Annual reporting and GRI

UPM's responsibility reporting dates back to1996 when we published our first environmental report along with the annual report. Since 2007 we have published an Annual Report with environmental and corporate responsibility reporting integrated into it.

​UPM uses the G4 Guidelines published by the Global Reporting Initiative (GRI) 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 disclosures for 2015 in English with a reference to external assurance in the GRI content index have been externally assured by an independent third party  PricewaterhouseCoopers Oy. Furthermore, UPM is committed to the principles of inclusivity, materiality and responsiveness,
as defined in the AA1000 AccountAbility Principles Standard (2008).

The index below shows where the G4 indicators are addressed in the Annual Report (AR), on UPM’s webpage or in the GRI content index .

 GRI content index (G4) - General standard disclosures

 
​CODE GRI CONTENT​ ​LOCATION COMMENT Assurance​
STRATEGY AND ANALYSIS
G4-1​ CEO's statement ​AR 3-4
​G4-2 ​Key impacts, risks and opportunities ​AR 9-12, 16-18, 36
ORGANIZATIONAL PROFILE
​G4-3 Name of the organization​ ​AR 94
​G4-4 ​Primary brands, products and services ​AR 1-2
​G4-5 Location of organization's headquarters​ ​AR 94
​G4-6 ​Number of countries and location of operations ​AR 149-150
​G4-7 ​Nature of ownership and legal form ​AR 94
​G4-8 ​Markets served ​AR 149-150
​G4-9 ​Scale of the reporting organization ​AR 1, 61-62, 79
​G4-10 ​Total workforce ​AR 38, 40, web Self-employed workers do not account for substantial part of UPM’s workforce. ​x
​G4-11 Coverage of collective bargaining agreements​ ​AR 39 ​x
​G4-12 ​Description of the supply chain ​AR 54-56
​G4-13 Significant changes regarding size, structure, ownership, supply chain ​AR 107
​G4-14 ​Addressing the precautionary approach or principle ​AR 17-18
​G4-15 ​External charters, principles, or other initiatives subscribed or endorsed ​AR 9
​G4-16 ​Memberships in associations web
IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES
​G4-17 Operational structure ​AR 126
​G4-18 ​Process for defining report content ​GRI index, see below
​G4-19 ​List of all material aspects ​AR 10, GRI index, see below
​G4-20 ​Aspect boundary for each material aspect inside the organisation ​GRI index, see below
​G4-21 ​Aspect boundary for each material aspect outside the organisation ​GRI index, see below
​G4-22 ​Re-statements of information provided in earlier reports ​GRI index, see below
​G4-23 ​Significant changes from previous reporting periods in the scope, boundary, or measurement methods ​GRI index, see below
STAKEHOLDER ENGAGEMENT​ ​
​G4-24 ​List of stakeholder groups engaged ​AR 43 and 45
​G4-25 ​Identification and selection of stakeholders ​AR 43
​G4-26 ​Approaches to stakeholder engagement ​AR 43
​G4-27 ​Key topics and concerns raised through stakeholder engagement ​AR 45
REPORT PROFILE 
​G4-28 ​Reporting period ​1 January 2015 – 31 December 2015
​G4-29 ​Date of most recent report ​3 March 2015
​G4-30 ​Reporting cycle ​Annual
​G4-31 ​Contact point for questions regarding the report or its content ​AR 152
​G4-32 ​GRI content index ​Shortened version: AR 75-76 ​This GRI content index is the actual version. A shortened version is published in the Annual Report on pages 75-76.
​G4-33 ​Policy and current practice with regard to seeking external assurance for the report ​AR 43, 77
GOVERNANCE
​G4-34 ​Governance structure ​​AR 63
​G4-35 Process of delegating authority in sustainability topics ​AR 9
G4-36​​Executive level appointments in sustainability topics​AR 9​
​G4-37 ​ Processes for consultation with stakeholder ​AR 64 ​Annual General Meeting
​G4-38 ​Composition of the Board of Directors ​AR 63-72
​G4-39 ​Position of the Chairman of the Board ​AR 65-66
​G4-40 ​Selection process for the Board ​AR 63-72
​G4-41 ​Processes for avoiding conflicts of interest ​AR 68
​G4-44​Processes for evaluating the Board’s performance​AR 66
​G4-47​Frequency of Board's review of risks, and opportunitiesAR 67
​G4-49​Process for communicating critical concerns to the Board​AR 63-64
ETHICS AND INTEGRITY
​G4-56​ Organization's values, Code of Conduct and other principles​AR 9, 43, 63

