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

plans for improving working conditions at each of the farms supplying them with starch. • A Corporate Human Rights Saliency Assessment was carried out. • A Human Rights Impacts Assessment was carried out in Uruguay. It included a review of supply chain management. • The implementation of the Sustainable Supply Chain Programme after its launch in 2023. Planned actions • UPM will continue to develop and implement measures to reach its 2030 targets. • Continuation of the contractor management project. » See Actions in 2024 • Implementation and training of the new UPM Supplier and Third-Party Code during 2025 Health and safety of contractors working on UPM sites and forest operations UPM's safety work is based on long-term planning, effective communication and leadership. Safety is integrated into all daily operations, and measures and standards cover UPM's own workforce, as well as contractors working on UPM's production sites and forest operations. UPM's Group-wide safety project aims to give a new boost to UPM's safety culture and address the changes needed throughout the organisation. For more information on key actions, actions in 2024 and planned actions, » Refer to S1-4 Safe and healthy working environment. UPM's actions » Refer to S2-4 Actions and targets » Refer to S2-5 Targets address the material risk which UPM identified related to workers in the value chain » Overview Refer to S2-1 Overview . The effectiveness of actions is tracked by a regular follow-up of targets. At the same time, the actions support the identified material opportunity by creating business value through supplier development and collaboration. » Refer to S2-1 Overview Incidents and remediation In 2024, no incidents of serious human rights violations occurred in UPM's value chain where UPM's activities would have caused or contributed to the harm. UPM monitors and works to remediate negative human rights impacts of which it becomes aware, and which the Company's activities have contributed to or caused. Remediation is specified case by case, based on verified impacts. The UPM compliance system covers remedy practices and ensures the adequacy of the process. Resources

of new suppliers and monitoring of business partners. These elements include counterparty screening, enhanced due diligence and Know Your Supplier screenings, forest and other certification systems, third-party sustainability assessments by EcoVadis, and the high sustainability risk supplier framework and model. We also conduct regular supplier audits and contractor reviews. In 2024, UPM carried out 97 (95) supplier audits and reviews globally. In addition, about 3,200 contractor reviews focusing on working conditions were carried out in Uruguay. » Refer to G1-2 Extensive supplier audits and reviews For processes related to engagement with value chain workers and measures to provide and/or enable remedy for human rights, » Refer to S2-2 and S2-3, chapter Processes below. PROCESSES Processes for engaging with value chain workers Stakeholder engagement is an essential part of UPM's business operations and activities and is implemented as appropriate to the topic and the nature and scale of the activities. Occupational health and safety is one of UPM's salient human rights issues in the supply chain. UPM's internal OHS audit programme includes engagement with contractors’ employees. In general, contractors and their employees at UPM's sites are required to adopt UPM's safe working practices and to comply with the rules and standards established by UPM. UPM also expects them to participate in hazard identification and proactive safety reporting. Before entering a UPM production site, contractors are required to attend UPM's safety induction and training, which covers the Company's safety requirements. In UPM's wood sourcing and forestry operations a continuous dialogue with stakeholders is also essential. The FSC Controlled Wood requirements are the minimum requirements that UPM applies to all its sourced wood (100% coverage). The requirements include a wide range of criteria related to the legality of the wood, respect for traditional and civil rights (including the rights of indigenous and tribal people), protection of areas of high conservation values, maintaining or improving the social and economic wellbeing of workers, and stakeholder engagement and dialogue. Processes are in place for providing feedback or submitting concerns to UPM. » Refer to S2-3 Processes for raising and handling concerns. Feedback and concerns are handled promptly in accordance with the Chain of Custody, forest certification and ISO 14001 environmental management systems. Stakeholders are informed of the actions taken by UPM in response to their feedback. There is also an annual stakeholder consultation process related to UPM's FSC forest management certificates. The focus of the consultation process is to identify forests with high conservation values and the actions required to maintain them. During the consultation process, stakeholders are also invited to express their other views on forest certification. In general, UPM's human rights due diligence processes include steps and measures to gain an insight into the perspective of workers. These include forest certification systems and related audits and worker S2-2

