UPM Annual Report 2024

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WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

ACTIONS

Planned actions • During 2025, UPM continues to develop and harmonise product stewardship and product-related regulatory monitoring processes in UPM to meet the needs of customers, the requirements of rapidly evolving product regulations and UPM's growing product portfolio. • In 2025, the new UPM Product Stewardship Standard is being implemented in all business areas to clarify roles and responsibilities and to ensure that UPM develops products that not only comply with rapidly evolving product regulations but also support the UN Sustainable Development Goals. • Continued Sustainable Product Design concept implementation in various UPM businesses, including lifecycle assessment work related to respective projects. Making use of residues, side streams and recovered materials Key actions UPM's goal is to make efficient use of all material streams and to implement a circular bioeconomy: renew; reduce; reuse; recycle; and recover. By 2030, UPM will not send process waste to landfill, and process waste will not be incinerated without recovering the energy. UPM's other circularity target is to use 100% of nutrients from recycled sources in its own effluent treatment plants by 2030. » Refer to E5-3 Targets for follow-up on these targets. Best practices, research results and ideas are shared throughout the Company, and internal working groups focus on issues such as the use of side streams and nutrient recycling. Green liquor dregs are a side stream from pulp production and one of the most difficult types of process waste to reuse. UPM uses its own side streams and residues, as well as materials recovered after product use, thus supporting the circular economy. Furthermore, most of UPM's organic production residues such as bark, wood residues and fibre-containing sludges from deinking and effluent treatment are used to generate energy for mill sites. Some fibrous residues are used in brick manufacturing or as soil amendment materials. Ash from biomass-based energy generation represents a large share of waste and by-products respectively. In 2024, 83% (93%) of the ash was used in various applications such as for soil stabilisation, fertiliser, in the cement industry or as a raw material for the production of paper fillers, and to replace caustic soda. UPM BioVerno renewable diesel and naphtha are produced from crude tall oil, a residue from chemical pulp production. For decades, UPM has been researching innovative uses for lignin, a side stream from pulp production. A good example is the WISA BioBond gluing technology, which uses lignin to replace part of the fossil-based phenol used in plywood production. Lime is a side stream from pulp production and can be used as a liming agent or for pH adjustment. UPM is also actively improving the circularity of its product lifecycle by using recovered materials. UPM Raflatac collects label waste from more than 440 partners worldwide and recycles it through its RafCycle® service. The service takes self-adhesive label waste and gives it a new life as a resource for pulp, paper and other fibre-based products or PET products. UPM also has a long history of using recovered paper to produce new graphic paper.

Actions in 2024 • UPM continued to follow-up the ISO and CEN standardisation of circular economy and tested the application of some of ISO’s circularity indicators. • Trials were conducted at several mills to test recycled nutrients in effluent treatment. If successful, the recycled nutrients will be brought into use – for example, at UPM Nordland Papier in Germany. • WISA birch plywood started to be wrapped and shipped in packaging material made of 30% post-industrial plastic. • Work started at UPM Ettringen and UPM Nordland Papier for separate sludge dewatering of biosludge and primary sludge. This will improve the utilisation options of these sludges. • In Uruguay, recycling options have been developed for lime kiln electrostatic precipitator dust, and environmental permitting for certain ash utilisation options is ongoing. In UPM Fray Bentos pulp mill, the sludge drying system was further modified allowing to increase the share of treated phosphorous sludge for utilisation from 50% to 80%. • Further work was done to find a solution for green liquor dregs recycling at UPM pulp mills in Uruguay and Finland. For example, in Uruguay, green liquor dried dregs were successfully trialed in cement production. Planned actions • In 2025, UPM continues its participation in the Finnish UUMA5 programme to enhance the utilisation of secondary raw materials in earth construction together with the Pohjolan Voima company. • The pulp mills in Uruguay continue to research and test waste utilisation possibilities which were identified in their 2030 Zero Solid Process Waste to Landfill roadmap. • In general, development work will continue for the recycled nutrient target and zero solid process waste to landfill target at several sites. » Refer to E3-2 Actions for water-related efficiency; » Refer to G1-2 Responsible Sourcing for UPM's Sustainable Supply Chain Programme, which addresses resource use. Resources In general, activities related to product stewardship, circular economy and waste management are included in UPM's overall operational expenditures, investment and resource planning. » Refer to E1-1 Investments and funding, Innovation products for significant actions and resources related to products » Refer to E2-2 Resources for more information on environmental costs and investments.