 

 GRI (G4) - Specific standard disclosures

CODEGRI CONTENTLOCATIONCOMMENT​OMISSIONAssurance
​G4-DMA​​Generic disclosures on management approach (DMA) ​GRI index, see belowDMA’s for all reported categories below
CATEGORY: ECONOMIC​ ​
ECONOMIC PERFORMANCE
​G4-EC1​​Direct economic value generated and distributed ​AR 47-48​x
​G4-EC2​Financial implications and other risks and opportunities for the organization’s activities due to climate change.​AR 15–18, 59–60​Qualitative description of risks,
opportunities and responses
​UPM is not disclosing financial implications of any risks or opportunities due to commercially sensitive nature of the data.​x
​G4-EC3​Coverage of the organization's defined benefit plan obligations​AR 117-120​x
​G4-EC4 ​Financial assistance received from government​AR 33, 96-97, 108​x
MARKET PRESENCE
​​G4-EC6​​Proportion of senior management hired from the local community at significant locations of operation​AR 39​Local in this indicator means nationality​x
INDIRECT ECONOMIC IMPACT
​​G4-EC8​Significant indirect economic impacts​AR 48​Scope of EC8 is Uruguay only​x
PROCUREMENT PRACTICES
​G4-EC9​​Proportion of spending on local suppliers
at significant locations of operation
​AR 56​Scope is fibre raw material which accounts for 29% of total spend. All units using fibre raw material are considered as significant locations. Local in this indicator means country, except in Austria and Germany also neighbouring country.​x
CATEGORY: ENVIRONMENT​ ​
​MATERIALS
​​G4-EN1​Materials used by weight or volume​AR 61-62, web​x
​​G4-EN2​​Percentage of materials used that are recycled input materials​AR 55-56, web ​Scope is fibre materials in paper production​x
​ENERGY
​​G4-EN3​​Energy consumption within the organization​Ar 55, 59-62, web​x
​​G4-EN5​Energy intensity​AR 147-148​UPM is following kWh electricity/tonne of paper produced​x
​G4-EN6​Reduction of energy consumption​AR 59-60​In energy saving reporting, savings related to use of electricity and heat are included​x
​WATER
​G4-EN8​Total water withdrawal by source​AR 61-62​x
​​G4-EN9​​​Water sources significantly affected by withdrawal of water​AR 58, webAccording to assessment based on WSI, no water sources are significantly affected by UPM’s withdrawal​x
BIODIVERSITY
​G4-EN11​Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.​AR 52-53, web​Scope is UPM's own forests​x
​G4-EN12​Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.​AR 52-53, web​Scope is UPM’s own forests​x
​G4-EN13​​Habitats protected or restored​AR 52-53, web​​Scope is UPM’s own forests​x
​G4-EN14Total number of IUCN red list species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.​AR 52-53, webScope is UPM’s own forestsx​
​EMISSIONS
​G4-EN15​Direct greenhouse gas (GHG) emissions (Scope 1)​AR 62, 148​Biogenic CO2 emissions not reported as UPM considers sustainably managed bioenergy sources to be neutral based on IPCC (IPCC).​x
​G4-EN16​Energy indirect greenhouse gas (GHG) emissions (Scope 2)​AR 148, webBiogenic CO2 emissions not reported as UPM considers sustainably managed bioenergy sources to be neutral based on IPCC (IPCC).​x
​G4-EN17​Other indirect greenhouse gas (GHG) emissions (Scope 3)AR 148, web ​x
