Report - COP Prototype

2022 Communication on Progress

UPM-Kymmene Corporation

Published date

June 27, 2022

No. of questions

Supplemental files

UPM Code of Conduct 2022.pdf UPM Responsibility Statement.pdf UPM Annual Report 2021.pdf upm-ar-gri-content-index-2021.pdf UPM Safety Rules.pdf UPM Human Resources Rules.pdf

CEO Statement

Signed

Governance

Policies and Responsibilities

1. Does the Board / highest governance body or most senior executive of the company:

Issue an annual statement about the relevance of sustainable development to the company

Issue an annual statement that addresses impacts on both people and the environment

Issue an annual statement highlighting a zero tolerance for corruption

Sign off on organizational sustainability targets

Supervise Environmental, Social, and Governance reporting

Regularly review potential risks related to the business model

None of the above

Optional comment

The annual "Report of the Board of Directors" includes statements on the sustainable development of UPM which is integrated in our business model and strategy (see page 120 "UPM introduction and business model"), addresses impacts on people and environment (see paragraphs on pages 137/139) and our commitment to anti-corruption (page 136 "Committed to anti-corruption"). The Board of Directors, assisted by the Audit Committee, monitors and assesses the effectiveness of the company’s risk management systems and oversees the assessment and management of risks related to the company’s strategy and operations (more information on risk management on page 131). See UPM Annual Report with the "Report of the Board of Directors" starting on page 120: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/120-121/

2. Does the company have a publicly stated commitment regarding the following sustainability topics?

	No, this is not a current priority	No, but we plan to have a commitment within 2 years	Yes, and the commitment is focused on our own operations	Yes, and the commitment includes our own operations and the value chain	Yes, and the commitment includes our own operations and the value chain along with communities and society
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Optional comment

These topics and respecitve UPM commitments are part of the UPM Code of Conduct. The UPM Code of Conduct emphasises UPM’s commitment to business integrity and responsible business operations, manifesting the company’s guiding principles. The preparations for the update of the Code of Conduct started in 2021, and the updated Code is launched in mid 2022. The UPM Code of Conduct is complemented by more detailed policies approved by the Board of Directors and rules or statements approved by the Group Executive Team, business areas or global functions. These policies, rules and statements cover such topics as treasury, taxes, disclosures, insider matters, anti-corruption, competition law, confidentiality, human resources, responsibility, forestry, information security and data protection, and safety. Please see UPM Annual Report 2021, page 135-136: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/134-135/

3. Does the company have in place a code of conduct regarding each of the following sustainability topics?

	No, this is not a current priority	No, but we plan to have a code of conduct within two years	Yes, focused on employee conduct	Yes, focused on employees and suppliers	Yes, focused on employees, suppliers, and other business relationships
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Optional comment

These topics are included in the UPM Code of Conduct. The UPM Code of Conduct emphasises UPM’s commitment to business integrity and responsible business operations, manifesting the company’s guiding principles. The preparations for the update of the Code of Conduct started in 2021, and the updated Code will be available in mid 2022. UPM requires its suppliers, third party intermediaries and joint venture partners to apply the same principles as in the UPM Code of Conduct and to fulfil criteria concerning social and environmental responsibility. These requirements are defined in the UPM Supplier and Third Party Code, latest updates effective as of beginning of 2020. Links: UPM Code of Conduct (https://www.upm.com/investors/governance/governance-guidelines/code-of-conduct/) Supplier and Third-Party Code (https://www.upm.com/about-us/for-suppliers/requirements/upm-supplier-and-third-party-code/) UPM Annual Report 2021, pages 135-136 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/134-135/)

4. Has the company appointed an individual or group responsible for each of the following sustainability topics?

	No one is specifically responsible for this topic	Yes, with limited influence on outcomes (e.g., limited access to internal information, limited decision-making authority)	Yes, with moderate influence on outcomes (e.g., has access to relevant information, reports to senior manager)	Yes, with direct influence of some outcomes (e.g., has access to relevant information, includes one or more senior manager with decision making rights	Yes, with direct influence at the highest levels of the organization (e.g., has access to relevant information, includes most senior members of organization)
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Optional comment

The Group Executive Team, headed by the President and CEO, is in charge of the management of corporate responsibility (including the topics listed above), determining courses of action and guiding development work. Please see UPM Annual Report 2021, page 136: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/

5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?

	No formal structure	Yes, and with limited influence on outcomes (e.g., limited access to internal information necessary to understand risks, poor representation from relevant departments or functions)	Yes, with moderate influence on outcomes (e.g., it includes representatives of some functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, reports to senior manager)	Yes, with direct influence on some outcomes (e.g., it includes representatives of functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, it involves one or more members of senior management)	Yes, and with direct influence at the highest level of the organization (e.g., full access to relevant information, it involves members at highest level of organization)
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Optional comment

The Board of Directors, with the assistance of the Audit Committee, is responsible for monitoring compliance with applicable legal and regulatory requirements and with the UPM Code of Conduct and other corporate policies. In addition, the Audit Committee oversees procedures for treatment of complaints and concerns received by the company, anonymous or otherwise. As part of the committee’s compliance review, the committee is provided with a quarterly report by the company’s Chief Compliance Officer, and a report of submissions under the company’s Report Misconduct channel by the Head of Internal Audit. Please see UPM Annual Report 2021, page 136: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/

Prevention

6. Does the company have a process or processes to assess risk?

	No, this is not a current priority	No, but we are planning to develop one in the next two years	Yes, related to our own operations	Yes, related to our own operations and entire value chain and other business relationships
Human rights risks
Labour rights risks
Environmental risks
Corruption risks

Optional comment

UPM and its business areas, functions and production units are exposed to a number of financial and non-financial risks and opportunities. Each business area, function and unit is responsible for identifying, measuring and managing risks related to its own operations, and for reporting on risk exposures, risk management activities and results to its own management team and to the Risk Management Function. In 2021, the compliance risk assessment process included a top down risk discussion with the management of each business area (including e.g. corruption). All UPM group entities were also assessed on the basis of country risk and complexity of operations. Please see UPM Annual Report 2021, page 136: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/

6.1. During the assessment of risk, which business relationships are reviewed?

	A few suppliers or business relationships [approximately less than 25 %]	Several suppliers / business relationships (i.e., first tier or other high priority) [approx. 25 - 50 %]	Most suppliers / relevant business relationships [approx. 51 - 99 %]	All suppliers / relevant business relationships outside the supply chain
Human rights risks
Labour rights risks
Environmental risks
Corruption risks

Optional comment

We have introduced a risk management process that covers all of our counterparties. The process includes an automated screening and alert functionalities. Our supplier assessment process covers supplier-specific financial, quality and supply risks, as well as any potential human rights and environmental risks. Human rights and environmental risk assessment is based on the country of origin (Transparency International), commodity specific risk and supply chain complexity. We extend risk assessments to several tiers, especially when commodities are originating from forestry, agriculture and mining industries.

