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

• UPM Requirements for wood suppliers • UPM Forest Action Program

Understanding potential impacts on communities The material impacts, risks and opportunities related to affected communities have been identified in UPM's double materiality assessment and in UPM's Corporate Human Rights Saliency Assessment. In accordance with the UN Guiding Principles on Business and Human Rights (UNGPS), UPM pays particular attention to individuals or groups who may be at higher risk of negative human rights impacts due to their vulnerability or marginalization, such as women, young workers, migrant workers, and indigenous peoples. Active and open dialogue with local communities is key to understanding these potential and actual impacts in different operating contexts. All UPM sites that may have a significant impact on local communities identify and map their stakeholders and engage with them according to their stakeholder engagement plan. This process allows them to identify and understand their potential impacts on local communities, build community dialogue, and support the planning of long-term initiatives. In Uruguay, UPM regularly conducts social monitoring surveys through an external provider to gather public opinion on its forestry operations, nurseries, and pulp mills. The surveys include interviews with local community members and contractor employees, focusing on their perceptions, knowledge, and expectations regarding UPM’s activities. Topics include plantation forestry, mill operations, environmental protection, certification, protected areas, job satisfaction, income, safety, and access to training. Because of their size and nature of their operations, UPM's pulp mills, paper mills, biorefineries, and forest operations are considered relevant for actual and potential material impacts on local communities such as community safety and land rights, for example. In recent years, there has been a special focus on pulp production and forest operations in Uruguay because of the construction and startup of a new pulp mill. Policies The UPM Code of Conduct expresses the company's respect for people and human rights, the environment, and ethical business practices. The Code is complemented by UPM's Sustainability Policy Statement, which addresses the engagement with stakeholders and society and company processes, e.g. related to sustainability due diligence. The UPM Supplier and Third-Party Code sets out minimum requirements for suppliers and other third parties. Refer to » G1-1 Policies In addition, specific aspects are covered in the following policy documents, programs and requirements: • UPM Standard for community engagement and the UPM Share and Care Program • UPM Sustainable Supply Chain Program, Refer to » G1-2 Sustainable Supply Chain Program S3-1

Impacts, risks and opportunities

The policy documents cover communities in UPM's area of influence and/ or communities in suppliers’ area of influence. There is a special focus on communities with potential impacts from forest management and harvesting via UPM's requirements for wood suppliers and the UPM Forest Action Program. Human rights in the affected communities UPM is committed to respecting human rights in line with the United Nations Guiding Principles on Business and Human Rights. UPM respects the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. UPM also promotes the human-rights-related principles of the UN Global Compact. UPM expects a similar commitment from its suppliers, third parties, and joint venture partners, as set out in the UPM Supplier and Third-Party Code. The UPM Code of Conduct, the UPM Sustainability Policy Statement, and the UPM Supplier and Third-Party Code are aligned with these internationally recognized standards. UPM's Sustainability Policy Statement specifies topics such as land use and engagement with communities, as well as grievance mechanisms, incident handling and remediation: • UPM recognizes the importance of responsible land tenure and respect for land rights. UPM is committed to ensuring that the land tenure and resource rights of individuals and communities, including indigenous people, are respected and promoted. UPM adheres to the community engagement practices embedded in forest certification requirements, including Free, Prior, and Informed Consent (FPIC), where applicable. • UPM has a zero-tolerance approach to land grabbing and maintains a respectful and mutually beneficial relationship with local communities in UPM's area of influence. • UPM recognizes the importance of dialogue and open communication channels with internal and external stakeholders who are or may be affected by UPM's actions. UPM acknowledges the need for a clear and consistent approach to local community consultation and social monitoring. UPM pays particular attention to individuals or groups who may be at greater risk of negative human rights impacts due to their vulnerability or marginalization, such as women, young workers, migrant workers, and indigenous peoples. • UPM monitors and works to remediate negative human rights impacts of which it is aware of, and which its activities have caused or contributed to. Access to UPM's Report Misconduct channel is ensured for all stakeholders. In 2025, no severe human rights incidents were reported in connection with affected communities where UPM's activities would have caused or contributed to the harm.