​G4 -EN18​Greenhouse gas (GHG)emissions intensity​AR 148UPM is following kg CO2/tonne of paper​ produced (Scope 1).​x
​G4-EN19​Reduction of greenhouse gas (GHG)emissions​AR 59-60​The emission reductions (Scope 1 and 2) are reported as CO2.​x
​G4-EN21​NOx, SOx, and other significant air emissions​AR 59, 62​x
EFFLUENTS AND WASTE
​G4-EN22​Total water discharge by quality and destination​AR 58, 62​x
​G4-EN23​Total weight of waste by type and disposal method​AR 60, 62​x
​G4-EN24​Total number and volume of significant spills​AR 57​x
​G4-EN26Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization's discharges of water and runoff.​See comment​Based on UPM’s bioindicator studies, no water sources are significantly affected by UPM. Read more on AR page 58 and web web.​x
PRODUCTS AND SERVICES​
​G4-EN27​​Extent of impact mitigation of environmental impacts of products and services​AR 22, 33-34, 36, 51, 57-60​x
COMPLIANCE
​G4-EN29​Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations​AR 57​x
​TRANSPORT
​G4-EN30​Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce​AR 56, 148, webUPM reports on CO2 emissions from transporting as part of Scope 3​x
​OVERALL
​G4-EN31​Total environmental protection expenditures and investments ​AR 57​x
SUPPLIER ENVIRONMENTAL ASSESSMENT
​G4-EN32​Percentage of new suppliers that were screened using environmental criteria​AR 54​Reporting scope is fibre raw material which accounts for 29% of total spend​x
​G4-EN33​Significant actual and potential negative environmental impacts in the supply chain and actions taken See comment​​No significant negative impacts identified in 2015. Read more on AR pages 54-56.​UPM monitors impact assessments based on share of qualified spend.​x
ENVIRONMENTAL GRIEVANCE MECHANISMS
​G4-EN34Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms​AR 46​All grievances related to environmental, social and economic issues are handled through misconduct channel. ​x
CATEGORY: SOCIAL - LABOUR PRACTICES AND DECENT WORK
​EMPLOYMENT
​G4-LA1Total number and rates of new employee hires and employee turnover by age group, gender and region​AR 40, web​x
LABOUR/MANAGEMENT RELATIONS
​G4-LA4​Minimum notice periods regarding operational changes, including whether these are specified in collective agreements​AR 39​For operating countries where the minimum notice is not reported, UPM complies with national legislation​x
OCCUPATIONAL HEALTH AND SAFETY
​G4-LA5​Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs​AR 41​For all operating countries, UPM complies with local legislation. Reported countries account for 62% of employees.​x
​G4-LA6Type of injury and rates of injury, occupational diseases, lost days, absenteeism, and total number of work-related fatalities, by region and by gender​AR 40-42​Split to gender will be available from 2016 onwards. Reporting of further contractor data will be evaluated during 2016.​x
TRAINING AND EDUCATION
​G4-LA9​Average hours of training per year per employee ​AR 40Following training per gender and employee category is not material to UPM.​x
​G4-LA10Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings​AR 37, 39​x
G4-LA11Percentage of employees receiving regular performance and career development reviews, by gender and by employee categoryAR 37

