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

UPM's own protected land areas

Wood deliveries

Indicator development Measuring and monitoring biodiversity requires the development of indicators. As part of the development work, UPM has reviewed and updated the indicator set with improved and concrete targets also during 2024. The updates also ensure better alignment with other indicators and targets set by UPM Forest, such as the Habitat Restoration Programme. For the indicators relating to the structural characteristics of forests, there will be two changes that will be implemented from 2025 onwards: • The current “Forest age” indicator will be replaced by “Retained aspen trees”, which measures the volume of aspen with a diameter of 30+ cm per hectare (m3/ha). At the end of 2024, the amount was 0.78 m3/ha, based on the latest National Forest Inventory data (2019-2023). • The “Forest structure” indicator will be renamed to “Continuous-cover forestry” and the scope changed to follow-up the share of continuous cover forestry on UPM lands. Biodiversity indicators – Uruguay In Uruguay, the impact on biodiversity conservation actions is measured using five indicators as set out in the table below. Targets and metrics are defined for each indicator.

For indicators relating to habitats outside commercial use, there will be two new metrics for “Habitat restoration”: • Restored peatland: with a target of 3,000 ha by 2030. For 2024, it was 10 ha. • Number of sites restored or managed to promote biodiversity: with a target of at least 100 sites by 2030. In 2024, the number of sites was 6. An indicator “Research and co-operation” will be added for projects and co-operation with research partners and other NGOs to develop sustainable forest management practices that promote biodiversity.

Wood deliveries to UPM mills

Globally, about 135,000 hectares (15%) of UPM's own land is protected or in restricted use. Protected areas include valuable habitats, natural forests and other important areas such as wetlands or culturally important sites. UPM's approach is to donate and create protected areas adjacent to or even within its forest and plantation areas, and to identify valuable habitats that are not managed. This means that 100% of the forest operations are nearby protected or other biodiversity-sensitive areas. UPM does not operate in global biodiversity hotspots.

MIO M 3

2024

2023

Finland

16.4

16.1

Uruguay

10.4

7.8

Germany

0.5

0.6

USA

0.3

0.5

0.2

0.2

Estonia

0.2

0.2

UK

-

0.1

Austria

Total

28.0

25.5

Biodiversity indicators – Finland In Finland, the target of a net-positive biodiversity impact is measured for UPM's own forest land using nine indicators: tree species; forest age; forest structure; deadwood; indicator development; protected areas; valuable habitats; habitat restoration; species and habitat projects. Indicators are developed in cooperation with research institutes

and other stakeholders. The baseline is set as 2019, and the assessment of each indicator is done by comparing the current status with the previous years’ figures. In 2024, an overall positive development was measured for each indicator.

The total area where UPM carries out some form of conservation measure is 62,100 hectares. This includes a network of 31 biodiversity reserves, covering more than 12,800 hectares. Each biodiversity reserve has specific management and monitoring plans.

Biodiversity indicators – Uruguay

Biodiversity indicators – Finland

INDICATOR

TARGET

METRIC

2024

2023

INDICATOR

TARGET

METRIC

2024

2023

Biodiversity conservation areas in UPM's own land

Ensure that the areas with conservation purposes represent at least 20% of the land owned by UPM Maintain or enhance endemic and threatened species populations

% of the conservation area of total own land

19.6% 19.3 %

Tree species

Increase broadleaved tree species volumes Share of broadleaved trees

11.8%

11.3%

Deadwood volumes *

Increase deadwood volumes in commercial forests Maintain diverse forest age structure Maintain and increase diverse forest structure

Volume of deadwood per hectare

7,4 m3/ha

5,5 m3/ha

Endemic and threatened species

No. of endemic and threatened species recorded during the last (rolling) 5 years/No. of endemic and threatened species recorded during the cumulative baseline period (i.e. since 1992) Variation of the active area of invasive exotic woody species between year end and year start Percentage of the landscape units present in land owned by UPM, which are included in the Network of Biodiversity Reserves Average conservation index for the biodiversity reserves on High Conservation Value Area (HCVA)

2.8%

9.2%

Forest age

Maintain different age groups

+

+

Forest structure

Share of alternative regeneration methods

+

+

Protected areas **

Nature conservation areas (protected areas/total hectares)

Control of invasive exotic woody species

Reduce by 8% per year the active area of invasive exotic woody species

*

*

Improved nature conservation network

17.2%

16.8%

Valuable habitats Habitat restoration

Diverse protected valuable habitat network Number of valuable habitats

55,327

47,841

Improved biodiversity in restored environments

Coverage of UPM's network of biodiversity reserves

Cover at least 85% of the landscape units in which UPM owns land

75%

75%

Existence of habitat restoration projects

+

+

Species & habitat projects

More joint stakeholder projects to protect biodiversity Complement the set of indicators and develop monitoring with researchers

Existence of species and habitat projects Biodiversity index and indicator development with external experts

+

+

Conservation status index of UPM's biodiversity reserves

>0,75

0.82

0.74

Indicator development

+

+

* The baseline for a new indicator, deadwood volumes, was set in 2022. Data is based on National Forest Inventory data collected from sample plots located in UPM owned land and calculated by Natural Resources Institute Finland (Luke). Updated data availability depends on the NFI rotation (~5 years). The latest data is from NFI 12 (2014–2018). New NFI data is available in 2024. ** The protection percentage includes strictly protected forestry land and protected areas, which can be managed and used in accordance with the instructions of the authorities.

* This indicator will start to be reported by 2025. The total area of active invasions of exotic woody species at the end of 2024 was 9,400 ha. This value is the starting point for reporting the area reduction to be achieved in 2025.

UPM FINANCIAL REPORT 2024

196

UPM FINANCIAL REPORT 2024

197

196

197

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024