7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?

	No, this is not a current priority	No, but we are planning to develop one in the next two years	Yes, related to our own operations	Yes, related to our own operations and entire value chain and other business relationships
Human rights risks
Labour rights risks
Environmental risks
Corruption risks

Optional comment

Identification, prevention, mitigation of actual and potential negative impacts to people or the environment is included in our processes in different ways. For example, - All production sites have a certified ISO 14001 management system. Occupational health and safety systems are in place as well in all operations, with a major part ISO 45001 certified. - We strive to ensure compliance with our values and commitments by implementing a company-wide compliance programme through our compliance system. The compliance system is embedded in our governance model and is designed to bolster company performance and a culture of integrity at all levels. - UPM reviews its human rights risks as part of UPM compliance process quarterly. The assessment of salient human rights issues on a business area level as well as the integration of the process to unit specific management systems continues. - UPM requires its suppliers, third-party intermediaries and joint venture partners to apply the same principles as in the UPM Code of Conduct including commitment to anti-corruption, environmental and social responsibility, safe products, human rights and occupational health and safety practices. See UPM Annual Report 2021, pages 76-77, 83, 136-137 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021)

7.1. During the due diligence process, which business relationships are reviewed?

	A few suppliers or business relationships [approximately less than 25 %]	Several suppliers / business relationships (i.e., first tier or other high priority) [approx. 25 - 50 %]	Most suppliers / relevant business relationships [approx. 51 - 99 %]	All suppliers / relevant business relationships outside the supply chain
Human rights risks
Labour rights risks
Environmental risks
Corruption risks

Concerns and grievance mechanisms

8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?

No, this is not a current priority

No, but we plan to within two years

Yes, we have an informal process (e.g., through supervisors, others)

Yes, we have a formal process

Optional comment

UPM employees have multiple ways to raise concerns: 1) Discussion with the manager, 2) Discussion with a representative of UPM Legal and Compliance, UPM Human Resources or UPM Internal Audit, 3) Use of UPM Misconduct channel which is available anonymously. Employees must report promptly any suspected or observed breach of the law, the Code of Conduct, or other UPM corporate policies. Concerns related to human rights, labour rights, environment, or anti-corruption are covered e.g. via their enclosure to the UPM Code of Conduct. Business partners are encouraged to report immediately to their UPM contact person any suspected or observed breach of the Supplier and Third-Party Code that may affect the business relationship or UPM or to use UPM Misconduct channel. See UPM.com: https://www.upm.com/investors/governance/compliance/reportmisconduct/ https://www.upm.com/articles/beyond-fossils/21/new-channel-for-voicing-concerns/

8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.

	No	Yes
Is the process communicated to all employees/workers in local languages?
Is the process available to non-employees (e.g., contractors, vendors, suppliers)?
Is the process confidential (e.g., whistleblowing process)?
Are there processes in place to avoid retaliation?
Can concerns be raised about suppliers or other business relationships (e.g., clients, partners, etc.)
Other (Please provide additional information)

Optional comment

UPM employees find information about how to raise concerns directly in the UPM Code of Conduct (available in 19 languages), and in UPM Intranet and webpages about the UPM Code of Conduct. The UPM Supplier and Third-Party Code is available in 22 languages, and also includes information about contact person for raising concerns and the link to the UPM Misconduct channel. The UPM Misconduct channel is available on the corporate website for both the company's employees and all external stakeholders. Concerns can be raised anonymously. Operated by an independent external service provider, the service is accessible in over 40 languages, 24/7. UPM’s Audit Committee oversees procedures for treatment of complaints and concerns received anonymously or otherwise by the company. As a part of the committee’s compliance review, the committee is provided with a quarterly report by the company’s Chief Compliance Officer and a report of submissions under the company’s Report Misconduct channel by the Head of Internal Audit. We do not tolerate retaliation against any person who, in good faith, reports suspected misconduct or participates in an investigation to resolve suspected misconduct. Examples of retaliation include demotion, dismissal, denial of promotion, salary reduction, and any kind of threatening, bullying, or harassment.

9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?

	No process to enable remedy to stakeholders	Remedy available to some stakeholders (i.e., some geographies, employees only)	Remedy is available to all affected stakeholders	Remedy is available to all stakeholders, and suppliers are expected to have similar policies
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Optional comment

At UPM, if a misconduct case is substantiated, appropriate disciplinary actions and/or legal proceedings will be determined, and lessons learned implemented. In the UPM Supplier and Third-Party Code, we set requirements for our suppliers to ensure they are committed to the same ethical business practices as we are, and we expect them to take these requirements further in their own supply chains.

Lessons

10. How does the company capture lessons regarding each of the following sustainability topics?

	No lessons are regularly captured	Conducts root cause analyses/investigation of major incidents	Conducts root cause analyses/investigation and changes organizational policies, processes, and practices accordingly	Systematically conducts root cause analyses/investigation and leverages learnings to influence both internal and external affairs
Human Rights
Labour Rights / Decent Work
Environment
Anti-Corruption

Executive Pay

11. Is executive pay linked to performance on one or more of the following sustainability topics?

Optional comment

As of January 2022, responsibility-related measures are included in UPM’s long-term incentive plan. The distinct performance measures are based on the company’s targets for fossil CO2 emission reduction, positive impact on biodiversity and ensuring gender pay equity (i.e. covering environment and labour rights/decent work). Because this decision was just made in early 2022, there's no plan for change or additions within two years to be expected.

