PAINTING THE WAY FORWARD BEYOND COATINGS BEYOND ASIA NIPSEA LFG SUSTAINABILITY REPORT 2020This is the second sustainability report by NIPSEA Group. It covers the sustainability performance of our operations across the 19 geographical locations we are present in, for the financial year of 1st January to 31st December 2020. The report discloses the company’s strategies, initiatives and performance in relation to Environmental, Social and Governance (“ESG”) issues that are considered to be the most relevant to the operations and stakeholders of NIPSEA Group, identified through a materiality assessment. We continue to take stock of how we manage our business activities in the pursuit of driving a sustainable business for the long-term in a measured and transparent way. GRI Standards The report has been prepared in accordance with the Global Reporting Initiative Sustainability Reporting Standards (“GRI Standards”): Core option. The GRI Standards provide the principles and disclosures required by organisations to report their economic, environmental, and social performance and impacts. NIPSEA Group applies the GRI principles in defining the report’s content and quality, as set out by the GRI Standards. Readers may refer to the full GRI Standards Index at the end of this report for an overview of the company’s approach in this regard. External Assurance The data disclosed in this report is not externally assured at this point in time. NIPSEA Group will explore options to externally assure sections of high materiality when a higher level of maturity in reporting is established. Feedback NIPSEA Group values the opinions of its stakeholders. We welcome all suggestions and feedback on how we can better our sustainability report or sustainability practices. Please share with us how we can further our commitments by contacting NIPSEA Group’s Sustainability Working Group at sustainability@nipsea.com.sg. About The ReportPAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 1 Content Chapter 1: About NIPSEA Group a. A Message from the Group Chief Executive Officer b. 2020 Highlights c. Business Legacy and Purpose d. Key Industries and Global Presence Chapter 2: Sustainability at NIPSEA Group a. Management Philosophy b. Materiality Matrix c. Sustainability Pillars and Targets 12 4 Chapter 4: Appendix a. ESG Performance Data b. GRI Content Index Chapter 3: NIPSEA Group’s Focus a. People b. Environment c. Customers d. Community e. Technical Capability 32 NIPSEA LFG SUSTAINABILITY REPORT 2020 CHAPTER 1ABOUT NIPSEA GROUPPAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 34 NIPSEA LFG SUSTAINABILITY REPORT 2020 A Message from the Group Chief Executive Officer, NIPSEA Group WEE SIEW KIM Group Chief Executive Officer, NIPSEA GroupPAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 5 In this second iteration of our Sustainability Report, you will read about how our NIPSEA Group of companies are stepping up to leverage our technical capabilities and partnerships to make a difference in the lives of our customers. For example, our NIPSEA Group R&D Centre in Shanghai is leading the group’s collaborative efforts with universities and research institutions to explore future- ready paints that can help reduce the effects of climate change through buildings and structures. We have upcoming plans to develop another R&D campus in the coming years. At the same time, we continue to follow up on the material topics identified last year, deep diving into areas where we can make the most impact. We pride ourselves in raising the bar on traditional functional coatings, while continuing to invest in the consumer space to create a wider range of products and services that safeguard the health and well-being of our customers. While we ramp up efforts in technology enablement to meet the needs of our customers, we also recognise that the loop can only be fulfilled when we invest in our talents – both internally and in the community. We decided to spend time this year reviewing our social engagements to better channel our efforts into the areas of Education, Empowerment and Engagement. The year 2020 is a seminal one. It forced us to rethink, reboot and rebuild what would now become the ‘new normal’. This report is the starting point of how we at NIPSEA Group are taking this opportunity to frame our new normal – one that has a sharpened emphasis on people and community, enabled by technology to adapt quickly and remotely to the different needs of our customers. “We renew our ‘people- first’ focus to build deeper consumer and community connections, and harness innovation to accelerate change and create solutions inspired by the needs of our stakeholders.” This report covers a crucial period, not just for us at NIPSEA Group but also for our customers, employees, partners, and the local communities we live in. Specifically, we saw how the crisis of our generation – COVID-19 – unfolded globally, impacting many lives and livelihoods. We took decisive actions to step up our efforts to support our customers and communities hardest hit by the pandemic. We mobilised our resources to distribute personal protection equipment (PPE), masks and sanitisers to frontliners such as doctors and nurses. To date, we have provided more than 8,000 kits to frontliners in India. We also made sure to avail PPE equipment to our essential workers in customer-facing positions in Bangladesh as they continued to provide service to customers. The critical period also saw our teams rally together to contribute more than US$3.6 million in the form of financial support, contribution of paint materials and distribution of daily essentials to support the disadvantaged. Leveraging what we do best, we scaled up production of our anti-viral paints to supply hospitals and schools with more than 615,000 litres of paint to protect medical staff and children. We are grateful to our construction partners in the Philippines who shared our vision in keeping high- risk stakeholders safe. Our efforts in addressing the challenges brought on by COVID-19 exemplify