Message from the Executive General Manager of the Sustainability Division

The corporate philosophy of the Kurita Group, "Study the properties of water, master them, and we will create an environment in which nature and humanity are in harmony," truly embodies our approach to sustainability. We are looking to contribute to the development of industry and society as well as achieve our own sustainable growth, by providing value to customers and society that only Kurita is capable of through our all-inclusive approach to water, our on-site know-how and the "water knowledge" that we have acquired from our experiences. The Kurita Group is a collection of people who empathize with a common corporate philosophy, and with its business contributing significantly to society, the Kurita Group is highly accepting of sustainability initiatives.
As we embark on our PSV-27 Plan, the Kurita Group outlined its approach to positioning sustainability at the core of its management, toward achieving sustainable growth where corporate activities blend in with and affect the natural environment and social systems. We then reviewed our corporate vision, and also identified materiality—key issues that need to be addressed to achieve our vision. Materiality comprises three shared value themes based on global issues related to sustainability, and five basic themes supporting efforts to achieve them.
While these initiatives for materiality have been incorporated into PSV-27 Plan in an organic manner, the remaining challenge was how to ensure that each and every employee understood their relationship with those initiatives, and apply them to their own duties with an awareness of the coordination between organizations and how they are linked to financial and non-financial aspects. Given this background, last fiscal year we visualized the correlation between our corporate vision, PSV-27 Plan and materiality as the "Value Pioneering Path," and focused on dialogue internally and externally while presenting the entire scope of PSV-27 Plan to achieve our corporate vision. Instead of simply promoting materiality initiatives, the mission of our division is to also boost these initiatives and support the Kurita Group's sustainability management by clarifying stories that outline the paths toward achieving our corporate vision, ensuring that the entire Group gains a firm understanding of the concept.

Among the megatrends that the Group needs to be focusing on are issues related to natural capital, such as climate change and biodiversity. An example that illustrates this is the issue of water resources is the active investments being made into semiconductors on a global scale. Semiconductor manufacturing requires vast quantities of water resources, and there are also concerns over disruptions to the regional water balance—this is becoming an issue, not only for individual companies, but also for entire regions. The impact of water on the market as a whole needs to be examined carefully, while factoring in water resources conditions and policy trends in each country and region, to be able to resolve problems in an optimal manner. International rules governing corporate water resource conservation have not yet been clearly established, but our Group is devising an approach where we will also be involved in the development of such rules.
Water is the source of our operations, so there is a strong expectation by society on the Kurita Group not only to reduce the risk of damage to natural capital, but to also crossing the high hurdle of taking on the challenge of making a positive impact—I think that initiatives like these will contribute to increasing the Kurita Group's business opportunities. The driver behind this is the "Creating Shared Value (CSV) business" that creates shared value with customers and society, and this is also related to the common shared theme of materiality.

We are aiming to achieve the shared value themes of materiality, "Solve issues related to water resources," "Contribute to the realization of a decarbonized society" and "Contribute to building a circular economy society," by expanding our CSV business, reducing the impact on the environmental arising from the Kurita Group's businesses, participating in international water-related initiatives, and engaging in initiatives with external parties. Of these, CSV business generates a positive impact on society and boosts the corporate value of the Kurita Group.
The CSV business of the high-social value water treatment business is defined as products, technologies and business models that contribute significantly to water-saving, greenhouse gas (GHG) emissions reduction, and resource recovery or reduction of resource inputs compared to conventional efforts, and there are currently more than around 80 such models. More than just quantity, we are committed to quality, and also focus on the fact that the value provided by each model benefits our customers. The value provided by each model is selected not only based on logic, but also with laboratory tests and verification of effectiveness in actual equipment, by the Sustainability Committee that is responsible for the management of materiality metrics. There are also cases where even models already selected as CSV businesses may no longer provide high value over time following changes in customers and society, so we regularly review both the social and economic value as a way of strengthening competitiveness.

Strengthening human capital, the driving force of value creation, will be essential for advancing our competitive strategy based on the two concepts of "Achieving transformation with customer value as starting point" and "Creating innovation with social value as starting point" as set forth in PSV-27 Plan. The vision of human resources and organization that the Kurita Group's aspires to is defined in our D&I Vision, and the permeation of shared values of respecting water and the environment, as well as the expansion and mutual interaction of our diversity in knowledge, expertise and experience will lead to a virtuous cycle of value creation that only the Kurita Group can provide.
As a group-wide initiative, we will also be instilling our "Values" that form the foundation of the Kurita Group Philosophy System. In April 2024, we implemented the Kurita Group Behavioral Guidelines that embodies decisions and actions to be taken based on the notions of "Deepen understanding of frontline sites (Gemba)," "Elevate and connect expertise," Exceed expectations," and "Maintain unwavering integrity," and we are planning to instill the integrity that makes the core concept of these guidelines as the foundation of actions taken by each and every employee. We are aiming to become a group in which all members including executives embody this integrity by making judgments and putting into practice "what is proper and good," so that each and every employee can stand proud knowing that they have acted properly.

To achieve our corporate philosophy, I think it is essential to be constantly asking ourselves whether we are creating value that is truly unique to Kurita and whether we are taking the proper steps toward achieving that value, as well as gaining awareness and knowledge by engaging in dialogue with our stakeholders. We will continue taking on the challenge of creating value that exceeds everyone's expectations by enhancing the information we disclose while utilizing international frameworks and standards related to sustainability and third-party verifications, and by listening carefully to the feedback we receive through dialogue.