Making my everyday Making thoughtful Making the world Kirei Lifestyle Plan Walking the right path more beautiful choices for society healthier & cleaner

Contents Editorial Policy CEO Message Kirei Lifestyle Plan KPI definitions Independent assurance report 60 Policies has become a part of many Our product lineup more their lives to make helping daily lives, people’s it is our responsibility to take believe comfortable. We for society by building example the lead in setting an sustainable lifestyles. technical promote will actively we as characteristic of Kao as well that are In particular, innovations human life lifestyle solutions, to realize sustainable is an important with respect to , which societal challenge, starting with the SDGs. will offer , we of Specifically, sustainable products through the Yoki-Monozukuri Our goal is to generate products themselves. daily-life and aspect of the environment returns to every our products. consumers choose society whenever range of marketing, In addition, through our wide and awareness- information dissemination, education understanding to foster will strive raising activities, we of of the importance by consumers themselves with them to sustainable lifestyles, and collaborate in order to promote contributions to , on society. a major impact achieve 102-12, 102-15, 103-1, 103-2 103-1, 102-15, 102-12, Contributions to the SDGs Risks related to realization of our vision by 2030 by of our vision to realization Risks related sustainable fail to practice the that if we believe We demands, or to offer lifestyle- manufacturing society could not only and services, we transforming products our brand, but also negatively damage the value of social values and hinder the global and impact new society. realization of a sustainable of our vision to realization Opportunities related 2030 by influenced lifestyles have Since our founding, we through our business activities in continuous also contributed have collaboration with consumers. We with 130 years to the realization of a sustainable society and by never of accumulated original technology, in our and comfort compromising on convenience this is what believe lifestyle solutions. We product driven In addition, by a global profile. has enabled us to achieve educational ideas for living reinforced by offering new the can maximize efforts, we and awareness-raising consumers global effect of a significant number of choices. adopting the habit of making more sustainable will contribute to addressing the we In this way, challenges facing the global environment.

Responsible consumption is also an important theme of Responsible consumption is also an important the SDGs. Our mission is to support consumer through our cleanliness, beauty and health in daily life positions us to cosmetics and daily use products. This products of living through ways offer consumers new around and services, and collaborate with consumers of people to realize enrichment of the lives the world of the world. globally and contribute to the sustainability life to selection on the part of consumers in daily Our aim is for a little adaptability and product of a sustainable contribute effortlessly to the realization this through Yoki-Monozukuri will achieve We society. responsibility to and daily life solutions, which reflect our that will contribute to overall a way in innovation drive will become an we In this way, social evolution. enterprise chosen by consumers and customers. Kao’s creating value Kao’s creating Our rich lifestyles are supported by consuming the Our rich lifestyles are in science and technology resources. Progress planet’s but at the standard of living, has enhanced humanity’s economic activity is exhausting same time, inappropriate the environment. resources and destroying private it behooves offer products enterprise not only to use its strengths to society, build a sustainable To sustainable lifestyles, and services, but to offer new, learn about along with information to help more people those lifestyles. Social issues we are aware of aware are Social issues we Kao’s creating value to address to address value Kao’s creating social issues Enable people to live more sustainable lifestyles through information, services and products that save precious resources such as energy and water. resources such precious that save services and products information, through lifestyles more sustainable to live Enable people Sustainable lifestyle promotion promotion lifestyle Sustainable Kao Kirei Lifestyle Plan Progress Report 2020 Making my everyday Making thoughtful Making the world Kirei Lifestyle Plan Walking the right path more beautiful choices for society healthier & cleaner

