UPM-Kymmene Corporation

Reference: page 131-134

UPM operates a one-tier governance model comprising the Annual General Meeting, the Board of Directors and the President and CEO. All nine Board members are non-executive and 100% are independent of the Company and its significant shareholders. The Board has three committees drawn from its members: the Audit Committee, the Remuneration Committee, and the Nomination and Governance Committee.

Roles

• The Board approves strategy, the Code of Conduct and Group policies, oversees IRO management and the double materiality assessment (with Audit Committee support), and sets Group-level sustainability targets for executive remuneration.
• The Audit Committee reviews material sustainability topics, the DMA process and assurance.
• The President and CEO leads daily operations, assisted by the Group Executive Team, Business Area Boards and the Strategy Team.

Diversity and expertise The Board spans five nationalities, ages 49-66, with 44% female and 56% male members. All hold university degrees. Members and the CEO have experience across pulp, paper, packaging, forestry, energy, chemicals, finance and sustainability reporting, including double materiality and ESG governance.

Reference: page 134

The President and CEO, or other members of executive management, reports to the Board at least annually on decisions and progress related to risks, impacts and opportunities and their management, as well as on targets and actions. The Audit Committee receives a quarterly compliance review. The President and CEO chairs the Group Executive Team, the Strategy Team and the Business Area Boards, and receives regular detailed information on relevant sustainability matters at their meetings.

Sustainability is integrated into Company strategy. The Strategy Team prepares proposals for updating strategy and is responsible for identifying and managing key strategic risks.

In 2024, the Board and Audit Committee focused on CSRD implementation, the related reporting and the ESG management model. When reviewing the draft Sustainability Statement they addressed all material impacts, risks and opportunities. The Remuneration Committee reviewed fair rewarding and other social focus areas including continuous learning and development, responsible leadership and diversity and inclusion. The GET approved the outcome of the double materiality assessment and changes to UPM's sourcing-related 2030 targets.

Reference: page 134

Since 2022, the Board has included ESG measures in the Company's Performance Share Plan (PSP), a long-term incentive plan targeted at the President and CEO, the Group Executive Team and selected senior management. Board members do not belong to short- or long-term incentive plans, and their remuneration is not linked to sustainability.

Each PSP runs over a minimum three-year performance period. For the 2022-2024, 2023-2025 and 2024-2026 plans, absolute total shareholder return carried 80% of the weighting. Three ESG measures carried the remaining 20%:

• reducing fossil CO2 emissions from own combustion and purchased energy by 65% by 2030 from the 2015 level (10%);
• achieving a net positive biodiversity impact in UPM's own forests in Finland (5%);
• achieving gender pay equity (5%).

The ESG measures are based on UPM's 2030 sustainability targets and, for the President and CEO, are covered by UPM's Remuneration Policy. The Board annually approves new plans, including terms, performance measures, targets and weightings.

Reference: page 135

UPM provides a mapping table covering the core elements of a due diligence process in accordance with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, alongside the main processes and measures of UPM's sustainability due diligence. Details are described in the relevant disclosures of the Sustainability Statement.

The table links the core elements to specific paragraphs:

• Embedding due diligence in governance, strategy and business model, through policy documents (G1-1, S1-1, E2-1).
• Engaging with affected stakeholders through stakeholder dialogue (ESRS 2 SBM-2, S1-2, S2-2, S3-2).
• Identifying and assessing adverse impacts via human rights risk assessments, the high sustainability risk supplier process, counterparty screening and saliency assessment (ESRS 2 SBM-3, S2-SBM3, S3-SBM3, G1-3).
• Taking actions through supplier codes, certification, EcoVadis assessments and remediation (G1-2, E2-2, S2-4).
• Tracking effectiveness via the compliance system and grievance channels (G1-1, G1-3, S1-1).
• Communicating efforts through the Annual Report, EMAS reports and the Human Rights review report.

Reference: page 136

UPM's Group-level sustainability reporting is based on its sustainability reporting guidelines and the ESRS requirements. To enhance data reliability, UPM has implemented internal controls tailored to its specific sustainability risks with a focus on materiality, and continues to develop its internal control framework.

A centralised approach allows review of quantitative and qualitative information and identification of inconsistencies or errors in data submitted by functions, production sites and forestry operations. The Sustainability Statement is integrated into the disclosure management tool used by UPM Finance, with data collected from sources such as the environmental database, the OHS reporting tool and the human resources data tool. Feedback from stakeholders, internal audits and the external assurance provider is used to identify improvements.

The main risks identified relate to accuracy of information, immature measurement methodologies and the credibility of estimates where information is missing. Prioritisation is based on severity, likelihood and resources required. The Audit Committee receives quarterly compliance reports and is responsible for monitoring the integrity of disclosures, the controls and related assurance.

Reference: page 136-139

UPM offers renewable alternatives to fossil-based materials. Its product range includes pulp, graphic and specialty papers, self-adhesive labels, renewable wood-based diesel and naphtha, CO2-free electricity, and plywood and timber. Products replace fossil plastics, steel and cement, and fossil fuels in transport, aviation and electricity. The strategy, perform to grow, seeks profitable, sustainable growth across renewable fibres, advanced materials and decarbonisation solutions, supported by key enablers: people, productivity, commercial excellence, sustainability and innovation.

Business model and value chain

• At the end of 2024, UPM had 15,827 employees, most in Europe (employees by geographical area incorporated by reference).
• UPM buys wood and other materials from around 23,000 B2B suppliers, including roughly 14,500 private forest owners; main sourcing categories are fibre, chemicals, other raw materials, logistics, energy and indirect purchases.
• Products are sold directly and through distributors to about 10,000 B2B customers worldwide, mostly as intermediary products further processed by customers.

Main sales destinations in 2024 were Finland, Germany, the United States and China. UPM does not have significant fossil fuel revenue; 99% of UPM Energy generation is CO2-free.

Reference: page 140-141

Understanding stakeholder views is central to UPM's success and the acceptance of its operations. Because many stakeholders view UPM primarily as an economic operator, financial success, stability, good governance, future outlook and growth were the main discussion topics, with significant focus on forests and forest use. Stakeholder mapping, active dialogue and systematic feedback collection underpin this work, and feedback is analysed to inform development and decision-making.

Key stakeholders are defined by materiality. Stakeholder relations are led globally by the Marketing, Sustainability and Communications function, with the EVP holding overall responsibility, supported by the Responsibility Team and business-level VPs. Methods include interviews, surveys, open dialogue and engagement events.

Views and feedback feed into the annual double materiality assessment, which also takes into account the interests, views and rights of UPM's own workforce, value chain workers and affected communities. Measures for own workforce include the annual Employee Engagement Survey. Identified material topics are reviewed by the Group Executive Team. The Board is informed through the Audit Committee Chair's regular reporting when stakeholders' views have an actual or potential material impact.

Reference: page 141-143

UPM's IRO identification is based on continuous business processes and stakeholder engagement, formalised within the double materiality assessment. All identified material IROs are covered by ESRS Disclosure Requirements. ESRS S4 Consumers and end-users is not material, as UPM does not sell directly to consumers and has no visibility of end-users of final products.

UPM presents an overview table organising material IROs by topic, each mapped to ESRS standards:

• Bio-based and renewable products, CO2-free energy, Circular bioeconomy, Climate change (E1, E5)
• Business resiliency (ESRS 2)
• Business ethics and values, Responsible sourcing (G1, S2)
• Biodiversity, Sustainable forestry (E4); Sustainable water usage (E3)
• Decent work and fair rewarding, Diversity and inclusion, Health and safety (S1, S2)
• Local engagement (S3)

Each topic lists positive impacts, opportunities, negative impacts and risks, mapped across upstream, own operations and downstream, over short, medium and long horizons. Main sustainability risks include climate change, biodiversity loss and human rights violations in the value chain. The list of material impacts, risks and opportunities remained unchanged compared with the previous year's (2023) report.

Reference: page 143-145

Since 2011, UPM has carried out its materiality assessment annually, and since 2023 it has followed EFRAG's guidelines for double materiality assessments. Double materiality covers both impact materiality (UPM's impact on people and the environment) and financial materiality (sustainability-related risks and opportunities likely to have a financial impact). The analysis covers negative and positive, actual and potential impacts on the economy, environment and people, including human rights.

