An excerpt from Integrated Report 2023

Section 4:

Human Resources Strategy

The Platform for
Value Creation

Corporate Philosophy

Basic Concept

D&I Vision
Our D&I Vision in terms of the state of personnel and organizations
when realizing our corporate vision is to be a “corporate group that
continues to create unique value through interaction among diverse
people who care about water and the environment and who accept
each other’s differences.”State of personnel and organizations
when realizing the corporate vision

For the Kurita Group, which provides diverse solutions to society andindustry with the aim of continuously creating “new value for water,”human resources are the driving force behind its sustainable growth.
That is why we continue to implement organizational and personnel
initiatives based on our Diversity & Inclusion (D&I) Vision and Human
Resources (HR) strategy, which are connected to our value creationled business strategy.

Valuecreationstory
Corporate Vision
Pioneering “new value for water” to contributeto the realization of a sustainable society

D&I Vision
The corporate group that continues to create
unique value through interaction among diverse
people who care about water and the environment
and who accept each other’s differences.

Now

Schematic Flywheel Representation of D&I Vision

Diverse humanresources andexperience

Penetration of D&I
owing toacceptance andutilization ofgreater diversity

Trust from
customers andsociety

Virtuous cycle asa result of increasein differences

Increase indifferences

Affinity withour corporate
philosophy

Creation ofunique value

Virtuous cycle asa result of
shared value

Harmonizationof individuality

A workplace endowed with D&I and employee
engagement can evenly harmonize increases indifferences, thus enabling personnel andorganizations to create unique value

48

Kurita Water Industries Ltd. Integrated Report 2023

Permeation ofshared values

Increase inemployeeengagement owing
to identification
with the corporate
philosophy andpermeation ofshared values

Overview of HR Strategy
which is the basis of our value creation story — and represents ourbasic policy on the values, thoughts and actions required of Kurita
Group employees. To this we add the changes in the Group’s internaland external environments, while our approach to initiatives isorganized into a course of action for both organizations and humanresources utilization.

Kurita Group Overview

We are formulating an HR strategy with which our organizations andpersonnel can give shape to our value creation story by realizing our
D&I Vision.
The HR strategy comprises a human resources policy and anunderlying course of action. The former is arranged around the kindsof organizations and personnel described in our strategic story —HR Strategy

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.
The kind of organizations we seek for bringing our value
creation story to life

Changes in the External Environment

Direction of the Organization
Organizational culture ransformation into a groupTwith a high level of engagementwith permeation of D&I

Organizational structure

Global business expansion through M&As
Fiscal 2014

Fiscal 2023

Overseas sales
weightingApprox.
20%

Approx.
50%

Ratio of overseas
employees

Approx.
20%

Approx.
50%

Direction of Human Resources Utilization
Utilizing and securing
human resources

Personnel system ctively utilize engineers inAtechnological fields including
human resources fordevelopment that support
KuritaUse human resources forintellectual property to predictthe direction of development
and maintain the competitive
advantages of development
outcomes
Create new value with humanresources for digital technology

 evelopment of a personnelDsystem providing the Group
with two strengths: cooperation
among human resources andactive participation ofindividuals who possess a highlevel of expertise

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

 romote overseas local
P
employees to managementroles
Improve the organization’s
global responsivenessInstill shared values in Group
employees

Changes in the Internal Environment

The Platform for Value Creation

 hanging attitude in Japan towards the seniorityCsystem and the concept of life-time employment
Diversification of working styles
Advancements in digital technology and growing
demand for digital specialists(1) Personnel that use worksite data to identify issues and deliver
solutions and business models through numerous contacts
within and outside the Group.
(2) Personnel that strengthen business with the following thoughts
and actions:• The accumulation of data and information related to water, as
well as customer information, to create explicit knowledge thatcan be harnessed to create and provide value• The utilization of digital tools and other new technologies• The highly accurate and rapid forecasting and quantification of
Kurita’s value(3) Personnel that possess an administrator’s point of view and havethe capacity to think logically.

