Kao's actions following the suspension of RSPO certification of the IOI Group

Kao has adopted the Guidelines for Sustainable Procurement of Raw Materials^*1 based on the policy of actively pursuing the environmental conservation. The Guidelines state that for palm oil we will monitor whether the plantations are properly developed by the suppliers, and if any violations are suspected, we will follow up with the suppliers and request remediation.

As the reason for the suspension of RSPO certification of the IOI Group in April was a breach of the RSPO Principles and Criteria^*2 in the development of plantations in Indonesia, we engaged with them and met with their top management to confirm the facts surrounding the suspension and to request that they sincerely address the matter in order to regain the trust of society and of the market. From the IOI Group, we were informed about the discussions that they had with the complainant, RSPO and other parties to address the issues identified in the complaint.

In parallel, we have decided to shift to other suppliers for the RSPO certified materials that we had planned to purchase from the IOI Group.

We will continue urging the IOI Group to implement corrective actions and monitor their progress. If we deem the actions of the IOI Group as inadequate, we will take a tougher stance including additional switching to alternative sources.

In accordance with Kao's Guidelines for Sustainable Procurement of Raw Materials, we will continue to promote the responsible procurement of raw materials.