STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT ASSURANCE

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1 GRI content inde UPM follows the Global Reporting Initiative s (GRI) Sustainability Reporting Standards in its corporate responsibility reporting. The reporting has been prepared in accordance with the GRI Standards: Core option. General and topic-specific disclosures for 2017 in English with a reference to eternal assurance in the GRI content inde have been eternally assured by an independent third party PricewaterhouseCoopers Oy. The Independent Assurance Report is available in UPM s Annual Report on page 92. The inde below shows where the GRI disclosures are addressed in the Annual Report (AR), on UPM s webpage (web) and or in the GRI content inde at hand. Including additional information: Information on materiality analysis and process for defining report content Information on re-statements Management approach Measurement techniques Environmental disclosures Social disclosures List of references for GRI disclosures: Annual Report 2017 Charting tool with responsibility data Corporate Governance Statement 2017 Remuneration Statement 2017 Carbon Inventory 2017 Material balance 2017 General disclosures STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT ASSURANCE GRI 102: General Disclosures 2016 Organizational Profile Name of the organisation AR Activities, brands, products, and services AR 4 5 There are no banned products in Location of headquarters AR Location of operations AR 121, Ownership and legal form AR Markets served AR 121, Scale of the organization AR Information on employees and other workers AR 45 47, web, web, web Workers who are not employees are not performing a significant portion of the organization s activities Supply chain AR Significant changes to the organization and its supply chain AR Precautionary principle approach AR Eternal initiatives AR Memberships of associations web Strategy Statement from senior decision-maker AR Key impacts, risks and opportunities AR 6 7, Ethics and integrity Values, principles, standards, and norms of behavior AR 18 19; 46 47, 76 77, Mechanisms for advice and concerns about ethics AR 77 1 UPM Annual Report 2017

2 STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT ASSURANCE Governance Governance structure AR 73, web Delegating authority AR Eecutive-level responsibility for economic, environmental, AR 104 and social topics Consulting stakeholders on economic, environmental, and social topics web Annual General Meeting Composition of the highest governance body and its committees AR 78, 80, Chair of the highest governance body AR Nominating and selecting the highest governance body AR Conflicts of interest AR 78 79, web Role of the highest governance body in setting purpose, values and strategy AR 77, Collective knowledge of highest governance body AR 81, Report of Board of Directors including non-financial disclosure approved by the Board Evaluating the highest governance body s performance AR Identifying and managing economic, environmental, and social impacts AR 79, Effectiveness of risk management processes web Review of economic, environmental, and social topics AR Communicating critical concerns AR Nature and total number of critical concerns AR Remuneration policies AR 85, web Process for determining remuneration AR 82, web Stakeholder engagement List of stakeholder groups AR Collective bargaining agreements AR Identifying and selecting of stakeholders web Approach to stakeholder engagement AR 50 55, web Key topics and concerns raised AR 55 57, web Reporting practice Entities included in the consolidated financial statements AR Defining report content and topic Boundaries GRI inde List of material topics GRI inde Restatements of information Any changes to previous reports are included in the topic-specific disclosures Changes in reporting GRI inde Reporting period 1 January December Date of most recent report 1 March Reporting cycle Annual Contact point for questions regarding the report AR Claims of reporting in accordance with the GRI Standards This report has been prepared in accordance with the GRI Standards: Core option GRI content inde This GRI content inde is the actual version. A shortened version is published in the Annual Report on page Eternal assurance AR 92, GRI inde 1 GRI 103: Management Approach Eplanation of the material topic and its boundary GRI inde The management approach and its components GRI inde Evaluation of the management approach GRI inde UPM Annual Report 2017

3 Material topics STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT OMISSION ASSURANCE GRI 200: Economic Standard Series GRI 201: Economic Performance Direct economic value generated and distributed AR 59 Corporate income taes and property taes reported separately for the eight main production countries Financial implications and other risks and opportunities due to climate change Defined benefit plan obligations and other retirement AR 20 23, 70 Qualitative description of risks, opportunities and responses UPM is not disclosing financial implications of any risks or opportunities or related costs due to commercially sensitive nature of the data. AR In 2017, the percent of salary contributed by employee is 6.3% and the percent of salary contributed by employer is 18.35% Financial assistance received from government AR No government is directly present in UPM s shareholding structure. GRI 202: Market Presence Proportion of senior management hired from