The Kurita Group’s Businesses(1) Organizations that generate new value by utilizing various
technologies from within and outside the Group as well as
innovation from the combination and integration of businesses
without being shackled by the principle of self-sufficiency anddifferences between organizational units.
Organizations that welcome challenges undertaken with an agile
approach, offer a sense of security in tolerating failures despite
diligent efforts, and value the idea of learning from past mistakes.
(2) Organizations that identify with the corporate philosophy, takepride in work that contributes to society, and work earnestly tosolve issues faced by customers, society, and the global
environment.

The kind of personnel we seek for bringing our value
creation story to life

Kurita Group Business Strategy

Human Resources Policy

49

The Platform for Value Creation

Human Resources Strategy

Promotion Framework
All initiatives related to the Kurita Group’s human capital are carried out
under the supervision of the Executive General Manager of the
Sustainability Division, who is also a corporate officer. Measures aimed
at fostering corporate culture are implemented in cooperation witheach division, business unit and Group company. In addition, measures
to develop and utilize human resources – one element of the Kurita
Group’s Materiality – are overseen and deployed by the Sustainability
Committee, chaired by the Executive General Manager of the

Sustainability Division, in collaboration with the Human Resources
Development Committee and the DX Committee. Reports on the statusof human capital initiatives are submitted to the Executive Committee,
which discusses their content and makes decisions on necessary
measures. The Executive Committee also reports the status of humancapital initiatives to the Board of Directors, which is responsible for theoverall supervision of the initiatives.

Board of Directors: Overall supervision of human capital initiatives
Supervise

ReportExecutive Committee: Overall discussion of human capital initiatives and decisions on measures
Decide / Instruct

Discuss / Report

Decide / Instruct

Executive General Manager,
Sustainability Division

Discuss / Report

Decide / Instruct

Human Resources Development
Committee and DX Committee

Sustainability Committee

Manages and promotes initiatives
related to development and use ofhuman resources

Promotes and oversees all humancapital initiatives

Discuss / Report

Develops engineers in technological fields andhuman resources for digital technology, etc.

Cooperate

Divisions and business units

Group companies

Fostering corporate culture

Cooperate

Fostering corporate culture

HR Strategy KPIs
In order to implement measures while quantitatively monitoring
progress with HR strategy, the Kurita Group has established thefollowing HR strategy KPIs and KGIs. The KGIs and KPIs consist of“materiality,” “quantitative targets,” and “indicators for monitoring
medium-term trends.” By measuring these areas, we are improving
the effectiveness of HR strategy. The indicators include “D&Iexecution level” (measuring the extent to which recommended D&I
actions are being taken to realize the D&I Vision) and “HR system
operation level” (measuring the effectiveness of the HR system).
These are unique Kurita indicators derived from the employee
engagement survey conducted every two years.

Creating human resources and organizations to realize our value creation story
A group of professionals in a range of fields who obtain joy
from their contributions to customers, society and theglobal environment through their work at the Kurita Group
with their commitment to creating new value.

the fiscal year ending
March 31, 2031

KGIs
Continuous improvement in employee engagement scoresa. Percentage of Group companies exceeding all-industry average:
75% (currently 50%)b. Scores from all Group companies surveyed: Continuous
improvement (currently 38%)

Approx. 30%

Approx. 50%
Approx. 80-90%
Approx. 2-8
weeks

Above
previous
surveythe fiscal year ending
March 31, 2028

40%

the fiscal year ending
March 31, 2026

35%

75%

the fiscal year ending
March 31, 2024

30%

65%

Current levels

27%

4.1%

29%

10.6%

68%
23 days

KPIs

Percentage ofbusiness execution
management roles
filled by women,
foreign nationals
and mid-career
hires

Percentage ofmanagement
roles filled by
women

Percentage ofcareer-track
recruits who
are women

Percentage of
mid-career
recruits in theworkforce

Percentage ofmale employees
taking childcare
leave / length ofleave

Approx.
30-40%

Approx. 10%

Initiative Areas

Approx. 80%

Kurita Water Industries Ltd. Integrated Report 2023

Above
previous
survey

51%

73%

32%

59%

43%

D&I execution
level

Percentage of
executives atoverseassubsidiaries
who are local
employees

Percentage ofglobally mindedpersonnel inmanagerequivalent
positions athead office

