Rinnai Report 2022 (Integrated Report)

Introduction

Environment

SocialGovernance

Data

Corporate Message

Aiming for the Realization of Healthy
and Comfortable Lifestyles andSustainable Societies
Since its founding in 1920, the Rinnai Group has
contributed to comfortable lifestyles for people
around the world through the provision of gas stoves,water heaters and heating systems.

At present, the Rinnai Group has bases in 19
countries and regions, and deploys products in over
80 countries throughout the world. Rinnai offers
optimal solutions suitable for lifestyle cultures, climate
conditions and energy requirements in each countryof the world to contribute to the realization of healthy
and comfortable lifestyles and sustainable societies
for people throughout the world.

01

Rinnai Report 2022

02

Introduction

Corporate Mission and Vision

Environment

SocialGovernance

Data

Rinnai Report 2022 (Integrated Report)

Fundamental Concept

Quality is our destiny

Editorial Policy
Rinnai produced the Rinnal Report 2022 (Integrated Report) to convey tostakeholders management’s approach to the realization of a sustainable society,to describe the activities undertaken Groupwide, and to encourage a deeper
understanding of the Group’s operations to as many people as possible.

01 Corporate Message
03 Corporate Mission and Vision Editorial Policy / Contents
05 100 Years of History
09 Rinnai Group Profile

Rinnai’s Activities

Company Motto

Contents

1 1 Value Creation Process

We produce an abridged version of our Rinnal Report (Integrated Report) inbooklet form. Other examples of Company initiatives, detailed information, andrelated data are posted in the Company Information section of our website.

13 Message from the President
19 Medium-term Business Plans
23 Message from the General Manager of the Overseas
Business Headquarters

Highly important activities(stakeholder perspective)

和 Harmony:
Develop personal character of the highest caliber
氣 Spirit:
Base your efforts on a consistent philosophy
眞 Sincerity:
Know the fundamentals and consider issues with
precision and clarity

25 Message from the President of an Overseas Subsidiary

Abridged version
booklet form
Rinnai Report 2022 (Integrated Report)

27 Identifying Material Issues

Environment

Rinnai Report(Integrated Report)

29 Rinnai Group’s Path to Becoming Carbon-Neutral

Website(Company Information)
Comprehensive
coverage of Group’s
CSR activities

31 Responses to the Task Force on Climate-related Financial
Disclosures

33 Global Deployment of Rinnai Group Water Heaters
35 Environmental Impact within Rinnai’s Value Chain

Highly important activities(Rinnai Group perspective)

Brand Promise —Rinnai’s Corporate Mission—

Creating a healthier way of living

Scope
Rinnai Group (Rinnai Corporation and companies under the Rinnai Groupumbrella in Japan and overseas)

Reporting Period
This report focuses on events that occurred in fiscal 2022—April 1, 2021, to
March 31, 2022—but also touches upon measures implemented and recent
activities undertaken since fiscal 2022 as well as future business direction,
targets, and plans.

Schematic Diagram of Company Ideals

Spiritual support of Rinnai
Company
Motto

Referenced Guidelines
GRI Standards, ISO 26000, E nvironmental Reporting Guidelines, issued by
Japan’s Ministry of the Environment
Environmental Accounting Guidelines, issued by Japan’s Ministry of theEnvironment
IIRC, The International Integrated Reporting Framework

Publication Schedule
Brand Promise—Rinnai’s Corporate Mission—

Expectations and attractiveness that
we keep promising with our customers

August 2022 (Japanese version)
Previous: August 2021, Next: August 2023 (planned)

Important Points Regarding Future Outlook
Rinnai Code of Conduct

03

Specific rules of day-to-day corporate activities

This report includes descriptions of earnings forecasts and outlooks for Rinnai
and Group companies.
These descriptions are based on currently available information andforecasts as determined by Rinnai. Actual results may differ from forecasts
depending on various external factors going forward.

37 Environmental Initiatives
Environmental Management, Prevention of Global Warning,
Resource Recycling, Pollution Prevention, Protecting Biodiversity,
Environmental Communication

Social55 Links between Corporate Strategy and the Realization ofa Sustainable Society (SDGs)

63 Safe and Secure Initiatives
Smooth Provision of Information through the Internet,
After-Sales Services, Inquiries Response and Support System,
Inspection Efforts

71 About Human Capital
Net Sales per Employee, Increasing Employee Engagement,
Health Management Initiatives, Personnel Training, Work-Life Balance,
Industrial Relations and Human Rights, Fair and Diversified Employment,
Occupational Health and Safety

85 Communication with Stakeholders
Shareholders and Investors, Customers, Business Partners,
Local Communities and Society, Global Social Contribution Activities,
Stakeholder Engagement

Governance
95 Management Structure
97 Leadership
99 Message from an Outside Director
100 Compliance
104 Risk Management
107 Information Security

Data Collection
109 Data Collection
Eleven-Year Financial Summary, Human Resource- and Personal-related
Data, Environmental Data, External Acclaim and Recognition

Rinnai Report 2022

04

Introduction

Environment

SocialGovernance

Data

100 Years of History (Part 1) 1920–2004

Historical Overview

Phase 1

Phase 2Phase 3Phase 4Phase 5

Founding and Postwar Reconstruction

Establishing a Corporate Foundation

Promoting Business Activities Overseas

Becoming a Listed Company

Advancing as a Global Corporation[1920–1949][1950–1965][1966–1978][1979–1987][1988–2004]

Childhood friends Hidejiro Naito and Kanekichi Hayashi
were inspired by the blue flame of an oil stove outside a shop
selling Imagawa-yaki (sweet stuffed pancakes) and decided
to start a business. Taking a character from each of theirsurnames, they named it Rinnai & Co., launching thedevelopment and commercialization of oil and gas stovesand oil heaters.
After the start of the Sino-Japanese war, the market
for oil and gas stoves was suspended due to oil
consumption regulations that prioritized military use, thus
the Company survived by manufacturing parts for aircraftand other equipment. After the war ended, they relaunchedtheir business with the manufacture of industrial andagricultural equipment, and in 1949, they resumed
production of gas and oil stoves as originally intended.

In 1950, the Company was relaunched as acorporation with the establishment of Rinnai
Seisakusho. During the 1950s, sales offices wereopened in Tokyo, Osaka, Fukuoka and other urban
areas, creating a nationwide sales network.
A major turning point came when theyencountered Dr. Schwank, developer of the gas
infrared ceramic burner. The first major hit productwas a gas infrared stove using burners manufactured
by Schwank GmbH based on a technology tie-up
between the two companies. In the early 1960s, theInba Factory (later the Asahi Factory) and Oguchi
Factory were constructed in response to the strong
demand for these stoves.

The Company, which commemorated its 50th
anniversary in 1970, changed its name to its current
form, Rinnai Corporation, the following year.
A Technology Center was also constructed anda development division was launched toundertake product development, establishinga development-oriented company structure.
Overseas development began with theestablishment of Rinnai International in Ohio, USA(1967), expanding to Taiwan, Australia, Malaysia, South
Korea, New Zealand, Brazil, the United Kingdom anda variety of other locations, where local offices andsubsidiaries were established in an effort to improvethe culture of everyday life in those areas.

In 1979, the Company was listed on the Second Sectionof the Nagoya Stock Exchange, and in 1983, it was listedon the First Section of both the Tokyo Stock Exchange
and the Nagoya Stock Exchange. Around the same time,
the Company made progress in terms of quality costdelivery (QCD), aiming to develop molds and other criticalcomponents that up to that time had been outsourced.
In developing new technologies and products, theCompany brought new products to market meeting userneeds, including the Yukko compact gas water heater(1982) and the push-button gas tabletop cooker (1984).
Focusing efforts on enhancing its customer service
system, in 1986 the Company launched telephone
support available 24 hours a day, 365 days a year.

In fiscal 1989, for the first time the Company achieved its
long-sought after sales target of ¥100 billion, and incommemoration of its 70th anniversary a year later, plans
were made to construct a new Head Office building thatwas completed in 1994.
In terms of products, the Company promoted
added value through safety functions that included gas
water heaters equipped with carbon monoxide sensors
and hobs (stovetops) equipped with a tempura oil fire
prevention function. In response to the rapid developmentof China and ASEAN countries, the Company establishedjoint manufacturing bases and acquired quality andenvironmental management certifications, including ISO
9000 and 14000 series in promotion of initiatives
undertaken as a global corporation.

2005¥202.0 billion

1989

Performance¥98.4 billion

1980¥48.3 billion

Net sales
1967¥5.6 billion

1951

Rinnai & Co. founded.
1921

Technologies andProducts

1951–●1920 The Rinnai-type kerosene gas stove registeredas a utility model is launched.
●1923 Gas tabletop stove, gas ranges, gas oven, gas
water heater and other product deliveries to gas
companies across Japan as overseas exports
begin.
●1937 Sales of oil and gas stoves across north China
market from base in Tianjin City are launched.

Rinnai-type kerosene gas stove

Management andOrganization

05¥21 million●1920 The company is incorporated as Rinnai & Co. byfounders Hidejiro Naito and Kanekichi Hayashi.
●1938 Manufacturing of aircraft parts takes place with thefactory coming under military supervision.
●1940 The company changes its name to Rinnai Aircraft
Parts Manufacturing.
●1947 Production of gas and kerosene appliances resumes
at the rebuilt Head Office factory.

●1957

1967–

The company forms a technology tie-up withGerman company Schwank GmbH to
manufacture and sell gas infrared burners and todevelop heaters and cooking appliances that use
them.

●1967
●1971
●1972

Technology Development Center opens.
Development and sales of high-speed gas
convection range, Convec.
The company receives the Ota Award fromthe Japan Gas Association for its high-speed
gas convection range, Convec.

Schwank gas infrared
heater produced
domestically in Japanfor the first timeHigh-speed gas
convection range,
Convec●1950 The company is reorganized as a joint stockcompany and renamed Rinnai Seisakusho.
●1954 The Tokyo Sales Office (now the Kanto Branch) opens.
●1956 The Osaka Sales Office (now the Kansai Branch) opens.
●1957 The Aichi Factory (now the Chubu Branch) opens.
●1960 The Inba Factory (later the Asahi Factory) opens.
●1961 The Fukuoka Sales Office (now the Kyushu
Branch) opens.
●1963 The Sendai Satellite Office (now the Tohoku
Branch) opens.
●1963 The Sapporo Satellite Office (now the Hokkaido
Sales Office) opens.

●1968 The Niigata Satellite Office (now the Niigata Sales
Office) opens.
●1969 The Nagoya Sales Office (now the Chubu Branch)opens.
●1970 Rinnai Taiwan Corporation is established.
●1970 Business partnership with Yanagisawa
Manufacturing Co., Ltd.
●1970 Investment in Yamauchi Yoko (now RT Engineering Co., Ltd.)●1971 The name changes to Rinnai Corporation.
●1971 RB Controls Co., Ltd. is established.
●1971 Rinnai Australia Pty. Ltd. is established.
●1973 Rinnai (Malaysia) Sdn. Bhd. is established.

1980–

1989–

●1980 Full-scale production of built-in equipment begins.
●1983 A gas instantaneous water heater, UT, equippedwith a safety mechanism to prevent incomplete
combustion launches.
●1985 The company receives the Ota Award from theJapan Gas Association for development of awater boiler equipped with a safety mechanism toprevent incomplete combustion.
●1986 The company receives the Excellent Technology
Prize from the Japan Gas Association as well as
the first Chunichi Industrial
Technology Award for thedevelopment of an ultracompact
water heater, Yukko.

●1990 The Tsukuba Research Center (now Tsukuba
Training Center) opens.
●1998 Gas fan heater and air purifier are combined together.
●1999 A highly efficient condensing gas water heater
is launched.
●2000 The company receives the Ministry of international
Trade and Industry’s Energy Conservation Award for
its highly efficient condensing gas water heater.
●2003 The company receives the Energy Conservation
Grand Prize (Chairman’s Prize) from the Energy
Conservation Center for its glass-top stoves with
inner flame burners.

The company is listed on the Second
Section of the Nagoya Stock Exchange.
●1979 Rinnai Precision Co., Ltd. is established.
●1979 The Seto Factory opens.
●1981 Japan Ceramics Co., Ltd. is established.
●1981 Business partnership with Isomura Kiki (now Rinnai
Technica Co., Ltd.)●1983 The Hiroshima Sales Office (now the Chugoku
Branch) opens.
●1983 The company is listed on the First Section of theTokyo Stock Exchange and the Nagoya Stock
Exchange.

(FY)

Highly efficient condensing
gas water heater

Gas instantaneous water heater, UT
●1979

2005

●1988
●1988
●1990
●1990
●1991
●1993
●1994
●1995
●1996
●1997

P.T. Indonesia is established.
The Hong Kong Representative Office opens.
Rinnai (Thailand) Co., Ltd. is established.
Noto Tech Co., Ltd. is established.
Rinnai Singapore Pte. Ltd. is established.
Shanghai Rinnai Co., Ltd. is established.
The new Headquarters building is completed.
The company receives ISO9001 certification for all domestic factories.
Rinnai Holdings (Pacific) Pte. Ltd. is established in Singapore.
Technology Division acquires ISO14001 certification(sequentially acquired thereafter).
●2004 Guangzhou Rinnai Co., Ltd. is established.

Rinnai Report 2022

06

Introduction

Environment

SocialGovernance

Data

Medium-term Business Plans

100 Years of History (Part 2) 2005–2025
Promoting Medium-term Business Plans Under a New Structure
Phase 6

Phase 7

Phase 8Phase 9Phase 10Phase 11

V-Shift Plan

Reform & BreakthroughJump UP 2014

Evolution and Succession 2017

G-shift 2020

New ERA 2025

[2006–2008][2009–2011][2012–2014][2015–2017][2018–2020][2021–2025]

In 2005, the current President Hiroyasu Naito was
appointed. His first policy was to “focus on a highvalue-added and differentiated product strategy
centered on new technologies.” This concept wasmade into concrete measures and incorporated into
the “V-shift Plan” medium-term business plan.
With “V” representing value, the plan, simply put,
aimed to transition from quantity to quality. In line withthe policies of switching from “a focus on sales andmarket share to added value and profits” and from an“omnidirectional strategy to selection andconcentration,” the Company revised its cost structure
and attempted to realize manufacturing innovations.

Under the medium-term business plan launched in2009 entitled “Reform & Breakthrough,” theCompany aimed to become a comprehensive heat
energy appliance manufacturer contributing topeople’s lifestyles throughout the world, establishinga presence with a unique business model appealing
to both people and business partners.
While accelerating manufacturing that placed
top priority on the environment, the Company aimed
for a lean corporate structure and the thoroughelimination of wasteful business activities. At thesame time, cooperation and collaborations were
strengthened among Group companies in Japan andoverseas, sharing the same ideals in an effort topromote the consolidation of a structure as acomprehensive heat energy appliance Group.

Launched directly after the Great East Japan
Earthquake, “Jump UP 2014” aimed to establish a
corporate structure able to supply appliances
optimized from an environmental standpoint to global
markets in light of social needs for the best energy mix.
The Company stepped up its pursuit of zero
defects in response to Rinnai fans who valued thebrand for its safe and trouble-free products.
Innovations aimed at revising development,
manufacturing and sales processes enhanced
mobility. Organizational capabilities were taken to a
new level through Group coordination and strategic
human resource development in response to
globalization and increasing sophistication. Whilefocusing efforts on these initiatives, the Company
engaged in the long-term enhancement of its
corporate value.

The Company views “succession” as indispensable
for its business. With its origin in the concept “quality is
our destiny,” Rinnai’s mission is to “utilize heating toprovide society with a comfortable way of life” in all
global markets.
At the same time, with regard to “evolution,” inorder to respond to liberalization in the energy
markets, shrinking workforces and other rapidchanges in the business environment, this plantargeted business model innovations through thepromotion of product sophistication in Japan and,overseas, the smooth horizontal deployment oftechnologies and products created by Group
companies. The plan also aimed to establish the
Rinnai brand as a comprehensive heat energy
appliance manufacturer.

Focused on the 100th anniversary of Rinnai’s
founding, this plan introduced the Group slogan“innovating technologies for the next generation andstrengthening overseas growth strategies to leap
forward as a global brand.”The “G-shift” medium-term business planname represents three core policies aimed atpromoting global strategies leveraging the Group’s
network, the shift to a new generation that passes on
traditions accumulated over the past 100 years andbreaks common sense, and the establishment of acorporate governance system meeting the demandsof society and modern times. In 2019, the Company
formulated the brand promise “Creating a healthier
way of living” to further clarify its stance.

Rinnai celebrated its 100th anniversary in 2020. As a fresh start for
the next 100 years, we formulated a new Medium-Term Business
Plan covering the five-year period from fiscal 2022 to fiscal 2026.
The aim of the plan is to realize healthy, comfortable lifestyles anddeliver sustainable corporate growth.
We have positioned the year 2021 (101 years since ourfoundation) as the start of a New ERA. We will achieve Advancementin addressing social challenges through Expansion of business scaleand Revolution of corporate structure.
In anticipation of accelerated environmental changes that
include efforts to achieve carbon neutrality, the transformation ofneeds and the entrenchment of the “new normal” and digitaladvances, Rinnai aims to be the brand of choice in a new and rapidlychanging era, and positions the next five years as a period fordelivering growth and implementing reforms from a medium- tolong-term perspective.

¥366.1 billion
Domestic sales

Overseas sales¥35.8 billion

Performance

56%

New ERA 2025
New Expansion, Revolution and Advancement

Operating income
Operating margin

Management andOrganization

Technologies and Products

2006

07

2007

2008

2009

2010

2011

2012

●2005 The company receives the Technology Prize fromthe Japan Gas Association for its Eco-Jozu
condensing dual water heater/space heaters.
●2006 The company receives the Technology Prize fromthe Japan Gas Association for its bathroom
heater/dryer with mist sauna function.
●2007 Built-in hob (stovetop) DELICIA series is launched.
●2008 Dishwasher with baking soda washing mode isreleased.
●2008 Rinnai Indonesia wins Best Brand Award.
●2008 Rinnai gas tankless water heater receives the Super
Nova Star Award (an energy-saving award) fromthe Alliance to Save Energy in the United States.

●2010 The Production and Technology Development
Center opens.
●2010 Commercialization of home-use hybrid water
heaters combining heat pumps and gas water
heaters.

●2006 Shanghai Rinnai Thermo Energy Engineering Co., Ltd.
is established.
●2008 Rinnai Italia S.r.l. is established.
●2008 The Integrated Logistics Center opens.

●2009 Rinnai Canada Holdings Ltd. is established.
●2010 The Production and Technology Development
Center opens.
●2011 The West Japan Customer Center opens.
Great East Japan Earthquake service support is
implemented.

2013

2014

2015

●2014 The company receives the Ministry ofInternational Trade and Industry’s Energy
Conservation Award for ECO ONE, a hybrid
water heater with heating system.
●2014 The company’s hybrid water heater with heating
system for Hokkaido receives the Kitaguni
Energy conservation and New Energy Grand
Prize.

2016

2017

2018

●2016 DELICIA dedicated app “DELICI APP” withcooking support function distribution is launched(“+ R RECIPE” from 2020 onward).
●2017 Third-generation ECO ONE hybrid water heaterand heating system wins Energy Conservation
Grand Prize Energy Conservation Center
Chairman's Award.
●2017 High-quality and luxury kitchen appliance series
G-LINE is launched.

2019

2020

2021

●2018 Drop-in modular-type gas cooker “G:101” wins
“iF Design Award 2018.”●2020 Domino-style built-in stove G-LINE series wins
“Red Dot Design Award 2020” at the Red Dot
Design Awards.
●2020 Microbubble Bath Units are launched.

2022

2023

2024

2025

2026 (FY)●2022
Launched sales of Leggiero
waterless cooking pots
Leggiero receives the Red Dot
Design Award 2022

●2022
Successfully developed
100% hydrogen combustion
technology for residential
water heaters●2013 The Akatsuki Factory opens.
●2013 The Rinnai Parts Center opens following businessintegration.
●2014 Brivis Climate Systems Pty. Ltd. in Australia is
acquired.

●2015 The Dubai Representative Office opens.
●2016 Gastar Co., Ltd. becomesa consolidated subsidiary.

●2018 The East Japan Logistics Center opens.
●2019 Our brand promise is established andthe Rinnai logo is updated.
●2020 Information Security Management
System (ISMS) certification is acquired.
●2020 Rinnai wins the “Excellence Award” at theEnvironmental Persons Development Awards.

●2021 Rinnai America acquired Industrias MASS S.A. de C.V. (Mexico)●2021 Announced the Rinnai Group Path to Becoming Carbon-Neutral
and Rinnai Innovation Manifesto 2050 (RIM 2050)●2022 Established the ESG Committee in April

Rinnai Report 2022

08

Introduction

Environment

SocialGovernance

Data

Rinnai Group Profile● Manufacturing and sales companies

Corporate Data (As of March 31, 2022)◎ Sales companies

RinnaiWorldwide○ Other business□ Overseas representative office

Incorporated

September 1, 1920

Established

September 2, 1950

Paid-in capital(As of April 1, 2022)

SOUTH KOREA● Rinnai Korea Corporation● RB Korea Ltd.

CHINA

Rinnai UK Ltd.

◎● Mikuni RK Corporation● Shanghai Rinnai Co., Ltd.
◎ Rinnai Treading B.V.
Rinnai Italia s.r.l.

JAPAN◎ Hainan Rinnai Minsheng Kitchen Appliances Sales Co., Ltd.

●Rinnai Corporation● Yanagisawa Manufacturing Co., Ltd.
Rinnai Hong Kong Ltd.
◎

Dubai
Representative
OfficeRinnai (Thailand)Co., Ltd.

●

Rinnai (Malaysia) Sdn. Bhd.

◎●

(From outside Japan): +81-52-361-8211
10,777 (consolidated), 3,605 (non-consolidated)
47 (domestic 12, overseas 35)◎◎ Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

□

Telephone

Rinnai Canada Holdings Ltd.

◎ Guangzhou Rinnai Gas and Electric Appliance Co., Ltd.

◎

2-26, Fukuzumi-cho, Nakagawa-ku,
Nagoya 454-0802, Japan

Number of Group companies◎ Rinnai Plus Corp.

● Shanghai RB Controls Co., Ltd.

Head office

Number of employees● RS Korea Ltd.

¥6,484,416,754● Rinnai Technica Co., Ltd.

● Rinnai Precision Co., Ltd.
● RT Engineering Co., Ltd.

Rinnai Holdings (Pacific)
Pte Ltd.

P.T. Rinnai Indonesia

Others ¥25.6 billion

South Korea¥32.1 billion● RB Controls Co., Ltd.

●

Rinnai Manufacturing Malaysia Sdn. Bhd.

Indonesia¥13.5 billion

Rinnai America Corporation●● Gastar Co., Ltd.

●Rinnai Taiwan Corporation
Rinnai Vietnam Co., Ltd.

◎

UNITED STATES● Industrias Mass, S.A. de C.V.

Net Salesby Region
Total● Noto Tech Co., Ltd.

● Techno Parts Co., Ltd.
◎ Rinnai Net Co., Ltd.

China
¥52.7 billion○ Rinnai Enterprises
●

366.1

¥

billion

INDONESIA
Rinnai Brasil Heating Technology Ltd.

AUSTRALIA●● Rinnai Australia Pty., Ltd.

Australia¥25.7 billion○ Gas Appliance Services Corporation
Rinnai New Zealand Ltd.
●◎
Central Heating New Zealand Ltd.

Water Heaters and Heating Systems
Water heaters, water heater with bath-filling systems,
water heater with heating systems, hybrid water
heater with heating systems, bathroom heater/dryer,
floor heating systems, and others

Kitchen AppliancesHome Heaters

Tabletop cookers, built-in hobs (stovetops), ovens,dishwashers, range hoods, rice cookers, and others

Commercial-Use Equipment, Others

Fan heaters, fanned flue heaters, infrared heaters, andothersIndustrial ceramics machines, commercial-use ranges,commercial-use cookers, gas clothes dryers, components, and others
Gas clothes dryer(JAPAN)DELICIA built-in
gas hob (stovetop)(JAPAN)Japan¥171.5 billion

United States¥44.7 billion

Others ¥39.5 billion

Commercial-use equipment¥9.0 billion
Home heaters¥21.1 billion

Gas fun heater A-style(JAPAN)Net Salesby Product
Total

366.1

¥

Eco Jozu, gas water
heater with bath-fillingsystem(JAPAN)09

High-efficiency gas
tankless water heater(UNITED STATES)

Drop-in gas hob(stovetop)(INDONESIA)

Fanned flue heater(UNITED STATES)

Kitchen appliances¥85.5 billion
Commercial-use gas rice cookers(JAPAN)billionWater heaters andheating systems¥211.0 billion

Rinnai Report 2022

10

Introduction

Environment

SocialGovernance

Data

Value Creation Process
The Rinnai Group attempts to conduct corporate management with a focus on ESG indicators to ascertain theenvironmental impact of various social issues and business activities as well as the opinions and expectations ofrelated stakeholders. We strive to realize sustainable corporate growth and contribute to international initiatives
such as the SDGs through the implementation of a value creation process driven by strategic management focusedon ESG indicators.

Rinnai Group Value Creation Process

External Environment / Social Issues

Value Provided

Business Activities

Climate change /global warming

Rinnai handles water heaters and heating units that utilize a large
proportion of residential energy.

Product usage risks

Company-related product usage risks include fires caused bygas stoves and “heat shock” occurring in the bathroom.

Work style changes
cause decrease inquality of lifestyles

Demand for products that reduce time required for household chores
due to decrease in quality of lifestyles as a result of a rise in dual
income households, declining birthrates and an aging population

Consolidated net sales

Creation of products
and services that are safe,
secure, andenvironmentally friendly¥366,185 million

Environmental
contribution(local production / in-house production)

Providing lifestyles that
reduce consumption of
everyday lifestyle energy
usage and impact on
the environment

Invested Capital (Fiscal 2022)
Human capitalIntellectual capital

Employees*1:
Employed (Rinnai non-consolidated) *1:
Training and development expenses:(Rinnai non-consolidated) *1
Overseas trainees (Rinnai non-consolidated):
Development headquarters staff:(Rinnai non-consolidated) *1
R&D expenses (Rinnai non-consolidated):ISO 9001 certification acquisition:(number of companies) *1
ISO 14001 certification acquisition:(number of companies) *1

10,777 people
84 people¥98 million¥35,864 million
Operating income ratio
9.8%
Net income attributable toowners of the parent company

0 people¥23,748 million¥8,186 million
17 companies

Net assets (equity ratio)

15 companies

ROE
ROIC
Equity ratio

Manufactured
capitalRinnai Group production bases:
25 companies(number of companies) *1
Production group staff (Rinnai non-consolidated) *1:
1,559 people
Capital expenditure (Rinnai non-consolidated):¥10,704 million

Natural capital

Input energy:
Water used: Ground water:
Public water:

Social andrelationship capital

Rinnai brand, external evaluations, stakeholder engagement,
Rinnai Group Code of Ethics

6.9%
14.1%
66.9%

Promoting businessunder the slogans “Heat & Lifestyles”
and “Health & Lifestyles”

1,133,492 GJ
234,501 m3
551,311 m3

Safety andpeace of mind
Supporting lifestyles thatenable the prevention andavoidance of various
potential risks in the home¥378,856 million (66.9%)
Dividend per share(annual) ¥140
Products contributing to improved
quality of life
Sales

Approx. ¥99,000 million

Products that benefit the
global environment*1 As of March 31, 2022

Opportunities[Domestic] Expansion of thermal energy
systems centered on electric power

Growing demand for energy-saving products
by strengthening environmental policies[Domestic] Price reduction of gas
appliances due to customer requests

Increasing needs for safety and accident
prevention as social issues[Domestic] Declining birthrates, an aging
population, and a decreasing number ofhouseholds[Overseas] Expand use of natural gas andhydrogenDecreasing working hours and intensifying
competition for securing human resources

Operating income

509 people

Financial capital

Risks

Fiscal 2022 Achievements[Overseas] Improving living standards
Progress in evaluation of corporate ESG
initiatives

Quality of life
Development of technologies
useful for people’s lives

Contribute to raising
standards of living globally(Combustion/heat utilization, electronic control,
fluid control, new technologies)

Social issue recognition

Proposing lifestyles that
reduce the burden andtime required to perform
household chores

Sales

Approx. ¥140,000 million

Amount contributed toreducing CO2 emissions*5.15 million tons
Announcements of productrecalls due to defects:
0 case* Consolidated basis

11

Rinnai Report 2022

12

Introduction

Environment

SocialGovernance

Data

Message from the President

Record Sales, but Resolution of Production Delays Bearing Close Watching
Fiscal 2022, the fiscal year ended March 31, 2022, wasAs a result, net sales for fiscal 2022 were ¥366,185 million

marked by great volatility around the world as economies(up 6.3% year on year), operating income was ¥35,864

began to normalize following the contraction caused bymillion (down 11.9%), ordinary income was ¥39,060 million

the COVID-19 pandemic. The Rinnai Group continued to(down 7.9%), and net income attributable to owners of thepost impressively strong sales in the first half of the year,

parent company was ¥23,748 million (down 13.9%). Net

and to “help resolve global environmental

buoyed by a global recovery in demand. Subsequently,

sales increased for the second consecutive fiscal year,

however, new waves of the pandemic in some countries

reaching a record high, thanks to growth in overseas sales,

problems” through our products

and regions led to restrictions on economic activities whileespecially in China and the United States, and a boostat the same time geopolitical risks heightened. This

from the yen’s depreciation against major currencies,

manifested events far exceeding expectations, including

despite a decline in domestic sales due to supply chain

a tightening of parts procurement, particularly forinterruptions. However, the substantial impact of cost

semiconductors and electronic components; disruptions

increases, including those for raw material and logistics,

in overseas transportation; and soaring energy, raw

led to a fall in operating income. In fiscal 2023, we aim tomaterial and logistics costs, causing substantial

quickly resolve supply delays and achieve record-highslowdowns in production and supply chains.

levels for both sales and profits.

Achieve sustainable growth as a company ofchoice by working to “improve the quality of life”

President

13

Hiroyasu Naito

Rinnai Report 2022

14

Introduction

Environment

SocialGovernance

Data

Message from the President continued

Launching “New ERA 2025” While Responding to Changing Social Conditions
Fiscal 2022 was also the first year our new medium-termcleaning the bathroom. The DELICIA and Lisse (updated

business plan called New ERA 2025. Although it was amodel launched in September 2021) built-in gas hobs

year in which we were constantly called upon to respond(stovetops) are capable of automated cooking, so meals

to social conditions, we steadily pursued our businesscan be prepared while working from home or doing otheractivities based on the three strategies of “Expansion ofhousehold chores. These product lineups are designed

business scale,” and “Revolution of corporate structure”

to provide customers with healthy and comfortable

leading to “Advancements in addressing to social

lifestyles in line with the requirements of modern society.

challenges.” I believe it was through these initiatives that

Overseas, demand is active in China and the United

we were able to achieve a new record high in net sales.

States, which we have positioned as strategic markets in

As society shifts to the new normal brought on by

The Griffin Factory of Rinnai America

terms of “Expansion of business scale.” In the United
Rinnai America acquired Industrias MASS S.A. de

Although procurement costs will increase, we believe thisthe pandemic and becomes more conscious than everStates, the market for tankless hot-water heatersof health and work-life balance, Rinnai is contributing to(instantaneous water heaters) is expanding. Orders have

C.V. of Mexico in September 2021, and will actively

is an effective risk hedge that will help the sustainability“Improve the quality of life” with products that add value

increased significantly due to growing recognition of the

expand its business in Latin America. In China, theof our business.

to conventional functions, thereby realizing

advantages of tankless products, which had not been

impact of the zero-COVID policy has been significant,Promoting “Revolution of corporate structure”“Advancements in addressing to social challenges.”

widely accepted in the past, such as never running out ofand although the future is uncertain, it is a rare market inthrough investment in human resources is also essential

For example, the gas clothes dryer Kanta-kun not only

hot water, space saving, and being very environmentally

the world where Internet sales are particularly prominent.

to the attainment of New ERA 2025. I am proud note thatshortens housework time, but also finishes clothes withfriendly. We expect the market to continue to expand in

At Shanghai Rinnai, we are working with two local

since I assumed the position of President, Rinnai has

air heated to 80°C providing strong antibacterial

the future. To expand production capacity and improvecompanies that have strong e-commerce businesses,

been able to make significant changes throughproperties that surpass those of electric clothes dryers.

productivity, we have established a new factoryand sales have been rising steadily over the past few

continued solid management to transform the Company

The RBHM series of hot-water bathroom heaters andin Griffin, Georgia, which began full-scale production

years. Our overseas strategy is to focus on expanding

into one that can generate profits. On the other hand,dryers (launched in October 2021) can control moldin April 2022. We will aggressively promote sales

sales in growth markets, markets we have not yet

we recognized through our internal engagement survey

growth with a mist, which also reduces the burden of

in the United States to expand our market share.

entered, and emerging economies.

that a steady, sure-footed approach to management

Yet we must be vigilant over the emergence of a

was not always a good motivator for employees. This isvariety of risks as we expand the scale of our businesssomething we humbly accept and are currently

activities. Currently, in the midst of the pandemic andreviewing in terms of the education and guidance of ourrising political and military tensions, many of thepersonnel. As such, we are encouraging the revamping

aforementioned risk events are occurring, forcing usof educational programs in the departments to which

to reevaluate our past thinking and approaches.

employees belong as well as in the Human Resources

As an example, until now we have purchased parts from

Division. We will also invest intensively in the first 10 years

a single domestic supplier that could procure them mostof employment as a period of basic training. In addition to

inexpensively and efficiently, and have thus been able tolanguage skills and IT-related skills, we will ensure that all

make products while holding almost no inventory.

employees acquire specialized knowledge and skills inThis is no longer viable now and we are in the process of

the work for which they are responsible. While capital

diversifying our procurement sources. In the future,investment is an essential investment for a company, thewe will shift to production activities in which parts aresame applies to human capital, and we plan to invest

procured from multiple domestic and overseas

more money in our talent than ever before.

companies and stocked to a certain degree.
Gas clothes dryer Kanta-kun helps shorten housework time

15

Lisse series compatible with recipe apps

Rinnai Report 2022

16

Introduction

Environment

SocialGovernance

Data

Message from the President continued

Promoting Carbon Neutrality Throughout the Group

Change to Management with Leeway to Ensure Future Growth

In November 2021, the Rinnai Group announced the

Although New ERA 2025 started in an uncertain

Meanwhile, in manufacturing, we will switch toIn the 16 years since being appointed President, I

Rinnai Innovation Manifesto 2050 (commonly known as

renewable energy facilities and non-fossil fuel facilities,

environment, I am confident that we can achieve ¥450

have always strived for steady and efficient management

RIM 2050), a policy to achieve carbon neutrality by 2050.

and we also envision the introduction of green power.

billion in consolidated net sales and ¥50 billion inthat earns solid returns with minimal risk-taking to place

Rinnai believes it is its duty to improve its environmental

Rinnai will invest to achieve carbon neutrality inconsolidated operating income by the final year of thethe highest priority on securing profits. However, we must

performance and expand the use of environmentallydevelopment, manufacturing, and sales, and expects toplan. On the strengths of our diverse product lineup thatchange our mindset if we are to be a sustainable

friendly products because the products it offers generate

invest a cumulative total of more than ¥50 billion over theenriches people’s lives, we expect growth in several

company in a society where measures of the past are noan overwhelming amount of CO2 emissions during use

five years to fiscal 2026. Until now, we have focused onoverseas markets, including the United States and China,

longer effective. To ensure future growth, Rinnai isthroughout their lifecycle. We have already developed

investments that can be expected to yield a reliable

and we recognize that the global movement towardcommitted to enhancing corporate value throughand marketed Eco-Jozu, a highly energy-efficient water

return, but now that society is beginning to move toward

carbon neutrality will also be a positive. Rinnai is currently

management with the leeway to take appropriate risks.

heater, and ECO ONE, a gas-electric hybrid water heater

new values, we believe it is necessary to take on thefocusing on branding, aiming to become the brand of

We also intend to deliver to our shareholders a total

with heating systems. In recent years, our efforts havechallenge of responding to society’s needs by assuming

choice even in these rapidly changing times. I would likereturn ratio of 40% on average over the five-year period

been bolstered by growing support for suchrisks and addressing them.

to see Rinnai products be chosen from among manythrough fiscal 2026 through continued share buybacks

environmentally friendly products among customers,

As one such initiative, we established an ESG

other products as “products that make life convenientand dividend increases, which we implemented in the

major gas companies, and government agencies.

