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UPM Annual Report 2015
36
IN BRIEF
STRATEGY
BUSINESSES
STAKEHOLDERS
GOVERNANCE
ACCOUNTS
Based on a materiality analysis
(page 10), UPM has established
a set of responsibility focus areas
to guide its responsibility activities,
and determined targets and
performance indicators.
The responsibility focus areas, targets and
performance indicators were all updated in
2015, and cover all three areas of responsibility:
economic responsibility, social responsibility,
and environmental responsibility. In addition
to being influenced by the materiality analysis,
UPM’s new long term responsibility targets
were also influenced by the UN’s Sustainable
Development Goals (SDG) published in 2015.
In the area of economic responsibility,
UPM’s responsibility principles cover econo-
mic performance, good governance and res-
ponsible sourcing. The principles for social
responsibility focus on the implementation of
human rights, occupational safety, local co-
UPM responsibility focus area 2030 target
2030 follow-up / 2015 RESULTS
E
conomic
Profit
Creating value to shareholders
•
Operating profit margin > 10%
•
Return on equity at least 5 percentage points above
the yield of a 10-year risk-free investment
•
Gearing ratio to be kept below 90%
•
Operating profit excluding special items was 11.5% of sales.
•
Return on equity excluding special items was 12.1%.
•
Gearing ratio as of 31 December 2015 was 26%.
Governance
Ensuring accountability and compliance
•
100% coverage of participation to UPM
Code of Conduct training (continuous)
•
More than 90% of employees have completed the previous
Code of Conduct training.
Responsible sourcing
Adding value through responsible
business practices
•
80% of UPM spend qualified against UPM Supplier
Code (continuous)
•
100% of UPM raw material spend qualified against
UPM Supplier Code by 2030
1)
•
Continuous supplier auditing based on systematic risk
assessment practices
•
79% of supplier spend qualified against UPM Supplier
Code. (+12pp compared with 2014).
•
92% of raw material spend qualified against UPM Suppler
Code.
•
Since 2013, the number of risk assessment-based
supplier audits has been doubled, with a much wider
geographical area than earlier.
Social
Diversity and inclusion
Developing organisational culture and local
conditions to ensure inclusive and diverse
working environment for business success
•
All UPM employees are treated as individuals regardless
of gender, age, race, nationality etc. 100% favourable
responses in Employee Engagement Survey by 2030
•
Diversity initiative to be started in 2016
•
Responses to Employee Engagement Survey’s diversity
question were 77% favourable.
•
Intiative will be started in 2016.
Continuous learning and development
Ensuring high performance for business
success and continuous professional
development for future employability
•
Target setting and development plan for all employees,
completion rate 100% by 2030
•
Employees experience the opportunity for learning and
development, 80% favourable in Employee Engagement
Survey by 2030
•
86% of all permanent employees had a personal
performance review with their managers.
•
Responses to Employee Engagement Survey’s question
regarding learning and development were 61% favourable.
Responsible leadership
Emphasising value-based and inspiring
leadership and integrity. Continuous
development of working environment
•
Employee engagement index overall favourable score
in global top quarter by 2030
•
Employee engagement index overall favourable score
increased to 66%. This is 10% below global top quarter.
Working conditions
Ensuring safe and healthy working
environment and wellbeing of employees
•
No fatalities or serious accidents in UPM operations
•
Continuous improvement in safety: Lost time accident
frequency (LTAF) <1 and Total recordable injury frequency
(TRIF) <2 levels permanently reached including contractors
•
All operations have certified OHS system by 2030
•
Health Promotion Programme is in use at all UPM sites
and businesses by 2030
•
Absenteeism rate < 2 % in all organisations by 2030
•
One fatal contractor accident in 2015.
•
LTAF was 3.9 for own employees and 5.5 for contractors.
TRIF was 10.6 for own employees. Follow-up of TRIF
for contractors will be evaluated in 2016.
•
All production sites have an OHS management system
in place. 45% of the sites got external certification
of their OHS system.
•
A majority of the sites have started their programme.
•
The absenteeism rate was 3.7% in 2015.
Community involvement
Ensuring local commitment
•
Continuous development of strategic sustainability initiatives
with leading NGOs
•
Continuous sharing of best practices of stakeholder initiatives
•
UPM sponsorship and donations programme to be started
•
Co-operation with BirdLife and Vida Silvestre continued.