our belief that business can be used as a platform to do good, in this case in ensuring that livelihoods of communities and businesses are kept elevated during crises. Shaping the Future Together, Inspired by You As the world restarts post-pandemic against a backdrop of uncertain economic and social recovery, what is clear is the need for us to put people at the core of everything that we do. At NIPSEA Group, we take this as an opportunity to renew our ‘people-first’ focus to build deeper consumer and community connections. We harness innovation to accelerate change and create solutions inspired by the needs of our stakeholders. We centred ourselves around five key pillars when we first started on our sustainability journey last year – Customers, People & Community, Environment, Organisational Health and Technical Capability. The pandemic has not diverted our attention from these broader agendas, but rather brought them to the fore.6 NIPSEA LFG SUSTAINABILITY REPORT 2020 2020 marked another year of continued success for NIPSEA Group in generating sustainable business value despite the COVID-19 pandemic. Advances in product and services innovation led to increased demands in our growing category of sealants, adhesives and fillers (SAF), while maintaining our strength in the architectural, automotive, industrial, marine and protective coatings segments. We also continued to make new strides on the environment and social sustainability front. Respectively, we focused on research and development to formulate innovative environmentally friendly paint products, and realigned assets and resources to serve the immediate needs of the community during the COVID-19 pandemic. Below, we share our FY2020 achievements as we continue to navigate sustainability-related issues and opportunities in today’s business environment. 2020 Highlights Asia’s No.1 paint and coatings company (in terms of revenue) 2.3 billion litres of paint produced in the year, an increase of more than 40% production volume as compared to FY2019 figure 23,285 employees 2 in NIPSEA Group, an increase of more than 1,000 hires within a year Global presence across 19 geographical locations Direct Economic Value Generated (USD‘mil) Economic Value Distributed (USD‘mil) Economic Value Retained 1 (USD‘mil) 2019 $4,068 2020 $4,461 2019 $3,516 2020 $3,861 2019 $552 2020 $600 Number of manufacturing facilities 2019 82 2020 83 Business Achievements Sustainability Achievements 1 Refers to Profit before Tax (PBT) 2 Includes operations in Japan Governance 0 cases of identified leaks, thefts, or loss of customer data Environmental Emissions intensity decreased by 2.86% Use of renewable raw materials increased by 13.2% Social Return-to-work rate of employees that took parental leave: >92%PAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 7 Business Legacy NIPSEA Group is a leading paint and coatings solutions company in Asia, serving a diversity of sectors that range from household to industrial and construction. We were established in 1962 as a partnership between Nippon Paint - our parent company - and Wuthelam Holdings Pte Ltd. Following which, we swiftly accelerated our growth in the region, expanding into Malaysia, the Philippines, and subsequently into China. In 2007, a new era began for NIPSEA Group, with our acquisition of consolidated subsidiaries across Asia Pacific to include markets such as Thailand, Taiwan, and South Korea. We are the 4th largest paint and coatings solutions company in the world, and still expanding. Nippon Paint was established in Tokyo by Mr. Moteki Jujiro in 1881 and is now the largest coatings manufacturer in Asia, since pioneering the first paint plant in Japan. As of 2021, NIPSEA Group will be a wholly owned subsidiary of Nippon Paint Holdings. The NIPSEA Brand We build upon the legacy by fulfilling our purpose of enriching the living world through the power of science and imagination. With that, we underwent a brand revitalisation that exemplifies our renewed focus of prioritising innovation with heart and people at our core. Through active engagement with our customers, we reimagine the future of consumption to bring about smart solutions that meet their evolving needs and improve the way society lives and works. Our Vision Building a sustainable future through customer- centric growth Our Brand Promise Innovation with heart and people at our core Organisational Culture Our vision of building a sustainable future for us and our stakeholders is driven by customer-centric growth in the Paint & Coatings industry, leveraging data-driven expertise and knowledge to create a net positive impact on the world around us. Our people are ingrained with our Lean For Growth (LFG) culture comprising five core values – Value Driven, Openness, Innovative, Collaborative and Excellence (VOICE). Put together, we nurture a purpose-driven organisation that embraces a collaborative mind-set for our people that spans teams and geographies. Value Driven We stay efficient and resourceful, constantly finding ways to maximise productivity and deliver high quality at good value. Openness We are open and willing to engage all our customers, to understand their needs to create better experiences. Innovative We remain inquisitive and inspired to make an impact by challenging present norms and championing new ideas for both our customers and organisation. Collaborative We respect, trust and support our team members and engage in best- practice sharing to succeed together. Excellence Quality and reliability are in our DNA. We go above and beyond to exceed expectations and hold ourselves to high standards. Insight Driven: Seek insightful customer understanding through proactive engagement and data mobilisation Collaboration: Embrace mutual respect, trust and support to establish long-term customer partnerships Passion for Innovation: Power purposeful innovation for our customers through continuous learning and education Strive for Excellence: Commit to deliver quality and excellence through products and services Our Brand ValuesNext >