UPM Annual Report 2016

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UPM Annual Report 2016 UPM Annual Report 2016 48 49
In brief Strategy Businesses Governance Accounts Stakeholders
WORDS MATTER
The aim of the “Sanat haltuun” (Words matter)
project, supported by UPM and organised by the
Finnish Reading Centre, is to inspire students from
technical vocational schools to read and improve
their reading skills. The Finnish Reading Centre will
organise 100 functional literacy workshops all
around Finland by the end of 2017.
“Literacy is closely linked to mathematical skills as
well as success in further studies and working life in
general. Slow readers also find it difficult to improve
their other professional competencies,” says Ilmi
Villacís, Executive Director of the Finnish Reading
Centre.
Fluent reading skills are required in all professions.
UPM is concerned about young people’s reading
skills, and wants to increase awareness of the
importance of reading and lifelong learning.
The feedback from the students has been encouraging.
The project is a combined effort between the Finnish
Reading Centre, Finnish teachers working in vocational
schools, authors, as well as researchers. It will also
involve collaboration with libraries. Promoting literacy
and learning among children and young people is
a focus area of UPM’s Biofore Share and Care
programme.
Read more:
CONTENTS
UPM does not tolerate any violations of the UPMCode of Conduct.
Employees can ask for advice from appointed Code of Conduct contact
persons or report misconduct anonymously through the UPMReport
Misconduct channel. Misconduct reports are reviewed carefully and
UPM takes corrective actions when necessary.
In 2016, UPM’s stakeholder relations organisation, mills and wood
sourcing organisation received approximately 200 inquiries and
concerns expressed by stakeholders. The concerns related mainly to
environment, forestry and biodiversity.
Seventeen cases were reported through the UPMReport Misconduct
channel or directly to internal audit. The complaints related mainly to
suspected cases of fraud and suspected failures to adhere to the
company’s HR Rules or compliance procedures. One case related to
suspected discrimination is still being investigated. The investigation of
four other cases is pending. None of the cases were related to local
communities, environment, human rights violations, corruption or
labour practices. Four cases led to disciplinary action including
warnings or terminations of employment.
Activity in 2016
The 2016 materiality analysis highlighted issues such as compliance
and ethics, competitiveness, occupational health and safety, employee
engagement, sustainable forest management, product stewardship and
climate change as the most important issues for UPM’s stakeholders.
The Code of Conduct was revised during the year and the Board
of Directors approved the new Code of Conduct in February 2016.
The revised Code of Conduct includes new sections on trade sanctions,
data privacy, responsible sourcing and interaction with stakeholders.
Implementation of the Code was the most important internal
group-wide initiative. The Code was discussed in management teams
on all levels. Targeted training sessions were organised for special
groups. By the end of the year, 97% of active UPM employees had
completed a Code training.
Sustainable forestry issues were highlighted during the year and
intense discussions were had with environmental organisations,
certification bodies and authorities.
Customer enquiries focused on topics such as product safety,
ecolabels and the origin of rawmaterials.
The majority of direct feedback from stakeholders focused on
the local effects of UPM’s operations, such as noise or odour. UPM
provided further information in each situation and the potential
disturbances connected to the mill stand-stills were communicated
to the communities in advance.
Competitiveness at the forefront
of public affairs
Through public affairs work, the company aimed to foster the necessary
prerequisites for operations, particularly in Finland, Uruguay and
China. UPM co-operated with a number of trade associations on these
topics, the most important being the Finnish Forest Industries
Federation (FFIF) and the Confederation of European Paper
Industries (CEPI). During the year, FFIF resigned from the
Confederation of Finnish Industries.
Within the EU, UPMpromoted competitive and consistent energy
and climate policy regulation. Influencing the future prerequisites and
markets within the advanced renewable fuels sector was one of the key
themes of the year. In November, the European Commission submitted
a proposal for the renewable energy directive for 2021–2030. The
proposal favours biofuels, such as UPMBioverno, which significantly
reduce CO2 emissions and are based on non-food rawmaterials as well
as waste and residues.
In Finland, UPM continued to discuss topic areas within the
Finnish operating environment that impact the competitiveness of the
forest industry in Finland. The same consistent messages were also
delivered to local decision makers. The topics are transparently
presented on UPM’s web page (in Finnish).
