UPM Annual Report 2016

UPM Annual Report 2016

In brief

Strategy

Businesses

Governance

Accounts

Stakeholders

To ensure long-term engagement, UPM continuously works with its diverse range of stakeholders

to understand their specific expectations. It is equally important to communicate and discuss the

company’s targets, operating principles, values and the challenges it faces within the business

environment. Well-functioning stakeholder engagement is bringing stability, predictability and

competitive advantage to the company.

CONTENTS

Stakeholder engagement

brings stability to operations

As stakeholders view UPMprimarily 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 responsibility

play a significant role in UPM’s licence to operate and affect

the long-term success of its businesses.

UPM aims to provide a balanced view of the economic,

environmental and social aspects of its business activities,

recognising, however, the varying focus of expectations of

different stakeholders.

Stakeholder engagement is part of

the strategy process

For all businesses, stakeholder mapping is an essential part of

stakeholder relations, along with the systematic gathering of

feedback and views from different sources. This way, UPM aims

to ensure that sufficient consideration is given to stakeholder

needs during the strategic development and decision-making

processes.

Every year, UPMupdates a materiality analysis (page 14)

that highlights the most important responsibility issues for

UPM and its stakeholders. The analysis is based on stakeholder

feedback and the company’s risk mapping.

The Stakeholder Relations function, which is represented

in all businesses, is responsible for the global leadership and

co-ordination of activities, while UPM’s businesses are

responsible for local activity (read more on the business

activities on p. 51). Best practices are regularly shared.

UPM’s most important stakeholders are customers, investors

and financiers, employees, suppliers, local communities,

authorities and key decision makers, the media and non-

governmental organisations. The approach to each varies based

on business focus, region and individual stakeholder groups.

The UPMCode of Conduct sets the standards of responsible

behaviour towards stakeholders for each and every UPM

employee. The standards cover topics relating to legal

compliance and disclosure, conflicts of interest, anti-corruption

and anti-bribery, HR practices, human rights questions and

environmental matters.

Dialogue with stakeholders helps identify risks and improves

understanding of key challenges and opportunities in the

company’s operating environment. All businesses carry out

customer surveys. The level of stakeholder engagement is also

measured by several indicators and enquiries such as the

number of customer enquiries, contact with the mills, forest

department or investor relations, number of job applications

and share price development.

UPM SUPPORTS REGIONAL TECHNICAL

EDUCATION IN URUGUAY

A brand new regional technological university,

the first of its kind in Uruguay, has been

established in Fray Bentos. The technological

institute will have the capacity to accommodate

2,000 students from the south-western coastal

region of Uruguay.

UPM signed an important co-operation

agreement with the Technological University of

Uruguay (UTEC) in February 2015. The aim is

to advance technical skills and engineering,

particularly in mechatronics, renewable energy,

transport and logistics. By 2017, UTEC plans to

expand its educational courses in biomedical

engineering and IT. With the co-operation, UPM

will significantly increase the competence pool of

qualified workforce and provide training

opportunities for UPM professionals to expand

their experience as well as improve the

recognition of mechatronics.

Uruguay’s education system is concentrated in

the capital. Montevideo offers three times more

educational opportunities than other areas.

Investment in regional education creates further

development opportunities, enhancing the overall

competitiveness and pool of skilled people within

Uruguay’s forest industry in the future.

Students will be able to participate in internships

and hands-on training in the agro-industrial

sector. Both parties encourage UPM technicians

and professionals to participate in the courses.

Research projects and product development in

co-operation with companies is a key area for

this university and for UPM. This co-operation

also includes student lectures led by UPM experts.

The founding of the Technological University of

Uruguay is part of UPM’s Biofore Share and Care

programme. The programme focuses on projects

that are relevant to both UPM’s business and

responsibility goals. The focus areas are: Reading

and learning, Engaging with communities,

Responsible water use and Boosting

bioinnovations.

Our

stakeholders

TARGETS

2030

Ensuring local commitment, enhanced

co-operation, stakeholder engagement

and sustainability initiatives