Kurita Water Industries Ltd.

1stESG Briefing
Creation of Shared Value with Society at Kurita(Securities code: 6370)

March 19, 2021

Contents
1

Philosophy of Value Creation at Kurita

p1-7

2

Building Systems for Value Creation

p 8 -24

1

Philosophy of Value Creation at Kurita

Michiya Kadota
President and Representative Director

History of Value Creation
Contributing to the provision of value to customers and the resolution of social issues
in the areas of water and the environment
Net sales

2017/2019
Acquired water treatment-relatedcompanies in the United States(billion yen)

300.0

1949
Founded as a company in the Water
Treatment Chemicals business (boilerwater treatment chemicals)

1965

1975

2002

2015

Expanded into process
treatment chemicals

Established an overseas company for theWater Treatment Chemicals business inBrazil

Launched ultrapure watersupply business

Acquired a water treatment
chemicals business in Europe

200.0

1951
Entered the Water Treatment
Facilities business

1973

1991

Entered the semiconductor
industry segment

Launched soil
remediation services

2019/2020
Investment in Pentagon Technologies
Group, Inc., which operates a toolcleaning business in the US

100.0

1958

2020

Expanded intomaintenance services

Conclusion of share transfer
agreement with a Middle Easternwater treatment chemicals company

0.0
1961
Listed on the Tokyo Stock Exchange
and the Osaka Securities Exchange

1949
Founded (Kobe)

1947
Economic andIndustrial history
Business
perspective

1955

1974
Head office built in Shinjuku, Tokyo

1973

2012
Relocated head office toNakano, Tokyo

1991

2010

Post-warrecovery periodHigh economic growth period

Stable growth period

Information society development
periodPeriod of IoT advancement

Industrial watertreatment

Response to environmental
regulations

Contribution to improvement ofproductivity

Energy saving and reduction of waste
Response to new environmental
regulations

Collection and reuse of resources
Acceleration of global expansion
（M&A）

1

What the Corporate Philosophy Means
The Kurita Group expresses its intent to create shared value with society through its business

Study the properties of water, master them, and we will create an environment

Establishment of atechnology-based
company pursuingon waterRealization of asustainable society

in which nature and man are in harmony

Reduction of theenvironmental impact
caused by humans

2

Establishment of CSR Promotion SystemPlacing CSR at the center of management to realize sustainable growth
Movements of the United Nations,
governments, and the finance industry

Movements of capital markets

Establishment of ESG information
infrastructure• UN Principles for ResponsibleInvestment• Stewardship Code• International standards and guidelines• Sustainable Development Goals(SDGs)• Investment decisions
considering ESG• ESG evaluation organizations• Paris Agreement and the like

• Increase in ESG disclosure bycompanies

A policy and promotion organization for CSR is necessary to obtain business opportunities
and competitive advantages

Established E&S Committee (Secretariat: CSR Section) in 20173

CSR at the Center of Management
CSR Policy
Provide solutions to issues related to water and the environment, and fulfill responsibility for the future

Basic themes
1. Provide highly safe services andproducts

Growth opportunity themes
4. Solve issues related to water
resources
5. Realize sustainable energy use

2. Conduct fair business activities

6. Reduce waste
3. Respect human rights

Reduction of risk
Lowering of capital cost

7. Advance industrial production technologies

Enhancement ofcorporate value

Creating of shared value with society

CSV
4Toward the Creation of Shared Value with Society
Provision of value starts from social issues

Customers

Social issues

Depletionof water
resources

KuritaGroupClimatechangeBusiness
partners

Decrease ofnaturalresources

5Creating solutions and business models that address social issues
Kurita of the past
Industrial water
treatment

Kurita of the future

Response toenvironmental regulations⚫ Have points of contact with sites atindustries and society

Contribution toimprovement ofproductivity

Collection and reuse ofresources⚫ Visualize and utilize “water knowledge”
Response to newenvironmental
regulations

