RENOVA : (Delayed)Corporate Governance Report

コーポレートガバナンス

CORPORATE GOVERNANCE

December 15, 2021

RENOVA, Inc. Yosuke Kiminami, Founding CEO & Representative Director Contact: Governance & Compliance Department [phone] http://www.renovainc.com/

The corporate governance of RENOVA, Inc. ("the Company") is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile, and Other Basic Information 1. Basic Views

The Company conducts business in line with its mission "To create green and sustainable energy systems for a better world" and its vision "To become Asia's renewable energy leader." The Company believes that to achieve these goals it is important to gain the trust of local communities, our customers, shareholders, employees, and all other stakeholders. To this end, we are strengthening and improving our corporate governance by building a legal compliance system, quick decision-making and operation system, and appropriate supervision and monitoring system.

[Reasons for Non-compliance with Principles of the Corporate Governance Code] Information is based on the Code after revision in June 2021.

a．Supplementary principle 2.4.1 Ensuring diversity in the promotion to core human resources

• The Company believes that all of its employees are core employees for realizing its corporate mission: "To create green and sustainable energy systems for a better world."
• Based on this assumption, the source of the Company's competitiveness is "each human resources ("individual") and "teams." The renewable energy business takes advantage of natural conditions and climates that differ from region to region. To harness such diverse natural conditions and climates for business purposes, the Company must incorporate diversity and have a high level of collective intelligence created by diversity. To this end, the Company has always promoted equality in its recruitment, evaluation and promotion of diverse employees, to harness the diversity of capable individuals with differing experiences, approaches and views, regardless of race, gender, age, nationality and other individual differences.
• As a result, as of December 1, 2021, the percentage of mid-career hires among employees on a Group basis (the Company and its consolidated subsidiaries) was 90.3%, the percentage of female employees was 31.7%, and the

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percentage of foreign nationals was 10.8%.

• Going forward, the Company will continue working on personnel and organization strategies to harness the strength of capable "individuals" in line with the Company's business strategies of expanding the offshore wind energy business and business in Asia rather than setting numerical targets for different attributes and pursuing these.
• The Company will tirelessly pursue inclusion and diversity by developing workplace environments aimed at "being barrier free and creating no barriers" so that all "individuals" play an active part through putting the right people into the right jobs and by implementing initiatives aimed at fostering employee understanding to eliminate any misunderstanding, ignorance and lack of awareness about diversity.
• Key initiatives in FY2021: The Company implemented an initiative to reword its description of the culture it should aim to create in the future as part of organizational and personnel strategies. In the course of such initiative, the CEO himself held dialogue meetings with all employees (11 meetings in total) to reconfirm through dialogue with employees the "importance of diversity."

b．Principle 3.1 i) Principle of information disclosure, Supplementary principle 4.1.2 Mid-term business plan, Principle 5.2 Establishing and Disclosing Business Strategies and Business Plans

The Company's policy is to continue aggressively developing new power plants in the future. However, project development periods are long and it is not uncommon to be slightly ahead of or behind the schedule for the start of operation. In addition, each project involves development on a very large scale and it is therefore not necessarily the case that publicly announcing numerical targets in the form of a mid-term management plan is helpful for appropriate information disclosure. The Company discloses information on the status of its project development to investors on a regular basis. It also considers its policy for properly communicating its growth and strategic business policies to investors and will continue implementing disclosure methods that will help investors make investment decisions.

[Disclosure Based on Principles of the Corporate Governance Code]

Actions taken by the Company in relation to the disclosures specified in each principle of the Corporate Governance Code are as follows.

Again, information is based on the Code after revision in June 2021.

a. Principle 1.4 Cross-Shareholdings

The Company currently holds no listed shares for the purpose of cross-shareholding. The Company has no intention of holding shares for the purpose of cross-shareholding in the future but, if it did, it would exercise voting rights from the viewpoint of the sustainable growth of the investee and the enhancement of its share value over the medium and long term.

b. Principle 1.7 Related Party Transactions

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• The Company's Commitment to Compliance demands compliance for the prevention of conflicts of interest and the Rules for the Board of Directors and Rules for Approval Authority stipulate to the effect that transactions between Directors and the Company require the prior approval of the Board of Directors.
• The Company checks and monitors transactions between officers themselves or their families, within the second degree of relationship (includes companies they own or subsidiaries thereof), and the Company or subsidiaries of the Company and discloses material transactions in its Annual Securities Report.

c. Principle 2.6: Roles of Corporate Pension Funds as Asset Owners

The Company does not have a corporate pension fund plan. It has introduced a corporate defined contribution pension plan for the steady build-up of employees' assets.

d. Principle 3.1 i) Company objectives (e.g. business principles), business strategies and business plans; 1. Company objectives (e.g. business principles)

The Company conducts business in line with its mission "To create green and sustainable energy systems for a better world" and its vision "To become Asia's renewable energy leader."

To realize its mission and vision, the Company defines the following as "Our Commitments."

