DECEMBER 2020

SPOTLIGHT ON
PUBLIC POLICYJAPANTHE ACT ON THE PROMOTION OF FEMALE PARTICIPATIONAND CAREER ADVANCEMENT IN THE WORKPLACE
In Japan, women’s participation in the workplace has been underpinned by law since it entered into force on 1 April 2016. The Act on
the Promotion of Women’s Participation and Advancement in theWorkplace has required public and private sector companies to measure gender diversity-related data, create action plans to address gaps,
and disclose this information.

This has led to increased transparency about the status and contributions of women and men in the workplace and has enabled genderequality to be recognized as a significant measure in evaluating acompany’s performance and values.

KEY FEATURES OF THE AC T ON THE PROMOTION OF FEMALEPARTICIPATION AND CAREER ADVANCEMENT IN THE WORKPL ACE
The Act requires public and private sector companies to measuregender diversity-related data, create action plans to address gaps,
and disclose this information.

The Act initially targeted companies with more than 300 employees and with the 2019 revisions to the law it is now applicable
to companies with 100 or more employees.

The data to be collected includes the rate of newly hired women,
employee working hours, the number of women in managerial positions and the gap between women and men in yearsof service.

Companies’ measuring and publishing of data has led to improved
transparency. This has fostered an enabling environment inwhich gender diversity benchmarking can be further developedand utilized for gender-lens investing and enhanced investment decisions.

SPOTLIGHT ON PUBLIC POLICY • JAPAN | 1

CONTEXT
Over the past two decades, Japan has seen its female labour participation ratio surge, from 59.6 per cent in 2000 to a record 72.6 percent in 2019.1
Improvements have also been seen in Japan’s ‘M curve’, the graphic
illustration of women in their 30s and 40s leaving the workforce
to care for children before returning to work.2 This can be attributed todifferent reasons, such as an aging population that needs more women workers and improved parental leave schemes. 3In 2017, 74 per cent of women aged between 25 and 44 were employed,close to the Government’s 2020 target of 77 per cent. 4 The ratio ofwomen returning to work after their first child has also increased,from 40 per cent between 2005 and 2009, to 53 per cent between
2010 and 2014. 5
At the same time, however, there are still several barriers to women’s
full participation in the workplace and to the advancement of theircareers, including gender pay gaps, unconscious bias and stereotypical gender roles in care work. 6
In order to create opportunities to speed up progress on women’s
career participation and advancement, the Intensive Policy To
Accelerate the Empowerment of Women was launched in June 2015.7
The policy was formulated for the purpose of incorporating theperspective of women’s empowerment into the annual requests forbudgetary appropriations of government ministries and agencies.
Since then, a new set of gender responsive policies and their budget
allocation is announced every June through the Intensive Policy.
It covers a wide range of areas impacting women’s lives, from healthand safety to childcare, education and political participation. Under
this policy, efforts to support women’s full participation in economic
life led to the enactment of the Act on Promotion of Women’s Participation and Advancement in the Workplace in 2016.

OVERVIEWThe Act initially obliged companies with more than 300 employees tocollect data on specific indicators and, based on the gaps identified,to create action plans to rectify them within a specific time. Most
significantly, the data and the subsequent action plans had tobe published.
Revisions to the law (published in June 2019) now mean that theserules will apply to companies with 100 or more employees. The changes will become mandatory on 1 April 2022.8 The Act is temporary, witha 10-year lifespan.

The data to be collected includes:••••Rate of newly hired women

Other efforts to promote women’s economic empowerment include
the revision of various laws which became effective in October 2017.9
These included enhancing legislation preventing:•Maternity harassment, including new mothers getting
their jobs terminated10•

Sexual harassment.

The Childcare and Family Care Leave Act has also been revised, providing for the extension of parental leave if children are unable toaccess a place at a childcare centres.

Other projects and initiatives include:•Supporting networks of women working in science and technology, which covered 194 organizations in May 2019

•Training women to become corporate directorcandidates•

Encouraging men to undertake housework andchildcare.11

Employee working hours
Number of women in managerial positions
Gap between women and men in years of service.

SPOTLIGHT ON PUBLIC POLICY • JAPAN | 2

CERTIFICATIONSThe Government of Japan has established a certification system calledEruboshi to recognize companies that have good policies for theretention and promotion of women. Employers that have excellent
initiatives for women are given the Platinum Eruboshi. As of December

2019, 992 companies were awarded Eruboshi certifications. Sectors
with relatively high ratios of firms with this certification include media,utilities, finance and insurance, petroleum products, and academic
research services.13

TRANSPARENCY
The 2016 Act has led to 98.9 per cent of private companies withmore than 300 employees devising an action plan as of December
2019, whereas 100 per cent of national and local Government agencies
had done so by the same time.14 Smaller firms also disclosed theirdiversity data, with the highest disclosure ratios for “ratio of femaleemployees”, “ratio of female directors”, and “difference in averagecontinuous years of employment.” 15

A Government website set up in 2016 shows that 13,142 companies
have shared data and 16,448 have created and shared action plans
as of 3 December 2020.16 The website is constantly updated as part ofthe mandatory reporting requirements. It also serves as a valuable
tool, not just for investors and businesses, but also for students andjob seekers who can compare companies to see, for example, theratio of their women managers or new women hires. The website
contains manuals and tools for companies to guide them throughdata-sharing and creating action plans.

