MSCI finds mixed outcomes in review of sustainability of Abenomics

A dearth of childcare to facilitate greater female participation at management levels, continued weakness of independent boards, and a poor trend in patent filing are raised as challenges to the sustainability of reforms required for Japan’s Abenomics policies to achieve their overall ESG goal, according to analysis performed by MSCI.

MSCI ESG Research has analysed constituents of the MSCI Japan index in light of the Japanese Stewardship and Corporate Governance codes, both of which have been implemented as part of developments linked to Abenomics. These ESG developments are intended to improved investor insight into areas such as corporate earnings capabilities, MSCI notes.

The trends studied for the research took in corporate governance, human capital and innovation.

“We found that while companies significantly improved their performance over key parameters, in aggregate, Japanese companies still had a large gap to make up in order to match global peers in governance oversight and in human capital capacity. An intense competitive landscape has also raised the bar for Japan to keep up with the pace of innovation among global firms,” MSCI concludes.

Challenges highlighted include:

  • Just 8% of the companies studied had a majority independent board
  • Just 2% of manager in sectors such as Energy and Materials are women; many of the companies are headquartered in areas without sufficient childcare
  • The country is suffering a negative trend in patents filed per GDP in the area of cleantech, relative to competitive economies such as US, China, South Korea

Click here to read the full report: Measuring the Sustainability of Abenomics – Japan Report 2016


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