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CSR Report 2016 ― Editorial Policy, etc.
Top Message
Rinnai Group
Corporate Mission and Vision
Medium-Term Business Plan, “Evolution and Succession”
Rinnai Group CSR
The Rinnai Group’s Value Chains and Their Impacts on Society
Stakeholder Engagement
Identifying CSR Material Issues
Management System
Major Award Winning History
Emvironmntal Initiatives
Innovative Home Scenarios Offered by Third-generation ECO ONE
Efforts to Make Products Better
Environmental Management System with Our Suppliers
Environmentally Conscious Monozukuri
Measures to Improve Logistics
Environment Education and Promotion of Awareness
Environmental Management System“7E Strategic Initiatives” Environmental Action Plan and Fiscal 2017 Targets
Environmental Accounting
Chronology of Environmental Activities at Rinnai
Scope of Calculation for Environmental Data
Initiatives for Safety and Peace of Mind
Creating Safe, Reliable, Comfortable, Healthy Living Spaces
Targeting “Temperature-barrier-free Homes”
Measures for Quality
Consumer Safety
Inquiry Response and Support System
Inspection and Repair Services
Communication with Our Stakeholders
Communication with Our Customers
Communication with Our Shareholders and Investors
Communication with Business Partners
Communication with Our Employees
Communication with Our Communities and Society

Supplemental Data:
1. Oguchi Factory
2. Seto Factory
3. Asahi Factory
4. Yanagisawa Manufacturing Co., Ltd.
5. Rinnai Technica Co., Ltd.
6. RB Controls Co., Ltd.

7. Rinnai Precision Co., Ltd.
8. RT Engineering Co., Ltd.
9. Japan Ceramics Co., Ltd.
10. Noto Tech Co., Ltd.
11. Techno Parts Co., Ltd.

CSR Report 2016┃Editorial Policy

CSR Report 2016
Editorial Policy
Rinnai puts out a CSR Report to convey to stakeholders management’s approach to CSR, to describe the activities
undertaken groupwide, and to encourage a deeper understanding of the Group’s operations to as many people aspossible.

Rinnai’s Activities
To provide an overview of our CSR activities in an easy-to-understand way, we produce an abridged version of our
CSR Report in booklet form. Information not contained in the booklet—such as case studies, specific details, andrelated data— is posted on the website.

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

Reporting Period
This report focuses on events that occurred in fiscal 2016—April 1, 2015, to March 31, 2016—but also touches
upon measures implemented and recent activities undertaken prior to fiscal 2016 as well as future businessdirection, targets and plans.

Referenced Guidelines
Sustainability Reporting Guidelines (G4), the fourth and most recent generation of guidelines by the Global
Reporting Initiative (GRI)
ISO 26000:2010
Environmental Reporting Guidelines (fiscal 2012), issued by Japan’s Ministry of the Environment
Environmental Accounting Guidelines (fiscal 2005), issued by Japan’s Ministry of the Environment
1

CSR Report 2016┃Editorial Policy

Publication Schedule
September 2016 (Japanese version), previous: October 2015, next: August 2017 (planned)

Contact
For information on the Rinnai Group’s social and environmental activities, please contact the Corporate
Communication Division at Administration Headquarters
2-26, Fukuzumi-cho, Nakagawa-ku, Nagoya, Aichi 454-0802, Japan
Telephone (from outside Japan): +81-52-361-8211
Fax (from outside Japan): +81-52-361-8529

2

CSR Report 2016│Top Message

Top Message
Message from the Chairman
Since its establishment in 1920, Rinnai has been developing, manufacturing, andselling gas and other heat energy appliances based on its objective of “using heat
energy to provide society with comfortable lifestyles.”Thanks to support from customers, we have grown into a comprehensive heat
energy appliance manufacturer, and we now have operations in 16 nations andregions around the world, including Japan.
One reason for our growth is our commitment to quality. Based on our
corporate philosophy, “Quality is our destiny,” we are stepping up quality-based
initiatives in Japan and over-seas. We are working to improve quality across allstages of our operations, from product development and manufacture to distribution
customer service, and maintenance.
Another reason is localization. While deploying technologies acquired inJapan, we propose scenarios matched to the needs of local communities, cultures,and consumers in overseas markets. Our local subsidiaries also welcome national andregional people into management positions to demonstrate our stance in emphasizing
localization.
Committed to protecting the environment, Rinnai is focusing on prevention of
global warming. Seeking to help reduce CO2 emissions from people’s homes, we arepromoting the proliferation of our ECO ONE hybrid water heaters with heating
systems and our Eco Jozu high-efficiency water heaters, both of which feature
minimal CO2 emissions.
Overseas as well, we plan, develop, manufacture, and sell environmentallyfriendly products tailored to national and regional attributes. As a comprehensive heat
energy appliance manufacturer, Rinnai will contribute to the creation of a sustainable
society by promoting products that are safe, reliable, comfortable, and environmentallyfriendly.

