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

Actions in 2025 • UPM's pulp and paper mills continued their systematic water saving efforts. For example, UPM Tervasaari investments on the production are expected to decrease specific water consumption and wastewater volumes. At UPM Nordland paper mill, a multi-year project has begun to replace pumps with high sealing water consumption to pumps consuming less water. Many pumps applicable for this change have been identified, and the total water savings opportunity is expected to amount to 20 m 3 /h once the project is completed. • UPM's San Francisco nursery in Uruguay implemented improvements to its water recycling system in the hardening area. The improvements allow the collection and recovery of irrigation excess in this part of the nursery, aiming for a 100% water recovery rate in the whole nursery. • A potential for water recovery was identified during a trial carbon capture project at UPM Caledonian paper mill when condensing moisture out of hot gas; an idea which has been shared internally in the regular Clean Run and 2030 environmental targets sessions. • UPM expanded its over 15-year collaboration with the Baltic Sea Action Group (BSAG) to include forestry water protection. • UPM's stream water program, launched in 2016, was expanded to include UPM-owned land areas in the catchment area. Planned actions • UPM will continue to develop and implement measures to reach its 2030 targets. • Further actions to improve the water recycling system at UPM's San Francisco nursery in Uruguay will be implemented in 2026, also focusing on improving sludge treatment. • In UPM Tervasaari, Finland, the startup of production investments resulting in lower specific wastewater volumes is scheduled for 2026. Water risk assessments Key action UPM regularly updates its water risk assessments. The most recent update was carried out in 2025 using the WWF Risk Filter Suite 2.0. According to the assessment, none of UPM's main production sites are located in basins with a current high basin physical risk. Rather, they are located in basins with a very low to medium physical risk. The tool also provides scenarios for water risks related to climate change for 2030 and 2050. The scenarios show that, with one exception, UPM's main production sites are in areas with a low to medium future

basin physical risk. The UPM Changshu paper mill near Shanghai in China is expected to face the highest increase in basin physical risk by 2050. However, the mill has made significant improvements in water efficiency and treatment over the years. Measures have included water recycling and wastewater recovery. Also the local authorities control the river flow to minimize risks such as drought or flooding in the area. The tool also gives several single-indicator results for country or water basin level, the highest ones of which UPM internally ground-proofs against actual conditions at the site. Actions in 2025 • An annual review of UPM's water risk assessment was carried out for its water-intensive production sites (i.e. pulp and paper mills as well as biorefineries) with the WWF Risk Filter. The results are summarized in this chapter. • A new internal ground-proofing, mitigation actions, and documenting process for WWF's tools highest physical water risk indicators per site was piloted. Planned actions • Sites that score very high on the water basin physical risk on even single quantitative or qualitative indicator level in the WWF Water Risk Filter assessment in 2025 will finalize their site-specific risk management analysis. • Utilization of the new WWF water risk tool version will be piloted in the sourcing processes. • Continuation of participation in the Science Based Targets Network (SBTN) Corporate Engagement Program in 2026. Resources In general, activities related to water management are included in UPM's overall operational expenditures, investment, and resource planning. Refer to » E2-2 Resources for more information on environmental costs and investments.

Policies

Actions

E3-1

E3-2

The UPM Code of Conduct expresses the company's respect for people, the environment, and ethical business practices. It includes its commitment to minimizing negative environmental impacts. The Code is complemented by UPM's Sustainability Policy Statement, which addresses the issue in more detail. The UPM Supplier and Third-Party Code sets minimum requirements for the value chain. Refer to » G1-1 Policies for more information about these policy documents. In addition, specific aspects are covered in the following policy documents and programs: • UPM Clean Run Standard, Refer to » E2-1 Policies UPM's Sustainability Policy Statement covers water management in a specific section. UPM's production sites aim to minimize water use and wastewater load. Basins where freshwater is scarce or projected to become scarce, or where the quality of the receiving water is considered to be poor, should be given particular attention. New water-intensive production sites shall not be located in areas with high water risk without appropriate measures to reduce related risks, taking future scenarios and the needs of society and nature into account. Furthermore, UPM's businesses are expected to design and optimize their processes for optimal resource efficiency, using best available techniques. Refer to » E2-1 Policies f or more information about the prevention and abatement of water pollution UPM also manages the impact of its forestry on water resources. UPM's sustainable forest management practices aim to minimize negative impacts and support the role of forests in the hydrological cycle. The Statement also takes UPM's approaches to sustainable product design, life cycle thinking, and life cycle assessment into account. This includes water-related issues. Refer to » E5-2 Sustainable Product Design concept for more information As a signatory of the UN Global Compact's CEO Water Mandate, UPM follows recognized water stewardship principles. UPM's Sustainable Supply Chain Program promotes supply chain compliance and risk mitigation. Resource efficiency is considered as one material environmental issue. UPM sources numerous commodities that are material-, energy-, or water-intensive to produce. UPM's sourcing professionals must identify such environmental considerations in their sourcing categories and integrate them into their category strategies and supplier management activities. Refer to » G1-2 Sustainable Supply Chain Program for more information UPM does not use marine resources. Connections with oceans or seas are related to the direct discharge of treated wastewater in the case of two UPM production sites located on the coast, the transportation of materials and products by sea, and indirectly through the discharge of treated wastewater originating in own operations into rivers and lakes ending up in the sea. UPM has assessed all these impacts but does not consider them to have a material negative impact or to pose a significant risk. • UPM Sustainable Product Design concept • UPM Sustainable Supply Chain Program

Based on the identified material topics, UPM has set the following focus areas and Group-level targets in relation to water: • Water (with a target for the volume of wastewater) • Responsible sourcing (with a target for spend covered by the UPM Supplier and Third-Party Code), Refer to » G1-2 Responsible sourcing Action plans have been developed to achieve the Group-level targets, as well as other relevant areas for continuous improvement. The key actions, previous year’s key actions and planned key actions are presented below. UPM's Clean Run concept Refer to » E2-2 Clean Run concept, for a description of UPM's means to improve environmental performance Water management Key action Pulp and paper production is UPM's most water-intensive activity. The water used in pulp and paper mills comes from rivers, lakes, or groundwater resources. It is used in the production processes as a dilution and transportation medium, and as cooling water for energy generation. Cooling water is not contaminated and can be discharged directly into the watercourse or used in production. The water used in production is recirculated internally, and only a small fraction eventually leaves the process as wastewater and needs to be replaced. All wastewater is treated in mechanical and biological effluent treatment plants before being released into watercourses. Refer to » E2-2 Reducing emissions to water for information about wastewater treatment The Group-level water reduction target (with process wastewater volume as the chosen indicator) therefore focuses on UPM's pulp and paper mills. Each pulp and paper mill has a respective roadmap to achieve its water reduction target by 2030. In addition, UPM's other businesses are also reducing their water use through their own measures. In 2025, the specific process wastewater volume per tonne of paper increased by 2% from the previous year and 6% compared to the target base year 2008. The specific value per tonne of pulp decreased by -3% from the previous year and by -37% compared to the target base year 2008. Refer to » E3-3 Targets for the follow-up of the target at Group level.

UPM Financial Report 2025

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UPM Financial Report 2025

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UPM Annual Report 2025

UPM Annual Report 2025