UPM annual report 2015

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IN BRIEF

STRATEGY

BUSINESSES

STAKEHOLDERS

GOVERNANCE

ACCOUNTS

Controlled and resource efficient production

Water plays an increasingly important role

CONTINUOUS River monitoring

been compensated by fish planting obligations and fish management fees set by authorities. UPM is currently participating in a two-year project administered by the Natural Resources Institute Finland in which suitable means for restoring migratory fish stocks and supporting their natural reproduction are studied. UPMwas the first forest industry company to sign the WASH Pledge (Water, Sanitation and Hygiene). During 2015, access to drinking water and sanitary conditions has been deter- mined at all UPMproduction plants. This work will continue in 2016. UPMupdated its water-related targets in 2015. The previous target of reducing the COD load by 20% by 2020 proceeded well as the target was nearly achieved in 2015. The second target of reducing the wastewater volume by 15% proved to be challenging. The new targets include reducing water consumption by 30%, reducing COD emissions by 40% and introduc- ing the use of recycled nutrients at wastewater treatment plants by 2030.

Water is one of the most important natural resources and of crucial importance to UPM. Water resources and the natural water cycle have an essential impact on our operations in forests, plantation forestry and the production of energy, pulp and paper. The company’s target is to minimise the impact of operations on local water resources, safeguard the natural water cycle in forests and maintain the functioning of aquatic ecosystems. UPM’s main production plants are located in areas where there is sufficient water available. The water used by UPMplants comes from rivers, lakes or groundwater resources. UPM uses water responsibly in terms of the com- pany’s water consumption and effluent quality. Reducing water consumption is a continuous target at all UPM mills Using less water also means using less electric- ity, chemicals and thermal energy. The water used in different processes is recycled as much as possible. All of UPM’s pulp and paper mills are required to have both a mechanical and a bio- logical wastewater treatment facility. In order to ensure the best possible treatment result and share best practice, UPM’s wastewater treat- ment facility team has continued its work. The results have been good and the number of inci- dents has decreased. UPMhas thoroughly studied the ecological state of the effluent discharge areas at all UPM pulp and paper mill sites using a number of bio-indicators. The international ISO water footprint standard, which has been in the mak- ing for several years, was published in 2015. UPM’s pioneering work in water footprint research contributed to the final standard. Hydropower plays an important role in UPM’s versatile energy production portfolio. In many areas, constructing hydropower facilities has affected the reproduction opportunities of migratory fish species. This has traditionally

Uruguayan environmental authorities and UPM have conducted a continuous monitoring of the Fray Bentos mill’s environmental performance with the help of several independent researchers and environmental experts during ten years. “Throughout the programme we have not found any evidence that pulp mill effluents would have an environmental impact on water quality and biology of Río Uruguay since the start-up of the mill in 2007,” says biologist Jukka Tana. Tana has been a member of the researcher group since the very beginning of the work. Between 2005 and 2007 the research group concluded baseline studies of water quality and biology of Rio Uruguay to analyse the river as the receiving water of the mill effluents. After the start-up these analyses have been continued as a permanent monitoring programme. Tana says the monitoring programme has been one of the most comprehensive research works ever conducted in a pulp mill emission studies. “We have also recruited local fishermen to keep a record of their fish catches. The fish community and population structure has remained unchanged at all three study areas and the condition of the fish caught has been observed to be in a good state.”

Certified management systems help UPM to control and improve the performance of the company’s production sites in matters related to the environment, health, safety and quality. The company uses rawmaterials, water, energy and other resources in a responsible manner and continuously improves energy, production and cost efficiency. Almost all of UPM’s production sites, as well as its wood sourcing operations, are covered by environmental, quality and occupational health and safety systems which are certified in accordance with the ISO 9001, ISO 14001 and OHSAS 18001 standards. Additionally, several production sites have an ISO 22000 food safety management system.

UPMhas certified all its European pulp and paper mills, the UPMFray Bentos pulp mill in Uruguay, and the UPMChangshu paper mill in China in accordance with the EU Eco-Manage- ment and Audit Scheme (EMAS). EMAS requires participants to have an Environmental Management System and to publish a third- party verified Environmental Statement, which increases the credibility and reliability of environmental data. In November 2015, the EU awarded UPM a recognition certificate for being one of the pioneers of the 20-year-old EMAS scheme. In order to improve energy efficiency, UPM introduced ISO 50001 certifi- cation systems in Germany and a national energy efficiency system (ETJ+) in Finland. Investments in environmental performance Investments ensure that UPM is able to con- tinue its good environmental performance. UPM’s investments in environmental perfor- mance are part of the Group’s investment pro- gramme and aim to improve the efficient and responsible use of energy, water and raw materials. In 2015, the company’s environmental investments totalled EUR 28 (12) million. The single largest investment was made to waste- water treatment and air protection at the UPM Changshu paper mill in China. UPM’s environmental protection costs totalled EUR 129 (127) million, including depreciation. The main cost items were effluent treatment, waste management and air pollu- tion control. Effluent treatment amounted to

EUR 49 (44) million, waste management to EUR 34 (41) million and air pollution control to EUR 5 (4) million. One of the focus areas in 2015 was the closer monitoring of environmen- tal costs. Positive development in number of environmental non-conformances The number of environmental non-conform- ances has seen a significant decrease since UPM’s internal Clean Run campaign was launched in 2012. Almost 2,000 anticipatory environmental observations were reported in 2015. The goal of UPM’s campaign is to further improve the company’s environmental perfor- mance, share best practice, and improve and occurred at UPMproduction plants in 2015, and UPMwas not ordered to pay any signifi- cant fines due to non-conformances. A total of 28 (37) temporary deviations from permit limits or major deviations from the environ- mental limits set by UPM occurred at the company’s pulp and paper mills during the year. The most notable deviations were either small oil leaks to nearby waters or biological sludge losses fromwastewater treatment plants. UPM immediately reported deviations from permit limits to the local authorities and undertook corrective measures to normalise the situation and prevent similar situations from occurring in the future. maintain environmental awareness. No major environmental incidents

The number of environmental deviations at UPM pulp and paper mills

UPM’s process wastewater volumes m³/t

100