Kurita Water Industries Ltd.

2nd

ESG Briefing(Securities code: 6370)

March 11, 2022

Table of Contents
1

Kurita's Corporate Governance Reforms

p 1-6

2

Human Resource Strategy for Value Creation

p 7-153

Creating Shared Value with Societyp 16-24

1

Kurita's Corporate Governance Reforms

President and Representative Director

Michiya Kadota

Management strategy transformation andcorporate governance reforms
What are needed to take risks proactively and decisively
Active cash utilization forgrowth investment⚫ Ample liquidity on hand

Transformation⚫ Firm balance sheet

Enhancing supervisionof management⚫ Overseas M&A⚫ Investment in ultrapure watersupply business and other service
contract-type businesses

Enhancing businessexecution capability

Corporate governance reforms

1Steps of corporate governance reforms
Systematization and implementation of measures based on policies
2015⚫ External Directors

Establishment of the Corporate
Governance Code⚫ Evaluation of the Effectivenessof the Board of Directors

Instilling awareness ofcorporate governancethrough dialogue withshareholders andinvestors
Around 2000 -Systematization of
corporate governancereforms through theestablishment of the
Corporate Governance
Policies
2014 - 2016

Identification of a wide
range of issues anddiscussions of the issues
at meetings of the Boardof Directors

Implementation of
measures andachievements from
corporate governancereforms

2015 -⚫ Enhancing the supervisory function⚫ Strengthening the Group’s businessexecution capability⚫ Developing management human resources⚫ Activities of the Investment Committee2Enhancing the supervisory function andbusiness execution capability
Reinforcing the supervisory function of the Board of Directors
and the executive officer system
Authorities and responsibilities ofexecutive officers(From FY ended 03/2019)

FY ended 03/2015 FY ending 03/2022

Top-level executives
Internal Directors

9 people5 people

who implement business execution
under the supervision of the Board of Directors

1-year

Appointment
External Directors

1 person

3 people
Performance-linked remuneration

Executive Officers

9 people

12 people

similar to that for directors

Evaluated by the Nomination ＆Remuneration Advisory Council3

Developing and selecting management human resources
Creation of a system for producing human resources on a long-term basis
Nomination & Remuneration
Advisory Council

Successor Planning Committee⚫ Performance evaluation anddeliberations on
remuneration⚫ Examination of election anddismissal

Members
External Directors
External Members of the
Audit & Supervisory
Board⚫ Selecting candidates⚫ Interviewing candidates

President⚫ External assessments⚫ Setting development plan

⚫ Requirements for election

Directors
Executive Officers
Management of Group companies

Senior General Managers
General Managers

Members
External Directors
External Members of the
Audit & Supervisory
Board

Selecting and developing future
candidates in addition to thecandidates for immediate next
terms from among diverse humanresources

Note: The president is included among the members of the Nomination ＆ Remuneration Advisory Council when nomination of and remuneration for personnel
other than the president are discussed. The president and executive senior managing director are included among the members of the Successor Planning
Committee for personnel other than the president are discussed.

4

Establishing Group governance
Enhancement of the Group's business execution capability inthe aspect of governance⚫ Reorganization of the Kurita Group Philosophy System
Revision of Corporate Vision
Improving Business Policy

Establishment of Basic Policies (CSR Policy, Human Rights Policy, etc.)⚫ Establishing Kurita’s Value Creation Story⚫ Establishment of the D&I Vision⚫ Introduction of Management
Monitoring System⚫ Process of nomination by the
Head Office⚫ Involvement of the Successor
Planning Committee in thedevelopment of management
candidates at overseas Group
companies

Nomination

AuditsGroup
companies
in Japan andother countries⚫ Introduction of a performancelinked remuneration systemthat is similar to the one for
officers of Kurita Water
Industries⚫ Consolidation of functions tomanage sales companies inJapan as shared services⚫ Establishment of regional
headquarters and transfer ofauthority

74 companies⚫ Evaluation based on KPI
common to the Group⚫ Evaluation of each company's
representative by the presidentof Kurita Water Industries Ltd.

