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Kuraray CSR Report 1
Corporate Social Responsibility Report
I
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Origin of the Kuraray Group
Corporate Statements Kuraray Group Code of Conduct
We are committed to developing new fields of business using pioneering technology
that improves the environment and enhances the quality of life throughout the world.
"For people and the planet — to achieve what no one else can."
Philosophy
Respect for individuals
Close cooperation to attain shared goals
• Constant creation of new value
Guiding Principles
Safety is the cornerstone of
everything we do
Customers' needs are our top priority
We act on ideas in the workplace
• We will constantly develop and provide safe, high-quality pro ducts and services.
• We will maintain a sound relationship with society through go od communication.
• We will strive to preserve and improve the global environment, and to secure
safety and health in all our workplaces.
• We will value all members of the Kuraray community and respect their rights.
• We will always conduct businesses in a free, fair and transparent manner.
• We will honor all intellectual property and secure data and information in a proper
manner.
Kuraray CSR Report 2017
*Safety and Quality of Products and
Services
Disclosure of Corporate Information
Anit-Bribery/Rules for Donations
No Relationships with Anti -Social
Group
4+ Contribution to Society
Environmental Preservation
* Safety and Disaster Prevention
o Safe and Comfortable Workplace
* Respect for Human Rights
*Enhancement of Diversity, Equal
Opportunity
*Compliance with Antitrust/
Competition Laws
e Prevention of Unfair Competition
*Compliance with Laws Related to
Exports and Imports
* Prohibition on Entertainment and Gift
in an Excessive Manner
*Prohibition on Conflicts of Interest
*Prohibition against Insider -Trading
*Protecting Trade Secrets
*Protecting Intellectual Property

Contents
Origin of the Kuraray Group 2
Corporate Statements
Kuraray Group Code of Conduct
Editorial Policy
Ove,-, of the Kuraray GrouprftisF h k
Corporate overview
Business Outline
Breakdown of Net Sales by Segment
Data on Economic Efficiency
Kuraray Group Network
TOP STATEMENT 6
Process Used by the Kuraray Group for
Creating Social Value
Identification of Materialities by Kuraray Group
CSR Activity Target and Results
Process Safety and Disaster Prevention,
Occupational Safety, and Logistics Safety
Chemical products • Product Safety
Topics 2016
Safety Activities
Editorial Policy_,..__.......__....__.._....._.._..._._._..._.__.__.........__.. Environmental Management
___...._.... _...,.. _,,.,... __ __.. __._.
This report conveys the CSR activities that the Kuraray Group Global warming Prevention
implemented in fiscal 2016 with the aim of boosting understanding Topics 2016
of them among all stakeholders. Reducing of Environmental Risks
Environmental Activities
Reporting Period
Fiscal 2016: Jan.1 to Dec. 31, 2016
Scope of the Report
Safety and Environment: Reports focus on Kuraray Co., Ltd, and domestic
affiliated companies, but also include some overseas affiliated companies
Social: Reports focus on Kuraray Co., Ltd., but also include some affiliated
companies depending on their activities in the respective field.
Economic: Kuraray Co., Ltd., consolidated subsidiaries, and equity method
affiliates (total 40 companies)
Referenced Guidelines
In accordance with the CORE of the GRI Sustainability Reporting
Guidelines (G4)
Environmental Report Guidelines (2012 Edition) of Ministry of the
Environments (Japan)
issue Date
May 2017 (Previous issue: May 2016; Next issue: May 2018 (planned))
at • . rkplace 22
Activities at Workplace
Topics 2016
Activities at Workplaces
InteractionSociety
Interaction with Society
Topics 2016
Social Interaction
Governance and CSR Promotion Structure
Compliance -
Kuraray CSR Report 2017 3

Overview of the Kuraray Group
Actively undertaking business inside and
outside of Japan fully utilizing the Group
technologies rich in originality
Corporate overview
Company name
Kuraray Co., Ltd.
Representative
Masaaki Ito
Director and
38 consolidated subsidiaries, t equity -method affiliate
President
(as of Dec. 31, 2016)
Established
June 1926
Capital
89 billion yen
(as of Dec. 31, 2016)
Employees
8,590
(consolidated)
(as of Dec. 31, 2016)
Business Outline
Head offices : Tokyo and Osaka
Plants
Kurashiki, Saijo, Okayama, Niigata, Kashima, Tsurumi
Laboratories
Kurashiki Research Center, Tsukuba Research Center
Group companies
38 consolidated subsidiaries, t equity -method affiliate
(as of Dec. 31, 2016)
Major operations
USA, Germany, Belgium, China, Singapore
Kuraray was founded for the purpose of commercializing
chemical fiber rayon in 1926 in Kurashiki City, Okayama
Prefecture. Ever since becoming the first firm in the world to
commercialize vinylon fibers after the war based on domestic
Breakdown of Net Sales by Segment (Fiscal 2016)*
Others
Trading
Fibers a
Textiles
Functio
Materia
technology, we have made use of this unique technology
and have delivered a variety of one and only and number -
one products to the world as a specialty chemical
manufacturer.
Breakdown of Net Sales by Region (Fiscal 2016)*
Others
North
Vinyl Acetate Europ(
)prene
" Sales figures include sales to external customers and the amount of cross -segment internal sales and transfers.
The figures do not include the adjustment expense of 103.2 billion yen.
Breakdown of Net Sales by Segment
Vinyl Acetat 253.2 billion
In this business, we manufacture and sell poval
resin, which features water solubility and
adhesive properties, poval film, which can be
applied to liquid crystal displays and is also
used for single -use packets for detergents and
so on, EVAL, which has an excellent gas barrier
property, and PVB film used as an interlayer for
laminated glass.
Fibers and Textile 48.6 billion
In this business, we manufacture and sell
vinylon fiber used as a substitute material for
asbestos, MAGIC TAPE hook and loop fasteners,
KURAFLEX nonwoven fabric used for lifestyle
products and industrial materials, and polyester
fiber.
Isoprene 51.1 billion
In this business, we manufacture and sell the
world's only synthetic isoprene chemical
products and their derivative SEPTON, a
thermoplastic elastomer, as well as GENESTAR
a new polyamide resin with excellent heat
resistance.
Trading 119.5 billion
In this business, we import, export and sell
wholesale fiber and textile products such as
polyester filament, resin and chemical
products.
All italicized product names in this report are trademarks of the Kuraray Group.
4 Kuraray CSR Report 2017
Japan
Asia
Functional Materials 52.2 billion
In this business, we manufacture and sell
CLARINO man-made leather with a structure
and functionality as elaborate as natural
leather, dental materials that enable repairs
that closely resemble natural teeth, and
methacrylate resin, which boasts excellent
transparency and weather resistance.
Others 63.8 billion
In this business, we manufacture and sell
carbon material and highly functional
membranes and systems used in water
treatment, conduct an engineering business,
as well as handle VECSTAR liquid crystalline
polymer film, which is used mainly for Flexible
circuit boards.

Data on Economic Efficiency
Trends in Consolidated Total Assets,
Trends in Consolidated Financial Results Net Assets, and Return on Assets
M Net sales ® Operating income = Net income = Total assets M Net assets • ROA*
(100 million yen) (100 million yen) (100 million yen) %
6,000 800 8,000 12
4,852
4,500 678 600
'12 '13 '14 '15 '16 (FY)
Kuraray Group Network
EVAL Europe N.V.
(Antwerp)
Kuraray Europe GmbH
(Frankfurt)
000 TROSIFOL
(Russia)
MonoSol AF, Ltd~ Kuraray Europe Moravia s.r.o
(Hartlebury) (Czech Republic)
Europe
97.2 billion
(20%)
'12 '13 '14 '15 '16 (FY)
*ROA: Return on Asset
Number of Employees (Consolidated)
(Employees)
10,000
'12 '13 '14 '15 '16 (FY)
The figures are sales by region in hundred million Japanese yen and breakdowns of sales by region in %.
Kuraray Korea Ltd. Japan
(Ulsan)-
180.1 billion
(37%)
�Noirth)ric
MonoSol, LLC --9 65 billion
(Merrillville) (13%)
Kuraray America, Inc. ♦
(Houston) Kuraray America, Inc.
(Fayetteville)
Asia and
others
142.9 billion
(30%)
The Kuraray Group
38 consolidated subsidiaries/1 equity -method affiliate (40 companies including Kuraray Co., Ltd.)
OKuraraysite W. Domestic affiliated companies ♦ Domestic Kuraray Group companies *Overseas affiliated companies
p Yb a
"WOM
L Kuraray China
Kuraray Co., Ltd.
Co., Ltd.
KURARAY ENGINEERING CO., LTD.
(Shanghai, China)
KURARAY CHEMICAL CO., LTD.*
Kuraray Europe Benelux B.V.
Kuraray Asia
Plantic
Technologies
Pacific Pte. Ltd.
Limited
(Singapore)
(Australia)
Kuraray Techno Co., Ltd.
1
�Noirth)ric
MonoSol, LLC --9 65 billion
(Merrillville) (13%)
Kuraray America, Inc. ♦
(Houston) Kuraray America, Inc.
(Fayetteville)
Asia and
others
142.9 billion
(30%)
The Kuraray Group
38 consolidated subsidiaries/1 equity -method affiliate (40 companies including Kuraray Co., Ltd.)
OKuraraysite W. Domestic affiliated companies ♦ Domestic Kuraray Group companies *Overseas affiliated companies
p Yb a
"WOM
SA
Kuraray Co., Ltd.
`♦
KURARAY ENGINEERING CO., LTD.
' A
KURARAY CHEMICAL CO., LTD.*
Kuraray Europe Benelux B.V.
KURARAY TRADING Co., LTD.
THE KURASHIKI KOKUSAI HOTEL, LTD.
Kuraray Plastics Co., Ltd.
Kuraray Europe Moravia s.r.o
KURARAYLIVING CO.,LTD.
A
Kuraray Techno Co., Ltd.
Kuraray Asia Pacific Pte. Ltd.
TECHNO SOFT CO., LTD.
A
Kuraray Travel Service Corporation
Kuraray Korea Ltd.
KURARAY SAUD CO., LTD.
4'�A
Kuraray Kuraflex Co., Ltd.
-'A
KURARAY FASTENINGCO.,LTD.
01
KURARAY TAMASHIMA COMPANY LIMITED
A
Iruma Country Club Co., Ltd.
* Merged into Kuraray Co., Ltd. effective January 1, 2017
Kuraray CSR Report 2017 5
OKAYAMA RINKOH CO., LTD.
♦
OOO TROSIFOL
=' ♦
Kuraray Noritake Dental Inc.
♦
Kuraray Europe Benelux B.V.
A
THE KURASHIKI KOKUSAI HOTEL, LTD.
♦
Kuraray Europe Moravia s.r.o
A
KURARAY AQUA CO., LTD.
♦
Kuraray Asia Pacific Pte. Ltd.
VA
OKAYWNNKOHWAREHOUSE ANDTRANSPORTCO,LTD.
♦
Kuraray Korea Ltd.
OV ♦
Kuraray Okayama Spinning CO., LTD.
♦
Kuraray (Shanghai) Co., Ltd.
♦
Kuraray Trading (Shanghai) Co., Ltd.
ro
♦
Kuraray China Co., Ltd.
♦
Kuraray Holdings U.S.A., Inc.
♦
Kuraray Hong Kong Co., Ltd.
♦
Kuraray America, Inc.
♦
Plantic Technologies Limited
♦
MonoSol Holdings, Inc.
♦
Plantic Tribond Pty Ltd.
♦
MonoSol, LLC.
♦
Plantic Technologies (UK) Ltd.
♦
MonoSol AF, Ltd.
♦
Plantic Technologies (Germany) GmbH
♦
Kuraray Europe GmbH
♦
EVAL Europe N.V.
Kuraray CSR Report 2017 5

TOP STATEMENT
STATEMENT FROM KURARAY'S TOP EXECUTIVI
IHigher Demands for CSR
Today, the demands for corporate social responsibility have
intensified. As one example, activities for E -S -G (environment,
society and governance) have become critical themes for
corporate management. This approach is based on the
concept that a steady and continued response to various
challenges by corporations based on these three viewpoints
becomes a motive power for a sound evolution and growth
for corporations that in turn contributes to the formation of a
sustainable society.
As one recent topic in the area of the environment, the Paris
Agreement that was adopted at COP21 in December 2015,
and went into effect in November 2016, can be singled out
first. The Paris Agreement hammered out a goal of reducing
greenhouse gas emissions substantially to zero by the second
half of this century throughout the world, targeted at
"controlling the average temperature rise of the world to 2° C
or lower!
This historic international agreement manifests a strong
sense of crisis entertained among the nations against the
spreading of adverse effects caused by climate change on a
global scale. I believe that we too in the Kuraray Group as a
whole should tackle this goal to realize a sustainable society.
Next, our next social challenge is the acceptance of diversity.
"Diversity" embraces a very broad scope such as human
ethnicities, languages, genders and religions. First, Kuraray will
aim at creating workplaces, in which female workers can play
active roles, through continuous improvements of the
Kuraray CSR Report 2017
---rvrtl � a CU
Represent'
Kurara
workstyle of its employees. Kuraray believes that this initiative
will eventually support the growth of Kuraray to be a corporation
with vitality where its diverse workers fully demonstrate their
capabilities.
Lastly, corporate governance has increasingly become a
critical challenge when corporations aim at enhancing their
corporate values. Kuraray aims at creating an efficient corporate
governance system based on the corporate governance code
set by the Tokyo Stock Exchange. Kuraray is determined to
enhance its corporate values sustainably over many years while
maintaining appropriate relations with its diverse stakeholders
and fulfilling its responsibilities to society.
The Path on which the Kuraray
Group should Tread
The basic approach of Kuraray toward CSR follows the belief
of our founder, Magosaburo Ohara, "Returning all assets gained
from society to society" and the philosophy of our second -
generation president Soichiro Ohara, "Any profit which a
company might gain should be confined to those profits that
come from technological innovation and from consideration of
the social and economic benefits it brings to the entire nation"
The basic approach of Kuraray embodies the mission "For
people and the planet — to achieve what no one else can."
Kuraray has the founder who had a clear approach toward
corporate social responsibility long before the word CSR was