Energy saving andreduction of waste

UtilizationofAI and IoT⚫ Merge a wide range of technologies
inside and outside the Group⚫ Had diverse points of contact with sites⚫ Accumulated experience related to water in industry⚫ Possessed comprehensive products and services

Create solutions and business models that respond toindustry and regional characteristics and social issues

6Transforming the COVID-19 Pandemic into an Opportunity
Kurita's own transformation is an urgent need
COVID-19 pandemic
Accelerating transformation

Reaffirmation

Risk management⚫ Environmental
awareness⚫ Virtual⚫

Sustainablesociety

StructuralchangeSolutions

Requirements

Requirements

Customers’ business
continuity

BCP⚫ Work styles⚫ Remote monitoring⚫ Automation⚫

Changesin needs

Solutions

Verify what
Kurita’s businessshould beRequirements

Kurita’s contribution

Social issues

7

2

Building Systems for Value Creation

Kosuke Arai
General Manager
Corporate Communications and CSR Department,
Corporate Planning and Control Division

Establishment of CSR Policy
Formulate a CSR Policy from both defense (preventing impairment of value) andproactive (competitiveness) perspectives
CSR Policy

Reaffirmation of Corporate Philosophy
CSR Definition and Initiative Objectives

Provide solutions to issues related to water and theenvironment, and fulfill responsibility for the future

Priority themes

Consideration of Priority Themes(Materiality)
Large

Basic themes
1. Provide highly safe services andproducts

The Kurita
Group’s impact
on society

Cluster of30 themes
consideredalong two axes

Large

Stakeholder expectations

4. Solve issues related to water
resources
5. Realize sustainable energy use

2. Conduct fair business activities
6. Reduce waste
3. Respect human rights

Small

Growth opportunity themes

7. Advance industrial production
technologies

CSV
8Framework for CSR Initiatives
CSR Policy
Individual activities

Activity organizations

1) Corporate governance2) Product and service liability
3) Fair business practices
4) Respect for human rights
5) Appropriate labor practices6) Environmental improvements7) Corporate CitizenshipResults⚫ Kurita Group HumanRights Policy⚫ Kurita Group
Environmental Policy

1) Board of Directors
2) E&S Committee
3) Divisions and Group
companies

Disclosure

Business policies

and other businesspolicies

Stakeholder
engagement

Verification andimprovement
9CSV at the Core of CSR Promotion
Promotion of CSV business aimed at the realization of corporate philosophy
Corporate philosophy indicating
creation of social value in “water and the environment”
Integration of business andenvironmental improvement activities

Start of operation of CSV business
Establishing a competitive advantage in water saving,
CO2 reduction, and waste reduction

CSV Business Selection Standards
CSV businesses demonstrate the following standards with regard to water-saving, CO₂ emissions reduction and waste reduction:1) Significantly more effective than previous orcompeting technologies.

2) New technologies or applications of existing
technologies in new markets.

3) Contribute to action plans aimed atachieving the SDGs.
10System for Promotion of CSV Business
Creation of mechanism for the Groupwide promotion of CSV business

External evaluations
and helping solve
issuesSocialissues

Internal Environmental
Impact Reduction

The Kurita Group
Total Solutions

WaterNew Products

Environmental Improvement
at Customers
SelectAlliances

CO2

Waste
Sharedvalue

Achievements

CSVbusiness
Higher Earnings

Internal/
External Awards

Awards1) Significantly more effective than previous orcompeting technologies.
2) New technologies or applications of existing
technologies in new markets.
3) Contribute to action plans presented in theSDGs.

