MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGYMSCI WORKFORCEGENDER DIVERSITYDATAMETHODOLOGYMSCI ESG Research

May 2023

MAY 2023

MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Contents

Introduction .....................................................................................3
Methodology ...................................................................................3
Workforce gender diversity performance .................................................. 4
Performance metrics ................................................................................................ 4
Performance metric scores...................................................................................... 5
Workforce gender diversity performance disclosure discount .............................. 8
Workforce gender diversity performance score ..................................................... 9

Workforce gender diversity practices ...................................................... 10
Practices metrics .................................................................................................... 10
Workforce gender diversity practices score ......................................................... 10

Workforce gender diversity score ............................................................ 11
Publication updates and quality review ................................................... 11
Data collection process .......................................................................................... 11
Ongoing updates of data ........................................................................................ 11
Coverage.................................................................................................................. 12

History of updates ....................................................................... 12
Data dictionary ............................................................................. 12© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

INTRODUCTION
The MSCI Workforce Gender Diversity data set provides data and an aggregatedassessment of companies’ workplace gender diversity. Currently, this data set isavailable for the top 700 Japanese companies by market capitalization1 (referred tohereafter as “universe”).

METHODOLOGY
Attraction, retention, and promotion are the core elements of the employment cycle
and key focus areas for any company looking to increase its effective utilization oftalent. We focus on these three key elements to evaluate a company’s support for
women’s participation and advancement in the workforce. This methodology relies
on publicly available data, including company-reported information on women’s
representation in the workforce (Performance) and workforce diversity policies(Practices). The aggregated Gender Diversity Score is a weighted average of acompany’s Gender Diversity Performance Score (75% weight) and Gender Diversity
Practices Score (25% weight)

1

Data as of November 2022

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Exhibit 1: Workforce gender diversity scoring methodology summary

WORKFORCE GENDER DIVERSITY PERFORMANCEThe underlying data for assessing company’s workforce gender diversity
performance is based around the core elements of attraction, retention, andpromotion. The details of the underlying data are available in the Data Dictionary
section of this document and the metrics derived from the underlying data aredescribed below.
PERFORMANCE METRICS
Attraction•

Percentage of women employees among new hires2•

Percentage of women employees in total workforce

Retention•

Percentage difference in average employment years for female and male
employees3

Promotion

2

Hires of the past year. We include new graduate and mid-career employment, but do not include re-employment.

3(Average employment years for female employees – Average employment years for male employees) / Average
employment years for male employees© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023•

Percentage of women in senior management4•

Percentage of women directors on the board of directors

PERFORMANCE METRIC SCORESFor each of the five performance metric scores, we use the performance metrics (asmentioned above) disclosed by companies in the universe and compute theirpercentile ranking (0-100) based on the latest available data.5 A 0 to 10 score is
assigned to each decile, with a score of 1 corresponding to the first decile and ascore of 10 corresponding to the top decile. See Exhibit 2 for an example of theconversion process from metric to score.
Exhibit 2: Percentile ranges and corresponding 0-10 scores for each of the five
Performance Metrics.
Performance Metric: Percentage of women employees among new hires
Percentage of women
employees among new hires

Percentile range

Score

0

0

0

>=0.01 to <16.7>=10 to <201>=16.7 to <19.8>=20 to <30

2>=19.8 to <23.6>=30 to <40

3>=23.6 to <27.0>=40 to <50

4>=27.0 to <31.1>=50 to <60

5>=31.1 to <36.9>=60 to <70

6>=36.9 to <43.5>=70 to <807>=43.5 to <53.6>=80 to <908>=53.6 to <100.0>=90 to <100

9>=100.0

>=100

10

4

Following the guidance by the Ministry of Health, Labour and Welfare(https://www.mhlw.go.jp/content/11900000/000496301.pdf), we define senior management as positions at equal or
higher than “Kacho” (head of a department), excluding “Yakuin”. “Yakuin” here includes not only statutory positions suchas directors of the board and auditors, but those that have similar job description and responsibilities, which may include“Shikkoyakuin”.
5

The most recent year can be different between percentage of women directors and the other performance metrics dueto the difference in the data update.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Performance Metric: Percentage of women employees in total workforce
Percentage of women
employees in total workforce

Percentile range

Score

0

0

0

>=0.01 to <13.4>=10 to <201>=13.4 to <16.0>=20 to <30

2>=16.0 to <18.7>=30 to <40

3>=18.7 to <22.0>=40 to <50

4>=22.0 to <27.0>=50 to <60

5>=27.0 to <31.6>=60 to <70

6>=31.6 to <38.6>=70 to <807>=38.6 to <48.0>=80 to <908>=48.0 to <92.3>=90 to <1009>=92.3>=100