⚫ Understanding of monitoring
results by the Board of Directors ofKurita Water Industries

SharedvaluesRemuneration
systemInternal
Control⚫ Introduction of the Group's
overall manager for each of thefunctions such as accounting,quality, and DX

Expansion through M&As
Group reorganization
5

Future direction
Implementing governance reforms that support
the creation of shared value with society

Redefining businesses based on social
issues and achieving sustainable growthMVP-22 medium-term
management plan

Establishing a rock-solid
earnings baseOrganizing a system that
supports business changes

Systematizing
corporate
governance reforms⚫ Enhancing supervisory function
from diverse perspectives

Establishing a system that
supports creation of social value
Enhancing measures to address
sustainability issues⚫ Adopting sustainability KPI to the
remuneration system⚫ Reinforcing the executive officer
system⚫ Developing managementhuman resources⚫ Establishing Group governance

Human resources managementof the overall Group6

2Human Resource Strategy for Value Creation

Corporate Planning and Management Office,Diversity and Engagement Department
General Manager

Mitsuhiro KokuraImportant capital for achieving
management strategies

Human resources are the driving force
supporting the value creation story.
Study the properties of water, master them, and we will create an environment
in which nature and man are in harmony.
Identifying
true issues

Technology
Development

Diverse pointsof contact
with sites

Waterknowledge
Operationof wide-ranging
businesses

Diversesolutions

Changing
society andindustries with"waterknowledge"

Maximizing
customer value

High profitability
and sustainablegrowthDiversebusiness models

Winning trust from
customers and building
a sustainable society

7

D&I Vision: Situation of the human resources and theorganization under the Corporate Vision
D&I VisionCorporate Philosophy

The corporate group that continues to create uniquevalue through interaction among diverse people whocare about water and the environment and who
accept each other’s differences.

PurposeValue Creation
Story

Diversehuman
resources andexperience

Trust from
customer andsociety

Sympathy
with our
corporatephilosophy

Corporate Vision“A Creator of unique value to thesolution of water and environment,"
contributing to the realization of asustainable society

D&I Vision

Situation of thehuman
resources andthe organization
under theCorporate Vision

Virtuous cycle as aresult of increase indifferences

Increase indifferences

Creation ofuniquevalue

Harmonization ofindividuality

Virtuous cycle as aresult of shared
value

Permeationof shared
valuesAt present

8Human Resource Strategy for Value Creation
Determining directions based on business strategy
and environmental changes
Human resources policy
A group of professionals in a range of fields who obtain joy from their contributions to customers, society andthe global environment through their work at the Kurita Group with their commitment to creating new value

Direction of the organization

Direction of human resources utilization

Organizational culture

Organizational Structure

Utilizing and securing
human resources⚫ Transformation into a group witha high level of engagement
where D&I has permeated⚫ The Group headquarters
oversees development,
technology, and other functions toimprove the level of operations.

⚫ Continuous enhancement ofactive participation of humanresources in technological fields
that support Kurita⚫ Active participation of locallyrecruited employees in countries
other than Japan⚫ Creation of new value by digitalspecialists who drive DX⚫ Changes in the ideas about Japanese-style
employment, such as the order of seniority andpermanent employment

Changes inthe external⚫ Diversification of work styles
environment⚫ Development of digital technologies andgrowth in demand for digital specialists

Personnel system⚫ Developing a human resources
system where the Group will have
two strengths: cooperation among
human resources and the active
participation of individuals who
possess a high degree ofexpertise

Expanding overseas businesses through M&A

Changes in
the internal Ratio of overseas
environment net sales
Ratio of overseas
employees

FY ended 03/2014

FY ended 03/2021

Approx. 20%

Approx. 40%

Approx. 20%

Approx. 50%

Value Creation Story
9

Initiatives for developing organizational culture
Driving behavior changes by permeating D&I
Steps of initiatives

Internal PR in the Group⚫ Distribution of video messages on D&I fromexecutive general managers of divisions

A culture which facilitates
Creating a team with a high creation of innovationlevel of engagement
Understanding D&I

Training and workshops for management-level employees⚫ Participation of 256 management-level employees of Kurita⚫ Promoting understanding of D&I and unconscious bias and eliminating boundaries between
organizations through discussion between management-level employees as a way of practicing
behavioral changes, thus driving the creation of conditions which facilitate collaboration⚫ Introduction of the D&I Vision, humanresource strategy, etc.

Workplace discussion⚫ Held at 212 sections of Kurita⚫ Relationship between D&I and operational innovations was discussed under the theme ofworkplace innovation to understand the current status of D&I at each section.

