ESG-Driven Management

Features of Kao's ESG-Driven Management

(1) An ESG-Driven Management shaped from the consumer's point of view

Since our founding, our mission has been to contribute to the prosperity of society through our business activities. In the 1990s, we began initiatives such as the development of environmentally conscious packaging and containers and universal design to offer products that are easy for everyone to use, such as notched containers so that shampoos and conditioners can be distinguished by touch. In 2009, we announced our Environmental Statement, and we have been promoting environmentally conscious initiatives in collaboration with stakeholders throughout product lifecycles.
We cannot be bystanders when it comes to serious global issues such as climate change, aging societies, resource scarcity and plastic waste. In addition, with dramatic changes in global awareness and the spread of ethical consumption, in which consideration for the environment and human rights is a factor in purchasing decisions, we have a strong sense of crisis that people will no longer choose our products unless we step up our efforts.
Therefore, in 2019 we announced our environmental, social and governance (ESG) strategy, the Kirei*1 Lifestyle Plan, and declared a major shift in course to ESG-driven management. The concept of ESG is not new to Kao, but we set forth a new strategy because of our desire to help resolve social issues globally at a higher level and to contribute through technology.
The foremost feature of the Kirei Lifestyle Plan is that consumers play the leading role. We defined the Kirei Lifestyle as a sustainable lifestyle that consumers seek, and formulated the plan to address the feelings and behaviors of consumers who want to live sustainable lifestyles that suit them as individuals. We believe that the role of a company is to provide options so that consumers can make choices that suit them, and we want to be closely involved in helping them realize their individual values.

  • * 1 The Japanese word "kirei" means beautiful or clean, not only on the outside but also on the inside. At Kao, Kirei is the value we want to bring to everyday life with our brands, products and services - now and in the future.

(2) Cooperation with various stakeholders

Solving global environmental and social issues is difficult, and a single company cannot do it alone. It requires cooperation and collaboration with various partners including local communities, national and local governments, NGOs and NPOs, academia, industry associations, and other companies.
For example, to help realize plastic resource circulation, we are collaborating with Lion Corporation in the recycling of film packaging. In addition, to build a sustainable supply chain, we are working with Apical Group, which is engaged in palm oil production and sales, and Asian Agri, a plantation company, in a program to help Indonesian palm oil smallholders improve their yields and acquire sustainability certification for their palm oil. In both cases, the companies pool their knowledge and know-how to solve problems that cannot be accomplished by one company on its own.

Oil palm smallholder in Indonesia

Collection box for used refill (Outlined in red)

(3) A strong governance structure that conducts initiatives for social issues

We have a flexible and robust ESG governance structure so that we respond quickly to the major changes taking place globally, aiming to ensure expansion of business opportunities and solve social issues. In our ESG governance structure, under the Board of Directors, the President and CEO and five subordinate organizations are responsible for business execution. Characteristics of this structure include an organization with outside committee member participation that functions to provide oversight and advice, and the swift and targeted implementation of management decisions broken down into innovation and initiatives.

ESG Managing Committee

The ESG Managing Committee is chaired by the President and Chief Executive Officer, and its members include Senior Managing Executives and Managing Executive Officers. These members push forward the ESG strategy, the Kirei Lifestyle Plan (KLP) by developing policy and strategy for our ESG activities, making final decisions on investments, identifying issues, risks and opportunities and confirming the progress of activities.

ESG External Advisory Board

By submitting reports and suggestions in response to queries from the ESG Managing Committee, the ESG External Advisory Board ensures that an external perspective is reflected in our management. To enable Kao to realize world-class plan formulation and implementation, the Board provides information and opportunities for collaboration with external partners, and also offers advice.

ESG Promotion Meeting

The ESG Promotion Meeting is attended by the heads of business divisions. These members promote to realize ESG strategy based on policies, direction, and proposals decided by the ESG Managing Committee.

ESG Steering Committee

For the priority issues, decarbonization, plastic packaging, human rights and DE&I, the ESG Steering Committees coordinate with the ESG Managing Committee and have the ability to make suggestions to divisions and group companies.

ESG Task Force

The ESG Task Force established for individual focus themes when an interdivisional structure is needed, and propose activities based on the detailed plan developed by the ESG Promotion Meeting.

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