Board Composition

12. Percentage of individuals within the company’s Board / highest governance body by:

	Number/Percentage	Not applicable (Please provide additional information)
Total number of board members (#)	9
Male (%)	67
Female (%)	33
Non-binary (%)	0
Under 30 years old (%)	0
30-50 years old (%)	22
Above 50 years old (%)	78
From minority or vulnerable groups (%)
No information available
Executive (%)	0
Independent (%)	9

Optional comment

We report diversity of the Board related to education, nationality, age, gender and tenure. See UPM.com ( https://www.upm.com/investors/governance/board-of-directors/board-diversity/)

Data Assurance

14. Is the information disclosed in this questionnaire assured by a third-party?

No assurance for any metrics

Limited assurance for minority of metrics (e.g., GHG emissions only)

Limited assurance for majority of metrics

The information in this questionnaire is to the major extent covered

Reasonable assurance for minority of metrics

Reasonable assurance for majority of metrics

Other (Please provide additional information)

Human Rights
Materiality / Saliency
1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?
Freedom of association and the effective recognition of the right to collective bargaining
Child labour
Forced labour
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)
Freedom of expression
Access to culture
Access to water and sanitation
Digital security / privacy
Rights of women and/or girls
Rights of indigenous peoples
Free, prior and informed consent
Rights of refugees and migrants
Other
Environmental pollution
Optional comment
UPM is committed to respect and promote human rights in line with the United Nations Guiding Principles on Business and Human Rights. UPM has assessed all its operations and activity and has identified the potential human rights issues and impacts. When considering both the severity and likelihood of these potential issues and impacts, UPM considers the salient human rights issues in the company’s sphere of influence to be environmental pollution, occupational health and safety (OHS), working conditions, protection of children, and forced labour. See UPM Annual Report 2021, page 137 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/)
Response
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
In 2021, UPM reviewed its human rights risks as part of UPM compliance process quarterly. The assessment of salient human rights issues on a business area level as well as the integration of the process to unit specific management systems continued. In 2021, we also have strengthened our commitments to ensure fair, equitable and competitive rewarding for employees and introduced new targets for living wage and gender pay equity. Our new target on diversity further demonstrates our drive in building diversity and inclusion into the workplace. All our targets for social responsibility are founded on the principle of respect for human rights. We constantly strive for better understanding of our impacts across our operations and business relationships and we prioritise our efforts accordingly. We monitor and work to remediate adverse impacts on human rights that we are aware of and that our activities have caused or contributed to. Remediation is specified case-by-case based on verified impacts. See UPM Annual Report, page 30 and 137 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/).

Labour

Commitment

1. Does the company have a policy commitment in relation to the following labour rights principles?

	No, and we have no plans to develop a policy	No, but we plan to in the next two years	Yes, included within a broader policy	Yes, articulated as a stand-alone policy	Not applicable (Please provide additional information)
Freedom of association and the effective recognition of the right to collective bargaining
UPM Human Resources Rules, 2019
Forced labour
UPM Human Resources Rules, 2019
Child labour
UPM Human Resources Rules, 2019
Non-discrimination in respect of employment and occupation
UPM Human Resources Rules, 2019
Occupational safety and health
UPM Safety Rules, 2018
Working conditions (wages, working hours)
UPM Human Resources Rules, 2019

Optional comment

Both documents (see attachments) are publicly available at our UPM.com

1.1. For each labour rights policy, is it:

	Aligned with international labour standards?	Publicly available?	Approved at most senior level of the company?	Applied to the company’s own operations?	Applied to the company’s supply chain and/or other business relationships?	Developed involving labour rights expertise from inside and outside the company?	Other (Please provide additional information)
Freedom of association and the effective recognition of the right to collective bargaining
Forced labour
Child labour
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)

Optional comment

These topics are addressed in the UPM Code of Conduct, the UPM Supplier and Third-Party Code, the UPM Human Resources Rules and in the UPM Safety Rules. All document are publicly available on UPM.com

Prevention

2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?

	No engagement on this topic	To better understand the risks/ impacts in question	To discuss potential ways to prevent or mitigate the risks/ impacts in question	To agree on a way to prevent/ mitigate the risks/ impacts in question	To assess progress in preventing/ mitigating the risks /impacts in question	To collaborate in the prevention/ mitigation of the risks/ impacts in question	Other (Please provide additional information)
Freedom of association and the effective recognition of the right to collective bargaining
Forced labour
Child labour
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)

Optional comment

In addition to robust Human Resources practices, UPM has adopted a continuous Human Rights Due Dilligence process that assesses and addresses these aspects, in collaboration with relevant stakeholders.

3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?

	Provided internal training/ capacity building for the direct workforce	Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)	Conducting an audit process and/or corrective action plan	Collective Action with peers or other stakeholders, in particular workers' organizations, to address the issue	Collaboration with governmental or regulatory bodies	Other (Please provide additional information)	No action within reporting period
Freedom of association and the effective recognition of the right to collective bargaining
Forced labour
Child labour
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)

Optional comment

Actions include, e.g.: the mandatory UPM Code of Conduct training for all employees, supplier audits and related development plans, our human rights due dilligence processes.

4. Who receives training for the following labour rights issues?

	No training provided	Select employees	All employees	Contractors	Direct suppliers of the organization	Indirect suppliers of the organization	Other – such as partners, clients, etc.
Freedom of association and the effective recognition of the right to collective bargaining
Forced labour
Child labour
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)

Optional comment

Human rights' aspects are covered in UPM's Code of Conduct and UPM's Supplier and Third-Party Code. 98% of active UPM employees (as of the end 2021) have completed the UPM Code of Conduct training. The Supplier and Third-Party Code is communicated to suppliers as part of the business contract. In 2021, 86% of UPM supplier spend was covered by the Code. In addition, occupational health and safety trainings are organised at all our production sites for employees and contractors working on-site.

5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?