UPMwas actively involved in the stakeholder processes related to
sustainable forestry. The round table forum initiated by the Ministry
of Agriculture and Environment and FFIF’s Forest Environment
programme focuses on maintaining the biodiversity of forests as part
of sustainable forestry practices.
For its part, UPMpromoted means to increase the amount of wood
on the Finnish markets. The forest gift deduction on the wood income
tax will be implemented in 2017 and will make the transition of forest
properties to the younger generation smoother, prevent fragmentation
of forest estates and activate the wood market.
In Uruguay, UPM started discussions with the Government of
Uruguay regarding the development of logistics infrastructure in the
country. Railroad and road connections are a critical challenge for
establishing a large scale industrial operation in the Uruguayan inland
and connecting it to a deep sea port.
Biofore Share and Care programme supports
company strategy
UPM’s Biofore Share and Care programme shows the company’s
dedication to a sustainable and innovative future through sponsorships
and donations. UPM shares its resources with causes that respect
sustainable development as well as the company strategy.
The company’s guidelines for sponsorships and donations are
applied by all businesses. They direct support to reading and learning
projects, water initiatives, bio-innovations and community engagement.
UPM does not financially support political parties or individual
candidates.
The focus of the local sponsorship is to support the vitality of
UPMproduction locations. UPM spent approximately EUR 1.4 million
on local sponsorships and donations. For commercial sponsorships,
UPM spent approximately EUR 800,000.
UPM’s support for its Uruguayan UPMFoundation continued with
USD 400,000. The foundation supports and encourages training,
entrepreneurship, employment and healthy living and entertainment
in local communities in the Uruguayan countryside. (Read more on the
Technical University of Uruguay on page 47)
EUR 232,500 was donated to charities or other non-profit causes,
including a donation to Finnish Reading Centre for organising reading
workshops for technical vocational schools and the Economic
Information Bureau for developing digital business course modules for
Finnish secondary-school students.
Continuous development with corrective actions
Should stakeholders have concerns or suspect misconduct, they are
encouraged to contact UPM’s Stakeholder Relations function or local
units or to use the UPMReport 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.
Co-operation on responsibility issues
improves prerequisites for operations
For environmental and responsibility issues, UPM’s stakeholder
engagement activity was aimed at maintaining consistent quality in
operations and products, along with securing the prerequisites for
future activities. Globally, UPM continued its active co-operation
with local permit authorities.
UPMparticipated in the UN Global Compact LEAD group, which
represents the world’s leading companies to promote sustainability
through innovation and actions.
Co-operation also continued on a voluntary basis with a wide range
of stakeholders relating to ecolabels, standards and standardisation
frameworks, as well as nature conservation.
With regard to ecolabels and standardisation issues, UPM
collaborated with FSC®, PEFC™, the German Blue Angel, the Swan
label, The Finnish Key Flag symbol, ISCC and the EU Ecolabel.
Co-operation was particularly active with FSC® and UPM significantly
increased the share of FSC® certified wood.
The company also engaged in several joint initiatives with different
parties. On environmental issues, co-operation continued with BirdLife
Finland and Vida Silvestre in Uruguay. In China, UPMparticipated in
the China Sustainable Paper Alliance (CSPA). The purpose of the
alliance is to promote responsible sourcing and sustainable forestry
in the Chinese forest industry.
LOGGING OPERATIONS ON ÄRJÄNSAARI
ISLAND CAUSED CONCERN
Logging operations on the UPM-owned Ärjänsaari Island in
northeastern Finland, caused concerns at the beginning of
the year. The concerns were linked to the island’s recreational
value, the potentially increasing storm damage and preserving
the local history.
UPM engaged local stakeholders throughout the planning
process and modified the forest management plan, approved
by the authorities in 2014, according to feedback. However,
the concerns were only expressed at the start of the logging
operations in January. Felling in the commercial forests in the
inner parts of the island received a lot of attention in the local
media, on social media and discussion forums.
UPM organised briefings, discussions and media meetings
locally and addressed all concerns. In February, UPM
organised an event with guided tours to present the island
and completed logging operations. Approximately 150
people participated in the event.
UPM modified its felling plan according to feedback received
at the public event. UPM sold Ärjänsaari Island to the State of
Finland for protection area in February 2017.
Read more:
REPORTED CASES RELATED TO
2016
Fraud 3
IPR/Confidential data 2
Conflict of interest 4
General human resources 1
Miscellaneous 7