• The Earth: To contribute towards a sustainable society and planet
• Communities: To create value in partnership with local communities, and respect their heritage and cultures
• Customers: To generate clean and efficient energy for our customers
• Shareholders: To generate sustained growth in shareholder value
• Employees: To gather the best people, and provide exciting career and growth opportunities for our employees 2. Business strategies
  The Group intends to develop multiple renewable energy sources and has set itself a medium-term target for the total capacity of power plants in operation and under construction of over 3.0GW. The Group is currently implementing the following business strategies to achieve this target.
• Continue to make upfront investments for the foreseeable future.

The Company will invest in expansion of its workforce for business development and make proactive investments in excellent projects.

• Achieve growth in the medium and long term through the development of large-scale offshore wind power generation projects

Among renewable energy sources, power generation from offshore wind has progressed furthest in Japan. The Company has built up expertise in this area through many years' involvement in a wind farm off the coast of Yurihonjo City, Akita Prefecture, which has been under development since 2015. The area off the shore of Yurihonjo City, Akita Prefecture has been designated as a "promotion area" under the Renewable Energy Sea Area Utilization Law and the process of selecting an operator by public tender is currently underway. The Company's policy is to leverage the knowhow built up in the Akita Yurihonjo offshore wind farm project and the

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knowledge of human resources with experience of offshore wind farm projects in Europe and other parts of the world to develop new offshore wind farm projects in Japan. The Company will invest management resources in segments of the renewable energy market with particularly strong growth potential to realize growth over the medium and long term and further enhancement of its share value.

• Achieve further growth through overseas business

Leveraging the knowhow built up in Japan in its overseas business, focused on Asia, the Company will develop renewable energy sources suited to each country and region. It will use entry to the Vietnamese market as an opportunity to accelerate project development in Asia, where electricity markets are growing at a dizzying pace, and to achieve long-term growth and further enhancement of its share value.

• Steadily achieve large-scale biomass power generation through continuous development

The Company will leverage expertise built up through the operation of biomass power plants at United Renewable Energy Co., Ltd. and Kanda Biomass Energy K.K., development expertise from four 75MW large-scale biomass pipeline projects, and its superior network to accelerate the development of new large-scale biomass projects. It will steadily accomplish the four projects under construction, improving and enhancing its construction management system.

• Achieve sustainable, stable operation by bringing the operation function in-house

A certain degree of operational knowhow is required to operate biomass power plants and wind farms in a sustainable and stable manner. The biomass power plants the Group is currently constructing are going to start operation in succession from 2023 and the Company is also putting efforts into the development of large-scale offshore wind farm projects. By bringing operation functions in-house and accumulating the expertise to realize sustainable and stable power generation, the Group will fulfil its responsibility as a provider of social infrastructure and maximize profit at the same time.

3. Business plans

As stated in [Reasons for Non-compliance with Principles of the Corporate Governance Code] above, the Company does not disclose business plan information such as numerical targets.

For details of the Company's mission, vision and commitment, please refer to the following link. https://www.renovainc.com/corporate/philosophy/

e. Principle 3-1 (ii) Basic views and guidelines on corporate governance

For the Company's basic views and guidelines on corporate governance, please refer to 1. Basic Views of Part I of this report.

f. Principle 3.1 ⅲ) Board policies and procedures in determining the remuneration of the senior management and directors

1. Policies

To achieve its missions and vision outlined above, the Company's policies for Directors' compensation are as

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follows.

1. Developing an environment that facilitates the promotion of human resources with professional skills in each area.
2. Establishing a compensation plan that easily enables the Company to attract and retain excellent human resources suitable for an executive position.
3. Making a commitment to realizing the medium- to long-term growth of the Company by focusing on it.
4. Achieving a compensation level worthy of the performance scale at the time when the medium- to long-term business performance of the Company is achieved
5. Ensuring the flexible and speedy operation to enable the Company to recruit appropriate human resources for appropriate positions and respond to their retention needs.
6. Ensuring the objectivity and transparency of the compensation decision process to build the foundation for external accountability.

2. Procedures

The Company has established the Nomination and Compensation Committee (discretionary organization) as an advisory body for the Board of Directors to ensure the objectivity and transparency of compensation for the Directors and Executive Officers. The Nomination and Compensation Committee is chaired by an Independent External Director, and the majority of the members are External Directors. The amount of compensation for Directors and Executive Officers is determined by the Board of Directors based in the recommendations of the Nomination and Compensation Committee. The total amount of compensation for Directors is set within a compensation limit approved at a general meeting of shareholders.

g. Principle 3.1 iv) Board policies and procedures in the appointment/dismissal of the senior management and the nomination of director candidates and Audit & Supervisory Board Member candidates

1. Policies

(a) Directors Appointment criteria

The Company appoints as Director candidates individuals who have outstanding personality and insight and high ethical standards and who satisfy the following requirements and will be capable of fulfilling their duties, taking diversity and the overall balance of knowledge experience and skills within the composition of the Board of Directors as a whole into consideration.

Internal Directors

• Must have excellent management sense and be familiar with management issues
• Must accurately understand changes in the operating environment and market and be capable of formulating and implementing management strategies for achieving improvement in corporate value in the medium and

long term External Directors

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