	No monitoring of progress	Review issues on ad-hoc basis	Set annual targets/ goals, track progress over time (internal programs only)	Set annual targets/ goals, track progress over time (internal and external programs)	Other (Please provide additional information)
Freedom of association and the effective recognition of the right to collective bargaining
General commitment in the UPM Code of Conduct
Forced labour
General commitment in the UPM Code of Conduct
Child labour
General commitment in the UPM Code of Conduct
Non-discrimination in respect of employment and occupation
Occupational safety and health
Working conditions (wages, working hours)

Optional comment

The UPM Code of Conduct includes general commitment to human right's related labour topics. For example: "We do not tolerate modern slavery, child labour, forced labour, or human trafficking in any context in our operations or in any part of our value chain." In addition, we have set group-level targets in the areas of OHS, fair rewarding and diversity and inclusion. These targets are followed up regularly and reported externally on annual basis. See: https://www.upm.com/responsibility/fundamentals/Our-responsibility-targets/

Performance

6. What is the percentage of employees covered under collective bargaining agreements?

	Percent of employees (%)	Unknown
Employees covered under collective bargaining (%)	57

Optional comment

See webpage: https://www.upm.com/responsibility/people-and-society/our-people/working-conditions/

7. What is the percentage of employees in a trade union or other workers' organization?

	Percent of employees (%)	Unknown	Not applicable (Please provide additional information)
Employees in a trade union or on a worker committee (%)

Optional comment

We do not collect information or report on our employees’ union membership at a global level due to differences in national legislation in our various operational countries.

8. In the course of the reporting period, what was the percentage of women in:

	Percent of women (%)	Unknown
Senior leadership level position	17
Non-executive board	33

Optional comment

Group Executive Team: 17%, Board of Directors: 33%

9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?

	Salary ratio (%)	Unknown	Choose to not disclose
Women / Men (%)

Optional comment

UPM is calculating and publishing the ratio of female to male salaries weighted basic salary for the nine biggest countries in terms of employees, but not the overall average. See UPM Annual Report 2021, page 231 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021).

10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?

	Frequency of injury	Unknown	Choose to not disclose
Frequency of injury	7.2

Optional comment

Total injuries per one million hours worked (TRIF) for UPM workforce including contractors. See UPM Annual Report 2021, page 74 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021)

11. In the course of the reporting period, what was the company’s incident rate?

	Incident rate	Unknown	Choose to not disclose
Incident rate

Optional comment

See above (question L10), TRIF is our indicator for the incident rate.

Response and Reporting

12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?

	Yes	No	Choose to not disclose	Not applicable (Please provide additional information)
Freedom of association and the effective recognition of the right to collective bargaining
We do not report details of certain alleged misconduct cases. See further information below.
Forced labour
We do not report details of certain alleged misconduct cases. See further information below.
Child labour
We do not report details of certain alleged misconduct cases. See further information below.
Non-discrimination in respect of employment and occupation
We do not report details of certain alleged misconduct cases. See further information below.
Occupational safety and health
We do not report details of certain alleged misconduct cases. See further information below.
Working conditions (wages, working hours)
We do not report details of certain alleged misconduct cases. See further information below.

Optional comment

Overall at UPM, there were 19 alleged misconduct cases related to "Respect people and human rights" in 2021. The reports related e.g. to alleged discrimination or harassment, inappropiate behaviour, breach of safety rules and alleged breach of labour laws in connection with recruitement or termination of employment. (see UPM Annual Report 2021, page 78: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/78-79/). Please note, that we do not report details of certain alleged misconduct cases.

13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.

For example: - UPM has completed its company-wide pay equity review and eliminated unexplained gender pay gaps (https://www.upm.com/about-us/for-media/releases/2021/12/upm-closes-the-unexplained-pay-gap/) - Working conditions have been and will be assessed in the wood supply chain to gain greater visibility on recruitment, employment contracts, working hours, payment practices, travel and accommodation of employees and to ensure that they comply with UPM Code of Conduct. (https://www.upm.com/articles/forest/22/upm-forest-audits-its-entire-supply-chain/) - New agreement between UPM and Paperworkers' Union in Finland (https://www.upm.com/about-us/for-media/releases/2022/04/upm-and-paperworkers-union-agree-on-first-ever-business-specific-collective-labour-agreements--strike-ends-at-upm-mills-in-finland/) - Rapid actions and persistent prevention measures helped to guarantee a safe working environment during the pandemic (https://www.upm.com/articles/responsibility/22/persistent-prevention-during-the-pandemic/)

Environment

Commitment

1. Does the company have a formal policy on the following environmental topics?

	No, and we have no plans to develop a policy	No, but we plan to in the next two years	Yes, included within a broader policy	Yes, articulated as a stand-alone policy	Not applicable (Please provide additional information)
Climate Action
2022
Water
2020
Oceans
2020
Forests / Biodiversity / Land Use
2022
Air Pollution
2020
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
2020
Energy & Resource Use
2020

Optional comment

Environmental topics are addressed in the UPM Code of Conduct, and further specified in the UPM Responsibility Statement (please see attachments). However, the updated Code of Conduct is launched only recently in June 2022, and respective updates in the UPM Responsibility Statement will follow. For example, the commitment to climate actions is much stronger in the updated Code of Conduct as it is in the current version of the UPM Responsibility Statement from 2020. Our policy statements: - Climate action, Forestry/Biodiversity/Land use: UPM is committed to science-based actions to mitigate the impact of our operations on climate and biodiversity and to adapt to climate change. We aim to minimise any direct or indirect negative impacts on the environment or people in our sphere of influence, including how we use land. (UPM Code of Conduct 2022) - Water, Oceans, Air pollution, Waste: UPM pays close attention to how its operations impact the air, climate, water, land and biodiversity, aiming to minimise any adverse effects. This means reducing emissions to air and water as well as minimising both non-hazardous and hazardous waste. (UPM Responsibility Statement 2020) - Energy and resource use, Waste: UPM uses energy, raw materials, water and other resources in a responsible manner and works to continuously improve its energy and resource efficiency. All operations are expected to design and optimise their processes for maximum energy and resource efficiency, using the best available techniques and methods. The Company promotes a circular economy approach by using materials recovered from production processes and by developing recycling options for side streams and residues of production processes. (UPM Responsibility Statement 2020) Links: - UPM Code of Conduct (https://www.upm.com/investors/governance/governance-guidelines/code-of-conduct/) - UPM Responsibility Statement (https://www.upm.com/responsibility/fundamentals/compliance-and-governance/upm-responsibility-statement/)

1.1. For each environmental policy, is it:

	Aligned with international environmental standards?	Publicly available?	Approved at most senior level of the company?	Applied to the company’s own operations?	Applied to the company’s supply chain and/or other business relationships?	Developed involving environmental expertise from inside and outside the company?	Other (Please provide additional information)
Climate Action
Water
Oceans
Forests / Biodiversity / Land Use
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Energy & Resource Use

