UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Sustainability Statement

Report of the Board of Directors

Financial Statements

Auditor's Report

Sustainability Assurance Reports

Turnover

4.13 “Manufacture of biogas and biofuels for use in transport and of bioliquids” relates to manufacture of biofuels from forest biomass and consists of UPM's biorefinery operations in Lappeenranta, Finland. 4.27 "Construction and safe operation of new nuclear power plants" relates to nuclear power plant Olkiluoto 3 through UPM’s shareholdings in Pohjolan Voima Oyj (PVO). 4.28 "Electricity generation from nuclear energy in existing installations" relates to nuclear power plants Olkiluoto 1&2 through UPM’s shareholdings in Pohjolan Voima Oyj (PVO). The activities 4.27 "Construction and safe operation of new nuclear power plants" (Olkiluoto 3) and 4.28 "Electricity generation from nuclear energy in existing installations" (Olkiluoto 1&2) are identified through UPM's shareholdings in Pohjolan Voima Oyj (PVO) which has direct shareholdings in Teollisuuden Voima Oyj (TVO), Refer to » Note 4.3 Financial assets at FVOCI in the consolidated financial statements. TVO operates three nuclear power plants in Finland after Olkiluoto 3 started its production phase in 2023. Both nuclear activities 4.27 and 4.28 are Taxonomy-aligned based on the comprehensive assessment conducted by Teollisuuden Voima Oyj (TVO). Until 2024 reporting, the nuclear and fossil gas-related activities have been reported separately according to the Complementary Delegated Act. Following the changes in EU Taxonomy reporting requirements in 2025, separate reporting templates for nuclear and fossil gas-related activities are no longer used. These activities are now disclosed within the common reporting templates. In 2025, UPM classified the previously reported economic activities 4.20 “Cogeneration of heat/cool and power from bioenergy” related to operation of installations used for cogeneration of heat/cool and power exclusively from biomass, biogas or bioliquids and 6.10 “Sea and coastal freight water transport, vessels for port operations and auxiliary activities” which relates to the sale of logistic services from leased vessels as non material based on the new materiality thresholds. In addition, UPM identified non-material activities 1.2 "Manufacture of medicinal products", related to its discontinued Biomedicals business, as well as 4.29 “Electricity generation from fossil gaseous fuels” related to the Nordland CHP plant in Germany. These latter two activities have also been reported as non - material in previous years, as they had no impact on the KPIs. Minimum Safeguards Requirements for Minimum Safeguards shall ensure that a company not only supports environmental goals, but also adheres to international social standards and guidelines. UPM evaluated the requirements to be fulfilled by UPM's Code of Conduct and related business practices, measures, and commitments. UPM's due diligence and remedy processes consider social and employee matters, respect for human rights, anti-corruption and anti-bribery. Information on Principal Adverse Impacts (PAIs), as defined in the EU SFDR, are addressed in UPM's reporting, if relevant. UPM's practices and assessments in relevant areas are described in more detail in the following sections: • Commitment to international frameworks: Refer to » S1-1 • UPM Code of Conduct and other corporate policies: Refer to » G1-1

• Taxation: See UPM Annual Report, chapter "Contributing to society through taxes"