10

Performance Metric: Percentage difference in average employment years for female
and male employees
Percentage difference inaverage employment years forfemale and male

Percentile range-100.00

0>=-99.9 to <-32.1>=10 to <201>=-32.1 to <-26.0>=20 to <30

2>=-26.0 to <-22.1>=30 to <40

3>=-22.1 to <-18.1>=40 to <50

4>=-18.1 to <-13.2>=50 to <60

5>=-13.2 to <-8.6>=60 to <70

6>=-8.6 to <-3.4>=70 to <807>=-3.4 to <4.7>=80 to <908>=4.7 to <136.5>=90 to <1009>=136.5>=100

10© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

Score

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Performance Metric: Percentage of women in senior management
Percentage of women in senior
management

Percentile range

Score

0

0

0

>=0.01 to <2.8>=10 to <201>=2.8 to <3.7>=20 to <30

2>=3.7 to <4.7>=30 to <40

3>=4.7 to <6.0>=40 to <50

4>=6.0 to <7.9>=50 to <60

5>=7.9 to <10.5>=60 to <70

6>=10.5 to <15.1>=70 to <807>=15.1 to <20.0>=80 to <908>=20.0 to <50.0>=90 to <1009>=50.0>=100

10Performance Metric: Percentage of women directors on the board
Percentage of women directors
on the board

Percentile range

Score

0

0

0

>=0.01 to <8.3>=10 to <201>=8.3 to <10.0>=20 to <30

2>=10.0 to <11.1>=30 to <40

3>=11.1 to <12.5>=40 to <50

4>=12.5 to <15.4>=50 to <60

5>=15.4 to <18.2>=60 to <70

6>=18.2 to <22.2>=70 to <80

7>=22.2 to <27.3>=80 to <908>=27.3 to <50.0>=90 to <1009>=50.0>=100

10Note: The percentile band ranges are based on the data as of November 2022.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

A simple average of all scores available for each company results in the Gender
Diversity Performance Interim Score. The next step is to calculate the disclosure
discount.
WORKFORCE GENDER DIVERSITY PERFORMANCE DISCLOSURE DISCOUNT
To limit the influence of companies reporting only selective, positive statistics, a
disclosure discount is applied to the Gender Diversity Performance Interim Score.
The disclosure discount is determined based on the number of gender diversity
performance metrics disclosed by the company. The highest possible discount is
20% in cases where only one performance metric is disclosed (Exhibit 3).

© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Exhibit 3: Level of disclosure discount applicable based on availability of
performance metrics
Number of
performance
metrics disclosed(out of 5)
1
2
3
4
5

Percentage deduction applied
to workforce gender diversity
performance interim score
20%
15%
10%
5%
0%

WORKFORCE GENDER DIVERSITY PERFORMANCE SCORE
The Workforce Gender Diversity Performance Score is calculated by subtracting theWorkforce Gender Diversity Performance Disclosure Discount from the Workforce
Gender Diversity Performance Interim Score. See Exhibit 4 for two examples of this
discounting process.
Exhibit 4: Example of Workforce Gender Diversity Performance Score Calculations
Performance Metrics
Percentage of Women Employees in
New Hires
Percentage of Women Employees in
Total Workforce
Percentage Difference in Average
Employment Years for Female toMale Employees
Percentage of Women in Senior
Management
Percentage of Women Directors on
the Board
Gender Diversity Performance
Interim Score
Gender Diversity Performance
Disclosure DiscountGender Diversity Performance
Score (Interim Score - Disclosure
Discount)Company A (Financials)

Company B (Health Care)

MetricValue

Percentile

Score

MetricValue

Percen
tile

Score

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

48%

80%

9

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

50%

90%

10

n.a.

n.a.

n.a.