Committee and made changes to tackle these issues as

and support healthy living, even if they are a little more

first half of fiscal 2023. We look forward to your continued

Rinnai’s goal by 2030 is to sell 300,000 units of its ECO

an organization. The ESG Committee, established in

expensive.” We are continuing our efforts to promote

guidance and support.

ONE water heaters, which reduce CO2 emissions byApril 2022 and chaired by myself, will examine ESG-

understanding and instill Rinnai’s values within theapproximately 50% compared to conventional models,related measures, monitor the status of initiatives, reportCompany so that all employees can aim to create suchand we feel that we are well on track toward achieving

and make proposals at meetings of the Board of

products.

this goal. In overseas markets, the Rinnai Group will also

Directors and other meetings, and promote ESG

focus on sales of tankless hot-water units with highactivities throughout the Group. In addition, thethermal efficiency in the United States, shifting away from

Environment Division was realigned under the Corporate

the storage tank-type heaters that are not very energy

Planning Headquarters in April 2022. The latter has aefficient but that currently account for more than 90% ofsection that examines Rinnai’s medium- to long-term

the US market. We also promote carbon neutral

strategies while keeping abreast of social trends andinitiatives that match the situation in each country on ademands. By moving the Environment Division to theGroup-wide basis.

same Corporate Planning Headquarters, we believe that

Another focus is on development, and Rinnai plans
to invest a cumulative total of over ¥30 billion over thethese two departments can collaborate to steadily
promote the realization of carbon neutrality.

five years through fiscal 2026 in equipment that utilizes
hydrogen fuel and heat pump equipment. Furthermore,
major gas companies and other energy industry players
are developing methanation and propanation. These aretechnologies attracting attention for their ability toartificially produce energy feedstocks. We expect thateven if such new clean energy is commercialized, ourECO ONE X5 contributes to achieving carbon neutrality

products themselves can be produced without major
specification changes.
Development of hydrogen combustion technology announced (May 2022)

17

Conceptual model of hydrogen water heater

Rinnai Report 2022

18

Introduction

Environment

SocialGovernance

Data

Medium-term Management Plans

New Medium-term Business Plan (2021–2025)

New ERA 2025
New Expansion, Revolution and Advancement

In fiscal 2022, Rinnai launched the New ERA 2025 five-year medium-term business plan. 2021 was the 101st year since
our founding, the start of a new era in which we will achieve Advancement in addressing social challenges throughExpansion of business scale and Revolution of corporate structure.

Medium-term Business Plan New ERA 2025 Targets
Expansion of business scale

Expand regional domains
Expand business domains

Consolidate Net Sales: ¥450 billion(Japan: ¥200 billion;
overseas: ¥250 billion)

Revolution of corporate
structure
Become more consumer-oriented
Make focused investments
in intangible assets
Enhance profitability

Advancement in addressing
social challenges

Operating Income: ¥50 billion
Return on invested capital (ROIC):
19.0%
Total return ratio (five-year average):
40.0%
Sales of products that improve quality of lifeand benefit the global environment(compared with fiscal 2021):

and our own core technologies to address social
challenges in our business field “heat and lifestyles”“health and lifestyles” and achieve a sustainable,
steady, long term growth.

Key Strategies
We have formulated three key strategies: Help resolve social issues, expand business scale, and revolutionize
corporate structure.

Advancement in addressing
social challenges• Improve quality of life
• Help resolve global environmental problems

Operating income

ROIC

500

20.0％

400

300

16.0％

200

14.0％

100

7 million tons

12.0％

40.6

Contribution to CO2 emission reduction:

18.0％

366.1

344.3

50% upCorporate Vision We will utilize various kinds of energy resources

Creating a healthier way of living

Net sales(Billions of yen)

450.0

Improve quality of life
Help resolve global
environmental problems

Brand Promise

Net Sales, Operating Income, ROIC Plan (image)

35.8

50.0

0

10.0％
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2021 2022 2023 2024 2025 2026

Risk Factors and Responses in Fiscal 2022
(Management of Newly Identified Risks)
In fiscal 2022, insufficient product supplies and rising costs inconvenienced many people. Rinnai will analyze
contributing factors and take resolute measures to ensure the stable delivery of products to customers.
Product Supply Delays
Component procurement difficulties

Marine transport disruptions

CausesFrom September 2021, Rinnai had difficulty procuring wire
harnesses, microcomputers and other components, with
supply delays affecting many products

Unreliable container shipping due to global increase inlogistics activities

Response

Increased product and component inventories. Diversified
procurement routes, including ordering the same components
from several different companies
Component standardization designs

Utilized multiple transportation routes, developed newtransportation routes

Expansion of business scale

Rising Product and Component Costs• Expand regional domains• Expand business domains

Rising raw material and component costs
CausesSoaring copper and steel prices. Component costs, andelectronic components in particular, also rose due to tightsupply and demand

Container prices soared due to marine transport disruptions,exacerbated by rising crude oil prices and higher marine andground freight rates

Response

Prices revised for portion unable to be absorbed throughcorporate efforts (implemented April 2022). Pursued further
cost reductions through production design revisions andimprovement activities

Created an export structure prioritizing product supply,
reduced the number of containers used through improved
loading efficiency, and established permanent local
production systems

Revolution of corporate structure• Become more consumer-oriented• Make focused investments in intangible assets• Enhance profitability

19

Rising logistics costs

Rinnai Report 2022

20

Introduction

Environment

SocialGovernance

Data

Medium-term Management Plans

New ERA 2025 Medium-term Business Plan Progress
New ERA 2025 Medium-term Business Plan
Advancement in addressing social issues

Expansion of business● Expanded lineup of products contributing to improved quality of life

● Expand business inThree Strategies Story
scale

Revolution of corporate structure● Developed 100%hydrogen combustion
technology

the Americas● Ongoing dividend increases and total return ratio improvements
150(Plan)

Dividends per Share, Consolidated Payout Ratio●

140

Rinnai Canada Holdings Ltd.
●

Rinnai America Corporation

125●

Industrias Mass

Launched sales of the Leggiero waterless cooking pot(February 2022)
Launched sales of ECO ONE X5, contributing to
the realization of carbon neutrality(June 2022)●

Rinnai Brasil
Heating
Technology Ltd.

Dividends per share (Yen)

Acquired Industrias Mass, S.A. de C.V. (Mexico),comprising the core of expansion into Latin America(September 2021).

76

Launched sales of bathroom
heaters/dryers equipped with
Mold Guard Mist
(October 2021)

carbon neutrality.
The Griffin Factory, constructed as a proprietary
manufacturing facility in the United States,
commenced mass production in April 2022.

New ERA 2025 Medium-term Business Plan
Sales of products that improve quality of life (compared with fiscal 2021)

Approx.

¥80.0 billion

Fiscal 2022 actual

Approx.

Fiscal 2026 plan

¥99.0 billion (+26%) +50%

Sales of products that benefit the global environment (compared with fiscal 2021)
Fiscal 2021 actual

Approx.

Fiscal 2022 actual

Fiscal 2026 plan

¥120.0 billion Approx. ¥140.0 billion (+17%) +50%

To realize carbon neutrality, Rinnai
successfully developed 100% hydrogen
combustion technology, and going forward,
demonstration tests will be conducted tocommercialize hydrogen water heaters.
(announced May 2022)

23.6%

29.0%

23.4%

(Plan)

23.3%

Consolidated payout ratio

Fiscal 2021 actual

2014

2015

2016

2017

2018

2019

2020

2021

2022

Operating income
billionFiscal 2026 plan

Fiscal 2021 actual

Fiscal 2022 actual

Fiscal 2026 plan¥450.0 billion¥40.6 billion¥35.8 billion¥50.0 billion

Fiscal 2021 actual

Fiscal 2022 actual

Fiscal 2026 plan

17.6%

14.1%

19.0%

Domestic
Fiscal 2021 actual

2013

KPI Achievement Progress

Fiscal 2022 actual¥344.3 billion ¥366.1

2012

In August 2021, Rinnai conducted share buybacks amounting to ¥17.4 billion.
We will continue to engage in strategic share buybacks going forward.

Consolidated net sales

ROIC
Fiscal 2022 actual¥175.8 billion ¥162.0

Fiscal 2026 planbillion¥200.0 billion

Overseas
Fiscal 2021 actual

Total return ratio
Fiscal 2022 actual¥168.4 billion ¥204.1
21

18.8%

20.0%

21.9%

15.0%

● Rinnai announced RIM 2050, its corporate policy for achieving

Launched Company-wide measures targeting the
reduction of CO2 emissions to zero by 2050
(November 2021).

98

68

15.2%

Launched sales of theLisse series, compatible
with the Rinnai recipe app(September 2021)

94

29.8%

60
19.1%

Fiscal 2021 actual

86

82

90

Fiscal 2026 planbillion¥250.0 billion

Fiscal 2021 actual−

Fiscal 2022 actual *fiscal 2022

102.7%

Fiscal 2026 plan40%

(fiscal 2021-fiscal 2026 average)

Rinnai Report 2022

22

Introduction

Environment

SocialGovernance

Data

Message from the General Manager of
the Overseas Business Headquarters
Accelerating Growth in Overseas Businessthrough Support for the Autonomous Growth ofOverseas Subsidiaries and the Development
and Execution of Medium- to Long-termGroup Strategies

Yoshihiko Takasu

Senior Executive Officer, General Manager of Overseas Business Headquarters

Robust Performance in 2021 Amid Lingering Challenges
In the Overseas Business in 2021 (January–December), sales and income growth were driven by the two major markets of theUnited States and China, where demand for daily necessities has risen sharply due to the pandemic. From the second half ofthe year, it became difficult to procure parts for semiconductors, harnesses and other products in Japan and overseas, achallenge we have yet to overcome.
In the United States, the switchover from storage tank-type water heaters to tankless water heaters (instantaneous water
heaters) is ongoing. In addition to offering low environmental impact and economic benefits, demand for renovations driven by
the movement of people into the suburbs due to the pandemic and rising prices of storage tank-type water heaters provided a
tailwind to sales. In China, online sales of water heaters were strong. While the market is mature, Rinnai products are stillrecognized as a high quality, high value-added brand generating stable sales and income. Although Rinnai performance in bothmarkets is robust, we believe it necessary to continue paying strict attention to social and economic trends, including risinginterest rates in the Unites States and the Zero-COVID policy in China.

Growth Story in Key Strategic Markets
In addition to the fast-growing North American market, the gas equipment market is expected to expand in many Central and SouthAmerican countries, which are attractive markets where Rinnai products and technologies can be utilized. Accordingly, we will also
focus efforts on business in South America, formulating strategies for North and South America as The Americas. One step in thisdirection is the acquisition of Industrias MASS S.A. de C.V., a leading manufacturer of commercial water heaters in Mexico. We expect

Deploying hydrogen water heaters, one option for achieving carbon
neutrality, in countries promoting hydrogen infrastructure

Hydrogen water heater demonstration tests launched in Australia(results announced June 2022)

Initiatives for Realizing Carbon Neutrality
To realize carbon neutrality in the Overseas Business, local subsidiaries are formulating strategies that consider decarbonization
processes in each country based on the Rinnai Group policy RIM 2050. Going forward, we must develop products that do notdepend on household appliances mainly powered by fossil fuels. This is especially critical in key regions where the Group does
substantial business, such as Australia and California (US), where electrification efforts are well underway. To this end, we willclosely monitor trends and respond appropriately. In this period of transition amid the restructuring of primary energy sources, toreduce risks and enable rapid responses, I believe the role of the Overseas Business Headquarters is to benchmark excellent
products from around the world and examine trends among partner companies. Naturally, Rinnai will remain steadfast in its
efforts to advance the development of technologies facilitating decarbonization. In May 2022, we announced the developmentof the world’s first 100% hydrogen combustion technology for residential water heaters. Demonstration tests will begin around
November 2022 in Australia, where efforts are being made to utilize hydrogen energy.

to be able to expand sales of commercial water heaters, as Industrias MASS has many distributors able to provide technical support

Focused on Maximizing Group Capabilities to Become a Company Sought by the Worldand create synergistic effects with Rinnai water heaters.
In China, an affiliate e-commerce website has commenced the opening of physical stores in regional cities. As sales are brisk, we will
focus on this area with the expectation of developing it as a new sales channel. We are also making efforts regarding the sale of kitchen
appliances, which account for about 10% of Shanghai Rinnai sales, with potential to grow much further, amid demands from e-commerce
websites to expand product lineups. In light of this, we are restructuring Shanghai Rinnai and strengthening the Kitchen Business.

In fiscal 2022, the Rinnai Group overseas sales ratio exceeded 55%, and we expect this share will continue increasing. Subsidiaries
have grown thus far through autonomous management, and going forward, we will enhance subsidiary management with the additionof Rinnai Group strategies, providing value that cannot be created by individual subsidiaries alone, while maximizing Group capabilities.
To this end, I believe a mechanism for executing strategies, the development of global human resources and visualization are critical. At
present, we are restructuring these mechanisms and the development of global human resources in a Company-wide effort to achievetargets set forth in the New ERA 2025 Medium-term Management Plan. We are also making advances in terms of visualization throughDX in an attempt to realize relevant and rapid business development. Further, we will establish a platform to share information on local
subsidiaries (management visualization), tools for sharing product information, and a trading system (logistics visualization) facilitatingsmooth logistics and risk avoidance.
Overseas business will play an extremely important role in Rinnai’s future growth, requiring us to work together as a Group andaccelerate business. Despite the challenges involved in tackling new initiatives, we will promote enhanced overseas business
operations to realize sustainable growth throughout the Rinnai Group.

New factory commences operations in anticipation of growing demand in the United States

23

Mexican water heater manufacturer acquired to expand into Central and SouthAmerica (exhibition in Mexico)

Rinnai Report 2022

24

Introduction

Environment

SocialGovernance

Data

Message from the President ofan Overseas Subsidiary
With Growth Slowing in the Chinese Market,
Rinnai Will Focus on Core Businesses and Areas
with High Potential for Development to Realize
Sustainable Growth

Hayao Nishizawa
President of Shanghai Rinnai Co., Ltd.
Display inside a physical store operated by e-commerce
website Tmall

Product display in the Shanghai Rinnai Experience Center

Robust Performance Amid an Environment of Lingering Uncertainty

Initiatives for Realizing Carbon Neutrality

In 2021, the Chinese market rebounded from the slump caused by the pandemic in the previous year, with sales exceeding one million

China has announced that it will reduce its ever-increasing carbon dioxide (CO2) emissions by 2030 and achieve carbon neutrality byunits when the export of core gas water heater products is included, resulting in total sales of more than three billion yuan and the2060, but it has not specified how this will be achieved. In China, once a government policy has been decided, everything moves in that

achievement of all-time high sales and income. 2023 will mark the 30th anniversary of our expansion to Shanghai, where from the very

direction all at once. Companies unable to respond can face massive losses, thus we must keep an eye on these trends. At present,

beginning, Rinnai garnered a reputation for high-quality products that has contributed substantially to robust online sales. In China,

Rinnai products are among the most energy-efficient and environmentally friendly products sold in China, hence we have confidence inhesitancy to make online purchases of products similar those handled by Rinnai has been declining in recent years amid the risingthat respect. In China, certain products require efficiency labeling (class 1–5) indicating energy efficiency and consumption. This

trend of inspecting actual products at mass retailers before purchasing them online through an e-commerce website.

includes gas appliances. Currently, only Class 1 products are acceptable for new construction in big cities such as Beijing, with the

Despite solid results in 2021, performance was greatly impacted in 2022 by pandemic countermeasure lockdowns in Shanghai

efficiency label becoming a guide for highly environmentally conscious consumers. While maintaining the strengths of our products, we

beginning in March and lasting approximately two months. One of the two biggest e-commerce events in China takes place in June,

will continue to closely monitor government policies and responses toward the realization of carbon neutrality from the fall of 2022

making May a critical month for manufacturers in terms of production and sales promotions. Rinnai maintained intermittent production

onward, further enhancing our product lineup.

to the extent possible during these lockdowns, but we were not sufficiently prepared. As the effects of the Chinese government’s
Zero-COVID policy remains an unavoidable risk, we will continue to closely monitor these developments.

Forward-looking Shanghai Rinnai Management Strategy
Rinnai expanded into Shanghai about 30 years ago, during which time Shanghai Rinnai has grown substantially along with the

Growth Story in the Chinese Market

expanding Chinese market. However, for the past several years, growth in the Chinese market has been flat or increased only slightly,

In the Chinese market, given the brisk online sales of water heaters, we will expand product lineups in 2022 by developing lower-cost

indicating that we cannot expect to see the same level of rapid growth going forward. Further, new market entries by companies in the

products that deliver the same performance as existing products. Up to now, it has been difficult to build sales networks throughsame industry are on the rise, and despite Rinnai’s strong business performance, the reality is we are being forced into intense

distributors in regional towns and cities. Recently, e-commerce websites have begun opening physical stores in regional towns andcompetition. Looking ahead, we cannot expect further business growth from existing businesses in China, thus we want to explore

cities. Rinnai started selling products at these stores, where sales have been extremely favorable since their launch in 2021. In regional

new businesses. Up to now, subsidiaries have engaged in autonomous management based on free-thinking. Going forward, we must

towns and cities, physical e-commerce stores are a very promising sales channel that we want to focus on going forward.

determine the ideal positioning for core businesses and the direction of the company from a long-term perspective while cooperating

We will also focus efforts on kitchen products, whichwith the Head Office’s Overseas Business Headquarters. In the future, I hope to play a role in developing the Rinnai Group by making

account for less than 10% of Shanghai Rinnai sales,

choices that can be considered good decisions for Shanghai Rinnai.

presenting an opportunity for further growth. Rinnai’s
partner e-commerce websites are also requesting weenhance our lineup of kitchen products, and in 2022, wewill develop products with expanded functions. To thisend, we restructured our organization and created theStrategic Planning Division in which a business unit wasestablished to facilitate the integration of kitchen productdevelopment, from product planning to sales promotions.
To compete against China’s top kitchen productmanufacturers, we will attempt to differentiate our
products by incorporating sensor technologies facilitating
safety and security accumulated by Rinnai over the years.

Shanghai Rinnai Co., Ltd.

25

Gas water heater

Built-in hob (stovetop)

Rinnai Report 2022

26

Introduction

Environment

SocialGovernance

Data

Identifying Material Issues

We make every effort to identify social challenges affecting the Rinnai Group through day-to-day communication

Material Issue Targets and Results

activities with stakeholders coupled with study and analysis of applicable guidelines and ESG indices. We also
identify CSR material issues through the Rinnai Group value creation process in relation to our management

2022 target

5.95

Material Issues

Main Target Indicators

Energy consumption
CO2 emissions

Amount contributed toreducing CO2 emissions
by using the productWe intend to develop and encourage
households to use water heaters andheating units with an emphasis on energy
savings and environmental performance,
in an effort to reduce energy consumption
and household CO2 emissions.

Target area: Global
Target stakeholders: All

Material Issues

Main Target Indicators

Consumer safety
Improving quality

Number of defects that have
led to product recall
announcements

strategies, revolving primarily around our Corporate Planning Division.

Identification Process● Conduct stakeholder questionnaire withthe aim of reviewing the Rinnai Report● Ascertain matters of interest to
stakeholders based on questionnaire
results and opinions expressed

Step 1

Step 2Outline existingengagement

Review CSR Report,(previous year s
version)● Outline communication activities withstakeholders● Ascertain opinions and matters of interest
to individual stakeholders● Analyze trends such as changing perspectives
on ESG and matters of public interest (Dow
Jones Sustainability Indices, FTSE4Good
Index Series, MSCI, etc.)

Step 3
Analyze international
standards andguidelines

Step 4
Analyze ESG indicesand questionnaires● Analyze sustainability-related
international standards andreporting guidelines (ISO 26000,
GRI G4 Guidelines, etc.)● Determine social challenges relating to the
Rinnai Group, and analyze their level ofimportance to stakeholders and Rinnai● Examine consistency with Rinnai management
strategy and identify CSR material issues

Step 5

Step 6

Study othercompanies

Determine social
challenges and identify
material issues● Study key stakeholders, and material
issues● Analyze methods of reporting
activities related to social contribution

We have determined social challenges relating to the Rinnai Group, analyzed their level of importance to stakeholders and the Group, and identified CSR
material issues.
As a change from the previous year, we have increased the importance level of the item “Work-life balance” to stakeholders and the Rinnai Group by one
level each.
○ Environmental issues

Very high<Importance to stakeholders>High
27◇ Customer issues

7.00

CO2

million tons

2021 results: 5.15 million tons

0

We are working toward achieving zero defects
Target area: Global
by eliminating defects at every stage of theTarget stakeholders: Customers
product lifecycle—from development,
production, and sale through to
obsolescence—and pursue a range ofactivities to publicize information and raiseawareness of preventing accidents in the home.

cases
2021 results: 0 cases◇ Pandemic□ Communicating with suppliers○ Energy consumption○ CO2 emissions◇ Consumer safety◇ Improving quality○ Biodiversity□ Child labor/forced labor□ Support for cultural activities
and the arts

○ Conserving resources/waste○ Drainage□ Industrial relations□ Occupational health and safety□ Protecting privacy◇ Repair and inspection services□ Wages and welfare□ IR communication activities□ Fair trade□ Work style reforms□ Diversity□ Support for school education/
vocational training□ Preventing corruption○ Transport and transfer◇ Enhancing Customer Center
services□ Training and education□ Dividend policy□ Surveying and evaluating suppliers<Importance to the Rinnai Group>

The Rinnai Group is participating in the Sustainable Development Goals (SDGs) set at the United Nations Summit in September 2015 and its actively
works to contribute to them. As Rinnai provides society with products that are closely related to the global environment and people’s lives, it recognizes
the importance of SDGs and will further develop its business with this focus.

The Sustainable Development Goals (SDGs)□ Other issues◇ Health◇ Housework time reduction□ Stable procurement□ Work-life balance○ Waste○ Harmful chemicals

High2025 target

Toward the achievement of a sustainable society

Determining and Identifying Material Issues

Classification of Issues

million tons

◇ Marketing communication

Very highSDGs Related to Rinnai
Goals

Contributions

Goals

Contributions

Promoting health through the hot bath effect ofbathing in microbubbles and the prevention of heatshock using bathroom heaters

Contributing to the global environment with moreenergy-efficient water heaters

Equalizing housework burdens with time-saving
products such as stoves equipped with an automatic
cooking function, clothes dryers and dishwashers

Contributing to secure lifelines during natural disasters
with hybrid water heaters

Contributing to water resource conservation withdishwashers

Implementing climate change countermeasuresthrough the spread of efficient water heaters

Rinnai Report 2022

28

Introduction

Environment

SocialGovernance

Data

Environment
Rinnai Group’s Path to Becoming Carbon-Neutral (announced November 2021)
Development of technology for 100% hydrogen combustion and development ofhydrogen equipment

Rinnai
Innovation
Manifesto 2050
Rinnai’s Roadmap through to 2050

Our products: Composition of energy used (%)

100%

Low-carbon society

Products supported by Rinnai
Carbon-free society (carbon neutrality)
Expansion of hydrogen
infrastructure

Concept model of hydrogen water heater

Hydrogen(Hydrogen combustion
appliances)Hydrogen combustion
equipment

Proliferation ofrenewable energy

Renewable energy(Hybrid and electric appliances)

Eco Jozu
Expansion of cleaner
fossil fuels

Water heater withheating system

Water heater withbath-filling system

Hybrid water
heater withheating system
Heat pumps(Electrical equipment)

Carbon-free gas(Gas appliances)

Fossil fuelsGas appliances

Continued use of existing equipment

2020

2050

Worldwide CO2 emissions: Zero by 2050

through methanation and propanation(Energy-saving equipment)

We will continue to promote the Eco Jozu high-efficiency hot-water units currently sold in Japan, move toward a lowcarbon society and respond with conventional products in line with trends in the fuel industry toward decarbonized gas(methanation and propanation).
Meanwhile, we will systemize hybrid water heaters, which are still being sold, to achieve net zero CO2 emissions,establish technologies for combustion equipment compatible with hydrogen infrastructure, and create a structure that is
in alignment with various external environments.

Rinnai has succeeded in developing 100% hydrogen combustion
technology for residential hot water heaters. Hydrogen is in demand as aclean fuel with zero CO2 emissions. The risk of explosion and unevencombustion, which had been considered problems, have been cleared andsuccessfully developed by making full use of the combustion and fluid
control technologies that Rinnai has long accumulated in the developmentof gas appliances.

We plan to conduct demonstration tests for thecommercialization of hydrogen water heaters in Australia, where
the realization of a hydrogen society is in progress. We willdevelop products and technologies in line with energy policies
and infrastructure expansion in countries around the world.
“Hydrogen House” planned for demonstration in Australia

Widespread use of high-efficiency water heaters and systems
using renewable energy sources
We aim to sell 300,000 units of
ECO ONE hybrid water heaters
annually by 2030.

Energy management systems combining solar power
generation, storage batteries, and ECO ONE willcontribute to decarbonization.
Photovoltaic
panelsECO ONE
StoragebatteryLife cycle of Rinnai products
Business activities

Percentage of
CO2 emissions

When products are used

Related to partsprocurement

Development/
production

Logistics

Product use

Final disposal process

4.8%

0.1%

0.05%

95.0%

0.03%

Main investments aimed at achieving carbon neutrality 

CO2 Emissions Targets
2020

2030

2050

2020

2030

2050

Domestic

30,000 t/CO2

15,000 t/CO2

Zero

16.8 million t/CO2

12.6 million t/CO2

Zero

Global100,000 t/CO2

50,000 t/CO2Zero

45 million t/CO2

−

Zero

(Figures of overseas products are rough estimates.)

In the life cycle of Rinnai products, approximately 95% of CO2 is emitted during product use, and Rinnai recognizes that it
must develop products that achieve low carbon and decarbonization because of their large environmental impact.
In Japan and overseas, we will promote environmental contribution activities with the goal of achieving zero CO2emissions by 2050.

29

Projected investment (5-year cumulative)

Product
development

Expansion of Innovation Center
Investment in hydrogen combustion equipment, heat pump equipment andother next-generation technologies¥30 billion or more

Manufacturing

Switch to renewable energy and non-fossil-fuel facilities
Switch to green power¥15 billion or moreECO ONE sales promotion (Japan)
Spread of energy-saving water heaters (global)¥5 billion or more

Sales

We plan to invest ¥50 billion or more in carbon neutrality over a cumulative five-year period.

Rinnai Report 2022

30

Introduction

Environment

SocialGovernance

Data

Environment

Responses to the Task Force on Climate-related
Financial Disclosures

Strategy
As a company that handles heating equipment, we understand that climate change is an important issue, and we assume
that climate change will have an impact on Rinnai’s business. We are also considering what actions are necessary toaddress the changes ahead and what the financial impact could potentially be.
ProfitImpact(Amount/
Duration)

Degree ofurgency

Convert to recyclable
materials¥(11.0)billion/
year

Small

Reduce procurement
costs throughindependent efforts¥(1.0)
billion/
year

Small

¥(0.5)
billion/5 years

Small¥(5.0)
billion/year

Medium

Impact on Rinnai

Raw material
procurement risks
associated withclimate change

Transition risks

With the aim of creating a virtuous circle of the environment and the economy which assumes a sustainable company,
Rinnai expressed its support for the recommendations issued by the Task Force on Climate-related Financial Disclosures(TCFD), a taskforce established by the Financial Stability Board (FSB). We are promoting the disclosure of the financial
impact on the Company caused by climate change and our approaches to resolve these issues.

Governance
ReportLeadership
Team

Risk Management
Committee

Report

ESG Committee

ReportSharing of
ESG Matters

ISO14001

Risk of procurement cost increases
in line with raw material costs thatare passed on through carbon
pricing (carbon taxes andemissions trading) to suppliers ofmaterials that emit large amounts ofgreenhouse gases.

Risk of impending necessity ofmeasures for replacing
conventional products amid
movements toward requiring
different methods than in the past
for consumers to realize theintended use of water heaters using
fossil fuels due to the transition fromthe conventional concept of a“low-carbon society” focused onenergy and resource conservation
to the long-term concept goal of a“decarbonized society.”

Physical risks fromnatural disasters—

Risk of increased
operating costs—

Opportunities

Rinnai’s risk management is led by its Risk Management Committee. The committee periodically updates Rinnai’s risk
profile including risks associated with climate change and manages risks by classifying them according to frequency ofoccurrence and level of impact.

In its approach to climate change risks, Rinnai has prioritized “improving energy efficiency and developing popularizing
environmentally conscious products that achieve this.” Rinnai is working to manage climate change risk by setting“energy consumption and CO2 emissions” as material issues and the “amount contributed to reducing CO2 emissions byusing the product” and “sales target for environmentally friendly products” as its main target indicators.

(Impact on Rinnai if the temperature rises
by 4°C)Gas water heater
regulations in line withfossil fuel regulations

Risk Management

Metrics and Targets(What Rinnai will do to keep the increase intemperature below 2°C)

Risk that the sale of water heaters
potentially using large amounts ofwater resources will be restricted asa result of global water shortage
problems.

Operation andEnvironment Management Management
Committee

4°C scenario*

Water heater
regulations as a resultof water resource
depletion

ESG Working

Physical risks

Rinnai reports on environmental issues tomanagement through the Risk Management
Committee, ESG Committee, andEnvironmental Management Committee.
The ESG Committee has an ESG Working
Group to handle day-to-day improvement
activities. In addition, Rinnai is promoting
initiatives related to risks and opportunities
associated with climate change andreporting to management through theoperation of ISO 14001 with the Environmental
Management Committee as the secretariat.

2°C scenario*

Adoption of energysaving water heaters
in line with tightening
environmental
regulations (CO2)

Current “low-carbon society”
initiatives require higher efficiency
energy-saving water heaters.
Additionally, the advance oftechnologies such as decarbonizedgas for realizing a “decarbonizedsociety” will require more efficientenergy-saving water heaters than in
the past.

Adoption of gas
boilers in line withtightening
environmental
regulations (PM 2.5)

In areas where coal boilers areused, gas boilers that do not
generate PM 2.5 will be required.

——

Rinnai’s response or
impact on Rinnai.

Develop water heaters
able to restrict theamount of water used.

Ascertain changing
conditions related toenergy while developing
and establishingtechnologies focused on
essential products.
—

Risk of supply chain distribution
disruptions due to the impact ofnatural disasters (floods, torrential
rains, water shortages and otherevents).

Enhance response
capabilities with business
continuity planning (BCP),
including decentralizedmaterials procurement
sources and production
bases.

¥(0.4)
billion/year

MediumRisk that air conditioning andcooling equipment operating costs
will increase due to a rise in averagetemperatures.

Promote the introductionof residential power
generation throughsustainable energy andother measures.

¥(5.7)
billion/5 years

Small

¥6.0
billion/year

Medium

¥6.0
billion/year

MediumPromote the expansion of
product lineups and salesof more efficient energysaving water heaters.
——

Target areas whereenvironmental regulations
have not yet tightened,
expanding the adoptionof products
corresponding to usage
environments in thoseareas.

* 2°C and 4°C scenarios
Scenarios used in the Fifth Assessment Report (released in 2014) of the Intergovernmental Panel on Climate Change (IPCC), which estimates the impacts of approximate 2°C and
4°C temperature increases due to global warming.