Contents Editorial Policy CEO Message Kirei Lifestyle Plan KPI definitions Independent assurance report 61 Improved quality of life/Framework Improved p. 44 Making my everyday more beautiful > everyday p. 44 Making my ➡ accordance with the 19 actions of our Kirei Lifestyle of our Kirei Lifestyle with the 19 actions accordance at reports are issued progress status Plan. Activity by Meetings hosted ESG Promotion company-wide and progress for Department, the ESG Promotion divisions is monitored at monthly individual company ESG Promotion Meetings. and targets Mid- to long-term performance Mid- to long-term targets for society,” Based on “Making thoughtful choices all one of the three Kirei Lifestyle Plan commitments, choices Kao brands will facilitate small but meaningful a more resilient on the part of the consumer to realize and compassionate society. mid- to achieving Anticipated benefits from long-term targets related to activities By engaging in awareness-raising can further we believe sustainable lifestyles, we reinforce consumer preference for ethical solving social contribute to consumption, and even heightened challenges. In addition, if consumers with will we choose our products, actively awareness comfortable contribute to the realization of abundant, challenges, as the solution of social lifestyles as well to our and reinforce long-term consumer loyalty brands. 102-43, 103-2, 103-3 103-2, 102-43, Decarbonization/Education and promotion: “eco Decarbonization/Education and promotion: together” with consumers/customers Collaboration with stakeholders waste: Zero based on “eco together” and promotion: conservation/Education Water “eco together” with consumers/customers Implementing education conservation: Water and activities based on “eco together” p. 85 Making the world healthier & cleaner > p. 85 Making the world ➡ healthier & cleaner > p. 114 Making the world ➡ healthier & cleaner > p. 119 Making the world ➡ healthier & cleaner > p. 124 Making the world ➡ sustainable life solutions and ethical consumption ethical consumption life solutions and sustainable selection and the point of brand options at purchase. as our products as well basic functionality of promote reductions in guidance for their use, when the product is used environmental impact consumers/customers). (“eco together” with disposal after the waste to ensure appropriate product is consumed. Framework a major shift to ESG announced In FY2019, we Lifestyle Plan, management, and formulated the Kirei ESG The which is the vision of that management. Business, Division will lead collaboration with our & Manufacturing, Supply Chain Management ESG-based Logistics and Sales divisions to promote promotion of the Kirei Lifestyle manufacturing, toward Plan. Each individual activity will be performed in • By offering information to consumers about the to consumers By offering information • local government Collaboration with distributors and •

manufacturing and products themselves. and products manufacturing lifestyle solutions. and public institutions. companies, organizations efficiency and reduce environmental impact, and efficiency and reduce environmental realize “white logistics.” • Collaboration with retailers and distributors to offer Collaboration with retailers • Collaboration with our diverse stakeholders is stakeholders Collaboration with our diverse and spark essential to enhance consumer awareness and lifestyles. lives to change people’s a movement collaboration with are promoting with respect to the following. As such, we stakeholders Collaboration with distributors to boost transport • Collaboration and engagement Collaboration with stakeholders Through the foregoing activities, we will educate will the foregoing activities, we Through of product selection, so that consumers at the point choices contributes to making each of their daily life In addition, more achievable. sustainable lifestyles points and with respect to our consumer contact engage actively will outlets of our retail customers, we and in communication relating to the environment and , and as water hygiene as well we particular, activities. In promote awareness-raising for the next activities will engage in awareness-raising importance generation, to learn about and realize the of responsible choice. Four actions Four solutions through Propose sustainable 1. to sustainable related Disseminate information 2. opportunities for hands-on learning. Offer 3. with educational activities in collaboration Conduct 4. Sustainable lifestyle promotion promotion lifestyle Sustainable Kao Kirei Lifestyle Plan Progress Report 2020 Making my everyday Making thoughtful Making the world Kirei Lifestyle Plan Walking the right path more beautiful choices for society healthier & cleaner

