1. OPPORTUNITIES FROM
ENVIRONMENTAL
SUSTAINABILITY
Philippe Riebel
VP Environmental Affairs
UPM-Kymmene Corporation

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Contents
• About UPM
• The Biofore Company
• Opportunities from sustainability
• Examples
- Effluent management
- Water Footprint
- Sustainable biomass
- Energy efficiency and carbon footprint
- Enhanced revenue generation
• Sustainable Paper Advantage
• Eco-labels
• Summary

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UPM Today
• 24,000 employees
• Sales 9.5 billion euros (2008)
• Three business groups:
• Production in 15 countries, worldwide sales network
• Listed in the NASDAQ OMX Helsinki stock exchange
Finnish pulp mills
Hydro power assets
Shares of associated
companies in pulp and
energy
Biofuels
Forests & Timber
Magazine
Fine
Newsprint
Speciality papers
Labels
RFID tags and inlays
Plywood
Wood plastic
composites
Energy and pulp Paper Engineered materials

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VISION
PURPOSE
We create value from renewable and
recyclable materials by combining
expertise and technologies within
fiber based, energy-related and
engineered materials businesses.
We reshape markets through cost
leadership, change readiness and
leading innovation
As the frontrunner of the new forest industry UPM leads the
integration of bio and forest industries into a new, sustainable
and innovation-driven future.
UPM - The Biofore Company.

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The
Biofore
Company
The integration
of bio and forest
industries
Sustainable and
innovation-driven
Renewable raw material
Low CO2 emissions
New bio-based products
Recyclable and renewable products
Carbon locked in the products
New approach to biomass value chain

6. 6 | © UPM Source: FIFF
Bio-based products
have substantial markets
Wood-based biomass procurement and logistics
Bioenergy – heat and electricity
for industry and households
Biofuels for transport
Biomaterials
Biochemicals
Nano
products
Added value
Volume
grows
Second generation
biodiesel: emissions
85% lower than with
fossil fuels
Pulp, paper, plywood and timber products
e.g. bio oil and
bio ethanol
e.g. composite
products

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Some UPM Examples
• Existing UPM products are based primarily on
renewable raw materials (wood), and they are
recyclable
• New sustainable businesses and products
- UPM ProFi wood-plastic composite (Finland and Germany)
• Renewable and bio-based energy production
(study phase)
- 2nd generation bio-diesel from forest residues,
used as transportation fuel
- ~ 85% less CO2 emissions compared to fossil fuels
- Only non-food raw material are used

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Opportunities from
Environmental Sustainability
1. Risk Mitigation
• Preventing risks by effective environmental management
• Engaging in key forums to ensure sustainable regulations and standards
• Applying best practices consistently in all regions of the world
2. Cost Reduction
• Direct cost reduction due to higher efficiency (ex: energy, water)
• Lower product costs due to eco-design over the product life-cycle
3. Revenue Enhancement (new business and markets)
• Environmental performance and services
• New sustainable products
• Effective communications and marketing
Cost
Cost
Sales
margin /
Revenue

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9
OPPORTUNITIES
FROM
SUSTAINABILITY
Examples

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Example 1:
Effluent Management
Key Area: WATER
Topic
• Ensuring proper operation of biological effluent treatment plant
following process interferences in the pulp and paper mill
Action
• Environmental management system
(ex: certified to ISO 14001 standard)
• Risks identified and ranked
• Operational procedures in place
• Operator and management training done
• Investments in infrastructure and monitoring
Opportunity
• Effective reaction, less down time and lower cost
• No legal issues and no image risks

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Example 2:
Water is the next Carbon
Key Area: WATER
Topic
• Freshwater scarcity and management is a
rapidly growing global challenge
• Water footprint standards development
Action
• Water Footprint Pilot Project launched at UPM
Nordland paper mill with the Water Footprint
Network – Case Study
Opportunity
• Developing internal expertise
• Contributing to standard development
0
10
20
30
40
50
60
98 99 00 01 02 03 04 05 06 07 08
per tonne of chemical pulp
per tonne of paper
m3/t
Process wastewater volumes per
tonne of paper or pulp produced