Follow-up per gender and employee category is not material to UPM.x
​DIVERSITY AND EQUAL OPPORTUNITY
G4-LA12Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversityAR 40, 66, web

Information about minorities is not gathered or tracked at UPM.x
​SUPPLIER ASSESSMENT FOR LABOUR PRACTICES
​G4-LA14​Percentage of new suppliers that were screened using labour practices criteria​AR 54​Reporting scope is fibre raw material which accounts for 29% of total spend​x
​G4-LA15​Significant actual and potential negative impacts for labour practices in the supply chain and actions takenSee comment​No significant negative impacts
identified in 2015. Read more on AR pages 54–56.
​UPM monitors impact assessments based
on share of qualified spend.
​x
LABOUR PRACTICES GRIEVANCE MECHANISMS
​G4-LA16​Number of grievances about labour practices filed, addressed, and resolved through formal grievance mechanisms​AR 46​All grievances related to environmental, social and economic issues are handled through misconduct channel​x
CATEGORY: SOCIAL - HUMAN RIGHTS​ ​
​INVESTMENT
​G4-HR1​Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening​AR 55​Read more on page 28x​
​G4-HR2​Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained​AR 9​Training hours are not reported so far, but will be reported from 2016 onwards.​x
NON-DISCRIMINATION
​G4-HR3Total number of incidents of discrimination and corrective actions taken​AR 46​x
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
​G4-HR4Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights.​See comment​No significant risk identified. Read more in AR page 39 for own operations, pages 54-55 for suppliers.x​
CHILD LABOUR
​G4-HR5Operations and suppliers identified as having significant risk of child labor, and measures taken to contribute to the effective abolition of child labour.​See comment​No significant risks identified in own and suppliers’ operations. Read more in AR pages 9-10, 54-56​x
FORCED AND COMPULSORY LABOUR
​G4-HR6​Operations and suppliers identified as having significant risk of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour.​See comment​No significant risks identified in own and suppliers’ operations. Read more in AR pages 9–10, 54–56.
INDIGENOUS RIGHTS
​G4-HR8Total number of ​incidents of violations involving rights of indigenous peoples and actions taken. ​See commentNo incidents occurred in 2015​. Read more in AR page 53.​x
SUPPLIER HUMAN RIGHTS ASSESSMENT
​G4-HR10Percentage of ​new suppliers that were screened using human rights criteria​AR 54​Reporting scope is fibre raw material which accounts for 29% of total spend.​x
​G4-HR11​Significant actual and potential negative human rights impacts in the supply chain and actions taken​See comment​No significant negative impacts identified in 2015. Read more on AR pages 54–56.​UPM monitors impact assessments based
on share of qualified spend.
HUMAN RIGHTS GRIEVANCE MECHANISMS
​G4-HR12Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms​AR 46​All grievances related to environmental, social and economic issues are handled through misconduct channel​x
CATEGORY: SOCIAL - SOCIETY​ ​
LOCAL COMMUNITIES
​G4-SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs​See commentUPM has implemented local community engagement programs in all significant locations where it operates. Pulp and paper mills considered as significant locations for this indicator. Read more in AR pages 39 and 45–46.​UPM does not report the percentage of operations with implemented local community engagement​x
​G4-SO2​Operations with significant actual and potential  negative impacts on local communities​See commentNo significant negative impacts identified in 2015. Read more in AR pages 39 and 53.​x
ANTI-CORRUPTION
​G4-SO5​Confirmed incidents of corruption and actions taken​AR 46​x
PUBLIC POLICY
​G4-SO6​Total value of political contributions by country and recipient/beneficiary​AR 45​x
​ANTI-COMPETITIVE BEHAVIOUR
​G4-SO7Total number of ​legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomesAR 84​There was one such case in 2015.​x
​COMPLIANCE
​G4-SO8Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations​AR 84​UPM has not identified any significant non-compliance with laws or regulations.​x
​SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY
​G4-SO9​Percentage of new suppliers that were screened using criteria for impacts on society​AR 54​Reporting scope is fibre raw material which accounts for 29% of total spend​x
​G4-S010​Significant actual and potential negative impacts on society in the supply chain and
actions taken
See comment​​No significant negative impacts identified in 2015. Read more on AR pages 54-56.​​UPM monitors impact assessments based on share of qualified spend.​x
GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY
​G4-SO11​Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms AR 46 ​All grievances related to environmental, social and economic issues are handled through misconduct channel.​x
CATEGORY: SOCIAL - PRODUCT RESPONSIBILITY
CUSTOMER HEALTH AND SAFETY
​G4-PR1Percentage of significant product and service categories for which health and safety impacts are assessed for improvement​AR 51, web​x
PRODUCT AND SERVICE LABELING
​G4-PR3​Type of product information required by the organization’s procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements​AR 51​UPM’s eco-design approach includes: The sourcing of components of the product or service; Content, particularly with regard to substances that might produce an environmental or social impact; Safe use of the product or service; Disposal of the product and environmental/social impacts; Other requirements set by ecolabels​x
G4-PR5​Results of surveys measuring customer satisfaction​AR 49​x
MARKETING COMMUNICATIONS
​G4-PR6​Sale of banned or disputed products​See commentNo banned or disputed products in 2015. Read more in AR pages 51-56​x
​COMPLIANCE
​G4-PR9Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services​See comment​No fines for product-related non-compliance with laws and regulations in 2015​x

