フロンティア・マネジメント株式会社

SUSTAINABILITY

We contribute to a thriving global environment and a sustainable society while achieving sustainable growth and development of the Group.

Frontier Management Basic Policy for Sustainability

Since its establishment, the Frontier Management Group has been operating under its mission “Contributions to the benefit of clients,” “Contributions to the benefit of stakeholders,” and “Contributions to society.”
By bringing together the intelligence and wisdom of a diverse team of professionals to assist clients in solving their management issues, the Group will contribute to a thriving global environment and a sustainable society while achieving sustainable growth and development for the Group itself.

Key themes and materiality

Key themes Materiality
Establishing diversity and expertise of human resources
  • Deepen diversity and acceptance
  • Continue investing in human capital
  • train and produce management talent
  • Contribute to a society where people can succeed while making most of their individuality
Contributing to a shift in the shape of society and business
  • Foster business ethics
  • Promote the shift to a decarbonized and recycling-oriented society
  • Contribute to regional revitalization
Strengthening corporate growth potential and resilience
  • Enhance long-term value of client companies
  • Pursue a sound governance system

Sustainability Promotion Structure

Sustainability Promotion Committee

(1) Role of the committee

The Sustainability Promotion Committee deliberates and provides operational directions for matters such as action plans and target-setting to address sustainability-related priority issues (materiality), the management of progress on these plans and targets, and the disclosure of related information. The committee regularly reports and submits proposals to the Board of Directors.

  • Verify and provide recommendations concerning the Group’s management policy and business strategy from the perspective of sustainability
  • Decide on policies to address each priority issue (establish KPIs)
  • Draft annual action plans based on the above policies and confirm progress on these plans (report and submit proposals to the Board of Directors)
  • Implement companywide risk management and coordination regarding items in the TCFD recommendations, in addition to items considered by the Risk Management Committee
  • Formulate the details of disclosures relating to the Group’s sustainability initiatives

(2) Composition of the committee

The Sustainability Promotion Committee is chaired by the President and composed of the heads of major organizational sections.

The Logical Structure of Our Basic Policy for Sustainability

Since its establishment, the Frontier Management Group has been operating under its mission “Contributions to the benefit of clients,” “Contributions to the benefit of stakeholders,” and “Contributions to society.”
By bringing together the intelligence and wisdom of a diverse team of professionals*1 to assist clients in solving their management issues,*2 the Group will contribute to a thriving global environment and a sustainable society*3 while achieving sustainable growth and development for the Group itself.*4

TCFD Disclosures

Initiatives to Address Climate Change

The Frontier Management Group will contribute to the fight against climate change by promoting the reduction of its greenhouse gas emissions and environmental footprint, and by actively supporting our corporate clients as they shift to new business models to build a sustainable global environment and society.
We will disclose climate change-related information in accordance with the TCFD framework: Governance, Strategy, Risk Management, and Metrics and Targets.

Governance

To contribute to sustainability throughout the Group in the medium to long term, our Group established a Basic Policy for Sustainability, the Sustainability-Related Priority Issues (Materiality) to be addressed by the Group, and a Sustainability Promotion Committee in November 2022.

Organization overview

  • Meetings of the Sustainability Promotion Committee are held regularly to discuss how to address sustainability-related priority issues.
  • The Sustainability Promotion Committee reports the status of the sustainability-related priority issues to the Board of Directors and receives directions.
  • The status of risk measures by the Sustainability Promotion Committee is monitored by the Risk Management Committee, and regularly reported to the Board of Directors twice a year.

Strategy (1) Risks and Opportunities of Climate Change

The Group conducted a scenario analysis based on the risks and opportunities brought about by the climate change.
In the scenario analysis, we analyzed the financial impact in 2030 on our mainstay business, Consulting and Advisory Business, for two assumed scenarios: a 1.5°C scenario in which the impact is manifested in terms of transition and a 4°C scenario in which the impact is manifested in physical terms.
For the magnitude of the financial impact, we set our operating income for the fiscal year ended December 31, 2023 to 100, with “Major” representing more than 30%, “Medium” representing 10% to less than 30%, and “Minor” representing less than 10%.
While natural disasters and the like caused by the climate change were found to have a negative impact on the Consulting and Advisory Business, the demand for these services may increase as companies go through the transition to a decarbonized society and adapt to climate change.

