Kao Group "Eco Together" with Consumers and Society through New Products and Processes

JFS Newsletter No.93 (May 2010)
"Towards a Sustainable Japan -- Corporations at Work" (No. 91)
http://www.kao.com/group/en/group/about.html

Japan's Kao Group is a long-time manufacturer of products used daily in households around the world, such as soap, detergent, and shampoo. Founded in 1887, Kao started with producing quality cosmetic soap under the corporate principle of "providing quality products." The company, one of Japan's leading manufacturers of detergents and other daily-use consumer products, has expanded its business from the beauty care business to a chemicals business dealing with fatty alcohols, surface active agents, etc.

In June 2009, the Kao Group released an environmental statement outlining its newly adopted mission and vision of positioning ecology at the core of its management strategy, while aiming to "contribute to the wholehearted satisfaction and enrichment of the lives of people globally" in the field of cleanliness, beauty, and health. In October 2009, the company changed its brand logo from the one that incorporates Japanese characters, to one based on the English transliteration of the word "Kao," with the aim of extending the trust its brand enjoys in Japan into a global phenomenon.

Minako Shimada, vice-president of the company's sustainability and corporate citizenship departments, says, "Kao's business activities have been focused on the principle of supplying quality products, but now eco-friendliness, globalism, and the development of human resources are also regarded as important keywords to guide activities that promote improved corporate social responsibility in terms of our relationship with society. In particular, our Environmental Statement represents a great change in our business."

Kao's "Eco Together" Program Aims to Minimize Environmental Impacts

Since 1995, Kao has continued to work on both improving product quality and reducing environmental impacts, under a basic philosophy that emphasizes the importance of safety and the environment. In fiscal 2008, Kao introduced a new index, the Environmental Impact Improvement Ratio, in order to assess and compare the overall carbon dioxide (CO2) emissions related to its current standard products (A) and those of newly developed ones (B). When the value of A divided by B is greater than one, it means the new product is more eco-friendly than the standard product. Based on this calculation, Kao has so far succeeded in developing 28 new items, including laundry detergent and paper diapers, that have increased Environmental Impact Improvement Ratios compared to the standard products.

The Kao Environmental Statement was established to promote further reduction in environmental impacts in more areas than through the activities described above. Under the direction of its Statement, Kao proposed its "Eco Together" program, which is a three-pronged approach to taking environmental action that applies to (1) consumers/customers who use Kao products; (2) business partners involved in material procurement, production, logistics, sales, etc.; and (3) society as a whole, where Kao intends to proactively be involved in society-wide environmental activities.

According to Kao's product life-cycle assessment, CO2 emissions from its products in fiscal 2007 in Japan totaled 6.92 million tons, of which 1.9 million tons was emitted during material procurement, 0.53 million tons during development and production, 0.09 million tons during distribution, 3.3 million tons during use at home, and 1.1 million tons during disposal. These figures show that the amount of CO2 emissions produced during home use of its products is prominently larger compared to those in the other stages.

Although the Kyoto Protocol requires Japan to reduce CO2 emissions during the five years between 2008 and 2012 by 6 percent below 1990 levels, the household sector is adversely increasing CO2 emissions. Detergents and shampoo, which are used almost every day in homes, together with a massive amount of hot and cold water, pose a serious problem in terms of consumers' environmental impacts.

World's Most Compact Detergent to Promote Being "Eco Together" with Consumers

To help solve the problem, in 2009, Kao released "Attack Neo," which it says is the world's most compact-sized, concentrated liquid laundry detergent.

The goal that Kao aimed for while developing the product was to reduce the rinsing frequency at home from twice to once, and to cut the volume of detergent needed to do the same job by half. For this purpose, it needed a hydrophilic and rinse-aid laundry detergent. After checking thousands of test results, the company made a breakthrough when it turned up a relatively unknown surfactant for use in laundry detergent. By improving it so as to have higher detergency and hydrophilicity, Kao was able to create its new Attack Neo detergent.

Reducing the rinse frequency from twice to once helps cut monthly water consumption for drum-type laundry machines by as much as 30 percent. The company also succeeded in increasing the detergent concentration to 2.5 times the conventional level, while keeping it in a stable liquid state, even with decreased water content. Thus, one compact bottle of the new detergent (about 400 grams) can be used to wash the same amount of laundry as a one-kilogram bottle of conventional detergent.

As a result, consumers gain benefits such as reduced water use and electricity bills plus a reduction in laundry time. The compact size also helps reduce environmental impacts during the transportation and disposal processes.

Shimada also proposed future policies for promoting the "Eco Together" program, saying, "We are thinking out how to publicize such benefits among consumers. For example, one-rinse washing shortens laundry time. This helps consumers save valuable time before going to work in the morning. In addition, the compact-sized detergent bottle is easier for shoppers to carry home and requires less room for storage. We need to emphasize not only the environmental friendliness of our products but also the new, more enjoyable lifestyle they can bring, while conserving energy at the same time."

Carbon Disclosure Project to Promote "Eco Together" with Business Partners
http://www.kao.com/jp/en/corp_csr/eco_activities_03.html

In the part of the "Eco Together" program involving business partners, Kao focuses particularly on information disclosure through the Carbon Disclosure Project (CDP), under which businesses are requested to make public their greenhouse gas emissions as well as their efforts to address climate change risks. This project is managed by the CDP, a London-based non-profit organization (NPO) established in 2000. Starting in 2002, the NPO sent major businesses around the world inquiry letters regarding their climate change strategies and greenhouse gas emissions. As CO2 emissions are becoming one criterion for consumers when selecting products and companies to do business with, Kao saw a need to participate, and has been actively involved with the CDP since 2003.

Carbon Disclosure Project
https://www.cdproject.net/

Kao joined the CDP supply chain in 2009 as one of three Japanese corporate members among 45 major businesses around the world. The company intends to not only disclose its own information but also to ask its business partners to disclose theirs, with the aim of encouraging companies in its whole supply chain to address climate change. Shimada emphasizes, "This kind of effort may be out of the view of consumers, but I think it very important from the viewpoint of our Eco Together program."

Aiming at Accelerating "Eco-Innovation"

As a mid-term goal, by 2020, Kao is aiming for a 35-percent reduction in the amount of CO2 emitted in the process of the production of products for its customers in Japan and a 30-percent reduction in the amount of water used when consumers use the company's detergents and so forth, both from the 2005 level. In outlining the company's plan for the future, Shimada says, "We must require each of our departments to make plans so that they can get themselves closer to this goal step by step, and we will continue developing more energy-efficient products, as we did with our Attack Neo laundry detergent."

To aid its efforts in achieving this goal, Kao is constructing an environmental technology research center on the premises of its plant in Wakayama Prefecture in western Japan. Its purpose is to bring the company's ecological management vision into actual production, as a comprehensive foothold in research and development in next-generation environmental fields. By addressing environmental research on a company-wide basis, previously addressed separately by each of its departments, Kao aims to accelerate its "eco-innovation" processes. Specifically, it plans to develop a technology to make highly effective use of renewable substances like plant-derived oils, as well as next-generation environmental technologies that have the potential to become a core in the fields of water, food, and green chemicals (chemicals with less environmental impacts).

The research center is scheduled for completion in February 2012. We will be paying attention to the latest technologies developed there and further steps Kao takes to implement its environmental statement.

Written by Taeko Ohno

See also: "Consumer Driven Policy - Making Good Products with Integrity" (Kao Corporation)
http://www.japanfs.org/en/mailmagazine/newsletter/pages/027887.html