KPI Management

E&S Committee

ExecutiveCommittee
11CSV Business and Orders Received
Principal products, technologies, and business models
Wastewater treatment 3S solution using coagulation sensors

Solution model

System for improving productive operating rate and enhancing environmental sanitation for thepapermaking process
Recycled water supply service
Dry and wet methane biogas power generation

Non-solution model

Percentage ofconsolidated sales⚫

Soil and groundwater source purification
technology⚫

Slime anti-adhesive technology⚫

Low environmental impact water treatment
systems

Low-pressure boiler chemicals⚫

Pure water supply service⚫

Products containing DReeM Polymer⚫

Tool cleaning⚫

Products containing highly concentratedpolymer⚫

Chemical cleaning⚫

Dropwise condensation technology⚫

Reverse osmosis membrane chemicals⚫

Incinerator chemicals⚫

Chemicals for automotive painting booths⚫

Orders receivedApprox.

37.0 billion yen(Year ended March 31, 2020)

Year ended March 31, 2020

Year ending March 31, 2021 target

Year ending March 31, 2023 target

14％

15％

20％
12

Example of CSV Business (Water Saving)
Service contributing to significant reduction of wastewater in factories
What is the CORR System?

Recycled water supply service

Facility (CORR System) - Kurita asset -Maintenance agreement

Servicecontracts

Initialinvestment
not required

A standard wastewater retrieval Facility
contributing to stable water quality and stable
operation with low facility costs by optimizing
functional agents/materials according to raw
water quality.

Remote monitoring system

Value provided to customer⚫ Water saving⚫ Stabilization of treated water quality⚫ Labor saving in operation and management

13

Example of CSV Business (Reduction of CO2 Emissions)Improving thermal conductivity by transforming water membrane that creates thermal resistanceinto droplets during condensation of steam
Mechanism of Kurita dropwise technology

Comparison with existing technology

Activeingredient

Heat

After application

Heat

Steam

Existing approach

Kurita dropwise condensation
technology

No waterrepellency

With water
repellency

Improved water
repellency

Metal surface

Steam

Value provided to customer⚫ Reduction of CO2emissions⚫ Improvement of productivity

14

Example of CSV Business (Reduction of Waste)
Wastewater treatment 3S (Stable, Secure, Saving) solution using coagulation sensors

Volume of wastewater treatment
chemicals used

If a fixed volume ofchemicals is used

If the volume of chemicals used
is controlled using sensors

Volume of waste generated fromwastewater treatment chemicals

Value provided to customer⚫ Reduction of volume ofchemicals used
⚫ Reduction of waste

The volume of chemicals canbe reduced⚫ Stabilization of treated water
quality
ConventionallyAfterapplication⚫ Labor saving in operation andmanagement

The appropriate volume of chemicals
used varies depending on the state ofoperation of the customer’s factory

TimeLess chemicals
Less waste

15Initiatives to Address Climate Change (Evaluation of Risks and Opportunities)
Evaluation of risks and opportunities based on the TCFD’s approach, and establishment ofmeasures to address theseType

Risks and Opportunities
Risk
Risk

Policy and legal

Opportunity

Technology

Risk
Opportunity

Risk

MarketOpportunity

Risk
Risk

Physical Risks

Opportunity

Resource
Efficiency

Opportunity
Opportunity

Opportunity

Energy Source
Products andServices
Resilience

Opportunity

Opportunity
Opportunity

Risk
Opportunity

Introduction or increase of carbon tax
Regulations for products and services with high GHG emissions
Dissemination of supportive policy incentives to the conversion to energy with low
GHG emissions
Substitution of existing products and services with lower emissions options

Measures of the Kurita Group• Low carbonization of products and services by utilizing digitaltechnology and reviewing design, etc.
• Reduction of Scope 1 and 2 emissions by switching toalternative fuels and renewable energies

Decreased demand from fossil fuel-related sector
Increased demand in the electronic industry due to the acceleration of DX
Soaring costs of material and energy• Development and expansion of renewable energy-related
businesses such as biomass power generation

Increased factory shutdowns and construction delays due to extreme weather
events such as cyclones and floods
Increased operating rate of cooling equipment• Continuous strengthening of business continuity inpreparation for natural disasters such as flood control