BENCHMARKINGOne of the most significant impacts of the Act has been that thesharing of data has enabled potential investors to use a gender lensto identify companies that have diversity in management and intheir board of directors.
MSCI, the leading provider of Environmental, Social and Governance(ESG) indexes, launched the MSCI Japan Empowering Women Index(WIN) in 2017, listing companies whose policies and measures encourage women to enter and return to the workforce more easily.17
According to MSCI, investors understand that gender diverse companies are “potentially more likely to withstand the challenges of ashrinking workforce” in Japan.18

The Government Pension Investment Fund for Japan (GPIF) uses theMSCI WIN index as one of its benchmarks for their ESG investment
strategy. As GPIF is one of the world’s largest pension funds, managing investments worth roughly 160 trillion, this strategy is expected
to lead to companies increasing their efforts for women’s greater
participation in the workplace. There are already signs of improvement, with the MSCI evaluation showing an increase in female hires,from 25 per cent to 28 per cent within a year.19
The development of the MSCI index can be attributed to the mandatory measuring and reporting of data as part of the Act. The improved
gender transparency has resulted in an environment in which benchmarking can be developed and utilized for better investment decisions.

CONCLUSIONSThe Government of Japan has taken several steps to promote women’sadvancement and leadership in the workplace. The 2016 Act, in particular, has triggered a cultural shift for companies to accelerate efforts
to achieve gender equality as it has allowed investors, employees andrecruits to see a company’s true level of commitment. In light of accel-erating ESG movements, companies are increasingly facing the need
to focus on internal analysis, target-setting, and transparency anddisclosures and this ten-year temporary legislation has set a foundation for such move.

SPOTLIGHT ON PUBLIC POLICY • JAPAN | 3

ENDNOTES
1. OECD Stats. https://stats.oecd.org/Index.aspx?DataSetCode=LFS_SEXAGE_I_R#
2. Goldman Sachs, Womenomics 5.0, Portfolio Strategy Research, 18 April 2019. Available at https://www.goldmansachs.com/insights/pages/womenomics-5.0/multimedia/womenomics-5.0report.pdf

11. Government of Japan, “Measures for Gender Equality”, The intensive policy to accelerate the empowermentof women 2019.
12. Government of Japan, “Measures for Gender Equality”, Women’s empowerment act.
13. Goldman Sachs, Womenomics 5.0.

3. Nikkei Asia. Japan’s female labor force set to toss out M curve. (17 September 2017). Available athttps://asia.nikkei.com/Politics/Japan-s-female-labor-force-set-to-toss-out-M-curve

14. Government of Japan, “Measures for Gender Equality”, Women’s empowerment act.

4. Ibid.

15. Goldman Sachs, Womenomics 5.0.

5. Ibid.

16. Government of Japan, The Database on Promotion of Women’s Participation and Advancement in
the Workplace. Available at https://positive-ryouritsu.mhlw.go.jp/positivedb/en_index.html

6. Ibid.
7. Government of Japan, “Measures for Gender Equality”, The intensive policy to accelerate the empowermentof women 2019. Available at https://www.gender.go.jp/english_contents/pr_act/pub/pamphlet/
women-and-men20/pdf/3-4.pdf
8. Government of Japan, “Measures for Gender Equality”, Women’s empowerment Act. Available at https://www.gender.go.jp/english_contents/pr_act/pub/pamphlet/women-and-men20/pdf/3-5.pdf

17. MSCI, MSCI launches two new ESG Indexes focused on Japan, press release, 3 July 2017. Available at:https://www.msci.com/documents/10199/60420eeb-5c4e-4293-b378-feab6a2bf77f.
18. MSCI, MSCI Japan Empowering Women Index. Available at www.msci.com/msci-japan-empoweringwomen-index.
19. Nikkei ESG Management Forum, ESG Evaluations of Japanese business rising (24 October 2018).
Available at https://project.nikkeibp.co.jp/ESG/atcl/eng/news/08/.

9. Government of Japan, “Measures for Gender Equality”, The intensive policy to accelerate the empowermentof women 2019.
10. Maternity harassment refers to the unfair treatment of working women, “both physical and mental...
when they become pregnant or give birth, which may involve termination of their employment,termination of their contract of employment, or forcing them to […]leave their employment.”
Matahara Net, ‘What is Matahara?’. Available at www.mataharanet.org/en/what-is-matahara/.

Funded by:weps.org@WEPrinciples

weps@unwomen.org@Empower_Women

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DISCLAIMER: The views expressed in this publication are those of the authors and do not necessarily represent the views of the European Union, UN Women, International Labour Organization or the United Nations
and their Member States.