engagement, supplier audits, and contractor reviews, including respective worker interviews and continuous dialogue with suppliers by UPM sourcing professionals or through collaboration forums such as the Together for Sustainability (TfS) initiative or UN Global Compact. In Uruguay, UPM conducts social monitoring involving contractor workers. UPM also promotes local and global grievance mechanisms. The Senior Vice President of the Sourcing function and the Executive Vice Presidents of the business areas have the operational responsibility for ensuring engagement with value chain workers. Processes for raising and handling concerns UPM monitors and works to remediate negative human rights impacts of which it becomes aware, and which the Company's activities have contributed to or caused. Remediation is specified case by case, based on verified impacts. UPM establishes channels for reporting concerns, reviews reports carefully, handles personal data appropriately, ensures protection against retaliation and treats all reports in strict confidence. Investigations are conducted by designated persons with the necessary competences. If a report is substantiated, UPM takes appropriate disciplinary and/or legal action, and lessons are learned. » Refer to G1-1 Reporting and identifying concerns Local stakeholders can report their concerns directly to UPM representatives at the mills and other sites and through locally provided channels such as email and telephone. In addition, UPM has other local grievance channels for specific business contexts and local needs such as the “how am I driving” solution in Uruguay, which focuses on road safety. UPM Report Misconduct channel – SpeakUp® is communicated to the suppliers as part of the UPM Supplier and Third-Party Code. Furthermore, suppliers are informed about the existing grievance mechanisms, e.g. during supplier audits and other interactions such as contractor safety induction. The forest certification systems also have existing grievance mechanisms. S2-3

S2-4

UPM's identified material topics have been defined as a result of a double materiality analysis, including UPM's Corporate Human Rights Saliency Assessment, considering impacts, risks and opportunities related to workers in the value chain. The following UPM focus areas are relevant for workers in the value chain: • Responsible sourcing (with targets on spend covered by UPM Supplier and Third-Party Code and supplier audits); • Forestry (with a target for certified fibre share) • Safe and healthy working environment (with targets for fatalities, serious accidents and injury frequency) Action plans have been established to achieve the Group-level targets, as well as other relevant areas for continuous improvement. The key actions, previous year's key actions, planned key actions and overarching concepts are presented below. UPM monitors the effectiveness of its actions to manage material impacts by tracking and reporting on the progress of its sustainability targets for 2030. » Refer to S2-5 Targets. Furthermore, UPM reviews the effectiveness of its risk management procedures quarterly through its Compliance system. » Refer to G1-3 UPM compliance system Responsible sourcing Key action UPM's responsible sourcing practices and priorities are formulated in the cohesive overarching Sustainable Supply Chain Programme. » Refer to G1-2 Sustainable Supply Chain Programme for a general description of the programme and the risk mitigation approach. The programme defines prioritised ESG topics. In the social area, these are labour and human rights, as well as health and safety. Based on systematic risk assessment, UPM engages in informed risk mitigation activities. UPM sourcing professionals promote respect for people and human rights among their suppliers. This means understanding the relevant risks associated with their sourcing categories, integrating these considerations into category strategies, and planning and implementing appropriate management activities. These activities can entail further supplier assessments, audits and relevant corrective actions. Actions in 2024 • » Refer to G1-2 Extensive supplier audits and reviews • UPM continued its work on contractor management, which focuses on contractors working on UPM's production sites and forest operations. A project was initiated to develop a verification model to manage and develop contractors’ social responsibility performance. This complements the contractor safety work. • UPM renewed its Supplier and Third-Party Code. • UPM initiated a supply chain collaboration programme with its direct starch suppliers to improve the working conditions of farm workers in Thailand (UPM's tier 2–3 suppliers). Based on previously conducted farm audits, improvement areas were identified, and working conditions on the farms were integrated as a key consideration into the category strategy of UPM's starch sourcing. Furthermore, UPM's starch suppliers were required to establish specific targets and action

In general, activities related to workers in the value chain are included in UPM's investment and resource planning.