UPM Annual Report 2024

First page Table of contents Previous page 200-201 Next page Last page

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

POLICIES

UPM's requirements for wood suppliers address legal compliance and detailed requirements related to the origin of wood. For example, the supplier must guarantee that all wood comes from acceptable sources, and that wood deliveries do not contain wood that is defined as unacceptable in the FSC™ Controlled Wood Requirements (FSC– STD-40-005 V3-1) or originate from controversial sources according to PEFC Chain-of-Custody requirements (PEFC ST 2002:2020). The pulp supplier requirements address environmental performance, forestry and wood sourcing, ecolabels, and reporting and audits. For example, UPM requires all pulp deliveries of the supplier to fulfil the latest valid FSC Controlled Wood and PEFC Due Diligence System requirements. The requirements for chemicals and pigments address, for example, legal compliance, ecolabel requirements, as well as reporting of relevant information to UPM. For example, UPM requires full compliance with the requirements of the local chemicals regulation, such as the European Union REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) and CLP (Classification, Labelling and Packaging) regulations. Use of renewable resources and responsible sourcing UPM offers bio-based alternatives to fossil-based materials. » Refer to ESRS 2 SBM-1, Strategy, business model and value chain . UPM's main raw materials are wood and wood-based materials. UPM's Sustainability Policy Statement, specific requirements for wood and pulp suppliers, and the UPM Forest Action Programme cover forest management, wood and fibre sourcing, and their various impacts and risks in detail. The UPM Supplier and Third-Party Code defines the minimum level of performance that UPM requires of all its suppliers and third parties such as agents, advisers, joint venture partners, local partners or distributors acting on behalf of UPM. UPM also requires all its suppliers to promote the same requirements in their own supply chains. » Refer to G1-1 Policies . The UPM Sustainable Supply Chain Programme promotes compliance and risk mitigation in the supply chain and helps achieve UPM's environmental, social and governance-related targets in the supply chain. » Refer to G1-2 Responsible Sourcing . Circular economy UPM's Sustainability Policy Statement states: "UPM is committed to a circular bioeconomy by using recovered materials from production processes and by developing recycling and utilisation options for side streams and residues. UPM promotes recyclability throughout the value chain and the use of recycled materials in its products."

E5-1

The UPM Code of Conduct expresses the Company's respect for people, the environment and ethical business practices, and includes its commitment to minimise negative environmental impacts. The Code is complemented by UPM's Sustainability Policy Statement, which addresses topics related to resource use and the circular economy in more detail. The UPM Supplier and Third-Party Code addresses minimum requirements for the value chain. » Refer to G1-1 Policies for more information about these policy documents. In addition, specific aspects are covered in the following policy documents, programmes and requirements: • UPM Product Stewardship Standard • UPM Clean Run Standard » Refer to E2-1 Policies • UPM's Sustainable Product Design concept » Refer to E5-2 Actions • UPM Sustainable Supply Chain Programme » Refer to G1-2 Responsible Sourcing • UPM Forest Action Programme » Refer to E4-3 Actions • UPM's requirements for wood suppliers • UPM Pulp supplier requirements • UPM's requirements for chemical and pigment supplier UPM Product Stewardship Standard The UPM Product Stewardship Standard aims to ensure that all UPM products produced and placed on the market anywhere in the world are safe for their intended use, compliant, and sustainable throughout their lifecycle. The standard establishes a framework for product management, emphasising thorough risk assessment, adherence to good manufacturing practices, and compliance with legislation, including detailed documentation. UPM businesses and functions are responsible for implementing the necessary actions and processes to meet this standard. Various management systems, such as ISO 9001 for quality management and ISO 22000 for food safety management, can be utilised to integrate these practices to operations. This standard and its processes apply to all products within UPM. It focuses on product safety, compliance with relevant legislation, sustainable product design and product lifecycle management and clear and accurate compliance and sustainability claims. The standard was developed in 2024, and approved by the UPM Marketing, Sustainability and Communications function in December 2024. It will be trained in 2025 to relevant persons working with product management, product development and technical customer service tasks in all UPM businesses. UPM's requirements for suppliers of wood, pulp, chemicals and pigments Specific requirements of UPM Sourcing for certain supplier groups are covered in additional documents, which are available on the UPM webpage.

Resource use and circular economy (ESRS E5) Resource efficiency and a circular bioeconomy respond to resource scarcity, contribute to climate change mitigation and provide sustainable new solutions for customers and consumers.

Increase of process waste sent to landfills or for incineration without energy recovery Nutrients used at effluent treatment from recycled sources 18% 89% 33% Compared to 2023 (2030 target: zero process waste) (2030 target: 100%) (2030 target: 100%) Share of applicable products eligible for ecolabelling