Susumu Naito,
Chairman3

CSR Report 2016│Top Message

Message from the President
We will help create a sustainable society as a comprehensive heat energy appliancemanufacturer, with the key themes “safety and peace of mind”, “comfort and health”, and“environment”.
We will use energy deregulation as an opportunity to establish
a robust brand.
Seeking to further solidify its brand image as a comprehensive heat
energy appliance manufacturer, in April 2015 the Rinnai Groupembarked on a medium-term business plan, entitled Evolution andSuccession 2017. In the fiscal year ended March 31, 2016, the first yearof the plan, the domestic market was somewhat lackluster, but overseas
markets were generally healthy. Accordingly, consolidated net sales
increased 8.4% year on year, to ¥319.9 billion, and operating income
rose 12.4%, to ¥34.5 billion.
As readers may be aware, deregulation of the Japanese electricity
market began in April 2016, with the gas market to follow starting in
April 2017. Amid intensifying competition in the energy sector, sales
promotion activities for gas appliances, previously handled by existinglarge-scale town gas providers, will be curtailed, andmanufacturers may need to take over those tasks. However, we do notbelieve this to be a negative factor. Rather, it is an opportunity tohighlight the excellence and high quality of our products to a broad
spectrum of customers. In addition to product development, therefore,
we will focus on activities to establish a positive brand image.
Overseas, we are stepping up initiatives in both advanced andemerging nations. In addition to building a new plant in China, forexample, we have set up a new base in Dubai, United Arab Emirates.
Our overseas sales ratio was 47.0% in the year under review, and we
expect this to grow in the future.
With the help of Gastar Co., Ltd., which became a subsidiary of
Rinnai Corporation in April 2016, we will reinforce our manufacturing
and sales operations in Japan’s northeast Kanto Region. Rinnai and
Gastar have engaged jointly in product manufacturing for many years,
and Gastar fully understands Rinnai’s commitment to quality. Goingforward, the two companies will together make and sell products,
guided by Rinnai’s corporate philosophy, “Quality is our destiny.”

Hiroyasu Naito, President

Promoting the spread of our ECO ONE hybrid water heaterwith heating system to help reduce CO2 emissions from homes
In the domestic market, we will work to increase sales of our ECO ONE hybrid water heater with heating system,
which combines a high-efficiency gas water with heating system and an electric heat pump. Sales of ECO ONE
are increasing steadily. For example, a condominium building in which ECO ONE systems are installed in all
residential units has been officially certified as a low-carbon building (see page 75). Moreover, a growing numberof residential construction companies are employing ECO ONE as a powerful tool for promoting the net zeroenergy house (ZEH) concept. At Rinnai, we will promote the spread of ECO ONE, as well as our high-efficiency
Eco Jozu water heaters, to help reduce CO2 emissions from people’s homes.
To help customers use our gas appliances with peace of mind, we are stepping up efforts to establish asafety inspection system for long-term-use products, and focusing on raising the number of products targeted forsuch inspections. We are also addressing “heat shock” and other problems that cause accidents in bathrooms,
where around 10,000 people in Japan lose their lives annually. Specifically, we have conducted PR explaining theeffectiveness of bathroom heaters in eliminating the temperature difference between the bathroom/dressing room
and adjacent rooms (see page 24). We will continue this initiative going forward. We will also continue
inspections, repairs, and parts replacements of dishwasher/dryers found to be defective in 2012, as well as some
fan-forced bathwater heaters made and sold by Gastar, identified as defective in 2014.
4