31

Rinnai Report 2022

32

Introduction

Environment

SocialGovernance

Data

Environment

Global Deployment of
Rinnai Group Water Heaters

Initiatives at Shanghai Rinnai (China)
In China, sales of gas water heaters and gas boilers with highenvironmental performance and convenience are increasing due
to the improved standard of living, which makes it easier for more
people to purchase convenient equipment, and an expanding
gas pipeline network to achieve a low-carbon society. Compared
to coal-fueled boilers and tank-type boilers that store water andboil water, gas water heaters are highly efficient and cancontribute to the environment. Shanghai Rinnai aims to reduce
environmental impact by promoting their widespread use.
As consumer behavior is changing in China, an increasing
percentage of water heaters are being purchased on line. While
expanding its internet sales channels, the company is also
leveraging Rinnai’s brand image of high quality and performance
to increase sales. In addition, in preparation for increased local
demand, the company plans to expand its production factory
located in Fengxian District of Shanghai, with the aim of
spreading the use of environmentally friendly products.

The Rinnai Group widely develops water heaters for use in Japan as well as overseas, engaging
in business deeply related to global warming and energy consumption. Viewed in another way,
the development and adoption of more highly efficient water heaters will enable the realizationof substantial reductions in adverse environmental impacts.

Source: Compiled by Rinnai from
US Air Conditioning,
Heating, and Refrigeration
Institute (AHRI) statistics(Thousands)
12,00012%

10,00010%

10.3%

Tank water heaters

8,000

8%

6,000

6%

4,000
2,000

4%

3.5%

Tankless water heater ratio

2%

Tankless water heaters0

Tankless water heaters ratio

Water heater shipmentsin the US market

Water heater shipments in the Unites States

Rinnai America Corporation Initiatives

0%2007 2008 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Of the approximately 10 million units shipped annually in the US water
heater market, more than 90% are tank-type units with low thermal
efficiency. However, there is a gradual shift to tankless water heaters
with high thermal efficiency. Rinnai America is reducing the impact on
the global environment by promoting the widespread use of efficienttankless water heaters.

Image of factory expansion at Shanghai Rinnai

Global development of products that contribute to the environment
We aim to reduce environmental impact globally by deploying high-efficiency
water heaters, boilers, and solar systems not only in the US and China, butalso around the world.

United States
China

Tankless water heater

MexicoCommercial water heating system

BoilerAssembly line at Griffin FactorySouth Korea

Water heater(instantaneous, IoT)

Environmentally friendly boiler

United Kingdom

BrazilItaly

In April 2022, mass production of tankless water heaters began at Rinnai America’s
Griffin Factory. This will be the first Rinnai America plant to operate as a companyowned local production facility. Previously, Rinnai America operated from a leased
plant in the same city of Griffin and a warehouse in Peachtree City, but now the new
Griffin Factory has assembly and warehouse wings that consolidate the functionsof the other facilities. We will strive to further promote the use of tankless water
heaters by boosting local production capacity.
Scene from factory employee training

33

Tankless water heater

Tankless water heater

New ZealandAustralia

Tankless water heater

Tankless water heater

Solar system

Rinnai Report 2022

34

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Impact within Rinnai’s Value Chain

Rinnai promotes environmental impact reduction initiatives through the value chain (see Note 1) in consideration ofsocietal demands and impact on the environment.
Note 1: A series of business activities and value creation processes that companies conduct to provide customers value in the form of products and services.

Rinnai’s Value Chain

Demands and Expectations
from Society(Overseas/Japan)

INPUT
Main resources consumed(Raw materials and energy)

Procurement

Development and Manufacturing

Sales, Logistics, and Services

Product Usage

Disposal

Handling procurement risk
through the supply chain• Increased demand for heat-energy
appliances mainly in the Asia region• Support for international frameworks
such as the Paris Accord and otherenvironmental regulations

Provision of household appliancesthat contribute to energy-efficient
homes such as Net Zero Energy
HousesPromotion of energy efficiency in the“use stages” with the largest amountof CO2 emissions in the productlifecycle

Promotion of activities that
contribute to building recycling
societies, including compliancewith plastic regulations

Raw materials
Iron, copper, stainless steel, brass,aluminum, plastics, rubber, etc.

EnergyWater• Energy; 1,133,492 GJ• Ground water: 234,501 m3

EnergyWater

EnergyWater

EnergyWater• Public water: 551,311 m3

CO2 Emissions (Emissions Ratio)

OUTPUT

883,457 t(8.93%)

Rinnai’s environmental impact—

Initiatives Rinnai conducts
through business

Solid waste(Includes valuable substances)

Wastewater

26,643 t 753,842 m³

Supply chain management

Pursuit of environmental
performance and streamliningof manufacturing processes

Procurement: We work with suppliers topromote improvement activities
that make the flow of products,from parts procurement tocommercialization, better.

Development: Develop products with superior
environmental performancethat meet the climate andneeds of the region

Rinnai’s estimates based on the “Basic Guidelines for Calculating Green House Emissions Through the Supply Chain”[Target scope] Development/manufacturing: Rinnai Corporation and consolidated subsidiaries
Procurement, sales/logistics/services, product usage/end of life treatment: Rinnai Corporation[Target period] Domestic: Fiscal 2022 (April 2021–End of March 2022)
Overseas: January 2021-End of December 2021
[CO2 emissions (units)]: t/CO2e, (%) represents the emissions ratio within each process.

35

35,941 t (0.36%)
Scope 2 67,987 t (0.69%)
Scope 1

Manufacturing: We are pursuing efficient processes,
minimizing invested resources andenergy, and promoting activities that
contribute to emission regulations
for CO2, waste products andchemical substances.

8,953 t(0.09%)—
Spread of environmentallyfriendly products
Sales: Strive to spread products that
contribute to energy efficiency inthe water heater and heating fields
Logistics: We are promoting logisticalstreamlining.
Services: Elevate the Rinnai brand withsecurity activities through a wealthof service maintenance andinspections

Scope 3 (Category 11)

6,109 t8,846,480 t (89.39%)(Concerns emissions from Japanese water heaters)—(0.06%)—

Proposal of reasonably
achievable ecological lifestyles

Promotion of environmentallyconscious design

Product Usage: We are teaching customers the environmental
Disposal: Application of design for thefriendliness of our products and promoting theirenvironment, e. g., to makeecological use through Company-sponsored
products easy to disassemble
product events.
in accordance with product
Proposal of sustainable, comfortable, and green
assessment standards
lifestyles through use of energy-saving products
Through various events, we will emphasize to allof our end users the environmental
performance of our products and how to usethem with the environment in mind.
The indicators marked □ have received third-party assurance by LRQA Limited.

Rinnai Report 2022

36

Introduction

Environment

SocialGovernance

Data

Environment
Environmental Initiatives

Environmental Management
Promotional Framework for Environmental Activities

Rinnai promotes green activities involving every employee in all business areas.

Basic Philosophy on the Environment

Environmental Slogan

Rinnai’s basic philosophy is to embrace environmental
protection on a global scale and contribute to society
through the pursuit of excellent, people- and planet-friendly
technologies, and product development, production, sales,and services infused with a sense of humanity.

Our actions are imbued with the wisdom of many andundertaken with due consideration for the sustainabilityof a people- and earth-friendly environment.

Environmental Policy
At Rinnai, we promote environmental conservation activities based on the following policies in accordance with our Basic
Philosophy on the Environment and Environmental Slogan.
1. W
 e will promote activities to protect the environment by accurately identifying the effects that heating appliances,including hot-water units, kitchen appliances and room heating appliances, as well as associated product development
and production activities and sales and service activities have on the environment and by establishing environmental
objectives and targets as well as programs that consider biodiversity, prevent environmental pollution, mitigate theeffects of climate change and adapt to climate change, and reduce environmental impact.
2. We will abide by environment-related laws and regulations in addition to our own self-established standards.
3. We will conduct eco-minded materials procurement (E-Procurement) and manufacture environmentally conscious
products (E-Products) at environmentally sustainable factories and offices—E-Factory and E-Office—underpinned bya high level of environmental awareness among employees (E-Mind), and through product sales and service activities
that minimize impact on the environment (E-Marketing and E-Service), we will implement initiatives to prevent global
warming—that is, save energy—and also effectively utilize resources, reduce waste and boost recycling, while working
with communities and contributing to society.
4. W
 e will set up a review committee at the management level and implement internal environmental audits, and we will
maintain a self-monitored environmental management system and strive for constant improvement.
5. We will make this environmental policy known to employees and all people who work within our organization anddisclose content to all stakeholders, that is, any interested parties.
March 28, 2016 Rinnai Corporation Representative Director and President and Executive President

Promoting 7E Strategic Initiatives in All Divisions

1

Hiroyasu Naito

Develop and provide environmentallyconscious products
5

As a manufacturing company, Rinnai is advancing detailed
7E strategic initiatives in each division and all productlifecycle processes (development, procurement, production,
sales, usage and disposal).
Link: destination: Data Book Environmental Data, 7E Strategic Initiatives

37

2

Promote green procurement

3

Promote activities
with reduced
environmental
impact4

Sell environmentallyconscious products;
Encourage customers
to be moreenvironmentally aware

E-Products(Products)
E-Service
E-Procurement (Installation(Procurement) and repair)
E-Factory(Factories)

E-Office(Offices)
E-Marketing(Sales)ac

E-Mind (Employees)tartivi B usin
al
tie s
e
m e nt e c
a s w hs s and enviro nc o r p o rat
e e l s of s a m e

Emphasize
environmentallyconscious installation
and repair services

6 Promote activities with

reduced environmental
impact at our offices

7

Improvement of
our employees’
environmental
awareness andpromotion of social
action programs
through environmental
education

Headed by the President, the Environment Management
President
Committee guides corporate efforts. This committee isEnvironment Management Committee
chaired by the executive officer responsible for the
Chairman of the Committee: Executive officer in charge of environmental issues
Bureau: Environment Divisionenvironment and has the participation of representatives
from all divisions. Its mandate is to promote environmentEnvironment Management Council
oriented activities from a “big picture” perspective.
The Environment Management Committee discusses
and decides important items including basic environmental
Head
Marketing &Logistic Control Office
Production Engineering
Factories
OfficeSales Headquarters
Parts Centers
Headquarters
policies, targets and medium- to long-term plans. The
Environmental Management Promotion Systemcommittee thoroughly informs individual divisions ofdecisions made by the committee and promotes concrete activities in line with annual plans. We review our objectives asnecessary and diligently strive to meet our targets quarterly. To perform specific activities, each division has a liaisongroup and holds routine meetings to make issues known to everyone in the respective division and continue
improvement activities.

ISO 14001 Certification
To conduct environmental conservation activities in an organized and ongoing basis in line with Rinnai’s Basic Philosophy
on the Environment and Environmental Policy, Rinnai promotes environmental management and works to boost its
environmental performance through the acquisition of ISO 14001 and other certifications related to environmental
management systems.
Link destination Data Book Environmental Data Page 123 Status of Acquisition of Certifications

External and Internal Environmental Audits
Rinnai undergoes a routine annual audit by an external screening
and registration body to verify that its environmental management
system is being properly applied. Regarding internal audits, theaudit team is composed of auditors selected from throughout theCompany with a neutral perspective in that they are not directly
affiliated with any of the departments to be audited. They audit
other departments for compliance with the environmental
management system and with any revisions to environmental
regulations as well as for the content of their activities.
We have confirmed that external and internal audits are
conducted through an annual PDCA cycle.

External Environmental Audits

Rinnai Report 2022

38

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Training

Environmentally Conscious Design (Product Assessment)

To promote environmental activities, it is important for all employees to have an environmental mindset. Rinnai
implements practical training for persons in charge and general training at each level of the organization.

Rinnai implements product development with a focus on the environment from the planning and design phases based on
its product assessment guidelines. We are developing equipment with a lower impact on the environment than preceding
models by reducing the amount of raw materials required and considering recycling in designs, such as structural designs
that facilitate disassembly.
With regard to the use of plastics in our products, we have set a goal to make new products lighter and with a smaller
footprint than previous models as outlined in these guidelines. At the same time, we endeavor to consider how the
product will be taken apart, such as minimizing the use of dissimilar materials in adhesive parts, which are difficult todisassemble. In our packaging design, we use packaging made from easy-to-recycle cardboard, and are also expanding
our use of returnable packaging to promote the reuse of packaging materials and are reducing the weight and volume ofpacking by making more effective use of packaging components.

Training for Internal Auditors

Our internal auditors play a key role in the ongoing enhancement of our environmental management systems.
Implementing audits demands a high level of expert knowledge and communication skills. To raise the skill level of
its internal auditors, Rinnai holds regular training sessions led by in-house trainers on laws and regulations, internal
policies, and issues identified and corrective actions from internal audits.
General Training

Aiming to promote environmental contributions in its core businesses, Rinnai’s general training incorporates
various programs to raise environmental consciousness targeting newly hired employees according toemployees’ roles and ranks.

Compliance with Legal Regulations
While compliance with legal regulations is a given, Rinnai sets more stringent voluntary standards and engages in daily
supervision, conducts periodic measurements and implements thorough environmental audits. We are working on thecreation of a rapid response mechanism to prevent recurrence in the unlikely event that a violation or complaint wereto occur.
In fiscal 2022, values exceeding voluntary biochemical oxygen demand (BOD) standards were detected inwastewater at some manufacturing sites. We investigated the root cause, implemented measures to ensure proper
management. Subsequent water quality analyses confirmed that values were within voluntary standards without
further problems.

39

Environmentally Conscious Design Policies• Conservation of resources• Reduce environmental impact at the manufacturing stage• Reduce environmental impact at the usage stage• Potential for recycling• Safety• Ease of collection and transport

Supply Chain Management
Amid rapid changes in the social environment aimed at realizing a sustainable society, to continue doing business into
the future, Rinnai must contribute to the environment both as a Group and through the supply chain. In addition tocommunicating Rinnai’s green procurement policies to our suppliers, through daily exchanges, we promote
improvements that contribute to environmental management and lead to reduced greenhouse gas emissions.
In recognition of these efforts, in fiscal 2022 Rinnai received a rating of “A-” in the Supplier Engagement Rating
conducted by CDP, an international non-profit organization that addresses climate change and other environmental issues.

Rinnai Report 2022

40

Introduction

Environment

SocialGovernance

Data

Environment

Prevention of Global Warning
Major changes in climate patterns due to global warming and other factors are threatening the building of

The Challenge of Zero CO2 Emissions from Factories and Offices

sustainable societies.
Rinnai will formulate long-term targets focused on 2050 and work toward minimizing energy consumption.

Formulated and Announced Commitment to Carbon Neutrality by 2050
To realize carbon neutrality in household heat utilization, we must undertake measures based on national policies, atheme closely connected to operators of energy infrastructure-related businesses.
In November 2021, we formulated and announced our commitment to carbon neutrality called Rinnai Innovation
Manifesto 2050 (RIM 2050) as a corporate policy, setting 2050 as the target year.
By shifting the target metric to “actual reductions,” we will promote the establishment of technologies as a company thatcan provide value in heat utilization to consumers in any era while working toward the realization of a decarbonized society.

Rinnai aims to achieve zero CO2 emissions from factories that manufacture products and offices including the Head
Office and sales offices. Among greenhouse gas emissions, we will target Scope 1 and Scope 2 emissions, and in
addition to reducing CO2 emissions through daily manufacturing improvements, Rinnai aims to achieve zero CO2emissions in 2050 through the proactive transition to green electricity among other efforts.
Main indicators

Examples of potential approaches for achieving these goals•D omestic bases will be converted to green electricity by2030•O verseas bases will be converted to green electricity by2050• Promote zero energy through karakuri1 improvements• Thoroughly eliminate waste by minimizing processes andlines of flow
• Promote renewable energy through the electrification ofequipment, etc.

News release: Announcement of “Rinnai Group’s Path to Becoming Carbon-Neutral” (URL: https://www.rinnai.co.jp/en/releases/2021/1105/index_3.html)


1. A simple mechanism that uses gravity rather than a motor or other electrical power source that is useful when transporting parts.

The Challenge of Zero CO2 Emissions from Product Usage
Amid global movements to curb rising temperatures, Rinnai views these efforts in terms of risks andopportunities as it takes on the challenge of realizing zero CO2 emissions from product usage by
2050. Looking at the lifecycle of our products from procurement to disposal, CO2 emissions during
use account for more than 95% of our total emissions. This makes it necessary not only to evolve
our existing energy-saving products such as high-efficiency water heaters with latent heat recovery
and the ECO ONE hybrid water heater and heating system, but also to ultimately create products
and systems that emit no CO2 at all. In anticipation of a full-scale decarbonized society in the future,
we will continue to develop and research combustion equipment that is compatible with hydrogen
infrastructure and systems for net zero CO2 emissions. Furthermore, toward the closest annual
target of 2025, we will continue to work on a global scale to achieve the “CO2 reduction contributionof 7 million tons,” as stated in the New ERA 2025 medium-term management plan.

Case Study: Promoting the Use of Renewable Energy at Each Worksite

World’s first 100% hydrogen (CO2free) combustion technology forresidential water heaters(announced in May 2022)

News release: World’s first 100% hydrogen combustion technology for residential water heaters (URL: https://www.rinnai.co.jp/en/releases/2022/0530/)

Most Recent Awards for Environmentally Conscious Products
Hybrid heating/cooling and water heater systems for cold regions
June 2022

Heat Pump & Thermal Storage
Technology Center of Japan(HPTCJ) Promotion Award

Demand-Side Management Award for 2022
(Organizer: Heat Pump & Thermal Storage Technology Centerof Japan (HPTCJ)

March 2022

Excellence Award

2021 Energy Saving and New Energy Grand Prize in Kitaguni(Organizer: METI Hokkaido Bureau of Economy, Trade andIndustry)

January 2022

Energy Conservation Center
Chairman’s Award

2021 Energy Conservation Center Grand Prize(Organizer: The Energy Conservation Center, Japan)

At each of our worksites, we are using the construction of new buildings andupdating of facilities as opportunities to install renewable energy equipment,such as solar panels. Notably, our subsidiary RB Controls, Co., Ltd.
converted to a renewable energy-derived electricity menu in April 2022, ineffect sourcing the electricity used at its head office from 100% renewableenergy. In addition, the head office building at this site has been expanded
as a net zero energy building (ZEB), certified with environmentallyconscious building specifications.

Also Taking on the Challenge to Achieve Zero CO2 Emissions
Outside of Product Use under Scope 3

In addition to CO2 emissions from product use, we believe there is room to reduce CO2 emissions from procurement ofmaterials and parts, logistics, human movement, and disposal, with the aim of mitigating the risks associated with climatechange. We will promote optimal energy-saving and CO2 reduction activities in each process and take on the challengeof achieving zero CO2 emissions under Scope 3. Specific plans for 2030 and beyond will be developed and discussed
within the RIM 2050 Council with a view toward achieving a decarbonized society in 2050.
Examples of potential approaches for achieving these goals
Procurement

Hybrid heating/cooling and water heater systems
October 2021

41

Energy Saving Division
Grand Prize

2021 Hokkaido Government Energy Saving / New Energy
Promotion Grand Prize (Organizer: Hokkaido Government)

Installation of solar panels in house

Enhance and promote environmentally friendly initiatives with an insistence on procuring materials andparts alongside business partners, etc.

Logistics

Strengthen CO2 reduction efforts that expand the scope of improvements to include logistics andsuppliers, etc.

DisposalPromote comprehensive recovery schemes within construction and operations, etc.

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Introduction

Environment

SocialGovernance

Data

Environment

Resource Recycling
From the perspective of intergenerational equity toward the creation of a sustainable society, there is a requirement

Industrial Waste Processing

to consume resources only to the extent that the resource needs of future generations may be met. Rinnai is
working to reduce the amount of waste generated (including valuables) in its business activities and develop
resource-saving products as well as reducing the amount of clean water and groundwater used.

Waste Generation Control and Zero Emissions
Rinnai continues to engage in reducing waste generation and zero emissions1 (zero landfill waste) efforts, maintaining a
recycling rate of 99.5% or higher. Although we assume raw materials used in the manufacturing process are used without
waste, we nevertheless make every possible effort to recycle unwanted materials that are generated.
1. Rinnai manufacturing site zero emissions definition: Recycling rate of 99.5% or higher (less than 0.5% landfill waste)

Primary Initiatives

Manufacturing• Lightweight design (reduced material
usage)• Increasing yields by raising the effective
utilization rate for pressed components(measures aimed at the root cause)• Effectively using leftover materials• Reducing defect rates• Raising the recovery rate of residual
chemical agents• Making transport materials returnable• Eliminating excessive packaging, other

OfficeBoth• Promoting a shift to paperless work
processes through digitaltransformation (DX)• Curtailing the use of disposable andconsumable materials• Raising awareness by letting
employees see how many copies they
make and how much they cost•Improving the accuracy of material
separation• Consigning industrial waste processing
to a reputable vendor, etc.

When reaching agreements with waste processing subcontractors,
Rinnai conducts strict inspections involving elements such as theirfinancial condition and on-site confirmations. In addition, we visit our
processing subcontractors each year to verify that they are
conducting appropriate waste disposal. Once there, we confirm how
manifests that contain information regarding different varieties ofwaste, their disposal methods, and processing statuses are being
administered. We also conduct on-site confirmations regarding
waste processing and exchange relevant information with thesubcontractor.
In fiscal 2022, the Company visited 37 locations to verify thatproper waste management was being conducted.

Regular patrol at waste treatment plant

Management of Polychlorinated biphenyl (PCB) Waste
The Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes requires that companies suchas Rinnai upgrade their storage of PCB, a substance used in transformer oil, and dispose of it by the end of March 2027.
We are promoting measures aimed at expedient disposal. Until PCB disposal is complete, the Company will implement
leakage prevention measures in preparation for possible equipment failures during storage. We also diligently secure
facilities to prevent loss and conduct proper labeling.

Initiatives in Resource-Saving Design
As one facet of environmentally conscious product development,
CAE analysis was used in the design of a dishwasher/dryer to create
the lightest water tank in the industry. At the same time, we arecontributing to energy savings in molding through improvementsthat shorten cycle time during production.

Case Study: Reuse of Used Waste Acid
To improve resource recycling in factories, it is important to establish a system totreat or reuse all waste within the same factory, instead of sending it externally forprocessing. Our subsidiary Noto Tech Co., Ltd. has developed a technology thatenables in-house treatment of waste acid that has been generated in enamel
production lines without outsourcing the treatment. In addition, Noto Tech is
improving its technology so that it can be reused as coagulants at wastewater
treatment plants, contributing to significant reductions in waste and costs. This initiative
received the “Governor of Ishikawa Prefecture Award,” the most prestigious award in
the 2022 Ishikawa Prefecture Award for Creativity and Ingenuity in the Workplace.

Wastewater treatment facility

43

Dishwasher/dryer

Initiatives to Improve Packaging

Annual impact: Waste liquid -9 tons
Link: Noto Tech receives Governor of Ishikawa Prefecture Award (URL: https://www.nt-k.co.jp/)

Annual impact: Mass reduction rate: -360g/unit (-10%)
CO2 emissions reduction -5 tons (-10%)

Award ceremony

Rinnai uses packaging made from easy-to-recycle cardboard, while also expanding the use of returnable packaging topromote the reuse of packaging materials in an effort to reduce the weight and volume of packing by making more
effective use of packaging components.

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Introduction

Environment

SocialGovernance

Data

Environment

Recycling Initiatives

Concern for Water

At least 80%–90% of the materials used to make gas appliances consist of recyclable materials such as iron and copper.
Gas appliances that have reached the end of their useful lives are collected and disposed of through two channels: by
local authorities in the case of appliances that require no installation work, and by contractors in the case of appliancesthat do require such work. The Environmental and Recycling Action Committee formed by the Japan Industrial
Association of Gas and Kerosene Appliances, of which we are a member, regularly surveys the state of disposal of endof-life gas and oil appliances. Thus far, the committee has conducted examinations in various formats, including
questionnaires, verification testing at recycling plants and processing condition confirmation. Through these efforts, thecommittee has confirmed that used gas and petroleum equipment has been properly disposed of and that the recycling
rate has been maintained at a high level.

Rinnai recognizes water as a critical resource and is
working to reduce its usage of both public water andgroundwater in its business activities. In addition, we
endeavor on a daily basis to save water and use
circulating water while undertaking thorough drainage
water management to ensure the water used does notharm the environment.

Primary Initiatives to Reduce Water Usage• Improving awareness of water-saving (banning leaving
faucets running, etc.)• Utilizing rain water• Using water-saving functions at facilities that use water• Creating and using frameworks to increase the volume
of circulating water(Utilization of treated wastewater in office toilets, etc.)

Case study: Water Circulation and Reuse

Recycling Home Electrical Appliances
Japan’s Home Appliance Recycling Law went into effect in 2001 with the goals of reducing the amount of waste going tolandfills and incinerators and to promote more effective use of resources. Since then, old appliances thrown out by
consumers have been recycled into new products. Rinnai now has two products—a unit-style air conditioner and aclothes dryer—that fall under the category of recycled products.

GASTAR Co., Ltd., a Rinnai subsidiary, has established a system
to recirculate water returned from assembly and inspectionlines. It is using this water for flushing toilets and other purposes,
thus reducing the company’s water usage by roughly half.
Annual impact: Water saved: -19,000 m3 (-40%)

Report on Recycling Specified Household Appliances (link: https://www.rinnai.co.jp/csr/result/index.html) (in Japanese only)

Recycling Containers and Packaging
Water circulation system cooling equipment (left)

Under the Containers and Packaging Recycling Law, which seeks to make more effective use of resources,
manufacturers and businesses that use the products are required to recycle product containers and packaging discarded
by households. In accordance with the law, Rinnai has outsourced the recycling of containers and packaging todesignated businesses that undertake associated services on the Company’s behalf.

Assessing and Understanding Water Risk
As the world’s population increases and urbanization and industrialization continue to progress, there is concern thathumanity may face water shortages. To respond to business risks associated with water, Rinnai is identifying businesslocations with high water risk both domestically and internationally using a water risk assessment tool known as
Aqueduct* and sharing the results of analyses performed with the tool. Rinnai, while focusing on the risk conditions
in each region, views reducing water usage as an opportunity to cut manufacturing costs and is working to mitigate waterrisk while also reducing manufacturing costs. In addition, Rinnai is working to protect water resources in its supply chain inrecognition of the impact water shortages can have on materials supplied by business partners.
We have therefore set criteria related to water resources in the Green Procurement Standards Guide, which outlines
the environmental activities that we ask our business partners to participate in.

Initiatives to Recycle Materials Used in Uniforms
Rinnai subsidiary RB Controls Co., Ltd. has collected and reused uniforms inconjunction with the renewal of its uniforms. Uniform collection boxes were
installed at each site, and the collected uniforms were crushed and turned into
cotton using a dedicated machine. The material is then used for vehicle interior
parts and other purposes.

* Aqueduct: A water risk atlas and information tool provided free of charge by the World Resources Institute (WRI)

Annual impact: W aste emissions: -2 tons (-100%)(equivalent to the interior materials for 360 vehicles)
Uniforms being collected

45

Cotton-like state after crushing

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Introduction

Environment

SocialGovernance

Data

Environment

Pollution Prevention
Some chemical substances can have a negative impact on ecosystems and human health if they are not managed

Main Initiatives

appropriately and accumulate as environmental pollution over long periods of time. Aiming to minimize the use ofchemical substances that may affect people and global environments (atmosphere, water areas, and soil), Rinnai
conducts management in accordance with both customer demand and each individual country’s regulations
throughout the lifecycles of its products.

Manufacturing-related• Introduction of environmentally friendly painting equipment in line withconstruction of a new factory• Optimization of piping routes for color change valves and paint guns
• Review of processing oils, otherPromoting Management of Products Containing Potentially Harmful Chemical Substances
Case Study: Environmental Improvements on Painting Lines
Companies are being required to appropriately understand andmanage the overall supply chain for the chemicals used in theirmaterials and products. The Rinnai Group endeavors toappropriately manage information concerning products
containing potentially harmful chemicals along with its suppliers.
The Company conducts this management based on its Green
Procurement Standards Guide (E-Procurement Standards
Briefing on chemical substance management guidelines for business
Guide) and its Chemical Substance Management Guidelines,
partners (online meeting)which address regulatory concerns regarding green procurement
and chemical substances contained in procured materials, respectively.

Initiatives to Reduce the Environmental Impact at Factories
To minimize the impact on the environment, Rinnai is reducing andAtmosphereeliminating the use of hazardous chemical substances through suchinitiatives as reviewing the chemical compounds used in the relevant
manufacturing processes and improving processing equipment. At
Products
Chemicaleach manufacturing site, we check and manage the amounts handled,
substances
released, and transferred of the 462 Class 1 chemical substances
Waste
designated under the PRTR1 Law, for which 500 kg or more is handledeach year.
Water areas
Soil
In fiscal 2022, we achieved a 3.4% year on year reduction in theamount of hazardous chemical substances handled* compared to
Flows of Release and Transfer of Chemical Substances (PRTR Substances)
the targeted 2% reduction from the base year. This achievement
reflects the successful implementation of planned daily improvement efforts at production bases.
* Amount of hazardous chemical substances handled: Per unit standard for amount of hazardous chemical substances handled, established by Rinnai.

47

As part of our environmentally conscious manufacturing, we are striving to reduce
environmental impact, including the use of hazardous chemicals in paints, throughimprovement activities in the coating lines at group manufacturing sites.
At the Oguchi Factory, improvement activities such as taking a fresh look at painting
hangers led to improved paint application efficiency and reduced the amount of paint used.
In addition, doubling the number of parts hung per hanger has improved productivity andcontributed to energy conservation.
Annual impact: Use of hazardous chemicals -10%, CO2 emissions -4%
Painting line: Hob (stovetop) parts
being hung (Oguchi Factory)

Preparing for Emergencies
All offices run annual drills premised on adverse events, such as environmental
accidents. To minimize environmental pollution risk, we have also reviewed
procedures setting out actions to take in the event of a crisis and have preparedemergency provisions.

Scenes from emergency response training

Inspection of Environmentally Critical Facilities
We prioritize inspection of facilities that have a risk of impacting the environment and safety, conducting inspections onsuch environmentally critical facilities on a regular basis. We work to prevent serious accidents by inspecting individual
facilities, verifying measuring equipment is working as expected, and conducting simulations of emergency situations.

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Introduction

Environment

SocialGovernance

Data

Environment

Protecting Biodiversity
Extermination of Specified Invasive Species

Protecting the biodiversity that underpins social sustainability has become an urgent priority for humankind.
Recognizing that business activities and biodiversity are interwoven, we support the Declaration on Biodiversity by
Japan Business Federation (Keidanren) and are working to protect the environment.

Approach to Protection of Biodiversity
We have incorporated “consideration for biodiversity” into our ISO 14001 environmental policy and are pursuing action on
an organization-wide basis in accordance with the following principles.
Rinnai Principles on Biodiversity

1. Recognition of theissuesRinnai regards protection of biodiversity as a priority for corporate survival andincorporates it into its environmental policy.

2. C ultivation ofawareness

Rinnai is committed to deepening understanding and cultivating awareness of
biodiversity by creating opportunities for contact with nature, including throughpreservation and greening activities undertaken around Company premises.

3. Pursuit of businessactivities contributing
to biodiversity

Rinnai recognizes that business activities and biodiversity are interwoven, and aims
to develop conditions that allow biodiversity to be preserved through greater action
to reduce environmental impacts.

4. D isclosure of
information

Rinnai will publish details, both internally and externally, of its policy on and initiatives
to protect biodiversity, and aims to develop cooperation with local communities.

Since fiscal 2018 during Environment Month in June, Rinnai works
together with local government bodies, volunteers, and employees ofneighboring companies to collect and dispose of the specified
invasive species Coreopsis lanceolata. Specified invasive species
are living organisms that the Japanese government has determined
to pose a risk of harm to ecosystems when they are introduced fromother regions. Their cultivation, preservation, import, transport, andbreeding are prohibited.
Continuing from the previous year, in fiscal 2022 Rinnai
collected and properly disposed of Coreopsis lanceolata while
paying careful attention to safety by limiting the area for removal andnumber of participants in consideration the of COVID-19 pandemic.

Extermination of the invasive species Coreopsis lanceolata

Toward the Spread of Biodiversity Conservation: Initiatives in Local Production for
Local Consumption
Local production for local consumption, which involves eating locally grown food and savoring what is in season, isanother initiative that leads to the conservation of biodiversity. As part of our environmental awareness program, since
fiscal 2017 we have been growing heirloom* and other local vegetables that have been popular since the Edo period. To
date, local vegetable seeds have been distributed to more than 1,000 employees and their families, providing them with
opportunities to experience local food culture and nature and become familiar with greenery through growing, harvesting,and eating the vegetables themselves.

Business Activities and Biodiversity*Heirloom vegetables: Vegetables that have long been popular in a region, such as Kyoto and Kaga vegetables.

Relationship between the Rinnai Group’s Business Activities and Biodiversity
Business activities

OutputGreenhouse effect gas
Use of energy

Design, manufacturing

Chemicals(fuels, electricity)

NOx
Use of biologicalresources

Raw materials
procurement

Transportationand sale

Soot and dust
Waste

Use of water
resources

Collection, disposal,
and recycling

Use of products
by customers

Use of land

Drainage
Noise and vibration

Impact on Biodiversity

CO2

Use of mineral
resources

Case Study: Providing Menus Using Local Ingredients in Company Cafeteria
Release into the atmosphere

Input
Dependence on Ecosystem Services

The Rinnai Group promotes activities that
contribute to the protection of biodiversity
through its daily efforts to reduce
environmental impact (e.g., CO2, waste,
atmosphere, water) in its business activities
at each worksite.