【The 1.5°C scenario】

In this scenario, the temperature increase in 2100 will be suppressed to about 1.5°C above pre-industrial levels.
To address climate change, reductions in greenhouse gas emissions and environmental impacts will be promoted, and this will lead to increased transition risks in terms of policy regulations, markets, and so forth.

【The 4.0°C scenario】

In this scenario, the temperature increase in 2100 will be about 4°C above pre-industrial levels.
Insufficient measures to address climate change will result in higher physical risks, such as an increase in extreme weather events.

Strategy (2) Risks and Opportunities of Climate Change

■Analysis of Financial Impact in 2030

Category Item Impact on Business Scenario
1.5℃ 4℃
Transition risks Political measures, laws and regulations Introduction of carbon pricing (carbon tax, etc.) If there is a sharp increase in financial burden, such as a carbon tax, this could have a negative impact on our business performance. Minor -
Tightening of environmental regulations on CO2 emissions If there is a sharp increase in energy costs due to higher prices for renewable energy, this could have a negative impact on our business performance. Minor -
Social evaluation Requests from stakeholders If our stakeholders’ interest in the transition to a decarbonized society and the status of adaptation to climate change increases rapidly and our response is delayed, our social evaluation could be lowered, resulting in a negative impact on our business performance. Minor -
Transition opportunities Political measures,
laws and regulations
Introduction of carbon pricing (carbon tax, etc.) If business conditions at our client companies deteriorate due to increases in burdens such as carbon taxes, there may be increased demand for M&A advisory and management consulting such as support for management improvement and rationalization. Minor -
Market (trends) Accelerated transition to decarbonized society If requests for Japan’s transition to a decarbonized society and the adaptation to the climate change accelerate and client companies are forced to act by changing their business models or the like, there may be increased demand for management consulting and M&A advisory. Medium -
Expansion of environmental awareness among stakeholders If the interest of stakeholders in the transition to a decarbonized society and the status of the adaptation to climate change increases, requests for information disclosure accelerate, and client companies are forced to react quickly, there may be increased demand for management consulting. Minor -
Physical risks Chronic Changes in climate patterns, such as rising average temperatures, due to the climate change If our employees work with lower efficiency or there is a decrease in active personnel caused by more people suffering from heat stroke or other diseases, this could have a negative impact on our business performance. Minor Minor
Acute Extreme weather events such as heavy rainfall or flooding due to the climate change If a natural disaster paralyzes transportation for an extended period of time, preventing employees from going to work or visiting clients, this could have a negative impact on our business performance. Minor Minor
If a natural disaster causes a power outage and stagnation of business activities for an extended period of time, this could have a negative impact on our business performance. Minor Medium
Outbreaks of infectious diseases such as Japanese encephalitis, malaria, and dengue fever due to global warming If an outbreak and spread of an infectious disease affects cross-border projects due to restrictions on overseas travel, this could have a negative impact on our business performance. Minor Medium
If an outbreak and spread of an infectious disease force us to suspend some of our business due to a decrease in active personnel caused by a mass infection of client employees/our employees, this could have a negative impact on our business performance. Minor Medium
Physical opportunities Chronic
Acute
Rebuilding of BCP measures of clients If client companies are forced to rebuild their BCP measures (measures against flood damage, consideration of location and relocation of bases, review of companies in the value chain) due to the impact of natural disasters, there may be increased demand for management consulting Minor Medium

Risk management

Our Group has positioned climate change risks as priority risks. A Risk Management Committee forecasts and appropriately evaluates operational risks and establishes measures to avoid, mitigate, and transfer those risks. The status of the measures and the like is regularly reported to the Board of Directors. Specifically, we manage risks as follows.