 

Information on materiality analysis and process for defining report content (G4 - 18)

  • The process for defining the report content is based on a materiality analysis that UPM does on annual basis. The materiality analysis of the company’s responsibility issues covers topics that directly or indirectly influence the ability to create, maintain or acquire economic, environmental or social value for UPM, stakeholders and society. The main sources for analysis are stakeholder feedback and conducted studies. The result of the materiality analysis are published in the Annual Report on page 12. UPM’s material aspects are aligned with the material analysis and described in the disclosure on management approach (below). 

Information on re-statements and significant changes from previous reporting (G4 – 22, 23)

  • The consolidated performance data is in accordance with the Group’s accounting principles, which are presented in the Annual Report, pages 94-100. Also the Group’s adoption of new and revised accounting standards is presented there.

 

 Disclosure on Management Approach (DMA)


DMAs for all reported categories can be found below.

GENERAL

Corporate responsibility is an integral part of all our operations and is seen as source of competitive advantage. UPM is strongly committed to continuous improvement in economic, social and environmental performance. UPM promotes responsible practices throughout the value chain and is active in finding sustainable solutions in co-operation with its customers, suppliers and partners.

The Group Executive Team, headed by the President and CEO, is in charge of managing corporate responsibility, determining the course of action and guiding development work.

UPM’s Biofore strategy and the Code of Conduct lay the foundations for responsible business operations and continuous improvement.

ECONOMIC

Material aspects

  • Economic performance
  • Procurement practices
  • Market presence
  • Indirect economic impacts

Aspect boundaries inside the organisation

  • The consolidated performance data is in accordance with the Group’s accounting principles. Information on joint operation companies, investments in associated companies and joint ventures, available-for-sale investments are not included except for joint-operation Madison Paper Industries.

Aspect boundaries outside the organisation

  • For the aspect “Procurement practices” the reported scope of local spend is UPM’s fibre based raw material.

Targets

  • Our economic targets focus on the key areas: profit, governance and responsible sourcing. In all these areas quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Commitments

  • Finnish Corporate Governance Code
  • UN Global Compact’s ten principles
  • Sustainable development goals of the UN Agenda 2030

Policies

  • Code of Conduct (link)
  • Corporate governance statement (link)
  • Disclosure policy (link)
  • Tax policy (link)

Monitoring and follow-up

  • The Board of Directors, assisted by the Audit Committee, is responsible for monitoring the company’s internal control and risk management systems. Internal audit assists the Board of Directors with its monitoring responsibility by ensuring that the group’s control measures have been planned and set up effectively.

Specific actions

  • Examples of related actions 2015 are described in the Annual Report on pages 11, 30, 32, 34, 44 and 48.
     

ENVIRONMENTAL

Material aspects

  • Materials
  • Energy
  • Water
  • Biodiversity
  • Emissions
  • Effluents and waste
  • Compliance
  • Supplier environmental assessment
  • Transport
  • Overall
  • Environmental grievance mechanisms
  • Products and services

Aspect boundaries inside the organisation

  • Consolidated environmental data covers all production units, unless otherwise stated in connection with the respective indicator.
  • Information on joint operation companies, investments in associated companies and joint ventures, available-for-sale investments are not included except for joint-operation Madison Paper Industries. Madison is 100% included in environmental indicators, excluding environmental costs and investments which are included 50%.
  • For biodiversity indicators UPM’s own forest areas are included.

