Sustainability-Linked Bond

Outline of the Bonds

Name Kao Corporation 7th Unsecured Bonds
（With special limited inter-bond pari passu clause）（Sustainability-Linked Bond）
Issuance amount 25 billion yen
Interest rate 0.345%
Maturity 5 years
Determination date
of issuance terms		 June 9, 2023
Issue date June 15, 2023
Redemption date June 20, 2028
KPI Percentage of reduction in absolute Scope 1 & 2 CO2 emissions from all Kao Group sites relative to
baseline year (FY2017)*
SPT 39% reduction in absolute Scope 1 & 2 CO2 emissions by FY2026 relative to baseline year (FY2017)
Bond
characteristics		 If the SPTs are not achieved by the judgment date, the interest rate will increase by 0.10% from the
day following the interest payment date that arrives immediately after the judgment date until the
redemption date.
  • * Boundary: All Kao Group sites including company cars in Japan
  • * Gases included: The seven GHGs specified by the Kyoto Protocol (only CO2 for sites outside Japan)

Suitability as a Sustainability-Linked Bond

Along with the Sustainability-Linked Bond, Kao has developed the Sustainability-Linked Bond Framework (the Framework) that outlines the five elements of the bond: (1) selection of KPIs, (2) setting of SPTs, (3) bond characteristics, (4) reporting and (5) verification when issuing the bonds. Kao has obtained a second opinion from Rating and Investment Information, Inc. (R&I), stating that the Framework complies with the Sustainability-Linked Bond Principles 2020 (SLBP) established by the International Capital Market Association (ICMA) and the Sustainability Linked Bond Guidelines (2022 version) established by the Ministry of the Environment.

Status of KPI

2021 2022 2023 2024 2025 Target
(2026)
Percentage of reduction in
absolute Scope 1 & 2 CO2
emissions relative to baseline
year (FY2017)		 20% 26% 35% 41% 47% 39%

Due to a review of the scope of calculations, the Scope 1 + 2 CO2 emissions from Inogami Co., Ltd. (approximately 11 thousand tons/year) in the Kao Group are reflected in the data from 2025 onward. We have also retroactively revised the data from previous fiscal years up to 2017. The impact of these revisions amounts to approximately 1% of the Scope 1 + 2 CO2 emissions in the base year and does not materially affect the overall trend.

Ratings and Bonds

Ratings and Bonds

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