We want to ensure fair, equitable and competitive rewarding for all UPM employees globally. We are committed to gender pay equity and to paying living wage for all UPM employees. Our commitment to fair rewarding is stated in our Code of Conduct and further specified in our policies and rules on rewarding.
We also see the critical role of living wage and decent work to promote respect for human rights and to tackle inequality.
Remuneration at UPM is designed to encourage UPM values-based behavior, to encourage employees to actively work towards the company’s ambitious strategy and long-term targets and to pay for performance accordingly.
The remuneration principles and practices are designed to attract, retain and motivate employees and to ensure the fairness and competitiveness of the remuneration in the diverse global markets where we operate. Additionally, remuneration practices are designed to enable, foster and encourage high performance, commitment and engagement to the company, as well as the differentiation of rewards by performance and impact. Rewarding is managed in a sustainable and affordable level.
Our approach to rewarding and recognising employees consists of both tangible and intangible components. Tangible remuneration and recognition consist of base salary, benefits and incentives, which are determined by UPM’s global rules, local legislation, general agreements, local market practices, the level of the position and individual performance. Gender, age, ethnic origin or nationality, for example, play no role in determining employee’s rewarding. Intangible remuneration and recognition consist of, for instance, a safe and healthy working environment, interesting and meaningful work, and good leadership and career opportunities.
In line with the UN’s Sustainable Development Goal 8 to ‘Promote inclusive and sustainable economic growth, employment and decent work for all’, we renewed our 2030 social responsibility targets in 2022 with one of the key priorities on fair rewarding.
The new targets are related to living wage and gender pay equity. We are committed to ensure gender pay equity to all employees and that employees’ pay meets at least a local living wage. We review the status of both annually and take corrective actions respectively. To ensure the objectivity of both reviews, the processes and data are audited by an external partner.
Living wage is a multidimensional concept that currently does not have a single, globally uniform definition that we can all conform to and use. We define living wage as a remuneration received for standard work by a worker in a particular time and place sufficient to afford a decent standard of living. Elements required for a decent standard of living include food, water, housing, education, healthcare, transport, clothing, and other essential needs, including also a provision for unexpected events for the worker.
The terms ‘living wage’ and ‘minimum wage’ are two different concepts. The minimum wage is required by law, and we comply with laws and regulation in all the countries we operate in. Living wage is instead a voluntary construct and typically value-wise higher than minimum wage.
In 2019, we initiated a global process to review the base salaries of our employees against local living wage standards and since then the review has been carried out annually and corrective actions taken accordingly. We work with an independent third party to develop our understanding of living wage. Our partner provides us with an external objective source of benchmark data for each of our operating countries.
We are an active member of the UN Global Compact Think Lab on Living Wage. Working poverty is a global issue and prevalent in many different industries. We develop living wage methodology and engage more companies in the living wage discussion. The Think Lab challenges more companies make bold commitments and send a signal to policymakers to adopt living wage policies.
In 2023, we joined the UN Global Compact Forward Faster Initiative together with 138 other companies. This ambitious undertaking calls for global business leaders to take tangible actions to accelerate the progress of the UN’s Sustainable Development Goals (SDGs). For social responsibility, our commitment encompasses two focus areas: promoting gender equality and ensuring living wages. Our pledge on gender equality signifies our commitment to fostering equal gender representation, participation and leadership at all levels of management by 2030 and to guaranteeing equal pay for equal work for all our employees. Companies committed to the living wage must ensure that their employees earn a living wage by 2030. Companies in this initiative will report on their progress to the Global Compact annually. The first official year of reporting year is 2025, but the relevant topics are already covered in our public reports.
In addition to being a considerable employer, we also buy products, materials and services from approximately 20,000 suppliers annually. The next step for us is to start promoting living wages also with our suppliers and contractors. It will be an important part of our future work impact-wise.
As a part of our fair remuneration commitment, we are committed to ensure gender pay equity to all our employees and to review the status annually. The review focuses on identifying pay gaps that cannot be explained for example by person's performance, work experience, job level or location, i.e., the factors that typically determine a person’s base salary and its development.
We made the review for the first time in 2021 and we continue to monitor the development annually and make corrective actions if needed.
In addition to monitoring the gender pay, we regularly also analyse female representation and career progress in the workforce. As a part of our 2030 social responsibility target renewal in 2022 and the diversity and inclusion initiative, we also set a 40% target of female representation in professional and managerial roles. All these factors have an impact on the development of pay equity.
Read more:
IMPACT STORY: Finnish forestry giant takes action to eliminate gender pay gaps | UN Global Compact
In January 2023 we were selected among the 484 listed companies in the Bloomberg Gender-Equality Index (GEI) as one of the three Finnish companies. UPM has been selected in the index for five times in a row. The index lists the most committed public companies committed to disclosing their efforts to support gender equality through policy development, representation, and transparency.
UK Gender Pay accordance with the UK Equality Act 2010, we publicly disclose our gender pay gap information concerning our operations in the UK. The disclosed gender pay gap is the difference in the average hourly wage of all men and women across a workforce. All public bodies with 250 or more employees are required to publish gender pay gap data on UK Government and company websites showing how large the pay gap is between their male and female employees. The gender pay gap is not the same as unequal pay, which is paying men and women differently for performing the same (or similar) work. Unequal pay has been unlawful in UK since 1970.
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