the local community 94% of management positions are held by locals. In this indicator, local means nationality, UPM s pulp and paper mills are the significant locations of operation, senior management are the members of the sites management team. GRI 203: Indirect Economic Impacts Significant indirect economic impacts AR 58, 74 75, web Scope is Finland only. GRI 204: Procurement Practices Proportion of spending on local suppliers Out of a total spend of EUR 2.3 billion for UPM primary raw materials wood, pulp and recovered paper 57% was purchased from local suppliers. Scope is fibre raw material which accounts for 32% of total spend. All units using fibre raw material are considered as significant locations. Local in this disclosure means country, ecept in Austria & Germany also neighbouring country. GRI 205: Anti-corruption Operations assessed for risks related to corruption AR Communication and training about anti-corruption policies and procedures Confirmed incidents of corruption and actions taken GRI 206: Anti-competitive behaviour Legal actions for anti-competitive behavior, anti-trust, and monopoly practices AR 77 Anti-corruption is one topic in UPM s Code of Conduct. In 2016, the Board of Directors discussed the revised Code of Conduct and related processes, before Board approved the document. All members of the Board were present at the meeting. The new Code was distributed to all employees. 98% of active UPM employees (as of the end of the year) completed the respective training, which included anticorruption. The Supplier and Third Party Code is communicated to suppliers as part of the business contract. In 2017, 82% of UPM supplier spend was qualified against the Code. Suppliers represent the majority of the relevant business partners with regard to Supplier and Third Party Code. For further information, read more on page 22 23, 77. There was no such case in However, in AR page 153 we describe the pending litigations which include a number of damages claims relating to court decision from Following training per employee category and region is not material to UPM. Following qualified suppliers by number and region is not material to UPM, but UPM follows the qualified supplier spend. GRI 300: Environmental Standard Series For reporting principles see page 9. GRI 301: Materials Materials used by weight or volume 74, web Recycled input materials used 65, web Scope is fibre materials in paper production. GRI 302: Energy Energy consumption within the organization AR 181, 71, 74, web Energy intensity web UPM is following kwh electricity/tonne of paper produced Reduction of energy consumption AR 70 In energy saving reporting, savings related to use of electricity and heat are included. GRI 303: Water Water withdrawal by source AR 74 3 UPM Annual Report 2017

4 STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT OMISSION ASSURANCE Water sources significantly affected by withdrawal of water GRI 304: Biodiversity Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Significant impacts of activities, products, and services on biodiversity AR 69, web According to assessment based on WSI, no water sources are significantly affected by UPM s withdrawal. AR 62 63, web Scope is UPM s own forests AR 62 63, web Scope is UPM s own forests Habitats protected or restored AR 62 63, web Scope is UPM s own forests IUCN Red List species and national conservation list species with habitats in areas affected by operations web Scope is UPM s own forests GRI 305: Emissions Direct (Scope 1) GHG emissions AR 75, 181, web, web Biogenic CO 2 reported. However, sustainably managed bioenergy sources are considered neutral (EU) Energy indirect (Scope 2) GHG emissions AR 181, web, web Other indirect (Scope 3) GHG emissions AR 181, web, web GHG emissions intensity AR 181 UPM is following kg CO 2 /tonne of paper produced (Scope 1 and 2) Reduction of GHG emissions AR 70 The emission reductions (Scope 1 and 2) are reported as CO Nitrogen oides (NO X ), sulfur oides (SO X ), and other significant air emissions AR 71 GRI 306: Effluents and Waste Water discharge by quality and destination AR 68, Waste by type and disposal method AR 71, web Significant spills AR Water bodies affected by water discharges and/or runoff GRI 307: Environmental Compliance Non-compliance with environmental laws and regulations GRI 308: Supplier Environmental Assessment New suppliers that were screened using environmental criteria Negative environmental impacts in the supply chain and actions taken AR 67 Based on UPM s bio indicator studies, no water sources are significantly affected by UPM. For further information, read more on AR page and web. AR 65 Reporting scope is fibre raw material which accounts for 32% of total spend. No significant negative impacts identified in UPM monitors impact assessments based on share of qualified spend. GRI 400: Social Standard Series GRI 401: Employment New employee hires and employee turnover AR 46, web, web GRI 402: Labor/Management Relations UPM Annual Report 2017