RB Controls, a subsidiary headquartered in Ishikawa
Prefecture, offers a limited lunch menu using heirloom
vegetables such as Kaga vegetables and other local
ingredients in its employee cafeteria. This is an
opportunity for employees to learn about local
production for local consumption and environmental
issues (biodiversity conservation). RB Controls also
recommends its partner cafeteria operators andneighboring businesses to convey the importanceof local production for local consumption.
Mixed tempura of
Kaga vegetables

49

Kaga thick cucumber
simmered with ginger

Deep-fried young
amberjack from Noto withthick vegetable sauce

Noto pork stir-fry withgrated ginger sauce

Rinnai Report 2022

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Introduction

Environment

SocialGovernance

Data

Environment

Nijyu-maru Project* Registration Efforts
The Rinnai Group endorses the Nijyu-maru Project organized by the Japan Committee for
the International Union for Conservation of Nature (IUCN-J) and promotes global biodiversity
conservation activities. “Nijyu-maru Project Registration” pertains to initiatives in line with the
20 goals outlined in the “Aichi Targets,” which are global objectives adopted at the 2010 TenthMeeting of the Conference of the Parties to the Convention on Biological Diversity held in
Nagoya, Aichi Prefecture. Thus far, five projects have been registered.
* Nijyu-maru Project: A framework in which citizens’ organizations, companies, local authorities, and others state and register theirdeclaration to do what they can to contribute to the Aichi Biodiversity Targets (Nijyu-maru Declaration)「愛知ターゲット」の「愛知ター ゲット」の目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と消費」

目標 1「普及啓発」・目標 2「各種計画への組み込み 」・目標 3 「補助金･ 奨励措置」・目標 4 「生産と消費」

目標 5「生息地の破壊」・目標 6「過剰漁獲」・目標 7「農業･林業･養殖業」・目標 8「化学汚染」

目標 5「生息地の破壊」・目標 6「過剰漁獲」・目標 7 「農業･ 林業･ 養殖業」・目標 8 「化学汚染」

目標 9「外来種」・目標 10「環境変化に弱い生態系の保護」・目標 11「保護地域」・目標 12「種の保全」「愛知ターゲット」の「愛知ターゲット」の目 標 1 「 普 及 啓 発 」・ 目 標 2 「 各 種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と消費」

目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と消費」

目 標 5 「 生 息 地 の 破 壊 」・ 目標 6「過剰漁獲」・目標 7「農業･林業･養殖業」・目標 8「化学汚染」

目標 5「生息地の破壊」・目標 6「過剰漁獲」・目標 7「農業･林業･養殖業」・目標 8「化学汚染」

目 標 9 「 外 来 種 」・ 目 標 1 0 「 環 境変化に弱い生態系の保護」・目標 11「保護地域」・目標 12「種の保全」

目標 9「外来種」・目標 10「環境変化に弱い生態系 の保護」・目標 1 1 「保護地域」・目標 1 2 「種の保全」

目標 13「遺伝的多様性」・目標 14「生態系サービス」・目標 15「復元と気候変動対策」・目標 16「ABS」

目標 13「遺伝的多様性」・目標 14「生態系サービス 」・目標 1 5 「復元と気候変動対策」・目標 1 6 「A B S 」

目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」

目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 1 9 「知識･ 技術の向上と普及」・目標 2 0 「人材･ 賃金」の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

目標 9「外来種」・目標 10「環境変化に弱い生態系の保護」・目標 11「保護地域」・目標 12「種の 保全」

目 標 1 3 「 遺 伝 的 多 様 性 」・ 目 標 14「生態系サービス」・目標 15「復元と気候変動対策」・目標 16「ABS」

目標 13「遺伝的多様性」・目標 14「生態系サービス」・目標 15「復元と気候変動対策」・目標 16「 ABS」

目 標 1 7 「 効 果 的 ･ 参 加 型 戦 略 」・ 目 標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」

目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」の 達 成 に 多 大 な る 貢献をしていることを表彰し、大きな ◎ をお贈り致します。

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

◎ の 周 り に た くさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

「愛知ターゲット」の目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と消費」
目標 5「生息地の破壊」・目標 6「過剰漁獲」・目標 7「農業･林業･養殖業」・目標 8「化学汚染」
目標 9「外来種」・目標 10「環境変化に弱い生態系の保護」・目標 11「保護地域」・目標 12「種の保全」
目標 13「遺伝的多様性」・目標 14「生態系サービス」・目標 15「復元と気候変動対策」・目標 16「ABS」
目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。
◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

51

Rinnai Report 2022

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Introduction

Environment

SocialGovernance

Data

Environment

Environmental Communication
We use regular communication and exchange events as a means of building awareness of the Rinnai Group’s

Communication with Local Communities

environmental activities in order to deepen our ties with and be a trusted member of our local communities.
Furthermore, Rinnai sets June as Environment Month and holds various environment-related events to further
enhance the environmental consciousness of its employees.

Rinnai invites local students and other groups to tour its factories to learn about
its environmental activities and various other business activities. Explanations
during tours and subsequent Q&A sessions are an opportunity for visitors togain an understanding of Rinnai’s environmental, quality, safety, andmanufacturing activities.

Rinnai Receives the Minister of the Environment Prize, the Top Award at the 2020 Environmental
Human Resource Development Corporate Awards
Hosting local high school students

In recognition of efforts to develop environmental humanresources, Rinnai received the Minister of the Environment Prize(Large Company Category), the top award at the 2020
Environmental Human Resource Development Corporate Awards,
organized by the Ministry of the Environment and theEnvironmental Consortium for Leadership Development(EcoLeaD). This is our third award, following two previous
consecutive Awards for Excellence. Rinnai was recognized for its“7E Strategy,” which promotes environmental activities throughout
the product lifecycle, as well as employee ideas and daily
improvements that motivate employees in their work, both ofwhich contribute significantly to the environment and management.

Rinnai Group Environmental Awards Programs
The Rinnai Group Environmental Awards are held annually to recognize outstanding
environmental activities and stimulate more action on the environment throughout the Group.
These awards recognize major contributions to environmental conservation and regional
communication and are open to all bases in Japan and throughout the world. The 12th awards
ceremony was held at the Rinnai Group New Year Convention, at which Rinnai’s CEO presented
the awards. In fiscal 2022, there were a record 141 entries submitted, from which one Grand
Prize and 11 category-specific awards covering manufacturing, offices, logistics and social
contributions were selected.
In-house award andsubmission awareness poster

Link: Rinnai Receives the Minister of the Environment Prize, the Top Award

In-house Environmental Newsletter Eco no Coe
Presentation on Rinnai’s Environmental Initiatives at a Lecture on the Environment
and Manufacturing
Nagoya Industries Promotion Corporation hosted the“2021 Lecture on Environment and Manufacturing” at the
Nagoya Municipal Industrial Research Institute (Nagoya
City, Aichi Prefecture), where Rinnai was a featured
speaker. Rinnai’s presentation was also delivered via an
online conferencing tool, with more than 80 participants,
including those online.
The presentation, titled “Environmental Strategy
Directly Linked to Business,” introduced Rinnai’s “7E
Strategy” for environmental activities along with specificcase studies. This was followed by a Q&A session thatprovided an opportunity for a lively exchange of opinions.

53

Rinnai regularly distributes the in-house environmental newsletter Eco no Coe toensure employees around the world stay up to date with Group environmental
activities and environmental trends elsewhere in Japan and other countries. This
newsletter has been published since 1999 as a means of enhancing environmental
knowledge and awareness, encouraging communication among employees.
In fiscal 2022, Rinnai introduced the trend of carbon neutrality and deepened
understanding of the content of Eco no Coe newsletter published so far by asking
questions in a quiz format.

Eco no Coe cover (Quiz on the Environment)

Cleanup and Greening Activities around Company Sites
Presentation on Rinnai’s environmental activities

Group employees periodically engage in cleanup and greening activities around the Group’s factories and along theircommuting routes to help look after the natural environment around its operations.

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Introduction

Environment

SocialGovernance

Data

SocialLinks between Corporate Strategy and theRealization of a Sustainable Society (SDGs)

Contributing to the Global Environment by Enhancing the Energy Efficiency ofWater Heaters

Medium-term Business Plan 2021–2025 New ERA 2025 Targets
Under the Rinnai medium-term business plan New ERA 2025, which runs from fiscal 2022 to fiscal 2026, we aim to contribute to theresolution of social issues by reducing CO2 emitted during product use by seven million tons and increasing the sales ratio of productsthat contribute to improved quality of life and the global environment by 50% in 2025 (compared to 2020). Rinnai will make an effort toachieve the SDGs through products that contribute to improved quality of life and the global environment.
As the products Rinnai provides are directly linked to the SDGs, we believe that the ongoing spread and expansion of our
products will lead to the resolution of social issues. As an example, replacing water heaters with highly energy-efficient water heaters
reduces burdens on the global environment, creating a world in which gas clothes dryers, dishwashers and stoves with an automatic
cooking function are widely used, equalizing the role of housework and advancing the movement toward gender equality.
Contributing to a (Unit: 1,000 t)
reduction in CO2
emitted during
product use
4,500

2020

7,000
5,150

2021

Sales of products
contributing to improved
quality of life and theglobal environment

2025(Unit: billions of yen)

99.0

120.0

Power &
lighting, etc.
33%

80.0

2020

2021

2025

Cooling 3%

As the products Rinnai provides are directly linked to the SDGs, we
believe that the ongoing spread and expansion of our products will lead tothe resolution of social issues. As an example, replacing water heaters withhighly energy-efficient water heaters reduces burdens on the global
environment, creating a world in which gas clothes dryers, dishwashers andstoves with an automatic cooking function are widely used, equalizing therole of housework and advancing the movement toward gender equality.

Cooking 10%

ThemesContributions

Energy-efficiency

Higher energy-efficient water heaters contribute to the global environment

ResilienceGas-electric hybrids contribute to the securing of lifelines during emergencies

Micro Bubble Bath units

Health promotion

The hot bath effect from bathing in ultrafine air bubbles contributes to healthy lifestyles

Gas clothes dryers

Reduces time requiredfor houseworkPowerful gas drying shortens time spent doing laundry, contributes to reducing houseworkburdens

Reduced water usage

Conserves water when washing dishes, contributes to the conservation of water resources

Water Heater CO2 Emissions Comparison

Heating water
29%
Percentage ofhousehold energy
consumption by usage(FY2019)

Conventional water heaters

1,507(kg CO2/year)

High-efficiency water heaters

1,270(kg CO2/year)

Approx.

Heat pump-type water heaters

865(kg CO2/year)

Approx.

43% reduction

Hybrid water heaters

707(kg CO2/year)

Approx.

50% reduction(mode thermal efficiency 92.5%)(JIS 3.3)

Heating
25%(ECO ONE 160 L type)

15% reduction

Source: Energy White Paper 2021, Agency for
Natural Resources and Energy

Contributing to the Securing of Lifelines During Emergencies with
Gas-electric Hybrid Water Heaters

Products provided by Rinnai and their connection to the SDGs
Product names

In Japanese households, the combination of hot water and heating account for about 60% of energy consumption.
Further, when looking at the water heater product lifecycle, the largest amount of CO2 is emitted during the usage stage.
In water heaters with heating systems that provide both hot water and heat, Rinnai’s hybrid water heaters ingeniously
combine gas and electricity to provide hot water and heat. As a results, CO2 emissions are reduced to half that ofconventional water heaters, contributing to the conservation of the global environment.
By expanding the use of environment-friendly products, Rinnai aims to achieve a seven-million-ton reduction in CO2
by 2025.

Goals

As awareness of disasters increases year by year, seismic performance ratings and earthquake-resistant architecture
and construction methods are attracting greater attention than ever before. However, regardless of the degree to which ahome is earthquake-resistant, if electricity, gas, water and other lifelines are cut, life will be very inconvenient until services
are restored. As preparation for emergencies, the use of hybrid water heaters providing both gas and electricity disperserisks and facilitate the use of hot water, even when lifelines are limited.

Hybrid water heaters

Dishwashers

55

Electricity

Gas(High-efficiency
water heaters)

Reduces time requiredfor housework

Automated dishwashing contributes to reducing housework burdens

Stoves with automatic
cooking functions

Reduces time requiredfor housework

Automated cooking contributes to reducing housework burdens

Highly efficientand energy-saving

Powerful andspeedyBathroom heaters/dryers

Prevents heat shock

Bathroom heating eliminates temperature differences when bathing, contributes to the preventionof heat shock

It boosts the efficiency ofelectrical energy by using
hot air.

Gas tankless water heaters

Energy-efficiency

Enhancing the energy efficiency of water heaters contributes to the global environment

It packs a punch andshows its power when lotsof hot water is used orwhen hot water is used forheating.

Gas boilers

Air pollution
countermeasures

Switching fuel from coal to gas in water heaters with heating systems contributes to the control of
air pollution(Heat pumps)

Hybrid water heaters

Rinnai Report 2022

56

Introduction

Environment

SocialGovernance

Data

SocialContributing to Healthy Lifestyles through the Hot Bath Effect from Bathing in
Ultrafine Air Bubbles

Contributing to Reductions in Housework Burdens with Powerful Gas Drying that
Shortens Time Spent Doing Laundry

The Micro Bubble Bath unit sprays ultrafine air bubbles (microbubbles) into the bathtub. Microbubbles permeate skin andpores to provide various benefits such as cleansing that removes dirt from the skin, the hot bath effect and relaxation.
Rinnai will enhance the merits of bathing and contribute to human health and spiritually rich lifestyles.

Gas clothes dryers use gas-heated air to dry clothing straightaway. This shortens time spent doing laundry and makes
bath towels soft and fluffy. It also provides the same level of sterilization as line drying in the sun. Powerful gas-drying
shortens the time required to perform daily housework, facilitating more relaxed lifestyles. Rinnai aims to achieve genderequality both in terms of housework burdens and lifestyle freedom.

What are microbubbles?

hot water into the bathtub), microbubbles are generated and produce a variety of health benefits for the bather.

In a questionnaire asking, “What are your concerns
regarding doing laundry during the rainy season?”
80% of households responded “difficult to dry.”
(%)

80

80.0%
63.5%

70

Husband

Effect and efficacy of microbubbles: Hot bath effect

Other

6.4%

0.3%

60
50
40
30

17.9%

20

Wife

93.3%

+1.6

0

+1.4
+1.2

10.8%

10

Awareness Survey on Laundry, Netsu to Kurashi Tsushin, May 2019; N = 534

Bad smell

Change over time in average skin temperature based on pre-bathing values

Difficult to dry

Change in averageskin temperature (˚C)

(˚C)

7.2%

0.2%
Other

In a questionnaire asking, “Who does the daily laundryin your house?” 93% of households responded “wife.”

None of the above

By affixing a microbubble bath unit between the bathtub and the water heater with dedicated circulator fittings (a device to spraydarkening

Microbubble bath unit

Causes yellowing or

milky cloud. As time passes, they float to the surface and become even finer bubbles as they contract in water.

Rinnai conducts surveys and analysis on various social issues, disseminating information
through the Netsu to Kurashi Tsushin (Heat & Life Newsletter).

Mold on clothing

Microbubbles are ultrafine bubbles measuring 1-100μm in diameter. They have low buoyance and spread out and gently rise like a

Awareness Survey on Laundry, Netsu to Kurashi Tsushin, May 2021; N = 1,000+1.0±0Prebathing

Start of rest
(Third minute ofbathing)

Rest for10 minutes

Rest for20 minutes
Microbubble bathing

Rest for30 minutes
Plain bathwater

Experiment parameters Research by Toho Gas Co., Ltd. and Nihon Fukushi University in fiscal 2019.
		
Subjects: Seven healthy women in their 30s
		Bathroom environment: Room temperature 29˚C, humidity 97%
		Bathing method: Whole-body bathing for 10 minutes with bathwater at 40˚CPowerful gas clothes dryers can dry an ample five kilograms oflaundry in approximately 52 minutes. Drying laundry in about
one-third the time required with electric dryers significantly
reduces time spent on housework.
Drying time comparison (laundry = 5 kg)

Gas clothes dryer

Fully automatic washer-dryer
with electric heat pump

Fully automatic washer-dryer
with electric heater

Approx.

Approx.

52 minutes

162 minutes
Approx.

281 minutes

Gas clothes dryer

Microbubble bath unit

57

Rinnai Report 2022

58

Introduction

Environment

SocialGovernance

Data

SocialContributing to the Conservation of Water Resources by Conserving Water
when Washing Dishes

Contributing to Reduced Housework Burden with Automated Cooking

Using a dishwasher to wash dishes uses approximately 80–90% of water used when washing by hand. The amount ofdetergent used is also reduced about 50–60%, contributing to resource conservation and reduced water pollution.

Stoves with automated cooking functions automatically prepare food when pre-prepped ingredients are added and amenu selection is made. In addition to reducing the time and effort required to cook, a full range of recipes reduces timespent worrying about menus. Even difficult recipes can be prepared deliciously in a short time by anyone, enabling users
to enjoy meals and family gatherings.

Water Used When Handwashing vs. Dishwashers
(ℓ)

120
100
80
60
40

103.2 ℓ12 ℓ61.5 ℓ200Dishwashers

Handwashing
30 items

Handwashing
56 items

Stove with automated cooking function

Waterless Cooking Pots Also Compatible with Automated Cooking and Recipe App

Contributing to Reduced Housework Burdens with Automated Dishwashers
Cleaning up is an inevitable part of everyday meals, and the larger a family, the more time and effort are required.
Dishwashers are an effective means of reducing time and effort, facilitating more free time spent with family. By
shortening the time required to perform daily housework and facilitating more relaxed lifestyles, Rinnai aims to achieve
gender equality both in terms of housework burdens and lifestyle freedoms.

Waterless cooking pots

In a questionnaire asking, “Choose the household chore
you dislike the most,” cleaning up after meals ranked insecond place.
(%)

30

In recent years, high-performance cooking pots compatible with anhydrous cooking and automatedcooking have been garnering attention amid increasing demands for easier and faster cooking methods. In
response, we developed proprietary waterless cooking pots compatible with Rinnai stoves equipped with anautomatic cooking function. These pots are made from aluminum, making them lightweight and easy to use,with durability comparable to conventional castiron pots.
We design cooking utensils and engage inproduct development and manufacturing
enabling anyone to easily prepare delicious foodevery day.

29%

25
20
15

19%
13%

12%

10

7%

5

1%

0
Cleaning Cleaning up Cooking Taking out
after meals
the trash

Laundry Shopping

Awareness Survey on Dual Incomes, Netsu to Kurashi Tsushin, May 2018; N = 10059

Dishwasher

Rinnai Report 2022

60

Introduction

Environment

SocialGovernance

Data

SocialContributing to the Prevention of Heat Shock with Bathroom Heating that
Eliminates Temperature Differences when Bathing
The number of deaths from heat shock accidents whilebathing is increasing year by year. Heat shock is a lifethreatening phenomenon in which sudden temperaturechanges, such as occur when bathing during winter, placea heavy load on the heart and brain. The use of bathroom
heaters/dryers eliminates these temperature differences
when bathing, supporting a comfortable and safe lifestyle.

Intellectual Capital Supporting Rinnai Growth

Comparison of fatal traffic accidents andfatal heat shock accidents（Persons）

Approx. 19,000

20,0004 times
15,000or more10,000Intellectual Capital Key Data

5,000

4,373
0
Fatal traffic accidents

43.7%

56.3%

Fatal heat shock accidents

Source: Health, Labour and Welfare Science Research Grants Researchon Ascertaining Actual Conditions Regarding Bathing-related
Accidents and Preventive Measures Fiscal 2013 Integrated/Apportioned Research Report, Metropolitan Police Department“Traffic Accident Fatalities in Fiscal 2013”

At risk forheat shock

Based on the themes of heat and life and health and life, Rinnai R&D aims to provide society with safe, secure, healthy andcomfortable lifestyles. To this end, we are enhancing product safety and promoting the R&D of high added value
environmentally conscious heating equipment through the pursuit of energy and resource conservation, recycling andother efforts so that everyone can use Rinnai products centered on electronics, control technologies, combustion, fluid
control and sensor technologies with peace of mind, facilitating the proposal of healthy, comfortable lifestyles.

According to a Netsu to Kurashi Tsushin survey, about 60% of Japanese were
determined to be at risk for heat shock in a test that measures the degree ofrisk for heat shock.

FY2018FY2019FY2020

FY2021

FY2022

Number of patent applications

286

217

203

223

190

Number of registered patents

104

101

170

178

229

Number of patents held

2,374

2,328

2,300

2,358

2,406

R&D expenses (millions of yen)

9,918

9,503

9,308

11,802

12,762Rinnai Technologies Supporting Comfortable Lifestyles and Society
Preventing Fires with Sensor Technologies
Rinnai has been engaged for some time in the development of safety
sensors, establishing a track record of fire prevention activities throughRinnai Heat Shock Risk Confirmation Test conductedin December 2021; N = 2,350

sales promotion and promulgation efforts. Further, in South Korea,
mandatory safety sensor requirements similar to those in Japan haveBathroom heater/dryers warm the bathroom toprevent heat shock, while also functioning as a dryer inwinter when wet clothing is difficult to dry, capable ofdrying two kilograms of laundry in about 60 minutes.

Using the Mold Guard Mist function on bathroom
heaters/dryers once every two weeks can reduce thegrowth of mold in the bathroom by 99.9%. This
maintains cleanliness while reducing the burden ofbothersome bathtub cleaning, contributing to the
reduction of housework burdens.

been mandated since 2014, achieving similar results. Rinnai is promoting
efforts encouraging the adoption of these products to prevent residential
fire incidents, which have become a social challenge.
As living standards improve throughout theworld, and cookware is expected to increase in linewith demands for more abundant lifestyles, Rinnai willleverage technologies accumulated in developed
countries to provide products with a high degree ofsafety in order to meet growing demands.
Gas stoves with sensors (China)

Hydrogen Combustion Technologies Contributing to the Realization of
Carbon Neutrality
Rinnai successfully developed the world’s first 100% hydrogen combustion technology for residential
water heaters. Rinnai has spent many years developing gas appliances, accumulating combustion
and fluid control technologies facilitating the successful development of water heaters powered byhydrogen, which is sought after as a clean fuel source with zero CO2 emissions, eliminating problems
Bathroom heaters/dryers

61

associated with explosion risks and combustion stability.

Rinnai Report 2022

62

Introduction

Environment

SocialGovernance

Data

SocialSafe and Secure Initiatives

Smooth Provision of Information through the Internet

After-Sales Services

Rinnai provides various types of information through its corporate website and product information websites.

To realize a “comfortable way of life” for all our customers, Rinnai is engaged in the provision of services that enable

We also support display optimization for browsing on smartphones and other mobile devices in an effort toour products to be used with peace of mind.

smoothly provide information in consideration of customer internet utilization circumstances.

Microcomputer Meter Reset Process Introduction

Prompt After-Sales Services

In the event of an earthquake having a seismic
intensity of five or greater, the microcomputer meter
automatically switches off gas lines. After anearthquake has occurred, the steps necessary toreset the microcomputer meter are quickly
published on the Rinnai corporate website to easily
enable the reset of the microcomputer meter when
it is safe to do so.

Approximately 600 servicemen across Japan repair Rinnai equipment. Confirming the status of service requests from
customers on portable terminal devices, servicemen make an effort to complete inspections on the same day or by thenext day to provide prompt after-sales services supporting a “comfortable way of life.”

Service Technician Assessment Questionnaire

Microcomputer meter reset process introduced on the Rinnai corporate website

Posted Reminders for Safe and Correct Product Usage
Using products for a long period of time can result in fire or injury caused by the deterioration or wearing of parts.
Furthermore, incorrect usage can result in malfunctions or injuries. To ensure customers use our products in a safe manner,
Rinnai provides warnings and displays in user manuals and on the products themselves that are useful for avoiding
accidents caused by misuse or carelessness. We also publish detailed examples on our corporate website, in an effort toprovide information that is easily understandable and draws attention in order to prevent product-related accidents.

Customer feedback questionnaires are provided
to customers requesting repair services. This
questionnaire assesses repair visit response
times and other factors determining the degreeof customer satisfaction with Rinnai repair
services. Customer assessment results areprovided as feedback and the results ofquestionnaires are utilized effectively throughout
the Company.
In fiscal 2022, 81,000 customers completed
questionnaires, which rated our after-sales
services an average of 97.9 points.

Degree of customer satisfaction with repair services

96.8

Comprehensive evaluation of service response

95.5

From repair request to completion of repair
Cleaning up after repair and maintenance

97.9

Description of repair details

97.9

Greetings and display of identification

98.2

Courtesy, attitude and language

98.7

Telephone response before visit

98.1
88

90

92

94

96

98

100(Points)

Storage and Provision of Service Parts
Product-Related Accident Information Disclosure
In the event that a serious product accident occurs with a Rinnai product, we will promptly report the incident to the relevant
authorities in accordance with the law. We will also proactively disclose all details directly to customers on our corporatewebsite to notify and alert customers as quickly as possible in accordance with the severity and scale of damage.

63

As a general rule, we supply gas appliance components for five to 10 years after the end of production, and in some cases
for more than 10 years. The establishment of a system able to quickly deliver parts when needed is indispensable forafter-sales service enabling customers to safely and comfortably use gas appliances over the long term. The Rinnai Parts
Center, where parts are stored and shipped, maintains a large inventory of parts that uses a system to pick, pack and ship
items. It is critical that we not make any mistakes regarding part type or quantity and that we deliver items by the due date.
We promote efforts to enhance quality that include the documentation of work in a standardized document format andwork guidance based on a brochure comprising our basic rules concerning quality.

Rinnai Report 2022

64

Introduction

Environment

SocialGovernance

Data

SocialInquiries Response and Support System
In line with our basic philosophy “quality is our destiny,” Rinnai satisfies customers by “responding to requests andconsultations in a sincere, prompt and accurate manner” under the policy of “providing customers with satisfaction, safety
and reliability.”

The Customer Center handles inquiries from customers via toll-free telephone numbers and emails. In fiscal 2022,
approximately 810,000 toll-free calls and 13,000 email inquiries were received.

Basic Policies

1.	We recognize customer opinions and requests to be the highest priority issues in all Rinnai
departments.
2.	We understand that customer complaints impact the entire Company, thus we take ultimate
responsibility for the entire organization.
3.	We take customer feedback seriously, share it internally and use it as a valuable source of
information to provide better products and services.
4.	We will always comply with laws and regulations and remain resolutely opposed to unreasonable
requests.

Rinnai Customer Center

Customers’ Inquiries

5.	Customer personal information is strictly protected in accordance with relevant laws andregulations and our personal information protection regulations.

Components 0.2%

Other 10.2%

Catalog requests

8.3%

0%

Industrial 0%
Air conditioners

Consultation
desk

Analysis ofcustomerfeedback
Identification andanalysis ofimportantquality issues

Service system enhancements

Inquiry
classification

Kitchens

36.4%(Fiscal 2022)

Executives
Analysis and identification results

CustomerCenterDaily information

Consultationdesk• Repair requests• General product inquiries• Technical consultations• Customer consultations

1.3%

Customers

We created the Customer Center with theaim of increasing customer satisfaction(CS). We receive various inquiries, opinions
and requests directly from customers over
the telephone or through our corporatewebsite. Much of this valuable informationfrom customers is provided as feedback to
all departments as it useful for identifying
and reviewing issues related to productdevelopment, quality control, and sales andservice improvements.

10%

Air conditioners

Customer Center

Relevant
departments

Feedback to
manufacturing
divisions
Information
sharing

Other 8.1%
Replacement purchases

Complaints

0.8%
Construction
methods

Inquiry
details

Products 36%(Fiscal 2022)

3.1%
Hot water supplies

Repairs

43.6%

41.7%

Frequently Asked Questions (FAQ)
In response to customer desires to solve problems on
their own, Rinnai created a “Frequently Asked
Questions” page on its corporate website, with manycustomers taking advantage of how-to videos thatapproximately 73% of respondents said resolved
their issue.

FAQ (Japanese language only)

65

Rinnai Report 2022

66

Introduction

Environment

SocialGovernance

Data

SocialInspection Efforts
Products Requiring Safety Inspections

Indoor bath heaters with gas burners

Gas fan heaters

The long-term use of products can pose safety hazards due to deterioration that occurs over time. Rinnai conducts safety

Fanned flue heaters

Gas clothes dryer

A notiﬁcation regarding inspection timing
is mailed to the customer(via email or standard mail)with standards based on inspection guidelines formulated by the industrial association to which Rinnai belongs, inaccordance with the Consumer Product Safety Act’s Product Safety Inspection System for Long-Term Use. With thehave them inspected.
The Rinnai Group aims to enhance its maintenance check system, which employs qualified personnel to conduct

Dishwashers

Built-in gas stoves

Built-in ovens

Inspection Processinspections in an effort to prevent accidents caused by deterioration over time. These inspections are conducted in line

understanding that products also have a standard usage period, we recommend that customers using Rinnai products

Outdoor gas water heaters

Staff member records
necessary information when
the customer applies for aninspection via telephone

1

2

3

4

5

Owner
registration

Notification of
inspection

Application
for inspection

Processing of
application

Inspection

appropriate inspections. At the same time, we offer unique services, such as extending product warranties for customers
who registered their household hot-water equipment with us for an additional three years.
In addition, we work to increase customers’ understanding of our inspection program and prevent accidents byproviding information through our website and consultations via our maintenance and inspection call centers.

Owner registration
conducted by the customer(via standard mail or online)

Customers request inspections
via a postcard enclosed with
the inspection notiﬁcation or byInternet or telephone.

Personnel visits thecustomer’s home andconducts inspection on theappointed day* Rinnai does not send inspection notifications for built-in gas stoves and air conditioner and heating units.

The Consumer Product Safety Act was revised in August 2021. Prior to this revision, owners of products designated as specified
maintenance products were required to undergo statutory, fee-based product inspections. The 2021 revisions exempt someproducts from this requirement. For details, please see “Regulatory Revisions Related to Legal Compliance Inspections” on the
Rinnai website (Japanese language only)

67

Through central management of owner registration status to the inspection of each customer, Rinnai strives to improvecustomer satisfaction so that we can respond smoothly to any inquiries.
We protect personal information appropriately based on laws, regulations and strict management, never provide it tothird parties, and do not anonymously process information. We will continue to improve our system and management
structure to further heighten trust from customers.

Rinnai Report 2022

68

Introduction

Environment

SocialGovernance

Data

SocialAbout Inspections

Five Basic Inspection Work Focus Areas and Rinnai’s Response
Five Focus Areas

Rinnai recommends safety inspections (fee-based) to prevent product accidents caused by age-related deterioration.
If inspections are not conducted, we recommend equipment be replaced.
Inspection work is carried out based on established inspection procedures. The accuracy of the inspection is
managed by checking the total number of work slips submitted to the customer and double checking to automaticallycheck whether the input data is correct when it is entered into the dedicated system. In addition to explaining the details
of inspections to customers, we also explain available options that customers should take into consideration inaccordance with the inspection results. In the unlikely event that a product is deemed unsafe to use, details regarding
follow-up inspections are mailed at a later date in an effort to prevent accidents. Inspections are conducted by certified
Rinnai technicians. We strive to improve the quality of inspections through efforts including instructing inspectors basedon statistically managed data.

Rinnai’s Response• From appointment to completion of inspection, all work conductedaccording to the inspection manual to promote higher CS

1

Qualityinspection

Quality inspector,
quality support, legal
compliance, inspector
report• Check progress of inspection to ensure appropriateness, confirm all
inspection work to prevent inspection errors• Train qualified inspection personnel through skills management, regulartraining and technical support for inspection engineers• Engage in customer safety activities such as alerting customers after
inspections which equipment is prohibited from usage

2

Customerfocus

Reflecting deteriorated
product use andcustomer feedback
into products• Customer feedback is collected at the time of inspection and isincorporated into the inspection system and products

Customer Feedback Regarding Inspections• Website content expanded and manual updated to provide appropriate
information to customer inquiries received by telephone

Among inquiries from customers, many are of the opinion that inspections are obligatory, or free of charge, or
unnecessary because the gas company already conducted an inspection. For these reasons, Rinnai strives to raiseawareness when conducting inspections to ensure customers receive inspections with peace of mind.
There are also situations where customers who have scheduled inspections request cancellations, thus we promotea deeper desire for inspections among customers who intend to prevent accidents caused by deterioration over time anduse their products for as long as it is possible to do so.

3

4

69

Appropriate and polite
provision of
information, etc.

• When registering products, customers are notified that registration iscomplete and asked to confirm registration details, establishing aframework for the provision of appropriate information.

Future Initiatives
Traditionally, manufacturers have engaged in activities such as the development, manufacturing, sales, and repair ofproducts, and are now involved in inspections through the safety inspection system, among other customer safety activities.
In order to prevent product-related accidents due to deterioration over time, it is necessary to understand theinspection system and further strengthen inspection-related efforts. Utilizing the results of inspections to understand how
equipment deteriorates over many years of usage, Rinnai will make an effort to strengthen its customer safeguardsystems and reflect this understanding in future inspection notifications.

Customersatisfaction• When making an appointment for inspections, we not only provide
explanations based on appropriate treatment standards, we also conduct
a preliminary survey, and if there is a possibility that the equipment is nolonger usable, to reduce the inconvenience to customers before theinspection, we offer the customer the option of inspection, repair or
replacement.

5

Safetyguidance

Establish
trust

Provide safety
guidance before
product failure, not after• We provide guidance so that products are inspected before they fail orafter the inspection date has passed to prevent degradation.

Based on appreciation
for many years of
product usage• For customers thinking about purchasing a Rinnai product, we provide
detailed information regarding our maintenance system in our catalogs
and on our corporate website. A registration completion notification is sent
to customers when they register their product, and in the unlikely event of
repairs, the warranty that began at registration is extended (applicable tohome gas appliances). When nearing the inspection date notifications aresent. These activities are useful for ensuring customer safety and security
when using our products starting as soon as they make a purchase.

Rinnai Report 2022

70

Introduction

Environment

SocialGovernance

Data

SocialAbout Human Capital

Net Sales per Employee
As Rinnai business expands, we continue to increase the number of employees, while proactively promoting
improvements in labor productivity and human resource skills, resulting in a steady increase in net sales per employee.
We will expand business globally while continuing to emphasize human capital and promote corporate prosperity in linewith personal growth.

Consolidated net sales per employee(Persons)

Health Management Initiatives(Millions of yen)

12,000

35
34
33
32

8,000

31
30

6,000

29
4,000

28

Net sales per employee

Number of employees

10,00027

2,000

Rinnai has clearly stated policies on the maintenance and promotion of employee health set forth in the Group Code of
Ethics and the Personnel Affairs Division management plan. The Personnel Affairs Division established dedicateddepartments (health and welfare team, health support office) as part of Rinnai’s three-pronged approach to supporting
employee health, incorporating the health insurance union, employee union and the Company.
In 2013, Rinnai established the Health Support Office, where full-time public health nurses provide individual healthguidance and consultations, as well as information related to personal health, including countermeasures for preventing
lifestyle-related diseases, while also conducting health promotion seminars to support mental and physical health.

