UPM annual report 2014

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UPM Annual Report 2014 31
CONTENTS
32
UPM Annual Report 2014
To ensure long-term engagement, UPM con-
tinuously works with its diverse range of stake-
holders to understand their specific needs and
expectations. It is equally important to commu-
nicate and discuss the company’s targets, oper-
ating principles, values and the challenges it
faces within the business environment.
As UPM is primarily viewed as an economic
operator, financial success, stability, future
outlook and growth are fundamental themes
for most stakeholders. In addition, UPM’s
environmental performance and social respon-
sibility play a significant role in UPM’s ability
to operate and affect the long-term success of
its businesses.
To address these different needs, and in
recognising the differing emphases of different
stakeholders, UPM aims to provide a balanced
view of the economic, environmental and social
aspects of its business activities.
Stakeholder engagement
is part of the strategy process
Regular stakeholder mapping in all businesses
is an essential part of stakeholder relations,
along with the systematic gathering of feed-
back and views from different sources. This
way, UPM aims to ensure that sufficient consid-
eration is given to stakeholder needs during
the strategic development and decision-making
processes.
UPM’s most important stakeholders are
customers, investors and financiers, employees,
UPM conducted a materiality analysis that
highlighted the most important issues for UPM
and its stakeholders. The analysis uses feedback
from different stakeholder enquiries, the com-
pany’s risk mapping and other information
sources based on which the importance and
potential impact of different issues or activities
on UPM’s operations was assessed.
During 2014, UPM was able to respond to
stakeholders’ expectations reasonably well.
UPM was not involved in any major stakehold-
er conflicts. This creates good opportunities to
further develop stakeholder relations in the
future.
The majority of direct feedback from stake-
holders focused on the local effects of UPM’s
operations, such as noise, odour or logging
practices. The single largest topic of feedback
relates to the problems caused by malodorous
gas emissions at the UPM Kaukas pulp mill.
Customer enquiries focused on topics such
as product safety, ecolabels and the origin of
raw materials. UPM actively participated in the
debate and sought to increase stakeholder
information of the situation.
Competitiveness at
the forefront of public affairs
Through public affairs activity, the company
aimed to foster the necessary prerequisites for
investment, particularly in China, Finland and
Uruguay. Within the EU, UPM promoted
competitive and consistent energy and climate
policy regulation. UPM co-operated with a
number of trade associations on these topics.
In Finland, UPM highlighted the economic
footprint of its existing operations.
In addition, the company defined six critical
topic areas within the Finnish operating envi-
ronment that impact the competitiveness of
the forest industry in Finland and discussed
these topic areas with several Finnish decision-
makers.
1 2 3
Well-functioning stakeholder
engagement is considered to
bring competitive advantage
to the company.
UPM’s materiality analysis highlights the most
important issues for UPM and its stakeholders.
The analysis uses feedback from different
stakeholder enquiries and the company’s risk
mapping based on which the importance and
potential impact of different issues or activities
on UPM’s operations are assessed.
In 2014, the three most important
issues were Biofore value creation and
opportunities in the changing business
environment, product stewardship and
occupational health and safety.
suppliers, authorities
and key decision-
makers, the media,
non-governmental
organisations and
local communities.
The approach to each
varies based on busi-
ness focus, region
and individual stake-
holder groups.
The UPM Code of Conduct sets the stand-
ards of responsible behaviour towards these
stakeholders for each and every UPM employee
globally. The standards cover topics relating to
legal compliance and disclosure, conflicts of
interest, gifts and bribes, HR practices, human
rights questions and environmental matters.
In 2015, the Code of Conduct will be reviewed.
The level of stakeholder engagement is
measured by several key performance indica-
tors. Feedback from stakeholders adds real
value by contributing to risk management and
mitigation, as well as the development of com-
petitive advantage and continuous innovation.
It also helps third parties to understand key
challenges and opportunities in the company’s
operating environment.
Should stakeholders have concerns or sus-
pect misconduct, they are encouraged to con-
tact UPM’s Stakeholder Relations function or
use the UPM Report Misconduct channel
accessible via the company website. A claim can
be made confidentially and anonymously. The
company has agreed internal procedures on
how to address possible misconduct.
Activity in 2014
At the beginning of the year, a new Stakeholder
Relations function was formed. Globally, the
function operates at Group Executive Team
level with UPM’s businesses responsible for
local activity.
THE POTENTIAL OF UPM’S
BIOMATERIALS PRESENTED
The Biofore Concept Car – showcased
at the International Geneva Motor Show in
March – demonstrates the innovative use of
biomaterials in the car industry. Most of the
parts traditionally made from plastic have
been replaced with high quality biomaterials,
UPM Formi and UPM Grada, and the vehicle
runs on UPM’s renewable wood-based diesel,
UPM BioVerno.
Following the successful premiere, the car
has appeared at dozens of events, including
UPM’s Annual General Meeting, WWF Living
Planet Report 2014 seminar, the CEPI
European Paperweek and the International
Day of Forests at the UN’s Palais des Nations
in Geneva, Switzerland.
During 2014, the car received wide publicity
all over the world.
The vehicle was designed and manufactured
by some 50 industrial design students from
the Helsinki Metropolia University of Applied
Sciences. Building the car took four years
and approximately 50,000 work hours.
Read more:
STAKEHOLDERS 31–44
To deliver true stakeholder value, UPM focuses on
ensuring good co-operation, regular discussion and
interaction at all levels. These tools and channels
enhance knowledge and understanding of the
company’s activities and targets, as well as building
long-term trust with its key stakeholder groups.
Creating added value
through stakeholder engagement
The Biofore Concept Car premiered at
the International Geneva Motor Show
in March.