SUSTAINABILITY | Frontier Management Inc.

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

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

Risks

Opportunities

Item

Recruitment

Development

Turnover

Health

Internal
environment

Recruitment

Development

Turnover

Health

Internal
environment

Impact on Business

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.

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.

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.

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.

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.

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.

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.

If loyalty among employees increases and turnover in human resources decreases, this could have a positive impact on our business performance.

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.

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

Establishing a comfortable culture/working environment for diverse human resources

Facilitating recruitment/promotion of diverse human resources

Metrics

Ratio of men taking childcare leave (%)

Ratio of women taking childcare leave (%)

Average years of service for senior management

Ratio of paid leave taken

Ratio of female employees

Ratio of female employees in managerial positions

Disparity in wages between male and female employees
(Ratio of female employee wages to male employee wages)

All employees

Full-time employees

Part-time employees

Fiscal 2025 results

70.6％

100.0％

4.6

34.5％

25.4％

5.2％

54.9％

57.1％

29.5％

Fiscal 2026 targets

40.0％

100.0％

6.0

70.0％

30.0％

15.0％

70.0％

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

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

Support for growth and health

Metrics

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)

Ratio of employees taking stress check

Number of employees moving between departments

Fiscal 2025 results

73.5％

97.3％

Fiscal 2026 targets

60.0％

100.0％

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

Train management talent

Metrics

Number of people seconded overseas/to alliance partners

Number of people sent as directors/CxOs

Fiscal 2025 results

Fiscal 2026 targets

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.
In the table below, the number of cases refers solely to those handled by the Company on a standalone basis. Within the Group, however, Celebrain Corporation, a consolidated subsidiary of the Company that provides human resources strategy consulting services, has undertaken a substantial number of consulting engagements related to human capital management, among others.

Description of implementation

Providing services for a society in which people can succeed while making the most of their individuality

Metrics

Number of consulting projects involving the promotion of DE&I, human capital management, and human rights to client companies

Fiscal 2025 results

Fiscal 2026 targets

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Basic Policy on Anti-Social Forces

Anti-Bribery Basic Policy

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