  • 1. Identify and update risks.
  • 2. Determine the severity of each risk by considering its frequency and the magnitude of its impact (risk analysis) and establish a priority order (risk assessment).
  • 3. Determine a policy for response and establish preventive measures according to the nature of each risk (risk measures).
  • 4. Evaluate the response status using five evaluation levels (monitoring and evaluation).

Metrics and targets

The Company aims to achieve a “net zero” in carbon dioxide emissions.

  • 1. To shift office electricity to renewable energy, we switched our head office in Roppongi, Tokyo, to green power in September 2022.
  • 2. By the fiscal year ending December 2030, we will reduce greenhouse gas emissions by 50% as compared to the fiscal year ended December 2021.
  • 3. By the term ending December 31, 2050, we will reduce greenhouse gas emissions to net-zero compared to the term ended December 31, 2021.
  • 4. We are working to reduce the amount of single-use plastics in our offices.
  • 5. We encourage climate-friendly business travel by our employees.
  • 6. We actively support our client companies for the shift to a decarbonized and recycling-oriented society.

Human Capital Disclosure

Our approach to policies on human resources development, including securing human resources diversity, and policies on the enhancement of workplace environments

The Group’s approach to policies on human resources development, including securing human resources diversity, and policies on the enhancement of workplace environments is shown below, together with the relevant indicators, targets, and results.

1.Human Resources Development Policy and Workplace Environment Enhancement Policy

For the Group to achieve sustainable growth and development, it is vital that our employees maintain mental and physical health, refine their individual abilities, act in ways that will gain the trust of our clients, stakeholders, and society, and continue to provide high-added-value services as professionals.
We will support the growth of our employees so that they can perform as professionals, as well as maintaining and enhancing workplace environments where they can fully utilize their abilities.

2.Risks and Opportunities

Category Item Impact on Business
Risks Recruitment If the Company is unable to hire enough individuals with high levels of experience and expertise, this could have a negative impact on our business performance.
Development If the proportion of inexperienced individuals increases tremendously and we are unable to develop them adequately, this could have a negative impact on our business performance.
Turnover If turnover increases tremendously and hiring costs rise significantly as a result of subsequent additional recruitment, this could have a negative impact on our business performance.
Health If employees are affected by health problems caused by overwork (death, impairment of mental and bodily functions etc.) or operational efficiency declines as a result of long working hours, and the Company does not respond with appropriate measures, this may result in a loss of social trust in the Company and have a negative impact on our business performance.
Internal
environment
If employees do not gain a sense of personal growth and contribution to society, or feel unable to express their individuality, this could lead to a decline in employee motivation and accelerate turnover, and have a negative impact on our business performance.
Opportunities Recruitment If the Company is able to hire enough individuals with high levels of experience and expertise, this could lead to the expansion of our solutions and have a positive impact on our business performance.
Development If we actively recruit and develop human resources, including inexperienced individuals, and develop human resources and headcount as planned, this could lead to an increase in the number of deals in which the Company is involved and have a positive impact on our business performance.
Turnover If loyalty among employees increases and turnover in human resources decreases, this could have a positive impact on our business performance.
Health If we take a more active approach to promoting and maintaining better health among employees, this could enhance employee productivity and invigorate the organization and have a positive impact on our business performance.
Internal
environment
If we take a more active approach to enhancing the internal environment of the Company, this could promote the recruitment and participation of diverse human resources and have a positive impact on our business performance.

3.Metrics and Targets

Deepen diversity and acceptance

In addition to establishing and facilitating a DE&I Promotion Committee, we are working to create a comfortable internal environment for diverse human resources, such as by maintaining and enhancing diversity of expertise and diversity of sex and nationality, introducing lifestyle support services for employees who are not of Japanese nationality, establishing leave, reduced working hours, and other systems for employees who are raising children, and encouraging employees to take childcare leave.
Our policies on recruitment and on working conditions are as follows.