Aspect boundaries outside the organisation

  • The indicators related to supply chain sustainability include all suppliers, unless otherwise stated in connection with the indicator.
  • Environmental indicators from companies of which UPM owns less than 50% are not reported, excluding energy related air emissions that correspond to UPM’s energy share.
  • Related to energy supply from jointly-owned connected power plants, relevant environmental parameters (air emissions, fuels and waste) are included depending on the energy supply to UPM’s production sites. Environmental costs and investments of such entities are not included.

Targets

  • Our environmental targets focus on the key areas: product stewardship, waste, climate, water, forests and biodiversity. In all these areas quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Commitments

  • UN Global Compact’s ten principles
  • Sustainable development goals of the UN Agenda 2030

Policies

  • Code of Conduct (link)
  • Environmental rules (link)
  • Forestry rules (link)
  • Supplier code (link)

Monitoring and follow-up

  • Internal and external audits are regularly conducted at production sites, e.g. for environmental management systems, Chain of Custody and so-called internal Clean Run audits. Key performance indicators like deviations or water volumes are followed up on monthly basis, other indicators are at least evaluated on annual basis.
  • Supplier audits are regularly performed, too, and for certain product groups performance figures are evaluated on annual basis.

Specific actions

  • Examples of environment-related actions 2015 are described in the Annual Report on pages 11, 21, 22, 24, 28, 44, 51, 52, 56, 58 and 59.
     

SOCIAL – in general

 Aspect boundaries inside the organisation

  • Consolidated data covers whole UPM Group, unless otherwise stated in connection with the respective indicator.
  • Information on joint operation companies, investments in associated companies and joint ventures, available-for-sale investments are not included except for joint-operation Madison Paper Industries which is included for 50% in HR Group indicators, 100% in Paper ENA personnel figures, and 100% in OHS indicators.

Aspect boundaries outside the organisation

  • Social indicators from companies of which UPM owns less than 50% are not reported.
  • The indicators related to supply chain sustainability include all suppliers, unless otherwise stated in connection with the indicator.

Commitments

  • ILO Declaration on Fundamental Principles and Rights to Work
  • OECD Guidelines for Multinational Enterprises
  • UN Global Compact’s ten principles
  • Sustainable development goals of the UN Agenda 2030

Policies

  • Code of Conduct (link)
  • Supplier Code (link)
     

SOCIAL - Labour practices and decent work

Material aspects

  • Employment
  • Labor/management relations
  • Training and education
  • Labor practices grievance mechanisms
  • Occupational health and safety
  • Diversity and equal opportunity
  • Supplier assessment for labor practices

Targets

  • Our related targets focus on the key areas: diversity and inclusion, continuous learning and development, responsible leadership, working conditions. In all these areas quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Monitoring and follow-up

  • Internal and external audits are regularly conducted at production sites, e.g. for OHS management systems and our internal safety audits. Key performance indicators like lost-time accidents are followed up on monthly basis.
  • Supplier audits are regularly performed.

Specific actions

  • Examples of related actions 2015 are described in the Annual Report on pages 28, 40, 42 and 56.

SOCIAL - Human rights

 Material aspects

  • Investment
  • Non-discrimination
  • Freedom of association and collective bargaining
  • Child labor
  • Forced and compulsory labor
  • Indigenous rights
  • Supplier human rights assessment
  • Human rights grievance mechanisms

Targets

  • Our related target focus on the key areas: responsible sourcing. Quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Monitoring and follow-up

  • Supplier audits are regularly performed.

Specific actions

  • Examples of related actions 2015 are described in the Annual Report on pages 21 and 56.

