Summary of the Q&A Session
at the 2nd ESG Briefing

Date and time: March 11 (Fri.), 2022, 16:00 - 17:20

Notice: This summary is a reference designed for the convenience of those who
could not attend the briefing stated above. Please note that this is not a word-forword transcript of all remarks made at that session, but is a summary preparedby Kurita Water Industries Ltd.

Q. On the topic of corporate governance, please talk about specificrecommendations made by each of the external directors and what haschanged.
A. In addition to a recommendation that we establish an Investment Committee,
former Director Moriwaki voiced opinions about specific business models atSolution Committee meetings. At the E&S Committee, Director Sugiyama has
actively participated in discussions of providing opportunities for women andexpressed opinions from an environmental perspective, her area of expertise.
Director Tanaka has made recommendations to elevate the discussion of D&I
and the creation of a dedicated D&I department. We have asked Director
Kamai to identify specific issues in the R&D organization, based on hishearings with general managers in R&D departments. Recommendations byexternal directors are not limited to only board meetings; they have also maderecommendations at company-wide committees, reflecting their areas ofspecialization.
Q. What type of reforms have resulted from the process of evaluating theeffectiveness of the Board?
A. We began systematically evaluating Board effectiveness in 2017. As a resultof discussions during the process, we have set up a system for thedevelopment of succession candidates, initiated the Business Monitoring
System as a way of strengthening the monitoring structure for groupcompanies, established the Group’s value creation story and set up theDigital Transformation (DX) Committee as a company-wide committee. All ofthese emerged from the process of evaluating Board effectiveness.
Q. Currently, how many of your employees are digital specialists or technicalengineers? Do you intend to increase headcount in these categories going
forward, or will you focus on elevating the skill levels of existing resources?
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A. We currently have 50 digital specialists at Kurita Water Industries (nonconsolidated). Through an assessment process, we have also identified
around 200 candidates for digital training, and plan to provide a specializedprogram. We aim to complete training for 50 individuals in the fiscal year
ending March 2023, which will increase the number from the current 50 to100.
For technical engineers, we have established that there are currently 360
engineers at Kurita Water Industries (non-consolidated), through a skill
mapping process. Based on the business development outlook, we will
identify technology areas in need of strengthening, and provide training witha focus on areas where there are either a limited number of engineers or
where the number of younger engineers is low. We aim to maintain the overall
number of technical engineers at current levels but to elevate the quality ofexpertise.
A. The root source of our competitive advantage is the diverse points of contact
with sites that we serve on a global basis. Technical engineers and digitalspecialists with the ability to create new solutions from the technology andskills developed at these contact points are indispensable to the developmentof the Kurita Group going forward. We want to ensure that we invest
appropriately.
Q. Please discuss your initiatives to appoint overseas human resources tomanagement roles. Please include HR policies that you have either already
implemented or plan to implement which will allow human resources fromacquired companies to play active roles in the Kurita Group.
A. The Kurita Group has 74 domestic and overseas companies. Managementlevel employees are assessed by an external HR evaluation company tobetter understand the degree to which they possess the necessary qualities
and skills required to be senior managers at a global company. We also holdtraining sessions to promote understanding of the Kurita Group's philosophyand values. In addition, we identify and set challenges to be addressed byeach business. As a part of reporting progress on these challenges, I, as thepresident of the group’s headquarters, meet with each individual tounderstand whether they share the values of the Kurita Group and arecapable of contributing to Kurita's development into a global company. ThisApril, we plan to appoint a number of local employees at overseas groupcompanies to director positions at these entities, so I feel the assessment
process is functioning appropriately.