CSR Report 2016│Top Message

Overseas, meanwhile, we develop and propose products matched to the attributes and environmental
policies of each nation and region. Through meticulous responses, we hope to make contributions that protect ourenvironment.
Management emphasis on transparency
Establishing workplaces where women can excel
We are focusing on strengthening management and establishing healthy workplace environments. On thecorporate governance side, in June 2016 we added one outside director, for a total of two. While deploying
external perspectives in management, we will practice corporate management that is more transparent than everbefore.
For a long time, the Rinnai Group has respected the human rights of its employees both in Japan andoverseas, and has endeavored to create worker-friendly environments. We have also implemented various
schemes, such as a system supporting the advancement of women. In addition, we have promoted activities tomaintain and improve the physical and mental health of employees. These efforts have been highly acclaimed.
For example, Rinnai Corporation has been included in the “Health and Productivity Index 2016” presented by the
Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange (TSE). We will continue working toincrease corporate value as a company in which employees work with enthusiasm.
With respect to local communities, each of our business operations engages in various independent initiatives
while also supporting local culture and contributing to local society through ongoing efforts, including support for
the Nakagawa Canal Restoration and Culture/Art Activity Assistance Project (ARToC10).
Going forward, the Rinnai Group will continue working to create prosperous, comfortable lifestyles and help
protect the environment through its core business. Committed to meeting the expectations of society, we will also
strive to create a sustainable society.

5

Rinnai GroupR i n n a i C S R R e p o r t 2016

Rinnai Group Network

Corporate Data (As of March 31, 2016)
Incorporated: September 1, 1920

● Manufacturing and sales companies ● Sales companies ● Other Business

Established: September 2, 1950
Paid-in capital: ¥6,459,746,974

JAPAN

Head office: 2-26, Fukuzumi-cho,
Nakagawa-ku, Nagoya 454-0802, Japan●Rinnai Corporation• Branches:
Tohoku, Kanto, Chubu, Kansai,
Kyushu• Domestic sales offices:
Hokkaido, Kita-Tohoku, Sendai,
Niigata, Tokyo, Kita-Kanto,
Higashi-Kanto, Minami-Kanto,
Tokai, Shizuoka, Hokuriku,
Nagano, Osaka, Keji,
Hyogo, Chugoku,●Rinnai Canada Holdings Ltd.
Shikoku, Fukuoka• Factories and related centers:
Technology Development Center,
Production and Technology,
Development Center,●
Integrated Logistics Center,
Rinnai America Corporation
Rinnai Parts Center,
Oguchi Factory,
Seto Factory,
Asahi Factory,
Akatsuki Factory

SOUTH KOREA●Rinnai Korea Corporation●RB Korea Ltd.
●Rinnai UK Ltd.

●RS Korea Ltd.

CHINA

●Mikuni RK Corporation●Rinnai Plus Corp.

●Shanghai Rinnai Co., Ltd.
●

●Shanghai RB Controls Co., Ltd.

Rinnai Italia s.r.l.

●Guangzhou Rinnai Gas and Electric Appliance Co., Ltd.
●Hainan Rinnai Minsheng Kitchen Appliances Sales Co., Ltd.
●Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

Dubai Representative Office●

Rinnai Hong Kong Ltd.●●Rinnai Taiwan Corporation

Rinnai (Thailand) Co., Ltd.●●Rinnai Vietnam Co., Ltd.

Number of employees: 9,940 (consolidated),
3,579 (non-consolidated)
Number of Group companies: 44 (domestic 15,
overseas 29)

Net Sales by Product (Year ended March 31, 2016)(Billions of yen)

Others
¥27.4 billion
Commercial-use equipment¥10.0 billion
Home heaters¥19.4 billion

Total¥319.9billion
Kitchen appliances¥93.3 billion●Yanagisawa Manufacturing Co., Ltd.

●Rinnai (Malaysia) Sdn. Bhd.
●Rinnai Holdings (Pacific) Pte Ltd.

Net Sales by Region (Year ended March 31, 2016)●Rinnai Technica Co., Ltd.

(Billions of yen)

●RB Controls Co., Ltd.

Indonesia¥11.0 billion●Rinnai Precision Co., Ltd.

●P.T. Rinnai Indonesia●RT Engineering Co., Ltd.
●Noto Tech Co., Ltd.
●Techno Parts Co., Ltd.

●Rinnai Australia Pty., Ltd.

●Rinnai Net Co., Ltd.

●Brivis Climate Systems Pty Ltd.

