UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Our strategy

Our businesses

Sustainability

OUR COMMITMENTS Sustainable forest management

ACTIONS FOR ENVIRONMENT

important not only to produce wood raw materi al but also for carbon sequestration, biodiversity restoration in forests and increased resilience to climate change. Enhancing biodiversity Forest biodiversity is critical to mitigating the effects of climate change and in preserving species and habitats. We are committed to en hance biodiversity in Finland, Uruguay and the United States where we own forests and planta tions. We ensure that our forests remain resilient and diverse in changing climate conditions and grow well for future generations.

OUR PRIORITIES Forest Action Programme Our global forest responsibility programme, For est Action, outlines an ambitious agenda for us to maximise the positive impact of our forestry operations by 2030. The programme covers targets and actions in climate, biodiversity, soil, water and social contribution. Climate For our forests to remain carbon sinks, growth must exceed harvesting. The annual carbon sink of UPM-owned forests in Finland and the USA and the plantations on our own and leased land in Uruguay has averaged -2.1 million tonnes of CO 2 equivalent over the last five years. The carbon sink is calculated annually by Natural Resources Institute Finland, and calculation methods are updated with the latest scientific developments. Biodiversity In Finland and the USA, biodiversity is mon itored and enhanced in the protected areas and commercial forests we own. In Uruguay, biodiversity is monitored and enhanced in con servation areas around the plantations. 40% of the land area we own in Uruguay is not planted and includes conservation areas and land in traditional use such as cattle grazing. Our third-party verified and certified wood origin monitoring systems ensure full traceability. No deforestation and no wood is sourced from tropical rainforests. No establishment of plan tations by converting natural forests or in areas where water is scarce. We do not use genetically modified trees. We require our suppliers and contactors to implement responsible practic es in accordance with the UPM Supplier and Third-Party Code, the company’s policies and rules, and respective forest certification chain of custody standards. Climate-positive forestry We ensure that our forests and plantations grow more than they are harvested and continue to act as carbon sinks. We ensure regeneration of forests. Our carefully selected tree seedlings are

Sustainable forestry Our business is based on sustainable forest management. We grow and harvest wood to produce renewable materials and products.

Respect for human rights and indigenous peoples

CASE STUDY

We respect human rights and the rights of indig enous peoples in all areas of our operations.

IMPROVING AND RESTORING THOUSANDS OF HECTARES OF HABITATS CHALLENGE Biodiversity loss threatens the bal ance of ecosystems and the diversity of life in forests. forest habitat programme in Finland, identifying more than 20,000 hectares of potential management and resto ration sites. The programme includes measures such as increasing the share of broadleaved trees, managing peatlands, groves, sunlit esker slopes and burnt environments, and restor ing drained peatlands. Under the pro gramme, we will restore a minimum of 3,000 hectares of peatland habitats and implement a management plan on at least 100 other sites by 2030. IMPACT We increase biodiversity and carbon sequestration and improve the resto ration of hydrology in our own forests in Finland. We also gain experience to educate our own personnel. ACTION In February, we published a new

Water and soil Our main harvesting practice is to leave untouched buffer zones along watercourses. In Finland, our forest inventory systems are updat ed annually to include the locations of valuable habitats and waterbodies in relation to wood harvesting activities. In Uruguay, we monitor wa ter quality close to our plantations. The planta tions are not irrigated apart from tree nurseries. We minimise our impact on soil and water in boreal and temperate forests by increasing the share of continuous cover forestry in peatlands and by monitoring soil damage. We provide jobs in rural areas related to forests, forestry and biodiversity, as well as on-the-job training and learning opportunities for children and young people. We have a long collaboration with academia and NGOs in sustainable forest ry. We participate in forest and environmental forums, including the Biodiversity Roundtables in Finland. We work with stakeholders and NGOs in Uruguay and local indigenous com munities in the USA. We also work with FSC™ and PEFC to develop certification schemes and promote sustainable forest management. Social contribution and stakeholder engagement

Forests and wood-based products play a unique role in climate change mitigation. Well-managed forests and plantations are a sustainable and efficient way to provide fibre for the increasing global demand. For estry also creates wealth and prosperity for local communities. Sustainability Statement, ESRS E4 Biodiversity and ecosystems on page 189 Ensuring a sustainable supply chain on page 80

UPM forests and plantations

2008 2024

Forest and plantation land, own and leased (1,000 ha)

1,012 1,090

Forest growth (million m 3 )

4.3

15.6

Wood harvested from UPM forests and plantations (million m 3 )

2.2

10.5

Value of forests and plantations, including land (EURm)

1,270 3,566

ACTIONS IN 2024 • In 2022, we began working with Natural Resources Institute Finland to improve soil carbon models for Uruguay using field data. Field measurements in eucalyptus plantations continued in 2024. • In Finland, a habitat programme was launched (on the right). • In the USA, we restored about 305 hectares of mixed forest and continued to build relationships with indig enous peoples, including employee training. • Cooperation with the University of Weihenstephan started in Germany to better understand the growth and carbon cycle of beech in the changing climate.

FACTS AND FIGURES Globally, about 135,000 hectares (15%) of UPM’s own land is protected or in re stricted use. Protected areas include valuable habitats, natural forests and other important areas such as wetlands or culturally significant sites. Of our four modern tree nurseries, three are in Uruguay, and one in Finland. All UPM-owned forests and plantations are certified or in the process of being certified if the site is new. In 2024, 90% of our own forests were FSC™ and PEFC double-certified, and 8% only PEFC (SFI) certified. Our FSC™ group certification schemes in Finland and in Uruguay support access to certification for small forest owners. In 2024, the forest area covered by UPM’s FSC™ group certification covered approximately 570,000 hectares in Finland and 14,000 hectares in Uruguay.

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UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024