UPM’s visionary purpose is to create a future beyond fossils. To achieve this goal in the most feasible way, we have a strategy process in place to enable UPM to thrive in an ever-shifting external operating environment. Our corporate and business strategy plans are updated on an annual basis to ensure that we are able to proactively drive the bioeconomy transformation. Our plans are built on continuous monitoring of trends and indicators, as well as topical analyses. In addition, we conduct scenario work and supplementary risk assessments as needed, especially in the event of unexpected shifts in the markets we serve or developments in key signposts monitored on the corporate level.

The assessment of transitional risks and opportunities is deeply embedded in our strategy work. By ‘transitional’ we mean such things as emission trends against world population megatrends, energy consumption, consumer preferences, changing regulations, land use and energy production technologies. 

It is also important to monitor potential physical impacts, especially regarding climate change. To understand the underlying mechanisms, we must adopt a long-term outlook and perform a comprehensive analysis of different scenarios. From nature’s point of view, impacts such as heavy rainfall, storms and droughts are predicted to be the most extreme risks across the world. On the opportunity side, climate change might for example accelerate forest growth and make more water available for local hydropower production.

To mitigate risks and seek opportunities, it is therefore extremely important to be aware of potential physical and transitional changes the company may face due to megatrends such as climate change and water scarcity.