UPM Annual Report 2025

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Governance

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Impacts, risks and opportunities

ESRS 2 SBM-3

Overview of material impacts, risks and opportunities

Workers in the value chain (ESRS S2) UPM's human rights due diligence process includes various actions to gain an insight into the perspective of workers. These include forest certification systems and related audits and worker engagement, supplier audits, and contractor reviews, including respective worker interviews and continuous dialogue with suppliers.

Material topics

Impacts, risks and opportunities

Description

Sourcing

Potential negative impact*: Human rights violations affecting people in the supply chain

There is a risk in UPM's multi-tier supply chain related to labor exploitation, forced labor, health and safety, and environmental incidents, for example. UPM's sourcing practices aim to minimize the risk and any potential negative impacts to people or the environment. UPM seizes sustainability-related opportunities to create business value through supplier development and collaboration. UPM's sourcing targets focus on selected environmental, social and governance issues. UPM uses joint development and innovation projects with its suppliers and various sustainability initiatives to promote sustainability in selected areas. A lack of skilled workforce is a risk for UPM's supply chains and sourcing. Traditional blue collar jobs may not attract new skilled employees e.g. in forest harvesting or traditional manufacturing jobs. Contractor safety is a Group-wide focus area for the company. All contractor workers receive a general safety induction and detailed safety training focusing on specific risks at their workplace. Although several measures are taken to prevent injuries and accidents to employees and contractors on UPM's production sites and forestry operations, a risk remains. The importance of health and safety is also addressed and followed up with contractors, but negative impacts can occur. These negative impacts are related to individual incidents. Failure to maintain a high level of safety management could result in physical injury, illness, or liability to UPM's contractors or third parties. These risks are managed through established management procedures, health and safety precautions, and loss prevention programs. Description of value chain workers in UPM's reporting scope The following categories of value chain workers could be materially impacted by UPM and are included in the scope of UPM's disclosure: • Workers working on the undertaking site but who are not part of UPM's own workforce: Contractors and their workers or subcontractors who work on UPM's production sites and forestry operations. The workers are controlled by the contractor and perform services such as technical and maintenance services, construction services and forestry services, facility services like cleaning, catering or security, IT services, etc. • Workers working for entities in the undertaking's upstream value chain: Workers and contractors working for UPM's suppliers such as suppliers of raw materials or services. • Workers working for entities in the undertaking’s downstream value chain: Workers and contractors working for UPM's service suppliers such as suppliers for outbound logistics. • Particularly vulnerable workers: UPM recognizes young workers, migrant workers, women, indigenous peoples, and temporary and contractor workers as having a higher risk of potentially experiencing adverse human rights impacts.

Opportunity: Creating business value through supplier development and collaboration

Risk: Disruptions in UPM's supply chain

Health and safety at UPM sites and forestry operations

Positive impact: Increased focus on health and safety measures for contractors working at UPM's operations Negative impact*: Health and safety incidents, including serious accidents and fatalities for contractors working at UPM's operations

Supplier audits conducted based on identified sustainability-related risks

Contractor reviews with focus on working conditions in Uruguay

Training for employees and suppliers on the renewed UPM Supplier and Third-Party Code

80 2,000

Risk: Potential injury to UPM's contractors or third parties working at UPM’s operations

* UPM's identified material potential negative impacts are not seen as widespread or systemic but are related to potential individual incidents.

Relation to UPM's business model and strategy Suppliers are an essential part of UPM's value chain. They also play an important role in UPM's business-specific growth projects. Supplier management, with the required competencies and digitalization, boosts product development and the commercialization of new products. Refer to » ESRS 2 SBM-1, Suppliers UPM buys products, materials, and services from some 17,000 B2B suppliers worldwide. Approximately 51,000 contractors' workers provided services, such as maintenance, construction, and logging on UPM's production sites and forestry operations during 2025.

UPM Financial Report 2025

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UPM Financial Report 2025

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UPM Annual Report 2025

UPM Annual Report 2025