22.2%

70%

8

11.1%

30%

4

9
10%

8.1

© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

4
0.9

20%

-

0.8

3.2

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

WORKFORCE GENDER DIVERSITY PRACTICES
While quantitative figures are useful to measure women representation incompanies’ workforces, they provide no indication of efforts or intent to improvediversity. The methodology also considers qualitative factors to measure thestrength of companies’ gender diversity practices.
PRACTICES METRICS
We examine the existence of workforce diversity policies, management oversight
responsibility for diversity, targets for improvement in women’s representation andprograms that make it easier for women to work – such as flexible working
arrangements, subsidized childcare and parental leave. We use the following two
qualitative factors in our assessment of gender diversity practices:
1. Workforce diversity policy and management oversight
2. Programs to increase workforce diversity
WORKFORCE GENDER DIVERSITY PRACTICES SCORE
Each assessment is assigned a score of 0-10 based on a company’s disclosure of its
policies and programs to empower women in the workforce. The aggregatedWorkforce Gender Diversity Practices Score is a simple average of the two practices
metrics scores. An example of the score calculation is illustrated in Exhibit 5.
Exhibit 5: Example of workforce gender diversity practices score calculations
Company A (Financials)

Company B (Health Care)

Practices Metrics

Metric Value

Workforce diversity
policy andmanagement
oversight

Senior executive or higher
level of oversight on
diversity performance5

Employee training on
diversity policy

5

Programs toincrease workforce
diversity

Provides material benefits
to facilitate diversity andinclusion

5

No evidence0

Practices Score(average of two
Practices Metrics)

Score

5

© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

Metric Value

Score

2.5

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

WORKFORCE GENDER DIVERSITY SCORE
The company’s Workforce Gender Diversity Score is computed as the weighted
average of the Workforce Gender Diversity Performance Score (75%) and Workforce
Gender Diversity Practices Score (25%). See Exhibit 6 for an example of thiscalculation.
Exhibit 6: Example of workforce gender diversity score calculation
Score

Company A (Financials)

Company B (Health Care)

Gender Performance Score(weight: 75%)

8.1

3.2

Gender Diversity Practices
Score (weight: 25%)

5.0

2.5

Gender Diversity Score

7.3

3.0

PUBLICATION UPDATESDATA COLLECTION PROCESSMSCI ESG Research collects a wide range of publicly available data from bothcompany-reported and government data sources, and we standardize data, byconverting performance metrics to a performance score based on percentile range.
We do not use estimated data. Quantitative data is only used if it pertains exclusively
to all operations in Japan.6 The following sources are used in the Workforce Gender
Diversity data set:•

The Database on Promotion of Women’s Participation and Advancement in
the Workplace, maintained by the Ministry of Health, Labour and Welfare•

Corporate documents such as annual reports, corporate social responsibility
reports, securities filings, and company websites•

Major news publications globally, including local-language sources

6

For holding companies whose primary business is controlling other companies and fulfilling headquarters function, weonly consider gender diversity data which covers at least one domestic subsidiary in addition to the holding company. For
non-holding companies, domestic data prepared on a non-consolidated basis may be used if consolidated domestic data
is not available.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

ONGOING MONITORING AND UPDATES OF DATA
Generally, board director data is obtained by MSCI ESG Research on an ongoingbasis and therefore we reflect updates to companies’ board directors. Company datafrom the Ministry of Health, Labour and Welfare and company disclosure is usuallyobtained between December and February and published by MSCI ESG Research in
April, annually.

COVERAGE
As of February 2023, Gender Diversity data covered the top 700 Japanese companies
by market capitalization (as of Nov. 2022).

HISTORY OF UPDATES
Date

UpdateDescription

July 3, 2017

Product launch

Launch of MSCI Workforce Gender
Diversity data

July 1, 2019

Coverage
expansion

Coverage expansion to the top 700
Japanese companies by market
capitalization

March 20, 2023

Methodology
enhancements

Updated the percentile band ranges andcorresponding scores for all performance
metrics using data as of March 2023.

DATA DICTIONARY
Factor Type

Factor Name

Factor Description

Underlying Data

Year

This date represents the year of captured gender
diversity data

Underlying Data

Number of Women
Employees in New
Hires

This data represents number of women
employees in new hires

Underlying Data

Total Number of
Newly Hired
Employees

This data represents total number of newly hired
employees© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Underlying Data

Score

Underlying Data

Underlying Data

Underlying Data

Score

Underlying Data

Underlying Data
Underlying Data

Score

Underlying Data

Underlying Data

Percentage of
Women Employees
in New Hires
Score: Percentageof women
employees in new
hires
Average Years
Employed by theCompany for
Female Employees
Average Years
Employed by theCompany for Male
Employees
Percentage
Difference in
Average
Employment Years
for Female to Male
Employees
Score: Percentage
difference inaverage
employment years
for female to male
employees
Number of Women
Employees in
Workforce
Total Workforce
Percentage of
Women Employeesin Total Workforce
Score: Percentageof women
employees in total
workforce
Number of Womenin SeniorManagement
Total Number of
Employees in Senior
Management

