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

IMPACTS, RISKS AND OPPORTUNITIES

Understanding potential impacts on communities The material impacts, risks and opportunities related to affected communities have been identified in UPM's double materiality assessment and in UPM's Corporate Human Rights Saliency Assessment. In accordance with the UN Guiding Principles on Business and Human Rights (UNGPS), UPM pays particular attention to individuals or groups who may be at higher risk of negative human rights impacts due to their vulnerability or marginalisation, such as women, young workers, migrant workers and indigenous peoples. Active and open dialogue with local communities is key to understanding these potential and actual impacts in different operating contexts. In Uruguay, UPM conducts regular social monitoring surveys at UPM's forestry operations and nurseries through an external service provider by interviewing affected community members and contractors’ employees. The surveys cover respondents' perceptions, knowledge and future expectations of UPM in topics such as plantation forestry activities, environmental protection, certification, protected areas, job satisfaction, income, safety measures and access to training. In 2024, a Human Rights Impact Assessment was carried out in UPM's operations in Uruguay, contributing to UPM's human rights due diligence and community engagement development locally and globally. The assessment confirmed that robust environmental and social management systems and stakeholder engagement activities are in place in Uruguay. However, it also highlighted development areas and sets a benchmark against international best practices for UPM's investment and business development projects in the future. » Refer to S3-4 Actions for more information on the findings of the assessment. Because of their size and nature of their operations, UPM's pulp mills, paper mills, biorefineries and forest operations are considered relevant for actual and potential material impacts on local communities such as community safety and land rights for example. In recent years, there has been a special focus on pulp production and forest operations in Uruguay because of the construction and start of a new pulp mill.

The policy documents cover communities in UPM's area of influence and/or communities in suppliers’ area of influence. There is a special focus on communities with potential impacts from forest management and harvesting via UPM's Requirements for wood suppliers and the UPM Forest Action Programme. Human rights in the affected communities UPM is committed to respecting human rights in line with the United Nations Guiding Principles on Business and Human Rights. UPM respects the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. UPM also promotes the human-rights-related principles of the UN Global Compact. UPM expects a similar commitment from its suppliers, third parties and joint venture partners, as set out in the UPM Supplier and Third-Party Code. The UPM Code of Conduct, the UPM Sustainability Policy Statement, and the UPM Supplier and Third-Party Code are aligned with these internationally recognised standards. UPM's Sustainability Policy Statement specifies topics such as land use and engagement with communities, as well as grievance mechanisms, incident handling and remediation: • UPM recognises the importance of responsible land tenure and respect for land rights. UPM is committed to ensuring that the land tenure and resource rights of individuals and communities, including indigenous people, are respected and promoted. UPM adheres to the community engagement practices embedded in forest certification requirements, including Free, Prior, and Informed Consent (FPIC), where applicable. • UPM has a zero-tolerance approach to land grabbing and maintains a respectful and mutually beneficial relationship with local communities in UPM's area of influence. • UPM recognises the importance of dialogue and open communication channels with internal and external stakeholders who are or may be affected by UPM's actions. UPM acknowledges the need for a clear and consistent approach to local community consultation and social monitoring. UPM pays particular attention to individuals or groups who may be at greater risk of negative human rights impacts due to their vulnerability or marginalisation, such as women, young workers, migrant workers and indigenous peoples. • UPM monitors and works to remediate negative human rights impacts of which it is aware, and which its activities have caused or contributed to. Access to UPM's Report Misconduct channel is ensured for all stakeholders. In 2024, no severe human rights incidents related to affected communities have been reported. However, in August 2023, an environmental incident occurred at the UPM Paso de los Toros pulp mill in Uruguay that had a temporary impact on a local creek. According to UPM's assessment, the incident did not cause or contribute to negative human rights impacts, but still required corrective measures. UPM implemented all necessary corrective actions and notified the environmental authorities and the local community about the incident. These measures aimed to prevent further harm and mitigate the impact on the environment and local communities. » Refer to E2-2 UPM's Clean Run concept for more information about the incident.

