Nippon Paint Group
Medium-Term Plan(FY2021-2023)
Progress Report
March 16, 2022
Yuichiro Wakatsuki
Representative Executive Officer & Co-President
Nippon Paint Holdings Co., Ltd.

3. Sustainability
Strategy3-1. Establishing an Autonomous Sustainability Structure
Strengthen the link between autonomous sustainability activities and business operations
Aim of Restructure

Board of Directors• Form four global teams with experts from eachpartner company who have business expertise• Direct reporting line to the Co-Presidents• Self-motivated sharing of best practices fromeach country and each partner company’s• Sustainability team to share the capital markets
and legal disclosure trends

Representative Executive
Officers & Co-Presidents
Sustainability Team

GlobalTeam

Scope

Innovation & ProductStewardship

Environment & Safety

People & Community

Governance• Minimize the carbon
footprint• Promote sustainableproducts• Ensure the safety ofemployees andstakeholders

Invest in the wellbeing of ouremployees, as well as
tp build and enable
better communities forall our stakeholders• Drive innovation
towards UN SDGs
and carbon
neutrality

Ensure the latest
governance system
as a listed company,
including integrity,internal control, andrisk management

DuluxGroup
Brad Hordern

NIPSEA
Gladys Goh

NIPSEA, NPCS
Hong Jiang

NPHD, NPCS
Yuri Inoue

TeamLeader

Outline of New Structure• Global team✓ based on materiality※• Global team leaders✓ directly report to the Co-Presidents,
who report to the Board of Directors✓ promote various initiatives involving thepartner company representatives※Governance team to discuss the best direction for enhancing our good governanceand autonomy in line with each materiality33-2. Progress & Further Plan of Materiality ①Deepen our activities based on the progress made in FY2021
MaterialityRisk••

Climate change••

Resources andenvironment•••

Safe people
and operations•

Enforcement/change of policies
and legal regulations such as
introduction of a carbon tax
Impact on production andshipment from extreme weather,such as typhoons and heavy
rainfalls, that are becoming
increasingly common in recentyears
Changes in customer behavior
toward transition to a
decarbonized society

Impact on business activities
from depletion of energy andwater resources
Tightening of regulations onwastes and increase of waste
disposal cost
Changes in customer needs
related to raw materials

Significant impact on operations if
a major accident occurs at a
production site
Impact on safety assurance due
to changes in manufacturing
processes accompanying
substantial increases inproduction

Opportunity

Progress•••

Expansion of the market forenvironmental products, such as
products contributing todecarbonization
Development of new businesses
through research anddevelopment

•
•

•

•
•

•

•

Expansion of the market forenvironmental products
Enhanced competitiveness byadvancing recycling
technologies, improving
resource efficiency, and utilizing
diverse raw materials

Improving worksite safety andhygiene by sharing bestpractices and education plansfrom around the world
Improving employee motivation
and Company competitivenessfor acquiring human resource
talentEndorsed the TCFD final report recommendations
and commenced disclosure in accordance withthe framework
Calculated the potential financial impact of acarbon tax
Agreed global target for GHG emissions
reduction※1 via each partner company developing
targets that meet or exceed local government
targets
Calculated Scope 3 GHG emissions※2

Further plan•••••

Developed and disclose global policy statement forresources and environment(e.g. waste and effective use of resources, water)•••

Developed global policy statement for safe peopleand operations(e.g. occupational safety and health)※1 Scope1 & 2; intensity basis※2 Disclosed Scope 3 GHG emissions from our operations in Japan in the Integrated Report•

Identify each partner company’s top climate changerisks and opportunities (high level scan) andpotential actions
Identify each partner company’s carbon reduction
action plans and develop consolidated group view(H1 2022)
Agree objectives for common priority focus areas(e.g. energy efficiency, renewable electricity sourcing,vehicle fleet replacement) and implement

Identify each partner company’s top resources andenvironment impacts, improvement priorities, andperformance measures
Agree common priority focus areas (e.g. wastereduction) and objectives for 2022/2023 andimplement

Identify each partner company’s top safety risks,
improvement priorities, and performance measures
Agree common priority focus areas (e.g. fire andfatality prevention) and objectives for 2022/2023
and implement43-3. Progress & Further Plan of Materiality ②
Deepen our activities based on the progress made in FY2021
MaterialityRisk•Diversity &Inclusion••

Growth withcommunities•

Difficulty of securing humanresources that satisfy diversity
requirements with a decrease in
the university graduatedpopulation
Slowing of business activities
that reflect diversity in customer
needs

Significant damage to thecorporate brand if the company
is not perceived as a corporate
citizen by local communities
Damage to the public image ofthe paint industry caused byinadequate activities oriented
toward the local community

Opportunity
••

•

••

Innovation fora sustainable
future•Significant hindering to future
corporate earnings owing toinability to generate innovation
due to slow response to newmarkets•