26
25

0
2010

2011

2012

2013

2014

■ Employees

2015

2016

2017

2018

2019

2020

2021

● Net sales per employee

Increasing Employee Engagement
Rinnai began conducting an engagement survey in fiscal 2022 to visualize and continuously improve employee
engagement. The latest survey, targeting approximately 4,000 employees, had a response rate of 95%. From the survey
results, we identified large discrepancies in engagement between managers and non-managers, and a lack ofmechanisms encouraging employee growth, as Company-wide issues.
To raise the positive response rate 15 points byfiscal 2026, we will share issues with management andthe heads of each organization, take measures toaddress issues Company-wide and in eachorganization, and strengthen manager capabilities,
among a variety of other improvement measures.

Positive response rates in the employee
engagement survey

We provided more detailed care to target employees toprevent the taking of leave due to mental stress, while atthe same time, we strengthened support systems
enabling a smooth return to the workplace for
employees who had taken leave. We expanded thescope of mental health seminars and enhanced support
for employees with cancer, incurable diseases and otherphysical ailments, as well as those with mental healthissues. In addition to conducting stress checks on
individual employees, we are working to systematicallyreduce employee stress and create a comfortableworkplace by conducting group analyses of results fromeach division.

Health Management Promotion System
Person responsible for health management(President and CEO)

Targeting a

15-point increase by fiscal 2026

Promotion and evaluationof health businessSports communication
Cooperation
event

Employee union

Cooperation

Personnel affairs
division
Health and safety committee(Each office)Employees

71

Data-based insurance
business

Health insurance
association

Rinnai believes healthy employees are important toenable the continued support of healthy customer
lifestyles, thus we conduct various measures to protect
the health of employees. As a result, Rinnai was selected
as an Outstanding Health Management Company 2022
(Large Enterprise Category), sponsored by the Ministryof Economy, Trade andIndustry, in recognition of
our efforts to promotehealth as a company
practicing excellent healthmanagement.

Rinnai Health Management Initiatives• Mental Health Measures	We conduct mental health seminars according to occupational level andencourage stress checks targeting a 95% or better participation rate.
• Lifestyle Disease Prevention Measures	We provide guidance on the prevention of serious illnesses to insured
persons with diabetes and hypertension who are not in treatment. We alsoorganize events such as sport and walking festivals.
• Metabolic Syndrome Prevention Measures	We provide specific health guidance aimed at reducing the number of
employees with metabolic syndrome by five percentage-points annually.

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Introduction

Environment

SocialGovernance

Data

SocialPersonnel Training

Career Development Review and Support

Consistently taking the initiative based on the idea of “developing employees who respect individual abilities andcharacteristics and continuously take on challenges autonomously to achieve their goals,” Rinnai promotes thecultivation of human resources who are able to drive the Company forward. We provide employees with numerous
opportunities to grow as individuals, such as rank-specific training programs, specialization courses, OJT training
and rotation training programs both in Japan and overseas.

For each training program to function effectively, it is essential to match the capability required by the organization and thegoals set by the employees.
Therefore, Rinnai prepares a “Skills Map” and a “Capability Evaluation Sheet” to define the skills and capabilities
required by each department and to clarify the goals and capabilities the Company expects the employees to achieve.
Based on these tools, our employees understand their current roles and responsibilities. Employees also have a one-onone interview with their supervisor, during which they receive the results of their performance evaluation and are informedof the Company’s future expectations of them. They then set up their own goals to work toward every year.
Supervisors, to actively perform the responsibility to navigate the growth of their staff, carefully review each staff’s
progress and contribution (performance evaluation) and adequately inform the staff of the results of the evaluation
through one-on-one interviews or performance appraisal feedback meetings.

OJT Personnel Training
We position human resources as our most important management resource, and offer personnel training to assist
employees to fully demonstrate their capabilities.
Our main training is OJT, wherein a supervisor guides his or her team member through an actual job. In addition, we
provide a rank-specific training program, which supports the improvement of each employee as an individual by grouping
them according to job responsibility, and a specialization course, which encourages our employees to be highly
specialized in their area. These three programs form the three pillars of Rinnai’s training system.

Major Rank-specific Training Programs
Training

73

Subject

Content

New employee training
program

New employees

Basic training for professionals (manners, awareness as aprofessional), Fundamental training for Rinnai employees (Company
overview, the Rinnai Spirit, corporate ethics, personnel system, policyon quality and environment), IT skills and mental health

New employee follow-up
training

Generalists (Clerical and sales
employees) in their 1st year, Generalists(technical employees) in their 2nd year,
clerical employees (technical employees)
in their 1st year

Training for increasing motivation to work and raising professionalawareness(Reconsolidation of what was learned in the new employee training
program; employees who joined the Company in the same year gather
and share information about their current status)

S4 level-qualified employee
training

S4 level-qualified employees

Reconsolidation of fundamentals (corporate ethics and management
policy), Recognition of his or her characteristics (to improve thestrength) and the reinforcement of awareness of management(creation of management plans)M6 level-qualified employee
training

M6 level-qualified employees

Reconsolidation of corporate ethics and management policy
Understanding duties of managerial supervisors (rules of employment,
Labor Standards Act, handling of problematic employees),
Understanding of management

M6 level-qualified employee
follow-up training

M6 level-qualified employees

Reaffirming shared goals
Reconsolidation of values concerning managers’ actions, Reviewing
the efficiency of the entire workplace

Reviewer training follow-up
training

Employees whose duties require them tointerview subordinates and review theirperformance

Review of personnel systems• Understanding of objectives and methods of performance reviews• Improvement of interview skills through interview practice

Support for Self-directed Development
To support each employee to acquire higher specialist knowledge, skills, and culture and support their growth as anindividual, we actively provide programs including foreign language education, correspondence courses, external open
seminars, technical proficiency examinations, license acquisition courses, and communication with people in different
companies/industries. We provide rank-specific training programs to create opportunities to be aware of aspects forstrengthening one’s sense of humanity.
In addition, for young employees who have a strong desire to work overseas, we arrange and operate a short-term
overseas working and training program that is available for them via application. This is to develop human resources thatcan globally demonstrate their capabilities working at our overseas locations. Currently, a total of six young engineers areworking under this program in the United States, Australia, Brazil, and Thailand. By providing our employees with
opportunities to work at our overseas locations in this way, we promote development of human resources that candemonstrate their abilities at a global level.

Succession of Monozukuri, the Spirit of Manufacturing
Training at the Production Technology Center
The Production Technology Center established in March 2010 is a place to pursue leading-edge monozukuri, with anemphasis placed on delving into core technologies. It is also a hub for developing human resources involved in monozukuri
activities at Group companies at home and abroad.
To pass Rinnai’s monozukuri to the next generation, over 30 booklets of “Visual manual” were produced as a talentdeveloping support tool. Utilizing this tool, our staff who are qualified in various technical areas provides detailed training on
Rinnai’s manufacturing technique accumulated from the past, for employees including trainees from overseas Group companies.

Worksite Training“Manufacturing succession centers” are established at each worksite topreserve and pass on tangible assets including accumulated process
technologies and new technologies that perpetuate the “worksite intuition” ofexperienced employees.
These are used as places to teach new employees manufacturing basics
as well as a place to share and pass on information and educate personnel withrespect to manufacturing “efficiency improvements and management
strengthening.”

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Introduction

Environment

SocialGovernance

Data

SocialDevelopment of Global Human Resources

VOICE
Assigned to an Overseas Group Company Based on Various Business
Experiences

In order to develop human resources who can play an active role across national borders and improve the capabilities of
employees around the world, the Group has developed a business practices program that assigns mutual training
programs to management divisions, product development divisions, and manufacturing divisions.
With regard to human resources in Japan, we provide opportunities for assignments to overseas group companies
to employees in their 20s. The program is based on gaining actual experience through overseas assignments and aims
to develop participants’ adaptability to different cultures and international business sense.

After joining Rinnai, I worked in the Production Engineering Division for three years developingpress dies and processing technologies, then spent 12 years in the Purchasing Division
involved mainly in overseas procurement before returning to the Production Engineering
Division for a further eight years where I was in charge of new product support operations.
In March 2020, I was assigned to Rinnai Thailand. While working in the Purchasing Division,

VOICE
Transferred from the Research & Development Headquarters’ Hot Water
Equipment Development Office to Overseas Group Company

Rinnai (Thailand) Co., Ltd.

I had spent three years from 2006 to 2009 working in the southern China city of Guangzhou,

Yuji Hayashi

so this is my second overseas assignment, but it is extremely invigorating to work in a different
country with a different culture.
At Rinnai Thailand, I am the manufacturing site manager, responsible for overseeing thework of approximately 150 people, accounting for one-third of the entire workforce. To improve

Having spent nearly 10 years in the Research and Development Headquarters’ Hot Water
Equipment Development Office, where I was mainly engaged in the development of products
for overseas markets, in March 2017, I was transferred to Rinnai America.
My work here primarily entails consultation on new product development specifications,
technical support, testing assistance, and liaising with Japan on quality-related issues, such as
Rinnai America Corporation

investigating market quality problems and responding when trouble occurs. Since being

Naoto Mase

assigned to this position, there have been several major changes, including Head Office andquality and productivity, I work with staff on a daily basis to improve the work site and make itworthy of the Rinnai brand. Initially, very few opinions were expressed, but proposals have
gradually come forward. As someone who values teamwork, my sense is that we are beginningto see a positive response. There are a large number of Japanese expatriates in Thailand, withhospitals and other infrastructure providing support for Japanese people, making daily life here
worry-free.

testing room expansions and renovations, as well as the launch of water heater production at a
local factory, which have enabled me to become more engaged with local employees.
After work, I interact with local employees, with whom I enjoy bowling, eating out and otheractivities. In this way, I am able to engage in work while making the most of my time in andoutside the office.

75

Rinnai Report 2022

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Introduction

Environment

SocialGovernance

Data

SocialWork-Life Balance
Support for Work-Life Balance
For all Rinnai employees to perform well, attaining a sense of accomplishment and fulfillment balancing work andpersonal life for each lifestyle, we continue to enhance our personnel system to support all employees of any gender andnationality throughout their lives.

Formulation and Implementation of the General Employers Action Plan
Rinnai formulated the General Employers Action Plan (Sixth Period: Fiscal 2023– Fiscal 2024) basedon the Act on Advancement of Measures to Support Raising Next-Generation Children.

Program and MeasureChildcare leave

Content
Employees living with and raising a child or children less than one year of age may take aleave of absence from work until the child or children reach one year or one year and six
months of age. (The leave of absence may be extended until the child or children reaches
two years of age, dependent upon the conditions of the application for leave.)

Sixth Period General Employers Action Plan

1. Plan period
April 1, 2022 to March 31, 2024

Employees who live with and raise children until March 31 of the third year of elementary
school can request to have their prescribed working hours changed within a range of not lessthan six hours a day.

2. Details

Sick or injured childcare leave program

Employees may take a maximum of 10 days (20 days for employees with two or more
applicable children) of leave per year in half-day units to care for sick or injured children.

To improve workplace environment and change awarenessfor realization of balance between childcare and work

Extended family care leave

Employees may take a maximum of 10 days (20 days for employees with two or more
applicable family members) of leave per year in half-day units to care for a family member inneed of long-term care.

<Measures>

Family care shortened work hours

Any employee who is responsible for a family member that requires full-time or nursing care
may shorten his or her daily working hours, provided that a minimum of 6 hours are worked
each day. This provision is possible for more than once during three years from the starts ofuse of this program per such family member.

Childcare shortened work hours

Objective:• Conduct roundtable discussions facilitating the exchange of information during training sessions
for female employees.

77

Family care leave

An employee can take up to 10 days leave per year (20 days per year if two or more family
members require care).

Work from home program

The longest duration of “Work from home program” shall be one year per application. Utilizing
IT equipment, an employee may work partially or entirely at home.

Come Back programThis program offers an employment opportunity to our former employees who had to leave
the Company for unavoidable reasons such as marriage, childcare and family care, or on his
or her discretion.

Measure to reduce working hours(Flexible working hours)

Depending on work plan, working hours and work start/end time can be negotiated.

Measure to reduce working hours (Noovertime day)Every Wednesday is set as “No overtime day” to encourage employees to leave early.

• Improve the rate of male employees taking childcare leave by publishing interviews with male
employees who have taken childcare leave and spreading awareness of amendments topaternity leave conditions under the Child and Family Care Act.
• Create a system covering the duties of employees taking leave through employee training aimed
at instilling expertise across multiple work areas.

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Introduction

Environment

SocialGovernance

Data

SocialIndustrial Relations and Human Rights
Working to Enrich the Lives of Our Employees’ Families

Establishment of Good Labor Relations
Employees of the Company are members of the Rinnai Employees’ Association, which functions as the organization torepresent the entirety of the Company’s employees. Based on mutual understanding and trust, the Company and the
Association establish healthy and sound labor relations, openly exchanging opinions on management issues, labor
conditions, workplace environments, and compensation and discussing improvement plans.
Moreover, the Company makes effort to provide a safe working environment without any concern to the employees
of our business partners, etc., in addition to our employees. We also actively arrange and offer welfare programs andvarious events and programs for our employees and their families.

Respect for Human Rights and Individuality
The Rinnai Group considers respect for human rights and individuality as one of its main pillars for performing its social
responsibilities as a company. We therefore strictly prohibit any form of discriminatory treatment based on gender, age,nationality, physical characteristics, or any other attributes of individuals. We also refer to the ideas of the United Nations
framework and ISO 26000, reflect them in the Rinnai Group “Code of Ethics” and publish them on our corporate website.
To promote and enforce the contents of the Rinnai Group “Code of Ethics” among all Group employees, aCompliance Committee member is allocated to each workplace and materials are published on the Company intranet.
At rank-specific training programs, we also educate our employees based on their roles and job responsibilities.

Rinnai aims to create workplace environments and climates that allow its employees to feel glad to be working for theCompany. We collect opinions regarding the Company from each workplace and hold regular joint labor management
conferences along with employee unions. The goal of these conferences is to make improvements to the Rinnai Group.
We move forward with improvements by sharing issues unique to each business location and conducting systemrevisions. The Company has conducted activities aimed at promoting the use of paid leave, established a new regional
allowance system, and held nursing care seminars. Rinnai also provides financial support for health enhancement events
held by employee unions, such as sport or bowling competitions and walking festivals. Finally, we collaborate with
employee unions to provide workplace tours to employees’ families at our development locations and factories. Throughthese tours, we educate employees’ families about what we and their employee family members do.

Major Programs in Rinnai Employees’ Association
Item

79

Overview

Nationwide eventsin Japan

Various events to promote health of our employees and their family members and communication
including bowling competition, barbecue picnic, and sports festivals

Training seminars
by age group

Training seminars focusing on “Education for the soul” that support employees to develop attractive
personalities as members of society

Efforts to Prevent Child Labor and Forced Labor
As a measure to prevent child labor and forced labor, the “Rinnai Code of Conduct: 4.2 Prohibition of Child Labor andForced Labor” stipulates that “We will not use any inappropriate labor including child labor that subjects persons under
the legal working age to harmful labor or any form of unjust labor contrary to the intent of workers.” The entire Groupabides by and acts on this rule.

Measures to Prevent Harassment
To maintain a working environment that our employees find comfortable, we take measures to prevent any infringementof human rights, including sexual harassment and power harassment. With regard to sexual harassment, power
harassment and harassment related to pregnancy, childbirth, childcare leave and nursing care leave (maternity/paternity
harassment), we produced a checklist of detailed examples of harassment that is posted on the Companywide intranet
for self-assessment.
Furthermore, in rank-specific training for promoted employees, we also provide harassment education to reinforce
prevention.
Additionally, as a measure preventing maternity/paternity and nursing care leave harassment, we establishedemployment regulations and in-house rules prohibiting disadvantageous treatment, and clarified harassment prohibition
details and disciplinary actions based on employment regulations in the event an employee violates these rules.

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Introduction

Environment

SocialGovernance

Data

SocialFair and Diversified Employment

Formulation and Implementation of the General Employers Action Plan

View toward Employment

Rinnai formulated the General Employers Action Plan (Fourth Period: Fiscal 2023– Fiscal 2024)
based on the Act on Promotion of Women’s Participation and Advancement in the Workplace.

We respect the diversity of individuals and provide employees with various job opportunities and a working environment
where they can demonstrate their various capabilities. The Rinnai Group Code of Ethics stipulates that “Anydiscriminatory act toward an individual based on gender, age, nationality or physical characteristics, etc. is prohibited.”
Based on this, we maintain fair and equitable hiring practices, in line with prevailing business plans and recruitment needs.
In addition, we actively engage in mid-career hiring to capitalize on the accumulated experience and knowledge ofindividuals who showed they can make a contribution to our success. We hire approximately 10 skilled mid-career
employees every year.

To improve the employment environment so that women can play an active role, Rinnai
has formulated the following action plan.
1. Plan period
April 1, 2022 to March 31, 2024

2. Company issues(1) Although Rinnai continues to hire female career-track employees among new graduates, there aredifferences in the length of employment between male and female employees, hence it is necessary todevelop systems and environments enabling employees to work for longer periods of time.
(2) The percentage of women in managerial positions is low. It is necessary to increase the number of women inpositions one level below section chief and increase the number of women promoted to managerial positions.

Supporting the Promotion and Active Participation of Women
As many Rinnai products are used in everyday life, we believe it
necessary that not only men, but also women occupy posts
facilitating both perspectives in planning and proposals. To increase
the ratio of female managers, which is one indicator of women’s
active participation, Rinnai must recruit and train women for careertrack positions. To this end, we are beginning to see the results ofefforts promoting the proactive hiring of female general employees,
the development of assistant manager-class female employees, andthe creation of comfortable working environments.
Although the current ratio of women in managerial positions is0.4%, Rinnai will conduct initiatives and confirm the results of efforts
focused on the recruitment and training of female generalemployees, raising this ratio to 1.5% by fiscal 2026 and 3.0% by
fiscal 2031.

Fourth Period General Employers Action Plan

Female employee ratio

3. Goals, initiative details and implementation timeframes

(%)

8
7
6
5
4
3
2
1
0

Female employees ingeneral positions

5.5%

16

5.7%

5.0%

,

17

,

18

,

19

,

20

Goal 1: R educe the difference in average years of service between men and women from 4.6 years to

4.0 years.
Initiative details: R educe the number of retirees due to childcare, family care or other factors.
• Support for employees working shortened hours.
• Expansion of telecommuting system.

Female assistantmanager-class employees

2.0%

,

6.7%

6.3%

,

21

,

22

,

24

(Planned) (Planned)

Female manager target ratios
FY2022 actual

FY2026 actual

FY2031 target

0.4%

1.5%

3.0%

Goal 2: Increase the percentage of women in general positions (non-managerial positions) from 6.3%

to 6.7%.
Initiative details: Reduce the number of retirees due to workplace culture, childcare and family care.
• Support for returning to work after maternity leave (usage and revision of interview check sheet used before
and after returning).
• Promotion of female employee roundtable discussions at each business site (understanding requests for work
details and environment and network formation support).
• Appeal to female general employees using in-house newsletters and other means of communication.
Goal 3: I ncrease the percentage of women at the section chief level from 5.0% to 5.7%.

VOICE

Initiative details: C hange awareness of women’s advancement by training and other methods.
• Conducting training for female employees (unions).
• Implementing a program fostering an understanding of diversity within managerial training.
• Implemented a program to motivate chiefs to seek promotion to section chiefs.

Daily Diligence Enabling Better System Development
The section where I work develops systems used in factories. I am mainly in charge ofsystems related to procurement and production.
While there is an air of tension surrounding some systems involved with production line
advances, the work is interesting and provides a sense of accomplishment when our

Disclosure of Information about Promotion of Women’s Participation and Advancement

systems are used on actual production sites and to realize operational improvements.
Further, in terms of workstyle, I have been working from home as a pandemic
countermeasure, which provides me with a daily sense of fulfillment as this is a workstylethat suits me well. Going forward, I will maintain efforts to enhance my skills and diligently
development even better systems.

81

Production Engineering Headquarters

Chihiro Akai

(1) Percentage of women at the section chief level 5.0%
(2) Difference in average years of service between men and women 3.6 years(Note: Employees with labor contracts having no fixed term. Excludes contract employees and temporary staff.)

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Introduction

Environment

SocialGovernance

Data

SocialOccupational Health and Safety
Reemployment of Retired Employees and Support for Demonstration of Their Abilities

Basic Policy on Safety and Hygiene

Rinnai promotes a reemployment program for employees who retired due to the age limit in order to continuously utilize
technologies and skills that skilled employees possess and to smoothly pass on the skills and the Rinnai Spirit to following
generations. There are currently many employees working under this program. We offer one-year contracts until the ageof 65, with a choice of three options, enabling employees to work full time, alternate days, or reduced hours. We also havea system in place to extend employment to the age of 68 in the case of employees with outstanding specialist skills or
abilities, to fit in with a wide range of individual lifestyles. This reemployment program provides employees with purposeand motivation in life as a leader/mentor and maintains and improves the corporate culture and dynamics within
the workplace.

Rinnai formulated the Basic Policy on Safety
and Hygiene to create workplaces where all
Rinnai employees can work with peace of mind,
as well as to maintain and promote health, withthe aim of reducing workplace accidents.

Promoting the Employment of People with Disabilities
Rinnai is collaborating with the Public Employment Security Office, schools for handicapped children and employment
support organizations to systematically promote the employment of people with disabilities. The Company
independently holds job fairs for people with disabilities and continuously conducts campus recruiting at schools forhandicapped children. Employment focused on people with disabilities concentrated in specific locations was started
in April 2018 and has been successful.
These employees are able to engage in a wide range of operations, from advanced computer processing work tosimple tasks and from cleaning work to weeding activities. Employees are provided with an individualized businessprogram that best suits their type and level of disability with the aim of creating a workplace that is rewarding, bright,
and enjoyable.

Basic Policy on Safety and Hygiene

1. Create safe and reliable work environment
2. Maintain and improve work environment
3. Work style reforms and compliance with Article 36
Agreement
4. Promote measures to support for health improvement
5. Promote crisis management
6. Personnel training through safety education andworkshops
7. Promote traffic safety activities

Promoting Safety and Health Activities
Rinnai has established the Rinnai Companywide Safety and Health Committee as a governing body for domestic Group
companies and is working with safety, health, and disaster prevention officers at each business location to promote
occupational safety and health activities.
Within safety and health activities conducted at each business site, to prevent disasters, activities include thehorizontal deployment of examples informing employees about work-related injuries and corresponding recurrence
prevention measures, establishing safety and health committees that include members from both labor andmanagement, conducting safety and health patrols, and implementing the Company’s five fundamentals of safety andhealth (regulation, arrangement, cleaning, sanitation and training). Through these activities, we are working to create
workplace environments that are secure, safe and comfortable.

Promotion of Traffic Safety

Computer operations

83

Weeding activities

We carry out various educational activities with the aim of raising employee awareness of traffic safety and contributing
to the local community. As a “Zero Day” activity, employees themselves stand on the streets and call out to passers-by.
We hold lectures by police officers in collaboration with local police stations, and for new employees, we rent out a driving
school and hold practical training and risk prediction courses. Furthermore, through the periodic acquisition of driving
record certificates, we ascertain the status of employee safe driving behaviors and provide individual guidance assituations demand. Rinnai company vehicles are equipped with drive recorders, corner sensors and other safety
equipment, including safe driving eco-drive promotion systems (telematics), in an effort to promote employee traffic
safety and eco-friendliness from practical as well as theoretical perspectives.

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Stakeholders
Communication with Shareholders and Investors

Aiming for Longer-Term Business Growth and Stable Shareholder Returns
IR Activities for Institutional Investors and Analysts
As IR activities have been curtailed by the pandemic, we are
currently shifting to the online dissemination of financial results
briefings to ensure the same level of communication withinstitutional investors and analysts. In addition to conducting IR
interviews using conventional conference calls, we have adopted
an online meeting system to enhance communications.
We explained Rinnai’s carbon neutrality policy at the fiscal
2022 Q2 results briefing, and held a separate carbon neutrality
briefing for investors and analysts to provide more detailregarding disclosure and responses.

Carbon neutrality briefing for investors and analysts(online meeting screenshot)

Fiscal 2022 Activities

We disclose information in an appropriate, timely, fair, and impartial manner, and engage in IR activities with an emphasis

IR interviews conducted a total of 176 times
One-on-one interviews: 14 (Tokyo: 9; Nagoya: 5)
Telephone interviews: 69 times
Online coverage: 93 times
Fiscal 2022 interim results briefing (livestream): 67 attendees
Fiscal 2022 year-end results briefing (livestream): 89 viewers

on two-way communication in order to earn the trust of shareholders and investors. In an effort to provide ourshareholders and investors with direct updates on our business activities, and to ensure that information is disclosed

IR interviews

quickly and fairly, we provide information via channels such as results briefings for analysts and institutional investors(twice a year), biannual shareholder reports, press releases and presentation materials for results briefings on our website,and our IR calendar. Through various opportunities to meet with them, shareholders and investors are able to understandour business growth strategies from a longer-term perspective and to hold expectations for stable shareholder returns.

Dividend Increases for 20 Consecutive
Fiscal Years
One of our top management priorities is to sustain astable return of profits to shareholders. When deciding
on dividends we consider consolidated performance,
return on equity, financial status, and have increased
our annual dividend for 20 consecutive fiscal years
since fiscal 2003. Additionally, in the fiscal year ending
March 31, 2023, Rinnai plans to provide an interim
dividend of ¥75 and a year-end dividend of ¥75,
amounting to a full-year dividend of ¥150.

Dividend per share
(Yen)
150

140
125

120

90

InterimYear-end

60

30

26 28 30
20 24

36

40 42

48

56

60

68

76

82 86

90 94

98

Institutional Investor Opinions at Fiscal 2022 Year-End
Rinnai received many inquiries pertaining to parts procurement
instability in the second half of fiscal 2022 and price revisions
implemented in April 2023 among usual questions related tobusiness performance, future outlook and the status of productsales from institutional investors and analysts at the fiscal 2022
financial results announcement.
There was more interest than ever in how major
environmental changes surrounding the pandemic will affectCompany activities and future business conditions. Rinnai
communicated the latest performance results and explained
the ongoing implementation of the medium-term businessplan, highlighting achievements thus far.

Institutional Investor Question Topics

Others14%
Medium-termbusiness plan13%

Performance
31%

OthersESG Results
Markets
CapitalpolicyForecasting

Investments
Transport
Materials
Lockdowns
Pricerevisions

Products
Parts
procurement

Supply chain
42%0(FY) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

85

Rinnai Report 2022

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Customers

Rinnai DX Initiatives
Rinnai is proactively promoting the transformation of its corporate structure (digital transformation [DX]), executing acomprehensive review of existing business and operational processes and shifting to a consumer-oriented approach.
We will respond flexibly to market changes, steadily pursuing sustainable development through business expansion
and global development.

Defense-oriented DX Strategies

Operational
reviews

Higherefficiency
Laborsaving

FasterdecisionmakingManagement rationalization

Offense-oriented DX Strategies
Provision of
new services

Businessmodel
creation

Expandcustomer
contact
points

New value creation

Having defined defense-oriented DX strategies as management rationalization, and offense-oriented DX strategies as
new value creation, Rinnai is engaged in initiatives on both fronts.
Management rationalization: Restructuring business processes utilizing new digital technologies and internal data
Initiatives: Revising operations, streamlining and conserving manpower in processes,
accelerating decision-making
New value creation: Utilizing product usage data, customer feedback and browsing history
Initiatives: Providing new services meeting needs, creating business models and expanding
customer contact points
In terms of promoting DX, Rinnai is creating a DX
DX Promotion Platform
promotion structure, developing human resources,
Promotion structure creation
Human resource development
establishing a technological environment and building• Allocate promotion personnel to• Cultivate DX-personnel
each division• Technology training for IT staff
data management infrastructure. We have allocated• Create cross-sectionalorganizational structure
personnel to this promotion structure to advance DX ineach business and management division. Further, weDevelop technologicalCreating a data management
environment
platformlaunched a Company-wide cross-functional project• Use of cloud technologies• Data storage platform creation
aimed at building a system uniting the entire Company.
• Backbone systems review• Data analysis platform creation
In developing human resources, we provide
training for personnel who promote DX to inculcate the latest technological trends and case studies, as well as themindset and skills required to promote DX. We also created an environment enabling IT staff to learn about AI, IoT
and other information technologies as part of efforts to incorporate them into business activities.
To improve Rinnai’s technological environment, we are promoting the rapid development of environments andoperational optimizations using cloud technologies while reviewing backbone systems, which can be a barrier to thepromotion of DX. With regard to data management infrastructure, we are working to build an environment for storing
and analyzing various data necessary to create new value.

87

Taking Advantage of the Internet to Enhance Customer Support
We supply care products and user replaceable parts via our R.
STYLE online shopping site to help our customers get the mostout of their purchases for as long as possible. The range ofofferings is being constantly expanded in response to direct
customer feedback and now includes cleaning and kitchen
supplies that are highly compatible with our products and original
products available only through R.STYLE.
We recently revamped the Rinnai website design to align itwith Rinnai’s brand promise and improve the members-only
The new Rinnai Style aligned with our brand promise
section. In addition to traditional credit card and convenience store
payment methods, our website now supports online payments via smartphone. In April 2022, the number of registeredmembers exceeded 970,000, providing even more opportunities for contact with users of our products. To keep in touchwith members’ needs, we conduct online questionnaires (annually more than four times) and use the data obtained todesign products that meet these needs and resolve issues that they raise. We will continue to expand direct contact withcustomers in our quest to deliver better service.

Developing More Intimate Communication through the Living Information Column
The Rinnai Group established R.STYLE column (“Rinnai-style
column” site). This site provides pertinent living information with thegoal of achieving ongoing communication with customers who use
Rinnai products.
The site provides wide-ranging content closely related to ourdaily lives, containing diverse information related to cleaning, tidying
up and storage, cooking, and laundry and ironing. It also contains
columns that aim to eliminate concerns regarding housework, andto share specialized expertise and information regarding new
discoveries. We try to make articles as plain and simple as possible
so that readers can easily try out the recommendations of experts.
The Group will continue to endeavor to operate a column sitethat offers rewarding and satisfying articles which will always bring
its readers back for more.

Rinnai Style Magazine

Rinnai Report 2022

88

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Business Partners

Working with Suppliers to Promote BCP
1. Ascertain risks

2. Formulate risk
countermeasures

3. Prepare for risks

Working with suppliers to promote BCP

Rinnai Group Purchasing Policy
To grow along with our suppliers, we emphasizetransactions based on a fair and impartial assessment
and selection process and respect for laws andregulations and corporate principles, in accordance with
the Rinnai Group Purchasing Policy.

Purchasing Policy

We will give equal opportunity to all companies athome and abroad and undertake fair evaluations to
procure excellent parts that meet our requirements.
https://www.rinnai.co.jp/en/corp/plan/

Rinnai’s Stance on the Relationship with Its Business Partners

Fire and natural disaster inspection patrols (with 13 suppliers)

VOICE
Fire and Disaster Mitigation Efforts
Having acquired ISO 14001 certification for this inspection, we had a certain degree of confidence, but

Our suppliers provide us with the raw materials and manyof the components that go into the products we make.
They are business partners indispensable to the creationof products that attract consumers to the Rinnai name. At
Rinnai, we believe that building stable, long-term relationships with our suppliers and growing with them as theygrow with us is vital to the creation of better products.

Provide appropriate
information

Rinnai

In 2021, the pandemic continued to cause plant shutdowns
and logistical problems, making parts procurement extremely
difficult. Compared to the past, Rinnai’s materials procurement
network has expanded globally, with the importance of BCP
increasing to unprecedented levels. We will work with suppliers
to firmly promote BCP.
We work closely with business partners to exchange
information, examine supply chain risks and grasp themarketability, availability and future viability of parts. To
mitigate risks, we also promote inventory optimization toprepare for various risk scenarios and are engaged in thediversification of materials, processes and logistical networks.
In recent years, as we have also seen an increase in partsprocurement problems due to plant fires and natural disasters.
In October and November 2021, we conducted fire and natural
disaster inspection patrols in conjunction with 13 suppliers.
Rinnai will strengthen BCP by further enhancing accident
prevention and mitigation with respect to fires and natural
disasters.
Going forward, we will continue to deepen communications
with suppliers in an effort to maintain stable production.

Monozukuri
supportRealization of Fair-and-Square Transactions

Resultsec t ivttraateea Cooperation
Cr

prod

Improve quality,
reduce costs

uc t sCo-existence,
co-prosperity(Win-Win)

Products,
monozukuri proposals

Suppliers

In accordance with the Rinnai Code of Conduct in the Rinnai Group Code of Ethics, our supplier acceptance process isapplied uniformly, whether the company is a long-time supplier or seeking to become a supplier. Our evaluations are fair,
giving equal opportunity to any and all companies with the right stuff, whether at home or abroad. Essentially, the divisions
involved in procurement—that is, divisions responsible for technology, quality, and purchasing—consider all factors,
including quality, price, and delivery as well as the potential supplier’s technological capabilities, safety, and its
environment-oriented activities, in reaching an impartial, well-considered decision.

still received a wealth of useful guidance aimed at reducing the potential for the spread of fires or otherdisasters to near zero, including in-depth guidance related to education and training. We are alreadytaking measures to address identified issues, and will continue to conduct regular internal inspections

Communication with Business Partners

to implement improvements as quickly as possible.
Toko Co., Ltd.
Senior Managing Director

Kimihiro Suzumura

89

In 2021, procurement activities were more difficult than in 2020 due toshortages in electronic and wire component supplies and lockdowns
in Vietnam.
We strive to ensure stable procurement by communicating withprimary suppliers from who we procure directly, as well as secondary andtertiary manufacturers and trading companies. Taking complex electricalwire components deployed in the global supply chain as an example,
Rinnai is strengthening business activity risk countermeasures throughthe face-to-face sharing of information and delivery date negotiations
for components that include electrical wires, connector parts, resin andmetal materials.