Identification draws on internal expertise and several internal sources:

• salient human rights assessments
• supplier audits
• occupational health and safety and environmental performance results
• grievance mechanisms
• company risk assessments and compliance
• regulatory monitoring
• sustainability-related data such as emissions, resource use and OHS data
• sustainability due diligence processes.

Stakeholder interests and concerns also inform the process, including customer and community enquiries, counterparty and media screening, NGO concerns, investor and regulatory agendas, and the employee engagement survey. Significance is assessed by severity (scale, scope, irremediability) and likelihood. The list of material IROs is reviewed annually, approved by the GET and reviewed by the Audit Committee.

Reference: page 146-147

The list of disclosure requirements is integrated into the table of contents at the start of the Sustainability Statement. The statement covers ESRS 2, E1, E2, E3, E4, E5, S1, S2, S3 and G1.

Omission ESRS S4 Consumers and end-users is omitted as not material. The majority of UPM's products are further processed by customers, so UPM does not have direct control over the products provided to consumers and end-users; based on the DMA, its impact on consumers and end-users is not considered material.

Incorporation by reference Three items are incorporated by reference:

• ESRS 2 SBM-1: employees by geographical area
• E1-9: anticipated financial effects from physical and transition risk and potential climate-related opportunities
• E4-6: anticipated financial effects from material biodiversity risk and opportunities.

Certain anticipated-financial-effects disclosure requirements (E3-5 and E5-6) and S1-15 are not separately disclosed. The statement also covers TCFD and TNFD disclosures, both within the assurance scope. UPM also lists datapoints derived from other EU legislation, noting where items are not material or phased-in.

Reference: page 149

UPM has a transition plan built on forests, wood-based products and low-carbon energy. Its Scopes 1, 2 and 3 fossil CO2 reduction targets for 2030 are validated by the SBTi as aligned with the 1.5C pathway, set using the absolute contraction approach. Targets are a combined 65% cut in Scope 1+2 from 2015 and a 30% cut in Scope 3 (materials and logistics) from 2018. Decarbonisation levers include energy efficiency, switching from fossil fuels to biogenic fuels or hydrogen, electrification of heat, strategic investments and value-chain reductions. As a forest-products company, UPM's forests in Finland, the US and Uruguay act as carbon sinks (five-year average -2.1 million tonnes CO2eq) and bio-based products provide temporary carbon storage. Financing is linked to sustainability: four green bonds since 2020 and a revolving credit facility tied to the Scope 1 and 2 target. Net-zero (per SBTi: at least 90% reduction plus neutralisation of residuals via removals) will be aligned to international standards once finalised. UPM considers it has no locked-in fossil GHG emissions.

Reference: page 151

UPM's high-level climate commitment is set out in the UPM Code of Conduct, which states the Company is committed to science-based actions to mitigate the impact of its operations on climate and biodiversity and to adapt to climate change. The Code is complemented by the UPM Sustainability Policy Statement, which specifies the CO2 reduction target covering operations and the supply chain in line with the science-based target, and introduces measures across three pillars of climate action: climate-positive forestry, reducing emissions, and climate-positive products. The UPM Supplier and Third-Party Code sets minimum requirements for the value chain. The Sustainable Supply Chain Programme expects suppliers to report their carbon footprint annually, commit to time-bound GHG reduction targets and take appropriate actions. Energy efficiency is addressed as a topic for continuous improvement, with energy management systems the preferred measure. Renewable energy targets and the phase-out of coal and peat support and specify the policy commitments.

Reference: page 152

UPM defines focus areas covering energy efficiency, renewable energy and Scope 1 and 2 emissions; forestry carbon sink; a climate-positive product portfolio; Scope 3 reduction in sourcing; and biodiversity. Energy actions in 2024 included a second-phase ultracapacitor investment at Kuusankoski hydropower (operational summer 2025), electric boilers for steam at three mills in Finland and Germany, and efficiency measures expected to cut fossil CO2 by about 120,000 tonnes per year. Forestry actions ensure forests in Finland, the US and Uruguay continue to act as carbon sinks (growth exceeding harvesting). The -30 by 30 Programme, launched 2022, targets a 30% cut in Scope 3 emissions from purchased materials and logistics; in 2024 supplier carbon footprint data covered over half of raw material spend. The flagship product action is the wood-based biochemicals biorefinery in Leuna, Germany (commissioning began late 2024, full production expected 2027). Climate activities are funded through general investment planning and a EUR 2,350 million green bond portfolio under the Green Finance Framework, plus a sustainability-linked revolving credit facility.

Reference: page 154

UPM's Scopes 1, 2 and 3 fossil CO2 targets for 2030 are SBTi-validated as 1.5C-aligned (absolute contraction approach). Targets and 2024 follow-up (2023 in brackets):

• Scope 1 and 2 fossil CO2: base year 2015 (6.80 mt), 2030 target -65%; achieved -50% (-45%).
• Scope 3 (materials and logistics): base year 2018 (6.08 mt), 2030 target -30%; achieved -22% (-23%).
• Coal and peat usage: base year 2020 (3.3 TWh), 2030 target 0 TWh; 2.8 (2.7) TWh.
• Annual energy efficiency improvement: +1% continuous since 2016; not achieved.
• Share of renewable fuels: base year 2015 (67%), target above 70%; 80% (76%).
• Climate-positive land-use (forest carbon sink): continuous removal; -2.1 mt CO2eq (five-year average).
• Climate-positive product portfolio: continuous improvement; decarbonisation solutions 8% of sales.

The Scope 1+2 target combines on-site fossil CO2 (market-based Scope 2). Setting and SBTi application of long-term targets continues in 2025 once FLAG sector tools are available.

Reference: page 157

Most electrical and thermal energy is used for UPM's paper and pulp production; pulp mills produce more energy than they consume. Renewable fuels accounted for 80% (76% in 2023) of fuel used at production sites. Total energy consumption was 48,800,000 MWh (45,300,000 in 2023). Of this, total renewable energy consumption was 35,600,000 MWh and total non-renewable consumption 13,200,000 MWh, giving a 73% renewable / 27% non-renewable split (69%/31% in 2023). Fossil fuel inputs included natural gas 4,200,000 MWh, oil 1,500,000 MWh, coal 2,500,000 MWh and peat 260,000 MWh (total fossil fuels 8,600,000 MWh). Nuclear electricity was 3,400,000 MWh. UPM is a significant Nordic electricity player through nuclear and hydropower holdings. All business activities are in high climate-impact sectors per NACE; total energy consumption per net revenue was 4,720 MWh/EURm (4,330 in 2023). UPM aims to stop using coal and peat for on-site generation by 2030; coal is mainly used at the Changshu mill in China and peat in Finland.

Reference: page 158

GHG figures for 2024 (2023 in brackets), tCO2/tCO2eq:

• Gross Scope 1: 2,180,000 (2,130,000); base year 2015 was 3,880,000 (-44% vs base).
• Gross location-based Scope 2: 1,640,000 (1,730,000).
• Gross market-based Scope 2: 1,200,000 (1,590,000); base year 2015 was 2,920,000.
• Scope 1 + market-based Scope 2: 3,380,000 (3,720,000), -9% year-on-year and -50% versus 2015 base of 6,800,000.
• Total gross indirect (Scope 3): 8,170,000 (7,680,000), +6%; largest categories purchased goods and services 2,970,000 and processing of sold products 3,200,000.
• Total GHG emissions (location-based): 11,980,000 (11,540,000).
• Total GHG emissions (market-based): 11,550,000 (11,400,000).

Scope 1 covers only CO2 (CH4 and N2O immaterial). Biogenic CO2 was Scope 1 11,740,000 t, Scope 2 170,000 t. Market-based GHG intensity was 1,120 tCO2/EURm sales (1,090).

