UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Sustainability

UPM in brief

Our strategy

Our businesses

Toward net-zero emissions (2025) We act through forests

Actions for the environment

We act through emissions reductions (Scope 1, 2, 3)

We act through products

Committed to climate action

-4.2 MtCO 2 Carbon

+2.9 MtCO 2 Scope 1 and 2 emissions

-2.4 MtCO 2 Temporary

substitution Fossil energy substitution

-1.9 MtCO 2 eq Carbon sink Carbon absorbed in trees and soil

Our strategy is driving the transition to a low-carbon economy.

carbon storage Carbon stored in wood-based products' lifetime

from own energy generation and purchased energy

Forests, wood-based products, low-carbon energy, and reducing fossil CO 2 emissions play a key role in mitigating climate change. As part of our Group-level sustainability tar gets for 2030, we have set ambitious targets for all these areas. Our commitment Limiting global temperature rise We are committed to climate actions to mitigate the direct and indirect impact of our operations on the climate, to contribute to science-based emissions reduction targets in line with a 1.5 °C pathway as outlined in the Paris Agreement. We act through forests Forests and forest biodiversity are critical for mitigating the effects of climate change. We en sure that our forests and plantation areas con tinue to act as carbon sinks and remain resilient and diverse in changing climate conditions, so they can thrive for future generations. For our forests to remain carbon sinks, growth must exceed harvesting. The annual carbon sink of UPM-owned forests in Finland and the U.S., and the plantations on our own and leased land in Uruguay, has averaged -1.9 million tonnes of CO 2 equivalent over the past five years. Natural Resources Institute Finland calculates the carbon sink annually, and the calculation methods are updated with the latest scientific developments. We act through emissions reduction The most important way to mitigate climate change is to minimize the use of fossil fuels and raw materials. We favor renewable and Our priorities

Actions in 2025 • UPM Communication Papers launched a climate action roadmap to significantly reduce product emissions by 2030 (page 43). • Work with the Natural Resources Institute Finland to improve soil carbon models for Uru guay since 2022. Field measurements in eucalyptus plantations continued. • UPM and its shipping partner Bore Ltd. joined the FuelEU Maritime compliance pooling service with three modern dual-fuel vessels, which now use bio-LNG. • A harmonized process for verifying carbon footprint data from suppliers implemented and tested. Category-specific roadmaps to achieve a 30% CO₂ reduction implemented in all business areas.

+7.7 MtCO 2 eq Scope 3 emissions from value chain (purchased goods

-5.4 MtCO 2

Long-term carbon storage Long-term storage in trees and soils

Carbon substitution Avoided emissions by replacing fossil- based products

and services, logistics, etc.)

We act through forests: Trees and soil absorb carbon and act as long-term carbon storage. This means they bind CO 2 from the atmosphere, marking a negative in our carbon calculation. We act through emissions reductions: Emissions from our own operations and those of our supply chain increase the amount of CO 2 in the atmosphere, marking a positive in our carbon calculation. We act through products: Replacing fossil-based products and energy reduces emissions, marking a negative in the carbon calculation. Our products act as temporary carbon storage over their lifetime, binding CO 2 from the atmosphere. In 2025, the annual carbon stock of our sold products increased from the previous year, marking a negative in the carbon calculation. We will align our net-zero approach with recognized international carbon accounting and assurance standards once they are finalized.

other carbon-neutral energy sources, and we produce CO 2 -free hydro and nuclear power in Finland. We are also committed to reducing the emissions in our supply chain. We are focused on achieving our 2030 targets, including a 65% reduction in fossil CO 2 emissions (Scope 1 and 2) from 2015 levels and a 30% reduction in fossil CO 2 emissions from sourced materials and logistics (Scope 3) from 2018 levels. The Science Based Targets initiative (SBTi) has validated our fossil CO 2 emissions reduction targets as consistent with the 1.5 °C pathway outlined in the Paris Agreement. We have evaluated our position and resil ience in different climate scenarios for our businesses and functions from both physical and transitional perspectives using scientific expertise. We act through products Innovating new products that are not based on fossil raw materials is at the core of our strat

egy. We develop safe, sustainable products that serve as alternatives to fossil materials. Many of our products have been proven to be climate-positive. A key action is investing in the world’s first industrial-scale biorefinery for wood-based biochemicals in Leuna, Germany. In addition, we introduced several innovative, co-created flexible packaging solutions with partners and brands, such as EvoPak, Walkers Chocolates, Orkla Suomi and Walki Westpak. These co-creation projects have resulted in packag ing solutions that offer a recyclable alterna tive to traditional plastic packaging.

In focus

UPM’s biochemicals help mitigate climate change

Products made with UPM’s wood-based bio chemicals have a significantly lower carbon footprint than those made with fossil-based alternatives. We have conducted a com prehensive Life Cycle Assessment (LCA) to evaluate the environmental impact of our biochemicals from raw material extraction to manufacturing. Renewable functional fillers provide light weight materials ideal for various rubber and plastic applications, such as tires and other automotive goods. UPM's renewable glycols behave like their oil-based counterparts and can be integrated

into existing manufacturing and recycling processes. They are well-suited for use in bottles, packaging, textiles, deicing fluids, composites, and detergents. Replacing fossil-based raw materials with lignin helps industries reduce their environ mental impact. We offer lignin solutions for the production of phenolic resins, adhesives, plastics, and polyurethanes. The Leuna biorefinery in Germany started the production of industrial sugars in De cember. Further commercial products are expected to enter the market in the first half of 2026.

Sustainability Statement, ESRS E1 Climate change on page 155 Our 2030 sustainability targets and progress on page 47

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UPM Annual Report 2025

UPM Annual Report 2025