Megatrends such as population growth, urbanisation and climate change are placing strain on the Earth’s carrying capacity. UPM developed its Biofore strategy as a smart response to global sustainability challenges.
Kari Ståhlberg, UPM’s Executive Vice President, Strategy, believes the challenges related to the Earth’s carrying capacity can be overcome. Natural resources are used and recycled more efficiently than before, which helps to satisfy the growing demand associated with population growth and higher living standards.
“I believe that the world will continue to go forward and become a better place for us all to live in. Higher living standards in China and other developing economies do not affect western countries negatively,” says Ståhlberg.
UPM follows global megatrends closely because they create both challenges and new opportunities for the company. For example, urbanisation, the growing middle class and the increased purchasing power of consumers have a positive effect on UPM’s business.
“They increase the demand for pulp, hygiene, wood and label products especially in developing economies.”
Ahead of the curve with Biofore
Business based on renewable and recyclable raw materials is at the core of UPM’s Biofore strategy. Ståhlberg believes this to be a solid foundation for the future.
“For a long time now, UPM’s businesses have been on sustainable ground. It helps us to answer the pressure for change and gives us a competitive advantage.” The fight against climate change received an encouraging boost from the Paris Climate Conference in December 2016. UPM has joined the fight by developing bio-based fuels to replace fossil energy sources producing emissions.
The company also produces biocomposites and bio-chemicals to replace oil-based materials.
These products create added value and may be a significant source of growth in the future.
“UPM’s strong balance sheet and income stream enable us to invest also in riskier prospects that may become new growth sectors in the future.”
Ståhlberg points out that retaining competitiveness requires continuous improvement of cost efficiency and productivity.
“UPM has shown that it is possible for a company using renewable raw materials to continuously improve its productivity.”
Ståhlberg notes that the revenue per hectare of forest plantation has increased significantly.
“By increasing productivity, we are able to spread wellbeing among the owners, employees and the surrounding society.”