UPM Annual Report 2016
UPM Annual Report 2016
UPM RESPONSIBILITY FOCUS AREA
2030 FOLLOW-UP / 2016 RESULTS
Creating value to shareholders
Comparable EBIT growth through focused top-line growth and margin
Comparable ROE: 10%
Net debt/EBITDA: around 2 times or less
Comparable EBIT increased by 25% to EUR 1,143 million (916 million).
Comparable ROE was 10.9%.
Net debt/EBITDA was 0.73 times.
Ensuring accountability and compliance
100% coverage of participation to UPM Code of Conduct training
97% of active employees completed the renewed Code of Conduct training.
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
Continuous supplier auditing based on systematic risk assessment practices
80% of supplier spend qualified against UPM Supplier Code.
(+1pp compared with 2015).
94% 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.
Diversity and inclusion
Developing organisational culture and local conditions to ensure
inclusive and diverse working environment for business success
All UPM's employees are treated as individuals regardless of gender, age,
race, nationality etc. 100% favourable responses in Employee Engagement
Survey by 2030
Diversity and inclusion initiative in place
Responses to Employee Engagement Survey’s diversity question
were 79% favourable (+2 ppt).
Diversity initiative was started.
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
87% of all permanent employees had a personal performance review with
Responses to Employee Engagement Survey’s question regarding
learning and development were 64% favourable.
Emphasising value-based and inspiring leadership and integrity
Continuous development of working environment
Employee engagement index overall favourable score in global top quarter
Employee engagement index overall favourable score increased to 69% (66%).
This is 8 percentage points below global top quarter.
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
Absenteeism rate < 2 % in all organisations by 2030
Two fatal accidents in 2016, one involving an UPM employee and one
LTAF was 3.7 for own employees and 6.2 for contractors. TRIF was 9.3
for own employees and 7.5 for contractors.
All production sites have an OHS management system in place. 38% of
the sites got external certification of their OHS system.
A majority of the sites implemented their programme.
The absenteeism rate was 3.4% (3.7%) in 2016.
Ensuring local commitment
Continuous development of strategic sustainability initiatives with leading
Continuous sharing of best practices of stakeholder initiatives
UPM’s Biofore Share and Care programme brings significant added value
Co-operation with BirdLife and Vida Silvestre continued.
Sharing of best practices ensured through well-established operational
stakeholder forums, for example.
Programme with four focus areas was launched.
Taking care of the entire lifecycle
Environmental Management Systems in 100% use (continuous)
Environmental Product Declarations for all products (continuous)
All applicable products ecolabelled by 2030
96% of production sites have a certified environmental management system
in place, remaining have implementation underway.
Environmental declarations are available for all relevant UPM products.
The share of ecolabelled products was 69% (70%). (Scope widened)
Promoting material efficiency and
circular economy – reduce, reuse and recycle
No process waste to landfills or to incineration without energy recovery
89% of UPM’s total process waste was recycled or recovered.
Creating climate solutions and
working towards carbon neutrality
emissions from own combustion and purchased electricity (Scope
1 and 2) reduced 30% by 2030
Maximise the business benefits of greenhouse gas claims (continuous)
Improve energy efficiency annually by 1% (continuous)
70% share of renewable fuels (continuous)
Acidifying flue gases (NOx/SO
) reduced 20% by 2030
Despite improvements, actions have not compensated for the increased level
caused by the Myllykoski acquisition in 2011 and increased CO
UPM sold greenhouse gas claims worth of 480,000 CO
tonnes. Without sales
UPM’s reported emissions (Scope 1 and 2) would have been over 7% lower.
Energy efficiency target was not achieved.
Level of 69% (67%) reached in the use of renewable fuels.
24% reduction achieved since 2008 for the UPM average product.
Using water responsibly
Effluent load (COD) reduced 40% by 2030
Wastewater volume reduced 30% by 2030
100% of nutrients used at effluent treatment from recycled sources by 2030
27% reduction in effluent load achieved since 2008 for the UPM average
13% reduction in wastewater volume achieved since 2008 for the UPM
Project was started in 2016, one site almost reached the level already.
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 share of certified fibre remained at 84%.
the Biofore strategy
UPM’s Biofore strategy guides
the company in achieving its
responsibility targets for 2030 and
in contributing to UN Sustainability
Development Goals (SDG).
In order to guide its responsibility activities,
UPMhas established a set of responsibility focus
areas with targets and key performance indicators.
They are analysed every year based on a materiality
analysis (page 14). The focus areas cover economic,
social and environmental responsibility.
Having successfully transformed its business
model and improved its business performance, UPM
has renewed its long-term financial targets in January
2017. Targets related to diversity and inclusion as well as
community engagement were changed from launching
to implementation. Climate-related focus area was
strengthened with two new targets for energy efficiency
and share of renewable fuels. The scope of ecolabelled
products was widened to cover also UPMRaflatac's
In the area of economic responsibility, UPM’s focus
areas are economic performance, good governance
and responsible sourcing. By economic performance
the company creates value to the entire surrounding
community. Good governance helps UPM to avoid risks
and enables growth and new business opportunities.
Responsible sourcing not only minimises risks, but
also creates extensive direct and indirect added value.
In the area of social responsibility the focus is
on the fulfilment of human rights, occupational health
and safety, local stakeholder engagement and UPM’s
role as a responsible employer. UPM is committed to
respecting human rights. Being a responsible employer
improves employee performance, engages people and
creates a safe working environment.
As a result of its significant local presence,
UPM adds value to society. The company also strives
to increase this value through stakeholder engagement.
Environmental responsibility covers sustainable
products, the climate, the use of forests and water,
and waste reduction. Some of the targets are continuous
and some have been extended to 2030. Long-term
targets are also monitored on an annual basis.
For environmental targets, the reference year is 2008.
Covers all UPM raw material spend including wood
and wood-based biomass sourcing and excluding energy
Environmental targets: from 2008 levels
Includes paper, timber, plywood, pulp and label
Numerical targets relevant for pulp and paper production
United Nations Sustainable Development Goals guiding UPM Targets