coined and this sense of mission has been passed down
unbroken from generation to generation.
I have always conveyed to our employees my aspiration of
wishing " Kuraray to be a company that sustainably grows
based on its own technology." In other words, I wish Kuraray
to be a company to contribute to society through its business
and to sustainably grow with all employees by making its
strong core businesses stronger and larger, by expanding the
scale of its businesses that are expected to grow using new
technologies rich in originality and by increasing the profit of
new businesses and products.
CSR Activities of Kuraray in
Action
The thought processes of Kuraray are explained above and
one of the tangible activities of Kuraray is participation in the
program called "Responsible Care (RC)" promoted by the
world's chemical industry. Kuraray expressed its approval of
the Responsible Care World Charter when I signed our
declaration in support of the charter and is promoting its RC
activities as core CSR activities of Kuraray.
The RC activities of Kuraray include activity items such as
"Environmental conservation," "Process safety and disaster
prevention," "Occupational safety and health," "Logistics
safety," "Chemical and product safety" and "Interaction with
society." The Kuraray plants in Japan continuously improve
their operations autonomously by rotating the PDCA cycle (a
cycle consisting of steps for "plan," "do," "check" and "act") for
each of these activity items. Our future challenge will be to
upgrade the level of our activities as group total activities
embracing the Kuraray Group in Japan as well as our overseas
affiliates.
Activities to reduce the emissions of greenhouse gases as a
goal of the Paris Agreement will be undertaken as part of our
RC activities when the Japanese Government presents specific
numerical targets together with a legal framework to the
industry.
The next topic is improvement of our workstytes. Since as
early as 2015, Kuraray has engaged in an activity to recognize
the value of time, which is a precious asset bestowed on all
people, instead of merely targeting the reduction of overtime
hours.
I believe it is extremely important for all employees to work
within a giventime, to foster family members and households,
to build relationships with communities and to aim at personal
growth.
Workstyles at companies are important to "lead a better
life:" We have been proceeding with work style improvements
where each one of the employees works in high quality,
efficiency of workplace are improved by all the members and
a healthy mind and body is maintained while each one of us
uses precious time effectively and makes all effort worthwhile
aiming at creation of new values and personal growth.
When these improvements in workstyle are accomplished, the
spectrum of activities of female employees, which has been a
social issue especially in Japan these days is expected to
expand.
TOP STATEMENT
At the same time, we consider that the employment of
female employees, expansion of their responsibilities and their
higher retention rate are crucial issues and have been
introducing specific measures to tackle with the issues.
Lastly, talking about corporate governance, in Fiscal 2003,
Kuraray established a management consultative committee,
increased the number of outside auditors and reinforced the
functions of its board of auditors. In Fiscal 2008, Kuraray
appointed two outside board directors and this timing in
having outside board directors was relatively early for
Japanese companies. Through these and other measures,
Kuraray is active in enhancing corporate governance. A
Kuraray governance report in compliance with the corporate
governance code that is introduced by Tokyo Stock Exchange
is also compiled in English for disclosure to foreign shareholders.
Thoroughness in Preventing
Recurrence of Incidents
In March 2016, the Fair Trade Commission of Japan made
an.,on-the-spot inspection of Kuraray, involving competitive
bidding on specified Vinylon products purchased by the
Acquisition, Technology and Logistics Agency of the Defense
Ministry. Kuraray fully cooperated with the investigation
conducted by the commission. In March 2017, the commission
ruled that Kuraray violated the Anti -Monopoly Law and issued
a cease and desist order.
Immediately after the on -the -spot inspection, I issued a
message to all the Group employees stating "I do not want
any profits gained by violating a law or a regulation. Those
businesses that cannot produce profits without i-nfri,nging a
law or a regulation must be discontinued."
Additionally, a new version of the Kuraray Group Anti -
Monopoly Law Compliance Guideline has been issued and
distributed to raise the compliance awareness of the Anti -
Monopoly Law among all our personnel. Measures for more
thorough compliance have been implemented, including
boosting of the compliance system within the organization,*
Nonetheless, in February 2017, the Fair Trade Commission
of Japan again conducted an on -the -spot inspection of
Kuraray on suspicion of having: violated the Anti -Monopoly
Law in connection with activated carbon used in water
purification facilities, waste incinerators and other facilities. We
deeply regret our failure to find this incident by ourselves: I'
apologize to all the stakeholders including our customers and
business clients for their concerns regarding this matter.
Kuraray takes the series of these events seriously and,
sincerely and will Implement all necessary measures to ensure
such incidents will never be repeated.
Kuraray is committed to more thoroughly comply with the
laws and regulations and to further devote itself to corporate
activities in maintaining good harmony with society in order
to regain the trust of its stakeholders and to respond to their
expectations,
r
* Please see. page 31 for Ku-raray's specific measures in implementing its
compliance activities.
Kuraray CSR Report 2017 7

CSR Activities at Kuraray Group
Process Used by the Kuraray Group for Creating Social Value
Basic Approach to CSR
As a corporate group engaged in manufacturing, Kuraray Group
creates economic and social value through providing its excellent
products and services to the market.
We in the Kuraray Group believe that the most fundamental
responsibility as a group of enterprises is to make a positive
contribution to solve social issues such as resource saving, energy
saving, environmental conservation and improvement of quality of
life through businesses utilizing the unique technologies of
Kuraray. These business activities are based on the foundations,
namely, "compliance," "safety" and "risk management" In the
course of these business activities Quality management for
manufacturing sustains the process of value creation.
On the other hand, all company activities are supported by
Corporate
Statements
Our Mission
Our Values
Our Commitment
-+132
Involvement with Stakeholders
Shareholders and Investors
Kuraray will strive to expand its corporate value,
will return profits to its shareholders and investors
and will appropriately disclose information
available to it.
Value Chain
Kuraray CSR Report 2017
dialogues with stakeholders (shareholders and investors, customers
and consumers, local communities, central and local governments,
NPOs). The employees, suppliers, and partners, who participate
directly in business activities themselves, are also Important
stakeholders.
Kuraray is committed to propelling CSR through its business
activities by further deepening dialog and cooperation further with
its stakeholders.
Responsible consideration given to
our stakeholders
Kuraray Group is engaged in the business of providing its
products and services by adding higher value to resources received
from society. The responsibility that needs to be fulfilled as a
Concept of CSR
Realizationof
Corporate
Value creation
through business
activities
Quality
management
Compliance
Suppliers and Partners
Striving to build a relationship of mutual growth
with its suppliers and partners, Kuraray will
conduct fair and transparent transactions and
SCR procurement activities.
Business Activities
Safety Risk
management
manu
impac
rangir
name
shippi
recycl
the of
respol
invest
such i
and d
returr
and o
G rot
Employees j Loca
Kuraray will continue to create safe and heal ving its cons
workplaces in which its diverse human resour -'servation an
are treated fairly and the employees can maxim ositive COMML
their capabilities and competences. ood relationshil
Procurement Development — Production
r9j (Raw Materials,E ui ment, and Parts
q p ) (Waste Emission)
Material Cycle

manufacturer is to give maximum consideration not only to
impacts on our stakeholders related to the entire material cycle
ranging from the activities in which the Group is directly involved,
namely, procurement, development, production, selling, and
shipping, but also to processing, consumption, waste disposal, and
recycling after selling and shipping products to the customers. On
the other hand, the Group believes that it is also an important
responsibility to invest funds received from our shareholders and
investors for business operation, to distribute the results earned in
such investment, to reinvest the funds in equipment and research
and development for sustainable growth and to appropriately
return such earnings to employees, social contribution activities,
and other purposes.
Growth strategy
"a high -profit specialty chemical
company with a global presence."
F GS -STEP J
or Growth Strategy with Synergy, Technology,;'
Eco -friendliness and Profitability
Growth strategy
Deepening of core Optimum allocation of
business management resources ;
Technological innovation Contribution to the
Next -generation growth environment
models
Stakeholder Communication
Solving Social Problems
Resource saving,
energy saving
Environmental conservation f
Enhancement of
quality of living
.. ...
Local Communities Central and Local Governments, NPOs and NGOs Customers and Consumers
....................................................................
eatTood
wing its consideration to environmental We will continue to build sound and constructive Kuraray is committed to building a relations hipof
ourcnservation and work safety and promoting relations based on transparent corporate trust over many years by providing "safe, trustful
ximsitive communication, Kuraray will build a governance. and satisfactory" products and services and by
relationship of coexistence with the local providing appropriate information.
Communities.
_. .....
Sales, Marketing and Shipping Processing, Consumption and Waste
Disposal (Recycling) Material Cycle
Kuraray CSR Report 2017 9
Shareholders and
General meetings of shareholders, plant tours,
Investors
meetings to explain settlement of accounts
Suppliers and
Purchasing activities, safety councils, liaison
Partners
meetings, etc.
Employees
Employee awareness surveys, labor-management
meetings, personnel evaluation interviews
Responsible Care Regional Dialogue, Meetings with
Local
local residents' associations for exchange of views,
Communities
Plant tours, chemistry classes for boys and girls,
Cherry blossom viewing parties, summer festivals
and other events
Central and Local
Governments,
Plant tours, firefighting drills, volunteer activities
NPOs and NGOs
Customers and
Sales and marketing activities, trade fairs (Eco -
Consumers
Products Fair and other fairs), questionnaires
Solving Social Problems
Resource saving,
energy saving
Environmental conservation f
Enhancement of
quality of living
.. ...
Local Communities Central and Local Governments, NPOs and NGOs Customers and Consumers
....................................................................
eatTood
wing its consideration to environmental We will continue to build sound and constructive Kuraray is committed to building a relations hipof
ourcnservation and work safety and promoting relations based on transparent corporate trust over many years by providing "safe, trustful
ximsitive communication, Kuraray will build a governance. and satisfactory" products and services and by
relationship of coexistence with the local providing appropriate information.
Communities.
_. .....
Sales, Marketing and Shipping Processing, Consumption and Waste
Disposal (Recycling) Material Cycle
Kuraray CSR Report 2017 9

CSR Activities at Kuraray Group
Identification of Materialities by Kuraray Group
For the purposes of meeting various codes and guidelines as
social requirements related to our businessactivities diversify, since
2014, Kuraray Group has been identifying priority issues
(materialities). Processof identification, material items (aspects) and
future management are posted.
Items (aspects) to be studied in terms of importance and priority were selected.
Selection Of Seventy items were selected, using GRI Sustainability Reporting Guidelines Version 4.0, which is
Items aninternational standard, as an indicator, coupled with requirements in ISO 26000 and Responsible Care
(RC).
The selected 70 items were evaluated by translating the degree of impact on Kuraray Group in the
processes of value chain into points. These processes are procurement (raw materials, equipment, and
parts), development to production (waste emission), sales marketing and shipping, processing,
Prioritization consumption, and waste disposal (recycling) and other (relations to local communities and central and
local governments). Among them, about 30 items that were ranked high priority were extracted.
At the same time, items for which outside stakeholders, financial research organizations, rating
agencies and other entities are expecting Kuraray Group to take action were given priority.
The 18 material items were identified by taking Materiality items for stakeholders and Materiality
items for Kuraray Group into considerations.
Identified items were validated by CSR Committee and reflected in the tasks and targets for related
Identification business activities.
An approach for material items will be made in future.
Periodical reviews will be made to ensure appropriate selection and management of items meeting
the changes of the times.
Materiality Map of Kuraray Group
Material Items
10 Kuraray CSR Report 2017
• •il
Products and services
Economic performance
Overall Local community
Materials
Employment Product and service labeling
Energy
Occupational health Customer health and safety
,.._,
Water sources in region
and safety Process safety and disaster
o
Emissions
Training and education prevention
z
v
Effluents and waste
Diversity and equal Safety in logistics
Yopportunity
Chemicals and products safety
w
!t7
Traditional procurement practice Equal pay for male and female employees Marketing communication
Presence in local community
Labor and management relations Privacy of customers
«`yr
Indirect economic impact
Assessment of impact of suppliers on society
®
Complaint processing system for labor customs
Freedom of association and group negotiation
Transportation and movement
FEM Assessment of human rights
in environmental aspect
Compliance in environmental aspect
Public policy Assessment ofhuman rights at suppliers
Biodiversity
Prevention of corruption Child labor, forced labor, investment, public -
Environmental assessment of
Anticompetitive practices security customary practice, rights of
Compliance in social aspect indigenous people, Nondiscrimination
suppliers
Environmental complaint
Social impact assessment of suppliers Complaint processing system for human rights
processing system
Complaint processing system regarding
social impact
Low
Medium High
Materiality for Kuraray Group
10 Kuraray CSR Report 2017

CSR Activity Target and Results
CSR Activity Target and Materialities of Kuraray Group
Activity Item Targety Material Items Boundary'[ Results
I
Medium-term
Management management
plan
Process Safety
and Disaster
Prevention
Safety
Occupational
Safety
"GS -STEP' (2015 to 2017)
management
• Deepening of core businesses
• Technological innovation
Economic performance
• Creation of next -generation growth models
I Products and services
• Optimum allocation of management
resources
• Measures to prevent process accidents
(Environmental efficiency]
• Transfer of operational skills and techniques
Process Safety and
from experienced persons to unexperienced
Disaster Prevention
persons (Know -Why activities) and
Occupational Safety
sustainable continuation
Logistics Safety
• Comprehensive understanding of risks and
Chemicals and products
steady implementation of measures
safety
-------_---------- ---------------- ----
• Enhancement of safety awareness of
Safety and health for
customers
individual persons
labeling of products
• Global deployment of safety activity
d
For the progress status of the medium-term
management plan "GS -STEP" that started from FY
QO 2015, please refer to the financial summary for the
fiscal year ended December 2016 (2. Management
policy).
For more
information,
please
contact:
Web site*2
The safety level was improved by implementation of
O transfer of0perational Skills and Techniques from
experienced persons to inexperienced persons P12
(Know -Why activities) as well as grasping of risks and to
countermeasures against risks. As a result, there are
no serious process accidents and domestic P15
occupational incidents have been the best in the past
V 10 years.
Kuraray CSR Report 2017 11
management
. an servrces
Japan: Greenhouse gas emissions
In Japan, measures to reduce GHG emissions by
(Environmental efficiency]
10,000tons-CO2e were implemented. As a result, the
Improvement by 40%compared with
'Environmental Efficiency' of the Kuraray Group in
j Global warming
Fiscal 2010 (Target year 2020)
i Energy
O Japan improved compared with fiscal 2010. However,
prevention
i Overseas: Energy consumption
Products and services
this performance is behind the target of fiscal 2016
j [Environmental efficiency]
envisioned in the Medium -Term Plan. On the other
Improvement by 10% compared with
hand, 'Environmental Efficiency'of the Overseas
Fiscal 2010 (Target year 2020)
affiliates as to energy consumption decreased.
Effective
Overseas: Water consumption
Although we have not set concrete target in Japan,
9 9 P
Utilization of
Water Resources
i [Environmental efficiency]
Improvement by 10%compared with
•
Water sources in region
Q we strove to make effective use. Overseas water
consumption increased with the increase in
i_.._ ------- —-------- --.`----------'—
Fiscal 2010 (Target year 2020)
production volume.
-----------i------_.--'-------------._._
Japan: Emission of PRTR chemical substances
1
_.._--.._ : --------------- '_ __--------_-_'_-----_-__..
Emissions of PRTR substances in Japan were lower
P16
Management of
; designated by the Japan Chemical
than the previous year's results, and the
to
chemical
Industry Association
Emission intoC
environmental efficiency improved compared to
P21
Environment " substance
[Environmental efficiency]
atmosphere
FY2010.Overseas, we comply with each chemical
emission
Improvement by 100% compared with
!
substance emission regulation at each production
i----------
Fiscal 2010 (Target year 2020)
site.
---------'-----------'-
--------------------'-------- --------- ----.._..
Since fiscal 2007, Kuraray Group in Japan has been
maintaining 'an effective utilization rate of waste of-
f-Japan
Japanand Overseas: Amount of waste
90% or higher, and final landfill disposal rate of : l%or
Effective
generated
Wastewater and waste
lower." In fiscal 2016 also, these rates were maintained.
Utilization of
[Environmental efficiency]
,� However, environmental efficiency was decreased
Waste
Improvement by 10% compared with
Raw materials
compared to fiscal 2010 due to the startup of
Fiscal 2010 (Target year 2020)
additional facilities and so on.
Environmental efficiency also decreased in overseas
r--- —----'--
--------------
as well
Investments for environmental conservation
Environmental
purposes totaled V382 million (Y420 million for the
I Accounting
Overall
Q previous year), while environmental conservation
Web site *a
expenses totaled Y2,359 million (Y2,596 million for the
previous year).
j
As part of fostering human resources who can actively
Personnel policy
take part in conducting business internationally,
allowinggroup
! Providing growth
training was provided for the personnel in the
employees to
Providing growth opportunities to employees
',. opportunities to
classes ofdivisiongeneral managers and section
O managers. Short-term training and other training
feel work is worth
accomplishing
employees
-
programs were undertaken for staff -level personnel,
participated by about 50 persons from the Kuraray
Group inside and outside of Japan.
;.._-------- ---..
_-------- --- -------- ---- --
----_
P22
Workplaces
Workshops for the personnel of the division general
to
Diversify,
• Promotion of active participation by female
equal
manager class were set to promote a corporate
P25
work -life
employees
culture to further encourage active participation of
O
balance
. Refined working style
opportunityty
opportunity
female employees in business scenes. The first phase
Minimizing unused annual paid vacation
Employment
of a homeworking scheme and other measures were i
9
implemented.
Healthy
Continuation and boosting of mental health
Occupational safety and;
As part of a mental care program, supervisor -to -
Management of
measures and measures against lifestyle-
health
O employee mental -care and self-care training sessions
Mind and Body
related diseases
and stress checks ,•vere undertaken.
Implementation of following activities:
Contribution in
• 'Sending School Backpacks Across the Sea'
Cultural,
! -Chemistry Classes for Boys and Girls'
Activities were undertaken with a focus on the
P26
SocietyAcademic,
'. Operation ofworkfacilities forpeoplewith
Local community
(culture,artandscience,environmentandwelfare
0
to
to
Environmental
intellectual disability
I in accordance with the social contribution
and Social
.'Kuraray FureaiFund"
;activity policy of the Kuraray Group. i
P29
Welfare Fields
j . Activity with emphasis on link to local
i
community
i
I
*1 Boundary: Range where influence occurs ® Inside and outside organization,
O Inside organization *2http://www.kuraray.cojp/ir/pdf/account/170208-jp.pdf
*3 http://www.kuraray.co.jp/en/csr/report20l7/environmental/
Kuraray CSR Report 2017 11

