UPM forestry meets global megatrends. FIPP Insider 12th December 2018 London Timo Lehesvirta Sustainable Forestry Lead, Forest Global, UPM

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1 UPM forestry meets global megatrends FIPP Insider 12th December 2018 London Timo Lehesvirta Sustainable Forestry Lead, Forest Global, UPM

2 Megatrends drive demand for sustainable and safe solutions Biofore fits well into the changing world Population growth, urbanisation Resource scarcity, role of renewables Digitalisation Climate change Efficient use of renewable materials and energy Renewable and recyclable products Innovations and new businesses Responsibility integrated in all operations Responsibility and compliance 2 UPM

3 Limitless opportunities of bioeconomy Purpose We create value by seizing the limitless potential of bioeconomy. Sustainable and safe solutions for growing global consumer demand Vision We lead the forest-based bioindustry into a sustainable, innovation-driven, and exciting future. The competence, integrity and drive of our people make us unique. Responsible operations and value chain Innovation Circular economy Values Trust and be trusted Achieve together Renew with courage High performing people Sustainable forestry 3 UPM

4 Global businesses local presence 13% North America UPM s sales by market 2017 EUR 10 billion 62% Europe 20% Asia 54 production plants in 12 countries 12,000 customers in 120 countries 90,000 shareholders in 35 countries 5% Rest of the world 19,100 employees in 46 countries 25,000 b-to-b suppliers in 75 countries 4 UPM

5 Evolution of wood usage Biomolecules Biofuels Biochemicals Fibres Pulp Paper Packaging Tissue Labelling materials Biocomposites Logs Sawn timber Plywood Trees Energy 5 UPM

6 UPM and forests 50M Tree seedlings planted annually 27Mm 3 Wood delivered globally to UPM mills annually 30,000 Wood trade transactions with private forest owners in Finland annually 85% Of wood used in UPM products certified 100% Of wood and wood fibre from sustainable sources 6 UPM

7 How to produce wood? Semi-natural forest Tree plantation Wood Biodiversity Climate Water and soil People 7 UPM

8 UPM forestry fundamentals Knowing the origin of wood Zero deforestation Maintaining carbon sinks Protecting waters Enhancing biodiversity Respecting stakeholders 8 UPM

9 Biodiversity as a basis for bioeconomy Timber Pulp and paper Fuel Energy Carbon sink Wellbeing Food Water protection BIODIVERSITY 9 UPM

10 UPM biodiversity program indicators Native trees diversified species composition Dead wood increased volumes of decaying wood Forest structure diversified structural variation Valuable habitats protected biodiversity hot spots 10 UPM

11 Biodiversity projects with stakeholders Continuous cover forestry Habitat restoration Grove forests Fire habitats Esker forests Species projects 11 UPM

12 Modern forestry Retention tree groups Habitat restoration Retention tree Deadwood 12 UPM

13 Valuable habitats Fertile bog Brook Small lake Grove Grove Grove Spring Brook Rocky patch Mire Spring Grove 300 m 13 UPM

14 Biodiversity research Threatened species Euconnus fimetarius Monotoma spinicollis Cryptophagus fallax Bisnius subuliformis Philonthus parvicornis Eucinetus haemorrhoidalis Lacon conspersus Dorcatorma substriata Cis submicans Tomoxia bucephala Corticeus longulus Phutobaenus ababilis Anaspis brunnipes Allandrus undulatus 14 UPM

15 Forests as carbon sink 15 UPM

16 Targeting to net positive impact on biodiversity As the first the forest company, we are committed to achieving net positive impact on biodiversity. We want to further develop modern forestry and create methods for biodiversity measurement, tailored for the forest sector. Our project is collaborative initiative. We want to invite expert stakeholders from academic world, authorities and NGOs to work with us. This new biodiversity target is included to our 2030 responsibility targets. 16 UPM

17 Ecosystem service integration into product value chain 1,000kg of UPM pulp 4,000kg Binds carbon 8,000,000l Cleans water > 800 species >200kg Provides food 5,5 m 3 of wood: UPM and Finnish Environment Institute 17 UPM

18 UPM Raflatac Biodiversity in product value chain Finland South Africa 18 UPM

19 Thank you and stay tuned! We will continue the discussion on sustainability in our upcoming white paper released soon. 19 UPM

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