UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Our strategy

Our businesses

Sustainability

Sustainable supply chain programme

CREATING VALUE FOR PEOPLE AND SOCIETY

We renew the everyday - Together

ENVIRONMENT

SOCIAL

GOVERNANCE

ESG topics

Resources and circularity

Business ethics and values

Climate action

Labour and human rights

Health and safety

Responsible use of assets

Strategic focus

Biodiversity

Responsible use and management of assets in the supply chain

Ethical behaviour and culture of integrity in the supply chain

Climate change mitigation in the supply chain

Biodiversity protection in the supply chain

Responsible resource use in the supply chain

Decent work in the supply chain

Health, safety and security in the supply chain

Ambition

Risk mitigation

Sustainability risk identification, assessment and mitigation in the supply chain Transparent sharing of reliable and credible sustainability information between chain members

Compliance

Compliance with applicable regulations and UPM requirements in the supply chain

Ensuring a sustainable supply chain

and social impacts. We share reliable and credible sustainability information through collaboration organisations such as Together for Sustainability (TfS). We have risk management contingency plans for identified suppliers with a high sustainability risk. The assessment is based on the country of origin, the material or service sourced, and UPM’s supply chain ESG risk register, which includes country, commodity and sector-specific sustainability risk information. We also use EcoVadis and other assess ments, supplier audits and reviews, and joint development plans to conduct more detailed assessments of suppliers’ activities. All

• 3,200 (890) contractor reviews carried out in Uruguay, focusing on working condi tions. • 23 internal awareness-raising sessions on supplier engagement with around 300 participants. Four internal online training courses on responsible sourcing with about 1,100 participants. suppliers are regularly screened using our counterparty risk management tool. If non-conformities are identified, the supplier is required to take corrective measures. We monitor the implementation of these actions and provide support to improve the suppliers’ operations where necessary. Some contracts may have to be terminated due to insufficient measures or the seriousness of UPM’s findings. Group-wide -30 by 30 programme to reduce CO 2 emissions in the supply chain on page 59 Sustainability Statement, ESRS G1 Business conduct on page 236 For suppliers

STRICT REQUIREMENTS FOR WOOD SOURCING

All the wood we use is legally harvested and comes from sustainably managed forests. We also verify that the wood deliv ered to our mills complies with applicable timber and deforestation legislation and other regional requirements. Our suppliers of wood, pulp and recov ered paper are continuously assessed for their environmental and social respon sibility and their involvement in the local community. These raw materials are either FSC™ (N003385) and PEFC (PEFC/02- 44-41) certified or meet the FSC Con trolled Wood standard or due diligence requirements for PEFC. We source all wood assortments to ensure the optimal use of this valuable raw material. In 2024, we purchased 28.0 (25.5) million cubic metres of wood worldwide.

An effective supply chain ensures a reliable and cost-competitive supply of materials and services worldwide in all market situations.

We work closely with our suppliers and contractors to continuously improve the efficiency, transparency and sustainability of our supply chain. We buy products, materials and services from around 23,000 B2B suppliers world wide, including start-ups and international corporations. We also purchase wood from around 14,500 private forest owners. The main sourcing categories are fibres, chemicals, other raw materials, logistics, en ergy and indirect purchases such as services. We select suppliers based on long-term sup ply reliability, cost-competitiveness, product and service quality, financial stability, social and environmental responsibility, product safety, and product carbon footprint. Supplier management and digitalisation

support product development and the com mercialisation of new products. Our sustainable supply chain programme sets out our responsible sourcing practices and priorities. It addresses environmental, social and governance topics contributing to a responsible and resilient supply chain. The programme includes instructions on relevant procurement and supply chain management practices and impacts at UPM, as well as sup plier requirements. Implementation is man aged and tracked through our 2030 responsi bility targets and performance indicators. Compliance with regulations and UPM requirements We are committed to sustainability and ethical practices throughout our supply chain in ac

cordance with our Code of Conduct. The min imum requirements for suppliers are defined in the UPM Supplier and Third-Party Code. We expect our suppliers to promote the same requirements in their own supply chains. We also apply additional category-specific requirements – for example, for sourcing of wood, chemicals, pulp, packaging materials and logistics. The requirements cover envi ronmental performance, social responsibility and reporting. Contractors working at our production sites must comply with UPM’s safety requirements. Risk mitigation We identify our most business-relevant suppliers and supply chains with a high risk of potential negative environmental

ACTIONS IN 2024

• 91% (89%) of total spend with suppliers who are committed to the Supplier and Third-Party Code. • Our own auditors and external auditors conducted 97 (95) audits worldwide based on identified risks related to social and environmental topics, incl. human rights.

80

81

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024