Process Safety and Disaster Prevention, Occupational Safety, and Logistics Safety
The Kuraray Group is promoting creating safe workplaces that
are free of occupational incidents, process accidents, and disasters
by raising the safety awareness of our employees and operating a
safety management system for preventing occupational incidents
and process accidents through early discovery of the risks for them.
In preparation for accidents or disasters, we make efforts to
minimize damage and to prevent the recurrences accidents or
disasters, such as emergency drills, sharing information of accidents
or lessons.
Guiding Principle on Ensuring Safety
"Safety is the Cornerstone of Everything We Do"
Action Courses on Ensuring Safety (FY 2017)
• Ensure "Safety First, Production (Construction and
R&D)Second"
• Take 5 seconds before You Act, and Do "CHECK" in
order to eliminate Unsafe Situation (action, behavior,
condition)
• Act with sense of ownership and responsibility for
all employees, aiming to achieve zero accidents and
disasters.
Targets and Performance in Safety Priority Activities
Item I FY2016
Safety Management
In accordance with Corporate's Safety Activity Management
Regulations, the Kuraray Group develops a safety plans every fiscal
year and operates them to ensure occupational safety, process
safety, and disaster prevention. To be more specific, each year, at
the Safety Promotion Committee attended by the President and
executives in charge, we makes an overall assessment and
discussion of safety activity performances of previous year and
decides activity policy for the coming fiscal year, and we
disseminate decided activity policy to all Group companies. In line
with this policy, the Group companies are conducting safety
activities that reflect the specific action plans of each plant and
department. A group of safety representatives from the
headquarters, including the executives in charge, visit every plant
twice a year to conduct Internal Safety Audits on their safety
activity plans, progress management, and the results.
Verification of Sites for Safety Activity at Kurashiki Plant
Evaluation: O Accomplished, 0 Nearly accomplished, X Not accomplished
Target Performance
Enhancement of process safety
manegement level Implementation of risk assessment of unusual jobs
Transfer of Operational Skills and Transfer ofoperational skills and techniques—utilizing
Techniques from experienced persons to career development program (CDP) incorporating
inexperienced persons (Know -Why "know -why" activities
activities) and sustainable continuation Installation of new system that integrate education and
Process Safety
and Disaster Grasping of risks and countermeasures
Prevention, against risks
Occupational
Safety
Enhancement of Safety Awareness of
Individual Persons
Constructing the base for globalization of
safety activity management
Numerical Target and Performance
Implementation of risk assessment aiming at improvement
the comprehensiveness
Implementation of inherently safe countermeasures for
serious risks
KY (Klken Yochi - hazardous prediction) before starting
operation
Pointing & call activities
Educating and compliance with rules
Activity of taking a pause before acting
Activating intercommunication with overseas affiliates
Construct the database "Global Safety Info"
Globalization of occupational incidentq avahutinn c—tom
2015 2016
2017
Target
Criteria for
Actual Target Actual
persons
evaluation
Process Safety
Numberof
Japan 3 0 4
*Imp ementation of
1 >
Outside
1 0 1
O
countermeasures for
Accidents
zero
damage
Japan
• Capability of detecting
none
abnormal signs and dealing
Number of Lost
Japan 6 0 2
AB rank 2 >_
Occupational
Time Incidents
O
Outside 17 0 13
Japan
none
Safety
zero
Frequency Rate of
Japan 1.32 0.8> 0.81
0.8 —
All Occu pati o na IOutside
Japan 726 4.0 >_ 6.10
none
Incidents
12 Kuraray CSR Report 2017
FY 2017 Priority Activities
Evaluation
O
In 2017, the Kuraray Group In Japan will set a new evaluation criterion for
safety performance aside from its objective goals. The Group will aim to
improve its safety level to below half of the average performance in the past
five years. Additionally, evaluation will be made based on the number of
occupational incidents that are evaluated as Rank AB in the labor accident
evaluation ranking, instead of evaluation based on the number of days off
taken due to an occupational incident. This evaluation ranking for
occupational incidents is an indicator unique to Kurafay and rates the levels
of seriousness of occupational incidents in accordance with the levels of
potential disorders and with the levels of faults that caused such accidents.
The rank AB is for severe accidents. On the other hand, in 2017, the Kuraray
affiliates outside of Japan will set evaluation criteria of their own, instead of
setting uniform evaluation criteria for the overseas Kuraray units.
The frequency rate of all occupational incidents is the number of all
occupational incidents per million working hours. All occupational incidents
are defined as incidents requiring at least minor medical attention, based on
the definition of a recordable incident by OSHA (Occupational Safety and
Health Administration) of the US.
• Enhancement of safety
awareness of individual
O
persons
•Implementation of risk
assessment of unusual Jobs
*Imp ementation of
inherently safe
O
countermeasures for
serious risks, or minimizing
damage
• Capability of detecting
O
abnormal signs and dealing
with abnormal situations
• Constructing the base for
globalization of safety
O
activity management
In 2017, the Kuraray Group In Japan will set a new evaluation criterion for
safety performance aside from its objective goals. The Group will aim to
improve its safety level to below half of the average performance in the past
five years. Additionally, evaluation will be made based on the number of
occupational incidents that are evaluated as Rank AB in the labor accident
evaluation ranking, instead of evaluation based on the number of days off
taken due to an occupational incident. This evaluation ranking for
occupational incidents is an indicator unique to Kurafay and rates the levels
of seriousness of occupational incidents in accordance with the levels of
potential disorders and with the levels of faults that caused such accidents.
The rank AB is for severe accidents. On the other hand, in 2017, the Kuraray
affiliates outside of Japan will set evaluation criteria of their own, instead of
setting uniform evaluation criteria for the overseas Kuraray units.
The frequency rate of all occupational incidents is the number of all
occupational incidents per million working hours. All occupational incidents
are defined as incidents requiring at least minor medical attention, based on
the definition of a recordable incident by OSHA (Occupational Safety and
Health Administration) of the US.

Process Safety and Disaster Prevention
At the Kuraray Group, we consider it a major responsibility to
prevent the occurrence of explosions, fires, leakage of hazardous
materials, and other accidents that could have an immense impact
on society, as well as to curtail the damage in the event of any
occurrence to the minimum level. For this purpose, we have
undertaken activities such as risk assessment related to process
safety and disaster prevention, earthquake countermeasures for
buildings and plants, and conditioning of the safety management
system for facilities in all plants.
We are promoting safety self -activities by implementing them
as planned: 10 Risk assessment, OO Utilization of accident
information and (D Transfer of technical background (Know -Why
activity) in accordance with the "Activity Plan for Industrial Safety'
compiled by the Japan Petrochemical Industry Association.
We are undertaking risk assessment of unusual situations such
as total power blackout and emergency stop and clarifying the
criteria for discriminating abnormal situations in order to activate
and enhance effectiveness of risk assessment activities.
Additionally, CDP*l activity and KMMS*2 are continuously
undertaken to promote the transfer of operational skills and
techniques from experienced persons to inexperienced persons
incorporating the Know -Why activities.
In Fiscal 2016, unfortunately, one minor fire accident and three
accidents involving leakage of chlorofluorocarbon (CFC) gas from
air conditioning equipment occurred inside of Japan. And one
minor fire accident occurred outside of Japan. All these accidents
had no impacts on the external environment or on human health
and safety.
In Fiscal 2017 and thereafter, we will continue to undertake the
safety self -activities to prevent accidents.
Number of Process Accidents
Fires Explosions, ruptures Leakage Other
Domestic Kuraray Group Overseas Affiliates
Number of Process Accidents Number of Process Accidents
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
2
1 1 1 1
0 0 0 I 0 I 0
'09 '10 '11 '12 '13 '14 '15 '16
(FY)
*1 CDP: A system to evaluate levels of knowledge, skills, techniques, technologies, and
action characteristics needed for first-line operators in workplaces to visualize them
and to compile an assessment chart for mapping of capabilities of all personnel, to set
targets for individual persons, and to provide training based on it.
*2 KMMS: A facility management system based on the PDCA cycle (P: Plan making for
maintenance, D: Do maintenance work, C: Check and evaluate activity results and
reassess maintenance plan, and A: Act to review maintenance plan) by evaluating the
importance of each piece of equipment in a unit of production activity and by setting
an equipment management system in accordance with risks associated with each
equipment.. By undertaking activities under this system, operators participate in cause
analyses of equipment problems and in reviewing countermeasures and equipment
management norms, for furtherance of human resource development and transfer of
techniques and technologies from experienced persons to inexperienced persons.
Preparedness against earthquakes and
tsunamis
In 2017, Japan is observing the 22nd anniversary of the Great
Hanshin and Awaji Earthquake, 6th anniversary of the Great East Japan
Earthquake and Tsunami and first anniversary of the Kumamoto
Earthquake. Japan is an earthquake -prone country and preparedness
against earthquakes and tsunami is a social responsibility of
enterprises in Japan. Kuraray is implementing various measures to
minimize potential damage caused by earthquakes and tsunamis
including the Nankai Trough Earthquake, which is expected to cause
large-scale damage in the future, and to ensure early recovery from
damage inflicted by earthquakes and tsunamis.
Preparedness against Earthquakes
■ Emergency evacuation using an emergency earthquake alert, emergency plant
shutdowns based on an earthquake flash and emergency shutting off of
piping
An anti -earthquake diagnosis of buildings, plants, facilities, and structures will
be conducted. Earthquake -proof reinforcement, rebuilding with
earthquakeproof facilities and structures, and installation of evacuation shelters
and other facilities will be undertaken as necessary
Prevention of dispersion of chemicals, furnishings and equipment inside
buildings and fixing of them to prevent them from falling over
Lecture meetings for disaster prevention, emergency drills, evacuation drills
and emergency lifesaving training
® > . _m Mr.i
1 ME
Experience in earthquake -
proof techniques Earthquake -proof
(Kuraray plastic Ibuki) reinforcement of plant
Seismograph building (Kashima Plant)
Automatic stop in the Rebuilding into
case of an earthquake earthquake -proof
IL
building (Sai)o Plant) Emergency shut-off
(Niigata Plant) valve (Kashima Plant)
Preparedness against Tsunami
Building and maintenance of tide embankments and reinforcement of shore
protection
Upgrading of critical equipment and facilities, prevention of inundation,
prevention of outflow of hazardous materials
Indication of elevations (above sea level), posting of information and
dissemination of evacuation sites and routes, evacuation drills and anti -
disaster agreements concluded with local residents
Stocking of emergency provisions, apparatuses and other articles to prepare
for isolation for a protracted period
6 •■■ MEGM ■AN
r 6.8M
im
Guide boards showing Boards indicating Stocking of emergency
evacuation route elevation above provisions (Okayama)
(Okayama) sea level (Tsurumi)
Tide embankment (Kurashiki) Emergency transport drill (Kurashiki)
Kuraray CSR Report 2017 13