Optional comment

All topics above are included in the UPM Code of Conduct and/or in the UPM Responsibility Statement. The UPM Code of Conduct emphasises UPM’s commitment to business integrity and responsible business operations, manifesting the company’s guiding principles. The preparations for the update of the Code of Conduct started in 2021, and the updated Code will be available in mid 2022. The UPM Responsibility Statement (2020) complements the UPM Code of Conduct. UPM requires its suppliers, third-party intermediaries and joint venture partners to apply the same principles as in the UPM Code of Conduct and to fulfil criteria concerning social and environmental responsibility. These requirements are defined in the UPM Supplier and Third Party-Code, latest updates effective as of beginning of 2020. Links: - UPM Code of Conduct (https://www.upm.com/investors/governance/governance-guidelines/code-of-conduct/) - UPM Responsibility Statement (https://www.upm.com/responsibility/fundamentals/compliance-and-governance/upm-responsibility-statement/) - UPM Supplier and Third Party Code (https://www.upm.com/about-us/for-suppliers/requirements/upm-supplier-and-third-party-code/)

Prevention

2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?

	No engagement on this topic	To better understand the risks/ impacts in question	To discuss potential ways to prevent or mitigate the risks/ impacts in question	To agree on a way to prevent/ mitigate the risks/ impacts in question	To assess progress in preventing/ mitigating the risks/ impacts in question	To collaborate in the prevention/ mitigation of the risks/ impacts in question	Other (Please provide additional information)
Climate Action
Water
Oceans
Forests / Biodiversity / Land Use
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Energy & Resource Use

Optional comment

For this question we considered the affected stakeholders in relation to environmental issues. In 2021, the engagement was mainly due to our forest management in Finland, Uruguay and the US where we have regular stakeholder dialogue in line with the requirements of the forest certification standards. Furthermore, we cooperate with local stakeholders in connection with our migratory fish programme in Finland. Read more in our Annual Report 2021, on page 97. In addition to affected stakeholders, we are having continuous dialogues with our stakeholders. Understanding their views and expectations plays a crucial role in the success of our company and the acceptability of our operations. Read more in our Annual Report 2021, on pages 64-67. See UPM Annual Report 2021 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021) In addition, our EMAS (EUEco-Management and Audit Scheme) statements cover local environmental and societal impacts, providing detailed information for our stakeholder of our pulp and paper mills. (https://www.upm.com/responsibility/fundamentals/reporting-and-data/emas-reports/)

3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?

	Provided internal training/ capacity building for the direct workforce	Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)	Conducting an audit process and/or corrective action plan	Collective Action with peers or other stakeholders to address the issue	Collaboration with governmental or regulatory bodies	Other (Please provide additional information)	No action within reporting period
Climate Action
Water
Oceans
Forests / Biodiversity / Land Use
Cooperation with researchers, academia, environmental organisations and other stakeholders to develop sustainable forest management.
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Energy & Resource Use

Optional comment

We take different actions to prevent and mitigate risks and impacts in relation to environment, depending on the topic and/or depending on the location or other circumstances. For example, we are having regular internal working groups on water and waste related topics, our internal CleanRun programme covers actions like audits and action plans. For the climate topic we collaborate with our suppliers to reach our scope 3 target, with our peers in the UN Global Compact and with the academia to develop our net zero approach, and internally to manage climate-related actions. We also have set group-level targets for all of these topics, and respective roadmaps and action plans are in place.

4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?

	No monitoring of progress	Review issues on ad-hoc basis	Set annual targets/ goals, track progress over time (internal programs only)	Set annual targets/ goals, track progress over time (internal and external programs)	Other (Please provide additional information)
Climate Action
Water
Oceans
We do not have a special goal related to oceans, but it is indirectly covered by our water-related targets on effluent load.
Forests / Biodiversity / Land Use
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Energy & Resource Use

4.1. For each environmental topic in which the company sets timebound goals / targets, what kind of targets has the company set?

	Description of targets (e.g., what is the target, absolute vs. intensity, externally verified, on track, etc.)
Climate Action	Our climate-related targets cover all aspects of the value chain: • 65% reduction of fossil CO2 emissions from our own combustion and purchased electricity by 2030, from 2015 level (Scope 1 and 2) •No coal and peat usage in on-site energy generation by 2030 •30% reduction of CO2 emissions from materials and logistics by 2030, from 2018 level (Scope 3) •Climate-positive land use (continuous) •Climate-positive product portfolio (continuous) Our target on scope 1 and 2 is an absolute target and validated by the Science-Based Target initiative to be aligned with the 1.5°C pathway according to the Paris agreement. In 2021, fossil CO emissions (scope 1 and 2) reduced by 27% compared to 2015 and by 8% compared to 2020. The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Energy & Resource Use	•1% annual energy efficiency improvement (continuous) •70% share of renewable fuels (continuous) The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Water	Our water-related targets: •40% reduction of effluent load (COD) by 2030, from 2008 level, relevant for pulp and paper •30% reduction of wastewater volume by 2030, from 2008 level, relevant for pulp and paper •100% of nutrients used at effluent treatment from recycled sources by 2030 The first two targets are intensity targets for the UPM average product. The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Forests / Biodiversity / Land Use	Our targets related to forests and biodiversity: •Climate-positive land use (continuous) •100% of fibre certified by 2030 •Positive impact on biodiversity: implementing biodiversity programme and developing monitoring system (continuous) The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Air Pollution	•20% reduction of acidifying flue gases by 2030, from 2015 level (NOx/SO2 ) This is an intensity targets for the UPM average product. The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)	•No process waste sent to landfills or to incineration without energy recovery by 2030 This is an absolute target. The targets as well as their annual follow-up is published in our Annual Report and on our webpage. The target follow-up is part of the annual external assurance of our sustainability reporting by PwC.
Oceans

Optional comment

Links for more information on our targets and their annual follow-up: UPM Annual Report 2021, pages 32-33 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/32-33/) UPM.com (https://www.upm.com/responsibility/fundamentals/Our-responsibility-targets/)

4.2. For each environmental topic in which the company sets timebound goals / targets, how is progress against target / goal tracked?