Product Design is the overarching concept in the development of products and services. LCAs are used to calculate potential environmental impacts of new raw materials or new products. They support decision-making in product development and provide evidence to support environmental claims for products entering or already available on the market. The ISO 9001 and ISO 22000 quality and food safety management systems provide a framework for continuous improvement of UPM's performance. All UPM's production sites are ISO 9001-certified. The relevant sites are ISO 22000-certified, which allows UPM to offer several products that are designed and produced to meet the requirements of food packaging. UPM's Chemical Management Standard requires careful assessment of the hazard properties of chemicals. All chemicals selected for use must have the lowest possible negative impact on human health, the environment and the safety of UPM's products. The list of restricted chemicals includes substances with selected hazard classifications. Product safety requirements are communicated to customers and suppliers of chemicals and raw materials. UPM has cooperated with several paper and chemical companies to increase transparency in the supply chain and accelerate the exchange of information. As a result of this cooperation, a harmonised questionnaire and a common tool (PP VIS) enable UPM to ensure that sourced products comply with laws and requirements such as the EU Ecolabel criteria. To support customer communications, UPM provides product safety profiles and statements of chemical substances that are not used in products. Most of UPM's products are certified with widely recognised international and regional ecolabels such as the EU Ecolabel. UPM Biofuels has both ISCC EU and ISCC PLUS certification, and UPM Biochemicals and four UPM Raflatac factories have ISCC PLUS certification. UPM Biofuels has also the Roundtable of Sustainable Biofuels (RSB) certification. All UPM businesses which are using wood have FSC™ and/or PEFC Chain of Custody certification. This verifies the origin of wood and guarantees that all wood used in UPM's products is legally harvested from sustainably managed forests and does not originate from controversial sources. Actions in 2024 • The EU Packaging and Packaging Waste Regulation (PPWR) is expected to be implemented from Q3/2026. PPWR requires all packaging to be recyclable. Plastic packaging that is brought to market in EU member states has to be recyclable. Plastic packaging must contain recycled material. In addition, PPWR will introduce changes to the responsibilities of packaging producers and fees, for example. UPM has started to assess the practical actions that need to be taken. • At the end of 2023, the UPM Sustainability Claims guideline was published. Related support material such as a practical guide and glossary, as well as training, was created and implemented in 2024. The guideline was adopted in all UPM businesses. • The UPM Product Stewardship Standard was developed and approved at year end. • In the last couple of years, UPM has improved and streamlined the management of chemical inventories and approval processes in UPM production units and developed a supporting IT system. Raflatac factories, sawmills and Biochemicals operations were not included in the first round, but in 2024, the system was extended to four Raflatac factories. • Product launches such as the UPM Biochemicals and Nokian Tyres joint project to develop a concept tyre partly based on UPM BioMotion™ Renewable Functional Fillers. » Refer to E1-3 Actions, Product stewardship: Climate-positive product portfolio

E5-2

Based on the identified material topics, UPM has set the following focus areas and Group-level targets related to the circular economy and resource use: • Forest (with a target for the share of certified fibre) • Waste (with a target for landfilled process waste) • Water (with a target for the use of nutrients in UPM's own effluent treatment plants from recycled sources) • Product stewardship (with a target on new products contributing to the SDGs and a target on eligible ecolabelled sales) • Responsible sourcing (with a target for spend covered by the UPM Supplier and Third-Party Code); » Refer to G1-2 Responsible Sourcing Action plans have been developed to achieve the Group-level targets, as well as for other relevant areas for continuous improvement. The key actions, previous year's key actions and planned key actions are presented below. UPM Clean Run concept » Refer to E2-2 Clean Run concept for a description of UPM's concept for improving environmental performance, including waste reduction and resource efficiency. UPM Sustainable Product Design concept UPM's Sustainable Product Design concept supports and steers product development projects, promotes a sustainable product lifecycle approach, and ensures that each new product and service has a proven sustainability value proposition. The concept also supports UPM's aim to develop new products and services that contribute to the UN Sustainable Development Goals (SDGs), as well as the development of a climate positive product portfolio. The approach is divided into six lifecycle steps: design; materials; production; distribution; use; and circularity. Several tools help evaluate the sustainability factors of each lifecycle step throughout the design process, such as Life Cycle Assessments (LCA), biodegradability and recyclability tests, or a screening tool for mapping environmental and social impacts and SDGs. Each step includes a variety of elements that guide the product development process. UPM's products have different applications, and customers are involved in different parts of the value chain. This means that the relevance of the different lifecycle steps and their specific elements may vary from business to business. Actions related to product stewardship Key actions For UPM, product stewardship comprises several areas, such as lifecycle thinking, chemical management, product safety, product-related statements or compliance declarations, or the use of environmental labels such as the EU Ecolabel or forest certification labels such as FSC™ (FSC N003385) or PEFC (PEFC/02-44-41). UPM's Sustainable