Kao's policy applies to palm oil products, including derivatives, and explicitly bans suppliers that develop on peatland, a carbon-rich landscape whose destruction is driving the forest fire and haze crisis in Indonesia.
All palm oil will also be traceable to the mill by 2015.
Although the Japanese giant is the first major consumer company based in Asia to promise to remove forest destruction processes from its products, Greenpeace reckons that this policy will not be able to guarantee its products forest friendly until 2020.
Reps for the NGO also say that there is no reference to Free Prior and Informed Consent (FPIC), which is "a critical part of a progressive palm oil sourcing policy and a universally recognised standard to ensure the rights of local and indigenous communities-are respected."
“A critical issue in policies such as Kao’s is around how companies plan to implement No Deforestation, known as the High Carbon Stock approach," says Rie Honda, forest campaigner at Greenpeace Japan.
"Suppliers such as Golden Agri Resources among others are already implementing it, taking into consideration conservation and social issues," she adds.
Furthermore, Honda notes that there is also a weak definition around community rights and that the policy does not include how it plans to take action if suppliers are found to violate its procedure.
Sustainability - a hot issue for the cosmetics industry
Palm oil and its derivatives are present in about 70% of cosmetic products, obtained from the flesh of the fruit of African oil palm (Elaeis guineensis) of which palm kernel oil is obtained by pressing oil from the kernel, or seed, of the fruit.
With it being one of the most important ingredients used by many cosmetics companies, sustainability became a hot-button issue in 2013.
Negative consumer reactions to less sustainable products are causing many companies to adopt ‘greener’ methods.
Shiseido and P&G have already committed to switching entirely to the use of sustainable palm oil in the near future; the former by the end of 2013 and the latter by 2015.