Level of sufficienthuman resources
for development,
digital andintellectual
property

HR system
operation
level

Securing and utilizing
human resources

HR system

Organizational culture

Organizational structure

Expand and utilize human capital

50

80%

Understanding Employee Engagement* The relationships between employees and company/organizations, and between
employees and their work. We believe that when these relationships are strong
and healthy, it is easier to create a virtuous cycle in which employees are
enthusiastic and motivated to contribute to the Company and its organizations.

Kurita Group Overview

issues that need to be addressed. Using this feedback, we areworking to improve employee engagement based on thecharacteristics of each company and organization. In our second
survey, to be conducted in the fiscal year ending March 31, 2024, weplan to survey 35 companies, including the four companies from lastyear.

To improve employee engagement*, we conduct an engagement
survey every two years to understand current levels of employee
engagement. This helps us to identify issues that need to beaddressed and to implement or upgrade related measures. In our
first survey, conducted in the fiscal year ended March 31, 2022, wesurveyed employees at Kurita Water Industries and three overseas
Group companies. Two of the four companies surveyed (50%)
exceeded the all-industry average for employee engagement in theirrespective countries. We received responses from 96% of the target
group and a total of 2,706 written comments, providing insights into

Engagement Scores (Percentage of People Strongly Engaged)

Japan

China

US

KuritaCompany A
Company B

20%

40%

60%

80%

100%

32%
61%
51%
90%

Company C

Country’s top
25th percentile(all industries)

Issues and responses

28%

39%

Issues: Career and personal development, understanding and awarenessof management policies
Responses: Address Companywide issues and organization-specific issues

74%

86%

Issue: Diversity
Responses: Increase opportunities for dialogue, overhaul compensation
system, promote D&I

64%

75%

Issue: Work-life balance
Response: Review use of leave

Kurita Group Business Strategy

0%Country
average (allindustries)*B lue = Kurita Group’s percentage is higher
Red = Kurita Group’s percentage is lower

To transform Kurita into a highly engaged group with well entrenched
D&I, we are promoting the following initiatives based on the situationin each division and Group company.

12

4

 ach Organization Implements Its Own Initiatives toEPromote D&I

Nine Recommended Actions

Create a psychologicallysafe workplace

Praise the achievements ofcolleagues and appreciate
their efforts

Learn, take action, andgrow autonomouslyInteract with all kinds ofpeople without falling victim
to differences of opinion

Be unafraid to take risks
and embrace challenges
agilely

Understand the vision

Enhance one’s sense of selfaffirmation

Share your D&I
accomplishments

Senior general managers visit each Employee networking event in Indonesia
business site to explain their division’s
strategies in person

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Be aware of unconscious
bias and pay attention todiversity

The Platform for Value Creation

3

Acknowledge
Know the D&I Vision
Recognize
Take personal ownership of D&I through workplace
discussions and other activities
Act
Implement the nine recommended actions to realize the
D&I Vision
Transform the business
Create value by putting the recommended actions into practiceIn the fiscal year ended March 31, 2023, we extended our efforts at
Kurita Water Industries to Group companies, focusing on steps (1)and (2). This included activities to promote wider understanding of
the D&I Vision by distributing explanatory videos, holding
presentations about activities within each organization, and runningworkshops, roundtable meetings, and workplace and group
discussions. These efforts helped to lift awareness of the D&I Vision
to over 90% of the workforce. In the fiscal year ending March 31,
2024, we plan to shift the focus to steps (3) and (4). We will ascertain
the D&I execution level through our employee engagement survey,
which will give us insights into how well the actions are taking root
and what improvements need to be made. We will also share bestpractices across the Group to transform our business.