10

Providing opportunities for active participation ofdiverse human resources
Connection between people that creates unprecedented value
Diverse humanresources

Opportunities for active participation of diverse human resources(e.g., Project Acorn)
Knowledge

Experience

Interactions withpeople inside the Groupand external people

Knowledge
Experience

Skill

Skill

Career
profileNationality

Kurita Innovation Hub

New
Value

GenderAge

Experience
Knowledge

Skill

Organization
Company

Research institution

Area ofexpertise

Experience
Knowledge

Skill

Startups

11

Utilizing and securing engineers in technological fieldand digital specialists
Strengthening development of human resources who drive value creation
Engineers in technological field

Digital specialists

Technological fields that support Kurita
ChemicalFacilityBasetechnologies technologies technologies

Planning anddriving
strategies
based on DX

Design andproduction
technologies[27 major categories]

Businessmodel
development

Building
infrastructure
and providing
IT services

Utilization of Digital Technologies

Kurita-Technical Education Program
Collaborations

Medium- and long-term humanresources reinforcement and wellplanned successor development

Creating digital businesses
Group-wide utilization of skills,
knowledge, and experience

Deepening and developing
water treatment technologies

Collecting "water knowledge,"making it explicit knowledge,
and utilizing it

Driving DX

Creating outside-the-box solutions and business models that only Kurita could create
12

Utilizing and securing digital specialists
Creating businesses which combine diverse points of contact
with sites and digital technologies⚫ Assessment of quality of digital
innovators
Technical
training

Digitalspecialists
who can use
informationand data as theircompetitive strength

Securing
human
resources⚫ Learning design methods fortransforming business models andacquiring knowledge and skills
related to AI and data science⚫ Collaborations with startups andother external parties⚫ Mid-career recruitment of digitalspecialists

DrivingDX⚫ DX workshops for officers andexecutive employees
All employees andofficers of the Group

Improving
IT literacy⚫ IT mentor system⚫ Information security training⚫ Acquiring basic knowledge andskills related to IT literacy

13Future Initiatives

FY ending 03/2022

Organizational
cultureFY ending 03/2023

FY ending 03/2024

Launching initiatives for permeating D&I

Identifying issues through engagement surveys and making improvements

Strengthening the generation of executives from among locally recruitedemployees in countries other than Japan

Organizational
structure

Creating and providing opportunities for Group employees tounderstand Kurita's philosophy, etc.

Utilizing andsecuring
human
resources

Building a system for developing engineers in technological fields

Securing and beginning to develop digital specialists

Personnel
systemConsidering a personnel system which will permit active participation of diverse human resources
and shifting to the system

14System for promoting the human resource strategy
Promotion system to which the Board of Directors is committed
Board of Directors
Supervising overall initiatives related to the human resource strategy
Reporting

Divisions and Group
companies
Initiatives to develop
organizational culture

Cooperation

Instruction

General Manager ofCorporate Planning andManagement OfficeDriving and managing overall initiatives
related to human resources strategy

Instruction

Cooperation

Human Resources
Development Committee& DX Committee
Developing human resources withprofessional technologies or digital skills

Cooperation

PR, CSR, and IR
Dialogue

Information
disclosure

Disclosing initiatives on the human resources strategy
and improving the disclosure continually

Stakeholders
15

3

Creating Shared Value with Society

Corporate Control and Administration Division,
CSR and Investor Relations Department
General Manager

Kosuke AraiCSR Policy
Defense (improving risk response capabilities) andoffense (improving business competitiveness through CSV)
Reaffirmation of
Corporate Philosophy

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

Defining CSR and sorting out
objectives of initiatives

Priority themes
Basic themes

Consideration of Priority Themes(Materiality)

Themes for growth opportunities

1. Provide highly safe services andproducts

4. Solve issues related to water
resources

5. Realize sustainable energy use
2. Conduct fair business activities

Large

Kurita Group's
impact onsociety

Evaluation ofmateriality of the
30 themes basedon two axes

Small

Large
Stakeholders' expectations

3. Respect human rights

6. Reduce waste
7. Advance industrial production
technologies

CSV（Creating Shared Value）

Contributing
to solvingsocial issues

Contributing tobusiness growth16Initiatives related to the themes for growth opportunities
Initiatives reflecting characteristics of Kurita's businesses and social demand

Theme

Theme 4
Solve issues
related to water
resources

Theme 5

Realizesustainableenergy use

Metrics

Category

Water savings at customers– Amount of the water intake used in ourbusiness activities