safety Activities
Occupational Safety
Realizing that the safety and health of its employees are the basis
of business activities, the Kuraray Group aims to create safe and
accident free workplaces by striving to enhance the safety level of
each of its employees and organizations through appropriate
implementation of its occupational safety management system.
In Fiscal 2016, the frequency rate of lost time incidents and
frequency rate of all occupational incidents of the Kuraray Group in
Japan were 0.16 and 0.81, respectively, registering the best records
since 2005.
On the other hand, in many of the cases that have taken place
outside Japan, doctors order employees to take temporary leave
from duty even if injuries are minor in severity.
Therefore, the same frequency rate of lost -time accidents
applied in Japan cannot be applied to the overseas units.
For this reason, the evaluation is made based on the frequency
rate of all occupational incidents severer than minor incidents,
instead of lost -time incidents.
The frequency rate for Fiscal 2016 was 6.10, lower than the 7.26
registered in the previous year.
Generally, the companies in Europe and North America
undertake activities focusing on preventing severe accidents and
the frequency rate of occupational incidents including slight
accidents there tends to be higher than in Japan.
In Fiscal 2017, the overseas Kuraray Group will be using an
industrial accident evaluation ranking of Kuraray's own on a trial
basis so that the performances of the Group units outside Japan
can be evaluated using the same criteria as those for inside Japan.
Global safety meetings and global deployment of a
management system for safety activities are planned beginning
2018. These measures are intended to promote the sharing of
information on safety activities inside and outside Japan and to
improve the frequency rate of lost -time incidents of the overseas
Kuraray Group.
Frequency Rate of Lost Time Incidents*
-*-Domestic Kuraray Group -*-Japanese chemical industry
-4 Members of Japan Chemical Industry Association(Parent companies)
1.2 Frequency Rate
0.8 0.81
0.4
0.0 0.29 0.16
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
(FYJan: Dec.)
"Frequency Rate of Lost Time Incidents : Number of Lost Time Incidents per
million work hours.
Frequency Rate of Lost Time Incidents*
t Domestic Kuraray Group -*- Overseas Affiliates
Frequency Rate -0- Kuraray Group inside and outside Japan
12.0
8.0 6.10
4.0
_ 24
oo 1181
'05 05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
(FY Jan:Dec.)
Frequency Rate of All Occupational Incidents : Number of all Occupational
Incidents per million work hours involving minor incidents and more serious
incidents.
14 Kuraray CSR Report 2017
Logistics Safety
To prevent damage to society at large caused by logistics
accidents, the Kuraray Group is engaged in an ongoing promotion
of activities to ensure logistics safety in the aspects of product
shipment andstorage.
The Kuraray Logistic Safety Conference, which is the core
organization for this activity, marked its 16th year. In Fiscal 2016,
filling work of hazardous materials and structures of transport
containers were verified on site at the Kashima Operations. Specific
measures were shared with the companies outsourced for
transport of hazardous materials to raise the awareness of them in
dealing with the specific measures to prevent accidents in the
transport of hazardous materials. (Nine companies outsourced for
the transport of hazardous materials participated in these on-site
verification examinations.)
Topics 2016
Risk Assessment of Chemical
Substances
In 2012, some of the employees and former
employees of an offset printing company in Japan,
which used a chlorinated organic solvent as a
detergent, suffered gallbladder cancer, causing a
major social problem. Triggered by this accident, the
Industrial Safety and Health Law has been amended.
Beginning June 2016, risk assessment of chemical
substances has become an obligation for business
establishments handling 640 chemical substances that
have a certain level of hazard or noxiousness.
Based on risk assessments, the employers are
required to improve manufacturing equipment or to
implement effective measures to safeguard workers
against hazards or health disorders believed caused by
such chemical substances.
Several chemical substances are used at worksites
of the Kuraray Group. In response to this law revision,
the Kuraray Group has reviewed and set new internal
rules and regulations related to risk assessments of
chemical substances. The Group has inspected how
chemical substances are handled at its operations and
plants in Japan and has verified that these chemical
substances are handled appropriately in accordance
with its internal rules and regulations.
Risk assessment is conducted by completing the following steps.
Identification of hazards and hannsofchemical substances and other materials
c
(Article 57-3 (1) of Industrial Safety and Health Act of Japan)
Estimation of potential risks by identified hazards and harms
(Article 34-2-7 (2) of Ordinance on Industrial Safety and Health of Japan)
Study of risk mitigation measures based on risk estimation
(Article 57-3 (1) of the Act)
Implementation of risk mitigation measures
(Article 57-3 (2) of the Act)
Dissemination of results of risk assessments to workers
(Article 34-2-8 of the Ordinance)

Chemical products -Product Safety
Basic Policy on Product Safety
Targeting contribution to realizing an affluent and
comfortable society by responding to customer
needs thorough supply of products that are safe and
reliable.
IProduct Safety
The first paragraph of "Our Commitment," a statement of
Kuraray Group reads "We will constantly develop and provide safe,
high-quality products and services."
A working group centering on the CSR Division staff has been
organized to study products that require a company -wide study of
safety and to verify product safety. The products to be studied
include those that are ingested in the body and that use
nanomaterials.
In Fiscal 2016, a committee was held on development projects
that handle various materials in accordance with the regulation on
the handling of nanomaterials. As a result, appropriate safety
T_ -_ , — — 1 / \'1 ef
IVPILb LV IV
measures have been taken to ensure safety of the workers,
environment and end users.
In Fiscal 2017, the Kuraray Group plans to further strengthen its
mechanism to evaluate product safety, in order to continue the
supply of safe products in the future also.
Chemical Substance Management
Kuraray Group is managing chemical substances using an
information technology (IT) system.
In Fiscal 2016, improvement of and education on the software
of the IT systems of the Group were continued to better comply
with the overseas laws and regulations. Periodic opportunities
were provided to the managers and their staff for the management
of chemical substances assigned to the group companies in Japan
and to the corporate divisions, to ensure strict compliance with the
laws and regulations.
In Fiscal 2017, the Kuraray Group is striving to improve the
quality of its product information supplied to the customers by
newly creating an opportunity to share information with the Group
companies outside of Japan and by advancing collaboration with
them in order to boost the management of chemical substances
within the entire Group.
Introduction and Utilization of IT System Dedicated to Management of
Chemical Substances
The Kuraray Group has installed and is using an IT system for
integrated management of information on chemical substances
used to appropriately respond to laws and regulations of the
countries and regions that are amended frequently from time to
time recently and to information supplied in the supply chain.
The IT system stores the information of the chemical substances
used by the Kuraray Group companies in Japan in a database. The
system links to external databases that contain information on
hazards and on laws and regulations for use in checking products
that are required new or additional actions as a result of an
amendment to a law or a regulation, in compiling safety data sheets
(SDS) that are supplied to the customers and for other purposes.
As a general trend, the countries and regions of the world are
reinforcing and adding laws and regulations related to chemical
substances. Kuraray is also facing increases in the number of
management items as types and destinations of chemical
substances that are used continue to increase. The IT system is
currently used mainly in Japan. Kuraray is studying the use of the
system in its overseas operations also in the future and is
contemplating building a system to effectively manage chemical
substances within the entire Group.
Kazuhiko Kugawa, Director, Primary Executive Officer
The actual frequency rate of all occupational incidents for Fiscal 2016 Japan -in Fiscal 2016. Fortunately, these accidents were not major ones that
for the plans in Japan stood at 0.81 compared with the target of 0.8 or less
and was slightly below the target. Nevertheless, this was the best result
since 2005 and I would say that this figure couldbe highly evaluated.
Aiming at causing no occupational incidents in Fiscal 2017, we are
continuing our effort to further improve our performance. In process safety
and disaster prevention, five accidents took place inside and outside of
would have causedgreat impacts on the local communities or on our
business. We continue preventing process accidents as they would cause
human damage, fires, explosions and other disasters even if they are minor
in scale. Our challenge will be to boost collaboration with our overseas
plants in overall safety actiyities as our business has rapidly been
giobalizing.
Kuraray CSR Report 2017 15

T
Environmental Management
We believe that the Kuraray Group's mission as a material and
intermediate material manufacturer is as follows:
• Contributing to society by providing the materials and intermediate
materials required for products that are needed to create a low -
carbon society and an eco -friendly society, and
Producing items with as low an environmental impact as possible.
With this in mind, we are working consistently to implement
environmental conservation activities that include promoting
measures against global warming, managing chemical substance
emissions, and the beneficial use of wastes.
[Note]
Asa result of the change in months in each fiscal year, the environmental data and
information contained in this report including graphs are as follows.
Before fiscal 2013: Actuals in 12 months from April to March of the following year
• Fiscal 2014: Actuals for 9 months from April to December + Actuals for January to
March 2014 (or estimated value) [Partially overlaps with fiscal 20131
After fiscal 2015 (For reference purposes): Actuals for 12 months from January to
December
IEnvironmental Management System.
Kuraray Group has established Kuraray Group Global Environment
Action Guidelines and Environmental Activity Policy. Furthermore,
continuous improvements in its environmental activities are made
by rotating the Plan -Do -Check- Act and improve (PDCA) cycle
among the plants, affiliates and head office in accordance with
Kuraray Environmental Activity Management Rules. Kuraray plants
and affiliates have acquired certificates under ISO 14001
(Environmental Management Systems) and are undertaking
environmental conservation activities by rotating the PDCA cycle.
Please visit Kuraray's website 'Organization Chart of CSR Committee"
for more information about the environmental conservation
promotion organization of Kuraray Group.
Kuraray has been working on updating the ISO 14001 system as
planned to the 2015 version required to be revised by September
2018.
Environmental Targets
and Results
***:Largely achieved, **:Achieved,
*:Need to be improved
Reduced by 10,000 tons-CO2e
Kuraray
Implement measures to reduce
compared with FY2015
Implement measures to
[Environmental Efficiency
Grou in
p
GHG emissions *1 by
reduce GHG emissions by
[Environmental Efficiency (GHG
(GHG emissions)]
Japan
20,000 tons-0O2e or more
12,000 tons-CO2e or more
emissions)]
Improve by 40% compared
compared with FY2015
Improved by5.1%compared compared with FY2016
with FY2010
with FY2010
(Environmental Efficiency (energy
[Environmental Efficiency
(Environmental Efficiency
Overseas
consumption) *21
Decreased by 6.5% compared
(energy consumption)]
(energy consumption)]
affiliates
Improve by 6% compared with
with FY2010
Improve by 7% compared
Improve by 10% compared
FY2010
with FY2010
with FY2010
JCIA-designated PRTR
UCIA-designated PRTR substance
substance emissions: 957 tons
[JCIA-designated PRTR
[Environmental Efficient y
Kuraray
Y
substance emissions]
(PRTR substance
Groupemissions]
Maintain the level of
[Environmental Efficiency (PRTR
Maintain the level of Fiscal
emissions)]
**
in Japan
emissions (1,104 tons), or less
or les
substance emissions)]
FY2010 emissions (1,104
Improve by 100%
,
Improved by 26.7% compared
tons), or less
compared with FY2010
with FY2010
Reduced by 1,400 tons
Kuraray
Implement measures to reduce
Implement measures to
[Environmental Efficiency
Group
waste by the equivalent of 1%
[Environmental Efficiency
reduce waste by the
(waste generation)]
**
in Japan
relative to FY2015 (832 tons), or
(waste generation)]
equivalent of 1% relative to
Improve by 10% compared
more
Decreased by 9.0% compared
FY2016 (900 tons), or more
with FY2010
with FY2010
[Environmental Efficiency (waste
[Environmental Efficiency
[Environmental Efficiency
Overseas
generation)]
Decreased by 41.7% compared
(waste generation)]
(waste generation)]
affiliates
Improve by6%compared with
with FY2010
Improve by7%compared
improve by 10% compared
FY2010
with FY2010
with FY2010
Kuraray
Considering the geographical conditions of Kuraray
Group
—
—
plants in Japan, we don't set a numerical targetfor the
_
in Japan
time being. However we will continue to watch the
water usage and save it as much as possible.
[Environmental Efficiency (water
[Environmental Efficiency [Environmental Efficiency
Overseas
usage except seawater)]
Decreased by 40.8% compared
(water usage except (water usage except
affiliates
Improve by 6% compared with
with FY2010
seawater)) seawater)]
FY2010
Improve by 7% compared Improve by 10% compared
with FY2010 with FY2010
*1 : Greenhouse Gas
*2: Almost all electric power and steam is purchased from external sources at Kurarays overseas affiliates. Because the source of supply has a large effect on GHG emissions (changes
in emission factor), energy consumption is evaluated without incorporating the impact of the supply source in order to properly evaluate the activities of our overseas affiliates.
16 Kuraray CSR Report 2017

Environmental Management
We believe that the Kuraray Group's mission as a material and
intermediate material manufacturer is as follows:
Contributing to society by providing the materials and intermediate
materials required for products that are needed to create a low -
carbon society and an eco -friendly society, and
Producing items with as low an environmental impact as possible.
With this in mind, we are working consistently to implement
environmental conservation activities that include promoting
measures against global warming, managing chemical substance
emissions, and the beneficial use of wastes.
[Note]
Asa result of the change in months in each fiscal year, the environmental data and
information contained in this report including graphs are as follows.
Before fiscal 2013: Actuals in 12 months from April to March of the following year
• Fiscal 2014: Actuals for 9 months from April to December + Actuals for January to
March 2014 (or estimated value) [Partially overlaps with fiscal 20131
• After fiscal 2015 (For reference purposes): Actuals for 12 months from January to
December
Environmental Targets and Results
III
Environmental Management System
Kuraray Group has established Kuraray Group Global Environment
Action Guidelines and Environmental Activity Policy. Furthermore,
continuous improvements in its environmental activities are made
by rotating the Plan -Do -Check- Act and improve (PDCA) cycle
among the plants, affiliates and head office in accordance with
Kuraray Environmental Activity Management Rules. Kuraray plants
and affiliates have acquired certificates under ISO 14001
(Environmental Management Systems) and are undertaking
environmental conservation activities by rotating the PDCA cycle.
Please visit Kuraray's website 'Organization Chart of CSR Committee"
for more information about the environmental conservation
promotion organization of Kuraray Group.
Kuraray has been working on updating the ISO 14001 system as
planned to the 2015 version required to be revised by September
2018.
Largely achieved, Achieved, : Need to be improved
nOUS& �cb
*2 : Almost all electric power and steam is purchased from external sources at Kuraray's overseas affiliates. Because the source of supply has a large effect on GHG emissions (changes
in emission factor), energy consumption is evaluated without incorporating the impact of the supply source in order to properly evaluate the activities of our overseas affiliates.
16 Kuraray CSR Report 2017
KL
M
Scope
FY2016
Medium-term
Target
Actual performances
FY2017 target
environmental target
Evaluation
(FY2020 target)
Reduced by 10,000 tons-0O2e
Implement measures to reduce
compared with FY2015
Implement plement measures to
[Environmental Efficiency
Group in
GHG emissions •1 by
20,000 tons-0O2e or more
[Environmental Efficiency (GHG
reduce GHG emissions by
(GHG emissions)]
Japan
com p
compared with FY2015
emissions)]
12,000 tons-CO2e or more
Improve by 40% compared
Global
Improved by 5.1% compared
compared with FY2016
with FY2010
warming
with FY2010
prevention
[Environmental Efficiency (energy
[Environmental Efficiency
[Environmental Efficiency
Overseas
consumption) '23
Decreased by 6.5% compared
(energy consumption)]
(energy consumption)]
affiliates
Improve by 6% compared with
with FY2010
Improve by 7% compared
Improve by 10% compared
FY2010
with FY2010
with FY2010
JCIA-designated PRTR
Ma na ement
g
Kuraray
[JCIA-designated PRTR substance
substance emissions: 957 tons
[JCIA-designated nated PRTR
9
[Environmental Efficiency
of=t
Group
emissions]
substance emissions]
(PRTR substance
substance
in Japan
Maintain the level of FY2010
[Environmental Efficiency (PRTR
Maintain the level of Fiscal
emissions)]
**
emissions
emissions (1,104 tons), or less
substance emissions)]
FY2010 emissions (1,104
Improve by 100%
Improved by 26.7% compared
tons), or less
compared with FY2010
with FY2010
Reduced by 1,400 tons
Kuraray
y
Implement measures to reduce
Implement
plement measures to
[Environmental Efficiency
Group
waste
waste by the equivalent of 1%
[Environmental Efficiency
reduce waste b the
in Japan
relative to FY2015 (832 tons), or
(waste generation)]
equivalent of 1% relative to
Improve by 10% compared
't't
Reduction
more
Decreased by 9.0% compared
FY2016 (900 tons), or more
with FY2010
of Waste
with FY2010
Overseas
[Environmental Efficiency (waste
[Environmental Efficiency
(Environmental Efficiency
affiliates
generation)]
Improve by 6% compared with
Decreased by 41.7% compared
with FY2010
(waste generation)]
Improve by 7% compared
(waste generation)]
Improve by 10% compared
FY2010
with FY2010
with FY2010
Kuraray
Considering the geographical conditions of Kuraray
Group
—
_
plants in Japan, we don't set a numerical target for the
Effective
in Japan
time being. However we will continue to watch the
_
utilization
water usage and save it as much as possible.
of water
resources
[Environmental Efficiency (water
[Environmental Efficiency
[Environmental Efficiency
Overseas
usage except seawater)]
Decreased by 40.8% compared
(water usage except
(water usage except
affiliates
Improve by 6% compared with
with FY2010
seawater)]
seawater)]
FY2010
Improve by 7% compared
Improve by 10% compared
with FY2010
with FY2010
nOUS& �cb
*2 : Almost all electric power and steam is purchased from external sources at Kuraray's overseas affiliates. Because the source of supply has a large effect on GHG emissions (changes
in emission factor), energy consumption is evaluated without incorporating the impact of the supply source in order to properly evaluate the activities of our overseas affiliates.
16 Kuraray CSR Report 2017
KL
M

