biodiversity values are assessed before the plantations are established, and valuable biodiversity hotspots and native forests are protected. UPM's work focuses on the active management of protected habitats and the control of invasive species. In Finland, UPM's hydropower plants and other obstacles such as dams impact the environment by altering river and stream flows and their ecosystems. UPM's stream water programme aims to remove obstacles to fish migration, restore fish stocks throughout Finland and improve the living conditions of all stream fauna.

UPM did not apply ecological thresholds and allocation of impacts when setting its targets. UPM targets are informed by local circumstances and legislation and evolve to respect international frameworks such as forest certification standards. UPM's biodiversity-related targets and their possible sub-indicators in the case of "net-positive impact on forest biodiversity" cover avoidance, minimisation, restoration and rehabilitation. » Refer to E1-4 Targets for climate target, » Refer to E2-3 Targets for air emissions and water targets, and » Refer to G1-2 Responsible sourcing for sourcing targets.

All UPM-owned forests are certified or in the process of being certified if the site is new. The forest area covered by UPM's FSC™ Group certification is approximately 570,000 hectares in Finland and over 14,000 hectares in Uruguay. UPM applies the same strict sustainability standards wherever it operates. UPM also promotes forest certification to private forest owners and other customers. UPM has established FSC™ Group certification schemes in Finland and in Uruguay, which support small forest owners' access to certification.

UPM FINANCIAL REPORT 2024

194

UPM FINANCIAL REPORT 2024

195

194

195

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024