SOCIAL - Society

Material aspects

  • Local communities
  • Anti-corruption
  • Public policy
  • Anti-competitive behavior
  • Compliance
  • Supplier assessment for impacts on society
  • Grievance mechanisms for impacts on society

Targets

  • Our related targets focus on the key areas: responsible sourcing, community involvement. In all these areas quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Monitoring and follow-up

  • Supplier audits are regularly performed. Sharing of best practices is ensured through well-established operational stakeholder forums, for example.

Specific actions

  • Examples of related actions 2015 are described in the Annual Report on pages 21, 34, 39, 44, 46 and 48.
     

SOCIAL - Product responsibility

Material aspects

  • Customer health and safety
  • Product and service labelling
  • Marketing communications
  • Comliance

Targets

  • Our related targets focus on the key area: product stewardship. In this area quantitative targets have been set, and are followed up regularly. In 2015, the former 2020 targets were updated with 2030 targets. Achievements in 2015 are documented on the web (for 2020 targets) and in the Annual Report (for 2030 targets).

Monitoring and follow-up

  • Compliance with ecolabel criteria and UPM’s restricted chemical list is regularly checked, internally and also by third-party verification.

Specific actions

  •  Examples of related actions 2015 are described in the Annual Report on pages 22, 26 and 30.
     
      

 Data measurement techniques:

Environmental indicators

Environmental data of all UPM’s production sites is collected in a common database.

UPM’s energy-related data (fuels, air emissions, waste) includes its own power plants and a respective share of co-owned or associated power plants, which correspond to UPM’s energy supply. External power plants or boilers are considered under heat supply and, for Hürth, this is also the case for electricity as there is a direct supply from the neighbouring power plant.

Data measurement techniques depend on local and national requirements and therefore can vary between production sites. If relevant, this is taken into account when summarising data for corporate reporting.

UPM uses rolling base year approach for reporting on applicable environmental indicators.

Materials

Information about material usage is aggregated data from UPM’s sourcing unit.

Energy

Information about energy usage is aggregated data from UPM’s energy unit based on information provided by the production units and power plants. For energy saving reporting, the reduction of electricity and heat is included. Total energy is reported by energy type.

Water

If not measured, the amount of water withdrawal is reported based on reasonable estimates.

Air emissions

UPM reports on emission of fossil CO2, NOX, SO2 and particulates as air emission related performance indicators. These indicators include emissions from UPM power plants and a respective share of co-owned or associated power plants that corresponds to UPM’s energy supply. External power plants or boilers are considered under heat supply, and, for Hürth, this is also the case for electricity as there is a direct supply from the neighbouring power plant. Direct fossil CO2 is calculated based on fuel usage. Calculation is done according to the European Emissions Trading System, other national requirements or based on official calculation factors. NOX, SO2 and particulates are usually measured online. Emissions of TRS by UPM’s pulp mills are converted to SO2 and included in the overall SO2 figure. Indirect CO2 emissions (scope 2 and scope 3) are calculated based on data availability, either with secondary emission factors or previous year’s primary emission factors. Detailed information about scope 3 calculation is published at UPM’s webpage. In EN15 and EN16 the emissions are reported as CO2 only. In EN17 the emissions are reported as CO2 equivalents (including CH4 and N2O) using IPCC’s GWP values.

Effluent

UPM reports on effluent flow, COD, BOD and AOX as water-related performance indicators. These are calculated based on mill level data from sampling or continuous monitoring. If the wastewater is treated in municipal or external effluent treatment plants, the values included in the total sums are the loads before effluent treatment. In the calculation of average load per product unit, these mills are excluded. Conversion is done in the case of different measurement scopes, e.g. BOD7 and BOD5.

Waste and by-products

UPM reports the sum of non-hazardous waste and by-products divided to recycling as material, energy recovery, composting, landfill, incineration, and temporary storage, and the sum of hazardous waste divided to recycling as material, energy recovery, incineration and other disposal. Recycled or recovered non-hazardous waste is reported as by-product. Waste figures are reported in dry tonnes, except for hazardous waste. The disposal method is determined by both direct information from the sites or from information provided by waste contractors.

