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Monday, June 28, 2021 | The Japan Times | 7

sustainable japan

Rivals become partners tackling environmental issues
ESG Talk
TOMOKO KAICHICONTRIBUTING WRITER

Kao, a major Japanese maker of home
products and cosmetics, announced its
medium-term business plan at the endof 2020. Environmental, social and governance activities — collectively known as
ESG — feature prominently in the plan,
which aims to both contribute to creatinga sustainable society and achieve businessgrowth. Yoshihiro Hasebe, who this past
January became president of Kao in thefirst year of the plan, has promised to leadthe company to become a “presence essential for our society as a company that protects lives in the future.”“My top priority as president is to makeKao into a company that embodies what
an ESG-aware company is all about,”
Hasebe said.
Founded in 1887, Kao has offered suggestions for new lifestyles throughout its long
history of product development. Manyof its products have anticipated today’s
increased awareness about ESG. One is
Attack, the world’s first compact-box powder laundry detergent, introduced in 1987,
which Hasebe says he is proud of for “taking Kao the farthest forward” as a company.
The product is claimed to require only a“spoonful,” or one-fourth the amount of
conventional products, to wash a load oflaundry. It realized the convenience of abox of detergent that lasts a long time. Kao

was also able to make the product’s box
less than one-fourth the size of conventional products, radically altering the imageof detergent boxes as heavy and bulky. It
significantly reduced the stress of doing
the laundry. “It made people feel much lessreluctant to do the laundry and, ultimately,changed the way of overall Japanese culture,” according to Hasebe.
After the debut of Attack, compactbox detergent products came into wideuse in the United States and Europe. Suchsmaller, lighter products also had a significant impact on the reduction of carbon
dioxide emissions associated with theirtransportation.

Advances in detergents

Kao has continued to improve on Attack,which has maintained the top spot inJapan’s laundry detergent market for overthree decades. Attack Neo, an “ultra-concentrated liquid laundry detergent” introduced
in 2009, comes in a bottle smaller than existing products, achieved by increasing the liquid’s concentration. This helped reduce theamount of plastic used for the bottles. And
thanks to a newly developed cleaning agent,laundry washed with Attack Neo requires
only a single rinse cycle. The product thus
enabled less water to be used in washing
and, ultimately, significantly cut emissionsof carbon dioxide. Attack Neo was wellreceived by consumers for its potential toreduce water bills and for its touted imageof allowing “anyone to take part in efforts
to conserve the environment,” Hasebe said.
Hasebe with Japan
Times publisher
Minako Suematsu.
Before becoming
CEO, he led Kao
Corp.’s research anddevelopment andstrategic innovativetechnology as vicepresident. YUICO TAIYAKao Corp. President and CEO Yoshihiro Hasebe YUICO TAIYA FOR PHOTOMATE

Endorsing this, appliance makers started
introducing washing machines with settings
that have only a single rinse cycle, rather
than two. Such a feature is now standard in
virtually all models on the market.
Hasebe, who was involved in the development of Attack Neo from the initial planningphase, said he had a strong sense of crisis
about the environment at the time. The
innovative product was born through a process of trial and error, he said.
“What we need to do is envision the
future,” he said. “I think what we should do is
the things only Kao — not any of the global
giants — can do, either working with othercompanies or leading them by example.”

Times Gallery

Recycling PET bottles

Kao, like many consumer product manufacturers, uses large amounts of plastic incontainers and packaging materials, which
is why the company sees helping create aplastic-recycling society as an especially
important mission. A recent example is its
use of 100% recycled polyethylene terephthalate (PET) for the bottles of its Attack
Zero detergent, launched this April. The
company has begun increasing the useof recycled plastic in earnest and plans toswitch all of the PET bottles for its home
products that are used in large quantities inJapan to recycled PET by 2025.
Kao is not averse to working with rival

JACOB REEDCONTRIBUTING WRITER

The “Ribbon of Life” exhibition at the Grand Hyatt Tokyo, part of the“Hyatt Loves Local” initiative in collaboration with the innovative
installation producer One Avenue Co., aims to support the local art
community and “send the message of love and human connection.”

Indonesian Ambassador Heri Akhmadi presents a souvenir ikat woven
garment from Flores to Kenichi Nishikawa, president of Fukuseki Maru,
after one of the company’s fishing vessels rescued the 20 Indonesian crew
members of a fishing boat that was sinking in the Indian Ocean.

