The UPM Sustainable Supply Chain program drives supply chain compliance and risk mitigation, and helps us achieve our environmental, social and governance-related ambitions in our supply chain. Each element in the strategy entails information regarding the relevant sourcing and supply chain management practices and implications within UPM, as well as tangible guidance and expectations for UPM’s suppliers. Effective implementation is managed and tracked through our 2030 responsibility targets and performance indicators.
Sustainable Supply Chain Program
What does this mean in UPM?
UPM is committed to compliance with all applicable regulations.Responsible sourcing in UPM begins with internal compliance with our sourcing and procurement processes and with our Code of Conduct, requiring us to know with whom we trade. To support UPM sourcing & Procurement professionals in the relevant due diligence, several internal and external tools and services are used, including Know Your Supplier screenings, Enhanced Due Diligence checks, as well as Business Integrity Screening, which continuously cross-reference our supplier base against a comprehensive suite of reference data e.g. in terms of international sanctions.
Clear supplier requirements form another core element in UPM’s responsible sourcing approach. UPM Supplier and Third-Party Code defines the minimum level of performance that UPM requires from all its suppliers. Our Sourcing & Procurement professionals must ensure our suppliers are familiar with these requirements and agree to comply with them.
What does this mean for UPM’s suppliers?
Our suppliers must comply with all applicable regulation and with relevant UPM requirements. UPM’s supplier requirements are divided into general and category specific requirements.
General requirements include UPM Supplier and Third-Party Code, which defines the minimum level of performance that UPM requires from all its suppliers. Suppliers are expected to promote these requirements for responsible conduct in their own supply chain. Our Supplier Assessment Criteria outlines further expectations regarding our suppliers’ performance relating to social, environmental and governance topics.
Category specific requirements include additional requirements for certain materials and services. Category specific requirements are available here: General and category specific requirements | UPM.COM.
Our 2030 target:
100% of raw material suppliers are committed to UPM Supplier and Third Party Code
Performance indicator: Percentage of raw material suppliers that have approved UPM Supplier and Third-Party Code* by spend
For further information on responsible sourcing in UPM, visit https://www.upm.com/responsibility/supply-chain/responsible-sourcing
*or demonstrate compliance with similar standards defined in their own Code of Conduct or company policies
What does this mean in UPM?
Systematic supplier risk assessment is one of the core elements in UPM’s responsible sourcing approach. We apply diverse methods in identifying sustainability risks. These methods include various internal and external tools and services, supplier surveys, as well as UPM’s supplier segmentation and risk identification processes, such as our Critical Supplier and High Sustainability Risk frameworks. High Sustainability Risks are identified based on environmental and social risks associated with the sourced material or service and based on country risk.
UPM sourcing professionals must understand the sustainability risks associated with their own sourcing category and have valid risk mitigation plans in place for their Critical and High Sustainability Risk suppliers. UPM sourcing risk management board reviews supply chain risks periodically.
Based on the systematic risk assessment, UPM engages in informed risk mitigation activities. These activities can entail further supplier assessments, audits and relevant corrective actions.
UPM engages its significant suppliers in Ecovadis third-party sustainability assessments and continuous improvement in accordance with identified improvement areas. We are a member of the Together for Sustainability(TfS) initiative, which strives to improve sustainability performance in the supply chains of the member companies. TfS audits and other sustainability audits are conducted on risk basis.
What does this mean for UPM’s suppliers?
Transparency and sharing of reliable and timely sustainability and supply chain information is the foundation of a trust-based, long-term partnership. Our suppliers and third parties must collaborate with us in mitigating sustainability risks and share relevant information as needed. We expect our suppliers to answer UPM’s surveys and inquiries precisely and in a timely manner.
We expect our suppliers to complete and share with us an Ecovadis third-party sustainability assessment. Further, we expect our suppliers to engage in continuous improvement by addressing the improvement areas identified by Ecovadis.
UPM may verify adequate sustainability performance of its suppliers and third parties through online or on-site audits. The Supplier is expected to provide UPM with all necessary support and access to its premises and to relevant documentation. We expect our supplier’s support also in audit arrangements and activities related our supplier’s sub-contractors and sub-suppliers’ operations.
Our suppliers are expected to identify sustainability risks in their own supply chain and to mitigate risks accordingly.
Our 2030 target:
100% of UPM’s strategic, critical and high sustainability risk supplier spend shall be covered by an Ecovadis assessment indicating a low sustainability risk.
What does this mean in UPM?
We are working towards net-zero emissions in our entire value chain to do our part in limiting global warming to 1.5˚C.We have a target of reducing emissions from the most significant sources in the value chain by 30 percent by 2030, against 2018 levels.