	Progress is reviewed against goals annually or more frequently	Progress is reported internally to the most senior level	Progress is reported externally	Other (Please provide additional information)
Climate Action
Energy & Resource Use
Water
Forests / Biodiversity / Land Use
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Oceans

Optional comment

On Group level, the responsibility targets are followed up on annual level, except the target on CO2 emissions (scope 1 and 2) which is followed-up more frequently. All our Group level targets are reported externally in the UPM Annual Report and on our webpage. Some of the targets are chosen as key performance indicators to be reported within the annual Report of the Board of Directors (UPM Annual Report 2021, pages 142-143). Links for more information on our targets and their annual follow-up: UPM Annual Report 2021, pages 32-33 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/32-33/) UPM Annual Report 2021, pages 142-143 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/142-143/) UPM.com (https://www.upm.com/responsibility/fundamentals/Our-responsibility-targets/)

5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?

	Yes	No	Choose to not disclose	Not applicable (Please provide additional information)
Climate Action
Water
Oceans
Forests / Biodiversity / Land Use
Air Pollution
Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)
Energy & Resource Use

Climate Action

6. What were the company’s gross global greenhouse gas emissions for the reporting period?

Scope 1 Emissions

Full

None

Emissions (tCO2e)

2700000

Scope 2 Emissions

Full

None

Emissions (tCO2e)

2300000

Scope 3 Emissions

Full

Partial

None

Emissions (tCO2e)

6300000

Optional comment

All emissions are reported "full", i.e. all material emissons are accounted for. (Please note that it was not possible to select "full" in the table above.)

7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?

Percent of revenue (%)

Unknown

Not applicable (Please provide additional information)

For CDP Climate we calculate and report the share in a slightly different way, thus "not applicable" has been chosen as answer. Here is our CDP answer for the year 2020 (2021 is not disclosed yet): In 2020, UPM spent 189 million EUR on research and development for existing and developing businesses, which equates to 18.8% of UPM’s operating cash flow. The majority of UPM’s R&D input is focused on new technologies and businesses, i.e. on developing biomass-based biofuels, biocomposites, biochemicals, biofibrils and CO2-neutral energy.

8. Has the organization acted to support climate change adaptation and resilience?

We have taken action to increase organization-wide resilience to climate change

We have taken action to increase resilience in our supply chains

We have taken action to increase resilience in the communities in which we operate

We have provided funding for climate change adaptation and resilience initiatives and projects

We have not taken actions to build climate change resilience in the reporting period

Other (Please provide additional information)

Unknown

Optional comment

Preserving biodiversity will help adaptation to potential impacts of climate change. The UPM biodiversity programme’s main focus is on integrating biodiversity protection to planning and harvesting operations in order to maintain and enhance biodiversity through forest management practices. Specific species projects and case studies in the programme have a role in demonstrating and communicating biodiversity issues, testing how programme actions meet the needs of single species, and creating a new working culture in collaboration with stakeholders. As a big landowner, UPM promotes voluntary-based nature conservation, and protected areas are part of the biodiversity programme solutions as well. UPM has integrated the programme into its everyday forest management. Since 2019, defined biodiversity indicators are measured and monitored to follow-up on UPM's target on a net-positive impact on biodiversity. In early 2022, UPM widenend its biodiversity programme and announced a new forest sustainability programme, UPM Forest Action. The programme covers UPM's own forests in Finland and the US as well as plantations in Uruguay, but it guides also the company's entire wood sourcing.

Energy / Resource Use

9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.

% of total energy consumption

Unknown

Optional comment

UPM does not disclose the renewable share of its total energy consumption, but the share of renewable fuels used in our own energy generation. With a share of 70% in 2021, UPM is in line with its Group level target "70% share of renewable fuels (continuous)". Please see UPM Annual Report 2021, pages 32-33, 95 and 98 for detailed information on our energy figures and target (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021).

Technology

10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?

Percent of total revenue (%)

In 2021, 84% of UPM sales were eligible for ecolabelling. The figure includes sales eligible for FSC or PEFC certification as well as sales eligible for EU ecolabel. Our Group level target is "100% of applicable products eligible for ecolabelling by 2030".

Unknown

Not applicable (Please provide additional information)

Optional comment

Most of our products are certified with widely recognised ecolabels, such as the EU Ecolabel and national ecolabels for graphic paper, RSB (Roundtable on Sustainable Biomaterials) certification for biofuels or ISCC (International Sustainability and Car bon Certification) for UPMBiofuels, UPM Formi and four UPMRaflatac production sites. In 2021, UPM Raflatac’s label range RAFNXT+ was the world’s first Carbon Neutral® certified label material to help mitigate climate change. All UPM businesses have FSC and PEFC chain of custody certification. See Annual Report 2021, page 87 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/86-87/)

Sector-specific: Water

12. Please provide details regarding the company's water withdrawal and consumption (own operations) during the reporting period.

Water withdrawal (volume of water in megaliters):

	Mega-liters	Unknown	Not applicable (Please provide additional information)
Total	414000
Groundwater:	24000
Surface water:	390000
Rainwater:
Rainwater is not used in the process, but it can be gathered and led to watercourses, depending on the site.
Wastewater:	0
Percentage of water withdrawn in regions with high or extremely high water stress (%)	0

Water consumption (volume of water in megaliters):

	Mega-liters	Unknown	Not applicable (Please provide additional information)
Total	24000
Groundwater:
Surface water:
Rainwater:	0
Wastewater:	0
Percentage of water consumed in regions with high or extremely high water stress (%)	0

Optional comment

The majority of water is used at UPM's pulp and paper mills: the impact of other UPM units is minor. The water we need for our pulp and paper production processes is circulated and reused as much as possible. 88-98% of the water we use in our pulp and paper mill processes is internally recirculated, and thus only a small fraction eventually leaves the process as effluent and needs to be replaced by fresh water. No water withdrawal, water consumption or water withdrawal in areas with water stress. Our water risk analysis in 2021 confirmed that our productions sites are located in areas with low to medium water stress or basin risk. For more information: UPM Annual Report 2021, pages 96-97 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/96-97/) UPM Material Balance 2021 (https://www.upm.com/siteassets/documents/responsibility/1-fundamentals/upm-2021-materal-balance.pdf)

13. Please provide details about the company’s water intensity of products in regions with high or extremely high water stress.