Reference: page 160

In 2024, the annual carbon sink from UPM's own forests in Finland and the US and its own and leased plantations in Uruguay averaged 2.1 million tonnes of CO2 equivalent over the past five years. This removal could be used to mitigate residual emissions in UPM's net-zero pathway, assuming carbon sinks become accepted by credible international carbon accounting and assurance standards. In 2023 the reported sink was 4.8 Mt CO2eq; the lower 2024 value reflects methodology changes and higher logging volumes in Finland and on Uruguayan plantations following start-up of the Paso de los Toros pulp mill. UPM's wood-based products also store carbon: in 2024 the change in annual carbon stock of sold wood-based products gave a removal of 2.8 million tonnes of CO2, estimated via the SYKE/IFEU report. On carbon credits, where UPM offers carbon-neutral products it uses credits from voluntary offsetting schemes such as Gold Standard; the total in 2024 was approximately 10,000 t CO2eq only, used solely for customer products and not counted towards UPM's emission reduction targets.

Reference: page 161

UPM operates an internal carbon price used as an input to its long-term electricity price forecast. The long-term electricity price and internal carbon price together are used to value UPM's existing assets and to plan investments. The type of system is an implicit carbon price, and it is set to align with the price of allowances under the EU Emissions Trading System (EU ETS). It is applied to capital expenditure and to risk and opportunity management to drive low-carbon investments, identify and seize low-carbon opportunities, and stress-test investments. UPM has fundamental power market models for the Nordic and Continental European areas that forecast electricity prices several decades ahead, factoring in the energy transition; the resulting power and commodity prices (including CO2) feed into asset valuation and investment decisions. These analyses are currently used up to 2045 and are also applied across other UPM businesses, such as paper, where future carbon prices may significantly affect the profitability of current and planned assets.

Reference: page 162

This disclosure is reported largely by incorporation by reference. For qualitative information on the financial impact of climate-related risks and opportunities, UPM refers readers to the Report of the Board of Directors (section Climate change, under Risks) and to Note 1.2 Basis of preparation in the consolidated financial statements (climate-related risks), with further opportunity information in the Strategy chapters of the Annual Report. UPM's position and resilience were evaluated under different climate scenarios from both physical and transitional perspectives: a Company-wide transition risk and opportunity assessment used the IEA New Policies, Current Policies and 2C scenarios, while physical scenario analysis covered three Shared Socioeconomic Pathways (SSP1-2.6, SSP2-4.5, SSP5-8.5) across Finland, Germany, Uruguay and China, focused on forest growth, productivity and water availability (study by the Finnish Meteorological Institute, 2024). Transition impacts dominate in low- and medium-emission scenarios, where UPM is well positioned, while physical impacts dominate in the high-emission scenario. The section also presents UPM's TCFD content mapping.

Reference: page 177

UPM's commitment to mitigating, preventing and controlling negative pollution impacts is set out in the UPM Code of Conduct, which states UPM aims to minimise direct or indirect negative impacts on the environment and people, measures and assesses environmental risks and impacts, and promotes best available techniques. This is complemented by the UPM Sustainability Policy Statement, which addresses reducing emissions to air and water, avoiding emissions to soil, and minimising hazardous and non-hazardous waste. The UPM Supplier and Third-Party Code sets minimum requirements for the value chain. Specific aspects are covered by the Sustainable Supply Chain Programme, the UPM Clean Run Standard, the UPM Chemical Management Standard, the UPM Risk Management Standard and the UPM Incident Investigation and Reporting Standard. The Chemical Management Standard requires selection of the least harmful alternative and restricts substances of very high concern (SVHCs) where safer alternatives are feasible. All relevant pollutants and substances are covered by UPM's policies, and reduction targets for the most material pollutants (NOX, SO2, COD and landfill waste) are included in UPM's 2030 sustainability targets.

Reference: page 178

UPM's main air emissions source is energy generation; acidifying flue gases (NOx and SO2) are the most material, with a 2030 reduction target. In 2024 specific acidifying flue gas emissions per tonne of paper fell 12% year-on-year and 32% versus the 2015 base year. Boilers using biomass, oil and coal are equipped with filter systems. For water, all wastewater from pulp and paper production is cleaned in mechanical and biological effluent treatment; COD is the chosen indicator, with a 2030 reduction target. Specific COD per tonne of paper fell 10% year-on-year and 33% versus the 2008 base year. The Company-wide Clean Run concept (launched 2012) is the overarching environmental management system; all production sites have ISO 14001 certification except two Raflatac sites in Germany. In 2024 there were 35 environmental non-conformances (28 in 2023). Soil/groundwater actions included improvements at UPM Kymi's bark storage and chemical unloading areas. In 2024 environmental investments totalled EUR 20 million (60 million) and environmental costs EUR 111 million (121 million).

Reference: page 180

UPM has set Group-level 2030 targets for the most material pollutants, followed up at least annually. Targets and 2024 follow-up (2023 in brackets):

• Acidifying flue gases (NOX/SO2) for an average UPM product: base year 2015 (100%), 2030 target -20%; -19% (-17%).
• Chemical oxygen demand (COD) for an average UPM product: base year 2008 (100%), 2030 target -40%; -44% (-39%).
• Process waste to landfill or incineration without energy recovery: base year 2015 (122,000 dry tonnes), 2030 target 0 tonnes; 97,000 (82,000) tonnes.
• Spend covered by UPM Supplier and Third-Party Code: base year 2015 (79%), target >80% continuous; 91% (89%).

Progress on COD and acidifying flue gases is ahead of schedule; the 2030 COD target was achieved in 2024 and the acidifying flue gas target is almost achieved. Targets are voluntary, set beyond permit values, and take EU Ecolabel and BAT reference values into account. Soil pollution risk is addressed via the zero-process-waste-to-landfill target.

Reference: page 181

UPM reports pollutants from the E-PRTR (Regulation (EC) No 166/2006) for sites exceeding thresholds, plus total amounts for the most material parameters. Total emissions to air, 2024 (2023): NOx 8,700 t (7,800), SO2 780 t (770), particulates 680 t (860), NMVOC 400 t (320). Total emissions to water, 2024 (2023): BOD7 5,200 t (5,300), COD 56,600 t (52,400), TOC (as COD/3) 18,900 t (17,500), AOX 280 t (290). E-PRTR-scope emissions to water include chlorides 14,600 t, zinc 6,300 kg, copper 1,700 kg, nickel 590 kg, chromium 110 kg, arsenic 100 kg, lead 80 kg, cadmium 10 kg, mercury 10 kg, and dioxins+furans 30 g. E-PRTR-scope emissions to air include carbon monoxide 6,700 t, HCl 20 t, chromium 150 kg, PAHs 80 kg and dioxins+furans 0.4 g. For emissions to soil, UPM reports no pollutants beyond hazardous waste covered under E5. Microplastics generated and used cannot yet be quantified; research continues. For pulp and paper mills in Europe, China and Uruguay, emissions are verified under EMAS by accredited auditors.

Reference: page 182

UPM does not produce substances of concern, nor are its main raw materials classified as such. Substances of concern can occur as components or, more often, impurities in chemical additives used in production or for maintenance; because UPM products are typically solid articles such as paper or plywood, these substances react chemically during production. Quantitative information on substances of concern leaving production sites is still unavailable. In 2024 UPM developed reporting for substances of concern (SoCs) contained in purchased production chemicals, calculated using the maximum of the supplier-declared range multiplied by chemical quantity, consolidated at Group level (whole-year data estimated from at least the first three quarters). Reported SoCs totalled 6,700 tonnes, led by bleaching chemicals (5,000 t) and biocides (900 t). Substances of very high concern (SVHCs) totalled 60 tonnes, found mainly in biocides (30 t), pigments (10 t) and resins (10 t). All pulp mills and European paper mills comply with relevant EU Ecolabel criteria. Reporting will be developed further in coming years.

Reference: page 183

UPM reports that in 2024 no major incidents happened at its operations and no major deposits (provisions) were made. As a result, there were no operating or capital expenditures associated with major incidents or deposits during the year. UPM therefore discloses no further quantified anticipated financial effects from pollution-related impacts, risks and opportunities for the reporting period.

Reference: page 185

UPM's water commitment is anchored in the UPM Code of Conduct (respect for the environment and minimising negative impacts) and the UPM Sustainability Policy Statement, which covers water management in a dedicated section. Production sites aim to minimise water use and wastewater load, with particular attention to basins where freshwater is scarce or projected to become scarce or where receiving water quality is poor. New water-intensive sites are not to be located in high water-risk areas without appropriate mitigation, considering future scenarios and the needs of society and nature. Businesses are expected to design and optimise processes for resource efficiency using best available techniques. UPM also manages forestry impacts on water resources through sustainable forest management supporting the hydrological cycle. UPM is a signatory of the UN Global Compact CEO Water Mandate and follows recognised water stewardship principles. The Supplier and Third-Party Code and Sustainable Supply Chain Programme address water-intensive sourcing. UPM does not use marine resources; coastal discharge from two sites and indirect discharge to the sea are assessed as not material.

