KEYS TO BUILDING A SUSTAINABLE FUTUREPäivi Rissanen, Director Sustainability UPM Paper ENAMarch 15, 2018

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UPM – The Biofore Company

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PURPOSEWe create value by seizing the limitless potential of bioeconomy.

VISIONWe lead the forest-based bioindustry into a sustainable, innovation-driven, and exciting future. The competence, integrity and drive of our people make us unique.

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Megatrends drive demand for sustainable and safe solutions

Resource scarcity

Population growth, urbanisation

Climate change

Digitalisation

Social responsibility

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Efficient use of renewable materials and energy

Renewable and recyclable products

Innovations and new businesses

Responsibility integrated in all operations

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Sustainability is the sum of three dimensions

• Human rights • Employee safety

and well-being

EnvironmentalResponsibility

FinancialResponsibility

SocialResponsibility

• Natural Capital• Environmental impacts

• Profit

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KEY #1RENEWABLE RAW MATERIAL

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Use of recycled fibre

Sustainable forest management

Resource efficiency

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WOOD FIBRE –the foundation for sustainability

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Sustainableand safe products for everyday use

LABEL MATERIALSfor food packaging, drinks bottles and for communicating information

SPECIALTY PAPERSfor food packaging

WOOD MATERIALSfor construction and design features

TIMBERfor ensuring high quality indoor air

ELECTRICITYfor lighting and heating

PULP AND BIOFUEL BASED MATERIALSfor packaging, transport, storage and hygiene products

PUBLICATION PAPERSfor reading and advertising

OFFICE PAPERSfor printing

WOOD MATERIALSfor furniture and the home

LABELSfor food products

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KEY #2CLIMATE CHANGE MITIGATION

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Sustainableforest

management

Energy-efficientprocesses

Renewable andrecyclable products

Renewable energy

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PAPER –a small carbon footprint, a big statement about responsibility

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Carbon footprint of a magazine

*Source: VTT LEADER project

Carbon footprint 140 g CO2 / magazine –equals ca. 1 km car driving

• Wood sourcing

• Other raw materials

Forest

Transportation of raw materials: 5 g CO2• Wood sourcing: 5 g CO2

• Pigments: 20 g CO2

Printing*:40 g CO2

Distribution to consumers:5 g CO2

Transportation to printing:2 g CO2

Use:0 g CO2

Recycled fibre

Paper production

Paper production:60 g CO2 = 90 g CO2 /

magazine

Printing

DistributionRecovered paper

Consumer

= 50 g CO2 /magazine

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KEY #3SOCIAL RESPONSIBILITY

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Respectinghuman rights

Local stakeholder engagementTaking care of

employees

0Accidents

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VALUE –through responsible operations

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Local societal value creation

UPM KAUKAS

UPM Kaukas comprises of a pulp and paper mill, biorefinery, sawmill, co-owned biofuel power plant, UPM R&D centre and wood sourcing and forestry operations

EMPLOYMENT EFFECT

160 summer jobs

2,600 indirectly employed*

*Source: City of Lappeenranta

1,700 external employees in pulp mill maintenance shutdown

1,775jobs

at the mill site when jobs provided by subcontractors are included

INDIRECT EFFECT(PURCHASE POWER)

• UPM Kaukas employees EUR 30 million

• Consumption through indirect employment EUR 38-45 million

• Stimulating effect of consumption on regional economy EUR 68-75 million

LOCAL TAXES*

• Estimated municipal tax on personnel wages

• Municipal share of corporation tax • Real estate tax• Estimated effect indirect employment

has on taxes

• Students performing upper-secondary vocational education and training completed an on-the-job learning placement

• Active collaboration with various schools and educational institutions

COLLABORATION WITHEDUCATIONAL INSTITUTIONS

EUR

31-34m 47

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Public Domain/Regulation Consumers Investors

14

Why sustainability matters…

• Incidents trigger steady increase of focus on all aspects of sustainability

• NGO campaigns are highly credible and become regulatory mainstream, e.g. forest use, human rights, diversity

• Consistent focus on sourcing strategies, certificates, reporting and regulatory compliance

• Sustainability needs broadened to also include social and economic aspects

• Consistent sourcing strategies and credible reporting becomes buying criterion

• Believe that resource efficiency pays off

• Market growth in renewable and sustainable technologies favors ESG focused companies

• ESG compliant companies have better risk management

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Find out more:

www.upm.comwww.upmpaper.com

Thank you!