Contents Editorial Policy CEO Message Kirei Lifestyle Plan KPI definitions Independent assurance report 62 Addressing the environmental challenges the environmental Addressing containers by presented to technology effectively new Our aim is to deploy by example reduce the environmental impact, for bottles to transitioning almost completely from plastic shampoo like refillable film containers for products set a have and conditioner by 2030. In addition, we goal of boosting production of environmentally by 2030. friendly containers to 300 million units from plastic bottles is being acceleration away our activities to date, but also our not only by The driven of our proprietary the deployment efforts to expand , which dramatically Refill Eco Pack Raku-raku as a primary simplifies the product refilling process, package. has already been Refill use of our Smart Holder in conjunction with Eco Pack The our Raku-raku considering a are we commercialized. Going forward, Eco solution for the bath area in which Raku-raku , be suspended from a Smart Holder Refill would Pack with appropriate amounts of product dispensable with a single push. 416-1 Hydrophilic group Hydrophilic Lipophilic group Lipophilic group (hydrophobic chain) (hydrophobic Bio IOS molecular structure model. water. Hydrophilic group: part with high affinity to affinity to fats. Its Lipophilic group (hydrophobic chain): part with high a hydrophilic group at special structure has a long lipophilic group with its midsection. used for limited purposes. The ability to utilize this The used for limited purposes. and the fat source effectively, heretofore hardly-used from algae, future prospect of using fats extracted base for Bio IOS a highly sustainable detergent make the future. use as a sustainable practical Bio IOS first saw detergent base in Attack ZERO, a concentrated liquid laundry detergent launched in 2019.

Our initiatives

Bio IOS is a unique surfactant, highly soluble in water soluble in water Bio IOS is a unique surfactant, highly affinity to while at the same time retaining its high stable through to globalized, a view oils. With our are reviewing production and procurement, we research results and manufacturing existing to of that review and using the fruits technology, molecules. new design and develop 12 to 14 carbon chains of fatty materials have made from naturally Most cleaning surfactants derived are less atoms, because agents with longer chains materials with 12 fat raw However, soluble in water. 5% of to 14 carbon atoms account for only about must total oil-based ingredients, and manufacturers material. compete for supplies of this scarce raw residue remaining from the of oil palm. from the fruit Bio IOS is extracted when palm oil is extracted oil ingredients Out of all the natural vegetable in FY 2017), (190 million tons in the world marketed oil. The palm oil is the most widely used multipurpose solid fats obtained from the residue of the oil have only been conventionally long carbon chains and have Solutions from materials: Solutions from base Bio IOS detergent of exemplified by our sustainable detergent base, single-rinse laundry detergents and sustainable detergent base, single-rinse by our —exemplified products and product packaging innovations will create environmentally friendly We and products themselves. lifestyle solutions based on manufacturing —and promote sustainable rapid-rinse shampoos Solving problems through manufacturing and products themselves and products manufacturing through Solving problems Sustainable lifestyle promotion promotion lifestyle Sustainable Kao Kirei Lifestyle Plan Progress Report 2020 Making my everyday Making thoughtful Making the world Kirei Lifestyle Plan Walking the right path more beautiful choices for society healthier & cleaner

Contents Editorial Policy CEO Message Kirei Lifestyle Plan KPI definitions Independent assurance report 63 Disseminating information information Disseminating living to sustainable related consumers from questions Responding to active to offer active praise for our efforts are drawing We media, such as Yahoo! support through social and with housekeeping- Chiebukuro, to consumers concerns. beauty-related information related to housekeeping, offer to a answers provided We and have beauty and health, 4,000 queries since 2015. Our over total of cumulative are posted specialist knowledge responses based on enables other consumers with to social media, which We similar concerns to benefit from the responses. of the Activity Prize the Consumer-Oriented received in Activity Awards Consumer-Oriented 3rd ACAP 2018. eco together website Environmental disseminate we our eco together website, Through information that contributes to environmental students. In learning, principally for elementary school for promote awareness-raising addition, we related to as children, consumers of all ages as well lifestyles. environmentally friendly activities and products from living Ideas for advocating social impact by to achieve strive We our product environmentally friendly living through awareness communication, and by raising consumer of sustainable lifestyles. hope that our product standards In addition, we will be adopted by competing companies, enabling us greater impact. to demonstrate an even 102-43, 416-1 102-43, s. Speeding up the shift away from plastic bottles plastic from Speeding up the shift away film containers the adoption of new through Future attention, we will do so using attention, we in an environmentally paper, conscious way. stickers. methods to eye-catching the total elimination of eye-catching the total elimination of eye-catching plastic sticker Total elimination of Total plastic eye-catching stickers • to call consumers’ necessary Where • communication Seeking alternative • will promote we Going forward, down thousand tons reduction