Characteristics ofKurita's businesses

Number of people that can benefit from
improvement in water resources

Global initiative

CO2 emissions reduction at customers– CO2 emissions from our business activities

Characteristics ofKurita's businesses

Reduction of Scope 1 and 2 emissions

Social demand

Reduction of Scope 3 emissions

Social demand

Waste reduction at customers– Waste generated from our business activities

Characteristics ofKurita's businesses

Theme 6
Reduce waste

17Initiative taken by applying characteristics ofKurita's businesses
Reducing environmental impact of both customers and Kurita
Reduction ofenvironmental impactof customers

99

Water
(million m3)

243

CO2

FY ended 03/2021(Results)

2.4

Environmental improvement in both aspects

Customers' environmental
improvement(Development of CSV
business)

249

399

Waste

Kurita's environmental improvement activities

FY ending 03/2023(Target)3.0

294(thousandtons)(thousandtons)

Our environmental
impactKurita's internal
environmental
improvement

389

274
500

Creating business
opportunities andimprovingcompetitiveness58

Measuring the impact on society with the formula ofCustomer impact reduction ー Kurita Group impact

100

Fulfilling social
responsibilities andresponding to risks

Solving social issues and achieving
business growth(Creating shared value)18

Internal environmental improvement activities
Fulfilling social responsibilities and reducing business risks
Theme 4
Water Resources

Risk assessment
Impact on society(million m3)

4.0
2.8

2.4

3.0

Business risks
Our water intake

Each business base of the Group

Theme 5
EnergyFY 03/2019

FY 03/2020

FY 03/2021

FY 03/2022
forecast(thousand tons)

223

236

249

250

FY 03/2019

FY 03/2020

FY 03/2021

FY 03/2022
forecast

Selecting premises at which initiatives should betaken preferentially and planning measures
Our CO2 emissions⚫ Examples of improvement
Ludwigshafen plant, Kurita Europe GmbH
Chemicalproduction plant

Water-saving
measures
Review of
production process

Use of waterfor cooling

Introduction of anelectric coolingsystem17%
reduction(thousand tons)

Theme 6Waste
30% or more

70

58

48

30

reduction

2.0 million m3
1.7 million m3

Our industrial
waste emissions

FY 03/2019

FY 03/2020

FY 03/2021

FY 03/2022
forecast

FY ended FY ended FY ending
03/2020
03/2021
03/2022
forecast* The above data are based on our approach in 2018, when we set the targets, andtherefore differ from data on "water intake" under the GRI Standards and ESG data weaggregate and accumulate based on the GHG Protocol.
19Customers' environmental improvement activities(Development of CSV business)
Creating business opportunities and improving competitivenessCSV (Creating Shared Value) businesses
Products, technologies, and business models that contribute tosaving water and reducing CO2 emissions and waste more greatly
than conventional ones
(FY ended 03/2021: 48 types in total )Selection standards
MustSuperiority to conventional/competing technologies

Must

Applying new or existing technologies in new markets

Must

Contributing to SDGs action plan

⚫ Contributing to reducing Scope 3 emissions by the Kurita
Group (new addition)⚫ Reduction ofenvironmental impact• CORR system• Reverse osmosis membrane
treatment chemicals, etc.

Theme 5
Energy• Kurita Dropwise Technology• Water treatment system using IoT
etc.,• Wastewater treatment 3S solution
using coagulation sensor• Reducing the volume ofwastewater sludge, recycling it
into resources, etc.

45

55

FY 03/2019 FY 03/2020 FY 03/2021 FY 03/2022
forecast(thousand tons)

187

279

347

294

FY 03/2019 FY 03/2020 FY 03/2021 FY 03/2022
forecast(thousand tons)

462
119

222

274

FY 03/2019 FY 03/2020 FY 03/2021 FY 03/2022
forecast(%)⚫ Selecting and developing
CSV businesses to focus ourefforts on each region/market

14

15

17

FY 03/2020

FY 03/2021

FY 03/2022
forecast

9

FY 03/2019⚫ Orders⚫ Business Profit Margin

126

99

Theme 6
Waste

CSV business orders
Ratio to net sales

KPI(million m3)

Theme 4
Water resources⚫ Using environmental
value for performance
evaluation
20

Climate change initiatives
Setting targets aligned with the Well Below 2°C indicated by SBTi

Percentageof emissions
FY ended
03/2020

Scope1, 2
27.5% reduction(Target for FY
ending 03/2031)