●RG Co., Ltd.

●Jordans NSW Corporation●Gas Appliance Services Corporation

RinnaiNew Zealand Ltd.

●Rinnai Enterprises●

Water Heaters and Heating Systems

Home Heaters

Water heaters, water heater with bath-filling system,
water heater with heating system, hybrid water heaterwith heating system, bathroom heater/dryer, mist
sauna, floor heating systems, and others

Fan heaters, fanned flue heaters, infrared heaters,
and others

Others¥18.5 billion
Japan¥178.7 billion

China¥31.9 billion●Japan Ceramics Co., Ltd.

AUSTRALIA

Water heaters¥169.6 billion

Rinnai Brasil
Heating Technology Ltd.
●

Australia¥23.0 billion
United States¥22.6 billion

Total¥319.9billionSouth Korea¥33.8 billion

Kitchen Appliances

Commercial-Use Equipment, Others

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

Industrial ceramics machines, commercial-use ranges,
rice cookers, clothes dryers, infrared burners,
components, and others

Bath Hot bathroom heater/dryer
Gas fan heater(5.8kW type)ECO ONE hybrid water heater withheating systems

DELICIA gas built-in hob (stovetops)

Built-in dishwasher
Commercial-use gas clothes dryer

CSR Report 2016│Corporate Mission and VisionCorporate Mission and Vision
Fundamental Concepts

Quality is our destiny
Company Motto
Harmony:
Develop personal character of the highest caliber
Spirit:Base your efforts on a consistent philosophy
Sincerity:
Know the fundamentals and consider issues with precisionand clarity

Rinnai’s Corporate Mission
Rinnai utilizes heating to provide society with a comfortable way of life.

Schematic Diagram of Company Ideals

8CSR Report 2016│Corporate Mission and Vision

Three Key Themes
Since its establishment, Rinnai has grown and developed through an unshakable focus on three themes. Part andparcel of the Rinnai Spirit, these themes are and always will be integral to our success.
Heat and
Lifestyles

Quality

Contributing
to LocalCommunities

Rinnai’s corporate mission hinges on the use of “heating” to provide society with“comfortable lifestyles.” Our strength is in sophisticated heating technologies, and we will
utilize this capability to facilitate the creation of pleasant living environments.
Rinnai’s catchphrase—“Quality is our destiny”—epitomizes a corporate obsession withquality. So it is only natural that we would keep production and other monozukuri(manufacturing) efforts in-house to sustain high-level standards. This enables us to deliversafety and peace of mind to our customers.
At Rinnai, we firmly believe that contributing to a better lifestyle culture in local communities
is vital to our role as a good corporate citizen. Basic strategies for expanding our presence
abroad require that sales and services are executed with local conditions in mind and that
manufacturing takes place in the markets where the products will be sold.

9

CSR Report 2016│Medium-Term Business Plan, “Evolution and Succession”

Medium-Term Business Plan, “Evolution and Succession”(April 2015–March 2018)“Evolution and Succession” is our medium-term business plan that began in April 2015. Under the plan, each of the
Rinnai Group companies will ensure the “succession” of our commitment to product quality and monozukuri(craftsmanship)—based on the spirit of our founder and fundamental belief that “Quality is our destiny”—whileemphasizing our “evolution” toward a new era. In the process, we will target major progress as a comprehensive heat
energy appliance brand as we approach Rinnai’s 100th anniversary in 2020.

Major Steps Forward as a Comprehensive Heat Energy Appliance Brandin the Lead-up to 2020 (Rinnai’s 100th Anniversary)

10

CSR Report 2016│Medium-Term Business Plan, “Evolution and Succession”

11CSR Report 2016│Rinnai Group CSR

Rinnai Group CSR
Approach to CSR
The Rinnai Group’s corporate mission is to use heat to provide society with comfortable lifestyles. With this inmind, we deliver heat-energy appliances with excellent features in terms of safety and peace of mind, comfort,
and the environment. We seek to improve lifestyle cultures of people around the world and offer a better outlook
for the planet.
The Group pursues CSR activities through core operations based on the three commitments it as emphasizedsince its foundation—“heat and lifestyles,” “quality,” and “contributing to local communities”—complemented
by “the environment,” for a total of four key themes.

