Kao increases presence on environmental, social and governance indices

By Natasha Spencer

- Last updated on GMT

Kao increases presence on environmental, social and governance indices
Chemical and cosmetics company, Kao, now appears on a number of global stock indices, strengthening its international presence.

The Japanese name has recently been added to environmental, social and governance (ESG) investing indices including the FTSE4Good Index Series for the 11th consecutive year, the FTSE Blossom Japan Index and MSCI Japan ESG Select Leaders Index for the second consecutive year.

In addition, for the first time, Kao Corporation, has appeared on the MSCI Japan Empowering Women Index (WIN).

Clarifying its direction

In May 2018, Cosmetics Design Asia reported how Kao was focusing its attention on harnessing an internationally-recognised portfolio​ to generate further growth in Asia and Europe, in particular.

FTSE Russell, which is a member of London Stock Exchange Group, has developed the FTSE4Good Index Series and the FTSE Blossom Japan Index. It has been created alongside FTSE4Good Index Inclusion Rules, which centre on current international ESG standards including the UN Sustainable Development Goals (SDGs).

ESG efforts

As ESG initiatives continue to grow in importance, international investors use the input and feedback from these indices to demonstrate plans and efforts relating to these ESG activities.

US-based MSCI develops MSCI Japan ESG Select Leaders Index and MSCI Japan Empowering Women Index (WIN). The company provides global institutional investors with a support function and provides various tools to aid decision making. 

Launching its division

Following the design of Kao’s strategic Group Mid-term Plan 2020 (K20) in 2017, the Japanese company is building its future's direction based on the theme of "Transforming Ourselves to Drive Change".

In July 2018, Kao established its ESG Division, to help attain its K20 goals.

"We are delighted to see Kao's ESG activities received so positively by the investment community. As Kao moves into its second year of K20, we will step up our efforts in this area to create a positive impact on the sustainability of society and for further business success,”​ noted Dave Muenz, head of the ESG Division.

For the six months ended June, Kao’s operating profit is reported to have increased 4% to approximately $817 mn (€699.3 mn), business publication Nikkei Asian Review, reported​.

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