This is the ambition of the -30by30 value chain emission reduction program, which strives to introduce climate as a key consideration in product development and sourcing decisions. Accurate and complete value chain emissions data is a crucial enabler for such decision-making.
UPM sourcing and procurement professionals are required to integrate climate considerations into their category strategies as well as everyday sourcing processes and supplier management activities.
What does this mean for UPM’s suppliers?
We want to collaborate with suppliers and partners who are capable and motivated to join us on our journey beyond fossils by designing and producing low-carbon products and solutions for our societies. UPM suppliers are expected to report annually their product carbon footprint for relevant products or services supplied to UPM in accordance with the Product Carbon Footprint Calculation Guideline.
Suppliers are also expected to commit to time-bound greenhouse gas emission reduction targets and to take appropriate action to reach their target.
Our 2030 target:
30% reduction in absolute scope 3 greenhouse gas emissions, compared to a 2018 baseline
What does this mean in UPM?
Biodiversity is one of the key environmental focus areas in UPM and biodiversity protection efforts are integrated into all areas of our operations – from daily practices to top management decision making. Beyond our own operations, we should understand and mitigate negative biodiversity impacts in our supply chain, and actively promote biodiversity enhancement. This ambition is supported by our interlinked environmental ambitions of climate change mitigation and responsible use of resources in the supply chain.
In UPM sourcing and procurement, biodiversity protection means working with suppliers who share our commitment to biodiversity protection. Ensuring a supplier’s commitment to sound environmental management practices is particularly crucial if a supplier’s operations or supply chain constitute a high risk of biodiversity loss through habitat destruction, over-exploitation, pollution, or climate change.
Such potential risks are identified in the category strategy, and relevant management and development activities are identified and carried out.
What does this mean for UPM’s suppliers?
When it comes to protecting, preserving and managing biodiversity in a sustainable manner, we believe in the power of collaboration. This means working closely together with our suppliers to protect and enhance biodiversity in our supply chain.
As part of their environmental, and sustainable supply chain management efforts, UPM suppliers are expected to map and understand the biodiversity impacts of both their own operations and their supply chains, and to engage in relevant biodiversity protection activities.
To ensure responsible origin of wood, we have detailed category specific requirements relating to wood sourcing and wood-based materials we source. With any biobased materials we source, we expect our suppliers to promote the responsible origin and traceability of the biobased material through relevant activities, such as credible third-party certification systems.
Our 2030 target:
100% of high biodiversity impact commodities originate from certified sources.
What does this mean in UPM?
Resource efficiency is at the core of UPM’s Biofore strategy. When it comes to optimizing the use of materials, water and energy in our own operations and in our supply chains, UPM sourcing and procurement is in a pivotal role.
UPM sources numerous commodities that are material, energy, or water intensive to produce. UPM sourcing and procurement professionals must identify such environmental considerations in their sourcing categories and integrate them into their category strategies and supplier management activities.
Further, UPM sourcing and procurement professionals should actively engage in internal, cross-functional efforts as well as supplier collaboration towards the development and introduction of products and solutions that promote the transition into circular bioeconomy.
What does this mean for UPM’s suppliers?
Be it materials, water, or energy, we expect our suppliers to engage in continuous improvement in resource efficiency, to minimize waste in their operations and to manage generated waste responsibly. We expect our suppliers to have an environmental management system in place in order to minimize their negative environmental impact on land, water and air, and to promote responsible resource use also in their own supply chain.
UPM seeks sustainable growth through new business opportunities and partnerships that support a transition towards circular bioeconomy. Accordingly, we encourage our suppliers to collaborate with us in innovating and developing new products and solutions that contribute to material reduction, efficiency or circulation, or replace fossils with circular or biomaterials.
Our 2030 target:
100% of strategic, critical and high sustainability risk suppliers demonstrate strong performance in responsible resource use.
What does this mean in UPM?
UPM is committed to promoting decent working conditions and fair employment in our own operations and across our value chain. Dignity, equality and fair income are top priorities in ensuring that everyone working in our supply chain is treated fairly. We recognize the critical role of decent work in fostering respect for human rights, tackling inequality and driving sustainable development. Living wage is an essential aspect of decent work, and we promote living wages and gender pay equity in our supply chain and among our contractors. UPM is a member of UN Global Compact and a contributor to their Labor and Decent work program.
UPM sourcing and procurement professionals are expected to understand labor and human rights related risks in their sourcing categories, to integrate these considerations into category strategies, and to plan and implement appropriate management activities. Beyond risk management, UPM sourcing and procurement professionals are expected to actively promote decent work among their suppliers, and to consider supplier performance related to labor and human rights in supplier evaluation and selection and when awarding business.
What does this mean for UPM’s suppliers?
Applicable to all suppliers, our requirements regarding labor and human rights are listed in UPM Supplier and Third-Party Code and Supplier Assessment Criteria.