Hanging package solution with dispensing hooks and downward Plastic 74% 93.1 Efforts to shift away from plastic bottles plastic from to shift away Efforts Raku-raku Eco Pack Refill + Eco Pack Raku-raku Smart Holder solution Evolution Speeding up the shift away from plastic bottles from the shift away Speeding up Product design that adds value after, and not just up to, purchase by the consumer the by and not just up to, purchase after, design that adds value Product

Plastic bottle reuse

To the To present Reduction of plastic waste through through Reduction of plastic waste and concentration product refills, packages larger Manufacture The challenge of eliminating eye-catching plastic stickers challenge of eliminating eye-catching The Promoting the shift away from plastic bottles through the adoption of new film containers adoption of new the through plastic bottles from away the shift Promoting air the insertion of of film alone, consisting type. While container new Bottle is a revolutionary Film Air-in The package this to develop will continue We as primary packaging. and function own bottle stand on its the allows recyclable. will be completely type, which Eye-catching plastic stickers provide consumers with consumers provide plastic stickers Eye-catching correct information on product advantages and they is over, usage. At the same time, after their role become waste. to completely eliminate the use of are working printing the by by 2021, for example We these stickers on the package itself. convey information they Sustainable lifestyle promotion promotion lifestyle Sustainable Kao Kirei Lifestyle Plan Progress Report 2020 Making my everyday Making thoughtful Making the world Kirei Lifestyle Plan Walking the right path more beautiful choices for society healthier & cleaner

Contents Editorial Policy CEO Message Kirei Lifestyle Plan KPI definitions Independent assurance report 64 International Environment Painting Contest for Contest for Painting International Environment Children raising activities at EcoPro 2019 raising activities at EcoPro Corporate citizenship activities: The Kao Corporate citizenship activities: The ➡ www.kao.com/content/dam/sites/kao/www-kao- com/global/en/sustainability/pdf/sus-db-2020-e-all. pdf#page=78 Corporate citizenship activities: Awareness- ➡ www.kao.com/content/dam/sites/kao/www-kao- com/global/en/sustainability/pdf/sus-db-2020-e-all. pdf#page=79 The Kao International Environment Painting Painting Kao International Environment The Children Contest for for Contest Our International Environment Painting Children aims to raise environmental awareness with paintings expressing generation, among the next our critical global should preserve we how environment for the future. a total of 2019, drew Our tenth contest, held in 16,552 entries from around the world. Awareness-raising activities carried carried activities Awareness-raising and organizations society, out with institutions public opportunities at Utilizing awareness-raising and other exhibitions EcoPro engage in direct we exhibition, At our annual EcoPro designed generation the next communication with with higher- awareness, environmental specifically to foster students as the main target. grade elementary school 102-43 next-generation through providing education in providing through next-generation and educational materials the classroom Corporate citizenship activities: Support for school Corporate citizenship activities: Support for plant and museum tours education through www.kao.com/content/dam/sites/kao/www-kao- com/global/en/sustainability/pdf/sus-db-2020-e-all. pdf#page=78 Corporate citizenship activities: Education for the Corporate citizenship activities: Education for ➡ www.kao.com/content/dam/sites/kao/www-kao- com/global/en/sustainability/pdf/sus-db-2020-e-all. pdf#page=77 ➡ Education programs with hands-on with Education programs and at worksites experiences environmental plants offer we plants and museum, At our worksites, about environmental opportunities to learn through hands-on awareness technologies and raise for elementary and junior high primarily experience, 32,000 elementary school students. Approximately students from around 870 and junior high school participated in plant tours. schools have lessons and hand-washing Promoting housecleaning classes on participating nationwide educational frontlines been offering visiting classes to have Since 2009, we students correct hand-washing teach young date, To as classes in cleaning. technique, as well students 81,000 kindergarten and elementary school these classes. experienced have Offering opportunities for for opportunities Offering hands-on learning Lifestyle Research introduces Kirei Living Research introduces Lifestyle ➡ (Japanese) www.kao.co.jp/lifei/support/

Offering environmentally conscious ideas for living. Sustainable lifestyle promotion promotion lifestyle Sustainable Kao Kirei Lifestyle Plan Progress Report 2020