Dissemination of efficient production and distribution processes
Reduction of water usage
Dissemination of energy with low GHG emissions
Conversion to distributed energy resources
Increased demand for products and services with low GHG emissions
Increasing diverse technical needs for reducing GHG emissions• Utilization of digital technology and development of low power
technology• Development and expansion of renewable energy-related
businesses such as biomass power generationSubstitution and diversification of fuel and water resources
16

Initiatives to Address Climate Change (CO2 Reduction Targets)
The “Well-below 2℃ standard” has been set as a long-term target
using the year ended March 31, 2020 as the base year according to the method indicated by SBTi

Priority theme in CSR Policy

5. Realize sustainable energy useIndicatorYear ending
March 31, 2023

CO2 emission reductions at customers– CO2 emissions from our business activities

Long-term targets
Year ending
March 31, 2031

Year ending
March 31, 2051

10,000t——

Scope 1 and 2 emissions reduction(Reduction rate from Year ended March 2020)

—

27.5％

100％

Scope 3 emissions reduction(Reduction rate from Year ended March 2020)

—

27.5％

—

17

Initiatives to Address Climate Change (Schedule for Reaching Targets)
Scope1,2
27.5% reduction(Year ending
March 2031 target)

Percentage ofemissions(Year endedMarch 31, 2020)

Scope1⚫

Gradual replacement of gasoline-powered vehicles with electric vehicles and the like⚫

Replacement of fuel with renewable energy

0.3%

⚫

Scope2

Use of renewable energy for power used at businesslocations0.8%⚫

Scope3

Scope1,2100% reduction(Year ending
March 2051 target)

Measures to reduce Scope 2 not derived from power⚫

Transformation of products and services provided and business⚫

Reduction of Scope 3 through promotion of CSV business⚫

Change in external environment (customers’ shift to renewable energy)

98.9%

Scope3
27.5% reduction(Year ending
March 2031 target)
18

Initiatives to Address Climate Change (Implementation Structure)
Implementation structure with commitment by Board of Directors
Board of Directors
Overall supervision of initiatives to address climate changeInstructions

ReportingInstructions

Divisions, Group companies, committees

E&S Committee
Overall management of initiatives to address climatechange, consideration of new measures

Coordination

Implementation of measures

Consideration of new measures

Disclosure

Continuous improvement ofdisclosure by referring to TCFD,GRI, SASB, etc.

Confirmation of progress of measures

Stakeholders
19

Initiatives to Solve Issues Related to Water Resource (Participation in WRC)
Effective implementation through coordination
with environmental improvement activities based on CSR Policy
Water Resilience Coalition
Global water resilience

VisionPledgeAchieve a measurable and net
positive impact in water-stressed*basins on availability, quality, andaccessibility through industryleading water operations and basin
initiatives

Building a water resilient world for our communities, our ecosystems, ourcompanies, and the global economy.

*A situation in which the maximum available water resource per head of population is less than
1,700 ㎥/year.

Founding members (9 companies)
◼
◼
◼
◼
◼

Anheuser-Busch InBev
DiageoPVH
GapMicrosoft

◼
◼
◼
◼

Cargill
Dow
Ecolab
KuritaDevelop, implement, and enableleading impact-based water resilience
practices across the global valuechain.

Raise the global ambition ofwater resilience through publicand corporate outreachMembers (9 companies)

Participatingcompanies◼
◼
◼
◼
◼

Coca Cola
Woolworths
Cummins
Levi Strauss
Intercontinental Hotels Group◼
◼
◼
◼

DanoneColgate-PalmoliveHeineken
GlaxoSmithKline(As of January 31, 2021)
20

Initiatives to Solve Issues Related to Water Resources(WRC Implementation Structure)
Initiatives are promoted through the Leadership Committee andthree working groups
Overview of operating structure and initiatives
Leadership Committee
Collective Action
Working Group⚫ Basin selection which WRC will
promote initiatives⚫ The Kurita Group will begin
activities in North America in theyear ending March 31, 2022