Water intensity of products (cubic meter/$):

Unknown

Not applicable (Please provide additional information)

Our risk assessment confirms that our production sites are located in areas with low to medium basin risk. See UPM Annual Report 2021, page 97 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/96-97/)

Sector-specific: Forest, biodiversity, and land use

14. Please report the number and area (in hectares) of sites owned, leased, or managed by the company in or adjacent to protected areas and/or key biodiversity areas (KBA).

	Number	Unknown	Not applicable (Please provide additional information)
Sites
This question is not applicable to UPM. UPM’s approach is to donate and create protected areas adjacent to or even within their forest and plantation areas. This means that 100% of the forest operations are close to protected areas.
Hectares
This question is not applicable to UPM. UPM’s approach is to donate and create protected areas adjacent to or even within their forest and plantation areas. This means that 100% of the forest operations are close to protected areas.

Optional comment

UPM owns forests and plantations in three countries: Finland, Uruguay and the USA. All UPM-owned forests and plantations are managed according to applicable forest certification (FSC/PEFC or SFI) standards and the principles of UPM Biodiversity programme. UPM owns thousands of forest estates that are used for production and these all have been mapped for biodiversity independently whether there are biodiversity values or not. UPM believes that even there won't be biodiversity values currently, those can be created with sustainable forest management practices. In northern boreal forests (Finland 516,000 ha, USA 76,000 ha), company's forest planning measures include the basic level inventory of biodiversity values. Compartment level set-aside areas for biodiversity are delineated in forest planning. In operational planning processes of commercial forest compartments, biodiversity mapping is done site-specifically and necessary site-level solutions for biodiversity protection and nature management are decided for each site. Instead of only saving biodiversity values, UPM aims to enhance those in all of its areas. In UPM's land holdings in Uruguay (305,000 ha), 35-40% of UPM-owned land is set-aside areas for different purposes, e.g. nature conservation, recreation and cattle grazing. All in all, approximately 180,000 ha (20%) out of the whole area of UPM-owned forests and plantations (897,000 ha) are protected.

15. What area (in hectares) of natural ecosystems was converted during the reporting period in areas owned, leased, or managed by the company?

Conversion of natural resources (hectares)

Unknown

Not applicable (Please provide additional information)

Optional comment

UPM is committed to not source wood from forest plantations that have been established by converting natural forests. You can find detailed information on our own eucalyptus plantations in Uruguay on UPMPULP.com (https://www.upmpulp.com/sustainable-pulp/sustainability/plantations/)

16. Is the company supporting or implementing project(s) focused on ecosystem restoration and protection?

	No	No, but we plan to in the next 2 years	Yes
Forest ecosystem restoration
Other ecosystem restoration
Measures for the recovery of migratory fish stocks While hydropower is a cost-effective, renewable and emission-free way to generate electricity, it can also have adverse impacts on water bodies and their ecosystems. We are working closely with authorities and other stakeholders to minimise these impacts. In addition to the regulatory fishery fees required by the permit conditions, we protect and restore migratory fish stocks through our own migratory fish programme. The programme involves dismantling migratory barriers and testing new ways to rebuild fish stocks in different parts of Finland. The migratory fish programme was also promoted in 2021. UPM submitted an application for a permit to dismantle the dam structures of a disused water intake in Arvajankoski, Jämsä, and to carry out a fish eries rehabilitation in Arvajankoski. We are actively looking for new potential sites for the removal of migration barriers and new innovative ways to promote fish migration in co-operation with stakeholders. See UPM Annual Report 2021, pages 45 and 97 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/44-45/)
Reforestation
Natural regeneration
Agroforestry
Set-aside land
Forest conservation The goal of conservation is to identify the most ecologically important areas, and to leave them out of commercial use. We protect key biotopes, such as springs, cliffs, groves and brooks, because they all have unique habitats. We also protect threathened species within forests and designate larger areas for conservation. Areas are designated for conservation based on law, or voluntarily, due to their conservation value. See UPM.com (https://www.upm.com/responsibility/forests/biodiversity/forest-conservation/)
Biodiversity offsetting
Other (please specify in text box)
A variety of biodiversity projects We continuously improve our own biodiversity actions and establish new initiatives with external stakeholders. Working with NGOs, government agencies and educational institutions, we have developed new metrics to monitor forest health, increased our understanding of rare and endangered species and promoted conservation practices worldwide. Please see details and examples on our webpages: https://www.upm.com/responsibility/forests/biodiversity/projects-and-collaboration/ https://www.upmpulp.com/media/blogs-and-stories/stories/protecting-biodiversity-in-uruguay/ https://www.upmpulp.com/articles/pulp/22/habitat-restoration-project/

Optional comment

https://www.upm.com/responsibility/forests/biodiversity/projects-and-collaboration/

Sector-specific: Air pollution

17. Where applicable, please report the company's emissions of the following pollutants during the reporting period.

	Emissions (tCO2e)	Unknown	Not applicable (Please provide additional information)
NOx	7700
SOx	820
Volatile Organic Compounds (VOC)	390
Hazardous air pollutants (HAP)
Not material for UPM's production processes and energy generation
Particulate matter (PM10)	1100
Persistent organic pollutants (POP)
Not material for UPM's production processes and energy generation
Other (please specify in text box)

Optional comment

Please note that we report Particulate matter in general as our production sites are not obliged to measure particle sizes. UPM's material air emissions are disclosed in the UPM Annual Report 2021, page 99 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/98-99/)

Sector-specific: Waste

18. Please report the company's total weight of waste generated in metric tonnes during the reporting period.

Waste Generated (t)

Unknown

Not applicable (Please provide additional information)

In 2021, 89% of UPM's process waste and 88% of total waste was recovered or recylced. Total amount of waste or by-products was 0.9 million tonnes of which only 12% were disposed on landfills or incinerated without energy recovery. UPM is making use of most its residues and side streams: Most organic production residues, such as bark, wood residues and fibre-containing solids from deinking and effuent treatment, are used to generate energy for mill sites. The fibrous residues that are not incinerated are used in brick manufacturing or as soil amendment materials. Overall, ash originating from biomass-based energy generation makes up the largest share of our solid waste. In 2021, 96% of the ash was used in various applications, such as in soil stabilisation, road construction and the cement industry, or internally to replace caustic soda or as raw material for paper filler production. We report in detail on our waste management in our Annual Report 2021, pages 88-91, and on the data in the UPM Material Balance 2021 (https://www.upm.com/siteassets/documents/responsibility/1-fundamentals/upm-2021-materal-balance.pdf) The total generated amount of waste and by-products alone does not seem applicable to be reported here for our industry, without reporting the recycling and recovery share at the same time.