5 STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT OMISSION ASSURANCE Minimum notice periods regarding operational changes GRI 403: Occupational Health and Safety Workers representation in formal joint management worker health and safety committees Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities Workers with high incidence or high risk of diseases related to their occupation AR 49 AR 46, 49, web, web, web, web In restructuring situations, UPM follows local labor laws. In Finland, the employer s minimum notice period is determined in the Finnish Employment Contract Act and collective agreements, based on the length of employment: for employment of less than 12 years, the notice period varies between 14 days and four months, and for employment eceeding 12 years it is si months. Similarly, in Germany the minimum notice period is determined by the German Civil Code and adhered to by collective agreements. It is calculated based on the length of employment: from zero up to 20 years, the notice period varies accordingly from four weeks to seven months. In China, the minimum notice period is 30 days and is described in local legislation. TRIF and LTAF are reported for UPM workforce, i.e. employees and supervised workers. There is no high incidence or high risk of disease among UPM employees related to their occupation. UPM analyses potential hazards and manages those that impact on healthy working environments. To minimise health hazards, UPM has standardised processes, for eample for risk assessment, personal protective equipment, chemical management, and occupational health workplace surveys. The majority of UPM s employees work in areas with no or only minimal risk of HIV/AIDS, malaria or tuberculosis. Instructions and support are available for employees travelling to critical areas. Follow-up of disclosures by gender is not material to UPM. GRI 404: Training and Education Average hours of training per year per employee AR 46 Following training per gender and employee category is not material to UPM Programs for upgrading employee skills and transition assistance programs AR 45 46, see comment Percentage of employees receiving regular performance and career development reviews AR 17, 47 UPM 1 Human Capital Return on Investment (UPM indicator) GRI 405: Diversity and Equal Opportunity Diversity of governance bodies and employees AR 46, 78, 180, web Ratio of basic salary and remuneration AR 180 of women to men GRI 406: Non-discrimination Incidents of discrimination and corrective actions taken GRI 407: Freedom of Association and Collective Bargaining Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk GRI 408: Child Labor 2016 AR 77 UPM organises etensive re-employment programmes above the mandatory level for employees affected by permanently closed operations and restructurings. The central elements of UPM s activities are typically retraining, re-employment and relocation within the company, supporting entrepreneurship, and severance payments. Different kinds of outplacement programmes providing group and individual guidance services for re-employment are offered. Active measures promoting employment and retraining are carried out in close co-operation with various authorities and other third parties. UPM s 2017 Human Capital Return on Investment ratio is EUR 2.0 : EUR 1. This indicates the amount returned for every EUR spent on human capital. Significant locations are the nine countries with largest number of salaried employees. These countries cover 89% of total salaried employees. Out of the 89%, the calculation covers 97% of salaried employees. See page 10 for details of the calculation. Baseline for the calculation is 1/11/2017. No significant risk identified. For further information, read more in AR page for own operations, page 65 for suppliers. Follow-up per gender and employee category is not material to UPM. 5 UPM Annual Report 2017

6 STANDARD / DISCLOSURE LOCATION DISCLOSURE / COMMENT OMISSION ASSURANCE Operations and suppliers at significant risk for incidents of child labor GRI 409: Forced or Compulsory Labor Operations and suppliers at significant risk for incidents of forced or compulsory labor GRI 411: Rights of Indigenous Peoples Incidents of violations involving rights of indigenous peoples GRI 412: Human Rights Assessment Operations that have been subject to human rights reviews or impact assessments Employee training on human rights policies or procedures Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening GRI 413: Local Communities Operations with local community engagement, impact assessments, and development programs Operations with significant actual and potential negative impacts on local communities GRI 414: Supplier Social Assessment New suppliers that were screened using social criteria Negative social impacts in the supply chain and actions taken No significant risks identified in own and suppliers operations. For further information, read more in AR page 19. No significant risks identified in own and suppliers operations. For further information, read more in AR page 19. No incidents occurred in For further information, read more in AR page 62. AR 19, 105 Total training hours for employees on human rights were 700 hours in This was part of the mandatory Code of Conduct trainings, which were completed by 98% of active employees (as of end of the year). For further information, read more in AR 19. Responsible sourcing practices (e.g. qualification against UPM s Supplier and Third Party Code) also cover all investments. For further information, read more in AR page 65. UPM has implemented local community engagement programs in all significant locations where it operates. Pulp and paper mills considered as significant locations for this disclosure. For further information, read more in AR pages No significant negative impacts identified in For further information, read more in AR pages 54 55, 58. UPM does not report the percentage of operations with implemented