Environment

Hot water and heating appliances account for much of the energy used in the averagehome. By developing, manufacturing, and selling appliances with exceptional energy
efficiency, Rinnai helps reduce emissions of greenhouse gases from homes.

Heat and Lifestyles

We deploy our advanced heat-related technologies and know-how to develop products thatpeople can use in a safe, comfortable, and efficient manner. In this way, we help people
lead abundant lifestyles.

Quality

We adhere to the basic tenet that “Quality is our destiny.” To this end, we pursue a “zerodefects” objective when designing, making, and selling our products, to ensure they remainfault-free until they are no longer used by the customer.

Contributing toLocal Communities

In principle, we focus on local production and local sales in advancing our overseas
business. Our aim is to help improve the lives of local people around the world by
delivering products and services that meet the climates, lifestyle cultures, and customs ofvarious nations and regions.

Returning Added Value to All Stakeholders
Together with stakeholders, we will strive for continuous growth by returning the economic value obtained
through Rinnai’s business activities to stakeholders, thus fostering sustained mutual advancement.

12

CSR Report 2016│Rinnai Group CSR

Environmental Policy
Rinnai’s environmental initiatives are underpinned by the “Basic Philosophy on the Environment,”“Environmental Slogan,” and “Basic Environmental Activities” (“7 E Strategic Initiatives” set out below. Our
efforts extend beyond the development of environmentally responsible products that reduce energy consumption
when in use and initiatives aimed at reducing greenhouse gases.
We recognize how our diverse activities—including the development, procurement, production, sale, anddisposal of products—are inextricably linked to the global environment. Accordingly, all Group employees
engage in environmental initiatives across all business domains.
Basic Philosophy on the Environment
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 technology, and product development, production,
sales and service infused with a sense of humanity.
Environmental Slogan“Our actions are imbued by the wisdom of many and undertaken with due consideration to the sustainability of apeople- and earth-friendly environment.”

Basic Environmental Policy
1. Provide environmentally conscious products that have minimal impact on the environment.
Through the diligent pursuit of product development stressing reduced consumption of resources and energy andhigher recycling rates as well as eco-minded materials procurement (E-Procurement), we will provide
environmentally conscious products (E-Products) that have minimal impact on the environment and contribute to ahealthier planet.
2. Create green factories and offices with the environment in mind.
We will emphasize activities that save energy, reduce waste and limit or eliminate hazardous chemical substances,and we will work toward the establishment of environmentally sustainable factories and offices—E-Factory and EOffice—that fit in with the natural surroundings.
3. Consider how sales and service activities might affect the environment.
We will reduce the impact that sales (E-Marketing), services (E-Service) and other business activities in general
might have on the environment.
4. Formulate an environmental management system and continuously improve it.
We will formulate an environmental management system and continuously enhance its scope through theestablishment and management of appropriate environmental objectives and targets.
5. Ensure activities are in compliance with regulations and restrictions, including laws, and self-establishedstandards.
Obviously, we will abide by laws, ordinances, agreements and other regulations and restrictions, but we will also
set and adhere to self-established standards corresponding to social demands. We will always strive to enhance our
response to meet revised regulations and evolving standards.
6. Raise environmental awareness among employees and work with communities to contribute to society.
We will raise environmental awareness among all employees through environment-themed training, and we will
promote activities undertaken jointly with regional communities and other groups to achieve public good. This
perspective is called e-mind.
7. Disclose information to employees and the communities in which we work.
We will disclose environment-related information, such as policies and strategies, to keep employees and society atlarge in the loop about our perspectives and actions on environmental issues.

13

CSR Report 2016│Rinnai Group CSRInternational Assessment of CSR Performance
Rinnai has been selected for inclusion in the FTSE4Good Global Index, a worldwide socially responsible
investment (SRI) index, for 11 consecutive years since 2004.

14

CSR Report 2016│The Rinnai Group’s Value Chains and Their Impacts on Society

The Rinnai Group’s Value Chains and Their Impacts on Society
Social Impacts and Activities of the Rinnai GroupWe recognize all of the impact our actions have on society and conduct our operations in anenvironmentally-friendly manner in every area in which we do business to fulfill our social responsibility fromprocurement to disposal of our products.

Input
Main resources
inputted(raw materials andenergy)Raw materials
Iron, copper,
stainless steel, brass,aluminum, plastics,
rubber, etc.