Securing diverse and competenthuman resource talent as a
global company
Creating wealth for companies,workers, and local communities
by creating diverse and inclusive
organizations

Improving public awareness ofthe corporate brand throughvalue chain investment incommunities
Promoting the sound growth ofcommunities through social
contribution activities to increase
the positive public view of ourGroupExpansion of market for productsthat contribute to controlling andadapting to climate change
Products and services thataddress social issues contributesignificantly to society and help
boost corporate earnings in thelong term

Progress••••••••

Confirmed the difference of the situation by eachcountry and region
Disclosed the educational programs on a global
basis

Established “NIPPON PAINT Group Global Outreach
Program” as common framework followed NIPSEACSRNIPSEA established the concept "Colouring Lives"to have a bigger impact for the whole CSR activities
as a groupAggregated the sustainable products globally in2021
Developed the Anti-Viral Paint Products across thegroup
Promoted open innovation with several 3rd parties
Initiatives regarding Chemicals of concern/LCA※1 insome companies※1 Life Cycle Assessment: A method of quantifying the environmental impacts across the entire life cycle of a product※2 Our unique framework that integrates the sustainability perspective in product development

Further plan•••

Formulation of human rights policy
Implementation of human rights risk assessment
Global data aggregation for the human capitalmanagement disclosure••Promote quantification of activities
Promote CSR activities and data aggregation underthe NIPSEA's concept "Colouring Lives" globally•••••

Define the sustainable productDevelop and implement Green Design Review※2
Formulate strategy and roadmap
Strengthen the control of Chemicals of concern
Develop and leverage LCA※1 capability

53-4. Specific Initiatives for Net Zero CO2 Emissions
Identify specific issues and measures in each region toward net zero target
Group’s CO2 emissions reduction target※Japan• Agreed Japan targets of 37% carbon※ reduction by 2030 from 2019 levels, plus net zerocarbon※ by 2050
• Purchase renewable energy in Japan. (100% renewable energy at Osaka headquarters inFY2021, approx. 7% of electricity used in Japan in FY2022. Afterwards, increase gradually• Consider energy-saving and use of renewable energy to reduce the impact of carbon taxes• Implement energy-saving (ex: heavy oil to LNG)NIPSEA Group (Asia)

Dunn-Edwards (U.S.)• Discussed scope, financials, and timeline for new corporate
office to operate on generated renewable energy• Committed to reducing energy usage at new corporate officethrough efficient lighting, EnergyStarTM equipment, and enhanced
systems• Committed to providing electric vehicle charging resources toselect facilities within the next 4 years• Committed to adopting software by Q2 2022 to trackcompany-wide Scope 1, 2, and 3 emissions in order to achieve
true metrics for net zero carbon※ by 2050

※Scope1 & 2• Formulated NIPSEA Green Plan 1.0, the movement to advance the agenda on sustainable
development – Profit, People, Environment• Carbon intensity (kgCO2/ton) reduced by 15% in 2021 mainly by the new solar projects and lessenergy consumption• Installed solar panel in several plants in FY2021 and saved cost. Other plants follow• Implemented the green production including batch cycle time reduction, maximization of batch size

DuluxGroup (Oceania)• Achieved a 5% reduction in energy consumption and 5% reduction in carbon ※ emissions, ourlowest levels on record• Agreed DGL targets of 50% renewable energy consumption and 50% carbon ※ reduction by 2030,
plus net zero carbon※ by 2050
• Commenced development of detailed action plans to achieve the 2030 targets, with plans to befinalised early 2022
• Commenced pilot program of specialist energy efficiency studies at 2 factories to identify
reduction opportunities

63-5. Specific Initiatives for Innovation
Anti-Viral Paint Products in the Nippon Paint Group that contribute to our business2020 2Q
2020 3Q
2020 4Q
2021 1Q▶ Singapore▶ Malaysia▶ Japan▶ China

VirusGuard+ Antiviral Coating

VirusGuard Anti-viral Coating

PROTECTON series

ClearShield

INTERIOR PAINT PREMIUM (PIAJ※1)
INTERIOR WALL VK-200 (PIAJ/SIAA※1)
INTERIOR WALL VK-200 FOR DIY (PIAJ※1)
INTERIOR WALL VK-500 (PIAJ/SIAA※1)
BARRIERX SPRAY (PIAJ/SIAA※1)
INTERIOR WALL VK COAT
FLOOR VK CLEARCAR INTERIOR VK COAT

Target Virus: 229E/H1N1

Target Virus:
229E/FCV/H3N2/EV71/SARS-CoV-2

Target Virus: 229E/H1N1/Coxsackie A16※1 Certification
SIAA (Society of Industrial-Technology for Antimicrobial Articles)
PIAJ (Photocatalysis Industry Association of Japan)※2 Certification
CIAA (Chinese Industry alliance for AntimicrobialMaterials and Products)※27