local community engagement. AR 65 Reporting scope is fibre raw material which accounts for 32% of total spend. No significant negative impacts identified in UPM monitors impact assessments based on share of qualified spend. GRI 415: Public Policy Political contributions AR 52 UPM does not financially support political parties or individual candidates. GRI 416: Customer Health and Safety Assessment of the health and safety impacts of product and service categories AR 60 For further information, read more on web. GRI 417: Marketing and Labeling Requirements for product and service information and labeling AR UPM s eco-design approach includes at least: The sourcing of components of the product or service. Content, particularly with regard to substances that might produce an environmental or social impact Safe use of the product or service Disposal of the product and environmental/social impacts Other requirements set by ecolabels GRI 419: Socioeconomic Compliance Non-compliance with laws and regulations in the social and economic area No significant fines for product-related non-compliance with laws and regulations in UPM Annual Report 2017

7 Information for defining report content and topic boundaries (GRI ) Management approach (GRI 103 1, 2 and 3) anonymously or otherwise by the company. As a part of the committee s compliance review, the committee is provided with a quarterly report by Targets Our economic targets focus on the key areas: profit, governance and responsible sourcing. The process for defining the report content is based General the company s Chief Compliance Officer and a report of submissions under the company s Report In all these areas quantitative targets have been set, and are followed up regularly. Having on a materiality analysis that UPM does on annual Misconduct channel by the Head of Internal Audit. success fully transformed its business model basis. The materiality analysis of the company s Corporate responsibility is an integral part of all and improved its business performance, UPM responsibility issues covers topics that directly or indirectly have an impact and influence the ability to create, maintain or acquire economic, environmental or social value for UPM, our operations and is seen as source of competitive advantage. UPM is strongly committed to continuous improvement in economic, social and environmental performance. UPM promotes Economic Material topics renewed its long-term financial targets in January See Annual Report pages 16 and 17. Monitoring and evaluation The Board of Directors, assisted by the Audit stakeholders and society. The main sources for responsible practices throughout the value chain Economic performance Committee, is responsible for monitoring analysis are stakeholder feedback and conducted and is active in finding sustainable solutions in Market presence the company s internal control and risk studies. The result of the materiality analysis are co-operation with its customers, suppliers and Indirect economic impacts management systems. Internal audit assists published in the Annual Report on page 53. UPM s partners. Procurement practices the Board of Directors with its monitoring material topics are aligned with the material The Group Eecutive Team, headed by the Anti-corruption responsibility by ensuring that the group s analysis and UPM s commitments. The reporting on sustainability is included to the Annual Report. This way we ensure to comply with the Reporting President and CEO, is in charge of managing corporate responsibility, determining the course of action and guiding development work. In practice, Anti-competitive behaviour Boundaries inside the organisation The consolidated performance data is in control measures have been planned and set up effectively. Specific actions Principles: stakeholder inclusiveness, materiality, corporate responsibility efforts take place in accordance with the Group s accounting Eamples of related actions 2017 are described sustainability contet, completeness. businesses and functions, and in the Group s principles. Information on joint operation in the Annual Report on pages 6 7, 27, 29, 31, Environment & Responsibility team, which companies, investments in associated 37, 41, 51, 54, 57, 58, 67 Changes in reporting (GRI ) coordinates the projects carried out by businesses and functions. UPM s Biofore strategy and the Code of Conduct companies and joint ventures, available-forsale investments are not included. Boundaries outside the organisation Environmental The consolidated performance data is in lay the foundations for responsible business operations and continuous improvement. For the topic Procurement practices the reported scope of local spend is UPM s fibre Material topics accordance with the Group s accounting principles, which are presented in the Annual Report, pages Also the Group s adoption of new and Grievance mechanisms based raw material. Policies Code of Conduct (link) Materials Energy Water revised accounting standards is presented there. Corporate governance statement (link) Biodiversity Should stakeholders have concerns or suspect Disclosure policy (link) Emissions misconduct, they are encouraged to contact UPM Ta policy (link) Effluents and Waste or to use the UPM Report Misconduct channel. This channel is available on UPM s intranet for Commitments Finnish Corporate Governance Code Environmental Compliance Supplier environment assessment UPM employees, and also on the corporate website UN Global Compact s ten principles for the company s eternal stakeholders. UPM s Sustainable development goals of the Audit Committee oversees procedures for UN Agenda 2030 treatment of complaints and concerns received 7 UPM Annual Report 2017