Kuraray Group Action Guideline for the Global Environment
Basic Guidelines
We fulfill our responsibility to future generations through
sustainable corporate activities that are in harmony with the
global environment and the local community. In order to achieve
these basic guidelines, we will undertake the following activities.
O We will assign the highest priority to the environment and
safety in the course of our corporate operations.
* We will work to improve the global environment and ensure
its sustainability.
* We will develop technologies and products that contribute to
the goal of improving the global environment.
Policy of Environment and Industrial Safety Management
Center for Fiscal 2016
*The Kuraray Group tackle following themes
1. Promotion of environmental conservation and environmental
improvement activities in accordance with the environmental
management system
2. Compliance with statutory requirements
3. Continuous improvement of environmental load to accomplish
medium-term environmental targets
Material Flow (Kuraray Group in Japan)
Raw materials 633,000 tons
Water (except seawater) ... 72.1 million m3
Energy •• 427,000 kL (crude oil equivalent)
Product packaging materials ••• 9,600 tons
Raw material etc. packaging materials
•••1,100 tons
Recycling of
(Kuraray Group in Japan)
used products 466 tons
Used products
r Medium -Term Environmental Plan and
Review of the Plan
Kuraray Group has mapped out its Medium -Term Environmental
Plan setting fiscal 2010 as a base year and fiscal 2020 as a target
year and has been undertaking activities since fiscal 2011. Kuraray's
Medium -Term Environmental Plan incorporates an indicator called
an "Environmental Efficiency— to numerically assess the activity
results. The targets are shown in the table on page 16. Nonetheless,
the business environment of Kuraray Group has greatly changed
compared with the time when the plan was mapped out due to
incorporating new business through large scale of M&A in
overseas. These changes provided the situation that evaluation
using the current "Environmental Efficiency" as an index no longer
accurately reflecting the environmental improvement activities in
the workplaces. For this reason, we believe that we need to
consider reviewing the plan including targets and evaluation index.
We will set the new evaluation index and targets for both
Kuraray Group in Japan and overseas affiliates within fiscal 2017
and will start to operate together with the next Medium-term
Management Plan from fiscal 2018.
* Environmental Efficiency = Net sales/environmental load
Environmental load: volume of GHG emissions, chemical substance emissions,
waste generation, etc.
Material Flow in Business Activities
(Fiscal 2016, Kuraray Group in Japan)
Kuraray Group uses large amount of energy, chemical
substances and water resources in the course of its business
activities. We make quantitative surveys of used resources and
emitted substances associated with our business activities.
Products 441,000 tons GHG...
1,303,000 tons-0O2e Wastewater (except seawater)
Byproducts ••• 194,000 tons NOx•••1,700tons
64.1 million m3
Chemical substances --957 tons Sox •••300tons
COD load •535 tons
Product packaging materials Soot and dust •••29tons External recycling waste •••66,800 tons
•••9,600 tons
External disposal of waste materials
•••1,300 tons
Interna
Product
recycling
,♦
(Kuraray Group in Japan)
Internal recycling of waste
materials 20,500 tons
End users Retail stores
Product processors
CO2...11,100 tons
NOx•••83 tons
Product transport
(Kuraray site)
Kuraray CSR Report 2017 17

Approaches to the Environment
Global Warming Prevention
Kuraray Group in Japan has been making CO2 reduction
activities such as increasing biomass fuel volume, using of waste
plastic as a fuel, higher operating efficiency, installing of energy
saving equipment and steady energy saving activities. In fiscal
2016, we implemented measures to reduce GHG emissions by
10,000 tons-0O2e and total GHG emissions of Kuraray Group in
Japan were 1,303,000 tons-0O2e.
As a result, the "Environmental Efficiency" of Kuraray Group in
Japan improved by 5% compared with fiscal 2010. However, this
performance is behind the target of 24% improvement as of fiscal
2016 envisioned in the Medium -Term Plan.
On the other hand, the energy consumption of overseas
affiliates was 437,000 kL (crude oil equivalent) almost equal to fiscal
2015 in spite of launching new production site by their energy
saving activities.
However, the "Environmental Efficiency" of the Overseas
affiliates has been decreasing since 2014, and in fiscal 2016 it was
below by 6.5% compared with the benchmark year of 2010.
This is because we have acquired the vinyl acetate business
which produces raw material of Poval resin to change our business
model from purchasing to self -manufacturing. For this reason,
energy consumption increased. However the sales did not increase
as much as energy consumption.
Actual GHG emissions and energy consumption in 2016 are as
follows.
Kuraray Group in Japan Total: 1,303,000 tons-0O2e
[FY2015 :1,265,000 tons-CO2e]
Overseas Affiliates 437,000kL (crude oil equivalent)
[FY2015 :443,000kL (crude oil equivalent)]
Trends in GHG Emissions at Kuraray Group
w M Kuraray ® Affiliated companies in Japan M Overseas affiliates
$ 2.500
0 937
o
C
i
o�
0
a '05 a '11 '12 '13 '14 15 '16 TY)
r�r
Trends in Energy Consumption at Overseas Affiliates21M im 0 0 0 0
A 500 Acquisition of vinyl acetate business
0 400 140
a
? 300
0
o _0
'13 '14 1
15 '16 (FY)
Kuraray CSR Report 2017
IPower Generation by Biomass Fuel
r
At Kurashiki Plant of Kuraray in Japan, biomass fuel* (wood
chippings from construction debris and other sources) has been
used as a substitute fuel of coal and the consumption of biomass
fuel has steadily been increasing. In fiscal 2016, about 50,000 tons
of biomass fuel, roughly the same level as that in fiscal 2015, was
consumed, contributing to a reduction of about 75,000 tons-COze
in its emissions.
Kuraray Group will continue its activities to increase the ratio of
biomass fuel consumption accounted for by the fuel in boiler.
*Biomass absorbs COz in the atmosphere as it grows and can be considered to
emit no COz when the COz that is generated while biomass is burnt is subtracted
from COz that is absorbed during its growth.
Reducing Environmental Load during
Product Transportation
Kuraray is also reducing its environmental load in the distribution
stage of delivering its products to the users, in addition to GHGs
emitted by itself during the manufacture of products at its plants
and other facilities. Kuraray is continuously active in the "modal
shift" of changing transportation means from trucks to cargo trains,
ships and other means. Since fiscal 2010, its emissions of GHGs and
nitrogen oxides during product transportation have gradually been
decreasing. In fiscal 2016, Kuraray emitted almost the same levels
of GHGs and nitrogen oxides as those of fiscal 2015.
IEmissions of Scope 3 GHG
The GHG Protocol* classifies GHG emissions into three categories,
Scopes 1, 2 and 3.
Scope 1; Direct emissions
GHG emissions generated by fuel combustion at the
plants and other facilities of own company
Scope 2; Indirect emissions
GHG emissions generated by the use of purchased
energy such as electricity, heat, and steam supplied
by other companies
Scope 3; Other indirect emissions
GHG emissions generated by other companies
related to activities of their own company except
Scope 1 and 2
Mandated under the law by which businesses voluntarily
calculate and report Scope 1 and Scope 2 to the government, we
have been reporting these to the government and publishing the
results in our CSR Report and elsewhere.
On the other hand, Scope 3 means the GHG emissions based on
the entire supply chain related to Kuraray. We can understand how
the indirect GHG emissions are generated from the viewpoint of
life cycle such as raw material procurement, product distribution,
product use and disposal as well as the direct emissions related to
Kuraray's business activities. Kuraray started Scope 3 calculations in
fiscal 2013.
Am
categc
quant
cycle c
Imag
Cap
J
vi<
Pun
UP!
(Inde
Trends in Energy Consumption at Overseas Affiliates21M im 0 0 0 0
A 500 Acquisition of vinyl acetate business
0 400 140
a
? 300
0
o _0
'13 '14 1
15 '16 (FY)
Kuraray CSR Report 2017
IPower Generation by Biomass Fuel
r
At Kurashiki Plant of Kuraray in Japan, biomass fuel* (wood
chippings from construction debris and other sources) has been
used as a substitute fuel of coal and the consumption of biomass
fuel has steadily been increasing. In fiscal 2016, about 50,000 tons
of biomass fuel, roughly the same level as that in fiscal 2015, was
consumed, contributing to a reduction of about 75,000 tons-COze
in its emissions.
Kuraray Group will continue its activities to increase the ratio of
biomass fuel consumption accounted for by the fuel in boiler.
*Biomass absorbs COz in the atmosphere as it grows and can be considered to
emit no COz when the COz that is generated while biomass is burnt is subtracted
from COz that is absorbed during its growth.
Reducing Environmental Load during
Product Transportation
Kuraray is also reducing its environmental load in the distribution
stage of delivering its products to the users, in addition to GHGs
emitted by itself during the manufacture of products at its plants
and other facilities. Kuraray is continuously active in the "modal
shift" of changing transportation means from trucks to cargo trains,
ships and other means. Since fiscal 2010, its emissions of GHGs and
nitrogen oxides during product transportation have gradually been
decreasing. In fiscal 2016, Kuraray emitted almost the same levels
of GHGs and nitrogen oxides as those of fiscal 2015.
IEmissions of Scope 3 GHG
The GHG Protocol* classifies GHG emissions into three categories,
Scopes 1, 2 and 3.
Scope 1; Direct emissions
GHG emissions generated by fuel combustion at the
plants and other facilities of own company
Scope 2; Indirect emissions
GHG emissions generated by the use of purchased
energy such as electricity, heat, and steam supplied
by other companies
Scope 3; Other indirect emissions
GHG emissions generated by other companies
related to activities of their own company except
Scope 1 and 2
Mandated under the law by which businesses voluntarily
calculate and report Scope 1 and Scope 2 to the government, we
have been reporting these to the government and publishing the
results in our CSR Report and elsewhere.
On the other hand, Scope 3 means the GHG emissions based on
the entire supply chain related to Kuraray. We can understand how
the indirect GHG emissions are generated from the viewpoint of
life cycle such as raw material procurement, product distribution,
product use and disposal as well as the direct emissions related to
Kuraray's business activities. Kuraray started Scope 3 calculations in
fiscal 2013.
Am
categc
quant
cycle c
Imag
Cap
J
vi<
Pun
UP!
(Inde

Among the 15 categories in total of Scope 3, we calculated 5 "GNG Protocol (Greenhouse Gas Protocol) is an initiative scheme to develop
categories (T—(V that is available in 2016. We will also continue international standards and related tools on greenhouse gases and climate
quantitatively to evaluate the CO2 reduction related to carbon life change led by the World Resources Institute (WRI) and World Business Council for
Sustainable Development (WBCSD) and participated by corporations, NGOs,
cycle of Kuraray Group products. government institutions and other organizations throughout the world.
S Image of Control on Emissions of Greenhouse Gases in Entire Scope 3 Supply Chain( 10 to a show categories of Scope 3)
s
capital goods Fuel and energy-related :rrr • ® Downstream leased assets
f activities (except scope t and 2) Franchises ® Investments
.,,� �; rrr • - rrr . •
• rrr • -..
Material and Equipment ProcurementIF
----.---.. --. Indirect emissions by the use of purchased energy Upstream trans ortation
Purchased goods and services 0 i ' p
!�� and distribution
643,000 tons-0O2e
ons -102
Upstream leased assets i
Direct emissions by fuel combustion and other means
(Included in Scopes 1 and 2)
Business travel, _
Employee --
commuting map".
Disposal of products
Use of product
End -of -life I1
treatment of+ar
Use of sold Downstream
sold products
products transportation
and distribution
Waste generation
In operations
Processing of intermediate products
Processing of sold products
O, O, O and O were not calculated in 2016. m, m and ® are not disclosed because they are only very small portions of Kuraray Group products.
®, m and ® are not applicable to Kuraray.
Topics 2016
Review of the Medium -Term Environmental Plan
Kuraray Group has been taken up the review of the Medium -
Term Environmental Plan (see page 16) as an issue since 2014
when the business environment of Kuraray Group greatly changed
due to large scale of M&A in overseas and increase in production.
We have been working on the issue to revise the plan during the
period of GS -STEP (Kuraray's Medium -Term Management Plan)
from fiscal 2015 to fiscal 2017.
As a result, the achievement of environmental improvement
activities in the workplaces no longer accurately reflected through
the current plan starting in 2010 as the base year.
In fisca12016, therefore, we discussed this issue in CSR
Committee and other conferences. Through the discussion, we
organized our basic concepts about the review of the Medium -
Term Environmental Plan. In terms of the evaluation index, we have
"Environmental Efficiency" as an evaluation index for been aiming to find out the new one and have made some case
environmental conservation activities, was defined as "sales/
environmental load" to enable us to evaluate "how business
activities were conducted with a small environmental load."
Nevertheless, the business situations of Kuraray Group have
unexpectedly changed compared with the time when the plan
was mapped out. This was because we acquired vinyl acetate
business and food packaging film business which resulted in the
drastic increase in energy consumption and the increase in the self -
manufacturing ratio of raw material of Poval resin.
studies by referring to the actual companies examples of inside
and outside of Japan. New index will have the benefits which
should not be easily affected by the changes of business
environment and the achievement of environmental improvement
activities in the workplaces will be appropriately reflected.
We will map out the revised plan within fiscal 2017 and will
start to operate together with the next Medium-term Management
Plan from fiscal 2018.
Kuraray CSR Report 2017 19

