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

Sustainable Supply Chain Programme UPM's responsible sourcing practices and priorities are formulated in the cohesive, overarching Sustainable Supply Chain Programme. Each element contains clear instructions regarding the relevant sourcing and supply chain management practices and impacts at UPM, as well as tangible guidelines, requirements and expectations for UPM's suppliers.

Communication and training UPM offers its employees and suppliers capacity building sessions on its Sustainable Supply Chain Programme. In 2024, a total of 23 internal training and awareness-raising sessions on supplier engagement and status were held. Around 300 participants attended the sessions. In addition, 200 UPM employees completed e-learning training related to the Sustainable Supply Chain Programme. Individual supplier meetings were held during the year to support and raise awareness of the programme's expectations and means of collaboration with suppliers. For 2025, both internal and external capacity building sessions will continue with an increased focus on external stakeholder engagement. In connection with the -30 by 30 Programme for CO 2 reduction in the supply chain, UPM provides capacity building programmes for its employees and suppliers. In 2024, a total of 41 individual supplier meetings were held to ensure awareness of climate actions related to UPM's Scope 3 CO 2 emissions, support on product carbon footprint calculation methodology and collaboration on decarbonisation. UPM also organised two logistics-related climate webinars with more than 200 internal and external participants on the –30 by 30 Programme, climate-related requirements and sharing best practices on supplier engagement. Internal training on how to engage with suppliers in climate actions was offered in three sessions with 49 participants. Training on product carbon footprints was launched via an e-learning solution and completed by 95 employees in 2024.

meet the low sustainability risk requirements are supported in developing their practices. Suppliers and UPM are able to monitor and benchmark suppliers' sustainability performance against industry averages through EcoVadis. Supplier compliance UPM is committed to responsible sourcing practices in accordance with the UPM Code of Conduct. The minimum requirements for suppliers are defined in the UPM Supplier and Third-Party Code. UPM requires the suppliers to ensure that their suppliers and contractors providing products or services connected to the agreement between the supplier and UPM comply with the UPM Supplier and Third-Party Code or similar standards. In 2024, 91% (89%) of UPM's total spend was with suppliers who are committed to the Supplier and Third-Party Code. Additional category-specific requirements apply to wood, chemicals, pulp, packaging materials and logistics, for example. The requirements cover environmental performance, social responsibility and reporting. Contractors working at UPM's production sites must comply with UPM's safety requirements. UPM seizes sustainability-related opportunities to create business value through supplier development and collaboration. UPM actively participates in various development and innovation projects with suppliers and joins different sustainability initiatives when feasible. Sourcing objectives focus on selected environmental, social and governance issues (illustrated above). In 2024, UPM updated the UPM Supplier and Third-Party Code » Refer G1-1, Supplier and Third-Party Code. UPM also continued to work closely with Together for Sustainability (TfS). -30 by 30 Programme for CO 2 reduction The Group-wide -30 by 30 Programme to reduce CO 2 emissions in the supply chain focuses on cooperation in climate actions. » Refer to E1-3, Responsible sourcing – the -30 by 30 Programme, for more information.

Effective implementation is managed and tracked through UPM's 2030 sustainability targets, performance indicators and capacity building programmes.

Risk mitigation UPM identifies suppliers with the greatest business relevance and supply chains with a high risk of potential negative environmental and social impacts. Risk management contingency plans have been created for identified high sustainability risk suppliers. The evaluation is based on the country of origin, the sourced material or service, and the UPM supply chain ESG risk register, which includes country-, commodity- and sector-specific sustainability risk insights. The UPM Sourcing Risk Management Steering Group evaluates the development of all sourcing and supply chain risks and oversees the implementation of risk management strategies and actions EcoVadis and other assessments, supplier audits and reviews, and joint development plans are used to conduct more detailed evaluations of suppliers' activities. All suppliers are regularly screened using a counterparty risk management tool. If non-conformities are identified, the supplier is required to take corrective measures. UPM monitors the implementation of these measures and provides support to improve the suppliers' operations if necessary. Some contracts may have to be terminated due to insufficient measures or the seriousness of UPM's findings.

Extensive supplier audits and reviews Supplier audits and reviews are defined based on, but not limited to, identified risks related to social and environmental topics, including human rights. In 2024, UPM carried out 97 (95) supplier audits and reviews globally. 62 were conducted by UPM's own trained auditors and 35 were carried out by external auditors from independent accredited auditing bodies. 549 (125) findings were identified in these audits. In 2024, none of the findings were considered critical with regard to actual or potential significant environmental or social impacts. All findings are followed up with corrective potential further audits in close collaboration with the suppliers. In addition, about 3,200 contractor reviews focusing on working conditions were carried out in Uruguay. UPM has an extensive contractor assurance system in Uruguay. Assurance consists of compliance reviews covering labour and other document audits and field audits focusing on security, safety and working standards. The information gathered in field audits is cross-examined against the pre existing data. 621 (540) of UPM's suppliers completed and have valid sustainability assessments through EcoVadis in 2024. The results of the assessment show that 95% of UPM's suppliers assessed with EcoVadis have a low sustainability risk by supplier count. All suppliers that do not