8 Boundaries inside the organisation Targets Local communities targets have been set, and are followed up Consolidated environmental data covers all Our environmental targets focus on the key Supplier social assessment regularly. The targets for diversity and production units, unless otherwise stated in areas: product stewardship, waste, climate, Public policy inclusion, continuous learning and connection with the respective disclosure. water, forests and biodiversity. In all these Customer health and safety development and responsible leadership were Information on joint operation companies, areas quantitative targets have been set, Marketing and labeling revised end of New formulations reflect investments in associated companies and joint ventures, available-for-sale investments are not included. and are followed up regularly. See Annual Report pages 16 and 17. Monitoring and evaluation Socioeconomic compliance Boundaries inside the organisation Consolidated data covers whole UPM UPM s ability to get more insight from the renewed Employee Engagement Survey and the development of UPM s people processes. For biodiversity disclosures UPM s own forest areas are included. Boundaries outside the organisation Internal and eternal audits are regularly conducted at production sites, e.g. for environmental management systems, Chain Corporation, unless otherwise stated in connection with the respective disclosure. Information on joint operation companies, See Annual Report pages 16 and 17. Monitoring and evaluation Internal and eternal audits are regularly The disclosures related to supply chain of Custody and so-called internal Clean Run investments in associated companies and joint conducted at production sites, e.g. for OHS sustainability include all suppliers, unless audits. Key performance indicators like ventures, available-for-sale investments are management systems and our internal safety otherwise stated in connection with the disclosure. deviations or water volumes are followed up on monthly basis, other indicators are at least not included. Boundaries outside the organisation audits. Key performance indicators like total recordable injury frequency or lost-time Environmental disclosures from companies evaluated on annual basis. Social disclosures from companies of which accidents are followed up on monthly basis. of which UPM owns less than 50% are not Supplier audits are regularly performed, too, UPM owns less than 50% are not reported. Supplier audits are regularly performed. reported, ecluding energy related air and for certain product groups performance The disclosures related to supply chain Sharing of best practices is ensured through emissions that correspond to UPM s energy share. figures are evaluated on annual basis. Specific actions sustainability include all suppliers, unless otherwise stated in connection with the well-established operational stakeholder forums, for eample. Related to energy supply from jointly-owned connected power plants, relevant environmental parameters (air emissions, fuels and waste) are included depending on the energy supply to UPM s production sites. Environmental costs and investments of Eamples of environment-related actions 2017 are described in the Annual Report on pages 6-7, 27, 29, 33, 39, 41, 43, 51, 63, 67, 69, 71, 73 Social disclosure. Policies Code of Conduct (link) Supplier and Third Party Code (link) Commitments ILO Declaration on Fundamental Principles Compliance with ecolabel criteria and UPM s restricted chemical list is regularly checked, internally and also by third-party verification. Specific actions Eamples of related actions 2017 are described in the Annual Report on pages 19, 35, 46, 47, 49, such entities are not included. The disclosures related to GHG emissions Material topics and Rights to Work OECD Guidelines for Multinational 52, 54, 58, 63, 67 cover all relevant upstream and downstream Employment Enterprises processes. Policies Labor/Management relations Occupational health and safety UN Global Compact s ten principles Sustainable development goals of the UN Code of Conduct (link) Training and education Agenda 2030 Environmental rules (link) Forestry rules (link) Supplier and third party code (link) Commitments UN Global Compact s ten principles Diversity and equal opportunity Non-discrimination Freedom of association and collective bargaining Child labor Policies Targets Our related targets focus on the key areas: diversity and inclusion, continuous learning and development, responsible leadership, UN CEO Water Mandate Forced or compulsory labor working conditions, responsible sourcing, Sustainable development goals of the Rights of indigenous people community involvement, product UN Agenda 2030 Human rights assessments stewardship. In all these areas quantitative 8 UPM Annual Report 2017

