Kao group members follow The Kao Way, a corporate philosophy for business activities with the aim of contributing to the satisfaction and enrichment of the lives of people through "Yoki-Monozukuri," literally meaning "good development of products."
This report contains four chapters that summarize Kao's CSR-based approaches and activities in fiscal 2006;

1.  Feature Reports, in which examples of the "Yoki-Monozukuri" practice are
     introduced from the perspective of relations with stakeholders

2. Management System

3. Responsibilities to Stakeholders

4. Environmental Activities

In this report, we also address new initiatives for the procurement of raw materials to enhance CSR activity in the supply chain.

From Green Procurement to CSR Procurement
To reinforce CSR activities in the supply chain, Kao has previously conducted environmentally friendly green procurement. In January 2007, Kao formulated the CSR Procurement Standards, to which items related to social aspects (e.g., human rights and compliance) were added, and has requested domestic and overseas suppliers to cooperate with Kao in complying with the standard. As of March 31, 2007, Kao had completed the investigation of 377 major suppliers in Japan and overseas.

Participated in the RSPO
Pilipinas Kao Inc. extended its production facilities for fatty alcohols made from vegetable fat and oil. On this occasion, Kao became a member of the RSPO (Round Table on Sustainable Palm Oil), a global organization in the pursuit of the sustainability of palm oil.