Approaches to the Environment
Reducing of Environmental Load
Control on Emission of Chemical Substances
Based on the Law Concerning Reporting, etc. of Pollutant
Release and Transfer Register (PRTR Law), Kuraray Group in Japan
checks, records and reports relevant chemical substances to the
national government of Japan. Kuraray Group similarly discloses on
its website and other places emissions of chemical substances not
only covered by the PRTR Law, but designated by the Japan
Chemical Industry Association (JCIA). In addition to them,
persistent organic pollutants (Pops), volatile organic compounds
(VOCs), hazardous atmospheric pollutants (HAPS) and particulate
matter (PM) are considered to be chemical substances and Kuraray
is taking action as explained in the table.
Classification
Actions to be taken
• Polychlorobiphenyl (PCB)
Storing, managing, reporting and processing to render
harmless in accordance with the Law Concerning Special
Measures against PCB
Waste. (Fiscal 2027 is set as a time limit for harm -free
POPS
processing)
• Dioxin and the like
Emissions are measured for individual plants and other
business units (Please visit Kuraray website)
• Substances other than the above
Not applicable to Kuraray manufacturing and use
voc
Included as substances in the pollutant release and
transfer register (PRTR) and emissions are measured and
HAP
reported as PRTR substances. (Please visit Kuraray website
for emissions by each plant)
PM
Emissions of particles of soot are reported in Material Flow
on page 17 of this report
Emissions of substances applicable to the law and to the
PRTR
listcompiled by the Japan Chemical Industry Association
are measured and reported (Please visit Kuraray website
for emissions by each plant)
In fiscal 2016, emissions of PRTR substances of entire Kuraray
Group in Japan totaled 957 tons (873 tons into atmosphere and 84
tons into water areas).
The "Environmental Efficiency" of Kuraray Group in Japan
improved by 26.7% compared with Fiscal 2010.
Even though the production volume has increased, we took
measures not to increase emissions such as changing the production
process from an organic solvent system to a water system.
The emissions of Kuraray overseas affiliates shows increasing
trend due to incorporating new business through M&A in overseas.
However we are working on the control on emissions complying
with the strict regulations for chemical substances of each country.
Emissions of Kuraray overseas affiliates totaled 431 tons in fiscal
2016.
Trends in Chemical Substance Emissions at Kuraray Group
M Kuraray M Affiliated companies in Japan ® Overseas affiliates
c
0
0
'US '11 '12 '13 '14 'is '16 (FY)
* Substances subject to the PRTR Act and substances designated by the Japan
Chemical Industry Association
20 Kuraray CSR Report 2017
Reduction and Effective use of Waste, and
Reduction of Landfill Waste
Since fiscal 2007, Kuraray Group in Japan has been maintaining
"an effective utilization rate of waste: 90% or higher, and final
landfill disposal rate: 1% or lower." In fiscal 2016 also, these rates
were maintained and the result of an effective utilization rate was
97.0% and final landfill disposal rate was 0.37%.
"Environmental Efficiency" of fiscal 2016 decreased by 9.0%
compared with fiscal 2010. Waste generation of Kuraray Group in
Japan has shown increasing trend for the past few years due to the
increase in production volume. However the plants and affiliates
are making continuous efforts to maximally reduce waste
generation such as by improving product yields and taking some
measures.
Almost all of the additional volume of waste generation was
recycled to the material or thermal resources which resulted in
having kept high beneficial use rate of waste. Through this activity,
we are taking care of not affecting to the external environment.
On the other hand, the production volume of Kuraray overseas
affiliates is largely increasing due to incorporating new business
through M&A (the volume tripled compared with fiscal 2010
including the raw material of Poval resin). The volume of waste
generation also tripled in the same period in spite of making
reducing efforts. For this reason, the "Environmental Efficiency"
decreased by 41.7% compared with fiscal 2010. We will continue to
work on watching future trend and taking reducing measures such
as by optimizing the operating conditions and recycling materials.
The reason why the amount of waste generation of Kuraray
overseas affiliates is very small compared with Kuraray group in
Japan is that the utilities such as electricity are purchased from
outside suppliers and that wastewater treatment is outsourced to
outside disposal companies so that soot and incineration residues
from boilers and sludge from wastewater treatment facilities are
not generated physically.
Trends in the Amount of Waste Generation at Kuraray
Group in Japan
- Kuraray Affiliated companies in Japan
'US Al '12 '1j '14 '15 '16 lrY)

Trends in the Amount of Waste Generation at
Overseas affiliates
40 Acquisition of vinyl acetate business — 11.2
0
0
q 30
0
W
C
v
0
c
0
E
a
'U5 'II 12 1.5 14 15 16 lrrJ
Trends in Waste Effective Utilization Rate at
Kuraray Group in Japan
-0-Kuraray Affiliated companies - -Total
'05 '11 '12 '13 '14 '15 '16 (FY)
Trends in Final Waste Landfill Disposal Rate at
Kuraray Group in Japan
-0-Kuraray Affiliated companies -*--Total
'05 '11 '12 '13 '14 '15 '16 trY1
Effective Utilization of Water Resources
Kuraray Group, including its overseas affiliates, is not engaged in
production activities in areas in which water resources are scant
and their business activities affect water sources of such areas.
The volume of water intake (except seawater) of Kuraray Group
in Japan totaled 73.1 million m3 per year and has been increasing
in the past few years due to the increase in the production volume.
Some Kuraray plants in Japan are reusing the water such as by
recycling thermal resources from hot waste water and cooling
water for boiler operation.
Even though Kuraray plants in Japan are located in good places
in terms of water resources, we believe that it is necessary to
conduct its business activities by considering the long-term
prospects of water supply such as risk of water shortage caused by
climate change due to global warming. We will keep track of water
consumption trends while continuously reducing our water
consumption.
Since fiscal 2014, water consumption of Kuraray overseas
affiliates has been increasing due to incorporating new business
through M&A in overseas such as increase in the self -
manufacturing ratio of raw material of Poval resin. As a result, the
"Environmental Efficiency" decreased by 40.8% compared with
fiscal 2010.
Trends in Water Usage at Kuraray Group
E
C
0
E
m
v
,,"Kuraray Affiliated companies in Japan M Overseas affiliates
'05 11 '12 '13 '14 '15 '16 kM
Kazuhiko Kugawa, Director, Primary Executive Officer
Our production plants inside and outside of Japan have acquired ISO
14001 (Environmental management systems) certification and are active in
environmental conservation activities. In the five years leading up to 2015,
the Kuraray plants in Japan reduced 140,000 tons-0O2e (target 100,000
tons-0O2e) through the use of wood biomass as fuel for in-house power
generation, installation of high -efficiency gas engine generators and
energy-saving activities. However, the reduction performance for the
Kuraray plants in Japan remained low in 2016,10,000 tons-0O2e compared
with our target of 20,000 tons-0O2e. Effective measures to reduce global
warming gases are decreasing, but the Kuraray Group will continue to
reduce the emission through originality and ingenuity. At the same time, as
a manufacturer of materials and intermediates, Kuraray will manufacture
and provide materials and intermediates, which are required in building a
low -carbon and low environmental -load society, at an environmental load
as low as possible.
Kuraray CSR Report 2017 21
97.1-
--♦
97.0
96.0
90
RR 11"fC
O
86.9
80
v
w 70
v
68.1
'05 '11 '12 '13 '14 '15 '16 (FY)
Trends in Final Waste Landfill Disposal Rate at
Kuraray Group in Japan
-0-Kuraray Affiliated companies -*--Total
'05 '11 '12 '13 '14 '15 '16 trY1
Effective Utilization of Water Resources
Kuraray Group, including its overseas affiliates, is not engaged in
production activities in areas in which water resources are scant
and their business activities affect water sources of such areas.
The volume of water intake (except seawater) of Kuraray Group
in Japan totaled 73.1 million m3 per year and has been increasing
in the past few years due to the increase in the production volume.
Some Kuraray plants in Japan are reusing the water such as by
recycling thermal resources from hot waste water and cooling
water for boiler operation.
Even though Kuraray plants in Japan are located in good places
in terms of water resources, we believe that it is necessary to
conduct its business activities by considering the long-term
prospects of water supply such as risk of water shortage caused by
climate change due to global warming. We will keep track of water
consumption trends while continuously reducing our water
consumption.
Since fiscal 2014, water consumption of Kuraray overseas
affiliates has been increasing due to incorporating new business
through M&A in overseas such as increase in the self -
manufacturing ratio of raw material of Poval resin. As a result, the
"Environmental Efficiency" decreased by 40.8% compared with
fiscal 2010.
Trends in Water Usage at Kuraray Group
E
C
0
E
m
v
,,"Kuraray Affiliated companies in Japan M Overseas affiliates
'05 11 '12 '13 '14 '15 '16 kM
Kazuhiko Kugawa, Director, Primary Executive Officer
Our production plants inside and outside of Japan have acquired ISO
14001 (Environmental management systems) certification and are active in
environmental conservation activities. In the five years leading up to 2015,
the Kuraray plants in Japan reduced 140,000 tons-0O2e (target 100,000
tons-0O2e) through the use of wood biomass as fuel for in-house power
generation, installation of high -efficiency gas engine generators and
energy-saving activities. However, the reduction performance for the
Kuraray plants in Japan remained low in 2016,10,000 tons-0O2e compared
with our target of 20,000 tons-0O2e. Effective measures to reduce global
warming gases are decreasing, but the Kuraray Group will continue to
reduce the emission through originality and ingenuity. At the same time, as
a manufacturer of materials and intermediates, Kuraray will manufacture
and provide materials and intermediates, which are required in building a
low -carbon and low environmental -load society, at an environmental load
as low as possible.
Kuraray CSR Report 2017 21

Activities at Workplace
Through the Kuraray Group Global Human Resources (HR)
Policy, Kuraray Group is making efforts to develop its organizational
system regarding the promotion of diversity, fostering of human
resources, and fair and just evaluation of performances, as well as
establishing a healthy corporate culture and creating new
employment opportunities, so that each employee can work in a
way which leads to personal growth through the fulfillment of his
or her duties.
Sociality Goals and Actual Performance
The Kuraray Group Global HR Policy
O We will respect the human rights of individuals.
© We will abolish discrimination and respect diversity and individuality.
O We will carry out our HR activities in full compliance with applicable
laws and regulations.
O We will create HR systems that uphold equality, fairness and
transparency.
© We will strive to improve the environment of workplaces.
O We will strive to employ personnel who are able to contribute to the
development ofthe Kuraray Group.
O We will place the right person in the right job.
O We will implement evaluation and benefits systems that are fairly
satisfactory.
O We will support professional development.
m We will strive to promote communication and disclosure information as
appropriate.
Theme
Goal
Event and Result
Evaluation and Challenges
Fiscal 2017 Plan
• Provided the program "Training for Designing One's
Own Career" to employees in various age brackets
•Challenges are fixation of this
• Increased the number of career advisors from one to
system within the Group and
utilization in the activity to
*Fixation of "Mechanism to Support
two persons
promote participation by
Autonomous Career Development"
*Opened a website page for transmission of
females as one approach
information on career development
• A mentor program to assign mentors to new
Implementing
managerial workers has been continued and briefing
*Fixation ofthis system is a
-The mentor program is continuously
Personnel Policy
sessions for mentor candidates have been held to
challenge
being implemented
Allowing
Provisioning of
spread the objective ofthe program
•More Group employees and
Employees to
growth
Feel Work is
opportunities to
the Employees
countries from abroad are
Worth
•GTT was undertaken, participated by seven overseas
participating. How to keep and
-Continued implementation of the GTT
Accomplishing
Group companies (Please see page 23).
increase the number of
program
participating countries is a
challenge
• In preparation for the introduction of a new globally
uniform personnel system (applicable to managerial
positions and higher) beginning Fiscal 2017, the new
*Smooth startup and subsequent
• Fixation and improvement ofthe
personnel system was put in place. Information on
fixation of the system are the
challenges
globally uniform personnel system
the new system was disseminated and briefing was
provided to related persons
• Workshops for personnel in the
Promotion of
• Developmentof a future plan
department general manager class
will be staged.
active
• Workshops were staged for all personnel in the
based on the results of
participation by
division general manager class
implementation in Fiscal 2016 is
*Training and education programs are
female employees
a challenge
planned for the Group female
Promotion of
employees to raise their awareness
Diversity and
and for other purposes.
Work -Life
Balance
Refined working
g
• Newly started a Flextime system (To deal with
teleconferencing with overseas staff)
•The challenge will be to propose
and implement tangible actions
*Expansion of a working system
style
y
*Implemented Phase 1 ofthe homeworking system
to refine working style
tailored to diverse ways of working
Minimizing•The
challenge will be to further
unused annual
• Achieved 80% use of annual paid vacation on
raise the rate of annual paid
•A study of specific measures to
paid vacations
average (Please see page 24)
vacations and to maintain the
promote acquisition
rate of 80%
Continuation and
• Line -care training and self-care training was
•Implemented as planned.
• Training programs continuously
Reinforcement
beefingu of
continuous) provided
y p
Continuous implementation
provided
and Promotion of
lp
mental support
•Conducted a stress check within the Kuraray Group
according to the plan is a
•Stress check to be made
Schemes for
measures
in Japan.
challenge
Management of
Continuation and
beefing up of
-Health improvement campaign: Sponsored health
*Continuation of health improvement
Healthy Mind
and Body
countermeasures
events improvement
p
Continuation of measures is a
campaign
for lifestyle-
• No -smoking campaign: Sponsored no -smoking
challenge
•Impiementationofno-smoking
related diseases
seminar
campaign
* Mentor: An elder employee who started in the Group earlier than a new employee and who is in the same workplace of a new employee or in a similar situation, to act as a mentor
and a person to be relied upon for consultation and for support in expanding the human network for a new employee and in other purposes.
Number of Employees As of December 31, 2017
Total Male Female
Kuraray Group as a whole 8,590 7,119 1,471
Kuraray only 3,386 3,031 355
Employee Turnover Rate FY 2016
Numberofthoseleaving Turnover rate
employment
Personal reasons 36 1.1%
Retirement 68 2.2%
22 Kuraray CSR Report 2017
Trends in the Number of Employees Trends in Number of Employees by Region
■Kuraray Group companies Kuraray
(persons)
91000 8 590 —
M
M3,386
'12 '13 '14 '15 '16 (FY)
■Japan ■Europe ...Americas %Asia ■others
(persons)
91000 8,590 —
8000n s3� X295
7000 1,277
6,000 935
5,000 6,018
0
'12 '13 '14 '15 '16 (FY)

