Kao Corporation

Lobbying
The company discloses a list of trade associations of which it is a member,

Stakeholder engagement
The company discloses an overview of the issues raised in stakeholder engagement activities, as well as its engagement process, and its stakeholder engagement covers nature and social issues.

Sustainability strategy and accountability
The company discloses its process for identifying and prioritising its most relevant sustainability impacts, and reports progress against all the targets it has set.

Ecosystem conversion and restoration
The company requires all of its third-party suppliers to prohibit the conversion and degradation of natural ecosystems to preserve biodiversity, High Conservation Value Forests (HCVF) defined by HCV Network, High Carbon Stock Forests (HCSF) defined by HCSA (High Carbon Stock Approach), and peatlands, regarding all its forest-risk commodities’ supply chains. The company is committed to restoring ecosystems.

GHG emissions
The company shows reductions in scope 1, 2, and 3 emissions, sets time-bound targets to reduce them, and reports progress against the targets. The targets are aligned with the 1.5°C trajectory.

Impact and dependencies assessment
The company has used the ENCORE tool to assess its impact and dependencies for biodiversity.

Resource exploitation and circularity performance
The company discloses its inputs, however, the scope of calculations related to raw materials is limited to its operations in Japan.

Solid and air pollution
The company reports quantitative reductions in its plastic waste and consumption, and reports on the proportion of its recycled plastic use.

Water
The company demonstrates it is reducing water withdrawal in its own operations. The company reports the proportion of water withdrawn for its own operations in water-stressed areas, and also engages with suppliers to reduce water withdrawal. The company discloses its processes for managing and monitoring discharge water quality, and also regularly reports on water pollution metrics.

Safe, clean, healthy and sustainable environment
The company discloses the risks specified through human rights risk assessments in the group, which include damage to health and adverse impacts on people’s lives in local communities.

Act ethically
The company provides an email address and a postal address for all workers, dispatched employees, business partners, and third parties to report bribery and corruption concerns without fear of reprisals. It also discloses expenditures to trade associations and political organizations, including lobbying activities.

Provide and promote decent work
The company commits to worker health and safety, evidenced by its publicly available policy and practice of monitoring and improving workplace conditions, complying with legal standards, and offering regular safety training. It tracks and reports data on workplace accidents, lost work days, and types of injuries, demonstrating transparency in occupational health and safety management. Regarding fair wages, the company mandates suppliers to provide a safe, hygienic working environment and verifies supplier compliance through audits and the Sedex platform. On gender equality, the company, a signatory of the Women’s Empowerment Principles since 2010, aims for equal gender representation in managerial roles by 2030, reporting 30.5% female managers in FY 2022 and targeting 70% representation by 2025.

Respect human rights
The company employs a robust human rights due diligence process, regularly conducting risk assessments that prioritise employees and business partners, and using a Plan-Do-Check-Action cycle to address significant risks, including slavery and human trafficking. It hosts human rights potential risks assessment workshops to identify key themes, such as the well-being of foreign workers in Japan and the conditions of raw material producers and farmers. Comprehensive surveys and third-party assessments through Sedex ensure broad compliance and continuous improvement. These efforts are complemented by stakeholder consultations and interviews, especially focusing on foreign workers, to address and mitigate potential human rights abuses across all company operations and supply chains.

Lobbying
The company has an opportunity to disclose a clear and detailed framework for assessing alignment of its trade associations with its sustainability targets, as well as potential misalignments between the lobbying activities of its trade associations and its sustainability targets.

Sustainability strategy and accountability
While the company has set some targets, it does not disclose group-wide targets on all key sustainability topics for the most material parts of its value chain. No evidence was found that the company links performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature, including biodiversity, and social issues. The company does not disclose whether its highest governance body has expertise regarding nature-related topics.

Ecosystem conversion and restoration
The company discloses some evidence of addressing conversion. However, this does not guarantee DCF-aligned practices. While the company has a target to achieve 100% third -party certification, it does not have a target for achieving a conversion-free supply chain.

Impact and dependencies assessment
The company has an opportunity to apply its assessments across all its operations, including all of its products.

Invasive species
The company has not identified any activities that could lead to the introduction of invasive alien species in its own operations.

Key areas and species
The company does not disclose key species or areas important for biodiversity affected by its operations or suppliers. It has an opportunity to increase its transparency.

Resource exploitation and circularity performance
The company does not report quantitatively on its group-wide circularity performance. The company has an opportunity to disclose activities to improve soil health or agrobiodiversity in its production or sourcing practices. The company has an opportunity to disclose a target to improve soil health in its production or sourcing practices and report progress against it.

Solid and air pollution
No evidence found that the company provides qualitative evidence of reducing the production of hazardous substances. The company does not commit to avoid developing or marketing new chemicals or products with SVHC (substance of very high concern) properties. The company is not reducing the production of hazardous waste. The company does not report on the amount of plastic waste generated and proportions directed from or to disposal. It also does not report metrics on air pollutants, nor set time-bound targets to reduce them.

Water
While the company has a target to reduce water withdrawal, the target is intensity based and does not necessarily result in an absolute reduction of water withdrawal. The company does not report a decrease in water pollution. The company does not report targets to reduce water pollution. The company has an opportunity to publicly commit to the right to water and to provide its processes for implementing preventive and corrective action plans for identified specific risks to the right to water and sanitation in its own operations.

Indigenous Peoples’ and land rights
The company does not show if it is committed to respecting Indigenous Peoples’ rights or land rights of local communities.

Safe, clean, healthy and sustainable environment
No evidence found that the company tracks its actual or potential negative impacts on the health of local communities, or that it has a commitment to respect the right to a safe, clean, healthy and sustainable environment.

Act ethically
The company articulates a stance against bribery in its Business Conduct Guidelines but lacks a formal policy commitment. It also does not describe its process for identifying bribery and corruption risks. Additionally, there is no formal policy on lobbying and political engagement, and the company does not prohibit political contributions explicitly. The company has an opportunity to formalise its anti-bribery, lobbying, and political engagement policies and define its approach to compliance and risk identification.

Provide and promote decent work
The company mandates its suppliers to ensure worker health and safety and fair wages, yet lacks a formal policy statement or details on monitoring these commitments. It asserts commitment to equal pay but does not verify if wages are sufficient for a decent living, nor does it disclose methods for determining living wages. While promoting gender equality within its workforce, it does not present comprehensive gender pay data or a public commitment to broad gender equality initiatives. The company has an opportunity to formalise and disclose its health and safety policies, clarify its living wage strategy, and enhance transparency on gender equality metrics.

Respect human rights
While the company expects its suppliers to adhere to human rights standards concerning discrimination, child labour, and forced labour, and to support the right to unionise, it has not extended these expectations formally to all business relationships concerning ILO-declared fundamental rights at work. The company’s policy does not explicitly cover the right to collective bargaining. It has an opportunity to establish a more comprehensive and publicly available human rights policy that encompasses all fundamental rights and to describe the processes for evaluating human rights risks in its business relationships more transparently.