9 Data measurement techniques emissions from UPM power plants and a respective Waste and by-products Workforce share of co-owned or associated power plants that UPM reports the sum of non-hazardous process Workforce includes UPM s own employees as well Environmental disclosures corresponds to UPM s energy supply. Eternal power plants or boilers are considered under heat supply. Direct fossil CO 2 is calculated based waste and by-products divided to recycling as material, energy recovery, composting, landfill, incineration, and temporary storage, and the sum as supervised workers. Personnel by country Environmental data of all UPM s production sites on fuel usage. Calculation is done according of hazardous waste divided to recycling as material, Personnel by country is reported based on the is collected in a common database. to the European Emissions Trading System, energy recovery, incineration and other disposal. UPM global total headcount definition including UPM s energy-related data (fuels, air emissions, other national requirements or based on official Recycled or recovered non-hazardous waste is employees classified as active and inactive and waste) includes its own power plants and a calculation factors. NO X, SO 2 and particulates reported as by-product. Waste figures are reported are calculated as heads. respective share of co-owned or associated power plants, which correspond to UPM s energy supply. are usually measured online. Emissions of TRS by UPM s pulp mills are converted to SO 2 and in dry tonnes, ecept for hazardous waste. The disposal method is determined by both direct Contract types Eter nal power plants or boilers are considered under heat supply. included in the overall SO 2 figure. Indirect CO 2 emissions (scope 2 and scope 3) are calculated information from the sites or from information provided by waste contractors. All contract types are divided into two categories: permanent and fied term. Permanent contracts Data measurement techniques depend on local and national requirements and therefore can vary based on data availability, either with secondary emission factors or previous year s primary Environmental costs and investments include all contracts that are valid until further notice as well as employees not covered under between production sites. If relevant, this is taken emission factors. Detailed information about As a guiding principle to calculate and report employment contracts such as the US, where all into account when summarising data for corporate scope 3 calculation is published at UPM s webpage. environmental costs and investments, UPM has employees are classified as Employment at Will. reporting. UPM uses rolling base year approach for In GRI disclosures and the emissions are reported as CO 2 only. In the emissions based its instructions on European Commission recommendation 2001/453/EC of 13 June 2001 Collective bargaining agreements reporting on applicable environmental disclosures. Materials are reported as CO 2 equivalents (including CH 4 and N 2 O) using IPCC s GWP values. In addition to energy-related disclosures UPM reports (Official Journal L 156, 13/06/2001) on the recognition, measurement and disclosure of environmental issues in the annual accounts and The percentage of employees covered under collective bargaining agreements include all employees (both active and inactive) regardless of Information about material usage is aggregated production-related VOC emissions from UPM annual reports of companies and their con- tract type and working time status and data from UPM s sourcing unit. Raflatac and UPM Plywood which are calculated Kirjanpitolautakunta: Yleisohje ympäristöasioiden includes all countries where UPM has operations. Energy using emission factor and/or mass balance methods. kirjaamisesta, laskennasta ja esittämisestä tilinpäätöksessä Employee turnover Information about energy usage is aggregated data from UPM Energy based on information provided by the production units and power plants. For Effluent UPM reports on effluent flow, COD, BOD and AOX Social responsibility disclosures Turnover is calculated using the number of all types of employment endings regardless of whether they are voluntary or involuntary (Number of energy saving reporting, the reduction of electricity and heat is included. as water-related performance indicators. These are calculated based on mill level data from sampling or Personnel / employees leavers 1. Jan. 31. Dec/Total headcount 31. Dec). Separate calculation is provided showing turnover Water continuous monitoring. If the wastewater is treated in municipal or eternal effluent treatment plants, Personnel figures base on the UPM global total headcount definition including employees specifically for voluntary employment endings. The calculation method has been changed in 2014 If not measured, the amount of water withdrawal the values included in the total sums are the loads classified as active and inactive and are calculated and employees with contract epiries and who later is reported based on reasonable estimates. before effluent treatment. In the calculation of as heads if not otherwise stated. The terms have a contract etension have been ecluded. Air emissions average load per product unit, these mills are ecluded. Conversion is done in the case of personnel and employees are used as synomyms and refer to UPM s own employees. Seasonal employees and those leaving due to a business being sold continue to be ecluded from UPM reports on emission of fossil CO 2, NO X, SO 2 and particulates as air emission related different measurement scopes, e.g. BOD 7 and BOD 5. the calculation. In 2015 voluntary employment endings have been further clarified to include only performance indicators. These indicators include reasons related to resignation. 9 UPM Annual Report 2017