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Example 3:
Sustainable Forest Biomass
Key Area: BIODIVERSITY
Topic
• Ensuring availability of biomass raw material to operate the
UPM Caledonian paper mill biomass energy plant built
in Scotland in 2009
Action
• Promote stump biomass harvesting and increase know-how among
staff and stakeholders
• Created operating instructions, guidelines and harvesting protocol
• Address concerns: soil, water, biodiversity, carbon
• Influenced how biomass harvesting is considered as part of forest
certification
Opportunity
• Secure approval of authorities
• Secure raw material for carbon-neutral energy production

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Example 4:
Energy Efficiency
Key Area: CLIMATE
Topic
• Cost of fossil fuels, electricity, EU Emissions Trading Scheme
Action
• More energy self-sufficient , 40% higher production capacity
since 1997
• Renewable energy and best-available-technology investments
(over €1 billion in 10 yrs)
• 12 modern biomass energy plants built since 1990
• 3 pulp mill recovery boilers modernised
• Internal energy audit program
Opportunity
• Lower energy costs, opportunities to sell power & steam
• Sell carbon allowances on EU ETS
• Lower carbon footprint (more attractive products)

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Carbon Footprint Reduction
Key Area: CLIMATE
Since 1990, fossil CO2 emissions per tonne of paper have decreased by:
→ 40 % in UPM Globally → 64 % in UPM Finland
* UPM acquired
- Changshu and Miramichi paper mills in 2000
- Haindl paper mills in 2001
CO2 t/t
0
0,2
0,4
0,6
90 92 94 96 98 00 02 04 06 08
CO2 t/t
0
0,2
0,4
0,6
90 92 94 96 98 00 02 04 06 08

15. VALUE CREATION IN
THE MARKET PLACE

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Enhanced Revenue Generation
Example for Printing Papers
• A growing % of global customers are
integrating sustainability into purchasing
decisions
• Increased price can be obtained by up to
6% of customers and up to 6% by volume
• In some cases, it can generate the whole
order
Environmental performance, services and
effective marketing are essential

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2008 – Webby Award
Best Corporate Web Site
www.upmforestlife.com

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Example 5:
Advantage of Sustainable Paper
Key Area: SUSTAINABLE PRODUCTS
Topic
• Key customers are using product scorecards
- Paper Profile
- Environmental Paper Assessment Tool
• They cover the life-cycle of papermaking:
- Forest management, mill operations
- Purchased power, certifications
- Paper composition, …and more
Action
• Making scorecards and information available to customers
Opportunity
• Customers are including UPM's sustainability score as part
of their overall paper purchasing scorecard or decision
• Top score means more business for UPM

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Example 6:
Third-Party Eco-Labels
Key Area: SUSTAINABLE PRODUCTS
Topic
• Customers have specific requests regarding eco-labels,
which can influence business
- Ex: FSC, recycled fibre
• Independently verified environmental claims help customers
send the right message
Action
• Improve performance, label and market products
• Environmental services, sales and customer education
programs can influence decisions
Opportunity
• More business, competitive advantage

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Environmental Life Cycle of Paper
• UPM's target is to minimise the environmental impact of a paper
throughout its entire life cycle

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Why the EU Eco-label? (EU Flower)
• Covers key elements of the life-cycle, not only fibre
• Water and energy use
• Air and wastewater emissions
• Fossil fuel use
• Solid waste management
• Chemical use
• Requires good overall environmental performance
• An official label (EU Commission), third party
certified
• 100 UPM products are labeled

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Summary
• YES - Environmental sustainability can give a
competitive edge
• Sustainable products over the life-cycle is KEY
Renewable, Recyclable, Biodegradable
Climate (low carbon)
Water (sustainable use)
Forest (certified, maintain and increase biodiversity)
Waste (minimize and re-use)
• Marketing and communications (a must!)
Eco-labels
Sending a simple and effective message

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