The Kurita Group’s Businesses

Fostering Corporate Culture

51

The Platform for Value Creation

Human Resources Strategy

Ensuring Diversity
We seek to have employees from all walks of life, irrespective ofgender, nationality, age, disability, employment history, working style(contract type and terms of employment), or experience, and makefull use of each other’s experience, knowledge, and skills to spark
innovation with a view to realizing our corporate philosophy.
Managers and employees in leadership roles are also actively working
to ensure diversity in the Company.
We are focusing our efforts on Kurita Water Industries, which faces
more challenges in ensuring diversity than other parts of the Group.
To lead these efforts, we have established a dedicated D&I
organization within the Company to roll out measures in collaboration
with other internal organizations and Group companies.

Empowering Female Employees

We have set targets to increase the proportion of women in
management roles related to business execution and in other key
roles and we are implementing measures to achieve the targets. As of
April 2023, the percentage of female managers was 4.2%, below ourtarget of at least 5%. This shortfall partly reflected the merger of acertain subsidiary, which led to an overall increase in the number ofmanagers. We continue to work towards our goal of lifting thepercentage to 10% by the fiscal year ending March 31, 2028.
In a survey we conducted last year, many respondents expressed
concerns about the lack of female role models and the need to balancefamily and work commitments. Based on this feedback, we implemented
the following initiatives in the fiscal year ended March 31, 2023.

A total of 25 team leaders and team leader candidates took
part, giving them the opportunity to talk with current female
managers and hear from female external directors about theirexperiences in career development. Our HR team provided
feedback on the workshops to line managers of the participants
and asked for cooperation in providing support on a daily basis.
(2) Networking meetings for female personnel interested in specialist roles
A total of 27 female employees took part in the networking
meetings, where senior female employees shared their experienceswith employees interested in demonstrating a high level ofexpertise in specialist fields. They talked about the background andthinking behind their decision to choose the specialist role career
path, how they gained their expertise, and how they balance workand family commitments.
From the fiscal year ending March 31, 2024, we will also holdroundtable discussions for executive general managers and female
employees to engage directly on the topic of female empowerment in
the workplace.

(1) Workshops for female personnel interested in management roles
We held workshops at each stage of the management promotion
process (for employees who have been with the Company forseveral years, team leader candidates, and team leaders) toprovide support and address any concerns about the process.

Workshop for team leader candidates

Female Manager Targets and Past Results (fiscal year ending March 31)

Kurita Water
Industries

Reference:
Kurita Group

2019

2020

2021

2022

2023

Percentage of female managers

1.1%

2.1%

2.4%

2.7%

Percentage of New graduates
women hired
for careerNew graduatestrack positions & mid-career

21%

19%

33%

15%

20%

Percentage of female managers

9%Percentage of female employees(vs. entire workforce)

24%

April 2023

2028

Targets

Results

4.1%

5% or
higher

4.2%

Around
10%

24%

31%

30%

35%

―

33%

28%

29%

―

―

Around30-40%

10%

12%

13%

13%

24%

25%

25%

25%

2031

Target and Current Percentage of Mid- Career Hires
Percentage of mid-career hires in workforce

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Kurita Water Industries Ltd. Integrated Report 2023

10.6%

Around30%

Supporting Mid-Career Hires

Supporting Globally Minded Personnel

Creating a Comfortable Working Environment fora Diverse Workforce

The Kurita Group is making every effort to create a workplaceenvironment where each and every employee can work with peace ofmind. We have systems in place that help employees balance theirwork with childcare, nursing care, and other life events, flexible
working style arrangements for those wishing to work from home or
remotely, and schemes that also take into account the situations ofminorities within the context of their SOGIE*, for example, byextending benefits and welfare to employees in a de facto or samesex relationship. Not only are we encouraging officers and employees
to know about and utilize these systems, we are working to create anenvironment where all kinds of people can work at ease by runningonline training sessions and regular awareness campaigns.
* Sexual orientation, gender identity, and gender expression

Kurita Group Business Strategy

The Kurita Group aims to provide global value tailored to thecharacteristics of each region. To maximize this value, we have to not
only encourage local employees to play an active role in our business,but also improve operational levels across the Group by ensuring theCompany and its Group companies interact under common
principles. To achieve this, we are training executives from overseas
Group companies and promoting them to management positions at
each company and at Kurita Water Industries, while also improving
their international skills. As result of these efforts, the proportion of
locally hired employees either in a representative position or with an

officer title at overseas Group companies now exceeds 70%,
illustrating how personnel hailing from different countries and regions
hold management positions throughout the Group. Going forward,
we plan to train these individuals to become core personnel byintroducing an overseas training system and expanding Groupwide
training functions.