•
Sharing of best practices ensured through well-established
operational stakeholder forums, for example.
•
Programme will be started in 2016.
Environmental
2)
Product stewardship
Taking care of the entire lifecycle
•
Environmental Management Systems in 100% use
(continuous)
•
Environmental Product Declarations for all products
(continuous)
3)
•
All applicable products ecolabelled by 2030
•
All production sites have a certified environmental
management system in place, except the new biorefinery.
•
Environmental declarations are available for all relevant
UPM products.
•
The share of ecolabelled products was 77% (76% in 2014).
Waste
Promoting material efficiency and circular
economy - reduce, reuse and recycle
•
No process waste to landfills or to incineration
without energy recovery by 2030
•
Over 90% of UPM’s total process waste was recycled or
recovered.
Climate
Creating climate solutions and working
towards carbon neutrality
•
Fossil CO
2
emissions from own combustion and purchased
electricity (Scope 1 and 2) reduced 30% by 2030
•
Maximise the business benefits of greenhouse gas claims
(continuous)
•
Acidifying flue gases (NOx/SO
2
) reduced 20% by 2030
4)
•
Despite improvements in fuel mix and energy efficiency,
actions have not compensated for the increased level
caused by the Myllykoski acquisition in 2011 and
increased CO
2
factors for purchased power.
•
UPM sold greenhouse gas claims worth of 0.5m CO
2
tonnes. Without sales UPM’s reported emissions
(Scope 1 and 2) would have been over 7% lower.
•
20% reduction achieved since 2008 for the UPM average
product.
Water
Using water responsibly
•
Effluent load (COD) reduced 40% by 2030
4)
•
Wastewater volume reduced 30% by 2030
4)
•
100% of nutrients used at effluent treatment from recycled
sources by 2030
•
29% reduction achieved since 2008 for
the UPM average product.
•
11% reduction in wastewater achieved since 2008
for the UPM average product.
•
Project will be started in 2016.
Forests and Biodiversity
Ensuring sustainable land use and
keeping forests full of life
•
100% coverage of chains of custody (continuous)
•
All fibre certified by 2030
•
Coverage is 100%.
•
The certified fibre share increased to 84%.
operation between UPM and stakeholders, and
UPM’s role as a responsible employer. In terms
of environmental responsibility, the key focus
areas are sustainable products, the climate, the
utilisation of forests and waterways, and the
reduction of waste. Some of the targets are con-
tinuous and some have been extended to 2030.
For environmental targets, the reference year
2008 was maintained to ensure that the new
targets remain comparable with previous
targets (see table on next page). The 2015
achievements in regard to old 2020 targets are
presented on UPMwebsite.
UPM provides an extensive
amount of assured information
UPMuses the G4 Guidelines published by the
Global Reporting Initiative to measure and
report on corporate responsibility at Group
level. UPM’s corporate responsibility reporting
in 2015 has been prepared to meet the GRI G4
‘In accordance’ - Core option. Standard disclo-
sures for 2015 in English with a reference to
external assurance in the GRI content index
have been externally assured by an independ-
ent third party PricewaterhouseCoopers Oy
(see the Independent Assurance Report on
page 77), and congruence between the English
and Finnish versions has been checked. The
shortened GRI content index can be found on
pages 75–76. The GRI content index, including
detailed descriptions of the scope of the repor-
ting and data collection techniques, is available
on the company website at
www.upm.com/responsibility.
To further underline the company’s strong
focus on stakeholder engagement and sustai-
nable development, UPM is committed to the
principles of inclusivity, materiality and res-
ponsiveness, as defined in the AA1000 Accoun-
tAbility Principles Standard (2008).
UPMprovides comprehensive environmen-
tal information that has been assured by third
parties from corporate level to the mills and
individual products. Ecolabelled products,
product declarations and certified operations
are used to inform the company’s stakeholders
about sustainability, transparency and risk
management (read more on product steward-
ship on page 51).
Read more:
www.upm.com/responsibility, https://sustainabledevelopment.un.orgUPM Annual Report 2015
35
New responsibility targets to 2030
United Nations Sustainable Development Goals guiding UPM Targets
1)
Covers all UPM raw material spend including wood
and wood-based biomass sourcing and excluding energy
2)
Environmental targets: from 2008 levels
3)
Includes paper, timber, plywood, pulp and label
4)
Numerical targets relevant for pulp and paper production
contents