Rinnai Group
Value Chain

Procurement

Energy•Electricity:
95,250,000kWh•Gas: 9,080,000㎥•LP gas: 3,075 t•Other materials:
2,491 kl
(Conversion to
crude oil)

Water
• Ground water:
90,000㎥• Public water:
620,000㎥

OutputMain emissions

Air emissions
770,000t

Main Concerns

Main environmental
activities of
the Rinnai GroupResource depletion,
global warming
atmosphericpollution, waterpollution, soil
pollution,
hazardous
chemicals andconflict minerals• Implementation of various
environ-mental efforts with
suppliers and groupcompanies to make ourprocesses better for
everything from partsprocurement to the final
product• Collection and managementof information on control ofhazardous chemicals incollaboration with suppliers
and group companies

Resource depletion,
global warming,
atmosphericpollution, waterpollution,soil pollution,
hazardous
chemicals and noise• Development/design ofproducts using combustionand control technologies toreduce environ-mental
impact on the output side
• Improvement of productivity
and reduction of energy
production by streamlining
manufacturing• Reduction of waste
emissions and maintenanceof zero emissions (zerowaste disposal by landfill)

Air emissions
CO2: 70,000t
NOx: 71t

Wastewater
630,000m3

Development
andManufacturing

Solid waste(Includes
valuable
substances)
30,000t

15

CSR Report 2016│The Rinnai Group’s Value Chains and Their Impacts on Society

EnergySales and
Logistics

Air emissions
CO2: 10,000t

EnergyProduct
Usage

Air emissions
9,170,000t

Resource depletion,
global warming,
atmosphericpollution and noise•Improvement of fuelefficiency by shortening
transportation distances (e.g.,
by changing routes andconsolidating distribution
centers)•Improvement of fuelefficiency by encouraging
eco-driving•Adoption of packing that iseasier to unload and move•Pursuit of selling andexpanding products that havea lower environmental
impactResource depletionand global warming•Proposal of sustainable,
comfort-able, green lifestyles
through use of energy-saving
products

Resource depletion,
global warming,
water pollution andsoil pollution•Application of design for theenvironment, e.g., to makeproducts easy to disassemblein accordance with productassessment standards

Water[Scope]Rinnai andconsolidated
subsidiaries[Development /Manufacturing]
Rinnai Corporation[Procurement / Sales /Logistics / Product
Usage / Disposal][Subject Period]
Fiscal 2016 (April
2015 - March 2016)

Air emissions
9,324tDisposal

The value chain is the chain of business activities and processes undertaken by a company to generate and deliver value(products and services) to the customer.

16

CSR Report 2016│Stakeholder Engagement

Stakeholder Engagement
The Rinnai Group places great importance on communication with a variety of stakeholders and applies the valuable feedback
and requests we receive in our business activities.

Two-Way Communication Initiatives
Throughout the Rinnai Group, we place great importance oncommunication with customers, employees, shareholders, investors,
business partners, local communities and the general public.
We take on board comments and requests from our customers
through channels such as exhibitions and our online shopping site, anduse them to help us improve our products and services. We exchange
information with our business partners on subjects such as management
policies and products, and also work together to improve management
through activities such as our Level-Up Workshop and Shipping
Subcommittee.
We will continue to engage in communication with all of ourshareholders on a daily basis, so that we can evolve our businessactivities and improve levels of satisfaction even further in the future.

Main
Stakeholders

Customers

Means of Communication•Customer Center•Official online shoppingsite “R.STYLE”•Exhibitions and otherevents•After-sales services(inspection and repairs)

Opinions and Issues Raised and Our Responses•We conscientiously answer a range of inquiries from
customers concerning products and parts, and post
frequently asked questions (FAQ) on our website.
•Customers who have had repairs done are surveyed to gauge
their satisfaction with elements of service such as “ease ofgetting through by phone” and - “politeness of operators.”
Details of responses are then fed back to operators so thatthey can remedy unsatisfactory areas.
•Respondents to a questionnaire survey of registered users
indicated that they would prefer user registration to behandled by stores. In response, in July 2012 we revised ouruser registration procedure and made improvements by, e.g.,
providing better explanations and making it clearer tocustomers that they can request stores to do the registration
paperwork for them.
• As some people are unaware of Maintenance and Inspection
System of Long-Life Products, we inform customers of thissystem when we have contact with them (e.g., when making
repairs).

