Green and sustainable finance
Sustainability plays an important role in UPM’s financing and gives investors an opportunity to promote activities such as climate change mitigation and adaptation and the UN Sustainable Development Goals (SDGs). We have linked CO2 emissions reduction targets and biodiversity KPI´s to our financing facilities and have issued several Green Bonds under our Green Finance Frameworks.
Green Finance Framework
We published our first Green Finance Framework in November 2020 and an updated framework in November 2023 and have issued four Green Bonds under them.
The updated Green Finance Framework has been established in accordance with the Green Bond Principles (GBP) 2021 (with June 2022 Appendix I), as well as the APLMA, LMA and the LSTA Green Loan Principles (GLP) 2023. With this framework, we may utilize a variety of Green Finance Instruments, including but not limited to Green Bonds and Green Loans. The Green Finance Framework is aligned with the core components of the GBP and GLP, including the recommended External Review component.
Eligible Green Categories
An amount at least equal to the proceeds from the Green Finance Instrument issued by UPM will be exclusively used to finance and/or refinance, in whole or in part, projects, assets, expenditures or activities that are in accordance with the Eligible Green Projects and Assets from following categories:
- Sustainable forest and plantation management
- Climate positive and circular bioeconomy adapted products and solutions
- Renewable or CO2-free energy
- Pollution prevention and control, including waste management
- Sustainable water and wastewater management
- Energy efficiency initiatives
UPM is committed to transparent allocation and impact reporting on any relevant Green Finance Instrument and will annually publish a report, until maturity of any issued Green Finance Instruments. UPM will also engage an independent external auditor to provide an annual limited assurance on both allocation and impact reporting, until the proceeds of the green finance instrument have been fully allocated.
Second Party Opinion
S&P Global Ratings has reviewed the Framework under its updated “Shades of Green” methodology and assessed its alignment with the ICMA Green Bond Principles. UPM´s updated Green Finance Framework has received the highest "Dark Green" shading from S&P Global Ratings, in line with the framework established in 2020.