Reference: page 185

UPM's focus areas relate to water (wastewater volume target) and responsible sourcing. Pulp and paper production is the most water-intensive activity; water comes from rivers, lakes or groundwater and is recirculated internally, with only a small fraction leaving as wastewater that is treated mechanically and biologically before release. The Group-level water reduction target uses process wastewater volume and focuses on pulp and paper mills, each with a roadmap to 2030. In 2024 specific process wastewater volume per tonne of paper fell 5% year-on-year. Actions in 2024 included improvements to water recycling at the Santana nursery in Uruguay, recycling of wastewater as cooling water at the Changshu mill in China (0.3 m3/tonne reduction), and reduced freshwater use at Jamsankoski in Finland. UPM conducts an annual water risk assessment with the WWF Water Risk Filter; no site is in a high physical water risk area, though Changshu faces the highest projected increase by 2050. UPM participated in the Science Based Targets Network Corporate Engagement Programme. Water activities are funded within overall operational and investment planning.

Reference: page 187

UPM's chosen water target parameter is the wastewater volume of its pulp and paper mills, its water-intensive sites, followed up at Group level at least annually. Targets and 2024 follow-up (2023 in brackets):

• Wastewater volume for an average UPM product: base year 2008 (100%), 2030 target -30%; -16% (-7%).
• Spend covered by UPM Supplier and Third-Party Code: base year 2015 (79%), target >80% continuous; 91% (89%).

The target is set beyond permit values, taking EU Ecolabel criteria and BAT reference values into account, and is allocated to business areas and sites. Progress on the 2030 wastewater volume target has been behind schedule since 2022, but 2024 showed good development for pulp and paper mills. UPM's main production sites are in low-to-medium basin risk areas, with the exception of the Changshu mill under the 2050 scenario, which is making extra efforts to reduce water use and load. Targets do not cover marine resources, which are not material for UPM. The targets are voluntary and additional to legal requirements.

Reference: page 188

Water figures for 2024 (2023 in brackets), m3:

• Total water withdrawal: 407,000,000 (395,000,000), comprising surface water 391,000,000 (378,000,000), ground water 12,000,000 (13,000,000) and communal water 4,000,000 (4,000,000).
• Total water discharge: 382,000,000 (370,000,000), comprising process wastewater 198,000,000 (197,000,000) and cooling water 184,000,000 (173,000,000).
• Total water consumption: 25,000,000 (25,000,000), calculated as withdrawal minus outflow.
• Total water consumption in areas at water risk: 0 (0).
• Water intensity: 2,430 m3/EURm sales (2,430).

In pulp and paper production, only about 5% of water used is taken from freshwater and internally recirculated multiple times; the average water reuse and recirculation ratio is about 20 (per ISO 59020 Annex A), equating to roughly 8 billion m3 of recycled and reused water. Water storage is not material. Wastewater volumes are always measured; withdrawal and cooling water may be estimated. Data for European, Chinese and Uruguayan mills is verified under EMAS.

Reference: page 190

Biodiversity is instrumental to UPM's business as a forest-products company. UPM depends on wood as its main production resource, so deteriorating biodiversity poses risks to the availability and acceptability of wood for pulp, paper, timber, biofuels and biochemicals. UPM's wood sourcing and land use activities may have significant negative impacts on biodiversity, mitigated through measures such as the use of certified wood.

The Global Forest Action Programme (launched 2022) combines measures on climate, biodiversity, soil, water and social contribution to deliver a net-positive impact on biodiversity in UPM's own forests and land areas, extended through the Sustainable Supply Chain Programme into the supply chain. Mitigating climate change is seen as a key measure to safeguard biodiversity, and biodiversity is recognised as essential for healthy forest growth and ecosystem resilience.

UPM has set sustainability focus areas including forests, biodiversity, climate, water and responsible sourcing, with 2030 or continuous targets reviewed annually based on the double materiality analysis.

Reference: page 191

Biodiversity policy is anchored in the UPM Code of Conduct, which expresses respect for people, the environment and ethical business, including a commitment to biodiversity. It is complemented by UPM's Sustainability Policy Statement, which addresses biodiversity in more detail, and the UPM Supplier and Third-Party Code sets minimum supply-chain requirements.

The Sustainability Policy Statement covers UPM's areas of impact on biodiversity (forest and land management, stream water dams, and production sites) and commits to sustainable forest management and zero deforestation, prohibiting forest conversion to plantations or non-forest uses. It addresses elimination of harmful invasive species and reduction of emissions to air and water.

When sourcing wood and fibre, forest certification must be used to manage biodiversity impacts, with Chain-of-Custody certification ensuring traceability. All UPM-owned forests and plantations are 100% certified or will be if new, under FSC (FSC N003385) and PEFC (PEFC/02-44-41). Additional documents include requirements for wood and pulp suppliers and the Forest Action Programme. UPM does not use biodiversity offsets.

Reference: page 191-193

Actions follow focus areas: forestry (100% certified fibre target), biodiversity (net positive impact and obstacle-free streams), climate, water and responsible sourcing. The Forest Action Programme drives biodiversity work in owned, leased and managed forests.

Actions in 2024:

• Launched the UPM Habitat Restoration Programme (February): by 2030 at least 3,000 hectares of peatland habitats restored and management plans on at least 100 other sites in UPM-owned Finnish forests.
• Continued an FSC-led project in Finland to quantify certification's biodiversity impact; implemented the Smart Forestry method in the USA.
• Participated in the Science Based Targets Network (SBTN) Corporate Engagement Programme.
• Two stream obstacle-removal projects carried out: Rutajoki Seinakoski (25 km) and Kelvanjoki (44 km); eDNA studies started in Finland and Uruguay.
• A new spider species discovered on UPM land in Uruguay; about 800 people visited the EARU Biodiversity Reserve.

Forest-related actions are part of overall investment planning, supported by a green bond portfolio of EUR 2,350 million and a sustainability-linked revolving credit facility. UPM does not use biodiversity offsets.

Reference: page 194-195

UPM has set biodiversity-related targets across forestry, stream waters, production-site emissions and the supply chain, supporting its policy objective to mitigate impacts on biodiversity.

Key targets and 2024 performance (2023 in brackets):

• Net-positive impact on forest biodiversity: continuous target of overall positive development; achieved when the majority of biodiversity indicators show positive development versus the prior year. Set for Finland since 2018 and Uruguay since 2022; a USA target is planned for 2025. Overall positive development was measured in 2024.
• Obstacle-free streams: 500 km by 2030 (base 2015, 0 km); 287 km (263 km) achieved. The 2023 figure was adjusted to 263 km from the earlier reported 186 km after monitoring improvements.
• Share of certified fibre: 100% by 2030 (base 2015, 84%); 88% (87%).

Targets did not apply ecological thresholds or allocation of impacts; they are informed by local circumstances, legislation and forest certification standards, and reviewed at least annually. Sub-indicators cover avoidance, minimisation, restoration and rehabilitation.

Reference: page 195-198

UPM's impact metrics focus on biodiversity; forest operations are not related to land-use change.

Forest and land areas (hectares, 2024 / 2023): Finland 522,000 / 523,000; Uruguay 318,000 / 304,000; USA 76,000 / 76,000; total owned 916,000 / 903,000; Uruguay leased 174,000 / 170,000; total owned and leased 1,090,000 / 1,073,000. UPM also manages about 1,600,000 hectares of privately owned forests in Finland. Globally about 135,000 hectares (15%) of UPM's own land is protected or in restricted use.

Forest certification (2024 / 2023): FSC and PEFC double certified 90.2% / 91.4%; PEFC certified 8.3% / 8.4%; in process 1.5% / 0.2%.

Biodiversity indicators - Finland use nine indicators; in 2024 overall positive development was measured (e.g. broadleaved share 11.8%, deadwood 7.4 m3/ha, valuable habitats 55,327). Restored peatland was 10 ha and 6 sites restored. Uruguay uses five indicators; conservation index 0.82 (0.74), conservation area 19.6% of own land.