  • ・The Company’s basic policy is one of fair recruitment activities, and we provide opportunities for applicants to respond regardless of their race, nationality, sex, age, or other attributes.
  • ・The Company does not discriminate based on race, nationality, sex, age, or other attributes in the matter of working conditions.
Description of implementation Metrics Fiscal 2023 results Fiscal 2026 targets
Establishing a comfortable culture/working environment for diverse human resources Ratio of men taking childcare leave (%) 28.6% 40.0%
Ratio of women taking childcare leave (%) 100.0% 100.0%
Average years of service for senior management 5.6 6.0
Ratio of paid leave taken 31.2% 70.0%
Facilitating recruitment/promotion of diverse human resources Ratio of female employees 24.7% 30.0%
Ratio of female employees in managerial positions 6.8% 15.0%
Disparity in wages between male and female employees
(Ratio of female employee wages to male employee wages)
All employees 51.9% 70.0%
Full-time employees 55.0% 70.0%
Part-time employees 31.1% 50.0%

(Note)Assessment and promotion within the Company are based on the individual’s abilities, irrespective of their sex, age, or other attributes. In addition, the level of wages is linked to the nature of an individual’s duties and their position, and there is no disparity between the level of wages for male and female workers involved in the same duties and serving in the same position.

Continue investing in human capital

In response to the question “When do you feel more strongly motivated towards your work?” in an internal questionnaire conducted in May 2023, the most popular response was “When I feel that my abilities and skills have improved,” with “When I feel that I have been of use to people and society through my work” in second place, and “When I am praised or thanked by clients” in third place. This supports the idea that the employees of the Company are eager to grow and contribute to the client and society through their work.
As a rule the Company recruits people for specific departments, work types, and working locations, but it supports the participation of diverse human resources through such measures as transfers to different departments (including moves to subsidiaries) at the request of employees.
The Company strives to provide support for the growth of employees and to maintain and enhance their health, so that they can demonstrate their abilities as professionals to the full.

  • Support for growth
    Employees other than managers and supervisors are provided with online educational and training tools that can be used freely for one year, and the Company also provides financial and other support to all employees for such purposes as acquiring qualifications and language study
  • Support for health
    All employees are provided with the opportunity to undergo a medical checkup and a stress check once a year at the expense of the Company.
    We have also established a Wellness Center, and put in place a system that makes an occupational physician available for meetings with employees once a week.
Description of
implementation
Metrics Fiscal 2023
results
Fiscal 2026
targets
Support for growth and health Ratio of employees who had made use of educational and training tools by the end of the fiscal year
(number of applicants/number of employees other than managers and supervisors)
56.3 60.0
Ratio of employees taking stress check 84.3 100.0
Number of employees moving between departments 4 10
Train and produce management talent

In order for employees to succeed as professionals, it is important that they act in such a way as to win the trust of clients, stakeholders, and society, that they hone their skills so that they can provide high-value-added services as professionals, and that they maintain their passion for contributing to clients and society.
In order to respond to employees’ eagerness to grow and contribute to society through their own work, the Company supplies training in the professional skills required for each department to offer its services, provides opportunities for employees to resolve difficult issues tailored to their level of ability, and so on.
The Company also works to provide opportunities for secondment overseas and to alliance partners, as well as for the accumulation of experience through sending managers as CxOs to client companies.

Description of
implementation
Metrics Fiscal 2023
results
Fiscal 2026
targets
Train management talent Number of people seconded overseas/to alliance partners 8 10
Number of people sent as directors/CxOs 26 50
Contribute to a society where people can succeed while making most of their individuality

Human capital management that leads to increased corporate value over the medium to long term is also becoming increasingly important for client companies seeking to achieve sustainable growth and development, and this could lead to increased demand for our management consulting services.
In order to help achieve a society in which people can succeed while making the most of their individuality, the Company will promote DE&I to clients, and provide services related to human capital management, human rights, and other issues to client companies.

Description of
implementation
Metrics Fiscal 2023
results
Fiscal 2026
targets
Providing services for a society in which people can succeed while making the most of their individuality Number of consulting projects involving the promotion of DE&I, human capital management, and human rights to client companies 9 15