Kurita Group Overview

Every year we recruit between 10 and 20 mid-career hires – equivalent
to 10-30% of all new hires over a 12-month period – based on theirpotential to be immediately effective in line with our businessexpansion. As of December 2022, 82 mid-career hires (13% of theworkforce) held a manager-equivalent position. In the fiscal year
ended March 31, 2023, we stepped up support for mid-career
recruitment, such as improving explanations about roles and available
career paths at the selection stage and offering a short introduction
program (around 3 days) to ease any concerns after joining theCompany so that new mid-career hires can have an immediate impact.

Utilizing and Securing Human Resources

Personal growth

AdviceExperience

Create humanresources andorganizations to realize
our value creation story

Training

Use talent management
platform to effectively utilize
human resources

The Platform for Value Creation

Support Mechanisms
Proactively deploy
personnel with careerdevelopment in mind

The Kurita Group’s Businesses

Based on feedback from our employee engagement survey, which
identified the need for systematic career development support, we
reorganized human resource development from three standpoints –experience, advice, and training. We started implementing training
programs based on this new approach from the fiscal year ended
March 31, 2023.
The Group emphasizes experience in employee growth anddevelopment. To give employees more experience, we will use
information from career preference surveys and our internal talentmanagement platform to create a system that encourages
experience. We will also provide career development support and use
personnel transfers and postings to support career development. In
addition, we will provide advice (cultivate managers who help
subordinates take on new challenges) and training (offer practicallearning opportunities and an environment for self-learning) todeepen their experience.

Corporate & Financial Information

Kurita Water Industries Ltd. Integrated Report 2023

53

The Platform for Value Creation

Human Resources Strategy

Human Resource Training System (Kurita Water Industries)
New hires
Gradebased
programs

New
employeetraining

Core employees

Foundational
training (first
2-3 years)

Core
employeetraining

Team leaders
Management
training

Managers
New manager
training

Senior managers

Leadershiptraining

Role-based
programs

Specialist skills training(Sales & marketing, technology & development, engineering & supply chains, digital skills,
business support)

Themebased
programs

Mind Career Program / cultivating the Group’s shared values

Corporate officer
candidate program

D&I, employee engagement

The Mind Career Program isdesigned to share the Group’s
corporate philosophy and corporate
vision, as well as provide
opportunities for employees todeepen self-understanding in linewith their individual goals (Will),
linking this into career planning. The
program is run as part of gradebased training and other courses.

Career development support for female employees
Support for mid-career hires
International skills improvement
Training for future overseas Group company executives
Other (information security, compliance, human rights, etc.)
Selfdevelopment

Support for self-development and obtaining national qualifications, etc.

As part of efforts to step up thetraining of future management
candidates and managers atoverseas Group companies, we arelaunching initiatives from the fiscal
year ending March 31, 2024 to create
diverse personnel networks andpromote our corporate philosophy.
This will include training at head
office and opportunities to work atother companies in the Group.

For grade-based training, we use an external learning platform with more than 2,000 courses and 10,000 e-learning
modules, providing an environment where each employee can access content relevant to their grade. The platform
helps our employees develop their own career paths and initiate their own learning.

Kurita Innovation Hub, which opened in 2022, is positioned as acenter to enhance the core knowledge and skills of Kurita Group
employees. Equipped with a wide range of water treatment facilities,
the center hosts training programs that improve the specialist skills of
our employees. The center also has a studio that has produced morethan 900 human resource training videos and other content, which isavailable to employees across the Group via a portal site.

