Utilizing Internal Carbon Price System and Promoting New Medium- and Long-term Initiatives toward Reducing Scope 3 CO2 Emissions
By implementing Innovation in Reduction and Innovation in Recycling with regard to CO2, Kao Corporation is aiming to achieve carbon zero by 2040, and carbon negative 2050 in its business activities. In April 2019, Kao established its ESG strategy, the Kirei Lifestyle Plan, which outlines 19 leadership actions, one of which is decarbonization. In 2022, the company took steps including the following actions: used internal carbon price, the cost of which was increased in 2021, and developed products contributing to CO2 reduction and formulated new medium- and long-term strategies for reducing Scope 3*1 emissions related to procurement and use of raw materials. The following is a report of progress made in 2022.
Continuing the measures implemented in 2021, in 2022 Kao employed renewable energy sources by entering into a corporate Power Purchase Agreement (PPA)*2 , adopting photovoltaic power generation facilities and using the non-fossil fuel certificate system*3 . Kao also continues to accelerate the use of renewable electricity by approving the company-wide carbon price system—which was raised from ¥3,500/ton-CO2 to $168*4 /ton-CO2 in 2021—to introduce a water heat pump system at the Toyohashi Plant (scheduled to be completed in May 2023) and a photovoltaic power generating facility at the Kashima Plant (scheduled to be completed in January 2024).
Ratio of renewable electricity used in Japan compared to | overseas2022 results: Japan 58%, overseas 38% (2021: Japan 51%, overseas 27%) |
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Photovoltaic power generating facility for on-site power | generation installation sites (as of the end of 2022)2022 results: 21 bases (2021: 17 bases) |
Looking at different stages of the product lifecycle, procurement of raw materials and product use generate a high percentage of CO2 emissions. To reduce emissions, Kao will continue decreasing its use of raw materials and use recycled plastics when procuring raw materials, developing water-saving products to reduce business partners and consumers' water use-related CO2 emissions, and using plant-based and other natural raw materials and cutting down on the use of plastics for packaging at the disposal and recycling stage.
Kao is taking steps to reduce CO2 emissions, which are especially high at the raw materials procurement and product use stages. In 2022, 69% of PET plastic containers sold in Japan used recycled PET plastics as material at the raw materials procurement stage. At the product use stage, Kao has introduced many products aiming to reduce CO2 through water saving, for example concentrated liquid laundry detergent Attack ZERO, which requires only one rinse cycle, quick-rinsing CuCute dishwashing liquid and water-saving Bioré u The Body foam body wash spread by hand.
Kao has also started new projects aimed at reducing CO2 over the medium to long term. In the area of procurement of raw materials, it is a founding member, together with Genomatica and Unilever, leading companies in sustainable materials, of a venture business set up in the United States to supply an alternative to palm oil to the market. Where disposal and recycling are concerned, Kao has been delegated by New Energy and Industrial Technology Development Organization (NEDO) to start a study on a manufacturing model for utilizing cassava residue.
Kao is continuing its efforts to develop technologies using CO2 as a raw material and implement emissions-reduction measures by 2030.
The Kao Group adopted the Kao Group Mid-term Plan 2025 (K25) in 2021, promoting the vision of "protecting future lives" and "sustainability as the only path." The Kao Group will continue to integrate its ESG strategy into its management practices, develop its business, provide better products and services for consumers and society, and work toward its purpose, "to realize a Kirei world in which all life lives in harmony."
Over the past 130 years, Kao has worked to improve people's lives and help them realize more sustainable lifestyles—a Kirei Lifestyle. The Japanese word 'kirei' describes something that is clean, well-ordered and beautiful, all at the same time. The Kao Group established its ESG strategy, the Kirei Lifestyle Plan in April 2019, which is designed to deliver the vision of a gentler and more sustainable way of living. By 2030, Kao aims to empower at least 1 billion people, to enjoy more beautiful lives and have 100% of its products leave a full lifecycle environmental footprint that science says our natural world can safely absorb. For more information, please click here.
Kao creates high-value-added products and services that provide care and enrichment for the life of all people and the planet. Through its portfolio of over 20 leading brands such as Attack, Bioré, Goldwell, Jergens, John Frieda, Kanebo, Laurier, Merries, and Molton Brown, Kao is part of the everyday lives of people in Asia, Oceania, North America, and Europe. Combined with its chemical business, which contributes to a wide range of industries, Kao generates about 1,550 billion yen in annual sales. Kao employs about 35,400 people worldwide and has 136 years of history in innovation. Please visit the Kao Group website for updated information.
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