YUJI AMANOEMBASSY OF INDONESIA

Jarman International’s monthly “Virtual” Charity Golf Cup at EastWood Country Club in Utsunomiya, Tochigi Prefecture, supports Mirai
no Mori, a nonprofit organization that empowers marginalized children in Japan. JARMAN INTERNATIONAL

Fast health checks via skin oil
Hasebe, who has worked in technology
fields for many years, says he is now particularly excited about a Kao technology
called RNA monitoring. A Kao researcher
found that sebum — skin oil — contains

YUICO TAIYA FOR PHOTOMATE

RNA. Analysis of sebum rubbed onto a blotting film can reveal the status of a person’shealth and immune functions, as well as
enable detection of signs of diseases suchas Parkinson’s, diabetes and infections.
“It’s not sufficient for an elderly person toundergo health checks only once a year ifthat person’s healthy life expectancy is to
be extended, but with this technology you
can look into the health status easily andat low cost,” Hasebe said. “I hope to makethis technology widely available to thegeneral public before my term as president
expires.”
Hasebe says he is also excited about
Japan’s technologies for frozen food andfake meat, although they are not Kao’s. “I
think it would be great if Japan’s technology to restore frozen foods in a short timeand its food culture could serve as catalysts for changing the environmental andwaste issues of the world,” he said, pointing
out that these technologies enhance theenjoyment of eating and reduce food waste
at the same time. The potential for new
lifestyles from Japan is
growing, starting froma no side to an initiativetranscending industry
boundaries.
The ESG Talk series are interviews with business leaders
who are active proponents of
ESG investing and practices
in Japan.

Achieving net zero: Webinar
examines targets and troubles
ESG/SDGs

Serbian Charge d’Afaires Ivana Golubovic-Duboka (right) together withembassy staff Tijana Nagato (left), Steps Gallery owner Masami Yoshioka (second from right) and artist Akiko Koga on June 1 at Koga’s solo
photo exhibition “Saint Sava’s Miracle” taken at the atelier of thefamous Serbian painter Milan Tucovic. EMBASSY OF SERBIA

manufacturers if it is good for the environment. This past May, the company
announced a deal with Unilever Japan on
the separation and collection of waste plastic containers for home products, including detergents and shampoos. Kao alsobegan working with Lion Corp. in 2020 on asimilar initiative for refill containers. “Rivals
that are making great products are ourbest partners,” Hasebe said. “Recycling andenvironmental issues are something manufacturers must deal with, but there’s only
so much a company can do by itself. Rivals
may compete with each other in terms ofwhat’s inside the containers, but it’s ‘no side’
when it comes to containers after the product has been used up, to use a rugby term.
There is a growing view that we will bebetter off if companies across the industry
work together.”
Kao is also working on a project to recycle contaminated or colored PET materials,
which are difficult to recycle into packaging
materials, as an asphalt modifier. Added invery small amounts, the material improves
the durability of asphalt pavement. It canmake asphalt, which typically requires
repaving every decade, last five decades,
according to Hasebe. It has the added benefit of reducing the amount of microplastic
released from paved road surfaces and,
therefore, their impact on the sea. Theasphalt modifier has already been usedin the paving of parking lots and repavingof roads controlled by local governments,
according to Hasebe.
“We have worked with many partners toget (this technology) to be introduced more
widely, and we have made a proposal for atechnology-sharing structure to the Ministry of the Environment,” he said.

Belgian Ambassador Roxane de Bilderling, together with UNICEF Tokyo
Director Roberto Benes, view the “Rebel Lives” exhibition, offering aunique perspective on children and armed conflict, at the Embassy of
Belgium in Tokyo on June 1. EMBASSY OF BELGIUM

Embassy of Jordan staffers and NTV crew members pose with Ambassador Lina Annab (center front) and embassy chef Ms. Nid (center rear)on June 1 during filming for a program on Jordanian cuisine and foodculture. EMBASSY OF JORDANOn May 25, the webinar “Delivering Net Zero
Emissions in Japan” was hosted by the PRI(Principles for Responsible Investment), an
independent, voluntary investment framework supported by the U.N. whose primary
goal is to encourage sustainable, ESG investment practices. The PRI has more than 4,000
signatories worldwide, 92 of whom are in
Japan.
The webinar opened with a summaryof the PRI in Japan and climate transition
finance, with remarks given by Michiyo
Morisawa, head of Japan PRI; Edward Baker,
PRI’s technical head of climate change andenergy transition; and Motoko Ogawa representing the Ministry of Economy, Trade andIndustry as the deputy director of the Environmental Economy Office. The panelists
included Teruyuki Ohno, executive director
at the Renewable Energy Institute; Masaaki
Nagamura, general manager of international
initiatives at Tokio Marine and Nichido Fire
Insurance; and Kazuyuki Shigemoto, executive officer and chief general manager ofinvestment at Dai-Ichi Life Insurance.