Environmental costs and investments

As a guiding principle to calculate and report environmental costs and investments, UPM has based its instructions on European Commission recommendation 2001/453/EC of 13 June 2001 (Official Journal L 156, 13/06/2001) on the recognition, measurement and disclosure of environmental issues in the annual accounts and annual reports of companies and Kirjanpitolautakunta: Yleisohje ympäristöasioiden kirjaamisesta, laskennasta ja esittämisestä tilinpäätöksessä 24.10.2006
 

Social responsibility indicators

Personnel / employees

Personnel figures base on the UPM global total headcount definition including employees classified as active and inactive and are calculated as heads if
not otherwise stated. The terms personnel and employees are used as synomyms and refer to UPM’s own employees.

Workforce

Workforce includes UPM’s own employees as well as supervised workers.

Personnel by country

Personnel figures base on the UPM global total headcount definition including employees classified as active and inactive and are calculated as heads if not otherwise stated. The terms personnel and employees are used as synomyms and refer to UPM’s own employees.

Contract types

All contract types are divided into two categories: permanent and fixed term. Permanent contracts include all contracts that are valid until further notice as well as employees not covered under employment contracts such as the US, where all employees are classified as “Employment at Will”.

Collective bargaining agreements

The percentage of employees covered under collective bargaining agreements include all employees (both active and inactive) regardless of their contract type and working time status and includes all countries where UPM has operations.

Employee turnover

Turnover is calculated using the number of all types of employment endings regardless of whether they are voluntary or involuntary (Number of leavers 1. Jan.–31. Dec/Total headcount 31. Dec). Separate calculation is provided showing turnover specifically for voluntary employment endings. The calculation method has been changed in 2014 and employees with contract expiries and who later have a contract extension have been excluded. Seasonal employees continue to be excluded from the calculation. In 2015 voluntary employment endings have been further clarified to include only reasons related to resignation.

Personal performance reviews

The PPR Process is fully automated for salaried employees; however, shopfloor employees have not been fully integrated into the automated PPR Tool. PPR completion rates are based on all employees who are not withdrawn at the time of reporting.

Training hours per employee

Number of training hours per employee are calculated based on the UPM active headcount definition as of the end of the year. Trainings include internal and external training.

Lost time accident frequency

Lost-time accidents per million hours worked (Including UPM employees and temporary/agencyhired workers). (The number of accidents at work
resulting in absence or disability one or more days)/(Actual hours worked)*1,000,000. UPM also reports on contractor accidents. Working hours in the calculation of contractor LTAF have not been collected based on a time attendance system. They are an estimate, and several calculation methods are applied in the group for calculating the estimate. The development of the calculation methods continues in 2016.

Total Recordable Injury Frequency

Including UPM employees and temporary/agency hired workers. Calculation is as follows: (‘LTA at work excluding contractors (number of LTAs which are one or more days)’+’Modified duty’+‘Medical treatment’)/’Actual hours worked (UPM)’*1,000,000. 

Absenteeism %

Absence percentage due to illness and accidents at work. Illness includes Absence hours due illness, Absences due to accidents during travelling to/ from work, and Absence hours due to accidents during time off work. Accidents at work include Absences due to accidents at work and Absences due to occupational diseases and illnesses. These figures are added and then divided by Theoretical working time and then multiplied by 100.

Number of occupational diseases

Number of new cases which have been officially diagnosed and reported as occupational diseases during the reporting year.

Code of Conduct training

The Code of Conduct completion rate is calculated against the employees classified as active as per our definition and those who are shown as active as
of 31 December of the year in question. Training is provided for all employees who are included in our global headcount of active employees definition.

Supplier qualification

UPM suppliers are qualified against the UPM Supplier Code that defines suppliers’ minimum compliance requirements in terms of responsibility with regard to matters such as environmental impact, human rights, labour practices, health and safety, and product safety. Supplier spend covers all UPM business-to-business spend including wood and wood-based biomass sourcing and excluding energy.