Reference: page 198

This disclosure is reported but incorporated by reference rather than quantified in the E4 section. For qualitative information about the financial impact of biodiversity-related risks, UPM refers to the Report of the Board of Directors, section "Biodiversity loss" in the chapter "Risks". Deteriorating biodiversity may cause significant adverse effects on the availability and acceptability of the wood raw material UPM needs to produce pulp, paper, timber, biofuels and biochemicals, while maintaining and enhancing biodiversity is treated as an opportunity instrumental to healthy forest growth and to forests adapting to climate change. No separate quantified anticipated financial effects are presented.

Reference: page 201

Resource-use and circular-economy policy is grounded in the UPM Code of Conduct, complemented by the Sustainability Policy Statement, with the UPM Supplier and Third-Party Code setting minimum value-chain requirements.

Specific instruments include the UPM Product Stewardship Standard (developed and approved in 2024, to be trained in 2025) ensuring products are safe, compliant and sustainable across their lifecycle; the UPM Clean Run Standard; the Sustainable Product Design concept; the Sustainable Supply Chain Programme; the Forest Action Programme; and specific requirements for suppliers of wood, pulp, chemicals and pigments.

Wood supplier requirements address legal compliance and wood origin, requiring acceptable sources and excluding wood deemed unacceptable under FSC Controlled Wood (FSC-STD-40-005 V3-1) or controversial under PEFC Chain-of-Custody (PEFC ST 2002:2020). Chemical and pigment requirements demand compliance with regulations such as EU REACH and CLP.

The Sustainability Policy Statement commits UPM to a circular bioeconomy using recovered materials, developing recycling and utilisation options for side streams and residues, and promoting recyclability and recycled materials.

Reference: page 202-203

UPM's circular-economy focus areas cover forest, waste, water, product stewardship and responsible sourcing. The Sustainable Product Design concept steers development across six lifecycle steps (design, materials, production, distribution, use, circularity), supported by Life Cycle Assessments, biodegradability and recyclability tests.

UPM's goal is to make efficient use of all material streams under a circular bioeconomy (renew, reduce, reuse, recycle, recover). Organic residues such as bark, wood residues and sludges are largely used to generate energy. In 2024, 83% (93%) of ash was used in applications such as soil stabilisation, fertiliser, the cement industry, paper fillers and replacing caustic soda. UPM Raflatac's RafCycle service collects label waste from more than 440 partners worldwide.

Actions in 2024:

• Trials of recycled nutrients in effluent treatment at several mills.
• WISA birch plywood wrapped in packaging made of 30% post-industrial plastic.
• In Uruguay, recycling options developed for lime kiln dust; at Fray Bentos, treated phosphorous sludge share for utilisation increased from 50% to 80%.
• Green liquor dregs recycling progressed, including trials in cement production in Uruguay.
• Assessment started of EU Packaging and Packaging Waste Regulation (PPWR), expected from Q3/2026.

Reference: page 204-205

UPM has targets for its resource-use and circular-economy focus areas covering forest, water, waste, product stewardship and responsible sourcing.

Key targets and 2024 performance (2023 in brackets):

• Share of certified fibre: 100% by 2030 (base 2015, 84%); 88.5% (87.0%).
• Nutrients used for effluent treatment from recycled sources: 100% by 2030 (base 2017, 17%); 33% (33%).
• Process waste sent to landfills or to incineration without energy recovery: 0 tonnes by 2030 (base 2015, 122,000 tonnes); 97,000 (82,000) tonnes, with 83% (87%) of UPM's process waste recovered or recycled.
• Climate-positive product portfolio: continuous improvement (since 2019); decarbonisation solutions were 8% of sales.
• Share of ecolabelled products: 100% by 2030 (base 2015, 77%); 89% (89%).
• UPM total spend covered by the Supplier and Third-Party Code: >80% continuous (base 2015, 79%); 91% (89%).

Process waste to landfill increased in 2023 and 2024 due to the ramp-up of the Paso de los Toros pulp mill in Uruguay. Targets are voluntary, additional to legal requirements, and reported at least annually.

Reference: page 205-206

Wood and fibre-based products are the basis of UPM's operations, with sourcing categories of fibres, other raw materials (pigments, chemicals), indirect materials, and services, logistics and energy. Materials are purchased from about 23,000 B2B suppliers and wood from about 14,500 private forest owners.

Raw materials (tonnes incl. moisture, 2024 / 2023): wood 23,300,000 / 21,800,000; market pulp 1,300,000 / 1,300,000; recovered paper 700,000 / 760,000; purchased paper for converting 310,000 / 280,000; minerals 1,800,000 / 1,900,000; chemicals 930,000 / 950,000; plastics, adhesives, resins, films 160,000 / 130,000; total 28,600,000 / 27,100,000.

Biological material: only wood is counted as biological; its share of total raw materials was 81% (80%). All wood-based raw materials are FSC/PEFC certified or comply with FSC Controlled Wood or PEFC Due Diligence requirements; total certified wood 88.5% (87.0%).

Secondary material: recovered paper accounted for 15% (17%) of fibre materials used in UPM's paper production in 2024.

Reference: page 205-206

Products (2024 / 2023): paper 4,600,000 / 4,700,000 t; chemical pulp 5,000,000 / 4,200,000 t; converting materials 500,000 / 400,000 t; plywood and veneer 500,000 / 400,000 m3; sawn timber 1,200,000 / 1,500,000 m3; heat 1,000 / 1,000 GWh; electricity 13,000 / 14,000 GWh.

Some products are made from side streams, residues or materials recovered after product use, supporting a circular bioeconomy. Durability is generally not the key requirement for UPM's B2B mass products, though it matters for construction plywood and timber; plywood lifespan can reach 100 years. Repairability is not relevant to UPM's range.

Recyclable content: most products are recyclable depending on processing. Paper grades for printing or packaging are 100% recyclable if further processing does not affect recyclability. Pulp is 100% recyclable and biodegradable, but as it is early in the processing chain a recyclability estimate for the final product is impossible. Plywood, veneer and sawn timber are 100% recyclable and can serve as energy sources at end of life. Label release liner is recovered via UPM Raflatac's RafCycle circular solution.

Reference: page 207-208

By-products and waste (tonnes dry weight, except hazardous waste; 2024 totals, with 2023 total in brackets): total waste and by-products 723,000 (745,000), split into by-products 72,000, non-hazardous process waste 622,000, other non-hazardous waste 22,000 and hazardous waste 7,000.

By disposal route (2024 total / 2023 total): recycling 352,000 / 408,000; composting 9,100 / 9,000; energy recovery 235,000 / 215,000; temporary storage 25,000 / 20,000; landfilling 95,000 / 85,000; incineration without energy recovery 5,800 / 7,000; other disposal 400 / 2,000.

Total non-recycled waste (landfilling, incineration without energy recovery, plus temporary storage) was 127,000 (113,000) tonnes, equal to 18% (15%) of waste.

Main waste and by-product streams (2024 / 2023): fibrous residues 50% / 48%; ash 26% / 31%; green liquor dregs 8% / 7%. Data is reported in bone dry tonnes (except hazardous waste); EU pulp and paper mills, China and Uruguay are verified under EMAS by accredited auditors.

Reference: page 211-212

The UPM Code of Conduct, UPM HR Rules and UPM Safety Rules apply to all of UPM's own workforce. Human resources management is based on the Company's values, and the HR Rules detail working conditions, labour practices and decent work as described by the ILO. The HR Rules are owned by Human Resources and approved by the Group Executive Team. UPM is committed to respecting human rights in line with the UN Guiding Principles on Business and Human Rights, 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 promotes fair working conditions and the right to freedom of association and collective bargaining, and does not tolerate modern slavery, child labour, forced labour or human trafficking. The Safety Rules set safety expectations at all levels and are supported by OHS management systems and safety standards. UPM promotes equal opportunities and does not tolerate direct or indirect discrimination or harassment.