19. Please report the percentage of the company's waste that was hazardous waste (i.e., hazardous waste ratio) during the reporting period.

Hazardous Waste Ratio (%)

0.6

Unknown

Not applicable (Please provide additional information)

Optional comment

For detailed information on our waste data, please see the UPM Material Balance 2021: https://www.upm.com/siteassets/documents/responsibility/1-fundamentals/upm-2021-materal-balance.pdf

20. Please report the company's estimated metric tonnes of single-use plastic consumed wherever material along the value chain during the reporting period.

Single-use plastics (tonnes)

Unknown

Not applicable (Please provide additional information)

Optional comment

We estimate the amount to be very minor. UPM's main raw materials are wood, pulp, recovered paper and minerals and as UPM's products are supposed to be recyclable, single-use plastic does not have a role as a material for our products.

Overall Environment

21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.

For example: - We continuously develop our industry leading practices in sustainable forestry. In 2021, we raised the bar with developing a new global UPM Forest Action programme that was launched in 2022 and reaches until 2030. The new programme covers not only climate and biodiversity targets but also sustainability criteria related to water, soil and economical and social contribution. (https://www.upm.com/responsibility/forests/forestaction/) - We developed and introduced our new sustainable product design concept in 2021.(https://www.upm.com/articles/responsibility/22/developing-a-new-sustainable-product-design-concept/) - We engaged in the 4evergreen alliance to promote the recycling of fibre-based packaging (https://www.upm.com/articles/responsibility/22/4evergreen-promotes-the-recycling-of-fibre-based-packaging/) - We continued our efforts to find recycling solutions for pulp side streams with a new collaboration project (https://www.upm.com/articles/responsibility/21/circular-economy-products-from-pulp-side-streams/) - UPM invested in a fleet of environmentally smart LNG fuelled vessels (https://www.upm.com/articles/supply-chain/21/new-lng-vessels-decarbonise-shipping-operations/)

Anti-corruption

Commitment

1. Does the company have an anti-corruption compliance programme?

No, it is not an immediate business priority

No, but we plan to in the next two years

Yes

UPM is having a company-wide compliance programme to ensure compliance with our values and commitment. This includes our commitment to zero tolerance attitude towards corruption and bribery in any form, as stated in the UPM Code of Conduct. For more information on the company-wide compliance programme: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/76-77/

2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?

No, and we have no plans to develop a policy

No, but we plan to in the next two years

Yes, included within a broader policy

Yes, articulated as a stand-alone policy

Optional comment

The UPM Code of Conduct underlines the company’s zero tolerance attitude towards corruption and bribery in any form. UPM Anti-Corruption Rules explain prohibited conduct and expected ethical behaviour in further detail. See UPM.com: https://www.upm.com/investors/governance/governance-guidelines/code-of-conduct/

Prevention

3. Who receives training on anti-corruption and integrity?

Optional comment

UPM has a dedicated anti-corruption e-learning platform. The anti-corruption training covers all white-collar employees. At the end of 2021, 96% of the target group has completed the training. In 2021, the company organised tailored anti-corruption training workshops for selected target groups across the company and performed risk-based compliance reviews in selected jurisdictions and operations. See UPM Annual Report 2021, pages 136-137, 76, 79 (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/)

3.1. How often is such training provided?

	One time only	Every year	Every two or more years	We do not collect this data
All employees
Select employees
Contractors
Direct suppliers of the organization
Other – such as partners, clients, etc.
Indirect suppliers of the organization

4. Does the company monitor its anti-corruption compliance programme?

No, we do not monitor the anti-corruption compliance programme

Review issues on ad-hoc basis

Yes, through internal employee self-evaluations

Yes, through automated controls monitoring

Yes, through external independent monitoring

Yes, through other mechanisms

Our monitoring activities are aimed at ensuring compliance at all levels of the organisation. The activities are based on a group company risk matrix that considers the country risk and complexity and the extent of our operations in each country. Our compliance team has a three-year monitoring plan for its unit-specific compliance reviews that are based on this matrix. On top of these general reviews covering all business integrity topics, we conduct risk based reviews around specific topics such as competition law or anti-corruption. See UPM Annual Report 2021: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/76-77/

Response and Reporting

5. Please report the company's total number and nature of incidents of corruption during the reporting year.

	Number of incident(s)	Unknown	Choose to not disclose
Confirmed during the current year, but related to previous years	0
Please see UPM Annual Report 2021, page 78, for alleged misconduct cases in certain areas. There was none for "Zero-tolerance for corruption and bribery. (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021)
Confirmed during the current year, and related to this year	0
Please see UPM Annual Report 2021, page 78, for alleged misconduct cases in certain areas. There was none for "Zero-tolerance for corruption and bribery. (https://user-fudicvo.cld.bz/UPM-Annual-Report-2021)

6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?

Initial case assessment

Internal investigation

Review by risk / ethics committee

Review by board of directors

External audit / review

Other (please provide additional information)

Not applicable/no incidents in the reporting period

7. Does your company engage in Collective Action against corruption?

No, it is not an immediate business priority

No, but we plan to in the next two years

Yes (please explain)

8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.

In 2021, the company organised tailored anti-corruption training workshops for selected target groups across the company and performed risk-based compliance reviews in selected jurisdictions and operations. UPM performs anti-corruption risk assessment on a regular basis. The annual risk-assessment process includes a top-down risk discussion with the management of each business area. All UPM group entities are also assessed on the basis of country risk and complexity of operations. Due diligence of suppliers and third parties with whom UPM does business is an essential part of UPM’s anti-corruption compliance programme. UPM requires that due diligence is performed before entering into or renewing any contract with a third party that meets specified criteria. UPM requires anti-bribery contract terms to be included in agreements with such third parties outlining the third party’s commitment to compliance with applicable anti-bribery laws and UPM’s right to audit the third party to verify compliance with these terms. See UPM Annual Report 2021: https://user-fudicvo.cld.bz/UPM-Annual-Report-2021/136-137/