This data represents percentage of women
employees in new hires
This score measures company's performance onlevel of hiring women employees in its workforce(Score 0-10, 10 indicates companies with thehighest percentages of women among new hires)
This data represents the average number of years
for female employees employed by the company

This data represents the average number of years
for male employees employed by the company

This data represents the percentage difference inaverage employment years for female to male
employees

This score measures company's performance on
average employment years for female employees
as compared to male employees (Score 0-10, 10
indicates companies where the difference inaverage employment years of female and male
employees is lowest)
This data represents the total number of women
employees in the workforce
This data represents the total number of
employees in the workforce
This data represents the percentage of women
employees in total workforce
This score measures company's performance onlevel of women employees in total workforce(Score 0-10, 10 indicates companies with thehighest percentages of women employees in total
workforce)
This data represents the total number of women
employees in senior management (managers andabove)
This data represents the total number of
employees in senior management (managers andabove)© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Underlying Data

Percentage of
Women in Senior
Management

This data represents the percentage of women
employees in senior management (managers andabove)

Score

Score: Percentageof women in senior
management

Underlying Data

Number of Women
Directors on the
Board
Total Number of
Directors on the
Board
Percentage of
Women Directors
on the Board
Score: Percentageof women directors
on the board

This score measures company's performance onlevel of women employees in senior management(managers and above) (Score 0-10, 10 indicatescompanies with the highest percentages ofwomen employees in senior management)This data represents the number of women
directors on the board

Underlying Data

Underlying Data

Score

Score

Gender Diversity
Performance
Interim Score

Underlying Data

Gender Diversity
Disclosure Level

This data represents the total number of director
on the board of directors
This data represents the percentage of women
directors on the company's board of directors
This score measures company's performance onlevel of women directors on the board of directors(Score 0-10, 10 indicates companies with thehighest percentages of women directors in theboard)
Assesses company's performance on disclosed
gender diversity metrics, derived as a simple
average of 5 sub-factor scores (1) Score:
Percentage of women employees in new hires, (2)Score: Percentage difference in average
employment years for female to male employees,(3) Score: Percentage of women employees intotal workforce, (4) Score: Percentage of womenin senior management, and (5) Score: Percentageof women directors on the board (Score 0-10)This data measures the percentage of gender
diversity performance metrics disclosed by thecompany based on availability of the 5 sub-factors(1) Percentage of Women Employees in New
Hires, (2) Percentage Difference in Average
Employment Years for Female to Male Employees,(3) Percentage of Women Employees in Total
Workforce, (4) Percentage of Women in Senior
Management, and (5) Percentage of Women
Directors on the Board© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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MSCI WORKFORCE GENDER DIVERSITY DATA METHODOLOGY | May 2023

Score

Gender Diversity
Performance
Disclosure Discount

Score

Gender Diversity
Performance Score

Underlying Data

Workforce Diversity
Policy andManagement
Oversight

Underlying Data

Programs to
Increase Workforce
Diversity

Score

Gender Diversity
Practices Score

Score

Gender Diversity
Score

This score measures the discount to be applied to
the Gender Diversity Performance Interim Score inproportion to the number of diversity metrics
disclosed by the company. Higher the number of
performance metrics disclosed, lower the Gender
Diversity Performance Disclosure Discount (Score
0-2)
Assesses company performance incorporating
disclosure discount (for non-disclosed
performance metrics), derived as a simple
subtraction of 2 sub-factors (1) Gender Diversity
Performance Interim Score, and (2) Gender
Diversity Performance Disclosure Discount (Score
0-10)
This qualitative data points indicates ourassessment of company's diversity policy andoversight by (1) providing its employees training
on its diversity policy, and (2) senior executive or
higher level of oversight on diversity performance(Qualitative assessment)This qualitative data points indicates ourassessment of company's programs to increase
workforce diversity by (1) providing material
benefits to its employees to facilitate diversity andinclusion, and (2) quantitative diversity targets inrecruitment process (Qualitative assessment)
Assesses a company's management policy andprograms to improve workforce diversity, derived
from the simple average of following sub-factor
scores: (1) Workforce diversity policy andmanagement oversight, and (2) Programs toincrease workforce diversity (Score 0-10)
Assesses a company's overall practices toimprove gender diversity and performance ongender diversity related metrics and disclosure,derived from the weighted average of following
sub-factor scores: (1) Gender Diversity Practices
Score, and (2) Gender Diversity Performance
Score (Score 0-10)© 2019 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

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