Reference: page 212

UPM aims to empower and engage employees through responsible leadership, with various forums for continuous dialogue between employees and business management. UPM engages in both formal and informal consultations with trade unions and promotes employee participation in line with international and national rules. Countries have cooperative bodies operating under country-specific rules. UPM has the UPM European Forum, a cooperative body that addresses changes in the Company and the business environment and organises regular meetings for employee representatives from European business units. The Human Resources function and the Executive Vice President of Human Resources have operational responsibility for ensuring employee engagement takes place. Every year, the Employee Engagement Survey (EES) is available for all employees to evaluate aspects of their working environment, including safety, diversity and inclusion, learning and growth, and leadership. A Health and Wellbeing pulse survey has complemented the EES for the last three years. The effectiveness of engagement is assessed through the EES and through individual target setting and follow-up discussions.

Reference: page 212

UPM has implemented processes for reporting, identifying and investigating concerns and for handling incidents, including remediation and protection against retaliation. These processes cover all stakeholders, including UPM's own workforce. UPM monitors and works to remedy adverse human rights impacts of which it is aware and which its activities have caused or contributed to. In the event of a violation of a human rights or environmental obligation, UPM determines the necessary and appropriate measures on a case-by-case basis, with remediation determined based on verified impacts. Employees have multiple ways to raise concerns: they can discuss them with their manager, with a representative of UPM's Legal and Compliance, Human Resources or Internal Audit functions, or use the UPM Report Misconduct channel, which is available anonymously. Detailed information on handling concerns is provided under G1-1.

Reference: page 213-215

UPM's material topics were defined through a double materiality analysis. Based on these, focus areas were developed: responsible leadership, continuous learning and development, diversity and inclusion, fair rewarding, and a safe and healthy working environment. UPM monitors effectiveness by tracking progress on its 2030 sustainability targets.

Key actions in 2024

• Learning and development uses a 70-20-10 framework; new digital and microlearning content introduced.
• Diversity and inclusion discussions continued; the BeU Employee Resource Group for LGBTIQ+ continued; the emerged gender pay gap was closed.
• Fair rewarding: annual reviews for both gender pay equity and living wage were conducted successfully and identified gaps closed.
• Safety: the Company-wide Safety project was the main focus, with development areas identified via employee dialogues at more than 50 production and office sites; process safety competences and a new global e-learning were developed; the Health and Wellbeing pulse survey was run in May.

UPM has paid a living wage to all employees since 2019 and has conducted annual gender pay gap reviews since 2021.

Reference: page 216

UPM has set workforce-related sustainability targets, approved by the Group Executive Team, mostly tracked through the Employee Engagement Survey (EES participation 76%, prior year 81%).

• Female representation in professional and managerial roles: 34.5% in 2024 (32.3% in 2023), base 30.7% in 2022, with a 2030 target of 40% female representation.
• Goal setting and development plans: 85% (85%) completed individual goal setting or annual discussion; 78% (81%) had a documented development plan; target 100% completion.
• Fatalities or serious accidents: 0 (0) fatal accidents and 3 (5) serious accidents in 2024; target of 0 since 2015.
• TRIF (including contractors): 6.1 (6.1) for UPM workforce and 5.1 (5.2) including contractors; 2030 target below 2.
• Absenteeism rate: 4.2% (4.3%); target below 2%.
• Work-life balance EES score: 72 (72), below top 10% benchmark by 7 points.
• Employee engagement EES score: 70 (70).

Reference: page 217-218

UPM had 15,827 total employees (headcount) at the end of 2024, down from 16,573 in 2023. By gender: 11,989 male, 3,835 female, 3 other and 0 not reported. By contract type, there were 14,601 permanent and 1,226 temporary employees, plus 42 non-guaranteed hours employees (all in Finland). There were 15,304 full-time and 523 part-time employees. By region: Americas 1,797; Asia 1,844; Europe 12,100; Rest of the World 86. The largest headcount countries were Finland 6,222 (6,281), Germany 3,390 (3,918), China 1,513 (1,572), Poland 1,270 (1,183), Uruguay 874 (872), United States 745 (735) and United Kingdom 445 (424). In 2024, 2,148 employees left UPM (1,846 in 2023), giving an employee turnover rate of 13.6% (11.1%). Headcount is calculated as heads at the end of the reporting period. During 2024 UPM closed its Hurth paper mill in Germany, one paper machine at Nordland, and its biocomposite business.

Reference: page 218

UPM's non-employees consist of two categories: independent contractors and agency hires. The total number of non-employees (agency hires) in UPM's own workforce was 344 in 2024, up from 168 in 2023. The number of agency hires has been fairly stable throughout the year and over the years. Agency hires are individuals employed by employment agencies or labour contractors to work at UPM's sites under UPM's direct supervision; they do not have an employment contract with UPM and are not included in UPM's official employee figures. Examples of work they perform include production operators, mechanical and automation technicians, forklift truck operators, quality operators, and converting, finishing and coating department operators. Independent contractors are self-employed individuals bound by a direct contractual arrangement other than a contract of employment. UPM conducted an internal survey across all sites and estimates the number of independent contractors to be very small and therefore not material to report.

Reference: page 219

The percentage of total employees covered by collective bargaining agreements was 49% in 2024, down from 52% in 2023. For coverage by region, within the EEA, Finland fell in the 40-59% band (57%) and Germany in the 60-79% band (75%). No non-EEA region met the disclosure criteria. For UPM operating countries, only Finland and Germany fulfil the criteria of being countries with more than 50 employees representing more than 10% of total employees. For social dialogue and workplace representation (EEA only), both Finland and Germany fell in the 80-100% band. Since 2010, UPM has had its own European Forum agreement, provided for under the European Works Council (EWC) Directive, covering UPM employees in the EEA.

Reference: page 219

Gender distribution of top management (defined as two levels below the President and CEO, excluding assistants): 55 male (69%) and 25 female (31%). By age group, employees in 2024 were: under 30, 2,071 (2,136 in 2023); 30-50, 8,188 (8,612); over 50, 5,568 (5,821); not reported 0 (4), for a total of 15,827 (16,573). Gender is as reported by the employee, and UPM does not have visibility of the legal gender of its employees. UPM has set a target for continuous improvement in female representation in professional and managerial roles, which reached 34.5% in 2024, with a 2030 target of 40%.

Reference: page 220

All UPM employees are paid at least an adequate wage in line with applicable benchmarks in the disclosure requirements. UPM uses the living wage concept, equivalent to adequate wages, to review this annually. The living wage review is conducted in cooperation with an established external partner using a proven methodology, process and benchmark, including local living wage threshold values of a typical family for all UPM's operating countries and cities. The review is global by default and applies to both salaried and shopfloor employees in UPM operating countries, covering workforce segments where salaries can be reasonably and fairly adjusted. If any pay gaps are identified, adjustments to pay are made annually. An employee's total annual salary, including regular and guaranteed pay such as base salary, regular shift pay and fixed cash allowances, is assessed against the local living wage threshold. Unexpected living wage gaps are vetted by appropriate HR personnel and local information is used to validate adjustments. UPM has monitored and paid a living wage to all employees since 2019.

Reference: page 220

For 2024, UPM's social protection disclosure covers its seven largest operating countries: Finland, Germany, Uruguay, China, Poland, the USA and the UK, accounting for approximately 91% of UPM's employees. Employees in all seven countries are covered against sickness, unemployment and retirement. Coverage against injury and disability applies in all seven except the UK, where employees are not covered. Parental leave coverage applies in all seven, although in the USA it is maternity leave only. Two qualifications are noted: in the UK, employees are not covered for injury and disability; and employees without 5 years of service are not covered in certain cases.

Reference: page 220

Due to legal restrictions, UPM cannot require its employees to report their disabilities. This information can only be collected on a voluntary basis, and UPM does not currently collect such information. As a result, UPM does not disclose the share or number of persons with disabilities among its employees.

Reference: page 220

In 2024, 78% of employees had documented development plans (81% in 2023), and 85% had completed individual goal setting or annual discussion (85% in 2023). By gender, documented development plans were held by 70% of female and 80% of male employees, and goal setting or annual discussion was completed by 82% of female and 85% of male employees; figures for the 'other' category are reported as not applicable. The average number of training hours per employee in 2024 was 9 (10 in 2023), with female employees averaging 8 (10) and male employees averaging 9 (10); the 'other' category is reported as not applicable.

Reference: page 221

All UPM employees are covered by UPM's OHS management system, which covers 100% of employees. Third-party certified OHS systems (mostly ISO 45001) were in place in 43 units with 11,800 employees, covering 74% of all employees.