Electrical wire components used by numerous companies

Rinnai Report 2022

90

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Local Communities and Society

Sponsoring the Oshigoto Hakubutsukan Career Development
Support ProjectContributing to Regional Cultural Development

Rinnai sponsors Oshigoto Nenkan, the core teaching material for the Oshigoto Hakubutsukan Career Development
Support Project promoted by The Asahi Shimbun Company.
The Oashigoto Nenkan is a supplemental teaching material for elementary and junior high school student careerdevelopment donated to all elementary and junior high schools and libraries across Japan. It has been published for six
consecutive years as an educational resource.

Participating in the International Canal ForumSponsorship Background
As Rinnai handles hobs (stovetops) and water heaters providing hot water for use in kitchens and baths, we have a duty
to inform the public about the principles of flames and safe usage. With elementary and junior high school students inparticular, we explain in an easily understandable way how flames are created and how gas and open flames can be usedsafely in the home. We will continue to provide this information so that everyone can understand and use heating
equipment with peace of mind.

Oshigoto Nenkan: Why are gas stovetop flames blue?
https://oshihaku.jp/nenkan/page/13152686

The Ministry of Education, Culture, Sports, Science and Technology (MEXT) has set the goal of creating a betterschool education and society through cooperation and collaboration between communities and schools (families) aimed
at realizing a curriculum open to society. Rinnai will continue to sponsor the Oshigoto Hakubutsukan career development
project in support of equal access to quality education for all people.

The International Canal Forum Nagoya 2020 was held at Aichi University (Nagoya) and other venues in May 2021 to
discuss the use of canals in urban development. Due to the pandemic, the forum was presented in a format that enabledonline participation streamed live for the general public.
At the International Canal Forum, participating company involvement with the Nakagawa Canal, including pastefforts and expectations for the future, were discussed at length. In addition to donating ¥10 million every year for the past
10 years since fiscal 2013 to ARToC10, a project subsidizing cultural and artistic activities in support of exchanges withcitizens and creative activities in the Nakagawa Canal Restoration and Cultural/Artistic Assistance Project’s “Nigiwai(Bustling) Zone.”
Rinnai Corporation, Actual Results in Fiscal 2022

• Support for restoration project on the Nakagawa Canal• Nagoya Philharmonic Orchestra• Campus Venture Grand Prix, Chubu Area
• Nagoya Shonen Shojo Hatsumei Club (Invention andInnovation Youth Club)• Keidanren Committee on Nature Conservation• Nagoya University Foundation• Chinese Spring Festival in Nagoya• Sponsorship of the Connecting Traditional Japanese
Culture Project• Green Fund• Monodzukuri Nihon Conference• Choju-no-Kai (Classical Japanese dance)

Social Contribution Amounts in Fiscal 2022

• Social contribution activities funding: ¥27,830,000• Political donations:¥790,000
Oshigoto Nenkan 2022

91

Rinnai sponsored page: Why are gas stovetop flames blue?

Rinnai Report 2022

92

Introduction

Environment

SocialGovernance

Data

SocialStakeholder Engagement
Global Social Contribution Activities

Rinnai places great importance on daily communication with customers, employees, shareholders, investors, business partners, local
communities, and the general public in an effort to further evolve our business activities and improve levels of satisfaction.
Means of Communication

China (Shanghai Rinnai)
In March 2022, COVID-19 began to spread once again, with conditions inShanghai being particularly serious. In cooperation with distributors,
suppliers and others, Shanghai Rinnai donated electric water heaters, water
purifiers and daily necessities to quarantine facilities for infected people.
During subsequent lockdowns, as food (especially vegetables) was in short
supply, we worked with distributors to collect 15 tons of vegetables in one
night, which we then donated to the Shanghai Fengxian District government.

Customers(Users) (Distributors)

Employees

Communication with
Our Stakeholders
Shareholders,
Investors
Donating electric water heaters to medical quarantine facilities

Business
Partners

South Korea (Rinnai Korea)
In April 2022, four South Korean boiler manufacturers, including Rinnai
Korea, as well as the Seoul Metropolitan Government and the Seoul
Council on Social Welfare, met to discuss the expansion of measures
supporting pro-environment boilers contributing to the global environmentand held a pro-environment boiler donation ceremony.

Community, Society• Customer Center• Exhibitions / Other events• After-sales services(inspection and repairs)• Official online shopping site “R.STYLE”• New Year meetings(policy presentations)• New product workshops utilizing internal
facilities• Corporate site
• Product information site

• Individual discussions• Workplace meetings• Training / Events• Corporate ethics advisory service• In-house intranet / In-house newsletter• Information exchange with employee
unions• General shareholders’ meetings• Results briefings• Factory tours• Investor relations (IR) meetings• Questionnaires• New Year meetings• Policy presentations for suppliers• Level-Up Workshop• Online communication tool, “R-LINE”• Participation in local / community
development activities• Support for cultural activities and the arts
• Employee volunteer activities• Support for extracurricular school
activities (factory tours, etc.)(Including government)

Feedback from the Nikkei Integrated Report Award 2021
Rinnai entered the Nikkei Integrated Report Award 2021 sponsored by Nikkei, Inc., receiving a wealth of evaluative feedback from judges that we will consider reflecting
in subsequent issued of the Rinnai Report.

Pro-environment boiler donation ceremony

United States (Rinnai America)
In March 2022, Rinnai America promoted the campaign theme “Break the Bias,” forInternational Women’s Day 2022. Throughout the entire month of March, weshowcased female employees and their work on our official Facebook page. As
efforts promoting gender equality are a year-round priority, Rinnai will continue to
Break the Bias.

Main Points of Evaluation

Main Issues• In Message from the President, the president's passionate ideas andcommitment to being a profitable company are evident.

• The report should integrate the link between Rinnai’s growth story and theenhancement of corporate value.

• Rinnai financial targets are highly original, as they include improving quality oflife and contributing to the environment as part of corporate value creation.

• Rinnai should provide more thorough explanations of its investment plan, neworganization, technological advantages, and other points indicating the future
direction of the company.

• In addition to financial data, useful non-financial data is also presented in an
extremely exemplary format.

• The report should indicate the status of Board of Director and othermanagement meetings, as well as provide a realistic overview of their activities.

Results of Questionnaire Regarding Rinnai Report 2021 (Integrated report) n=275
Showcasing women’s active participation onsocial media

Thailand (Rinnai Thailand)
In September 2021, we donated high-flow oxygen concentrators to local
hospitals for use in treating patients infected with COVID-19.

Donating high-flow oxygen concentrators to local hospitals

93

We sent a questionnaire to readers of our 2021 Rinnai Report and asked them to vote on topics they found interesting.
We intend to incorporate the results of this questionnaire in our next edition.
Corporate Message
Corporate Mission and Vision Editorial Policy / Contents
100 Years of History
Rinnai Group Profile
Value Creation Process
Message from the President
Medium-term Management Plans
Message from the General Manager of Corporate Planning Headquarters
Message from the President of a US Subsidiary
Identifying Material Issues
Response to Global Environmental Problems
Responses to the Task Force on Climate-related Financial Disclosures
Global Deployment of Rinnai Group Water Heaters
Environmental Impact within Rinnai’s Value Chain
Defining “Improved Quality of Life”

Response rate
0

10

20

30

40

50(%)

Rinnai Report 2022

94

Introduction

Environment

SocialGovernance

Data

GovernanceManagement Structure
Basic Principles

Audit System for Monitoring and Supervising Management

01

Rinnai views reinforcement and enhancement of corporate governance as important management priorities fromthe perspectives of strengthening competitiveness and continually improving corporate value of the Group.

02

Rinnai takes care to preserve equality of shareholders by ensuring that their rights are essentially protected andthat those rights can be exercised smoothly.

03

Rinnai views appropriate cooperation with all stakeholders as essential to improving corporate value and, throughits business activities, strives for its own growth together with social and economic prosperity.

04

Rinnai emphasizes highly transparent management through the swift and appropriate disclosure of wide-ranging
information while stepping up efforts to ensure that disclosure of Company information is based on legal
regulations.

05

Rinnai’s Board of Directors recognizes its fiduciary responsibilities to shareholders and strives to continually
improve corporate value though transparent, fair, swift, and resolute decision-making.

06

Rinnai encourages mutual communication through dialogue with shareholders and other stakeholders in order tobuild relationships of trust with those stakeholders.

Corporate Governance Structure

Election and dismissal

Cooperation

Audit & Supervisory Board

Accounting Auditor

Cooperation

Election and dismissal

Audit

Consultation andrecommendation

Nomination/Compensation
Advisory Committee

Board of Directors

Election, dismissal,
and administration

President

ReportManagement

Internal
Audit

Related Committees

ReportReportAudit

Rinnai’s Board of Directors is comprised of seven members, two of whom are outside directors, and meets once a month inprinciple. The Board makes decisions regarding major management issues and also oversees business execution by Board
members. Some directors below the President serve concurrently as executive officers, whose role is to convey decisions by
the Board to executives in the relevant divisions responsible for business execution. The Board confirms business operations
and discusses issues at general business meetings and at other business meetings held on a quarterly basis. Moreover, theterm of Directors is fixed at one year in order to clarify management responsibilities and increase opportunities to enhanceshareholder confidence in the Board.

ReportExecutive Officers
ReportRinnai established a Nomination Advisory Board and a Compensation Advisory Board comprising a majority of outside
independent directors as advisory bodies to the Board of Directors to ensure a higher degree of objectivity and transparency inthe process of determining nominations and compensation for senior management and directors. Nominations andcompensation of directors and executive officers are discussed by the respective advisory committee, with a final decision
made by the Board of Directors.

Director Compensation

Election, dismissal,
and administration

Direction

Internal Control Office
Audit

Board of Directors

Nomination Advisory Board and Compensation Advisory Board
General Shareholders’ Meeting

Election and dismissal

Rinnai recognizes the reinforcement and enhancement of its corporate governance to be important management priorities
from the perspectives of strengthening competitiveness and continually improving corporate value of the Group. We aim to
conduct highly transparent management by providing swift and precise disclosure of wide-ranging information to all of ourdiverse stakeholders while endeavoring to enhance the functionality of internal bodies, such as our Board of Directors
and Audit & Supervisory Board.
The Audit & Supervisory Board is comprised of four members, two of whom are outside auditors. Audit & Supervisory
Board members attend Board of Directors’ meetings and other important meetings to monitor director and executive
organization execution of duties, the development and operation of the internal control system, and the status of operations andproperty management at the head office and major offices. In addition to these duties, external account auditors audit theCompany’s accounts and verifies from a third-party perspective the legality of the internal control system as it relates tofinancial accounts.

Direction

Corporate Ethics Committee
Risk Management Committee
Environment Management
Committee
ESG Committee*1 and other

Cooperation

Business Divisions*1 In April 2022, Rinnai established the ESG Committee chaired by the President. The ESG Committee has functions as an organization that implements improvements in mattersrelated to the environment, society, and governance aimed at improving corporate value.

Compensation Amounts for Directors and Auditors
Compensation limits for directors and auditors are determined in(Fiscal 2022)
accordance with the resolution of the general meeting of
Total amount ofshareholders..
Category
Persons
compensation
paid*2Compensation for directors consists of a basic component
Directors
7¥284
million(fixed compensation) and a performance-linked component in a(of which are(2)(15)
outside directors)
ratio of approximately 70:30 for the purpose of providing a soundAuditors
4¥43 million
motivation for increased corporate value and target achievement.
(of which are(2)(11)
outside auditors)
Performance-linked compensation consists of an annual bonus,
Total
11¥327 million
designed to promote steady attainment of performance targets
every fiscal year, and a restricted stock compensation, designed to
Director salaries do not include employee salaries for directors who also serve
as employees. As of March 31, 2022, there were five directors (including two
seek steady improvement of corporate value through sharing
outside directors) and four auditors (including two outside auditors).
interests with shareholders by holding the Corporation’s shares forthe medium to long term. Compensation for auditors is determined through discussions among them.
*2 Excluding outside directors and directors who hold more than a certain number of shares

95

Rinnai Report 2022

96

Introduction

Environment

SocialGovernance

Data

Human
Resources
Strategy (S)Governance(G)/Legal
Matters

IT/Digital
Transformation(DX)

Governance

Leadership (As of June 29, 2022)
Board of Directors
Kenji Hayashi

Skills Matrix of Directors

Representative Director, Chairman of the Board

Career Summary and Current Position in the Corporation:
Apr. 1972 Joined Rinnai Corporation
Sep. 1978 Director
Feb. 1980 Director, and General Manager of Corporate Planning OfficeJun. 1983	Managing Director, and General Manager of Production Technology Division

Hiroyasu Naito

Expertise and Experience
Jul. 1992	Managing Director, and General Manager of Related Business DivisionJun. 2005	Director, Managing Executive Officer, and General Manager of Related Business
Division
Jun. 2006 Representative Director, Vice Chairman of the Corporation
Apr. 2017 Representative Director, Chairman of the Board (current)

Representative Director and President and Executive President

Career Summary and Current Position in the Corporation:
Apr. 1983 Joined Rinnai Corporation
Jun. 1991	Director, Deputy General Manager of Technology Research Headquarters, andconcurrently General Manager of New Technology Development Division
Jul. 1998 Director, General Manager of Technology Research Headquarters
Jul. 2001	Director, General Manager of Corporate Planning Division and concurrently,
General Manager of Administration DivisionJun. 2003	Managing Director, General Manager of Corporate Planning Division andconcurrently General Manager of Administration DivisionJun. 2005	Director, Managing Executive Officer, General Manager of Corporate Planning
Division and concurrently General Manager of Administration DivisionNov. 2005	Representative Director, President and Executive Officer of the Corporation(current)

Career Summary and Current Position in the Corporation:
Apr. 1967 Joined Rinnai Corporation
Jun. 1988	Director, General Manager of Technology Research Headquarters andconcurrently General Manager of Quality Guarantee DivisionJun. 2001 Managing Director, General Manager of Production Headquarters
Jun. 2005	Director, Managing Executive Officer, and General Manager of Production
Headquarters
Nov. 2005	Director, Managing Executive Officer, in charge of domestic business, andconcurrently General Manager of Marketing & Sales Headquarters
Apr. 2006	Director, Senior Executive Officer, in charge of domestic business, andconcurrently General Manager of Marketing & Sales Headquarters

Apr. 2009	Director, Executive Vice President; responsible for Research & Development
Headquarters, Production Headquarters, Overseas Business Headquarters andCustomer Division, and General Manager of Marketing & Sales Headquarters
Apr. 2010	Representative Director, Executive Vice President; responsible for Research &Development Headquarters, Production Headquarters, Overseas Business
Headquarters and Customer Division, and General Manager of Marketing & Sales
Headquarters
Oct. 2010	Representative Director, Executive Vice President; responsible for Research &Development Headquarters, Production Headquarters, Overseas Business
Headquarters, and General Manager of Marketing & Sales Headquarters
Apr. 2016	Representative Director, Executive Vice President, President’s Assistant, in chargeof Production Headquarters and Overseas Business Headquarters
Apr. 2018	Representative Director, Executive Vice President, President’s Assistant (current)

Nobuyuki Matsui Outside director, Independent officer

Takashi Kamio

Career Summary and Current Position in the Corporation:
Apr. 1985	Professor at Department of Electrical Engineering in Nagoya Institute ofTechnology
Jan. 2004 President at Nagoya Institute of Technology
Apr. 2010	Auditor at Aichi University of Education, Adviser of Aichi Prefectural Government
Office (Industrial Labor Section)
Apr. 2012 Professor at Chubu University
Jun. 2014 Outside director, Rinnai Corporation (current)
Apr. 2021	President at International Professional University of Technology in Nagoya (current)

Career Summary and Current Position in the Corporation:
Apr. 1965 Joined Toyota Motor Co., Ltd.
Jun. 1996 Director at Toyota Motor Corporation
Jun. 1999 Managing Director at Toyota Motor Corporation
Jun. 2001 Senior Managing Director at Toyota Motor Corporation
Jun. 2005	Senior Advisor at Toyota Motor Corporation
President at Towa Real Estate Co., Ltd. (currently, Toyota Fudosan Co., Ltd.)
Jun. 2006 Director at Nakanihon Kogyo Co., Ltd.
May 2010	Advisor at Toyota Motor Corporation
Jun. 2010 Senior Advisor at Towa Real Estate Co., Ltd. (currently, Toyota Fudosan Co., Ltd.)
Jun. 2011	
Audit & Supervisory Board Member at Central Nippon Expressway Company Limited
Jun. 2016 Outside director, Rinnai Corporation (current)

Outside director, Independent officer

Current Representation in Other Companies:
Chairman of Sasaeai, specified nonprofit corporation

Audit & Supervisory Board Members
Haruhiko Ishikawa

Standing Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Apr. 1980 Joined Rinnai Corporation
Nov. 2005	General Manager of Administration Division, Administration Headquarters
Apr. 2014	Executive Officer, General Manager of Administration Division, Administration
Headquarter
Jun. 2016 Audit & Supervisory Board member (current)

Masaaki Matsuoka

97

Outside Independent Audit & Supervisory Board
MemberKinji Mori

Kenji Hayashi

●

●

●

−

●

●

●

−

President andExecutive President

Hiroyasu Naito

●

●

●

−

●

●

●

−

Representative Director andExecutive Vice President

Tsunenori Narita

●

●

●

●

−

●

−

−

Director (outside)

Nobuyuki Matsui

●

−

●

−

−

●

●

●

Director (outside)

Takashi Kamio

●

●

−

●

−

●

●

−

Reasons behind Selecting Eight-Point Skills Matrix
SkillsReasons behind Matrix Selection

Corporate management

It is vital for Rinnai, which seeks to address global social challenges through core technologies under the business themes of "heat and lifestyles"
and "health and lifestyles," to have directors who possess a wealth of knowledge in consumer services as well as management experience atmanufacturing companies, research facilities and other organizations.

Global management

Rinnai must have directors who possess overseas business management experience and a deep understanding of and involvement at the local
level, that is, the local lifestyle and culture and the environment, to support business expansion in global markets, particularly Japan, the UnitedStates and China, and to support sustainable growth.

Technology<Development/
Production/Environment>

Basic research into the use of all sorts of energy sources and component development as well as measures to maintain a highly reliable production
system are essential to an expanded lineup of products that contribute to "heat and lifestyles" and "health and lifestyles," and Rinnai must therefore
have directors with demonstrated knowledge and experience in development, production and the environment.

Business Plans/Marketing

Rinnai must have directors with demonstrated knowledge and experience in business planning and marketing to gather information on the realneeds of consumers and develop product planning and sales planning matched to these needs, and to reinforce business activities related to direct
sales.
Rinnai must have directors with demonstrated knowledge and experience in financial, accounting and capital policy disciplines for optimum

Finance/Accounting/Capital
allocation to strategic investments, return to shareholders and risk-responsive capital from the current added-value and profit-emphasis
Policymanagement perspective as well as a medium-term perspective.

Rinnai must have directors with demonstrated knowledge and experience in human resources development, workplace creation, health

Human Resources Strategy
management and diversity-oriented hiring to realize personnel system reform that encourages employees to challenge themselves and strive for(S)

personal fulfillment, and to present new workstyles and improve brand power.

Governance (G)/Legal Matters

Rinnai must have directors with demonstrated knowledge and experience in corporate governance, risk management and legal matters to maintainthe appropriate global governance structure and keep business activities going in fair and equitable workplace environment.

IT/Digital Transformation(DX)

Rinnai must have directors with demonstrated knowledge and experience in IT and DX, not only to promote digital transformation throughout the
Corporation but also to establish an information infrastructure to thwart cyberattacks and to utilize leading-edge information technologies.

Standing Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Apr. 1981 Joined Rinnai Corporation
Apr. 2010	Executive Officer, General Manager of Product Development Division, Research &Development Headquarters
Apr. 2011	Executive Officer, Deputy General Manager of Research & Development
Headquarters, General Manager of Product Development Division
Apr. 2016	Managing Executive Officer, General Manager of Research & Development
Headquarters
Apr. 2018	Managing Executive Officer, General Manager of Research & Development
Headquarters, General Manager of Technology Administration Division
Apr. 2019	Managing Executive Officer, General Manager of Quality Assurance Headquarters,
General Manager of Environment DivisionJun. 2022 Audit & Supervisory Board member (current)

Ippei Watanabe

Chairman* This table does not show all of the skills possessed by each Director.

Tsunenori Narita Representative Director and Executive Vice President, President’s assistantCurrent Representation in Other Companies: Outside director at Aichi Tokei Denki Co., Ltd.,
President at International Professional University of Technology in Nagoya

Corporate
management

Technology<Development/
Finance/
GlobalBusiness Plans/
Production/
Accounting/management
Marketing
Environment
Capital Policy(E)>

Executive Officers (excluding concurrent directors)
Hideyuki Shiraki

Chuji Nakashima

Kazuto Inoue

Hirohisa Ooi

Takuya Ogawa

Managing Executive Officer
General Manager of Marketing &Sales Headquarters and General
Manager of Sales Division

Managing Executive Officer
General Manager of Research &Development Headquarters, andGeneral Manager of Technology
Administration Division

Managing Executive Officer
General Manager of Production
Engineering Headquarters

Senior Executive Officer
General Manager of Production
Headquarters

Senior Executive Officer
General Manager of Corporate
Planning Headquarters

Yoshihiko Takasu

Masanori Shimizu

Kenichi Ebata

Katsunori Tanioka

Hiroyuki Hoyano

Senior Executive Officer
General Manager of Overseas
Business Headquarters

Senior Executive Officer
General Manager of Quality
Assurance Headquarters

Senior Executive Officer
General Manager of President’s
Office, and General Manager ofGeneral Affairs Division

Executive Officer
General Manager of Chubu Branch,Marketing & Sales Headquarters

Executive Officer
General Manager of Kanto Branch,Marketing & Sales Headquarters

Atsuo Kashima

KazuhikoMatsumoto

Kenji Endo

Hayao Nishizawa

Outside Independent Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Sep. 1976 Registration of a certified public accountant
Jul. 1988	Partner at Deloitte Tohmatsu LLC (Now, Deloitte Touche Tohmatsu LLC)
Jun. 2014 Retired from Deloitte Touche Tohmatsu LLC
Jul. 2014 Established Masaaki Matsuoka CPA office (current)
Jun. 2016 Audit & Supervisory Board Member (current)

Career Summary and Current Position in the Corporation:
Apr. 1978	Registration of attorneys
Joined Saji & Ohta Law firm
Jun. 1991	Established Ohta & Watanabe Law firm (currently, TRUTH & TRUST Law Office)(current)
Jun. 2016 Audit & Supervisory Board Member (current)

Current Representation in other companies
Audit & Supervisory Board Member at Kanemi Co., Ltd.
Outside Audit & Supervisory Board Member at Mitachi Co., Ltd.

Current Representation in other companies
Outside director at Howa Machinery, Ltd. (Audit and supervisory committee member)

Executive Officer
General Manager of Accounting
Division

Executive Officer
Presidents of Rinnai Precision Co., Ltd.

Executive Officer
Executive Officer
President of RB Controls Co., Ltd. and President of Shanghai Rinnai Co., Ltd.
President of Noto Tech Co., Ltd.

Rinnai Report 2022

98

Introduction

Environment

SocialGovernance

Data

Governance

Message from an Outside Director

Compliance
Rinnai thoroughly instills compliance in all its executives and employees to ensure it is a sound corporate group that istrusted by society. We are enhancing our corporate culture of compliance and creating an environment in which all
executives and employees can fulfill their social responsibilities and approach their work in a forward-looking manner.

Rinnai Group Code of Ethics

Takashi Kamio
Outside Director, Independent Officer

My Views on Rinnai’s Initiatives and Business Performance
It has been two years since the pandemic began, and even now the world’s politics and economics are undergoing
dramatic changes, among the most prominent being Russia’s invasion of Ukraine.
Amid this situation, Rinnai experienced great difficulties in production and sales due to parts procurement
disruptions and cost increases. However, I think I saw Rinnai’s true mettle in overcoming obstacles, as sales in fiscal 2022
reached a record high.

The Rinnai Group has compiled behavioral standards that all executives and employees must obey in the “Code of
Ethics,” a small booklet that includes the “Rinnai Code of Conduct” as a guideline for specific daily activities.
In addition, an English-language version of the “Code of Ethics” is issued to Group companies, and in countries
where the official language is not English, the manual is translated into the local language of that country.
Each year, Rinnai conducts Code of Conduct awareness activities for all Group employees including those outsideof Japan.
Furthermore, in Japan we have created the “Rinnai Code of Conduct Guidebook” as a tool to deepen understandingof the content in the “Rinnai Code of Conduct” and we also implement tests using e-learning to confirm the level ofunderstanding.

What I Find Good about Rinnai
Rinnai’s fundamental concept is “Quality is our destiny,” and it is posted in key locations throughout the Company. I believethat this is the embodiment of its commitment to quality as a manufacturer. In addition, I feel that the tradition of “startingand ending with a bow” at Board of Directors’ meetings creates a sense of healthy intensity at such meetings and is how
the quality of discussions is enhanced.
While there is a feeling of intensity in the meetings, the President himself answers questions from Outside Directors
and Audit & Supervisory Board members with detailed explanations, which is impressive and creates an atmosphere thatallows free and vigorous discussions. In addition, there are planned briefing sessions on issues and initiatives in eachbusiness unit, as well as factory and facility tours, to ensure information sharing as a basis for discussion.

Code of Ethics summary awareness meeting(Rinnai Holdings Pacific)

Code of Ethics summary awareness meeting(Rinnai Korea)

Issues Facing Rinnai
There are four steps in approaching risk management: 1) prediction and forecasting, 2) prevention and mitigation, 3)
response to incidents, and 4) prevention of recurrence. During the difficulties with procuring parts in that latter part of fiscal
2022, I think management took decisive actions in step 3) response to incidents and thereafter. I think the issues fromnow on are how to discuss 1) prediction and forecasting and 2) prevention and mitigation, and I would like to see the Risk
Management Committee emphasize this as part of its role.
Furthermore, as stated in the medium-term business plan, to achieve expansion of business scale, the planning
function for overseas strategies, marketing function, and overseas human resource development are indispensable asconditions for further corporate growth. I intend to continue to discuss these issues through Board of Directors’ meetingsand other settings.

99

Rinnai (New Zealand)
Written Pledge

Rinnai (Malaysia) Training via Zoom

Rinnai Group Code of Ethics(English, Chinese and Korean versions)

Rinnai Report 2022 100

Introduction

Environment

SocialGovernance

Data

GovernanceCompliance Education Activities

Disciplinary Actions

Rinnai’s Legal Division conducts legal education every year with regard to laws closely related to operations conductedby business divisions. Rinnai also conducts compliance education every year during employee training for new recruits
and by rank, with 221 employees attending in fiscal 2022. Compliance training was also conducted for divisional heads by
Rinnai’s corporate lawyer.
In addition, we share a variety of information with domestic Group employees via our in-house intranet, where wepost data such as information regarding legal reforms, legal commentary concerning our operations, and examples ofviolations that occurred at other companies.

In order to maintain an appropriate work environment, disciplinary action is imposed on those who violate work rules andinternal regulations.
In particular, in cases of severe disciplinary action, the Disciplinary Committee will meet to take strict measures.
Furthermore, for the purpose of preventing recurrence, violations and results of disciplinary actions are disclosed every
year in the Company newsletter, except for information that identifies individuals.

Compliance Violations
Confirmation and Modification of Compliance Activities

In fiscal 2022, there were no serious compliance violations.

Every year, we conduct employee questionnaires to ascertain how deeply ingrained elements of our Corporate
Philosophy have become. In fiscal 2022, these showed that 99.7% of respondents were familiar with the Company Motto,
97.6% of respondents recognized Rinnai Brand Promise, and 96.0% understood our Corporate Mission.
We will continue to actively promote compliance activities to maintain these high levels.

Facilitation of Internal Reporting System
If, in the course of business activities, an employee at a domestic company under the Groupumbrella suspects possible breach of laws or the internal rules or unfair practices, and it isdifficult to approach a superior or the person responsible for the division with suchsuspicions, the employee may report the perceived infraction to the Corporate Ethics
Helpline.
Established in November 2005, the Helpline accepts inquiries from within and outside
the Company. In this system, we stipulated that the person who reported the incident will
not receive any unfair treatment by the fact that he or she reported the matter, and we also
pay full attention to the protection of privacy of the person who made the report.
In fiscal 2022, the helpline received 10 reports and requests for advice. Appropriate
measures have been taken, including investigation and confirmation of the facts in thesecases of alleged misconduct.

101

A legal violation or someother issue occurs during
operations
Breaches of laws, regulations,internal rules, and ethics
Confirmation of illegal activities
Found it difficult
to consult witha supervisor

Protecting Personal Information
Rinnai has established internal rules based on the Act on the Protection of Personal Information. We also established a
Privacy Policy as a guideline for handling personal information that is published on our website (https://www.rinnai.co.jp/
en/policy/privacy/). Through these efforts, we strive to properly manage, use and protect personal information.
Specifically, a Personal Information Protection Manager is appointed at the Head Office to maintain and teachinternal rules. Personal Information Protection Committee members are assigned in each workplace and domestic Group
company to provide guidance on methods and procedures to the person in charge of handling personal information.
In addition, the Personal Information Protection Committee member conducts internal audits once each year under
the direction of the Personal Information Protection Manager regarding the management status of personal information ineach workplace.
In fiscal 2022, there were no personal information leakage incidents.

Consult with a supervisor or
the person responsible forthe division
SolvedNot solved
Corporate Ethics Helpline

Executive Structure
We have introduced an executive officer system in order to create a flexible management structure capable ofresponding swiftly to changes in the business environment. Some directors, from the President down, serve concurrently
as executive officers, and their role is to convey the details of decisions made by the Board of Directors to the managersof the divisions responsible so that they can be implemented. Quarterly Companywide management meetings andindividual management meetings are also held to confirm how business is progressing and to share information on thechallenges faced.

Rinnai Report 2022 102

Introduction

Environment

SocialGovernance

Data

GovernanceRisk Management
Basic Principles of the Internal Control System

Risk Management Policy

Seeking to reinforce our management system and fulfill our social responsibilities, we established an internal control
system with the following aims:

As society becomes increasingly complex, companies face a variety of risks. As a Company that produces thermalenergy appliances to support people’s lifestyles, we believe it is our responsibility to maintain the stable supply of our
products. The Rinnai Group is implementing risk management to ensure it remains trusted by its customers and society
and conducts business activities in a stable fashion.

(1 ) To enhance the stability and efficiency of business operations;(2) To ensure the reliability of financial reports;(3) To comply with laws and regulations affecting business operations and internal regulations;(4) To maintain assets
Internal control reports (Link destination: https://www.rinnai.co.jp/ir/internal/) (in Japanese only)

Information Disclosure
In addition to the formulation of internal rules for the timely and appropriate disclosure of important information
concerning the Group, Rinnai created a disclosure policy that is published on our corporate website as a guideline for
information disclosure.

Promotion Structure
Rinnai’s Risk Management Committee is comprised mainly of executive officers and divisional heads with the President
serving as Chairman. The Risk Management Committee meets regularly to identify key risks to life, its credibility, businessactivities, and assets. It prepares a “List of Material Risks,” which evaluates the importance of each item in terms of degreeof impact and frequency of occurrence. The Committee also determines which business divisions have a primary
responsibility for each type of risk. It also discusses and develops mechanisms to prevent risks from materializing, rapidly
resolves crises, minimizes any damage that may occur as a result, and prevents recurrences. The Committee works withall divisions and Group companies to mitigate risks and enhance risk response capabilities.

Disclosure policy (Link destination: https://www.rinnai.co.jp/en/ir/disclosure/)

Material Risks (Excerpted)

103

Management Risk

• Compliance• Product accident defects• Labor-related• Environment• Intellectual property• Supply chain• Market environment, etc.

Financial Risk

• Foreign exchange rates• Taxation, etc.

Accident and Disaster Risk

• Production shutdowns, etc.

IT Risk• Cyberattacks• Information leakage, etc.

Health Risk

• Infectious diseases• Mental health, etc.

Country Risk

• Geopolitical risk, etc.

Rinnai Report 2022 104

Introduction

Environment

SocialGovernance

Data

Governance

Promotion of Business Continuity

Rinnai Efforts to Prevent the Spread of COVID-19

In the event of a major risk such as a natural disaster, fire, or infectious disease materializing, we envision that business
operations may be suspended for a long time, resulting in significant losses and having a serious impact on stakeholders.
We position cases where there is a risk of interruption in the manufacture or supply of products vital to customers asimportant issues for business continuity management and are formulating and reviewing business continuity planning(BCP).

In February 2020, we established the COVID-19 Countermeasures Headquarters in anticipation that the spread of
COVID-19 would have a significant impact on the continuation of our business operations. From the perspective of firstand foremost protecting safety and health of our employees and their families but also business continuity, we strive toensure the health and safety of our employees and other stakeholders by thoroughly implementing telecommuting andinfection prevention measures in the workplace through Companywide notifications. Furthermore, to ensure a stablesupply of products, we evaluate the impact of each supplier and item and simultaneously switch to alternative suppliers
and in-house production as needed.

Response to Natural Disasters

Examples of Responses
Headquarters

Sales activities (customer visits, etc.)

Ordering and receiving office work, etc.