Training Program
For the domestic Kuraray Group companies, we have
established a companywide training scheme to support acquisition
of the knowledge and skills required for jobs and career -building
efforts by employees themselves.
The training is open not only to regular employees but also
parttime and contract -based ones, as necessary. In addition,
Kuraray plants and domestic group companies plan and
implement their own training programs and provide their
employees with finely tuned support for skill development and
career -building. Kuraray also has an incentive system under which
it furnishes grants for acquisition of certain public qualifications by
employees for their own selfimprovement.
Companywide Training Programs at Kuraray
New employee training
Basic training
Training for Year 2 Follow-up training
promoted personnel
Adviser system
Mentor system
Field leader
development training
Global Talent Basic training
Development Specialist training
Program Master training
Fxecutiveand manager candidatedevelopmenttraining
Subordinate management training
Logical presentation
training Assessor training
• Training at outside business school or similar schools, scholarship for MBA acquisition
Language training courses
Education by correspondence, e -Learning
Training for career design by self
Career advisor system
Global Talent Development Program
Training is provided at each level of the organization to foster
personnel who can actively play a part on the global stage to
further accelerate global growth of the Kuraray Group.
In Fiscal 2016, group training (executive management training
and global team training) for personnel of the division general
manager class and section manager class and short-term training
for staff personnel were provided among the planned training
programs. A total of slightly more than 50 persons from the
organizations inside and outside of Japan participated in these
training programs.
In Fiscal 2017, training for the classes of department general
managers and section managers will be provided with a revised
training content.
Global Talent Development Program
r
c�
� E
Lam
u i iuuuw-uy
Cross -company training
Intercultural understand
Overseas safety training Area training
A Fair, Impartial, and Transparent HR System
m
HR System
Kuraray has instituted a personnel system in which elements
such as improvement of job execution capabilities, performance,
roles, and spirit to challenge demanding targets (as opposed to
seniority and personal factors) are reflected in remuneration.
Specifically, we instituted a scheme of role ranks for management
positions, under which remuneration slides with the role and
performance, and one of skill qualifications for ordinary employees,
under which remuneration reflects the extent of skills and
performance.
In Fiscal 2017, the globally uniform personnel system mainly for
the personnel in managerial positions will be introduced to further
utilize and activate human resources working within the Kuraray
Group.A review of wages, allowances, bonuses and work systems
will be continued to further enhance an understanding of the
employee treatment system.
Evaluation
Personnel are evaluated based on management by objectives,
in which goals for job duties and competence development are set
after consultation between superiors and subordinates, and actual
performances of individual employees are evaluated. Assessor
training is continuously provided also.
Kuraray CSR Report 2017 23

Activities at Workplace
Promotion of Diversity
Kuraray aims at enhancing its organizational power by
maximizing the capabilities of its diverse human resources. In
particular, in Fiscal 2016, workshops for personnel in the division
general manager class were staged to create a corporate culture in
order to promote more active participation by female employees
with a focus on three points - employing more female employees,
expanding areas of their responsibility at work and enabling female
employees to work longer at their workplaces. Plans for Fiscal 2017
include workshops for personnel in the department general
manager class and training for female employees to enhance their
career awareness so that career development and household
circumstances such as child rearing can be accomplished at the
same time.
Scheme for Work -Life Balance
6
Employment Systems and Average Working Hours
Kuraray has instituted systems for flexibility in employment.
These main systems include discretionary labor systems for
adaptation to the nature of individual work, the "de facto working
hour" system for out -of office work, and variable working hour
system. We also have no -overtime days and are striving to improve
the r ate of taking yearly paid vacations.
Trends in Total Average Working Hours and Rate of Taking
Yearly Paid Vacations (Kuraray)
-W- Total average working hours -*-Rate of taking yearly paid vacations
(hours/year) (off)
2,000 100
1,900 1,885 go
1,800 80
1,700
80 70
2012 2013 2014 2015 2016 (FY)
Leave for Childcare and Nursing Care
Kuraray has a scheme in place to support childcare and nursing
care by its employees. In consideration of the timing of admission
into a day-care center, employees are allowed to take childcare
leave either until the end of April in the year after the child turns
one or until the child is one year and six months old, whichever is
longer. We recommend male employees to take childcare leave to
encourage more fathers to get involved in child rearing.
Number of Employees Taking Leave for Childcare/
Nursing Care (Kuraray)
Fiscal year Childcare Male employees Nursing care
FY 2014 46 7 2
FY 2015 48 18 2
FY 2016 43 27 0
System Allowing Employees to Take Temporary
Leave from Duty to Live Abroad with Spouse
Assigned to Overseas Post
A system has been established and implemented allowing
employees to take a temporary leave from duty to accompany
their spouse who is assigned to an overseas post or in a similar
circumstance. Those employees who take a temporary leave from
duty are allowed to return to their posts in the Kuraray Group when
the overseas assignment of their spouse terminates or when a
similar circumstance ends.
24 Kuraray CSR Report 2017
Employment of People with Disabilities
In addition to meeting the statutory employment rate
(2.0%),Kuraray is supporting self -sustenance of people with
disabilities in cooperation with communities and support groups
for people with disabilities.Kuraray has opened workshops for
people with intellectual disabilities in cooperation with local
welfare facilities.
Rate of Employment of People with Disabilities (Kuraray)
(%) f Employment rate
2.5
- 2.30
2.0
Sir—Statutory employment rate*
2012 2013 2014 2015 2016 (FY)
* The statutory employment rate for disabled persons was revised from 1.8% to
2.0% in April 2013.
Scheme for Management of Healthy Mind
and Body
Basic Policy for Occupational Health
To provide a workplace environment where it is possible to
work in both a physically and mentally safe and healthy manner,
we formulated the Kuraray Basic Policy on Occupational Health.
Kuraray Basic Policy on Occupational Health
In keeping with Our Commitment, the Kuraray Group
recognizes that ensuring the safety and health of
employees and other stakeholders is the basis of a
company's business activity. Kuraray strives to provide a
healthy and safe work environment for its employees and
engages in health promotion activities.
Mental Health Care Schemes
Kuraray has four care schemes including schemes for self-care
and line care in an effort to reduce mental disorders. Kuraray has
implemented and is promoting a stress check, training for the
prevention of a mental or physical disorder, a consulting system
such as counseling, and work attendance system allowing
employees on a rehabilitation program to work on a time schedule
suiting their rehabilitation programs when they return to their
workplaces.
Support for Health Improvement
Enhancement of health awareness of the employees is
promoted through personal guidance on health, promotion of
health improvement campaigns and other means. "Health
Improvement Operation" is carried out companywide urging the
employees to voluntarily deal with improvement of their lifestyles.
Health checkups featuring checkup items surpassing the checkup
items required by laws are provided to find employees who need
health improvement.

Topics 2016
OMechanism to Support Autonomous Career Development
Beginning Fiscal 2015, the domestic Kuraray group
has inaugurated a "mechanism to support autonomous
career development, "aiming at creating organizations
in which each employee actively tackles his or her career
development and engages with work enthusiastically.
As part of this scheme, "Training for Designing One's
© The message by Career Advisor
4. This training scheme aims at
fostering individuals by awakening
each individual to the following four
b points. OO To be aware of career
( independence and be free of
orientation to preserve the status
quo. (2) To have a sense of
involvement in career development and to find diverse
possibilities based on being like oneself even though
unanticipated situations occur. OO To be active in
developing capability, in creating one's own job and in
shaping one's own place for living. ® To be able to
contribute to the activation and growth of his or her
organization in response to expectations of one's own
organization.
Own Career" is undertaken for employees in three age
brackets (30s, 40s and 50s). In the two years up to 2016,
196 persons received the training. After receiving the
training, the trainees are interviewed by a career advisor
and receive support to attain their career goals.
More specifically, the following activities are
undertaken. OO Support of growth in the future keeping
in mind a behavior modification. (2) Sorting out of issues
and problems in accordance with age, role in job, family
composition, circumstances in the organization and
other factors. O Counseling and support on human
relations, enhanced communication skill, intracompany
career and life career.
One year after initial counselling, the career advisors
follow up whether or not new risks and obstacles exist in
realizing career goals. The career advisors also make
proposals for creating a corporate culture and
organizations that place an emphasis on career
independence.
Kazuhiko Kugawa, Director, Primary Executive Officer
As stated in the Statement from Kuraray's Top Executive, Kuraray is
implementing a variety of measures to "lead a better life." As one example
of these measures, a system has been established and implemented in
Japan allowing employees to take a temporary leave from duty to
accompany their spouse who is assigned to an overseas post, in order to
lower the employee turnover ratio of female employees, in addition to
systems that had been implemented. These measures have achieved a
(Career Advisor : Kunihiko Ogawa)
certain level of results. Kuraray will aim at creating workplaces in which all
employees including female employees can work easier and better,
including homeworking and flextime systems. Attuned to the rapid
globalization trend of Kuraray's business, a globally -uniform human
resource system will be created within the Group in order to achieve an
optimal allocation and effective utilization of human resources.
Kura ray CSR Report 2017 25

Interaction with Society
We in the Kuraray Group consider the sound and sustainable
advancement of society a precondition for corporate growth and
prosperity, as well as the ultimate objective of corporate activities.
It goes without saying that we see it as our duty to contribute to
society through provision of products with genuine value to the
people. Beyond this, we consider assistance with the resolution of
social issues within an appropriate scope to be another important
form of social contribution in our capacity as a corporate citizen.
In fiscal 2016, the Kuraray Group carried out activities focusing
on culture, science, environment and social welfare in accordance
with its policy for social contribution activities.
Goals and Actual Results in Social Interaction
Kuraray Group Policy for Social Contribution Activities
To fulfill its responsibilities as a member of society, the Kuraray
Group shall make vigorous approaches to social contribution
activities in accordance with the following policy.
Types of Activities
• Activities that lead to a resolution of social issues
• Activities rooted in local communities where Kuraray's
establishments are based
• Activities emphasizing participation by employees on their
own initiative
• Activities that are sustainable in the long term
Areas of Activities
Priority areas: culture, science, environment, and social
welfare
Fiscal 2016
Goal
Actual Results
Evaluation and Challenges
Fiscal 2017 Goals
[Science]
"Sending School Backpacks Across
• Delivered/7,732 backpacks
p
• The campaign was carried out
• "Sending School Backpacks
the Sea" campaign was steadily
*Advertise to collect school backpacks through the Kuraray
as planned. This campaign will
Across the Sea" campaign
undertaken
website and nearby elementary schools of Kuraray plants
be hosted next fiscal year also
will be steadily undertaken
• Hosted 13 times in total with 289 participants (Twice at
[Science]
Kurashiki Plant, three times at Saijo Plant, twice at
"Chemistry Classes for Boys and Girls"
Okayama Plant,four times at Niigata Plant and twice at
• The event was carried out as
*To sponsor events more than
once per year at each plant
was hosted at the five plants and
Kashima Plant) Additionally, Kashima Plant participated in
planned
To
head office of Kuraray more than
the Kamisu Festa and the Science Festival for Youths
sponsor events outside
once this year
*Tokyo Head Office participated in the Children's Summer
the company
Chemistry Experiment Show (held at Science Museum)
[Social Welfare]
Operating workshops for people with
• Number of people employed/Intellectually and physically
*The targeted number
•To continuous) employ the
same number of people at
intellectual disabilities
disabled: 36people,lnstructors:l2 people
people were hired as planned
the workshops
• Activities that have been
undertaken in the past could
*To continuously carry out the
[Culture] [Science] [Environment]
[Social Welfare]
be steadfastly continuously
activities
conducted
*Situations surrounding the
To steadfastly undertake existing
activities at plants, sites and affiliated
p
*On-going activities were steadfast) undertaken
g 9 y
• A recapitulation of the
activities undertaken by the
entire Group
companies focusing on the
situations surrounding the
activities undertaken by the
includingng the the overseas
relationship with local communities
operations are continuously
overseas operations was
made I
being grasped
Activities in Culture Field
The Kuraray Group continues to support the Ohara Museum of
Art,which was established by Magosaburo Ohara, the first president
of the company. The Group also supports cultural activities at its
plants and sites.
The Ohara Museum of Art
26 Kuraray CSR Report 2017
Okayama Plant has been holding the Elementary School Student
Painting and Calligraphy Contest annually since 2005. Having
become a fixture in the local community thanks to its ongoing
successes, this contest received numerous artwork entries from
five elementary schools in Fiscal 2016. Winning entries are
displayed at the local community center, and all entries are shown
on the Kuraray website. This contest will be continuously
sponsored.
Contest on Painting and Calligraphy at Okayama Plant

Activities in Science Field
In fiscal 2016, the Kuraray plants sponsored the Chemistry
Classes for Boys and Girls, participated in outside events and
sponsored sports tournaments to foster healthyjuniors and
teenagers by continuously supporting on-going activities.
Chemistry Classes for Boys and Girls
Kuraray conducts the "Chemistry Classes for Boys and Girls"
program with the goal of enabling elementary school students to
experience the fun of chemistry through experimental work. In this
program, employee volunteers of Kuraray serve as lecturers and
assistants in dedicated classrooms in Kuraray plant premises, as
well as in elementary schools and public facilities in the areas. This
program has been sponsored every year since 1992 at Kuraray
plants in Japan. In Fiscal 2016, 289 children and family members
participated in thirteen class events. Tokyo Head Office
participated in the Children's Summer Chemistry Experiment Show
held in Tokyo's Chiyoda Ward. Kashima Plant participated in the
Kamisu Festa held in Kamisu City, and the Science Festival for
Youths in Hokota City, all in Ibaraki Prefecture. Kuraray's booths
were visited by about 2,800 people. We will continue these events
in the future.
The Kamisu Festival (Kashima Plant)
Plant
Class name
Numberof
classes
Numberof
participants
Kurashiki Plant
Fun Chemistry House
69
1,840
Saijo Plant
Exciting Chemistry Class
70
2,082
Okayama Plant
Fun Chemistry Class
43
1,356
Niigata Plant
Wondrous Laboratory
55
1,570
Kashima Plant
Fun Chemistry Class
21
1,283
Total
258
8,131
I Various Sports Events Sponsored
Various plants of Kuraray are sponsoring sports events from the
standpoint of fostering healthy juniors and teenagers. In Fiscal
2016, various sports and other events were hosted at the plants of
Kuraray, including a tennis tournament for children at the Okayama
Plant that was started in Fiscal 2015. Kuraray is offering its baseball
parks, gymnasiums and tennis courts to students of nearby schools
for the promotion of sports in neighboring areas. These activities
will be continued in the future.
Children's Tennis Tournament, Okayama Prefecture
Activities in Environmental Field
Aiming at implementing forest conservation work and volunteer
cleaning work carried out every year, in Fiscal 2016, Okayama Plant
undertook "Kuraray Mirai no Mori (Kuraray Forest of Future)
Activity," and Niigata Plant undertook the "MIRABAKESSO Forest
Creating Activity." All the plants undertook volunteer cleaning
work.
The Group companies are also periodically undertaking
voluntary environmental work such as cleaning of areas around
their plants.
At each Kuraray plant, employee volunteers engage in forest
conservation activities, cleaning parks, roads and mowing gardens
in day nurseries in cooperation with local governments and NPOs.
Work scene in Kuraray Mirai no Mori (Kuraray Forest for the Future), Okayama
Prefecture
Kuraray CSR Report 2017 27

