ESG Strategy

Kao has placed ESG at the core of its management to achieve its vision for 2030—becoming a globally indispensable company, “Kao.” Based on the ESG Strategy, the Kirei Lifestyle Plan (KLP), Kao promotes Yoki-Monozukuri from an ESG perspective. Through this approach, Kao aims to achieve both profitable business growth and the realization of a sustainable world by solving issues in society.

Enhancement of “K27” Through the ESG Strategy

“K27” is our Mid-term Plan to enhance Kao’s global presence, realize a sustainable society, and achieve company growth. The KLP reinforces K27’s four strategies in a multifaceted manner to achieve profitable growth and address social issues in the following five perspectives:

Strengthening our business by accurately understanding future consumer needs across the globe

By accurately anticipating the needs and expectations of diverse consumers around the world and enhancing the competitiveness of our products and services, we will create new markets and add value to our products and contribute to building Global Sharp Top businesses.

Strengthening the human capital necessary for global expansion

Development of people that can meet the needs of global consumers in marketing, product development, and sales, will fortify our Global Sharp Top human capital strategy.

Optimizing investments to accurately reflect future risks and opportunities from a global perspective

We promote capital efficiency and profitability improvement by reducing ESG-related risks, increasing business resilience, creating opportunities and optimizing capital allocation.

Enhancing mutual empathy with our partners and strengthening co-creation

Partnership collaboration is essential for addressing social issues that Kao cannot tackle alone. We promote business development through co-creation by expanding our collaborative relationships with our partners in diverse ways.

Enhancing risk reduction and opportunity creation in the entire value chain

ESG-related risks and opportunities exist throughout the value chain in which our business operates. By reducing risks and creating opportunities across the value chain, we strengthen K27 achievement across the organization and increase the sustainability of our business.

Enhancement of business growth through the KLP

As mentioned above, the KLP strengthens K27, enhancing business growth. It contributes to business growth in the following three perspectives:

(1) Providing products and services that foster high loyalty

Products and services that embed ESG perspectives and are developed with unique technologies can gain a high level of loyalty from consumers and customers, enhance competitive advantage , and contribute to business growth.

(2) Expanding business by creating new business domains

By addressing sustainability-related issues facing consumers and society, we develop product value in new domains and drive diverse business development.

(3) Expanding business by creating new value in existing categories

By reassessing the needs of consumers and customers from an ESG-driven perspective, we create new value within existing product categories and services, develop new market domains, and expand the scope of our business.
Through ESG-driven Yoki-Monozukuri based on the KLP, we will continue to achieve K27 and strengthen sustainable business growth.

ESG management framework

The overall execution of ESG has a governance structure with the ESG Managing Committee chaired by the Representative Director, President and Chief Executive Officer as the highest authority. The ESG Managing Committee, which consists of management, discusses and decides on the direction of activities related to the KLP, and reports the status of activities to the Board of Directors. In addition, the ESG External Advisory Board, which is comprised of outside experts, provides reports and recommendations in response to the consultations of the ESG Managing Committee, and reflects the third-party perspectives of outside directors and experts in management.
We have established the ESG Promotion Meeting, which works to achieve the KLP, and the ESG Steering Committee, which strives to ensure reliable and timely execution for priority issues. Based on the decision made by the ESG Managing Committee, the ESG Promotion Meeting promotes ESG-related activities throughout the Kao Group and monitors the progress of each department. The ESG Promotion Meeting is chaired by the Senior Vice President and the Executive Officer of the ESG division, and the meeting attendees are made up of the people responsible for business divisions, regions, functional divisions, and corporate divisions. The ESG Steering Committee will promote initiatives based on the priority issues of decarbonization, plastic packaging, human rights and DE&I, and chemical stewardship, respectively.People at the officer level are responsible as the owners of each issue and are granted a certain level of decision-making rights. The ESG Steering Committee works in conjunction with the ESG Managing Committee to ensure that initiatives are implemented promptly and reliably in each area. The ESG Task Force, which proposes activities related to key themes, plays a role in promoting the activities of each division and group company.
ESG-related risk management is carried out by the Internal Control Committee (which meets twice a year and is chaired by the Representative Director, President and CEO), and opportunity management is conducted by the ESG Managing Committee (which meets six times a year and is chaired by the Representative Director, President and CEO).

Kao Integrated Report 2025：ESG Strategy