Creation of New Corporate Value and Societal Contribution through Numerical Analyses of Well-being

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In recent years, the term "well-being" is attracting attention as a key for the sustainability of society as a whole and the creation of new corporate value, beyond feelings of happiness or satisfaction that people have (here, this paper envisages subjective well-being; for the concept of well-being and measurement methods, see Kumagai, Managi (2024)). Well-being is also mentioned in the Japanese government's Basic Policy on Economic and Fiscal Management and Reform and is receiving increasing attention in financial and industrial circles.

Gross Domestic Product (GDP) has long been considered as a major index for economic growth as it is a measure of the amount of production of goods and services. However, it is impossible to truly measure people's sense of abundance or quality of life with the GDP, meaning their good health, spiritual richness, social ties, and the quality of the surrounding environment. With the increasing awareness that economic growth does not necessarily enhance people's well-being is spreading, other indicators that complement the GDP are required (Managi, 2019).

Against such a background, the perspective of evaluating capital as the basis of economic activities in a multifaceted manner is important. The significance of human capital (the knowledge and skills that workers possess) and natural capital (benefits from natural environments) is now recognized in addition to physical capital (factories and infrastructure, etc.), which has long been studied in conventional economics. Comprehensive evaluation of these different types of capital is raising awareness of the actual sustainability and well-being of society as a whole (Inclusive Wealth Project: https://www.managi-lab.com/iwp/iwp_home.html / Managi, 2021). The idea of physical capital, human capital, and natural capital here is based on the idea of production-based capital advocated by Dr. Kenneth Arrow, who was awarded the Nobel Prize in Economic Sciences, Dr. James Tobin, and Prof. William Nordhaus (Polasky et al., 2019).

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