A new MSCI report has been released today which measures the sustainability of abenomics.
The third “arrow” of Abenomics, the growth strategy, focused on a series of government-driven initiatives impacting corporations and capital markets, and among them was the establishment of Japan’s Stewardship Code and Corporate Governance Code. Implementation of these codes focused greater attention among Japanese companies and investors on corporate earnings capabilities.
Constituents of the MSCI Japan Index showed return on equity growth of 13% (CAGR) between FY2012 and FY2015, however questions remain as to whether the positive trends in earnings growth can continue and whether Japanese companies have fundamentally changed their practices to accelerate future growth. To investigate this. MSCI ESG Research analysed constituents of the MSCI Japan Index for trends in corporate governance, human capital and innovation. The research 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.
To download the full report, please visit: https://www.msci.com/www/research-paper/measuring-the-sustainability-of/0465920391