Kao: Ethics over profits?

By Natasha Spencer

- Last updated on GMT

Kao: Ethics over profits?

Related tags: Kao

For the 11th consecutive year, chemicals and cosmetics name, Kao, is voted as one of the ‘World’s Most Ethical Companies’.

Choosing honesty

Kao was awarded the status of being one of the World's Most Ethical Companies 2017 by US ethics and social responsibility-focused think tank, Ethisphere Institute.

Achieving this accolade, the Japanese company was recognised as a leader in corporate transparency, fairness, ethics and compliance. The Ethisphere Institute analysed and monitored numerous global organisations in terms of their ethics and compliance programmes; reputation, leadership and innovation; corporate citizenship and responsibility; governance; and culture of ethics.

"Kao is the only company in Japan that we have honoured on the World's Most Ethical Companies list every year since the award's inception,"​ said Timothy Erblich, CEO, Ethisphere Institute.

"It underscores their commitment to engaging in business with integrity and we hope they will continue to lead their industry in advancing ethical standards and practices,"​ Erblich commented.

Driving sustainability

Basing its beauty activities on integrity, Kao has developed business conduct guidelines that emphasise Kao’s commitment to engage in honest, ethical and healthy practices.

Michitaka Sawada, President and CEO, Kao, emphasised:"As a core value, we positioned integrity as the foundation of the Kao Group Mid-term Plan 2020 (K20), which started from this year. This integrity continues to be embraced as K20 guides the group's daily business activities."

Sales effect

Ethics have remained a main focal point for APAC companies. Ethical labelling on chemicals and cosmetics items team with optimising sustainability and ethical standards within companies themselves to create brands that place honesty and integrity as core values that drive promotional efforts in the personal care industry. 

However, despite its sustainability statement, Euromonitor International stated that the Tokyo-based business has aimed to limit its reliance on its domestic market, but has not managed this. In addition, Kao’s sales in China have dropped.

As Kao has failed to concentrate its growth strategies on cosmetics, instead, opting to prioritise its chemical business, the business risks losing market share at present, Euromonitor added.

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