10 Goal setting discussions Training hours per employee Total Recordable Injury Frequency working time and then multiplied by 100. All hours Disclosures for goal setting discussions is based Number of training hours per employee are Including UPM employees and temporary/agency of absence from work due to accidents at work are on the percentage of completed goal setting calculated based on the UPM active headcount hired workers. Calculation is as follows: ( LTA at included (including hours on day when accident discussions launched in UPM HR system according definition as of the end of the year. Trainings work ecluding contractors (number of LTAs which occurred). to UPM people processes annual clock. Figure consists of percentage of completed goal setting templates by the end of July for salaried employees and percentage of completed Annual Discussion include internal and eternal training. Human Capital Return on Investment (HC ROI) are one or more days) + Modified duty + Medical treatment )/ Actual hours worked (UPM) *1,000,000. Total Recordable Injury type ecludes first aid cases. Number of occupational diseases Number of new cases which have been officially diagnosed and reported as occupational diseases templates for shop floor employees by the end Human Capital Return on Investment (HC ROI) UPM reports separately for employees and during the reporting year. Reporting year is the last of December. indicator measures the return on capital invested contractors. Disclosure is based on following year ecept for Germany where cases are reported Development plans Disclosures for development plans documented in employee costs. It indicates the value of investing in human asset, i.e. amount returned for every EUR spent on human capital. Formula used in UPM: annual data: incidents occurred from January to December and actual hours worked from December to November. for the penultimate year. Code of Conduct training is based on number of completed development plans in UPM HR system comparing to UPM end Dividing the operating profit less employee costs by employee costs calculates the ratio of the Contractors and contractor working hours The Code of Conduct completion rate is calculated against the employees classified as active as per our of year headcount. Figure consists of number of company s profitability to its human capital Contractor is a person or organization which definition and those who are shown as active as of development plans for salaried employees by end epenses. Employee costs as presented in Note 3.1 provides services to UPM as agreed. Contractor 31 December of the year in question. Training is of the reporting year and number of completed to the consolidated financial statement (i.e. does personnel is not directly employed by UPM. provided for all employees who are included in our annual discussions by the end of reporting year not include Costs in Support of Employees e.g. Contractor actual working time consists of all global headcount of active employees definition. for shop floor employees. For shop floor employees development plans are integrated to annual office charges, training neither Costs in Lieu of Employees i.e. outsourcing). hours contractors have worked in UPM premises or under UPM supervision. Contractor working hours Supplier Qualification discussion. Ratio of basic salary of women to men Lost-time accident frequency Lost-time accidents per million hours worked are used to calculate lost-time accident frequency and total recordable injury frequency. If working hours are not collected based on a time attendance UPM suppliers are qualified against the UPM Supplier and Third Party Code that defines suppliers minimum compliance requirements in The ratio is calculated by comparing weighted (Including UPM employees and temporary/agency- system, an estimate is used. UPM has defined and terms of responsibility with regard to matters such average of basic salaries of women to men on the hired workers). (The number of accidents at work published method for calculating contractor as environmental impact, human rights, labour same job grade, per country. Basic salary is the resulting in absence or disability one or more working hours if the eact number is not available. practices, health and safety, and product safety. constant agreed salary ecluding variable parts days)/(actual hours worked)*1,000,000. Lost time Estimates are based on the number of workers or Supplier spend covers all UPM business-to- like shift allowances. The calculation includes all accident type ecludes modified duties, medical on contract monetary value. business spend including wood and wood-based employees that have a job grade evaluated in the assessed countries and all job grades per country treatments and first aid cases, but includes fatal accidents. Absenteeism % biomass sourcing. that have minimum three male and female UPM reports separately for employees and Absence percentage due to illness and accidents at employees. Thus the calculation covers salaried contractors. Disclosure is based on following work. Illness includes Absence hours due to illness, employees only. The reference date for the annual data: incidents occurred from January Absences due to accidents during travelling to/ calculation of the ratio is 1 November of the year to December and actual hours worked from from work, and Absence hours due to accidents in question. December to November. during time off work. Accidents at work include Absences due to accidents at work and Absences due to occupational diseases and illnesses. These figures are added and then divided by Theoretical 10 UPM Annual Report 2017