CSR InitiativesRisk Management

The Kurita Group Approach

The Kurita Group defines risk as any event that makes its sustainable growth and enhancement of the Group’s corporate value uncertain. We identify risks that need to be addressed while minimizing losses and damage by taking measures to avoid and mitigate risks, so that we can continue securing business opportunities for further growth.

Risk Management System

The executive general manager of the Corporate Planning and Control Division is responsible for monitoring risks and implementing risk management in the Kurita Group. The executive general manager regularly analyzes and evaluates the Group’s risks, conducts ongoing monitoring based on the Company-wide risk map, and takes steps to prevent risks from occurring.
In the event of a risk that could have a serious impact on Kurita’s business, the general manager formulates systems with those responsible for responding to the risk, obtains approval from the president and the representative director, and immediately issues instructions. Those responsible for responding to the risk promptly take action and report to the president and the representative director and the executive general manager of the Corporate Planning and Control Division regarding the impact of the risk, progress with mitigation and measures to prevent reoccurrence.
The E&S Committee is responsible for tackling material risks related to compliance and climate change, while the chairperson of the Headquarters Health and Safety Committee is responsible for material risks related to health, safety and disasters. The executive general manager of each division is responsible for responding to risks directly associated with day-to-day business operations. Also, responding to commonly seen risks relating to quality, the environment, information security, export controls, and so on are handled by the respective divisions responsible.
The executive general manager of the Corporate Planning and Control Division, the chairperson of each committee and the executive general manager of each division report periodically to the Board of Directors on the status of risk management implementation, and report as necessary to the Board of Directors and the Audit & Supervisory Board on the occurrence and impact of material risks. Furthermore, the Internal Auditing Department monitors the execution status and improvement status of risk management measures.

Identifying Risks and Formulating Response Measures

The Kurita Group uses a Group-wide risk map to identify potential risks in its business activities and assess risks against monitoring benchmarks. The Kurita Group also determines material risks for the Group based on the expected quantitative and qualitative impact of those risks and the likelihood of them occurring.
Material risks are mapped and specific response measures developed for each division. Risks are also reflected in business plans for each division and progress with risk response measures is monitored. Progress is regularly reported to the Board of Directors, which discusses and formulates material risk response measures for the next fiscal year, including responses to emerging risks caused by changes in the operating environment.

Kurita Group Risk Map

Risk category Main risks
Operating environment risk
  • Changes in demand due to fluctuations in factory operating rates and capital investment in client industries
  • Decline in prices for products and services due to intensifying competition
  • Price fluctuations for raw materials and other inputs
  • Impact on overseas operations due to changes in exchange rates and other factors
Country risk
  • Changes in regulatory frameworks and political and economic instability in Kurita’s markets
Disaster risk
  • Human and business losses caused by pandemics or natural disasters
Strategic risk
  • Failure to attain goals in medium-term management plan due to delays with organizational reforms, business restructuring
  • Slow pace of business expansion caused by delays with launching new businesses, executing growth strategy
  • Delays with developing businesses matched to client needs and characteristics of each country/region
  • Failure to remain competitive in water treatment market due to delays with introducing IT and building digital businesses
Business risk
  • Failure to provide competitive products, services or solution models in a timely manner
  • Claims for damages due to defects in products or services and delays with productivity improvements
  • Loss of competitiveness due to outflow of technical expertise
Financial risk
  • Loss of public trust caused by inadequate internal controls related to financial reporting
  • Deterioration in profitability or cash flow due to poor management of affiliated companies
  • Writedown of goodwill caused by weak earnings at acquired companies
Labor risk
  • Health issues caused by long working hours
  • Decline in ability to adapt diversity and other changes in operating environment
Legal and compliance risk
  • Infringement of intellectual property rights
  • Loss of public trust due to legal, regulatory or compliance violations and data breaches

  • ・The above table is not an exhaustive list of the Kurita Group’s risks.
  • ・Please click on the link below for more details about risk factors related to the Group’s business conditions, financial accounts and other items in the Securities Exchange Report that could have material impact on investor decisions.

Business Continuity Management (BCM) Policy

The Kurita Group has formulated a Business Continuity Management (BCM) Policy to set out the Kurita Group’s principles for handling emergencies that pose a risk to the continuity of the Group’s businesses, such as severe earthquakes, typhoons or pandemics. The policy enables Kurita Group officers and employees to make judgements and act appropriately by clarifying our basic approach as follows.

1. Highest priority on ensuring the preservation of human life

The Kurita Group will place highest priority on ensuring the peace of mind and safety and security of officers and employees and their family members.

2. Early restoration of business operations

The Kurita Group will endeavor to quickly restore operations at its own facilities, completed projects, projects under construction. In this way, it will make efforts to supply products and services in a stable manner and to support recovery efforts at clients.

3. Community support

The Kurita Group will support reconstruction of the local community while working to prevent secondary disasters at its own sites

Measures to Ensure Business Continuity During the COVID-19 Outbreak

Infections caused by coronavirus disease 2019 (COVID-19) have been increasing since February 2020. In response, the Kurita Group has introduced a backup personnel system for officers, division managers and other individuals involved in business execution in the event that they become infected. Reporting lines with Group companies have also been established to rapidly and accurately gather information.
In addition, Kurita has identified operations within each organization that are essential to ensure business continuity for clients and the Group and to fulfill its responsibilities to society. Infection prevention measures and backup personnel systems have been developed for employees working at Group companies and partner companies involved in essential operations.
Also, amid calls from the government for the public to stay at home, Kurita implemented rules on home working in regions where stay-at-home requests were in place. In principle, all employees in those regions were required to work at home unless they were involved in essential operations.
The Kurita Group will continue to flexibly adapt work systems in response to infection trends in each country and the needs of society and clients, while also developing new internal systems and reviewing work practices to align with the new realities of everyday life and changes in work styles.