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We are developing the various elements of our HR system while we are
expanding our businesses globally. As such, the development of a framework
to leverage global human resources and establish an evaluation andpromotion system are currently a work in progress. I would like to see
overseas human resources be promoted to executive officer and director
positions for Kurita Water Industries during the next medium-term
management plan period as a result of the human resource strategies
discussed today.
Q. At last year's ESG Briefing, you commented that the target for CSV businessorders as a percentage of consolidated sales for the fiscal year ending March2023 was 20%. What is your assessment of the progress you have made,given this fiscal year's guidance is 17%? Have you changed your 20% target
for the fiscal year ending March 2023?
A. We had hoped to see more progress this fiscal year, but we recognize that it
was a challenging environment given the pandemic conditions, which madeit difficult to make advances on projects where on-site assessment andtesting is required. To raise the percentage of sales coming from the CSV
business going forward, it is necessary to elevate the quality and volume ofsolutions' proposals. Even as we raise prices, if we make progress on quality
and volume by proposing CSV business solutions in addition to building a
promotional framework, I believe we can achieve the 20% target for the next
fiscal year.
Q. You indicated that you will be adding non-financial metrics to the KPIs for
directors' compensation from the next fiscal year. Please provide specifics
about the type of KPIs you will add.
A. This fiscal year, on a trial basis we added 3 KPIs to the evaluation criteria fordirectors with direct responsibilities for business divisions: volume of watersavings, CO2 emission reduction volume and waste reduction volume. We
will expand this to all of the directors from next fiscal year. We are also
considering adopting objective third-party scores, such as ESG scores, in theevaluation criteria in future, in addition to these 3 KPIs.
Q. Is there an example where D&I has contributed to innovation? If there is, could
you share it with us?
A. The backdrop to the creation of the human resource strategy this time is myclear sense that the source of the Kurita Group's competitive advantage isthe diverse points of contact with sites that we serve. This was brought home
to me through my 6 years as president, as I engaged with many people ofdifferent nationalities and values who have joined the Kurita Group. I believethat the technologies and know-how developed across this wide range ofcontact points will contribute to the creation of new solutions.
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As a specific example, I will highlight Project Acorn, which is a solution project
related to RO membranes. This is a global project headed up by the CEO ofAvista Technologies, which we acquired. The project is designed to apply
Avista's management resources and business models on a global basis.
Project members includes individuals from Avista and Kurita Water Industries(Japan), as well as employees who have responsibility for customer contact
points in Southeast Asia, East Asia, Europe and other regions. The project isfocused on developing a new business model which represents an evolutionof Avista's model. We expect to generate sales of around 9 billion yen fromthis in the current fiscal year. Next fiscal year, I think we can exceed 10 billion
yen. Going forward, I would like to increase the number of projects that link
Kurita employees around the world through solutions that are developed fromour customer interactions at contact points.
Q. How do you manage and coordinate with overseas group companies from theperspective of governance and management effectiveness? Are there areas
where you would like to see improvements?
A. Fundamentally, we manage and coordinate through the sharing of common
values, and through the nomination/remuneration and internal control/ audit
functions. With regard to values, we focus on ensuring there is a deep
understanding of the Kurita Group's purpose and corporate philosophy. In thearea of nomination and remuneration, we identify and set challenges
appropriate to each business. Within this framework we focus on developing
human resources for management roles within the group. From theperspective of internal control and audit, we monitor the management
situation of each company based on a unified standard.
Going forward, we expect local human resources will take on senior
management roles at overseas group companies. In addition to building HR
systems and evaluation frameworks where not already in place, it will be
important to develop human resources for solutions projects, which are a
global initiative across our businesses.
Currently, the human resources for administrative functions such as financethat serve local top management are under the control of the group’s
headquarters. Going forward, we will develop a system where there will beindividuals with global responsibilities for functions such as accounting,marketing and others at the group level with functional ties to the overseas
group companies, which should contribute to improving earnings andgovernance.