• Telecommuting• Shift work
• Closure of sales offices• Business shifting between neighboring locations

Installation work
After-sales service• Installation in neighboring area
• Adjustment to different service shop

Call centers• Adjustment of balance between two sites

Factory production• Follow current BCP• Substitute production at mother factory

Parts procurement• Purchasing from multiple companies and adjustment of delivery quantities• In case of shutdown of cooperative factories
1. Halt production (insource)
2. Dispatch personnel

Equipment and dyes

• Adjustment of balance among cooperative factories

Logistics• Multi-company transportation (company assignment to be coordinated)• Multi-company warehousing (selected by region)

Research &Development
Headquarters

Development (design changes)
Testing• Shift work
• Telecommuting (online meetings)

Overseas
Business
Headquarters

Export (Shipping)• Multi-company shipping (changes to ports and routes)• Use of air cargo

Other Indirect
Operations–• Telecommuting (Electronic applications, paperless documentation, online meetings)• Shift work
• Staggered working hours

Marketing & Sales
Headquarters

Risk ofnon-compliance ormanagement inviolation of applicablelaws

Geopoliticalrisks

Important Identified
Risks

Health risks such as
infectious diseases andmental health

105

Risk of suspension ordelays affecting raw
material procurement
activities

Production
Headquarters

Risks related tothe environment

IT risks such as
cyber-attacks andinformation leaks

Response• Telecommuting (online negotiations)• Sales calls without visiting the worksite• Closure of sales offices• Business shifting between neighboring locations

Rinnai’s business sites are concentrated in the Chubu region. To prepare for a Nankai Trough Mega Earthquake that issaid to occur within the next 30 years, we are promoting Companywide seismic and disaster prevention measures andreviewing our BCP. In addition, all employees participate annual drills using the safety confirmation system.

Risk of fire, explosion
accidents, andnatural disasters

Priority Operations for Continuity

Rinnai Report 2022 106

Introduction

Environment

SocialGovernance

Data

Governance

Information Security
Information Security Policy

Information Security Education and Training Activities

We have created the Rinnai Group Information Security Policy, which establishes policies regarding the developmentof internal rules, promotion systems, the implementation of information security measures, enlightenment, education,
training and continuous improvements, and we are unifying the direction of information security measures throughout
the Group.
Amid necessary preparations for cyberattacks, we are working daily to further strengthen information security
measures throughout the entire Group in accordance with these policies.

The Rinnai Group conducts information security education every year toensure that all employees are fully aware of the importance of information
security measures and properly handle information assets used in businessactivities.
In fiscal 2022, we conducted education on the themes of “cyberattack
incidents and precautions for avoiding damage.” Education is provided to all
Information security training for newly recruited employees
employees who use personal computers via e-learning. We regularly
release videos of our training content to facilitate employee understanding and learning.
In addition, we regularly conduct cyberattack email training in an effort to hone employee experience so that we canrespond promptly when problems related to information security occur.

Information Security System Maintenance
Chief Information
Security Officer

Information Security Countermeasures Status Verification

Head Office Information
Security Manager

IT Security Office

Head Office Information
Security Manager

In order to implement Companywide information security measures, Rinnai has
appointed a Chief Information Security Officer (CISO) who oversees information
security measures, and we have also established the IT Security Office to promote
information security measures among a variety of other initiatives.
In addition, we have appointed Information Security Managers at each businesssite. The IT Security Office and the Information Security Managers work closely
together to create a system that enables smooth progress toward information security
countermeasures.
Further, we regularly hold Information Security Measures meetings consisting of
employees involved in information security measures, including the Chief Information
Security Officer, and we strive to enhance the level of information security measures byconducting discussions and information sharing as well as conducting education andtraining on information security measures.

The Rinnai Group conducts IT assessments to inspect the status of information security measures at overseas Group
companies and to strengthen governance. We set goals for information security measures to enhance the capabilities ofthe entire Rinnai Group.
Additionally, in order to objectively evaluate information security initiatives, Rinnai’s Product Inspection Center
acquired ISMS certification (ISO 27001). To facilitate even more appropriate handling of important information from
customers, we created an information security management system and promote ongoing improvements to information
security countermeasures.

Information Security System Diagram

Implementation of Information Security Measures
To combat intensifying cyberattacks, Rinnai has implemented countermeasures targeting computer viruses andunauthorized access and has also strengthened attack e-mail filters. We are also working to detect cyberattacks bycollaborating with third-party security specialists and establishing an information security monitoring system. To prevent
damage from cyberattacks, we are also working daily to improve our response and recovery measures in the event of an
attack. Furthermore, measures to prevent information leaks include encryption of data before information assets are
removed from company premises, control of devices such as USB memory sticks, management of access to each
worksite, and control access to sensitive areas.
Also, when a new system for internal use is deployed, system requirements are set forth in internal standards.
Requirements are reviewed periodically and efforts are made to maintain and improve the security level of the internal
systems.

107

Rinnai Report 2022 108

Introduction

Environment

SocialGovernance

Data

Data Collection
Eleven-Year Financial Summary
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Net sales(Millions of yen)

246,636

251,832

286,981

295,022

319,935

330,256

347,071

348,022

340,460

344,364

366,185

Operating income(Millions of yen)

26,63426,35134,01830,787

34,59334,05632,84930,87934,422

40,69035,864

(%)

10.8%

10.5%

11.9%

10.4%

10.8%

10.3%

9.5%

8.9%

10.1%

11.8%

9.8%

Ordinary income(Millions of yen)

28,90729,06436,91032,93835,80735,28034,28633,31835,67942,40039,060Net income attributable to owners of theparent company(Millions of yen)

16,807

19,371

23,254

20,64722,71022,322

21,194

20,48021,561

27,581

23,748

Total net assets(Millions of yen)

154,737

178,007

232,635

261,414271,709290,638

307,965

320,696

340,959

371,318

378,856

Total assets(Millions of yen)

238,853

262,590334,382355,140

368,084

402,107422,422430,885

450,486

497,291

512,867

Net assets per share(Yen)

3,070.14

3,516.11

4,245.48

4,742.42

4,924.24

5,245.62

5,589.17

5,819.80

6,140.52

6,660.40

6,889.76

Net income per share(Yen)

342.60394.86454.74397.03436.71429.27410.41398.45419.49536.62

470.39Equity ratio

(%)

63.1%

65.7%

66.0%

69.4%

69.6%

67.8%

68.0%

69.4%

70.1%

68.8%

66.9%

Return on equity

(%)

11.7%

12.0%

11.8%

8.8%

9.0%

8.4%

7.6%

7.0%

7.0%

8.4%

6.9%

Cash flows from operating activities(Millions of yen)

23,07422,87236,45325,671

36,06639,55429,91429,47937,69449,491

28,696

Cash flows from investing activities(Millions of yen)

(16,222)(12,607)(32,908)(23,649)(17,770)(17,732)(12,190)(7,288)(7,124)(15,820)(25,486)

Cash flows from financing activities(Millions of yen)

(3,937)(5,002)

13,183(8,659)(6,554)(5,217)(11,725)(6,150)(6,436)(7,269)(27,109)

Cash and cash equivalents at end of year

(Millions of yen)

48,64855,03074,27969,34079,60095,297

101,697

116,133

140,138

166,524

147,972

Capital expenditures(Millions of yen)

9,378

8,222

12,43913,774

16,93820,664

16,105

13,481

10,58013,301

22,682

Research and development expenses(Millions of yen)

7,665

8,060

8,380

8,895

9,113

9,340

9,918

9,503

9,308

11,802

12,762

Operating income margin

Dividends

(Yen)

56

60

68

76

82

86

90

94

98

125

140

Payout ratio

(%)

16.3%

15.2%

15.0%

19.1%

18.8%

20.0%

21.9%

23.6%

23.4%

23.3%

29.8%

Number of outstanding shares(Shares)

54,216,463

54,216,463

52,216,463

52,216,463

52,216,463

52,216,463

51,616,463

51,616,463

51,616,463

51,616,463

50,021,057

Closing price at the end of the period

(Yen)

5,960

6,770

9,070

8,910

9,940

9,230

10,100

7,830

7,650

12,3909,170(Millions of yen)

323,130

367,045473,603465,249

519,032

481,958

521,326

404,157

394,866

639,528

458,693

Market capitalization* We apply the Partial Revisions to Accounting Standards for Tax Effect Accounting (Corporate Accounting Standards No. 28, February 16, 2018) as of fiscal 2019. As such, figures for fiscal
2015–fiscal 2018 have been adjusted to retroactively apply said accounting standards.

109

Rinnai Report 2022

110

Introduction

Environment

SocialGovernance

Data

Data Collection
Financial Data
Consolidated

Rinnai Corporation

Results of profit
and loss

Domestic
consolidated andaffiliated companies
Overseas
consolidated
companies

Total

Consolidated

Rinnai Corporation

Sales by product

Domestic
consolidated andaffiliated companies

Overseas
consolidated
companies

Total

Rinnai America

Rinnai Australia
Results of profit andloss by overseas
consolidated
Shanghai Rinnai
subsidiaries(Before eliminationof consolidation)
Rinnai Korea

Rinnai Indonesia *(Millions of yen)

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Water heaters
Kitchen appliances
Conditioning appliances
Commercial-use appliances
OthersWater heaters
Kitchen appliances
Conditioning appliances
Commercial-use appliances
OthersWater heaters
Kitchen appliances
Conditioning appliances
Commercial-use appliances
OthersWater heaters
Kitchen appliances
Conditioning appliances
Commercial-use appliances
OthersWater heaters
Kitchen appliances
Conditioning appliances
Commercial-use appliances
Others
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income
Net sales
Operating income
Ordinary income
Net income

251,832
26,351
29,064
19,371
188,559
18,066
19,911
12,80496,824
2,403
2,571
1,573
77,083
5,963
6,584
6,224
362,467
26,432
29,067
20,603
127,125
78,782
15,666
6,912
23,346
92,60866,62912,0292,748
14,54325,513
24,955
1,147
1,618
43,58845,218
11,465
6,227
4,624
9,548
163,340
103,050
19,404
8,991
67,67911,333315
317
200
13,752
2,186
2,611
1,818
14,207
1,175
1,300
1,082
19,720
725
638
1,818
-

286,981
34,01836,91023,254
205,598
24,27827,13818,176105,111
2,775
2,881
1,889
99,152
7,255
8,260
6,006
409,862
34,30838,28026,071
146,883
88,031
16,716
7,552
27,797
103,942
71,953
12,0692,692
14,941
27,19928,435
1,051
1,474
46,94957,906
15,828
7,631
5,311
12,474
189,048
116,217
20,753
9,477
74,364
15,487845
849
536
15,272
2,337
2,776
1,939
20,652
1,650
1,817
1,461
25,054
407
519
301
-

295,02230,78732,93820,647
190,475
18,67522,073
15,33999,967
2,086
2,199
1,426
126,880
9,921
11,026
8,497
417,323
30,68235,29925,262
153,697
90,838
14,972
9,227
26,287
99,636
62,236
10,725
2,673
15,203
26,71424,006786
1,620
46,83870,902
29,246
7,309
7,114
12,307
197,253
115,489
18,822
11,40874,34917,754
1,020
1,036
667
15,360
1,456
1,634
1,130
27,202
2,174
2,472
1,972
31,215
1,371
1,236
1,184
11,733
1,366
1,879
1,456

319,935
34,59335,80722,710
197,592
20,191
21,946
15,602
99,599
2,552
2,735
1,902
149,987
11,636
12,542
9,236
447,178
34,38037,224
26,741
169,623
93,34019,463
10,041
27,466
105,999
62,849
9,965
2,675
16,10328,25922,260628
1,590
46,85984,33531,346
12,8288,010
13,465
218,594
116,457
23,422
12,27676,42722,602
1,817
1,841
1,145
23,137
1,366
1,522
1,049
33,958
2,727
3,016
2,378
33,594
1,356
1,551
1,144
11,640
1,486
1,707
1,334

330,256
34,05635,28022,322
198,870
18,814
21,512
16,215
124,806
3,626
3,837
2,029
149,917
12,45313,0609,411
473,595
34,89438,40927,655
188,20288,456
17,952
9,122
26,521
109,258
61,3598,945
2,629
16,677
51,822
21,139669
1,609
49,56488,08228,368
12,212
7,206
14,047249,163
110,868
21,827
11,44580,29023,504
1,661
1,644
1,037
21,515
1,461
1,447
998
37,448
3,136
3,268
2,519
32,254
1,233
1,306
1,043
11,327
2,052
2,295
1,776

347,071
32,84934,286
21,194201,936
15,37818,466
13,850125,536
2,749
2,924
2,069
169,125
14,765
15,555
11,673
496,597
32,89336,946
27,593202,387
88,36419,084
9,499
27,735112,561
59,5099,535
2,308
18,021
52,28019,128678
1,501
51,946104,149
29,80913,116
7,689
14,360268,992
108,448
23,32911,49884,32827,738
2,207
2,219
1,254
23,585
1,803
1,847
1,208
45,969
5,133
5,223
4,283
34,905727
802
499
12,041
1,952
2,209
1,720

348,02230,87933,31820,480206,015
14,602
19,026
14,175
122,181
2,748
3,014
2,087
175,756
13,64014,932
11,510503,953
30,991
36,973
27,773
202,630
88,322
19,642
8,452
28,974
116,81058,8529,139
2,226
18,98649,21018,934714
1,337
51,985
110,131
30,746
13,791
6,708
14,379276,151
108,533
23,645
10,27285,35130,390
1,491
1,481
1,100
25,033
1,720
2,065
1,459
47,511
5,088
5,319
4,378
32,803102
269
242
12,840
1,828
2,076
1,620

340,460
34,42235,67921,561
207,805
17,35920,295
15,058
101,938
3,248
3,476
2,475
171,40912,242
13,182
10,604
481,153
32,85036,95428,138196,122
86,19318,901
8,556
30,685
115,908
59,934
8,658
2,225
21,07933,583
15,611704
1,363
50,676
107,979
29,736
13,294
6,943
13,454257,471
105,282
22,657
10,532
85,21033,133
2,032
2,025
1,436
23,760593
393
262
43,628
5,593
5,868
5,228
27,535(1,382)(1,248)(987)
11,263
1,600
1,906
1,504

344,364
40,69042,40027,581
212,388
20,612
23,515
18,208104,234
3,859
4,090
2,948
170,830
14,95916,264
13,369487,453
39,431
43,86934,525
195,755
88,441
19,013
7,726
33,428118,052
60,5988,369
1,997
23,36934,343
15,873846
3,903
49,267
107,315
30,382
13,593
6,134
13,403259,712
106,854
22,81012,03586,04036,971
2,187
2,187
1,742
24,404928
839
639
39,192
5,512
6,186
5,492
27,50658
165
126
11,766
2,423
2,785
2,248

366,185
35,86439,06023,748204,929
14,275
19,975
15,43598,019
2,988
3,391
2,416
207,746
19,142
20,885
16,552510,695
36,40544,252
34,404211,026
85,531
21,109
9,007
39,509113,587
55,744
8,102
2,291
25,20232,282
13,601852
1,453
49,829134,938
32,68015,5407,196
17,390280,808
102,026
24,495
10,942
92,42244,752
2,012
2,003
1,475
25,895
1,615
1,928
1,286
52,131
7,117
8,278
7,306
30,298
906
1,036
812
14,297
2,826
3,116
2,487

Note: Before conversion to a wholly owned subsidiary, thus no data is available prior to the fiscal year ended March 31, 2014.

111

Rinnai Report 2022

112

Introduction

Environment

SocialGovernance

Data

Data Collection
Human Resource- and Personnel-related Data
The Rinnai Group
Number of Full-time Employees (Consolidated, Year-end)
Rinnai Corporation
Domestic Group
companies
Overseas Group
companies

Male
FemaleMale
FemaleMale
Female

Total

Executive Position

Fiscal 2020

Fiscal 2021

Fiscal 2022

2,631
1,127
1,282
650
3,295
1,466
10,451

2,619
1,103
1,290
696
3,245
1,433
10,386

2,533
1,072
1,273
688
3,553
1,658
10,777

Managerial Position
Appointment Status(People)* End-FY2022 Compiled
from the Rinnai Corporation

Japan

Asia, excluding Japan

North America
Other(Oceania, SouthAmerica, and Europe)
Total

Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

Fiscal 2021

Fiscal 2022

Composition

3,913
1,777
5,690
2,498
1,137
3,635
215
101
316
582
228
810
10,451

3,909
1,799
5,708
2,451
1,094
3,545
217
109
326
577
230
807
10,386

3,806
1,760
5,566
2,501
1,242
3,743
408
173
581
644
243
887
10,777——51.65%——
34.73%
—
—
5.39%
—
—
8.23%
100%

Fiscal 2020

Fiscal 2021

Fiscal 2022

583
399
982
714
392
1,106
689
237
926
631
97
728
14
2
16
3

534
329
863
756
434
1,190
641
232
873
676
107
783
12
1
13
4

Under 30

447
271
718
733
451
1,184
606
233
839
730
116
846
17
1
18
5

30–39

40–49

50–59

60 or older
Number of non-Japanese employees

Fiscal 2022
Female ratio

31.6%

33.2%

29.8%

27.4%
31.7%

Number of employees who
used the work from home
program

Newly recruitedemployees
Mid-career recruitment
Mid-career recruitment
rate (%)
Temporary staff
Average working years

Average age (Years old)

113

Fiscal 2021

Fiscal 2022

Male
FemaleSubtotal
Male
FemaleSubtotal

62
22
84
2
6
8

66
35
101
0
1
1

71
13
84
7
1
8

Subtotal

919Subtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

189
17.3
13.3
16.1
39.7
34.5
38.2

194
17.9
14.2
16.8
40.1
35.3
38.7

178
18.7
15.3
17.7
41.0
36.3
39.6

Ratio of Women (%)

673

0

0.44

0

41

0

0

0

24

0

0

0

15

0

0

Fiscal 2020

Fiscal 2021

Fiscal 2022

2.3
20.0
12.1
58.0
74
2.23
37
0.23
21
57
0
123
123
—
100
100
0
131
131
1
48
49
1
4
5
1
4
5
1
2
3

1.8
20.0
12.2
63.0
79
2.22
28
0.56
20
62
5
95
100
100
98
99
0
161
161
1
27
28
2
3
5
0
5
5
0
0
0

1.2
20.0
14.0
70.1
82
2.33
26
0.00
31
63
7
123
130
100
97
99
4
199
203
2
38
40
3
2
5
0
1
1
0
0
0

Male

59

835

512

Female

14

247

210

Subtotal

73

1,082

722

Working Hours and Average Wages

Number of Employees (Non-consolidated)
Fiscal 2020

Male

Maximum number of days added with paid leave* Rinnai parent Based on the status of
Average number of days taken with paid leave
leave taken by permanent employees
Utilization ratio (%)
Number of persons with disabilities
Employment of persons withdisabilities
Employment rate (%)
Number of the accident
Number of OJT accidents*Includes domestic consolidated subsidiaries
Number of the disasters(%)(LTIFR)
Number of employees on mental health leave
Number of employees who used childcare leave
Male
Number of employees who
took childcare leaves ofFemaleabsence
Subtotal
Male
Proportion of employees who
return to work after taking
Femaleparental leave (%)
Subtotal
Male
Number of employees who
Femaleused shortened work hours
Subtotal
Male
Number of employees who
Femaleused family care leave
Subtotal
Male
Number of employees who
Femaleused nursing leave
Subtotal
Male
Number of employees who
Femaletook nursing leaves of absence
Subtotal
Male
Number of employees who
used our reemployment
Female(Come Back) system
Subtotal

Rinnai Corporation
Employee Ages
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Subtotal

Non-Japanese3

Voluntary termination rate (%)
Paid leave

Number of Full-time Employees by Region (Consolidated, Year-end)
Fiscal 2020

FemaleSupervisory position
Of which are generalmanagers or higher
Director
Of which are
executive directors

Newly recruitedemployee retention

Male
FemaleSubtotal

Newly recruitedemployees in April 2019

Employees retainedin April 2021

62
22
84

56
20
76

Annual total actual working hours per employee (Hours)*
Annual non-scheduled working hours per employee (Hours)*
Average overtime per month (Hours)*
Average wage (Yen)*
Highest wage at 30
Average wages at 30 years old (Yen)
Lowest wage at 30*Excluding overtime pay
Average wage at 30

Fiscal 2020

Fiscal 2021

Fiscal 2022

2,007.9
199.2
16.6
6,309,876
311,750
256,850
289,647

1,952.0
176.7
14.7
6,440,168
319,550
269,450
296,680

2,054.4
211.3
17.6
6,532,997
303,150
265,450
284,965

Fiscal 2021

Fiscal 2022

Others (Social Contribution and Compliance)
Fiscal 2020

Number of whistleblower incidents *Includes domestic consolidated subsidiaries
Criminal charges for compliance related accidents and incidents (Numberof cases)*2
Total expenditure on social contribution activities (Millions of yen)
Political contributions and lobbying activities expenditures (Millions of yen)

6

2

10

0

0

0

14
1.0

13
0.7

27
0.7

* Excluding managers

Rinnai Report 2022

114

Introduction

Environment

SocialGovernance

Data

Data Collection
Environmental Data

With the aim of promoting environmental efforts by all employees in all business domains, Rinnai promotes environmental
activities (7E strategic initiatives) in all business processes (development, procurement, production, sales, use anddisposal). We report targets and achievements for each 7E activity (E-marketing, E-services, E-products, E-procurement,
E-mind, E-factories and E-offices).

Basic Environmental Activities and Targets for Fiscal 2022–2026
Field

Basic Environmental Activities

Environment
marketing (Sales)
Environmental
services(Construction andrepair)Promotion of low-carbon and decarbonization throughproducts(Reductions in Scope 3 Category 11)
Expanding Sales of Environmentally Friendly Products(Japan & Overseas)
CO2 reduction contribution by fiscal 2026: 7 million tons

Environmental
products (Productdevelopment)

Promotion of low carbon and decarbonization
Continuously develop high-efficiency equipment for
Zero-Energy Homes (ZEH) and products that use lesspower during both standby and use
Promotion of resource conservation and resource
recycling
Continuously evaluate each product’s environmental
impact from its design stage through its lifecycle anddevelop smaller and lighter products

Environmental
procurement

Promote Supply Chain Management
Conduct environmental conservation activities incooperation with business partners, and continuously
conduct green procurement management incompliance with regulations in each country

Fiscal 2022 Results

Field• 5.15 million tons of CO2 reduction contribution*1 whenusing products

Environmental minds(Regional
communities andemployees)• Developed technology for 100% hydrogen
combustion in residential water heaters• Developing highly efficient gas water heaters andkitchen equipment• Implementing designs to reduce the weight of water
heaters and gas stoves• Hybrid heating/cooling and water heater systems forcold regions received Energy Conservation Center
Chairman’s Award• Conducting the management of Rinnai Green
Procurement Standards Guide (Material procurement
and use, including new parts)• Increasing cooperation with business partners andimproving the management level of chemical
substance• Received an A- rating on the CDP Supplier
Engagement Rating (SER) evaluation

Environmental
factories
Environmental offices

Basic Environmental Activities

Fiscal 2022 Results

Communication of ESG-related Information
Rinnai continuously engages in dialogues withstakeholders to deepen understanding, as well as
efforts that contribute to environmental brand
improvement.

• ESG Committee established to strengthen ESG
initiatives• Participating in various external evaluations

Contributing to Local Communities
Rinnai continuously engages in activities that ensure
the preservation of biodiversity, as well as efforts that
contribute to local governments and schools.

• Implementing efforts to exterminate specified invasive
species at multiple worksites• Events held to learn about local production for local
consumption through heirloom vegetables and otherlocal foods

Conducting Environmental Training and Awareness
Activities
Continuing with initiatives that foster environmental
awareness and the enhanced ability to take action in
employees through training• Multiple environmental awareness events andinformation dissemination implemented for
employees• Received the “Minister of the Environment Award(Large Enterprise Category)” at the 2020
Environmental Human Resources Development
Corporate Awards organized by the Ministry of theEnvironment

Promotion of low-carbon and decarbonization atworksites(Scope 1 and 2 reductions)
Reduction of per-unit energy consumption*2 by morethan 6% compared to fiscal 2020 by fiscal 2026

Increased by 8.5% compared to fiscal 2020

Shift to energy use with lower CO2 emissions

Consideration of adopting electricity with low CO2
emission factor(Introduction of renewable energy, others)

Reduction of waste discharge*2 by more than 6%
compared to fiscal 2020 by fiscal 2026

Reduced by 0.4% compared to fiscal 2020

Maintain and advance zero-emissions initiatives
Realized recycling rate of 99.5% or higher

Realized recycling rate of 99.8%

Reduction of water use*2 by more than 6% comparedto fiscal 2020 by fiscal 2026

Increased by 2.8% compared to fiscal 2020

Reduction of harmful chemicals*2 handled by morethan 2% compared to fiscal 2020 by fiscal 2022

Reduced by 3.6% compared to fiscal 2020

Reporting Period: April 1, 2021 to March 31, 2022
Notes: 1. CO2 reduction contribution = Reduction in CO2 emissions compared to products sold in 2005 resulting from improved performance of Rinnai water heaters (estimated)
Concerns emissions produced through markets in Japan and overseas.
2. Basic unit: Burden per unit standard determined by Rinnai.

115

Rinnai Report 2022

116

Data Collection

Introduction

Environment

SocialUnit
MWhFiscal 2019
123,664.3

Fiscal 2020
117,642.1

Fiscal 2021
122,561.4

kNm3

11,220.3

10,391.1

10,461.1

10,698.2

✓
□

kNm3
km3

1.4
35.0

1.2
38.7

0.5
46.1

0.1
41.6

✓
□
✓
□

t

2,843.1

2,538.0

2,338.6

2,353.3

✓
□

t
t
t
t
kl
kl

1.0
16.5
7.7
0.03
0.18
21.3

1.4
13.8
7.7
0.07
0.18
18.5

1.9
15.2
7.5
0.04
0.18
15.6

1.3
9.8
9.7
0.04
0.18
20.1

✓
□
✓
□
✓
□
✓
□
✓
□
✓
□

kl

136.1

107.2

88.1

90.6

✓
□

kl

431.3

419.6

359.3

320.2

✓
□

kl

5.5

5.1

4.7

5.4

✓
□

kl
GJ

2,098.7
1,192,078

1,819.3
1,106,557

1,420.2
1,100,713

1,552.3
1,133,492

✓
□

Unit
MWh

Fiscal 2019
385

Fiscal 2020
428

Fiscal 2021
451

Electricity

Impact on the Environment of the Rinnai Groupfor the use of equipmentin each facility
for vehicle use

Town gas
MethaneRinnai is working to achieve full comprehension of all environmental impacts related to its business activities. In particular,
we have identified three important issues involving environmental impacts: Energy consumption, CO2 emissions (Scope 1
and 2) and use of sold products (Scope 3, Category 11), which produce overwhelmingly high emissions. With regard tothese three issues, we are implementing third-party inspections and are working to ensure the accuracy and reliability of
information disclosure.

for the use of equipmentin each facility
for vehicle use

LPG
ButaneAcetylene
Ethylene
Heavy oil
Heating oil

for the use of equipmentin each facility
for vehicle use
for the use of equipmentin each facility
for vehicle use

Light oil

Scope of Accounting
Rinnai Corporation and consolidated subsidiaries
Company Name
• Rinnai Corporation• Yanagisawa Manufacturing Co., Ltd.
• Rinnai Technica Co., Ltd.
• Gastar Co., Ltd.
• RB Controls Co., Ltd.
• Rinnai Precision Co., Ltd.
• RT Engineering Co., Ltd.
• Noto Tech Co., Ltd.
• Techno Parts Co., Ltd.
• Rinnai Net Co., Ltd.
• Rinnai Enterprises• Rinnai Holdings (Pacific) Pte Ltd.
• Rinnai Hong Kong Ltd.
• Guangzhou Rinnai Gas and Electric Appliance Co., Ltd.
• Rinnai Italia S.r.l.

Reporting Period

Gasoline
Total• Rinnai Canada Holdings Ltd.
• Shanghai Rinnai Thermo Energy Engineering Co., Ltd.
• Rinnai America Corporation• Rinnai Australia Pty., Ltd.
• Shanghai Rinnai Co., Ltd.
• Rinnai Korea Corporation• P.T. Rinnai Indonesia• Rinnai New Zealand Ltd.
• Rinnai Taiwan Corporation• Rinnai (Thailand) Co., Ltd.
• Rinnai Brasil Heating Technology Ltd.
• Rinnai Viet Nam Co., Ltd.
• Rinnai Manufacturing Malaysia Sdn. Bhd.
• RB Korea Ltd.
• Gas Appliance Services Corporation

Scope
Total of renewable energy

Scope

6
7

Purchased goods andservices
Capital goods
Fuel- and energy-related
activities
Upstream transportationand distribution
Waste generated inoperations
Business travel
Employee commuting

8

Upstream leased assets

1
2
3
4
5

9

✓ Thisicon indicates that a measure has third-partyassurance from Lloyd’s Register Quality Assurance (LRQA).

10
11
12

Total amount ratio of the entire value chain(CO2 emissions) * 1
Scope 3 Category 1
Purchased goods / services

1,107

1,101

1,133

(contribute to reduction of CO2 emissions)(1,000 tCO2e)
8,000

880,000 t(8.93%)

7,000
5,950

6,000

5,150

800
Total of Scope 1, 2, 3
600

13

Eco-friendly products

1,000

9,900,000 t

4,300
4,000

8,850,000 t (89.39%)

117

Downstream transportation anddistribution
Processing of soldproducts
Use of sold products
End-of-life treatment ofsold products
Downstream leased
assets14

Franchises

15

Investments

Total of Scope 1, 2, and 3

Scope

0
Scope 3 Category 11
Use of sold products

tCO2e

Fiscal 2019 Fiscal 2020
40,25436,72373,181
66,239Fiscal 2021 Fiscal 2022 Percentage Assurance✓□
35,16135,9410.36%✓□
68,606
67,987
0.69%

866,847

821,979

848,727

883,457

8.93%−

25,92821,07823,661

39,589

0.40%

−

3,263

4,379

4,386

4,475

0.05%

−

8,838

8,377

9,384

8,953

0.09%

−

565

5,668

1,036

1,028

0.01%

−

530
1,592
Included in
Scope 1535
1,598
Included in
Scope 1

531.18
1,586
Included in
Scope 1515
1,544
Included in
Scope 1

0.01%
0.02%

−
−

−

−

−

−

−

−

−

−

Not
applicable
10,825,493

Not
applicable
10,511,507

Not
applicable
10,497,104

Not
applicable
8,846,480−−

89.39%

✓
□

5,414

5,942

5,937

6,109

0.06%

−

Not
applicableNot
applicableNot
applicable
11,851,905

Not
applicableNot
applicableNot
applicable
11,484,025

Not
applicableNot
applicableNot
applicable
11,496,120

NotapplicableNot
applicableNot
applicable
9,896,078

−

−

−

−

−

−
100%

Shipping Volume and CO2 Emissions

2,000
200

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2022
Assurance
504−

Please refer to the conditions for calculation on p. 127–128 for the calculation range of CO2 emissions.
*1 Scope 1: The volume of greenhouse gases that are leaked directly into the Earth’s atmosphere from sources related to Rinnai’s business activities*2 Scope 2: The volume of emissions that occur during electricity and heat generation phases when using electricity and heat supplied by third parties*3 Scope 3: The volume of emissions that occur during business activities conducted throughout Rinnai’s supply chain (excluding those in Scope 1 and 2)

4,510

400

0

Unit

Scope 1*1
Scope 2*2

Global Warming Prevention
Total energy used✓□

CO2 Emissions

Third-Party Assurance

Domestic: From April 1, 2021 to March 31, 2022
Overseas: From January 1, 2021 to December 31, 2021

Fiscal 2022
Assurance✓□
127,665.4

Renewable Energy

Scope 3*3

1,192

Data

Energy Consumption
Scope

(TJ)
1,200

GovernanceFiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023(Target)Fiscal2026(Target)Shipping volume
CO2 emissions

Unit
Millions tons/
km
tCO2e

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

58.15

58.37

65.24

61.52

8,838

8,377

9,384

8,953

Rinnai Report 2022

118

Introduction

Environment

SocialGovernance

Data

Data Collection
Resource Recycling, Pollution Prevention, and Protecting Biodiversity

Environmental Accounting
Breakdown of Costs forEnvironmental Protection

Water used

Solid waste

(kg)
400

(1,000 m3)
1,000
859
31

31

808

800

30

758

37

50

Environmental
Mainly efforts to save energy
protection

15

31

11

28

Resource
recycling

Recycling as well as treatment anddisposal of industrial waste

102

117

103

95

Upstream/downstream

Collection/recycling and volume/
weight reduction of materials such as
product packaging

11

12

13

11

Management activities

Mainly monitoring and surveillance ofenvironmental impact

150

109

119

100

Research and development

Research and development onenvironmentally conscious products

1,149

733

1,243

1,239

Community efforts

Environmental communication withlocal regions and beautification/
greening at places of business andsurrounding areas

2

2

3

2

786
300

27

230

600
20

200

180

400
10

0
Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

101

100

200
0
Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Unit

Fiscal 20190

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2020

Fiscal 2021

Fiscal 2022

Waste generated (Including valuables)

Thousand tons

31

31

30

27

Recycled waste

Thousand tons

31

29

28

25

Waste into landfill

Thousand tons

1.2

1.8

1.2

1.7

Water withdrawal

Thousand m3

859

808

758

786

Discharge of water

Thousand m3

846

778

742

754

Hazardous chemicals*1 use

t

237

217

224

238

Weight of exterminating specified invasive species*2

kg

180

360

230

101

Number of people participated in the extermination of
specified invasive species*2

Persons

63

89

42

31

*1 Class I designated chemical substance stipulated by the Pollutant Release and Transfer Register (PRTR) Law
Scope: Rinnai Corporation, Rinnai domestic manufacturing affiliates (Figures for prior periods have been adjusted retroactively due to a change in the scope of coverage.)*2 In fiscal 2021 and fiscal 2022, the area and number of participants were limited due to the COVID-19 pandemic and were handled while paying due attention to safety.

Mainly efforts to prevent air and waterpollution

Fiscal 2022

27

In the scope ofoperations

360

Costs (Millions of yen)
Fiscal 2020
Fiscal 2021

Fiscal 201944

(Weight of exterminating specified invasive species)(1,000 t)
40

30

Pollution
prevention

Biodiversity protection*2(includes valuable substances)

Key Activities

Key Activities
Environmental Protection
EffectUnit

Fiscal 2019

Environmental Impact Reduction
Fiscal 2020
Fiscal 2021

Fiscal 2022

CO2 emissions
reductions

Thousand tCO2e

2.0

6.0

3.5

10.8

Waste curtailment

Thousand tons

0.4

0.3

0.5

0.1

Water saving

Thousand m3

6.7

17.0

31.8

21.9

• Environmental protection effect are not increases or decreases in overall costs but rather an effective amount regarded for its economic benefit through the associated activities ofeach site.