⚫ Establishment of short-termtargets and strategies until 2023
⚫ Formulation of medium-termtargets for 2030 and 2050
Communications & Recruitment
Working Group⚫ Holding collaborative campaigns
and events in the areas of waterand health⚫ Encouraging other companies tobecome members

Metrics & Tracking
Working Group⚫ Definition of water stress aimed at
the creation of a global standard
on water resource preservation⚫ Development of tools enabling
self-evaluation associating thelevel of companies’ water
management systems with SDGs

Workshops

21

New PDCA for Promotion of CSR
Added “external organizations” to PDCA cycle due to participation in WRCPlanDirectors ofKurita◼ Formulate medium-term

E&S
Committee◼ Identify group-wide tasks

Variouscommittees, eachdivision of Kurita,
each Group
company
Externalorganizations

Do◼ Implement measures in lightof tasks related to individual
activities on CSR andmedium-term management
plan/business plan.

◼ Active participation inplanning processes ofexternal organizations

Action◼ Check and evaluate results ofindividual activities on CSR.
◼ Recognize and accept
stakeholders’ expectations,concerns, and requests.

management plans/businessplans plans by reflecting
group-wide tasks related toCSR initiatives.

related to CSR initiatives
and formulate the CSR
Policy and KPIs.

Check◼ Check the progress of◼ Consolidate the results ofindividual activities on CSR.
◼ Disclosure information
related to CSR.
◼ Have dialogues withstakeholders.

individual activities on CSR.
◼ Evaluate and analyze theresults of individual activities
on CSR based on
stakeholders’ expectations
and concerns.

◼ Carry out the individual◼ Evaluate and analyze theactivities on CSR.
◼ Report the results of individual

results of individual activities
on CSR.

activities on CSR to the E&SCommittee.
◼ Have dialogues withstakeholders.

◼ Check stakeholders’◼ Implementation of activities◼ Confirmation of consistency inin coordination withexternal organizations◼ Review CSR Policy andCSR-related KPIs.
◼ Outcomes of activities andimprovement measures
reported to Board ofDirectors.
◼ Review measures onindividual activities on CSR.

expectations and concerns.

direction as to activities ofexternal organizations andKurita’s CSR Policy◼ Reconsideration ofcontinuation of activities inrelevant external organizations
as needed22

Status of ESG Evaluation (As of March 2021)
Inclusion in ESG Indices
FTSE4Good Index Series

FTSE Blossom Japan Index

MSCI ACWI ESG Leaders Index

The MSCI Japan Empowering
Women Index (WIN)SOMPO Sustainability Index

Evaluation by ESG ratings organization

Evaluation by supplier evaluation organization

ISS-ESG

EcoVadis* The inclusion of Kurita Water Industries Ltd. in any MSCI index, and the use of MSCI logos, trademarks, service marks, or index names herein, do not constitute a sponsorship, endorsement, or promotion ofKurita Water Industries Ltd. by MSCI or any of its affiliates.
The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.
23

Disclosure Issue
Disclosure representing the Kurita Group’s value creation⚫ Disclosure in accordance with TCFD proposal

Issue⚫ Previously referred to GRI standard⚫ Will refer to SASB items and indicators in future

It may not be possible to appropriately express the value created by theKurita Group simply by conforming with standards⚫ Focus also on integration of multiple frameworks

Original indicators
Continuous improvement ofdisclosure“Reduction of customers’
environmental impact”“Kurita’s environmental impact”

Association withvalue creation story
24

Forward-looking Statements
The plans and values contained in this document are decided based on information available at the present time. They
contain risks and uncertainties, and therefore may differ from actual results.

* Trademarks (products, services, logos) used in this document belong to the Company or to owners who
have approved the Company’s use of the trademarks.