/IA�11 Interaction with Society
Activities in Social Welfare Field
Aiming to support and continue the employment of people
with intellectual disabilities and to undertake the Kuraray
Fureai(Rapport) Fund -Raising Campaign, Kuraray's Kurashiki, Saijo,
Niigata and Kashima Plants operated workshops and donated
money raised in the campaign. Also, cherry blossom viewing
parties were held at the Saijo and Niigata Plants tuned to the
cherry blossoming season. Residents of nearby social welfare
facilities visited the plants and enjoyed viewing cherry blossoms.
These activities will be continued.
In cooperation with local welfare facilities, Kuraray has built
workshops for people with disabilities to support their
selfsustenance by providing employment opportunities.
In cooperation with Nakajo Town (currently Tainai City) and Niji
no le (meaning ""Rainbow House"", operated by a social welfare
corporation, Nanaho-kai) , the Kuraray Workshop of Kuraray's
Niigata Plant opened in 1997 for people with intellectual
disabilities. The workshop sorts plastic waste generated in the
production process for recycling and manufactures supplies and
fittings. In 2007, the Himawari Sunflower Workshop opened at
Kuraray's Saijo Plant. In 2011, the Kashima Plant opened its Aozora
Blue Sky Works assisted by a social welfare corporation, Kamisu
Keiai-en.12 instructors and 36 workers now work at four of Kuraray'
s plants to accomplish a variety of job assign ments,including those
employees at Kuraray's Kurashiki Plant engaged in cleaning of
uniforms and labeling on Kuraray products. They mingle with
Topics 2016
Kuraray's employees through sports events and other occasions.
These workshops and employment of those with intellectual
disabilities will be maintained and continued.
Workshop in Kurashiki Plant
Types of Work
Kurashiki (Cleaning uniforms, labeling products
Saijo I Product recycling, cleaning uniforms
Niigata Product recycling, manufacture of pot stands and aprons,
cleaning uniforms
Kashima Making double -ply product packing bags, separating
foreign matter in products
( Moto . .. _ I , . , of JOICFP)
A
(Photo through courtesy of JOICFP)
FY
Number of
Backpacks
FY
Number of
Backpacks
2004
8,514
2011
11,144
2005
12,076
2012
8,326
2006
5,504
2013
6,396
2007
6,894
2014
7,908
2008
7,022
2015
7,111
2009
7,522
2016
7,732
2010
8,973
Cumulative
total
105,122
28 Kuraray CSR Report 2017
(Photo through courtesy of
JOICFP)
The "Sending School Backpacks Across the Sea"
Campaign
"Sending School Backpacks Across the Sea" is an international contribution
activity in which elementary school children in Japan send used school backpacks to
children in Afghanistan and other areas, who are deprived of education opportunity
by war. The backpacks are donated every year together filled with stationery and
letters. Up to now, these backpacks have been sent to Afghanistan, Mongolia and
Nepal.
On the 13th anniversary of the campaign that was launched in 2004, 7,732 school
backpacks were donated in Fiscal 2016 from various parts of Japan. In cooperation
with JOICFP, a public interest incorporated foundation, the school backpacks were
sorted and packed by volunteer groups and the employees of Kuraray Group. From
October to December the school backpacks were sent to 11 elementary schools in
Nangarhar Province, Afghanistan. Many volunteers cooperated in shipping them via
oceans. So far, a total of 105,122 school backpacks have been sent as presents.
Kuraray wishes to expand this contribution activity to other countries in the future.

We eatablished the Kuraray Fureai Fund in July 1992.Under this
fund, companies make donations consisting of those made by
their employees plus a matching gift of the same amount.
Employees endorsing the fund agree to donate amounts of less
than 100 yen from their salaries to it, and the company matches
this amount. The funds collected in this way are used for social
welfare programs.
In Fiscal 2016, activities were undertaken contributing to local
communities such as donating nursing care supplies, books and
other articles mainly to welfare facilities,local governments and
schools in the neighborhoods of Kuraray plants. The fund will be
continuously used for the sake of social welfare.
Kuraray Library financed by Kuraray Fureai Fund (Saijo Plant)
History of Kuraray's CSR Procurement
Activities
Promotes Green Procurement to Business Partners
(2002)
Under the Kuraray Group Action Guidelines for the Global
Environment (established in 1993), we formulated our Green
Procurement Standards in 2002 to promote global environmental
preservation with the cooperation of our business partners. We
also distributed a booklet comprising the above standards to
around 800 key business partners and evaluated the status of
initiatives at each company by way of a checklist.
Develops into CSR Procurement (2005)
In 2005, we formulated the Kuraray CSR Procurement Policy
based on the 10 principles of the United Nations Global Compact,
which are both international and universal. This policy has become
more comprehensive than before as it has added sections on
"Respect for human rights and individuality" and "Compliance" to
the "Promotion of Green Procurement" section. We requested the
understanding of this policy from business partners and grasped
the CSR procurement status of around 700 key business partners
by conducting questionnaires about CSR procurement. Following
the survey, we provided feedback and improvement requests to
business partners in Japan with some problems.
CSR Procurement Policy of Kuraray
O Respect for Human Rights
© Observance of the International
Respect for Labor Organization's core labor
Human Rights standards
• Guarantee of the right to
organize and the right to
collective bargaining
• Prohibition of compulsory labor
• Prohibition of child labor
• Compliance policy
Compliance • Compliance systems
• Compliance education program
• Preparation of environmental
Promotion policies and environmental reports
of Green • Green procurement
Procurement implementation plan and
implementation apparatus
• IS014001 certification
• Education and awareness campaign
for green procurement
Continuation of CSR Procurement - 2016 Onward
The Kuraray Group will continue to check the CSR procurement
activities of suppliers before purchases are made from new
suppliers.
In purchases of equipment and materials, a system has been
built allowing checks of CSR procurement activities of suppliers
through the Internet by renovating the purchasing system. This
system will allow a more precise understanding of purchasing
situations of suppliers.
Kuraray's Activities for Purchases of Green
Commodities
In 2002, Kuraray set its Green Procurement Guidelines for
purchases of 107 items in nine product categories needed for its
business operations, including stationery, office equipment and
automobiles. Since then, the Kuraray Group has been undertaking
activities to preferentially and actively purchase Green
Commodities that are low in environmental load. These activities
will continuously be undertaken.
Kazuhiko Kugawa, Director, Primary Executive Officer
Kuraray is the manufacturer of CLARINO®, artificial leather. CLARINO° children of Afghanistan in the past years. I witnessed the sorting of school
has a market share of more than 70% as a material for school backpacks. bags for Fiscal 2017 the other day as a volunteer while cherry trees were in
Beginning in 2004, the activity "Sending School Bags across the Sea
Campaign" has been kicked off to present used school backpacks to
children of Afghanistan in response to the voices of children and their
parents who donated school bags to give these bags a second lease of life.
In Fiscal 2016, the activity marked its 13th anniversary. We are very glad that
as many as 100,000 school bags have crossed the sea to be delivered to the
full bloom. About 7,000 school bags will travel to Afghanistan this year also.
Above all, the continuation is of paramount importance for social
contribution activities such as "Sending School Bags across the Sea
Campaign". Steady efforts will be continued.
Kuraray CSR Report 2017 29

CSR Management
Governance and CSR Promotion Structure
Corporate Governance Structure
Kuraray considers it is vital and necessary not only to maintain
sound relations with our various stakeholders including our
shareholders, to assist the improvement of our performance and
sustainable growth as a company but also to implement corporate
governance to fulfill our responsibility to society.
Kuraray in Fiscal 2003 separated supervision and business
execution by reinforcing its board of corporate auditors by
increasing the number of outside auditors, setting up a
management advisory council, shortening the terms of office of
directors, introducing an executive officer system and other
measures. From Fiscal 2008, outside directors have been elected.
These measures contributed to putting corporate governance into
effect. In Fiscal 2015, the Basic Policy for Establishment of Internal
Control System was amended to strengthen the governance
system for Kuraray Group.
Corporate Governance Report
http://www.kurarayy.co.jp/ir/strategy/pdf/
governance_170404.pdf
CSR Promotion Structure
In 2003, Kuraray set up CSR Committee by integrating Social
Environment Committee and In-house Ethics Committee, and
bolstered its CSR promotion structure on a Group level. Three
committees of experts (Social Responsibility and Economic
Subcommittee, Environmental and Industrial. Safety Subcommittee,
and Risk Management and Compliance Subcommittee) are
organized under CSR Committee. Nine working teams are
organized in each committee of experts. These committees of
experts and working teams study company -wide policies and
targets and propose them to the management. Departments, that
are responsible for special issues, constituiting these committees
and working teams collaborates with various organizations in
Kuraray Group in addressing respective theme in accordance with
company -wide CSR policy. We will reorganize the structure and the
operation system of the CSR committee in 2017, aiming at the
more workable CSR implementing body.
Risk Management
Within the Kuraray Group, the President formulates and conveys
a Group policy on risk management to the entire organization each
year. This policy consists of two parts, namely, a long-term and
continuous "basic policy" embracing overall Group risk
management and "annual themes" that are dealt with in each fiscal
year in light of social situations and trends of the Kuraray Group
and other companies. This system allows flexible and prompt
actions to be taken against changes in the risk environment while
maintaining the basic approach in responding to risks.
The Kuraray Group's risk management is characterized by a two-
tier approach to risk management: "vertical" and "horizontal" risk
management. In vertical risk management, the business units,
divisions, offices, plants and affiliates identify risks facing their
individual organizations, evaluate such risks by themselves and
appropriately devise and implement actions and measures to be
taken. In horizontal risk management, the corporate staff
department evaluates and conducts cross-sectional management
30 Kura ray CSR Report 2017
of pure risks such as natural disasters and infringement of laws and
regulations that cause only negative impacts when such risks take
place.
Additionally, critical risks selected from all these risks that need
to be managed on the company management level are extracted
and actions and measures are taken on them on a priority basis.
IQuality Management
Within Kuraray Group, quality management is carried out by
implementing quality management systems such as ISO 9001 at
each manufacturing site. The divisions have built a mechanism for
each of their businesses to supply products that incorporate the
requirements of customers. The corporate CSR Division undertakes
activities aiming at reinforcing quality management within the
entire group.
Among Kuraray's divisions, the EVAL Division beginning Fiscal
2012 and GENESTAR Division beginning Fiscal 2015 have been
continuing their ICS activity aimed at enhancing customer
satisfaction such as by undertaking a cross-sectional improvement
activity.
As a new initiative, beginning Fiscal 2016, a scheme called
"Saiteki Activity(meeting to discuss quality management)" was
launched. Under this scheme, the divisions and CSR Division
together verify the current statuses of and improvements made in
quality management at the divisions. The scheme enables
checking of common items to be reinforced with respect to quality
management of the entire Kuraray Group, triggering improvement
activities involving all the divisions.
As part of this scheme, the seminar aimed at improving the
quality of automotive materials was hosted.
In Fiscal 2016, Kuraray Group quality handbook was compiled to
share the concepts "quality as contemplated by Kuraray" and
"quality is customer satisfaction" based on the company statement
of the Kuraray Group. Furthermore, companywide education was
launched using this handbook.
Handling of Product Complaints
Within Kuraray Group, information on complaints and claims
received from the customers is managed by its divisions, so
responses to customers can be promptly made and action is taken
swiftly to prevent the recurrence of same flaws. Material complaints
and claims are handled in accordance with the "Regulations on
Product Liability -related Accident Response and Quality Complaint
Report" In Fiscal 2016, no product recalls or accidents that cause
severe damage to health or damage to property such as fire were
reported.

Compliance
IBasic Approach to Compliance
"Our Commitment" states the principles of our conduct wich we
should observe in doing our business. "Kuraray Group Code of
Conduct" serves as guidelines to implement the commitment in
performing day-to-day work. Top management of Kuraray Group
has declared that we will comply with laws and regulations and
"Our Commitment" under any circumstances. In order to share
these principles and commitments among all Kuraray Group
personnel throughout the world, Compliance Handbook has been
compiled containing the foregoing declaration by the top person
and explanations of "Kuraray Group Code of Conduct"
In order to disseminate these principles and commitments
among all Kuraray Group employees, a compliance handbook has
been distributed to the Group employees throughout the world.
The handbook contains the foregoing declaration by the top
executive and explanations of the Kuraray Group Code of Conduct
and is written in eight languages, Japanese, English, German,
Chinese, Hangul, Russian, Flemish and Czech.
We plan to appoint compliance officers at Plants, Offices and
Laboratories of Kuraray and group companies and to organize a
compliance committee in each region to effectively and
sustainably promote and implement compliance activities within
the group as a whole.
IWhistleblower System
As a whistleblower system to prevent and to identify and
troubleshoot any compliance violation at an early stage, Kuraray
Group Employee Counseling Room has been set up for all
employees of domestic Kuraray group including part-time
employees, contract employees and dispatched staffs.
Whistleblower contact windows are also provided at major
subsidiaries in Europe and North America. In recent years,
globalization of Kuraray Group has accelerated rapidly through
M&A and other activities and the group is building a system at
subsidiaries that do not have such contact windows yet, allowing
all employees of the group inside and outside Japan to access a
contact window.
Number of Consultations at Kuraray Group Employee
Counseling Room
FY
2012
2013
2014
2015
2016
Number of Consultations at
Kuraray Group Employee
5
1
1
3
4
Counseling Room
Actions Taken for More Thorough Compliance with the Law
In March 2016, the Fair Trade Commission of Japan made an on -the -spot inspection of Kuraray, involving competitive bidding
on textile products purchased by the Acquisition, Technology and Logistics Agency, Defense Ministry.
Subsequently, in March 2017, the commission ruled that Kuraray had violated the Anti -Monopoly Law and issued a cease-and-
desist order. Responding sincerely to this fact, Kuraray has implementedthe following measures to enable each of the officers
and employees of the Kuraray Group to more thoroughly comply with the laws and regulations.
Nevertheless, in February 2017, the Fair Trade Commission of Japan made an on -the -spot inspection again at Kuraray on the
manufacture and sale of activated carbon used in water purification facilities, waste incinerators and other facilities. We take the
series of these events seriously and sincerely and will implement all necessary measures to ensure such incidents will never recur,
as we fully cooperate with the inspection by the commission and will clarify the points that should be improved on the following
aspects and will reinforce the countermeasure.
Status of Activities
[Message from Top Executive]
In response to the on -the -spot inspection by the Fair Trade
Commission of Japan, the top executive issued a message to all the officers
and employees of the Kuraray Group instructing stricter compliance with
the Ant -Monopoly Law. The message from the top executive was posted
on Kuraray's intranet, bulletin boards and other places in order to ensure
information dissemination and stricter compliance.
[Amendment of Guidelines on Compliance with the
Anti -Monopoly Law]
To assist and ensure more thorough compliance with the Anti -
Monopoly Law, Kuraray's Guidelines on Compliance with the Anti -
Monopoly Law were newly published, adding an easy -to -understand
explanation of those matters that should receive attention in
accomplishing routine work as viewed from a global perspective. The
newly published guideline handbook was distributed to the officers and
employees of Kuraray and related parties in Japan. In the light of the
violations and other cases, all the divisions checked their transactions
thoroughly.
[Enlightenment, Education and Training]
An outside expert was invited to seminars held by Kuraray on the Anti -
Monopoly Law attended by the sales personnel of Kuraray, as well as all the
managerial personnel in the Tokyo and Osaka Head Offices. All the Kuraray
employees in Japan received a course of e-leaming lessons to further raise
their awareness about compliance with the laws add regulations.
[Creation and U-pdating of Rules]
A variety of measures have been implemented including a revision of
the employment rules with an emphasis on compliance with laws and
regulations and the setting of new rules of contact in dealing with other
companies in the same trade.
Kuraray CSR Report 2017 31

"u,
.a r
t
KURARAY CO., LTD.
Tokyo Head Office Ote Center Building, 1-1-3, Otemachi, Chiyoda-ku, Tokyo 100-8115
Osaka Head Office Umeda Hankyu Building Office Tower, 8-1, Kakudacho, Kita-ku, Osaka 530-8611
TEL: [phone] FAX: [phone]
http://www.kuraray.co.jp/
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