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

Serious occupational accidents (= High-consequence work-related injuries) Accidents at work causing: Life-threatening injury requiring intervention of emergency response personnel to provide life sustaining support; Life altering injury/Permanent disability: An injury resulting in permanent or long-term impairment or loss of use of an external organ, body function, or body part. Remuneration metrics Gender pay gap Since 2021, UPM has carried out on a voluntary basis an annual Company-wide process to review and close any possibly identified unexplained pay gap between the genders. The review applies to all UPM's operating countries and includes both salaried and shopfloor employees. This commitment is in alignment with the Company’s disclosed 2030 social responsibility targets in the fair rewarding focus area. For this annual review, UPM applies a framework of adjusted pay gap concept, which takes the typical legitimate drivers of pay and pay development into account – for example, the type and level of the job performed, the country and the location of the job, the individual’s performance and work experience, etc. These drivers are included in the review using a statistical model. If any unexplained pay gaps are identified between men and women performing the same type of job with equal value, the Company is committed to close them on an annual basis. In 2024, UPM continued monitoring the situation through the established process, and pay adjustments were implemented to close identified statistically significant unexplained gaps related to gender. The Company's initiative is exceptional among its peer companies. Further details on the statistical methodology can be found in the UPM GRI content index. The raw pay gap, as defined by the standard S1-16 and its disclosure requirements, is calculated purely by dividing the difference of average gross hourly pay of all male and all female employees by the average gross hourly pay of all male employees. In contrast with the adjusted gender pay gap framework, this raw pay gap framework and calculation does not take into account, for example, the number and distribution of the Company's male and female employees in different countries and locations or the different types and levels of jobs performed by the Company's male and female employees, or the experience and performance of the employees and the varying labour market conditions, all of which are considered legitimate factors typically driving pay and pay development decisions. Consequently, as S1-16

the legitimate factors affecting pay in real life are not captured in the calculation methodology, the calculated pay gap value is purely artificial and not a representation of real equal pay practices in the company's countries of operation. The Company's voluntary commitment to an annual review of gender pay equity status via the adjusted pay gap framework takes these legitimate factors into account as described above. In 2024, the UPM global raw pay gap, calculated in accordance with disclosure requirements as of 1st of October 2024, was 6.5%. Raw pay gap is calculated with the same effective date and data as the UPM adjusted gender pay equity review is conducted. Total remuneration ratio The annual total remuneration ratio of the highest paid individual to the average annual total remuneration for all employees at UPM is 23.6. The pay ratio is calculated using the UPM average annual total remuneration (without CEO) published in the Company's remuneration report for governing bodies. » See Remuneration report at upm.com. UPM discloses annually the CEO's total remuneration and UPM average employee remuneration for the past 5 years, based on the applicable legislation and the Finnish Corporate Governance Code. The average annual total remuneration for UPM employee is calculated by dividing the disclosed financial statement value of employee costs with the number of personnel at the end of the financial year (excluding the CEO remuneration), both published in the financial statements. UPM average employee remuneration includes the following elements of employee costs: salaries and fees, and share-based payments. The chosen methodology is in line with the figures published in the remuneration report and annual report regarding the employee costs and the remuneration of the highest paid individual. Incidents, complaints and severe human rights impacts No severe human rights incidents connected to UPM's workforce have been reported during the reporting period. The severity of incidents is assessed based on the UN Guiding Principles on Business and Human Rights. UPM's employees have multiple ways to raise concerns: they can discuss them with their manager, discuss them with a representative of UPM's Legal and Compliance, Human Resources or Internal Audit functions, or they can use the UPM Report Misconduct channel (available anonymously). » Refer to G1-1, Reporting and identifying concerns S1-17

Workers in the value chain (ESRS S2) In general, UPM's human rights due diligence process includes various actions to gain an insight into the perspective of workers. These include forest certification systems and related audits and worker engagement, supplier audits, and contractor reviews, including respective worker interviews and continuous dialogue with suppliers.

Supplier audits conducted based on identified sustainability-related risks

Contractor reviews with focus on working conditions in Uruguay

97 3,200

Renewal of the UPM Supplier and Third-Party Code

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UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024