UPM Annual Report 2025

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aspects of their working environment. See » S1-2 Processes for more information about EES. For example, UPM and NGOs may have different views on how to address climate change and biodiversity loss, but they share the same goal. UPM believes that active and timely forest management maintains carbon sinks and enhances biodiversity, while society needs to reduce its dependence on fossil fuels and raw materials. UPM addresses stakeholders' concerns at the local, national and international levels, participates in public debates, and meets with NGO representatives. In general, human rights considerations and due diligence requirements are integrated into UPM's global processes, forming the basis for UPM's business model. The Board is informed through the Audit Committee Chair's regular reports when the Audit Committee receives information about stakeholders' views and interests that have an actual or potential material impact on sustainability. The Audit Committee oversees risk management and compliance and receives regular updates on these matters. UPM's identification of sustainable impacts, risks, and opportunities is based on continuous business processes and stakeholder engagement. UPM continuously assesses new opportunities, risks and impacts to achieve its strategic business objectives. As part of the double materiality assessment, UPM has formalized the identification of impacts, risks and opportunities in accordance with the ESRS requirements. All identified material impacts, risks and opportunities are covered by the ESRS Disclosure Requirements. Disclosure of ESRS S4 Consumers and end-users is not considered material for UPM because UPM does not sell directly to consumers. UPM's products are mainly used as raw materials and intermediate products, and UPM does not have visibility for the end users of the final products. Although UPM has businesses that produce final products, these are not considered material in the context of the overall UPM Group. Refer to » ESRS 2 BP-1 Coverage of the value chain The table on the next page provides an overview of the material topics identified. Impacts, risks and opportunities SBM-3

Overview of material impacts, risks and opportunities Positive impact or opportunity Negative impact or risk Upstream Own operations Downstream Short (1 year)

Interest and views of stakeholders

Medium (2–5 years)

Long (over 5 years)

UPM focus areas

Value chain location

Time horizon

Material topics ESRS

Impacts, risks and opportunities - in short

Economic and governance Renewable and circular products, and CO 2 -free energy ESRS 2, E1, E5

SBM-2

Positive impact: Renewable and circular products, as well as CO 2 -free energy, as alternative for fossil-based products

Product stewardship

Opportunity: Increasing market demand for bio-based products and CO 2 -free energy

Understanding the views and expectations of stakeholders is crucial to UPM's success and the acceptance of its operations. UPM aims to provide stakeholders with a clear picture of its future direction, strategy implementation, and creation of long-term value for stakeholders. UPM discloses relevant and accurate information in accordance with market regulations. As many stakeholders primarily see UPM as an economic operator, the main topics of discussion were financial success, stability, good governance, outlook and growth. Many discussions also focused on forests and forest use. Stakeholder mapping, active dialogue, and the systematic collection of feedback play an important role in UPM's stakeholder relations work. UPM carefully analyzes feedback to understand stakeholder expectations. These expectations are taken into account in development work and decision-making. UPM's strategy forms the foundation of its stakeholder dialogue. Focus areas and activities vary locally and according to stakeholder needs. Key stakeholders are defined based on materiality: UPM's operations have a significant impact on stakeholders and vice versa. Stakeholder relations are led and coordinated globally by the UPM Marketing, Sustainability and Communications function. The EVP of this function has the overall responsibility for stakeholder engagement processes and development, supported by the Responsibility Team at the Group level. The same responsibility exists at the business level, where the VP of the function is responsible for stakeholder engagement and continuous dialogue with customers, business partners, and local communities within their business area. This ensures proactive and relevant engagement across the business and geographical spectrum. UPM's most important stakeholders are investors, customers, current and future employees, suppliers, communities, media, governments and regulators, NGOs, and researchers. The company incorporated the views and insights gained through stakeholder engagement into its business decisions and strategy in multiple ways. These methods include, but are not limited to, regular interviews and surveys, open dialogue, and engagement events. Function representatives are responsible for turning the views into insights that help develop the business, its performance, and future strategy. The views and feedback from stakeholder dialogue are considered in the double materiality assessment to evaluate material sustainability topics further. The analysis is based on internal assessments, as well as stakeholder interests and concerns. The annual double materiality assessment also considers the interests, views, and rights of UPM's workforce, value chain workers and affected communities. The Group Executive Team reviews the identified material topics, and further action is taken if considered relevant. Measures for UPM's own workforce include the annual UPM Employee Engagement Survey (EES), which invites all employees to evaluate various

Potential negative impact: Threat of temporary shut-downs or closures of sites due to lack of competitive raw materials or sales market conditions causing negative impact on employment Risks: Dependency on a few main resources such as wood, energy, or water; Unpredictability of emerging regulation in the sustainability area Opportunity: Competitive advantage to increase efficiency in using main resources Positive impact: Ensuring and enhancing ethical behavior in operations and value chain Risk: Non-compliance with legislation or agreed practices Potential negative impact: Human rights violations with effects on people in the supply chain Risk: Disruptions in UPM's supply chain Opportunity: Creating business value through supplier development and collaboration

Business resiliency

ESRS 2

Profit

Business ethics and values

G1, S2

Governance

Responsible sourcing

G1, S2

Responsible sourcing

Environmental Biodiversity

Positive impact: Ensuring and enhancing net-positive impact on biodiversity by UPM's forest management Potential negative impact: Biodiversity loss in UPM's multi-tier supply chain

E4 Biodiversity

Risk: Dependency on wood as main resource for production Opportunity: Biodiversity ensures healthy forest growth

Positive impact: Circularity in UPM's production processes and recyclability of products reducing the need for non circular materials Opportunity: Avoided costs for waste disposal and purchase of virgin materials Positive impact: Climate change mitigation through climate-related effects of forests, renewable and circular products, and CO 2 -free energy Negative impact: Fossil CO 2 emissions from own energy generation (Scope 1), purchased energy (Scope 2) and related to value chain (Scope 3) Risk: Transitional as well as physical climate-related risks, due to changes in legislation and extreme weather events Opportunity: Transition opportunities covered by UPM's business model focusing on bio-based products and CO 2 -free energy

Circular bioeconomy

E5 Waste, Product

stewardship

Climate change E1

Climate

Potential negative impact: Deforestation in UPM's multi-tier supply chain Risk: Physical risks for forests due to climate change Opportunity: Accelerated forest growth due to climate change

Sustainable forestry

E4 Forestry

Sustainable water usage

E2, E3

Water

Potential negative impact: UPM's water usage and environmental incidents may effect the environment

Risk: Potential operational hazards causing shutdown or curtailed production

Social Decent work and fair rewarding

S1

Responsible leadership, Continuous learning and development, Fair rewarding Diversity and inclusion

Positive impact: Providing equal and adequate wages, training, and development support

Potential negative impact: Job losses due to closing of operations or restructuring

Risk: Lack of skilled workforce

Opportunity: Being the employer of choice

Diversity and inclusion Health and safety

S1

Positive impact: Enhancement of diversity and inclusion with positive effect on workforce

Positive impact: Enhanced health and safety for workforce in all UPM sites Negative impact: Health and safety incidents, including serious accidents and fatalities for people working at UPM sites and in the supply chain Risk: Potential injury of UPM's employees, contractors, or third parties Positive impact: Effect on local development through UPM's production sites and investments Potential negative impact: Environmental incidents or safety accidents can effect people in the communities around UPM sites

S1, S2 Safe and healthy working

environment

Communities S3 Community involvement

UPM Financial Report 2025

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UPM Financial Report 2025

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UPM Annual Report 2025

UPM Annual Report 2025