Net-zero Japan

Much emphasis has been placed on Prime
Minister Yoshihide Suga’s 2050 net-zeropolicy initiative. One of the webinar’s key
takeaways, however, is that the nearer-term
2030 goals are a more important indicatorof progress. But what should these goals be?
An ensemble of policy recommendations
for Japan produced by the PRI suggest thatcarbon pricing be significantly raised, existingcoal plants and planned projects be phasedout or canceled, and new investments into
infrastructure for renewables be prioritized.
According to a recent optimistic International Energy Agency report, achieving
net zero by 2050 does not require any new
investments in fossil fuels. However, robust
policy frameworks on how this can bedone in Japan will be necessary for the mostenergy-intensive sectors: power, transportation and industry. METI, together with theEnvironment Ministry and the Financial
Services Agency, have written the “Basic
Guidelines on Climate Transition Finance,”
which set out to make the process of fund-

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raising through debt more transparent, alongwith providing key investor information.
Throughout 2021, METI intends to create
industry-specific road maps toward carbon
neutrality. They will include model cases foreach industry and plans to subsidize companies that demonstrate progress aligning with
the nation’s net-zero initiatives.

Headwinds

Realizing a 46% to 50% emission reduction
by 2030 will require a substantial shift inJapan’s energy policy. During the webinar,
Ohno outlined a gap between the targets set
forth by the government and the policies
that are supposed to achieve them, saying,“The policies are not proactive or aggressiveat all.” For example, the price of carbon emissions in Japan is still far too low. The pricing is“not functional,” he said, and he believes thecost for 1 ton of emissions of carbon dioxideshould rise from the current ¥289 to several
thousand or even ¥10,000 (about $90). Ohno
added that “there are certain forces in Japan
trying to cling on to conventional energy
policy” and that “irrational regulations” prevent land usage for renewables.
Nonetheless, METI’s Ogawa pointed outthat not all companies can transition equally.
Unlike service-based industries, sectors withheavy capital expenditures, such as transportation and manufacturing, will require vastly
more investment to even begin transitioning. As a result, balanced pathways need tobe considered: “Green is not the only way of
mitigation,” Ogawa said.

Transition financeTransitioning investments toward sustainability has been trying. For instance, debt
financing through green bonds for industry-- one of the sectors in most need of transitioning -- stood at a mere $4 billion — 0.5%of the total of globally issued green bonds —between 2010 and 2020.
However, institutional investors like DaiIchi Life are leading the way in responsible
ESG investment initiatives in Japan. Beyond
a return on investment, the company is prioritizing net-zero businesses. It also finances“impact” projects such as the developmentof new wind-turbine propeller technology.
One major barrier, however, is maritime
shipping. While investment has been moving toward funding less carbon-intensive
new liquefied natural gas carriers, these still

Michiyo Morisawa

are not net-zero and are a potential stain on
any ESG portfolio.
To make informed investments on environmental, social and governance issues,
transparent company disclosure about climate-related metrics is vital. The TCFD Consortium — set up in Japan in 2019 following areport by the Task Force on Climate-related
Financial Disclosures, which had been
established in 2015 by the Financial Stability Board, an international organization thatmonitors global financial systems — encourages businesses to do just this. Currently,
there are 355 Japanese member companies.
With environmental awareness increasing in Japan, climate-related disclosure and,more crucially, its relative financial impact
are information investors desire, and thisclarity could help pave the way for more ESG
investment.

Japan’s role

Nagamura sees Japan as somewhat isolated
from the global climate dialogue. “Japan isn’t
an initiative-taking country. We cannot isolate ourselves from international discussion,or we’ll see investors turn their backs on us,”he said. On the other hand, he pointed outthat the majority of talks focus on developed
nations and tend to push aside the needsof and issues affecting developing ones.
Nagamura believes that “Japan can play a roleby connecting different interests” and bringing disparate voices to the table to “deepen
the discussion.”
This section highlights the environment
and a sustainable society.
For more information on
ESG and SDG issues, seewww.sustainable.japantimes.com/esg