Economic EffectAccompanying
Environmental
Protection Measures

Key Activities
Reduced expenses through energy
conservation, waste curtailment, andwater saving

Fiscal 2019
270

Economic Effect (Millions of yen)
Fiscal 2020
Fiscal 2021
295

Fiscal 2022

538

359

• The calculations above exclude depreciation and amortization expense.
• The economic effects achieved through energy-savings and waste reduction are not increases or decreases in overall costs but rather an effective amount regarded for its
economic benefit through the associated activities of each site.
• Deemed effects, such as avoiding risks and enhanced product sales, fall outside the scope of economic effects because the standard for evaluation is too vague.

119

Rinnai Report 2022 120

Introduction

Environment

SocialGovernance

Data

Data Collection
Chronology of Environmental Activities at Rinnai
1993
1994
1996
1997

1998

March
June
October
December

2000

FebruaryMay
June
AugustWon Minister of Economy, Trade and Industry Award for condensing water heater at Ministry's 10th Energy Conservation Awards
Drafted Rinnai Environmental Action Principles
Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Published inaugural issue of Environmental Report

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

2002

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

2006
2007
2008

2009
2010

2016

May Acquired a certificate of a low-carbon building as Japan’s first residential complex in which all units have ECO ONE and floor heating
June Environment Month events: Issued new environmental cards to all Rinnai employees Organized an exchange event (visit) with a corporate
environmental pioneer
July Participated in COOL CHOICE campaign, a new national movement to global climatic changes and reducing greenhouse effect gas
August Won Good Packaging Prize at Japan Packaging Contest 2014 for a bottom tray with parts box for important attachments
September Held the seventh Rinnai Group Environmental Awards ceremony
December Won Nagoya Municipal Industrial Research Institute Director’s Award at 21st Resource Recycling Monozukuri Symposium IMS

2017

January Presented a talk on Rinnai’s environmental activities at the 20th Dialogue and Exchange Event hosted by EPOC
Won the Energy Center Director’s Award at the Energy Conservation Awards for third-generation ECO ONE hybrid water and space heating system
March Conducted inspections regarding conversion to ISO 14001:2015 standards
June Environment Month events:
Organized action to eradicate a specified invasive species (Coreopsis lanceolata)
Organized an exchange event (visit) with a corporate environmental pioneer
3,922 Rinnai employees participated in the My Action Declaration’s five actions to protect
biodiversity backed by the Japan Committee for the United Nations Decade on Biodiversity (UNDB-J)
November Rinnai Kansai branch office received Eco-Drive Excellent activity certificate in the general division of the 2017 Eco-drive Activity Concours,
sponsored by the Foundation for Promoting Personal Mobility and Eco-Drive Ecological Transportation

2018

January Held the eighth Rinnai Group Environmental Awards during our New Year’s celebration
February Won first prize in the Aichi Environmental Awards, which is an extremely energy-efficient water heater and heating system that cleverly and optimallyuses diverse energy (development of ECO ONE)
April Published fourth edition of our Green Procurement Standards Guide
June Environment Month events:
Removed Coreopsis lanceolata coreopsis plants, an invasive species, and held an Environmentally Progressive Company Inspection Council(exchange meeting)Exterminated the specified invasive species Coreopsis lanceolata
September Held internal study groups on ESG and the SDGs (invited outside lecturers)
December Participated in the EcoPro 2018 exhibition

2019

January 9th Rinnai Group Environmental Award Ceremony held during the New Year's ceremony
February Received the “Minister of the Environment Award,” the top award at the COOL CHOICE LEADERS AWARD 2018 sponsored by the Ministry of theEnvironment (development of ECO ONE)
Received the “Excellence Award” at the 22nd Environmental Communication Awards sponsored by the Ministry of the Environment (CSR Report
2018)
May Received the “Excellence Award” from the Ministry of the Environment(Medium-term management plan G-shift 2020 “Development of human resources to promote environmental management and contribution”)
Ranked 26th overall at the 22nd Environmental Management Ranking hosted by The Nikkei, which evaluates the environmental management levelof Japanese companies
June Monthly environmental events• Held environmentally advanced company exchange meetings (inspection meetings)• Exterminated the specified invasive species Coreopsis lanceolata
September Received “Honorable Mention” at the 2nd EcoPro Awards sponsored by the Industrial Environment Management Association of Japan (for thedevelopment of “optimal hot water supply and heating systems” according to energy and environmental conditions in each country and region)
November Received an Award at the Biodiversity Action Awards 2019 (Let’s grow heirloom vegetables together) organized by the Japan Committee for theUnited Nations Decade on Biodiversity (UNDB-J)
December Participated in the EcoPro 2019 exhibition

Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Established Environment DivisionMarket debut: Ecomax burner and Eco burner-equipped gas cooking stove
Market debut: Condensing water heater boasting 95% heat efficiency and NOx emissions under 30 ppm

2001

2005

April Market debut: Eco One third-generation hybrid water heater with heating systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the sixth Rinnai Group Environmental Awards ceremony

Won special prize at 2nd Eco-Design Awards for tabletop cooking stove
Market debut: Absorption-type gas air conditioner (non-CFC)
Acquired ISO 14001 certification at Oguchi Factory
Won prize at 8th Energy Conservation Vanguard 21 for tabletop oven RSBN-096

April Won top prize for gas clothes dryer and special awards for small hot-water heater and for absorption-type gas air conditioner at 3rd Eco-DesignAwards
October Market debut: Yukko V Series, featuring no styrene packing, low stand by power consumption and low NOx emissions
June
July
September
October

2004

2015

July Market debut: Low-NOx burner built-in water heater (NOx at less than 60 ppm)
March Won top prize at 1st Eco-Design Awards, sponsored by Tokyo Gas, Osaka Gas and Toho Gas for water heater, fan heater and small hot-water heater

1999

2003

121

March Drafted Environmental Preservation Action Plan; established Environment Committee
December Won prize at 4th Energy Conservation Vanguard 21 for gas-blast type high-heat griller RGM-4, 6, 8

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2003 for built-in 75 cm-wide
glass-top gas cooking stove
June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Won Logistics Prize at Japan Packaging Contest 2004 for bathroom heater/dryer
December Created the Green Procurement Standards Guide (first edition)
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Participated in Team Minus 6%, a national movement to prevent global warming
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2006
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Gas tankless water heater sold in the United States captured 2008 Super Nova Star Award (Stars of Energy Efficiency) in the United States from theAlliance to Save Energy
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2008 for gas fan heater
February Market debut: Eco-Jozu hot-water/heating unit RVD-E Series
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
January Market debut: Eco-Jozu water heater with bath-filling systems RUF-E Series Participated in Challenge 25 campaign, a national movement to prevent
global warming
February Won Silver Award at Aichi Environmental Award 2010 sponsored by Aichi Prefecture for global promotion of high-efficiency combustion appliancesand systems, including latent heat recovery water heaters (development of latent heat recovery type water heaters)
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the first Rinnai Group Environmental Awards ceremony

2011

April Market debut: Eco One hybrid water heater with heating systems for colder regions
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the second Rinnai Group Environmental Awards ceremony
December Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 16th Resource Recycling Manufacturing Symposium

2012

June
September
October
December

2013

June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the fourth Rinnai Group Environmental Awards ceremony
December Won the Chairman Award of Nagoya Industries Promotion Corporation at the IMS 18th Resource Recycling Manufacturing Symposium

2014

January Won top energy conservation award at METI Award in the fiscal 2013 Energy Conservation Awards for Eco One hybrid water heater with heating
systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
August Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2014 for returnable package
September Held the fifth Rinnai Group Environmental Awards ceremony
December Won 2014 Energy Saving and New Energy Grand Prize in Kitaguni (northern area in Japan) for Eco One hybrid water heater with heating systems for
the Hokkaido region
Won the Chunichi Shimbun Award at the IMS 19th Resource Recycling Manufacturing Symposium for our development of an eco-friendly water
heater with bath-filling systems

Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the third Rinnai Group Environmental Awards ceremony
Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2012 for Eco One hybrid water heater with heating systems
Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 17th Resource Recycling Manufacturing Symposium

2020

2021

2022

January
May
June
July
October

10th Rinnai Group Environmental Award Ceremony held during the New-Year Convention
Received the “Excellence Award” in the Ministry of the Environment’s 2019 Environmental Persons Development Awards
Environment Month events: Exterminated the specified invasive species Coreopsis lanceolata
Selected as “Good Practice” at the Aichi-Nagoya Biodiversity Best PracticeReceived the Japan Packaging Contest “Packaging Category Award (Industrial Packaging Category Award)” for exported water heater packaging
improvements

January Held the 11th Rinnai Group Environmental Awards during the Company’s New Year’s celebration
Received the “Silver Prize” at the Sustainability Website Awards 2021 organized by the CSR Communications Association
March Received the “Minister of the Environment Award (Large Enterprise Category)” at the 2020 Environmental Human Resources Development
Corporate Awards organized by the Ministry of the Environment
June Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata
July Conducted a lecture on Rinnai’s environmental efforts at the “Environment and Manufacturing Conference” organized by the Nagoya Industries
Promotion Corporation
October Received the Energy Saving Division Grand Prize in the 2021 Hokkaido Government Energy Saving / New Energy Promotion Grand Prize
November Announced commitment to carbon neutrality (RIM 2050)
January Held the 12th Rinnai Group Environmental Awards during the Company’s New Year’s celebration
Received the Energy Conservation Center Chairman’s Award in the 2021 Energy Conservation Center Grand Prize
March Received the Excellence Award in the 2021 Energy Saving and New Energy Grand Prize in Kitaguni organized by METI Hokkaido Bureau of
Economy, Trade and Industry
April Established ESG Committee
May Succeeded in developing the world’s first 100% hydrogen combustion technology for home-use water heaters
June Received the Heat Pump & Thermal Storage Technology Center of Japan (HPTCJ) Promotion Award in the Demand-Side Management Award for2022 organized by HPTCJ
Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata

Rinnai Report 2022 122

Introduction

Environment

SocialGovernance

Data

Data Collection
Certification Acquisition Status

Data by Site (Fiscal 2022 Results)✓ CO2 emissions

Environmental Management System International Standard [ISO 14001:2015]
Location
Rinnai

Domestic Group companies

Overseas Group companies

Site nameLocation

Certified Year/Month✓

Scope 1
(tCO2e)Scope 2
(tCO2e)Energy use(GJ)

Amount of waste
generated(Including valuables)(Thousands of tons)*1

Amount of waste
into landfill(Thousands of tons)

Amount ofrecycled waste(Thousands of tons)

Research & Development Headquarters

October 1997

Oguchi Factory

Oguchi-cho, Niwa-gun, Aichi

1,930

1,788

55,561

4.4

4.4

0.009

Production Engineering Division

October 1997

Seto Factory

Seto-shi, Aichi

1,681

3,906

71,067

2.2

2.2

0

Oguchi Factory

October 1997

Akatsuki Factory

Seto-shi, Aichi

791

1,447

28,592

1.2

1.2

0

Seto Factory

December 2000

Environment DivisionDecember 2000

Technology Development Center

Oguchi-cho, Niwa-gun, Aichi

2,210

2,426

67,050

0.1

0.1

0

—

3,350

2,046

72,185

0.5

0.5

0.02

Quality Assurance Headquarters

November 2003

Head Office and Sales Offices

Head Office

December 2008

Yanagisawa Manufacturing Co., Ltd. Kadoma-shi, Osaka

737

709

21,590

0.4

0.4

0

Chube Branch

December 2008

Rinnai Technica Co., Ltd.

Kakegawa-shi, Shizuoka

1,283

1,251

32,819

1

1

0.006

Kansai Branch

May 2010

Gastar Co., Ltd.

Yamato-shi, Kanagawa

1,307

1,295

37,992

0.4

0.4

0.001

Logistic Control Office

May 2010

Kanto Branch

May 2011

RB Controls Co., Ltd.

Kanazawa-shi, Ishikawa

899

2,741

36,411

0.4

0.4

0.043

Chugoku Sales Office

May 2011

Rinnai Precision Co., Ltd.

Komaki-shi, Aichi

5,275

7,210

163,872

2.4

2.4

0.003

Rinnai Parts CenterMay 2011

RT Engineering Co., Ltd.

Toyoda-shi, Aichi

288

1,174

16,095

0.2

0.2

0.006

Kyushu Branch

April 2012

Hokkaido Sales Office

April 2012

Noto Tech Co., Ltd.

Nakanoto-cho,Kajima-gun, Ishikawa

1,233

1,104

29,088

1.5

1.4

0.14

Niigata Sales Office

April 2012

Techno Parts Co., Ltd.

Aichi

219

215

6,251

0.06

0.06

0.001

Tohoku Branch

May 2013

Rinnai Holdings (Pacific) Pte Ltd.

Singapore

40

21

774

—

—

—

Shikoku Sales Office

May 2013

Rinnai Hong Kong Ltd.

Hong Kong

0

3

13

—

—

—

Higashikanto Sales Office

April 2014

Kitakanto Sales Office

April 2016

Guangzhou Rinnai Gas andElectric Appliance Co., Ltd.

China

49

85

1,102

—

—

—

Akatsuki Factory

March 2018

Rinnai Italia S.r.l.

Italy

Oguchi Higashi Factry

June 2018

52

11

996

—

—

—

Minami-Kanto Branch

June 2019

Rinnai America Corporation*3

United States of America

707

1,347

25,006———

Gastar Co., Ltd.

October 2001

Rinnai Australia Pty., Ltd.*4

Australia

1,860

7,067

58,800———Rinnai Technica Co., Ltd.

December 2003

Shanghai Rinnai Co., Ltd.

China

2,301

11,212

96,294———

Yanagisawa Manufacturing Co., Ltd.

June 2004

Rinnai Korea Corporation

South Korea

2,307

5,329

87,479———Rinnai Precision Co., Ltd.

December 2005

P.T. Rinnai Indonesia

Indonesia

RT Engineering Co., Ltd.

March 2006

4,624

11,393

142,263———

RB Controls Co., Ltd.

March 2006

Rinnai New Zealand Ltd.

New Zealand

257

91

6,329

—

—

—

Noto Tech Co., Ltd.

January 2007

Rinnai Taiwan Corporation

Taiwan699

1,118

20,574———

Rinnai Korea Corporation

July 1997

Rinnai (Thailand) Co., Ltd.

Thailand

1,191

1,935

34,813———

RB Korea Ltd.

October 2006

Rinnai Brasil Heating Technology Ltd. Brazil

150

119

6,343

—

—

—

Shanghai Rinnai Co., Ltd.

December 2008

Rinnai Viet Nam Co., Ltd.

Viet Nam

Rinnai Brasil Heating Technology Ltd.

June 2011

425

403

8,943

—

—

—

Rinnai New Zealand Ltd.

July 2013

RB Korea Ltd.

South Korea

77

542

5,188

—

—

—

Rinnai Viet Nam Co., Ltd.

June 2019*2*5

1. In some cases, there is a mismatch between the breakdowns and totals for the amount of waste generated, the amount of waste into landfill and the amount of recycled waste (Unit:
Thousands of tons).
2. Includes the Head Office, nationwide sales offices, logistics centers and the Rinnai Parts Center.
3. Includes Rinnai Canada Holdings Ltd.
4. Includes Gas Appliance Services Corporation.
5. Includes Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

Environmental Management System “Eco Action21”
Location
Domestic Group companies

123

Techno Parts Co., Ltd.

Certified Year/Month
August 2011

Rinnai Report 2022 124

Introduction

Environment

SocialGovernance

Data

Data Collection
Water Discharge*1 (Fiscal 2022 Results)
Site
Oguchi Factory

Seto Factory

Akatsuki Factory

Yanagisawa
Manufacturing Co., Ltd.

Rinnai Technica Co., Ltd.

Gastar Co., Ltd., Head
Office and Factories

Gastar Co., Ltd.,
Research Building

Rinnai Precision Co., Ltd.,
Head Office and Komaki
Factory

Water discharge
standard(Water discharge to)
Sewer

River
(Yatoko River)River(Kazunari River)

Sewer

River
(Ota River)

Sewer

River
(Sakai River)Sewer

Rinnai Precision Co., Ltd.,
Kani Factory
The Second Building

River(Kani River)

Rinnai Precision Co., Ltd.,
Kani Factory
The Third Building

River(Kani River)

RT Engineering Co., Ltd.

Sewer

Noto Tech Co., Ltd.

River
(Nagaso River)

Substance*1

PRTR*3 (Fiscal 2022 Results)
Regulation value

Voluntary

Actual value(Maximum)

pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.625(20)
25(20)
30(20)
5.8~8.620
20
20

5.8~8.7240—240
6.0~8.420
20
20
5.9~8.519
19
19

6.9~7.676—45
7.2~7.62
3.6
10
7.1~7.3
7
9.7
3

pH

5.0~9.0

5.9~8.5

6.7~8.1

BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

600
—
600
5.8~8.625(20)
160(120)50(40)
5.0~9.0600——
5.8~8.615
2540
5.8~8.6600—
300
5.8~8.6
15
—
30

100
—
100
6.3~8.1
20(15)
20(20)
30(20)
5.2~8.8480——
6.0~8.41220
32
6.0~8.4300—
10
5.8~8.6
15
—
30

7
—
46
6.8~7.1
13
16
8.1
7.6~8.0
less than 5——
7.7~8.0
less than 5less than 5less than 5
7.4~7.6580*2—
3
6.6~8.5
9.9
—
13

pH

5.8~8.6

5.8~8.6

6.6~8.2

BOD

15

15

8.4

COD

—

—

—

Amount of emission/discharge

Amount of transfer
Outsidetherelevant
officeClass I designated chemical Handling
substance nameamountAir

53

Ethylbenzene

1,400

870

0

0

0

0

370

71

Ferric chloride

1,100

0

0

0

0

0

1,100

80

Xylene

2,500

1,300

0

0

0

0

570

300

Toluene

1,800

1,100

0

0

0

0

480

309

Nickel compounds

1,100

0

0

0

0

0

130

405

Boron compounds

3,200

0

0

0

0

0

380

53

Ethylbenzene

1,400

1,100

0

0

0

0

330

80

Xylene

1,900

1,500

0

0

0

0

330

87

Chromium and chromium (III)compounds

33,000

0

0

0

0

0

0

308

Nickel

59,000

0

0

0

0

0

0

Gaster Co., Ltd.
Yamato Head Office
Factory

53

Ethylbenzene

1,200

310

0

0

0

0

900

Akatsuki Factory

53

Ethylbenzene

2,300

2,200

0

0

0

0

150

Site

Oguchi Factory

Seto Factory

RB Controls Co., Ltd.;
Kanaiwa Factory

RB Controls Co., Ltd.;
Tsurugi Factory
Rinnai Precision Co., Ltd.
Kani Factory

Noto Tech Co., Ltd.

NumberPublicwatersSoil

Landfill

Sewers80

Xylene

5,200

5,000

0

0

0

0

150

296

1,2,4-trimethylbenzene

1,200

1,200

0

0

0

0

23

300

Toluene

1,800

720

0

0

0

0

1,100

31

Antimony and its
compounds

2,100

0

0

0

0

0

250

265

Tetrahydromethylphthalicanhydride

13,000

0

0

0

0

0

0

448

Methylenebis (4,1-phenylene)
diisocyanate

1,100

0

0

0

0

0

0

460

Tritolyl phosphate

1,900

0

0

0

0

0

260

448

Methylenebis (4,1-phenylene)
diisocyanate

35,000

0

0

0

0

0

0

460

Tritolyl phosphate

42,000

0

0

0

0

0

4,500

53

Ethylbenzene

1,300

1,000

0

0

0

0

300

80

Xylene

1,700

1,500

0

0

0

0

200

300

Toluene

6,900

6,900

0

0

0

0

0

31

Antimony and its
compounds

8,900

0

0

0

0

0

250

SS

30

30

13

309

Nickel compounds

650

0

0

0

0

0

170

pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.2
40(30)
160(120)40(30)

5.7~8.2150—150
6.0~8.2
36(27)
140(100)
36(27)

6.1~7.8
27—120
6.9~7.4
20
17
6

405

Boron compounds

5,200

0

63

0

0

0

1,800

*3 Class I designated chemical substance stipulated by the Pollutant Release and Transfer Register (PRTR) Law (Unit: kg), Two significant digits*1. pH: Concentration of hydrogen ions, BOD: Biochemical oxygen demand (mg/l), COD: Chemical oxygen demand (mg/l), SS: Concentration of aqueous suspended solids (mg/l),( ) Daily average*2. As a result of water quality inspections of wastewater, values exceeding the voluntary standard value were detected in BOD at Rinnai Technica Co., Ltd.
While identifying the source together with the measuring company, the maintenance cycle of the septic tank was revised with the intention of replacing the equipment, renewal
and improvements such as processing control optimization were implemented because the processing capacity of the septic tank was assumed to be insufficient. Water quality
results after these measures show no problems in terms of maintaining the voluntary standards.

125

Rinnai Report 2022 126

Introduction

Environment

SocialGovernance

Data

Data Collection
Emissions into the Air (Fiscal 2022 Results)
Regulation value

Voluntary

Actual value(Maximum)Combustion furnace Soot and dust

0.25

0.16

0.001

NOx emissions

180

150

51

Soot and dust

0.1

0.08

0.002

NOx emissions

150

96

70

Soot and dust

0.1

0.05

0.002

NOx emissions

150

79

25

Combustion furnace Soot and dust

0.2

0.16

0.004

NOx emissions

230

180

3

Soot and dust

0.1

0.1

0.002

NOx emissions

150

150

24

Combustion furnace Soot and dust

0.2

0.2

0.002

BoilerSoot and dust

0.1

0.08

0.0012NOx emissions

150

120

40

Site

Facility

Oguchi Factory

BoilerSeto Factory

BoilerAkatsuki Factory

Yanagisawa Manufacturing Co., Ltd. Boiler

Gaster Co., Ltd.

Substance*1*1 Soot and dust: g/m3N, NOx: ppm, SOx: m3N/h

Scope 2
• Scope of calculations: Rinnai Corporation and its consolidated subsidiaries• CO2 conversion factors
Domestic emission factors: “Emission Factors by Electricity Utility (for FY2022 Reporting)” in MOE/METI, GHG Emission
Calculation and Reporting Manual (Ver. 4.8)
Overseas emission factors: Latest figures published for electricity utilities, etc., in the countries concerned
Australia

Electricity

0.4400 ~ 1.1020

tCO2e/MWh

New Zealand

0.1940tCO2e/MWh

United States

0.3538 ~ 0.3890

tCO2e/MWhHong Kong

0.7100tCO2e/MWhTaiwan0.5079tCO2e/MWh

South Korea

0.4590 ~ 0.4836

tCO2e/MWhIndonesia

0.8000tCO2e/MWhThailand

0.4670tCO2e/MWh

0.7921 ~ 0.8042

tCO2e/MWhBrazil0.1264tCO2e/MWh

Singapore

0.4080tCO2e/MWhViet Nam

0.8041tCO2e/MWhItaly0.2134tCO2e/MWhChina (Shanghai)

Conditions for Calculations
Scope 3
• Calculated in accordance with MOE/METI, Basic Guidelines on Calculation of Greenhouse Gas Emissions Throughout
the Supply Chain (Ver. 2.4)

Scope 1
• Scope of calculations: Rinnai Corporation and its consolidated subsidiaries• CO2 conversion factors
Emission factor: MOE/METI, GHG Emission Calculation and Reporting Manual (Ver. 4.8)
Heating value: • City gas: 45 MJ/Nm3
		• Methane gas: 39.7 MJ/m3
Town gas
Gas

Oil

127

2.24

tCO2e/1,000 Nm3

Methane2.02

tCO2e/1,000 Nm3

LPG

3.00

tCO2e/tButane3.00

tCO2e/tHeavy oil

2.71

tCO2e/kl

Kerosene

2.49

tCO2e/kl

Light oil

2.58

tCO2e/kl

Gasoline

2.32

tCO2e/kl• Conditions for all categories• Scope of calculation: Rinnai Corporation• Emission factors: MOE, Emission Factor Database (Ver. 3.2)
Sustainable Management Promotion Organization’s LCI database IDEAv2 (for calculating GHG emissions in the supply
chain)• Conditions for category 11 (Use of sold products)• Products covered: Water heaters sold by Rinnai• Period: 10 years• Conditions: Conditions defined by Rinnai• Emission factors:• Electricity: 0.570 kgCO2e/kWh• Federation of Electric Power Companies of Japan, Environmental Action Plans in the Electricity Industry,
September 2015 (reference materials: collected data on performance in fiscal 2014)• City gas: 2.21 kgCO2e/m3• Tokyo Gas Co., Ltd., City Gas CO2 Emission Factors (13A, 45 MJ/m3, ordinary households and other customers
receiving low-pressure supply)

Rinnai Report 2022 128

Introduction

Environment

SocialGovernance

Data

Data Collection
Third-Party Assurance Statement

LRQA Independent Assurance Statement

Table 1. Summary of Rinnai Corporation’s GHG Emissions Inventory in FY 2021
Scope
Energy direct GHG emissions (Scope 1)

Relating to Rinnai Corporation’s Environmental Data for the fiscal year
2021

67,987

Other indirect GHG emissions (Scope 3, Category 11)

8,846,480

Table 2. Summary of Rinnai Corporation’s Energy Consumption Data in FY2021

Terms of Engagement

Electricity

LRQA Limited (“LRQA”) was commissioned by Rinnai Corporation (“the Company”) to provide independent
assurance on its environmental data (“the report”) for the fiscal year 2021 1 against the assurance criteria below to alimited level of assurance and at the materiality of the professional judgement of the verifier using ISAE 3000 (Revised)
and ISO 14064-3:2019 for greenhouse gas (“GHG”) emissions.

Town gasfor vehicle use

Based on LRQA’s approach nothing has come to our attention that would cause us to believe that the Company has
not, in all material respects:• Met the requirements of the Company’s reporting methodologies• Disclosed accurate and reliable environmental data as summarized in Table 1 and Table 2 below
The opinion expressed is formed on the basis of a limited level of assurance6 and at the materiality of the professional
judgement of the verifier.

1

The reporting period is based on the fiscal year of domestic and overseas subsidiary companies: (1) domestic subsidiary companies:
FY2021(01/04/2021 – 31/03/2022), and (2) overseas subsidiary companies: CY2021 (01/01/2021– 31/12/2021)
GHG quantification is subject to inherent uncertainty.
3
The scope 1 GHG emissions cover only energy-oriented CO2.
4
Scope 3 emissions data cover activities associated with the usage of water heaters domestically sold by Rinnai Corporation.
5
The scope includes the breakdown of energy consumption.
6
The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited assurance
engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance obtained in alimited assurance engagement is lower than the assurance that would have been obtained had a reasonable assurance engagement been
performed.
2Page 1 of 3

129

459,595.5

GJ

kNm3

481,526.9

GJ
GJ

kNm3

4.6

km3

1,651.2GJ

2,353.3

t119,548.8

GJ

1.3

t

66.1

GJ

9.8

t

483.3

GJ

Acetylene

9.7

t

488.2

GJ

Ethylene

0.04

t

2.1

GJ

Heavy oil

0.18

kl

7.0

GJ

for the use of equipment in each facility
for vehicle use

Kerosene
Light oil

Our assurance engagement excluded the data and information of the Company’s suppliers, contractors and any
third-parties mentioned in the report.

MWh10,698.2
0.1

ButaneScope 1 GHG emissions (tonnes CO2e)
Scope 2 GHG emissions [Market-based] (tonnes CO2e)
Scope 3 GHG emissions (Category 11) (tonnes CO2e) 4
Energy consumption (GJ) 5

127,665.4

41.6

LPG

23

LRQA’s Opinion

for the use of equipment in each facility

MethaneOur assurance engagement covered the Company and its consolidated subsidiaries’ operations and activities inJapan and overseas and specifically the following requirements:• Verifying conformance with the Company’s reporting methodologies for the selected indicators:• Evaluating the accuracy and reliability of data for only the selected indicators listed below:

LRQA’s responsibility is only to the Company. LRQA disclaims any liability or responsibility to others as explained in
the end footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all the dataand information within the report and for maintaining effective internal controls over the systems from which thereport is derived. Ultimately, the report has been approved by, and remains the responsibility of the Company.

35,941

Energy indirect GHG emissions (Scope 2, Market-based)

This Assurance Statement has been prepared for Rinnai Corporation in accordance with our contract.

•
•
•
•

LRQA’s Standards, Competence and Independence

Tonnes CO2e

Gasoline

20.1

kl

737.4

GJ

for the use of equipment in each facility

90.6

kl

3,414.0

GJ

for vehicle use

320.2

kl

12,069.8

GJ

5.4

kl

185.9

GJ

1,552.3kl

53710.8

GJ

for the use of equipment in each facility
for vehicle use

LRQA’s Approach

LRQA’s assurance engagements are carried out in accordance with ISAE 3000 (Revised) and ISO 14064-3:2019 for GHG
emissions. The following tasks were undertaken as part of the evidence gathering process for this assurance
engagement:• Auditing the Company’s data management systems to confirm that there were no significant errors, omissions
or misstatements in the report. We did this by reviewing the effectiveness of data handling procedures,instructions and systems, including those for internal verification.
• Interviewing with those key people responsible for compiling the data and drafting the report.
• Sampling datasets and traced activity data back to aggregated levels;• Verifying the historical environmental data and records for the fiscal year 2021; and• By implementing the Company’s “No Visitor” Policy due to the global infection spread of COVID-19, conducting
the remote verification to Yanagisawa Mfg Co.,Ltd. , Rinnai Corporation Kansai Branch Office, and Kanto Branch
Office for confirming the effectiveness of its data management systems via emails and Microsoft Teams.

LRQA implements and maintains a comprehensive management system that meets accreditation requirements for
ISO 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use inaccreditation or other forms of recognition and ISO/IEC 17021-1 Conformity assessment – Requirements for bodies
providing audit and certification of management systems – Part1: Requirements that are at least as demanding as therequirements of the International Standard on Quality Control 1 and comply with the Code of Ethics for Professional
Accountants issued by the International Ethics Standards Board for Accountants.
LRQA ensures the selection of appropriately qualified individuals based on their qualifications, training andexperience. The outcome of all verification and certification assessments is then internally reviewed by senior
management to ensure that the approach applied is rigorous and transparent.
This is the only work undertaken by LRQA for the Company and as such does not compromise our independence or
impartiality.
SignedDated: 10 July 2022

Jun Yasumoto
LRQA Lead Verifier
On behalf of LRQA Limited
10th Floor, Queen's Tower A, 2-3-1 Minatomirai, Nishi-ku, Yokohama, JAPANLRQA reference: YKA4005612
LRQA, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in this clauseas 'LRQA'. LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on theinformation or advice in this document or howsoever provided, unless that person has signed a contract with the relevant LRQA entity for theprovision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that
contract.
The English version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into otherlanguages.
This Assurance Statement is only valid when published with the report to which it refers. It may only be reproduced in its entirety.
Copyright © LRQA, 2022.

Observations••

The Company has demonstrated improvement in its data management system over the years. But the Company
is expected further demonstrate the completeness of its future environmental indicators. In particular, basedon the interests of stakeholders, it is expected that the verification of Scope 3 GHG emissions, which is currently
being disclosed, will be expanded.
In addition, considering that the Company has a product line that uses fluorocarbons as a refrigerant, we expect
the Company to newly estimate the amount of HFC leakage from product use to disposal, which is not currently
calculated as Category 11 of Scope 3 GHG emissions.

Page 2 of 3

Page 3 of 3

Rinnai Report 2022 130

Introduction

Environment

SocialGovernance

Data

Data Collection
External Acclaim and Recognition

International Recognition for ESG Efforts
Rinnai was selected for inclusion in the FTSE4Good Index Series and theFTSE Blossom Japan Index, the leading environmental, social andgovernance (ESG) investment indices.

Rinnai was selected for inclusion in the FTSE Blossom Japan Index
formulated by FTSE Russell, a leading environmental, social andgovernance (ESG) rating organization. In addition to the ESG assessment,
Rinnai was evaluated for environmental impact and management approach
to climate change risks and opportunities.

Certified by the City of Nagoya as a “Company Promoting
Women’s Activities”
Rinnai was certified as a “company promoting women’s activities,” as part of ascheme operated by the City of Nagoya (Aichi Prefecture) in fiscal 2014.
We have been certified in recognition of three key initiatives aimed at
expanding frameworks, assigning duties, and changing attitudes, to support
female employees so that they play a greater role in the workplace.

Registered by Aichi Prefectural Government as a “Family
Friendly Company”
In March 2014, Rinnai was registered by the Aichi prefectural government as a“family friendly company,” based on its commitment to ensuring that
employees strike a balance between their work and private lives.

Rinnai was selected for inclusion in the “Sompo Sustainability Index”
launched by SOMPO Asset Management Co., Ltd.

Evaluation of Climate Change
The Carbon Disclosure Project (CDP), an international non-profit
organization, globally evaluates corporate efforts regarding climate change.
• CDP Climate Change
CDP Climate Change evaluates the corporate response to climate change.
Rinnai has received a B rating.
• CDP Supplier Engagement Rating (SER)
The CDP SER evaluates performance in governance, targets, Scope 3
emissions, and value chain engagement within the CDP Climate Change
Questionnaire. Rinnai has received an A- rating.

131

Certified as a “General Business Owner Meeting Standards”
In May 2014, Rinnai was certified by the Aichi Labour Bureau of the Ministry of
Health, Labour and Welfare as a “general business owner meeting standards” inaccordance with the Act on Advancement of Measures to Support Raising
Next-Generation Children, and was awarded the “Kurumin” next-generation
certification mark.

Certified as a “Parent-Friendly Company”
In fiscal 2016, we were recognized as a parent-friendly company under
Nagoya’s parent-friendly company accreditation scheme. The purpose of such
schemes is to certify or recognize companies that are working to create
parent-friendly environments.

Rinnai Report 2022 132