Japanese Health and Productivity Award Pays Off for Companies

Companies that win a prestigious Japanese award recognizing their commitment to improving employee health and well-being are rewarded by the stock market, reports a study in the June Journal of Occupational and Environmental Medicine.

First-time winners of the health and productivity management (HPM) award showed an immediate "booster effect" on stock prices, according to the new research by Hiroo Wada, MD, PhD, and Yukihiro Yasuda, PhD, of Hitotsubashi University, Tokyo.

Launched in 2015 by the Japanese Ministry of Economy, Trade, and Industry and the Tokyo Stock Exchange, the HPM award recognizes companies making a strategic investment in employees' health. The researchers used an event study approach to analyze the value effect of winning the HPM award on business performance in terms of company stock prices.

The results showed that first-time winners of the HPM award realized a significant positive increase in returns: 0.25% higher than normal returns. The beneficial value effect was observed immediately—on the day the HPM award was announced.

First-time winners also saw a subsequent increase of $1.6 million (US dollars) in market value. There was no significant increase in returns for companies winning the HPM award for the second time or more—"suggesting that the high evaluation by the market is already reflected in their stock price," the researchers write. However, over 5 years, a stock portfolio of HPM award-winning companies appreciated in value by 34.3%, compared to 21.8% for a market portfolio—a 12% increase in returns.

Previous studies from the United States have shown even larger effects on business performance for companies winning similar HPM awards, such as the C. Everett Koop Award and the ACOEM's Excellence in Corporate Health Achievement Award. The difference may reflect the long history of employees being considered "an essential intangible asset" by Japanese companies, the researchers suggest.

"HPM not only promotes the health of employees but also creates value for firms," Drs. Wada and Yasuda conclude. "The present evidence of beneficial and instantaneous value effect of HPM encourages managers of business firms to consider their corporate social responsibility and sustainable development goals through pursuing the health of their employees and the success of their business simultaneously."
About the Author
Dr. Yasuda may be contacted for interviews at y.yasuda@r.hit-u.ac.jp.
ACOEM (www.acoem.org), an international society of 4,000 occupational physicians and other health care professionals, provides leadership to promote optimal health and safety of workers, workplaces, and environments.
About the Journal of Occupational and Environmental Medicine
The Journal of Occupational and Environmental Medicine (www.joem.org) is the official journal of the American College of Occupational and Environmental Medicine. Edited to serve as a guide for physicians, nurses, and researchers, the clinically oriented research articles are an excellent source for new ideas, concepts, techniques, and procedures that can be readily applied in the industrial or commercial employment setting.


Wada H, Yasuda Y. Value Effect of Health and Productivity Management: An Event Study of the HPM Award in Japan. J Occup Environ Med. 2022;64(6):465-469.