UPM workforce (2024, with 2023 comparatives)

• TRIF (total injuries per million hours worked): 6.1 (6.1)
• LTAF (lost-time accidents per million hours worked): 3.4 (3.7)
• Number of accidents: 166 (168)
• Serious accidents: 2 (4)
• Fatalities: 0 (0)
• Days lost due to work-related injuries: 3,200 (3,200)
• Absenteeism: 4.2% (4.3%)
• Work-related ill-health cases: 4 (5)

UPM workforce including contractors (2024, 2023)

• TRIF: 5.1 (5.2)
• LTAF: 3.2 (3.4)
• Number of accidents: 253 (267)
• Serious accidents: 3 (5)
• Fatalities: 0 (0)

Reference: page 222

In 2024, the UPM global raw pay gap, calculated in accordance with disclosure requirements as of 1 October 2024, was 6.5%. The raw pay gap is calculated by dividing the difference in average gross hourly pay of all male and all female employees by the average gross hourly pay of all male employees, and does not take into account factors such as the distribution of male and female employees across countries, locations, job types and levels, experience or performance. UPM notes that the raw pay gap is artificial and not representative of real equal pay practices, and that its voluntary annual adjusted gender pay equity review takes legitimate pay drivers into account; pay adjustments were implemented in 2024 to close statistically significant unexplained gaps. The annual total remuneration ratio of the highest paid individual to the average annual total remuneration for all employees (excluding CEO) was 23.6.

Reference: page 222

No severe human rights incidents connected to UPM's workforce were reported during the reporting period. The severity of incidents is assessed based on the UN Guiding Principles on Business and Human Rights. UPM reported 0 fatalities for its workforce (and 0 including contractors) in 2024. No fines related to workforce incidents or complaints are reported. UPM's employees have multiple ways to raise concerns: discussing them with their manager, with a representative of UPM's Legal and Compliance, Human Resources or Internal Audit functions, or using the UPM Report Misconduct channel, which is available anonymously. Further information on reporting and identifying concerns is provided under G1-1.

Reference: page 225-226

The UPM Code of Conduct expresses respect for people and human rights, the environment and ethical business practices, complemented by the UPM Sustainability Policy Statement. The UPM Supplier and Third-Party Code sets minimum requirements for the value chain and covers all suppliers and third parties such as agents, advisers, joint ventures and distributors. UPM is committed to respecting human rights in line with the UN Guiding Principles on Business and Human Rights, the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises.

Specific aspects are covered by the Supplier Assessment Criteria, the UPM Sustainable Supply Chain Programme, category-specific requirements (wood, pulp, chemicals, logistics), the UPM Forest Action Programme and UPM Safety Rules and Safety requirements for contractors. UPM has identified forced labour as a salient human rights risk in some contracted services and global supply chains and recognises migrants as a particularly vulnerable group.

Reference: page 226

Stakeholder engagement is implemented according to the topic and the nature and scale of activities. UPM's internal occupational health and safety audit programme includes engagement with contractors' employees. Contractors and their employees at UPM sites must adopt UPM's safe working practices, participate in hazard identification and proactive safety reporting, and attend safety induction and training before entering a production site.

In wood sourcing and forestry operations, continuous dialogue with stakeholders is essential. The FSC Controlled Wood requirements are applied to all sourced wood (100% coverage) and cover legality, traditional and civil rights including those of indigenous and tribal people, high conservation values and the social and economic wellbeing of workers. An annual stakeholder consultation process relates to UPM's FSC forest management certificates. UPM also conducts supplier audits, contractor reviews with worker interviews, and social monitoring involving contractor workers in Uruguay. The Senior Vice President of Sourcing and the Executive Vice Presidents of the business areas hold operational responsibility for engagement.

Reference: page 226

UPM monitors and works to remediate negative human rights impacts of which it becomes aware and which its activities have contributed to or caused. Remediation is specified case by case based on verified impacts. UPM establishes reporting channels, reviews reports carefully, handles personal data appropriately, ensures protection against retaliation and treats reports in strict confidence. Investigations are conducted by designated persons with the necessary competences, and substantiated reports lead to appropriate disciplinary and/or legal action.

Local stakeholders can report concerns directly to UPM representatives at mills and other sites, and through locally provided channels such as email and telephone. Specific local grievance channels exist, such as the "how am I driving" solution in Uruguay focused on road safety. The UPM Report Misconduct channel (SpeakUp) is communicated to suppliers as part of the Supplier and Third-Party Code, and suppliers are informed about grievance mechanisms during audits and contractor safety inductions. Forest certification systems also have existing grievance mechanisms.

Reference: page 227

UPM's relevant focus areas are responsible sourcing, forestry, and a safe and healthy working environment, supported by action plans to achieve Group-level targets. UPM tracks effectiveness through progress on its 2030 sustainability targets and reviews risk management procedures quarterly through its compliance system.

Actions in 2024

• Continued work on contractor management, initiating a project to develop a verification model for contractors' social responsibility performance.
• Renewed its Supplier and Third-Party Code.
• Initiated a supply chain collaboration programme with direct starch suppliers to improve working conditions of farm workers in Thailand (tier 2-3 suppliers).
• Carried out a Corporate Human Rights Saliency Assessment and a Human Rights Impact Assessment in Uruguay.

In 2024, no incidents of serious human rights violations occurred in UPM's value chain where its activities caused or contributed to harm. Activities related to value chain workers are included in UPM's investment and resource planning.

Reference: page 228

UPM has set targets and key performance indicators covering the supply chain (Forestry, Responsible Sourcing) and on-site workers (Health and Safety). Targets are developed internally taking external stakeholder views into account and are approved by the Group Executive Team. They are followed up at Group level at least annually.

Key targets and 2024 results (2023 in brackets)

• Share of certified fibre: 2030 target 100% (base year 2015, 84%); 2024 result 88.5% (87.0%).
• UPM total spend covered by UPM Supplier and Third-Party Code: target above 80% continuous (base 2015, 79%); 2024 result 91% (89%).
• Fatalities or serious accidents in UPM operations: target 0 continuous; 2024 result 0 (0) fatal accidents and 3 (5) serious accidents.
• Total recordable injury frequency (TRIF) including contractors: 2030 target below 2 (base 2017, 8.5); 2024 result 5.1 (5.2).

Target setting is based on an annually updated double materiality assessment.

Reference: page 231

The UPM Code of Conduct expresses respect for people and human rights, the environment and ethical business practices, complemented by the UPM Sustainability Policy Statement, which addresses engagement with stakeholders and society. The UPM Supplier and Third-Party Code sets minimum requirements for suppliers and other third parties. Specific aspects are covered by the UPM Rules for Donations, Sponsorships and Employee volunteering, the Sustainable Supply Chain Programme, the Requirements for wood suppliers and the Forest Action Programme.

UPM is committed to respecting human rights in line with the UN Guiding Principles on Business and Human Rights and recognises responsible land tenure, land rights and Free, Prior and Informed Consent where applicable. It maintains a zero-tolerance approach to land grabbing. In 2024, no severe human rights incidents related to affected communities were reported. An environmental incident in August 2023 at the UPM Paso de los Toros pulp mill in Uruguay had a temporary impact on a local creek; UPM implemented corrective actions and notified authorities and the local community.

Reference: page 232

UPM engages with a wide range of stakeholders including customers, investors, employees, suppliers, authorities, NGOs and local communities. The Executive Vice President of Marketing, Sustainability and Communications has operational responsibility for local engagement, coordinating stakeholder relations at Group level while businesses are responsible for continuous local dialogue. The UPM Kaukas and UPM Kymi mills in Finland have local dialogue forums, and Uruguay has a dedicated local community engagement team.

Engagement takes the form of visiting communities, keeping them informed of potential impacts, managing concerns and establishing projects with key stakeholders. Measures include environmental and social impact assessments, continuous human rights due diligence, ISO 14001 and 45001 management systems, FSC and/or PEFC certification, and restructuring processes planned with employees, organisations and authorities. In 2024, UPM received approximately 350 (350) enquiries or concerns from the general public. Regular social monitoring surveys and public opinion surveys are conducted by external providers in Uruguay, including at the Fray Bentos and Paso de los Toros pulp mills.

