Three years after Japan’s powerful Keidanren business federation proposed that capitalism shift to a more sustainable model, its companies are under mounting pressure from government and employees to act on this pledge to look beyond short-term profit.
Long before America’s biggest businesses announced a move away from a focus on shareholder primacy in 2019, chief executives at Japanese companies had repeatedly argued that the wellbeing of workers and society should carry the same weight as returns to investors.
But, for most of the past three decades, with the economy struggling to escape deflation, companies have resisted lifting wages and the workforce has refrained from aggressive salary demands. Faced with a shrinking home market, businesses have invested in overseas expansion, leading to a decline in domestic capital investment.