ESRS 2 SBM-3

Overview of material impacts, risks and opportunities

Material topics

Impacts, risks and opportunities

Description

Local engagement

Positive impact: Impact on local development through UPM’s production sites and investments

UPM promotes positive impacts in local communities in various ways, for example, through the development of infrastructure. Surrounding communities also benefit from tax payments and employment opportunities. Measures also include apprenticeship programs in Finland, Germany, and Uruguay, and collaboration with educational institutions to contribute to science and research and increase the social capital and skills. UPM's Share and Care Program shares resources with causes that promote the vitality and well-being of communities where UPM operates. In Uruguay, the UPM Foundation (Fundación UPM) promotes education and entrepreneurship through cooperation with social organizations and local representatives. Potential material negative impacts can occur as a result of safety incidents in transportation to and from UPM's paper mills, pulp mills, biorefineries, and forestry operations, environmental incidents in UPM’s operations, or a decrease in employment and taxes because of UPM's restructuring measures, for example. UPM manages these for example by certified environmental and safety management systems, internal standards and other locally defined measures. UPM's own forest areas are located in Finland, Uruguay, and the U.S. They are considered particularly relevant due to their importance for local communities. The focus of UPM's reporting is on its operational countries with significant landholdings such as forestry or plantations operations. • For example, UPM Forestal Oriental in Uruguay operates in five regions in the departments of Cerro Largo, Colonia, Durazno, Flores, Florida, Lavalleja, Paysandú, Río Negro, Rivera, Rocha, Salto, Soriano, Tacuarembó and Treinta y Tres. In every region, UPM identifies and works with affected communities. UPM reviews the planning of operations annually (including planting, harvesting, loading, and transportation), identifying the areas that will be affected, and the activities that will be carried out with the communities to prevent, mitigate, and accommodate such activities. • Communities along the undertaking's value chain: UPM's wood and other applicable wood-based raw material sourcing complies with forest certification requirements on responsible land tenure and securing the land-use rights of indigenous peoples. • Communities of indigenous people: UPM recognizes that the most marginalized and vulnerable populations (e.g. indigenous and tribal peoples) may be disproportionally affected by land acquisition and/or use of wood and other natural resources and therefore require special safeguards. UPM recognizes that its landholdings and wood sourcing in the U.S. may have potential impacts on indigenous communities. Forest certification systems and other safeguards are established to avoid potential negative impacts, so this is not considered a potential material negative impact.

Local engagement

Potential negative impact*: Environmental incidents or safety incidents, as well as restructuring situations, may affect people in the communities surrounding UPM's sites and forestry 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 Building and maintaining good relations with and supporting the vitality of local communities close to UPM's operations is essential for the acceptability of operations and identifying the challenges, key risks, and opportunities in the operating context. Active and open dialogue with communities supports the management of the impacts of UPM's operations and activities, and contributes to the sustainable development of surrounding communities. In general, human rights considerations and due diligence requirements are integrated into UPM's global processes, which form the basis for UPM's business model. UPM identified its material positive and potential negative impacts for communities during its double materiality assessment, including the Corporate Human Rights Saliency Assessment. However, none of these material impacts is considered as resulting in a material financial risk or opportunity. Refer to » ESRS 2 IRO-1 Materiality assessment process Description of communities affected by UPM's operations The following types of communities could be materially impacted by UPM and are included in the scope of UPM's disclosure: • Communities living or working around the undertaking’s operating sites: UPM considers the local communities close to its pulp mills, paper mills, biorefineries, and forestry operations as those who are potentially materially impacted by its operations. The main production units are UPM's pulp mills, paper mills, and biorefineries, which are located in China, Finland, Germany, the UK, Uruguay, and the U.S.

UPM Financial Report 2025

230

UPM Financial Report 2025

231

230

231

UPM Annual Report 2025

UPM Annual Report 2025