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Kao Decarbonization

Accelerating Efforts Toward Carbon Zero by 2040 and Carbon Negative By 2050

By implementing Innovation in Reduction and Recycling with regards to carbon dioxide (CO2), the Kao Corporation is striving toward the realization of a decarbonized society. It aims to be carbon zero by 2040 and carbon negative by 2050 in its business activities. In April 2019, Kao established its ESG strategy, the Kirei Lifestyle Plan, which outlines 19 leadership actions. One of these actions is to contribute towards decarbonization. This mid- to long-term goal has been certified by the global Science Based Targets initiative (SBTi) as a 1.5°C target. Kao is also a member of the international initiative, RE100, which aims to power businesses using 100% renewable electricity. Additionally, all of Kao's logistics sites throughout Japan used only 100% renewable electricity in 2021. The following is a report of the progress made in 2021.
Innovation in CO2 Reduction/targets to achieve carbon zero by 2040 and the 2021 results
In 2021, in addition to utilizing the non-fossil fuel energy certificates*1 , a newly established corporate Power Purchase Agreement (PPA) was utilized at Kao Head Office. The Kao Group also installed the largest photovoltaic power generating facilities for on-site power generation at its Sakata Plant (total panel power generation capacity of 2,845 kW). Furthermore, 100% renewable electricity consumption has been achieved at all domestic logistics sites (55 locations), the Sumida Complex (including the Tokyo Plant), and the Sakata Plant.
*1 The non-fossil fuel energy certificates system provides energy retailers with proof that the portion of energy under the certificate is from renewable energy sources, which allows for the identification of power plants that contribute environmental value. This system began in Japan in 2018.
For 2022, Kao supports the installation of low CO2 emitting equipment and photovoltaic power generating facilities for on-site power generation. It also continues to accelerate the use of renewable electricity by approving the company-wide carbon price system—which was raised last year—and adopting it across Japan and the world. Moreover, 100% renewable electricity consumption has been achieved at the Tochigi Plant in January and at the Kao Head Office in February.
By 2030, Kao will have reduced Scope 1+2*2 CO2 emissions (absolute value) by 55% (taking 2017 as the base year) 
2021 results: 20% (2020: 15%)

Note: SBTi 1.5°C target certification
*2 The volume of greenhouse gases emitted directly by business enterprises and other organizations.
By 2030, 100% of the electricity used will be sourced from renewable energy
2021 results: 38% (2020: 28%)

Note: RE100 participation
● Ratio of renewable electricity used in Japan compared to overseas
Japan 51%, overseas 25% (2020: Japan 32%, overseas 23%)
● Photovoltaic power generating facility for on-site power generation installation sites (as of the end of 2021)
17 sites*3 (2020: 13 sites)
*3 Tochigi Plant, Toyohashi Plant, Ehime Plant (Kao Sanitary Products Ehime), Atsugi Logistics Center, Sumida Kita Logistics Center, Wakayama Complex, Sumida Complex (including the Tokyo Plant), Kao Industrial Thailand, Kao Corporation Shanghai, Kao Penang Group (Malaysia), Kao USA. Cincinnati Plant, Pilipinas Kao (Philippines), Kao Austria. In 2021, equipment will be newly installed at Kawasaki Plant, Sakata Plant, Kao Indonesia Chemicals and Kao Chimigraf Rubi Plant (Spain).
By 2030, Kao will have reduced CO2 emissions (absolute value) throughout the product lifecycle*4 by 22% (taking 2017 as the base year)
2021 results: 4% (2020: 4%)

A large proportion of CO2 emitted at each stage of a product's lifecycle is during raw material procurement and use. Consequently, Kao will reduce the amount of raw materials needed, and encourage the use of recycled plastics and plant-derived raw materials, the development of water-saving products, and the reduction of plastic used in packaging containers.
Note: SBTi 1.5°C Certification
*4 The volume of CO2 emissions deriving from raw materials procurement, manufacturing, transportation, product usage, and disposal of used products. This covers Scope 1, Scope 2, and part of Scope 3 emissions.
Amount of CO2 emissions reduced as a whole by using Kao's products and services: 10 million tons by 2030
2021 results: 4,564,000 tons (2020: 4,022,000 tons)

Kao is developing products, services, and technologies in its Consumer Products Business and Chemical Business that contribute to the sustainability of society. As part of this goal, Kao has set a target for the amount of CO2 emissions it can reduce. Kao compares the CO2 produced when offering new products and services with the CO2 created by current products and services. The difference between the two is the reduction contribution amount.
CO2 related Innovation in Recycling/targets to achieve carbon negative by 2050 and the 2021 results
Kao will continue to develop technology that enables CO2 to be used as a raw material in its own products.
In 2021, Kao launched its Mid-term Plan 2025 (K25), which declares "Sustainability as the Only Path" as its vision. Kao will continue to integrate ESG into the core of its company management. It also aims to drive business growth, as well as better serve consumers and society through its enhanced products and services, in order to achieve a Kirei life for all by providing care and enrichment for the life of all people and the planet.
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