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ESG-Driven Management

Features of Kao's ESG-Driven Management

(1) An ESG Strategy 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.

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Oil palm smallholder in Indonesia

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Collection box for used refill (Outlined in red)

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

We are building a structure to realize flexible and robust ESG activities. We have established the ESG Managing Committee*2 under the Board of Directors to discuss and decide the direction of our ESG Strategy. In addition, we have established the ESG External Advisory Board composed of external experts, the ESG Promotion Meeting, which works to execute the ESG Strategy, and the ESG Task Force, which proposes activities for focus themes. Through this structure, we conduct activities while incorporating external perspectives.
The ESG Managing Committee consists of members of management, and the ESG Promotion Meeting is composed of the heads of business divisions, regions, functional divisions and corporate divisions. This structure facilitates swift management decisions on ESG matters and enables each division to advance ESG activities. The ESG External Advisory Board, which consists of external experts including non-Japanese members, provides advice and recommendations to the ESG Managing Committee, thus bringing external perspectives to our management.
In addition to managing all global ESG activities under this structure, we promote the Kao Actions set forth in the Kirei Lifestyle Plan and make management decisions on business and investment strategies based on their impact on business and society. To promote commitment to ESG activities, management compensation is linked to sustainability targets.

  • * 2 The ESG Committee was renamed the ESG Managing Committee as of June 1, 2021

ESG promotion structure

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