EU Taxonomy EU Taxonomy is a sustainable finance classification system based on Regulation (EU) 2020/852, which defines criteria for economic activities that are considered environmentally sustainable. It represents an important step towards achieving carbon neutrality by 2050 in line with the EU’s climate and environmental goals. For the reporting year 2025, the EU Taxonomy disclosure requirements were amended to introduce a quantitative materiality threshold for the economic activities and new simplified reporting tables including a new summary table. Economic activities representing less than 10% of turnover, capital expenditure (CapEx) or operating expenditure (OpEx) may be reported as non-material. These changes aim to reduce reporting complexity while maintaining transparency on taxonomy-eligible and aligned activities. Assessment of Taxonomy eligibility and alignment UPM annually conducts a thorough evaluation of the eligibility and alignment of activities with the requirements defined in the Taxonomy Regulation. The assessments are coordinated by UPM's Finance and Responsibility Teams with the support of several UPM functions and businesses. EU NACE Classification (Statistical Classification of Economic Activities in the European Community) is used as a reference for activity identification. In 2025, UPM identified seven material eligible economic activities of which five were Taxonomy-aligned. All the activities aim at a substantial contribution to climate change mitigation (CCM) and they meet specific technical screening criteria including criteria for 'do no significant harm' (DNSH) stated for each activity within the relevant Appendix to the delegated act. For all activities contributing to climate change mitigation, a physical climate risk assessment is needed pursuant to Appendix A to the Climate Delegated Act. Substantial contribution and 'do no significant harm' criteria were reviewed together with the sustainability experts from related UPM's businesses. UPM continues to report activities 1.1 “Afforestation” and 1.3 “Forest management” as Taxonomy-eligible but not Taxonomy-aligned for the reporting year 2025. These activities consist of UPM's afforestation operations in Uruguay and forest management and regeneration activities in Finland, Uruguay, and the USA. UPM considers that the mentioned activities fulfil all the alignment requirements, apart from the third-party verification (section 4. Audit). UPM has been searching for a partner who would fulfil Taxonomy certifier requirements and is capable of conducting the specific audit on Forest management. Until now, UPM has not been able to find a suitable service provider from the market and, hence reports its forest management activities as not aligned. In 2025, UPM's material Taxonomy-aligned economic activities were the following: 3.6 “Manufacture of other low-carbon technologies” relates to technologies and products dedicated to the reduction of GHG emissions and includes mainly construction of UPM's new biochemicals biorefinery in Leuna, Germany. 4.5 “Electricity generation from hydropower” relates to the operation of electricity generation facilities that produce electricity from hydropower including UPM's own and co-owned hydropower plants.

100%

92%

92%

UPM's Taxonomy alignment 2025 and development compared to previous year In 2025, UPM's total Taxonomy-aligned turnover was €689 million (€774 million), 7% (7%) of total sales, Taxonomy-aligned CapEx was €284 million (€324 million), 46% (40%) of total CapEx and Taxonomy-aligned OpEx €88 (€71 million), 13% (11%) of total OpEx as defined in Disclosures Delegated Act. Taxonomy-aligned turnover KPI remained unchanged in percentage terms compared to the previous year. Taxonomy-aligned CapEx KPI increased 6 percentage points, mainly due to a higher proportion of Leuna biochemicals biorefinery investment out of total CapEx. OpEx KPI increased by 2 percentage points mainly due to higher OpEx related to the Leuna biorefinery and nuclear related OpEx associated with the Olkiluoto 1 and 2 nuclear plants (activity 4.28). The Taxonomy Regulation is still under development and does not cover all sustainable economic activities. The majority of UPM´s products and services, such as pulp, paper, timber, plywood, and label materials contributing to the turnover, are not included in the EU Taxonomy, thus the high proportion of Taxonomy non-eligible activities. KPIs and accounting policies The eligibility and aligned-related financial information to be disclosed pursuant to Article 8 of the Taxonomy Regulation is presented in the following pages in the tables Template 1: Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities - disclosure covering year 2025 (summary KPIs) and Template 2: Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities - disclosure covering year 2025 (Activity breakdown), the latter of which is duplicated for Turnover, CapEx and OpEx KPIs separately.

50%

7% 1%

7% 1%

0%

2025

2024

Taxonomy-aligned activities Taxonomy-eligible but not Taxonomy-aligned activities Taxonomy-non-eligible activities

CapEx

100%

43%

52%

50%

11%

9%

46%

40%

0%

2025

2024

Taxonomy-aligned activities Taxonomy-eligible but not Taxonomy-aligned activities Taxonomy-non-eligible activities

OpEx

100%

83%

85%

50%

4%

11% 4%

13%

0%

2025

2024

Taxonomy-aligned activities Taxonomy-eligible but not Taxonomy-aligned activities Taxonomy-non-eligible activities

• Sustainability governance: Refer to » ESRS 2 GOV-1 • Anti-corruption and anti-bribery: Refer to » G1-3 • UPM and human rights: Refer to » S1-1 , » S2-1 , » S3-1

UPM Financial Report 2025

170

UPM Financial Report 2025

171

170

171

UPM Annual Report 2025

UPM Annual Report 2025