Kao's TNFD-Based Report on Biodiversity

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by KnowESG,

Kao Corporation

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Kao Corporation, in partnership with Accenture Japan Ltd., has released a report titled "Business Risk and Opportunity on Biodiversity - TNFD Case Study with Location Analysis."

The report's analytical method, known as LEAP, was proposed by the Taskforce on Nature-Related Financial Disclosures (TNFD).

LEAP approach involves four steps: Locate (identifying priority areas), Evaluate (understanding dependencies and impacts), Assess (identifying and evaluating risks and opportunities), and Prepare (setting goals, developing strategies, and reporting on progress).

Preventing biodiversity loss has become an urgent global issue alongside climate change. Kao recognises the importance of biodiversity and the ecosystems that support its products' entire life cycle.

To reverse biodiversity loss, Kao is working to reduce its negative impact on nature and biodiversity while increasing positive actions. In April 2022, Kao revised its Basic Policy on Biodiversity and actively promotes sustainable raw material procurement and technology development.

TNFD provides frameworks for risk management and disclosure to help organisations report and act on evolving nature-related risks and opportunities. Kao participated in the TNFD Forum in April 2022 to exchange information with other companies and gain a better understanding of analytical methods. Kao collaborated with Accenture to publish the Business Risk and Opportunity on Biodiversity Report, following TNFD's framework.

The recently published report by Kao, in line with TNFD's LEAP approach (beta version 0.3), confirms the relationship between biodiversity and Kao's business. The report considers future natural and economic conditions and examines potential scenarios affecting the manufacturing industry.

It analyses the risks and opportunities posed by changes in biodiversity, economic, and social conditions to Kao's business activities and financial information. Additionally, the report highlights business opportunities that could provide benefits to nature and the manufacturing industry as a whole. It also provides specific examples of Kao's activities.

Following are examples of Kao's activities:

Development of Bio IOS, a detergent base that optimises the use of resources

Kao has successfully commercialised Bio IOS, a detergent base produced from solid fats, which were previously underutilised sustainable raw materials. Bio IOS is an effective cleaning agent that minimises the amount of rinse water required.

Upcycling waste PET plastic in NEWTLAC 5000

NEWTLAC 5000 is an asphalt modifier that incorporates waste PET plastic into its raw material, promoting a recycling-oriented society. In addition, it enhances pavement strength and maintains its colour for a longer period, adding value for customers.

Implementing internal carbon pricing to encourage investments that support biodiversity conservation

Kao has strengthened its internal carbon pricing to reduce scope 1 and 2 CO2 emissions and guide investment decisions towards decarbonisation. This includes initiatives such as installing solar power generation equipment, procuring renewable energy at its bases, and using less carbon-emitting transportation in logistics.

In 2019, Kao Group established its ESG strategy, the Kirei Lifestyle Plan, which was further strengthened in 2021 with the corporate purpose of "realising a Kirei World in which all life lives in harmony," and the Kao Group Mid-term Plan 2025 (K25), which prioritises sustainability as the only path.

This long-term approach guides the company's management decisions and business activities, including the provision of products and solutions, with a focus on contributing to the conservation and restoration of biodiversity and the regeneration of nature. Kao is committed to continuing to improve its information disclosure and taking proactive steps towards achieving its ESG objectives.

To view and compare company ESG Ratings and Sustainability Reports across sectors, follow our Company ESG Profiles page.

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Source: Kao


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