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

TARGETS

METRICS Resource inflows

Circular product design

Stewardship) and the supply chain. These targets support UPM's policy objective for the responsible use of resources and the circular bioeconomy (UPM Sustainability Policy Statement). UPM's sustainability targets are developed by taking the views, wishes and perspectives of external stakeholders from UPM's constant multi-stakeholder dialogue into account.

Product stewardship is one of UPM's sustainability focus areas. It includes three product-related targets (see table above) that are linked to circularity and recyclability: • Circularity usually has a positive impact on the carbon footprint of products, thus supporting UPM's target of a climate-positive product portfolio; • Circularity is an aspect of UPM's Sustainable Product Design concept and contributes positively to SDG 12 "Responsible consumption and production"; • The EU Ecolabel for graphic paper includes criteria for recyclability. Circular material use and minimisation of primary raw material UPM is committed to continuous improvement of resource efficiency and to a circular bioeconomy approach. The Company uses materials recovered from production processes and develops recycling and utilisation options for side streams and residues from production processes, as stated in UPM's Sustainability Policy Statement. UPM has also dedicated targets for zero process waste to landfill and 100% use of nutrients from recycled sources in UPM's effluent treatment plants. Use of renewable resources Wood is a renewable resource and is UPM's main raw material. UPM's target of 100% certified fibre by 2030 underlines the importance of forest certification for wood-based resources, even though Chain-of Custody certification for non-certified forest areas already ensures the origin of wood, legal harvesting and sourcing of wood from non controversial sources. Forest certification also plays a crucial role in maintaining and enhancing biodiversity. » Refer to E4-3 Actions, Forests and biodiversity Sustainable sourcing Responsible sourcing is one of UPM's sustainability focus areas and includes targets and key performance indicators. Resources and circularity are also addressed as relevant environmental issues in UPM's Sustainable Supply Chain Programme. » Refer to G1-2 Responsible Sourcing Waste management By 2030, zero process waste will be sent to landfills or to incineration without energy recovery. This means all UPM's non-hazardous process waste must be recycled or recovered. Waste management supports the achievement of this target, e.g. through proper sorting of waste and research into waste recycling options. UPM's targets can contribute to waste prevention, waste recycling or energy recovery from waste. The targets are voluntary and additional to legal requirements.

E5-3

To manage its sustainability activities, UPM has set several targets and key performance indicators for its sustainability focus areas covering its own operations (covered under Forest, Water, Waste, Product

E5-4

Wood and fibre-based products are the basis of UPM's operations. Certified Chain-of-Custody systems and forest certification ensure that wood and other fibre-based materials are sourced from sustainably managed forests. UPM's main sourcing categories are fibres (wood and fibre-based materials), other raw materials (including pigments and chemicals), indirect materials, and services, logistics and energy.

Targets related to circular economy and resource use

SUSTAINABILITY FOCUS AREA AND KEY PERFORMANCE INDICATOR

BASE YEAR

TARGET FOLLOW-UP 2024 (2023)

BASE YEAR

VALUE 2030 TARGET

Forest Share of certified fibre

UPM’s external purchasing spend 2024

2015

84 %

100 %

88.5% (87.0%)

Water Nutrients used for effluent treatment from recycled sources *

13%

10%

2017

17 %

100 %

33% (33%)

Waste Process waste sent to landfills or to incineration without energy recovery

2015 122,000 tonnes

0 tonnes

97,000 (82,000) tonnes; 83% (87%) of UPM's process waste recovered or recycled

19%

27%

Product stewardship Climate-positive product portfolio

Since 2019

Continuous improvement

Decarbonisation solutions: 8% of sales For example, UPM SolargoTM, a new range of bio-based plant stimulants

Development of new products and services with contribution to SDGs

Since 2019

continuous

30%

Share of ecolabelled products

2015

77 %

100 %

89% (89%)

Raw materials Fibres Logistics Indirect material and services Energy

Responsible sourcing UPM total spend covered by UPM Supplier and Third-Party Code

2015

79 %

>80% (continuous)

91% (89%)

*Relevant for pulp and paper production

Suppliers are an essential part of UPM's value chain. Materials and services are purchased from approximately 23,000 B2B suppliers globally. The sourcing network includes suppliers from startup companies to international corporations. In addition, wood is purchased from about 14,500 private forest owners.

UPM's sustainability targets for 2030 are followed up and reported at Group level at least annually. The target parameters chosen cover different aspects of resource use and circular economy (see the following paragraphs). The targets are are evaluated and set based on their potential positive impact and the minimisation of any negative impact. Some of the targets related to resource use and circular economy show progress towards the Group-level targets. However, the total amount of process waste to landfills increased in 2023 and in 2024 due to the ramp-up of the Paso de los Toros pulp mill in Uruguay. Measures are taken to achieve UPM's zero process waste to landfill target. The share of recycled nutrients in effluent treatment remained at the same level in 2024, but the results of trials in 2024 should be visible in the coming years. » Refer to E5-2 Actions, Making use of residues, side streams and recovered materials » Refer to G1-2 Responsible Sourcing for more information about the sourcing target.

UPM's targets related to resource inflows and outflows specifically address the following aspects.