Beyond these requirements, we encourage our suppliers to provide decent work by paying their employees a living wage and by promoting gender pay equity, management diversity and employee empowerment. Further, we encourage our suppliers to promote decent work in their own supply chains and to integrate decent work as a consideration in their responsible sourcing approach. Beyond their own supply chains, we expect our suppliers to be responsible corporate citizens towards the stakeholders and communities they have an impact on.
In order to track and manage our suppliers’ performance relating to labor and human rights, we expect all our high priority suppliers to complete and maintain an Ecovadis assessment.
Our 2030 target:
100% of strategic, critical and high sustainability risk suppliers demonstrate a strong commitment to labor & human rights
What does this mean in UPM?
Ensuring the right to a safe and healthy working environment is one of the top priorities of our responsibility agenda. This applies to our own operations, to our contractors, and to our supply chains.
UPM sourcing and procurement professionals must promote health, safety and security among their suppliers. This means understanding the relevant risks associated with the sourcing categories, integrating these considerations into category strategies, and planning and implementing appropriate management activities. Beyond risk management, UPM sourcing and procurement professionals are expected to actively promote health, safety and security among their suppliers, and to consider supplier performance related to the topics in supplier evaluation and selection and when awarding business.
What does this mean for UPM’s suppliers?
Applicable to all suppliers, our minimum requirements regarding occupational health and safety are listed in UPM Supplier and Third-Party Code and Supplier Assessment Criteria.
UPM’s supplier must ensure the health, safety and security of its employees, visitors and contractors working at its premises. This entails having a suitable safety management system in place. We expect our suppliers to commit to the principle of continuous improvement, in health and safety, which involves extensive internal and external audits and management reviews. We also expect our suppliers to promote health, safety and security in their own supply chains.
In order to track and manage our suppliers’ performance relating to health, safety and security, we expect all our high priority suppliers to complete and maintain an Ecovadis assessment.
Our 2030 target:
100% of UPM’s strategic, critical and high sustainability risk suppliers demonstrate strong performance in occupational health and safety
What does this mean in UPM?
Ethical practices create long-term value for both UPM and its stakeholders. UPM has stated its commitment to integrity in its Code of Conduct, including zero-tolerance for corruption and bribery, avoiding conflicts of interest, complying with competition laws, and protecting assets and information. We do not compromise our standards of integrity under any circumstances.
Each UPM employee working with our suppliers must ensure these standards of business integrity are upheld in our supplier relationships. Further, our sourcing and procurement professionals must know with whom they trade and remain vigilant for any indications of breaches in business ethics among UPM suppliers. Any identified concerns are brought to the attention of sourcing management and UPM compliance.
What does this mean for UPM’s suppliers?
Applicable to all suppliers, our minimum requirements regarding business ethics are listed in UPM Supplier and Third-Party Code and Supplier Assessment Criteria. We expect our suppliers to act according to high standards of integrity that are not compromised under any circumstances.
Suppliers must maintain adequate procedures to prevent corruption and bribery in their operations. These procedures must be regularly monitored and reviewed. A supplier must have documented guidelines and policies promoting zero-tolerance for corruption and bribery and provide related employee training. We expect our suppliers to be responsible tax-payers.
Our supplier must make it possible for employees and other stakeholders to voice their concerns about misbehavior or to suggest improvements or give general feedback anonymously.
Our 2030 target:
80% of strategic, critical and high sustainability risk suppliers demonstrate a strong commitment to business ethics
What does this mean in UPM?
Responsible use and management of assets is a core element in responsible business conduct. We see ‘assets’ as meaning both tangible assets, as well as intangible assets and information. In UPM, we believe financial resources hold great potential in promoting sustainable development, and strive to realize this ambition through responsible sourcing activities and green, responsible investment projects. In terms of intangible assets, information security is a key part of good governance, and something we ensure in our own operations and require from our suppliers.
UPM sourcing and procurement professionals are expected to actively promote responsible use and management of assets among their suppliers, particularly in relation to responsible sourcing activities.
What does this mean for UPM’s suppliers?
We expect our suppliers to use and manage assets responsibly. ‘Assets’ in this instance is to be understood as both tangible assets, and as intangible assets and information. Accordingly, responsible use and management of assets encompasses responsible sourcing and responsible finance and investment activities, as well as diligent handling and protection of intellectual property and information.
In relation to responsible sourcing, we expect our suppliers to ensure sufficient environmental, social and governance performance of their own suppliers, as described in UPM Supplier and Third-Party Code. In investment decisions, we expect our suppliers to engage in a thorough assessment of environmental and social impacts of the investment, and to consider the triple bottom line of economic, environmental and social gain, rather than sole economic outcome.
