Our activities and products have an impact on society at large. Understanding our influence is a prerequisite for us to develop our operations and to respond to the needs of surrounding societies. At UPM we are constantly aiming to better understand and communicate our added value. In the material balance, published in UPM’s Annual Report 2016 (pages 71/72), we showed an overview of our value in the whole supply chain from economic, social and environmental perspectives.
The material balance shows good examples of UPM’s direct and indirect value creation, but the monetized value of the impacts is still missing. To complete the picture, we initiated a pilot study to assess the monetary value of the social and environmental impacts in greater detail. Those impacts were calculated when possible and relevant, showing qualitative and quantitative indicators. The study incudes five evaluation cases focusing on natural and social capital issues relevant to our stakeholders according to the materiality analysis conducted by the company (see UPM Annual Report 2016, page 14).
There are several potential methodologies for impact valuation. The Social Capital Protocol and the Natural Capital Protocol of the World Business Council for Sustainable Development (WBCSD) were seen as the most appropriate methodologies to describe and valuate the impacts of UPM.
Impact valuation is a continuous process to understand the societal impacts of the company. This study provides us with good case examples, but most of all, it gives us means and methodology to further develop our impact valuation framework and processes.
According to a study made by the Research Institute of the Finnish Economy (Etla), UPM is the company producing the most added value in Finland when taking into account the added value produced by companies themselves and the indirect added value resulting from purchases.
UPM and the Finnish Environment Institute (SYKE) have been developing a method for assessing ecosystem services derived alongside the production of wood-based products. This pilot study focused on the environmental impacts resulting from the growth of trees used for the production of one tonne of pulp. In this study, the carbon sink effect, water protection and the sustainability of native forest species were analysed in detail. The study confirmed that the forest area from where pulpwood is sourced yields multiple benefits besides just wood raw material.