ESRS 2 SBM-3

Overview of material impacts, risks and opportunities

MATERIAL TOPICS IMPACTS, RISKS AND OPPORTUNITIES DESCRIPTION Local engagement Positive impact: Impact on local development through UPM’s production sites and investments

UPM promotes positive impacts in local communities in various ways, for example, through development of infrastructure. Surrounding communities also benefit from tax payments and employment opportunities. Measures also include apprenticeship programmes in Finland, Germany and Uruguay, and collaboration with educational institutions to contribute to science and research and increase the social capital and skills. UPM's Share and Care Programme shares resources with causes that promote the vitality and wellbeing of communities where we operate. In Uruguay, the UPM Foundation (Fundación UPM) promotes education and entrepreneurship through co-operation with social organisations and local representatives. Potential material negative impacts can occur as a result of safety risks in transport to and from UPM's paper mills, pulp mills, biorefineries and forestry operations, or a decrease in employment and taxes because of UPM's restructuring measures, for example.

Potential negative impact*: Environmental or safety incidents, as well as restructuring situations, may affect people or the environment in the communities surrounding UPM's sites and forestry operations

Local engagement

*UPM's identified material potential negative impacts are not seen as widespread or systemic but are related to potential individual incidents.

Relation to UPM's business model and strategy Building and maintaining good relations with and supporting the vitality of local communities close to UPM's operations is essential for the acceptability of operations and identifying the challenges, key risks and opportunities in the operating context. Active and open dialogue with communities supports the management of the impacts of UPM's operations and activities, and contributes to the sustainable development of surrounding communities. In general, human rights considerations and due diligence requirements are integrated into UPM's global processes, which form the basis for UPM's business model. UPM identified its material positive and potential negative impacts for communities during its double materiality assessment, including the Corporate Human Rights Saliency Assessment. However, none of these material impacts is considered as resulting in a material financial risk or opportunity. » Refer to ESRS 2 IRO-1 Materiality assessment process Description of communities affected by UPM's operations The following types of communities could be materially impacted by UPM and are included in the scope of UPM's disclosure: • Communities living or working around the undertaking’s operating sites: UPM considers the local communities close to its pulp mills, paper mills, biorefineries and forestry operations as those who are potentially materially impacted by its operations. The main production units are UPM' pulp mills, paper mills and biorefineries,

which are located in China, Finland, Germany, the UK, Uruguay and the USA. UPM's own forest areas are located in Finland, Uruguay and the USA. They are considered particularly relevant due to their importance for local communities. The focus of UPM's reporting is on its operational countries with significant landholdings such as forestry or plantations operations. • For example, UPM Forestal Oriental in Uruguay operates in five regions in the departments of Cerro Largo, Colonia, Durazno, Flores, Florida, Lavalleja, Paysandú, Río Negro, Rivera, Rocha, Salto, Soriano, Tacuarembó and Treinta y Tres. In every region, UPM identifies and works with affected communities. UPM reviews the planning of operations annually (including planting, harvesting, loading and transport), identifying the areas that will be affected and the activities that will be carried out with the communities to prevent, mitigate and accommodate such activities. • Communities along the undertaking's value chain: UPM's wood and other applicable wood-based raw material sourcing complies with forest certification requirements on responsible land tenure and securing the land-use rights of indigenous peoples. • Communities of indigenous people: UPM recognises that the most marginalised and vulnerable populations (e.g. indigenous and tribal peoples) may be disproportionally affected by land acquisition and/ or use of wood and other natural resources and therefore require special safeguards. UPM recognises that its landholdings and wood sourcing in the US may have potential impacts on indigenous communities. Forest certification systems and other safeguards are established to avoid potential negative impacts, so this is not considered a potential material negative impact.

POLICIES

S3-1

The UPM Code of Conduct expresses the Company's respect for people and human rights, the environment, and ethical business practices. The Code is complemented by UPM's Sustainability Policy Statement, which addresses the engagement with stakeholders and society and Company processes, e.g. related to sustainability due diligence. The UPM Supplier and Third-Party Code sets out minimum requirements for suppliers and other third-parties. » Refer to G1-1 Policies In addition, specific aspects are covered in the following policy documents, programmes and requirements: • UPM Rules for Donations, Sponsorships and Employee volunteering • UPM Sustainable Supply Chain Programme » Refer to G1-2

Sustainable Supply Chain Programme • UPM Requirements for wood suppliers • UPM Forest Action Programme