Reference: page 232-233

UPM monitors and works to remediate negative human rights impacts of which it becomes aware and which its activities have contributed to or caused, with remediation specified case by case based on verified impacts. Reports of misconduct are carefully reviewed, personal data is handled appropriately, protection against retaliation is ensured and reports are treated in strict confidence. Investigations are conducted by designated competent persons, and substantiated reports lead to appropriate disciplinary and/or legal action.

All members of affected communities can report concerns anonymously online via the UPM Report Misconduct channel (SpeakUp). Local stakeholders can also report directly to UPM representatives at mills and sites and through email and telephone. Typical concerns relate to odours, traffic and noise, and grievances are followed up as part of UPM's management systems, handled in accordance with PEFC and/or FSC Chain of Custody requirements, forest certification standards and ISO 14001. The channel is available on UPM's webpage and promoted via the Supplier and Third-Party Code and contractor safety inductions.

Reference: page 233-234

UPM's relevant focus areas are local engagement, forestry and responsible sourcing, supported by action plans to achieve Group-level targets. Effectiveness is tracked through progress on 2030 sustainability targets and a quarterly review of risk management procedures via the compliance system.

Actions in 2024

• A Human Rights Impact Assessment of UPM's operations in Uruguay was conducted by an independent consultant, indicating strong management systems and proposing development actions.
• Steps were taken to enhance community rail safety in Uruguay through a Railway Safety Awareness Programme with the Ministry of Transport and Public Works.
• In the USA, UPM continued cooperation with local indigenous peoples' communities.
• UPM initiated development of a local community engagement policy.

Under the Share and Care Programme, 2024 local sponsorships and contributions amounted to approximately EUR 800,000 (EUR 900,000) and a total of EUR 920,000 (EUR 533,800) was donated to charities and non-profit causes. In 2024, no severe human rights incidents related to affected communities were reported.

Reference: page 235

UPM has set targets and key performance indicators covering the supply chain (Forestry, Responsible Sourcing) and its own operations (Community involvement). Targets are developed internally taking external stakeholder views into account, approved by the Group Executive Team, and followed up at Group level at least annually.

Targets and 2024 follow-up

• Community involvement: Assessment of quality of community relationships and defined actions at relevant sites (continuous, base year 2021). In 2024 a Human Rights Impact Assessment was conducted in Uruguay and a development plan created, with a preliminary community engagement policy established and implementation planned for 2025.
• Long-term initiatives impacting mill communities defined under the Share and Care Programme (continuous, all businesses, base 2021): supported local education and learning initiatives and provided aid to people impacted by conflicts and natural disasters.
• Share of certified fibre: 2030 target 100% (base 2015, 84%); 2024 result 88.5% (87.0%).
• UPM total spend covered by Supplier and Third-Party Code: target above 80% continuous (base 2015, 79%); 2024 result 91% (89%).

Reference: page 237-238

UPM's decision-making, management and operations are guided by UPM's values and the UPM Code of Conduct, which underlines commitment to integrity and covers respect for people and human rights, environmental impact and product safety, zero tolerance for corruption and bribery, knowing whom you trade with, and engaging with stakeholders. The Code is approved by the Board of Directors and was last updated in 2022. The Group Executive Team is responsible for managing corporate responsibility. The Supplier and Third-Party Code, updated at the end of 2024, extends the same principles to suppliers and third parties. The Sustainability Policy Statement was approved by the Group Executive Team at the end of 2024.

UPM's values are Trust and be trusted, Achieve together, and Renew with courage. All employees share responsibility for integrity and are obliged to speak up. The UPM Report Misconduct channel (SpeakUp), provided by an external supplier, allows anonymous reports in more than 40 languages. UPM is subject to the EU Whistleblowing Directive ((EU) 2019/1937) as implemented nationally, and maintains a strict non-retaliation policy.

Reference: page 239-241

Suppliers are an essential part of UPM's value chain. UPM buys products, materials and services from around 23,000 B2B suppliers globally and wood from around 14,500 private forest owners. Selection priorities include reliable deliveries, cost-competitiveness, quality, financial stability, social and environmental responsibility, product safety and carbon footprint. Responsible sourcing practices are formulated in the Sustainable Supply Chain Programme. In 2024, 91% (89%) of total spend was with suppliers committed to the Supplier and Third-Party Code, which was updated in 2024.

UPM carried out 97 (95) supplier audits and reviews globally in 2024 (62 by its own auditors, 35 by external auditors), identifying 549 (125) findings, none considered critical. About 3,200 contractor reviews on working conditions were carried out in Uruguay. 621 (540) suppliers had valid EcoVadis assessments, with 95% showing low sustainability risk by supplier count. Contractual payment terms are defined by UPM or, in some cases, the supplier, with no special procedures for SMEs.

Reference: page 242-244

The UPM Code of Conduct underlines a zero-tolerance attitude towards corruption and bribery. The Anti-Corruption Rules, last updated in 2024, explain prohibited conduct and expected ethical behaviour. Anti-corruption and anti-bribery are managed through the Company-wide compliance system, embedded in UPM's governance model. UPM regularly performs anti-corruption risk assessments; the 2024 process included top-down risk discussions with each business area's management and assessment of all entities by country risk and complexity. Some operating countries (Mexico, Türkiye, Indonesia, Thailand, Argentina, India, South Africa and Vietnam) are perceived as highly corrupt or corrupt by Transparency International.

UPM has identified salaried employees as most exposed to corruption and bribery and provides anti-corruption training to all of them; 98% completed the anti-corruption e-learning by end of 2024. Due diligence is required before entering or renewing contracts with qualifying third parties, with anti-bribery contract terms and audit rights. Monitoring is based on a Group company risk matrix and a three-year unit-specific compliance review plan, with key findings reported to the Board's Audit Committee.

Reference: page 244

In 2024 there were 0 (2023: 0) convictions for corruption or bribery and the amount of fines was EUR 0 (2023: EUR 0).

In 2024, two cases of alleged violations of UPM's anti-corruption policies and procedures, including those related to gifts and hospitality, were investigated. In both cases, violations of UPM's policies were substantiated and the employees concerned were disciplined. In response to violations, UPM conducted investigations and monitoring activities and took action to improve its control environment, including disciplinary measures and training for identified risk groups.

There were no confirmed cases of contracts with business partners being terminated or not renewed due to violations related to corruption or bribery in 2024. No cases of corruption or bribery were brought against the Company or its own employees during the reporting period. Allegations or incidents can be reported through the UPM Report Misconduct channel and are investigated under the supervision of Internal Audit or Legal and Compliance, separate from the management chain involved.

Reference: page 244-245

Through public affairs work, UPM aims to promote the prerequisites for its operations, particularly in its main operating countries Finland, Uruguay, Germany and China, as well as at EU level. Public affairs activities are based on UPM's strategy and aligned with the Paris Agreement. The Public Affairs Team is led by the EVP of Marketing, Sustainability and Communication, a member of the Group Executive Team, which regularly reviews these topics.

In accordance with the UPM Code of Conduct, UPM does not support political parties or individual candidates financially or in kind. UPM's identification number in the EU Transparency Register is 861194311863-31; it is also registered in the German Lobby Register and, as of 2024, the new Finnish Transparency Register. UPM cooperates with trade associations, most importantly the Finnish Forest Industries Federation and the Confederation of European Paper Industries (Cepi). One Board member, Mr Jari Gustafsson, held a position in public administration (Finnish Ambassador for Greece and Albania until 31 August 2024) in the two years preceding his appointment; the President and CEO has not.

Reference: page 245

The average number of days it takes to pay an invoice after the due date determined in the payment schedule is not followed up by UPM as a payment-related performance indicator. UPM is also not gathering statistics on the number of legal proceedings currently outstanding for late payments. The development of this reporting will start in 2025.

On average, UPM applies payment terms of 14 to 60 days in its contracts with suppliers and, as standard, payments are made according to the due date. UPM follows the contractual payment terms as defined by UPM or, in some cases, by the supplier, and the due date determines the payment schedule. Individual contracts and respective payment terms may vary between countries and businesses, reflecting the characteristics of the business. The invoice processing schedule is defined for invoice verifiers and approvers and is monitored daily, with notifications sent and processes escalated in the event of delays. There are no special procedures for SMEs.