UPM annual report 2015

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IN BRIEF

STRATEGY

BUSINESSES

STAKEHOLDERS

GOVERNANCE

ACCOUNTS

For commercial sponsorships, UPM spent approximately EUR 800,000. UPM’s support for its Uruguayan UPM Foundation continued with EUR 367,000. The foundation supports and encourages training, entrepreneurship, employment and healthy living and entertainment in local communities in the Uruguayan countryside. EUR 60,000 was donated to charities or other non-profit purposes, including a dona- tion to the German Stiftung Lesen founda- tion for supporting reading among refugee children in Germany. Continuous development with corrective actions Should stakeholders have concerns or sus- pect misconduct, they are encouraged to contact UPM’s Stakeholder Relations func- tion or local units or use the UPMReport Misconduct channel accessible via the com- pany website. A claim can be made confiden- tially and anonymously. The company has agreed internal procedures on how to address possible misconduct.

company’s guidelines for sponsorships and donations are applied in all businesses. UPM does not financially support political parties or individual candidates. An important sponsorship agreement was signed with the Technological University of Uruguay (UTEC) to facilitate regional high level technical education in Fray Bentos. The target is to advance technical skills and engi- neering, particularly in mechatronics, renew- able energy, transport and logistics. The investment in education will create further development opportunities, enhancing the overall competitiveness and competence pool of the forest industry in Uruguay in the future. Another significant sponsorship was signed with Guides and Scouts of Finland. The target is to strengthen the youth’s relationship with forests by encouraging them to see the forests from a versatile perspective and by using innovative mobile applications. The focus of the local sponsorship was to support the vitality of UPMproduction loca- tions. UPM spent approximately EUR 3.6 million on local sponsorships and donations.

first investment in a new, innovative produc- tion facility in Finland as part of the transfor- mation of the forest industry. The biorefinery received significant domestic and international publicity. The visit of two heads of state, Fin- land and Sweden, was a public recognition for the work and courage required to renew. Engagement in the Slush event as a key partner was also a new opening. Slush is the world’s leading event where start-up and tech- nology companies meet. At Slush, UPMwas looking for partners to develop solutions in circular economy and customer-friendly digital solutions and aid in the utilisation of non-core patents and industrial internet. UPM also continued co-operation with WWF Finland to promote the sustainability of forestry and the sustainability of wood-based liquid biofuels. Sponsorships supporting company strategy UPM focuses on sponsorship initiatives that are future-oriented and support innovation and sustainable values or local vitality. The

the focus of upm’s stakeholder engagement work

UPM’s Biofore strategy forms the foundation of UPM’s stakeholder dialogue. The key focus areas and activities vary locally and according to stakeholder needs. Find out more about our activities in 2015 in this picture.

1 Future-oriented, trusted partner with clear requirements and expectations 2 Good governance, supplier collaboration projects and responsible sourcing practices 3 Efficiency, cost leadership, innovativeness, continuous development and compliance with supplier requirements

1 Stakeholders’ main concerns and expectations 2 Key engagement activities 3 UPM’s target

1 Responsible, safe neighbour, employment opportunities, dialogue on local topics 2 Open door events, stakeholder visits, sponsorship and local community projects 3 License to operate and good collaboration

UPM promotes reading

Suppliers

UPM does not tolerate any violations of the UPMCode of Conduct. Employees can ask for advice from appointed Code of Conduct contact persons or report misconduct anonymously through UPMReport Misconduct channel. Misconduct reports are reviewed carefully and UPM takes corrective actions when necessary. In 2015, UPM received approximately 210 inquiries and concerns expressed by stakeholders. The concerns related mainly to environment, forestry and biodiversity. 12 cases were reported through UPMReport Misconduct channel. The complaints related mainly to suspected cases of fraud and suspected failures to adhere to the com- pany’s HR Rules or compliance procedures. Five cases related to discrimination were reported, but none were found to be justified. None of the cases were related to society, environment, human rights violations, corruption or labour practices. Some of the reported cases led to disciplinary action includ- ing warnings or terminations of employment.

The two village schools of Quebracho in Paysandú, Uruguay welcomed UPM Foundation’s book donation with great enthusiasm. “We aim to improve the reading habits of school children in a new way but also improve the amount of interest that their families display for reading and education in general. The idea is to go around the neighbourhood and visit children and hundreds of families and spend time with them by reading and lending books,” says Rosario Maldonado who is the head teacher of one of the schools involved. “With the help of UPM Foundation we renewed our library and received some 170 new books from our wish list. The children are happy as they like to listen to stories and read encyclopaedias but families are also happy with the experiment.” UPM also supports reading among refugee children in Germany through German Stiftung Lesen (German Reading Foundation). Reading is fundamental to human development and a prerequisite for full participation in today’s media-led and culturally diverse society.

1 Publish interesting content 2 Proactive media outreach 3 UPM messaging incorporated in content

Media

Communities

1 Safe and motivating working environment 2 Continuous development of safety culture and leadership capabilities 3 Employee engagement

Employees

1 Total shareholder value 2 Clear and reliable disclosure and communications, investor meetings and events 3 Attractive investment

Investors

Government and regulators

NGOs

1 Fulfil regulatory require- ments, employment and competitiveness 2 Network to ensure UPM view is heard 3 Ensure competitiveness and a fair operating environment

1 Reliable partner, service offering, product safety and quality, product profiles and ecolabels, supply chain performance 2 Collaboration, customer satisfaction surveys, best practice sharing, strengthened customer focus 3 Mutual business success and Biofore opportunities

1 High level of environmental and social responsibility performance 2 Dialogue, transparency and

Customers