Our operations are widely dependent on biodiversity

At UPM, wood sourcing is the area of operations with the greatest impact on biodiversity, solely due to its wide geographical coverage. Biodiversity is critical for maintaining healthy forests and helping them adapt to climate change. Understanding our impact on biodiversity is also crucial to our energy business, especially regarding our hydropower plants. We cannot either ignore the impacts of our operations on the local environment at our mill sites. Understanding and mitigating these impacts, and most importantly of all, developing indicators to measure them, are driving our actions to enhance biodiversity.

In 2022, we set a new environmental focus area specifically dedicated to enhancing biodiversity. Our efforts will be guided by two key performance indicators, which will help us measure our progress and ensure we are making a real impact:

• Positive impact on biodiversity and developing a monitoring system with a focus on our own forests in Finland and plantations in Uruguay
• Obstacle-free streams, with the target of releasing or restoring 500 km of stream waters by 2030.

Holistic focus on managing biodiversity

Biodiversity is one of our environmental focus areas, and it is widely linked also to our management activities. In 2020, we linked the margin of a EUR 750 million revolving credit facility to the biodiversity enhancement in our forests in Finland. In 2022, we further strengthened this link by including biodiversity as a measure in the management remuneration and set it also as a KPI that is followed by the UPM Board of Directors.

When it comes to protecting, preserving and managing biodiversity in a sustainable manner, we believe in the power of collaboration. That is why we work closely with NGOs, researchers and government institutions to develop metrics for monitoring biodiversity, to gain a deeper understanding of rare and endangered species, and to promote conservation and sustainable management practices around the world.

In 2022, we took our commitment to the next level by joining the Science Based Targets Network (SBTN) Corporate Engagement Program. Through this partnership, we are participating in the development and testing of tools and methodology for setting science-based targets for nature.

In March 2024, we published our first nature-related disclosures according to Taskforce on Nature-relaed Financial Disclosures (TNFD) as part of the Report of Board of Directors in the UPM Annual Report 2023. It means that we have assessed and reported our nature-related dependencies, impacts, risks and opportunities according to the TNFD recommendations. The list of TNFD Adopters can be found here.