Kurita Innovation Hub is also used as a training centerfor employees from overseas Group companies

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Kurita Water Industries Ltd. Integrated Report 2023

We also plan to implement the following initiatives from the fiscal
year ending March 31, 2024 to attract personnel with diverse
expertise and experience.
• U se a wider range of recruitment channels and introduce a
specialist recruitment system for new hires• Increase wages for the main target age groups• Introduce a compensation scheme to attract seniors with highly
specialized skills

Securing and Utilizing Engineers in Technological Fields,
Human Resources for Digital and Intellectual Property

Facilitytechnology

Basictechnology

Human Resources for Digital Technology“Offensive IP”

Technical fields that support Kurita
Chemicaltechnology

Human Resources forIntellectual Property

Design &engineering
technology

About 30 technology sub-categories

Support for various strategies withIP analysis

×“Defensive IP”

Protection for the business withIP rights
Reduce risk of infringing
IP rights of others

Group-wide utilization ofLonger-term personnel
skills, knowledge, andreinforcement and plannedexperiencedevelopment of successors

Developing
businessmodelsBuilding
infrastructure
and providing
IT services

Use of Digital Technology

Collaboration

Creation of digitalbusinesses

Accumulation of “water
knowledge,” creation anduse of explicit knowledge

Promotion of DX

Further deepening and development ofwater treatment technology

Kurita Water Industries Ltd. Integrated Report 2023

Corporate & Financial Information

Creating Solutions and Business Models Unique to Kurita

The Platform for Value Creation

Kurita-Technical Education Program

Planning andpromotion of
DX-drivenstrategies

The Kurita Group’s Businesses

Engineers in Technological Fields• Human Resources for Intellectual Property
In addition to our existing intellectual property (IP) protection and risk
reduction activities (defensive IP), we launched IP information analysis(offensive IP), including IP landscape analysis, from the fiscal year
ended March 31, 2023. The aim is to use IP information to support
management, business, and innovation strategies. We also plan tostrengthen global IP activities and look at ways of improving IP quality.
To achieve these goals, we are working to identify and train highly
specialized IP personnel who can collaborate with other divisions inorder to raise the level of IP expertise in the workforce and step up IP
activities across the Group.

Kurita Group Business Strategy• Engineers in Technological Fields
The technologies that underpin the Group can be broadly divided
into four categories: chemical technology, facility technology, basic
technology, and design & engineering technology. These groups canbe further divided into around 30 subcategories. By mapping thehuman resources engaged in these fields, we can visualize where
there are gaps in personnel in each technology category. Based on
this, we can reinforce our workforce over the longer term and develop
future engineers through the Kurita-Technical Education Program,
our systemized human resources training program. Giving full play tothe skills, knowledge, and experience of engineers throughout theGroup will serve to further deepen and develop our water treatment
technologies. As of June 2023, the Company had around 310
engineers, plus about 370 future engineer candidates.

Kurita Group Overview

The Kurita Group is working to attract and utilize engineers intechnological fields with extensive water treatment expertise including
human resources for development, digital specialists who can drive
the Group’s digital transformation (DX), and intellectual property
specialists who can support the Group’s focus on technology, as
these personnel will be key to acquiring and leveraging “water
knowledge” to develop innovative solutions.

• Human Resources for Digital Technology
Digital specialists with the skills to devise and deploy DX-driven
strategies, develop business models, build infrastructure, and provide
IT services are indispensable to the Group’s DX. We are working to
attract and develop digital specialists who can create new businesses
that integrate digital technology with diverse contact points, while also
improving the digital literacy of other personnel. In the fiscal year
ended March 31, 2023, we provided technical training to employees
identified as having high “digital aptitude” in an assessment process.
We also selected personnel from the group to work on businessproposals that utilize digital technology. These activities also extend
beyond the Group – we are partnering with start-ups and hiring
people with experience from outside the Company. In the fiscal year
ended March 31, 2023, the Group had approximately 180 digitalspecialists on its books and we aim to expand this number to about
400 over a three-year period.

55