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Q. Do you find there are differences in values at the overseas group companies?
A. We have been actively engaged in overseas M&A since 2015. I have foundthat people involved in water treatment businesses basically hold the samevalues. There is a very strong desire to contribute to society and many takegreat pride in their businesses. In that sense, regardless of where they are in
the world, when I speak to employees, I feel that everyone holds the samevalues. I think the strong complementarity reflects the nature of the business.
Our business is customer-centric: we focus looking at issues from thecustomer's perspective and finding solutions.
Q. From the standpoint of establishing a fair HR evaluation system, taking into
account the degree to which the company's values have been embraced aswell as differences in cultures and operating environments, how would youintegrate these elements?
A. We apply a single standard in evaluating people in management roles
throughout the group. To measure the contribution to the overall group, inaddition to an assessment of the progress relative to consolidated earnings
forecasts, we also look at the earnings of the individual companies and otherfactors, based on a common approach. We do not apply different standards
for individual companies.
That said, I believe it will be important to reflect the social value created by
the CSV businesses in evaluations: to consider from the standpoint ofinclusivity how individuals contribute to the achievement of the Kurita Group's
purpose and corporate philosophy through projects and initiatives. We arestill at the early stage of developing this framework so this metric is currently
only being applied to the directors with responsibilities for business divisions
at Kurita Water Industries (non-consolidated). Our aim is to makeadjustments to this so that it can be applied to evaluations of all department
heads and above for the group companies. I hope that we will be able toadopt this framework more broadly in the next medium-term management
plan.
Q. Do you have specific targets for your plan to develop digital specialists? How
many do you aim to train and what is the time horizon? How much do you
intend to invest for digitalization, including the training of human resources?
A. We haven’t set specific quantitative targets at this point. Initially, we are aiming
to have between 50 to 100 digital specialists as a result of the current humanresource development plans. DX is indispensable for the transformation of
the water treatment business model. However, rather than targeting a specificnumber of specialists, we aim to accelerate DX by, for example, gathering
human resources from throughout the Kurita Group to participate incollaborative projects with Fracta Leap that leverage AI technology to realize
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autonomous operation of water treatment facilities or automated control. If
these activities contribute to elevating the reputation of the Kurita Group as acompany seriously engaged in digital transformation initiatives, it should
support our hiring efforts and also elevate the consciousness of employees
seeking to develop digital skills.
On investments, I believe we have already invested an amount that isequivalent to our R&D expenses. Once we see the results from the projects
currently underway, I think we will be able to provide a clearer direction on
investment amount in the next medium-term management plan.
Q. Why are you expecting your CO2 emissions to rise suddenly in the next fiscal
year? Under current conditions, achieving the Scope 1 and 2 emissions
reduction target of 27.5% by the fiscal year ending March 2031 appears
challenging. Is a shift from conventional electric power and fuel to renewableenergy sufficient to achieve this?
A. First, under both Scope 1 & 2, and our own in-house standard defined as'Customer emissions reduction less in-house emissions', the in-house portion
includes a part of what is included in Scope 3, Category 13. The increase inemissions in the next fiscal year reflects the impact from the ramping up of
new ultrapure water supply facilities, which would be included in Scope 3,Category 13.
With regard to the 27.5% target for Scope 1 & 2, in addition to shifting to theuse of renewable energy, we have started to consider the adoption of EVs.
We would aim to achieve the target through measures such as this.
Achieving the Scope 3 target will be challenging, but the overall mix of electric
power sources is leading to a decline in the CO2 coefficient around the world.
In addition, I would expect our customers, particularly those in the electronics
industry which is a significant consumer of electric power, to make progressin transitioning to renewable energy. We are also focused on developing new
CSV businesses that will accelerate our customers' emissions reductions
going forward. In this way, we aim to achieve the 27.5% target.
Q. I believe that your current human resource evaluations are based on agebased seniority. Do you have plans to introduce performance-based
programs or to adopt job-specific hiring?
A. One of the key features of the Kurita Group is our focus on membership-type
employment. One of the strengths of this approach is that it encourages
employees to develop the ability to directly respond to on-site issues andfosters teamwork.
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Given this, rather than aiming for a wholesale change to our current evaluation
system, I would like to develop a hybrid system that leverages the corporate
culture resulting from a membership-type approach and its positive elements,
and a performance-based system. In developing this hybrid system, I would
like to reassess and identify the positive elements of our current system while
using the evaluation metrics related to a wide variety of projects and initiatives
to create social value to appropriately reward those who have madecontributions. We are still at the early stages of development so I do not havespecifics I can share with you at this point, but this is how we are thinking
about this issue.
Q. Why does the difference between the reductions in your customers' CO2
emissions and the in-house load narrow in the fiscal year ending March
2023?
A. The in-house portion includes the CO2 emitted from ultrapure water supply
sites. Our emissions load will increase because there is a new site coming
online in the next fiscal year.
Q. With regard to biodiversity, are there measures you are considering to comply
with TNFD?
A. Our understanding is that TNFD goes beyond TCFD in that it will require
disclosure of the financial impact on companies from nature-related
opportunities and risks, including water and biodiversity. We are currently
studying TNFD developments as we await the establishment of clear rules.
Related to this, we expect it will become necessary to disclose how green ourbusinesses are in responding to the EU taxonomy, SFDR and CSRD. We are
already making preparations for this.

Business forecasts presented and other statements relating to the future made inthis document are based on information currently available and certain
assumptions the Company considers reasonable. A variety of factors may cause
actual financial results and other forward-looking statements to differ materiallyfrom the forecasts.

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