Scope1, 2
100% reduction(Target for FY
ending 03/2051)

Process of selecting measures
Selection of risks based on
scenario analysis

Scope 1

0.3%

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

Extent of
ImpactLikelihood⚫Replacement of fuel with renewable energy

Formulation and implementation of
the Group's measures

Scope 20.8%

⚫Use of renewable energy for power
used at business locations⚫Measures to reduce Scope 2 not derived from power

Breakdown of
Scope 3 emissions
Category 13
8%

Scope 3

98.9%

⚫Reduction of Scope 3 throughpromotion of CSV business⚫Transformation of products andservices provided and businesses

Others1%

Category 1, 4, 9
20%

Reducing Scope 3 emissions
with CSV businesses
Water treatment
systems with low
environmental impact

Methane fermentation
system for biogas
power generation

Category 11
71%⚫Change in external environment (customers’ shift to renewable energy)
Scope 3
27.5% reduction(Target for FY
ending 03/2031)(FY ended 03/2020)

Focusing efforts also on avoided emission(customers' environmental improvement),
which does not fall into Scope 1 to 3.

Establish acompetitive advantage
21

Relationship of Scope1, 2, and 3 emissions
by Kurita and customers
Kurita's Category 11 and 13
Customers' Scope 1 and 2(Some CSV businesses apply)

Kurita's Category 9
and 12Customers' Category
4 and 5

Customers'
Scope1 + 2

Kurita's Category 13
Customers' Category 8
or Scope 1 and 2(Depends oncustomers' selection)

Kurita's Category 1
Customers'
Category 1 and 2

Customers'
Scope 3
upstream

Kurita Group's
Scope 3
upstream

Kurita Group's
Scope 3downstream
Customers'
Scope 3downstream

Kurita Group's
Scope 1 + 2

Kurita's Scope 1 and 2
Customers' Category 1
and 2
Note: The size of the circle illustrates the amount of emissions by the Kurita Group/customers. Given the characteristics of products and services, Scope 1 to 3of the Kurita Group and those of customers differ in position. The relationship is indicated based on general ideas estimated at present.
22

Addressing issues related to water resources (WRC）Participating in industry-driven initiatives as a leadership committee member
Water Resilience Coalition
2050 Vision

Our Pledge

Creating a world in which water can be consistently supplied to therequired place, in the required quantity, and at the required quality.

Global water resilience

Improve water availability,
quality and accessibility inbasins facing serious water
resource problems

United Nations Global Compact

Raise the global ambition ofwater resilience throughpublic and corporate outreach

The CEO Water Mandate

Leadership committee members(11 companies)◼ Anheuser-Busch InBev◼ Diageo
◼ PVH
◼ Gap
◼ Microsoft◼ Cargill◼ Dow◼ Ecolab◼ STARBUCKS◼ 3M◼ Kurita

Implement measures toresolve water resource
problems across the entire
value chain

Water Resilience Coalition

Members(15 companies)

Participatingcompanies◼ The Coca-Cola Company◼ Woolworths◼ Cummins◼ Levi Strauss & Co.
◼ IHG Hotels & Resorts◼ Danone◼ Colgate◼ HEINEKEN◼ gsk◼ PhosAgro◼ DUPONT◼ MARS◼ Reckitt Benckiser◼ BAYER◼ Braskem(As of March 2022)
23

Progress and outlook of initiatives
Applying "water knowledge" and acquiring new knowledge
Global water resilience⚫ Participation in the formulation of indicesfor measuring achievements from basin
activities and reporting the format⚫ Enhancement of functions of theWater Action Hub, a comprehensive
platform related to water

Collective initiatives

Participants

Launch of basin activities aimed at solving
water resource issues in North America
Basin

MethodColorado River(Seven states in
the United States)

Considering collective
initiatives that take advantage
of Kurita's solutions

WRC member companies/
NGOs
Other companies/
NGOs, public offices, etc.

Creating platforms
related to water resources
and standardizing relevant
initiatives

Spreading rules and driving
information disclosure

Implementing activities andincreasing basins where activities
are implemented24Forward-looking Statements
This presentation contains forward-looking statements, business plan projections, and judgments based on information
available to management at the time of writing. Due to the existence of a variety of risk factors and uncertainties, actual
results may differ from those specified or implied by these forward-looking statements and projections.

The trademarks (products, services, logos) contained in this presentation belong to the Company
or right holders that allow the Company to use the trademarks.