17

CSR Report 2016│Stakeholder Engagement

Employees•Intranet and in-housenewsletter•Training and related
events•Individual discussions•Corporate ethics advisory
service•Workplace meetings

Shareholders,
Investors•General shareholders'meetings•Results briefings•Investor relations
meetings•Factory tours•Questionnaires

Business
Partners•New Year meetings /Policy presentations for
suppliers•Supplier liaison group•Online communication
tool,“R-LINE”*•Level-Up Workshop

Community,
Society(including
government)•Participation in local/
community development
activities•Support for culturalactivities and the arts
•Employee volunteer
activities•Support for extracurricularschool activities (factory
tours, etc.)•We have established a number of programs to create a more
pleasant working environment, including our Come-Backprogram, reduced working hours, and telecommuting
arrangements, and we will continue to pursue improvements
to the physical and psychological working environment.
• Responding to requests from employees to be given
feedback on their personnel evaluation results, we haveintroduced arrangements for one-to-one meetings withsuperiors and encourage headquarters to provide such
feedback.
• We heard from a number of employees that wanted to use
the shortened work hour system up until July when theirchild entered elementary school, and it has been revised toinclude up until July 31st of the school year.
• Child nursing leave has been revised to 10 days instead of
5 days per year.
• We are continuously committed to providing parental
support and promoting women's employment, and areenhancing our programs beyond statutory requirements.
• We carefully explain our “Evolution and Succession 2017”
medium-term business plan at results briefings andindividual IR meetings, and endeavor to improveunderstanding of the Group’s management policy andstrategy.
• We regularly organize facility and factory tours for
institutional investors to give them a better understanding of
our strengths and competitive advantages, and to outline ourapproach to manufacturing and technical capabilities.
• We hold results briefings and individual IR meetings toanswer inquiries and explain our underlying thinking on
dividend policy.
• We receive inquiries from suppliers on our most recent
production levels and provide production data for individual
products and details of future production plans via regular
Supplier Liaison Group meetings.
• Responding to requests from suppliers for advice on, e.g.,
improving quality and productivity, we organize Level-Up
Workshops and Management Improvement Workshops for
major suppliers to provide them with guidance on making
improvements in the workplace and help suppliers to makemanagement improvements.
• We are asked by people living near our plants and offices toassist with events and festivals aimed at enlivening theircommunities, and we actively assist and take part in such
events as a member of these communities.
• We assist in cultural and artistic events in the Nakagawa
Canal area and other regions, and provide ongoing support
for exchanges and creative activities at the grassroots level.
• In response to requests for assistance with community
learning and school education, we organize events such as
seminars on the history of manufacturing at Rinnai andfactory tours for schoolchildren.

*R-LINE is our online channels for sharing information and communicating with suppliers.

18

CSR Report 2016│Stakeholder Engagement

CSR Report 2015 Questionnaire Results (n=424)

Selected Questionnaire Feedback
Q. What do you expect from the Rinnai Group in terms of energy?
• I would like to see the Rinnai Group actively working to support family infrastructures, especially in developing
countries, in order to improve energy efficiency in the future.
• I would like to see the Rinnai Group focus on not only the efficient use of energy, but also environmental
preservation. It would also be great to see some inexpensive energy devices developed that can be used indeveloping countries.
• I am not sure what should be the main energy we use in our daily lives. It feels like there is a strong emphasis on
consumers, but I wanted to know a little bit more examples that comprehensively use heat energy.
Q. General opinions and impressions• In the volunteer and community-based activities section, it introduces some volunteer efforts at overseas
companies, but I am interested in what you are doing in Japan. It would be great if you did the same work inJapan as well.
• The digest version is much more compact overall and is easy to understand. However, I thought it was a bit longand some of the sentences could have been omitted. For the values regarding the mid-term business plan, it would
have been easier to understand if you listed the business results for three terms to compare them with the past
results.
• The content felt very sincere. It uses many graphs and pictures, and I thought the content was very easy tounderstand. However, I thought it would have been more memorable if more original content was included.

19

CSR Report 2016│Identifying CSR Material Issues

Identifying CSR Material Issues
Process of Identifying CSR Material Issues
We actively take on board the opinions and expectations of various different stakeholders and incorporate theminto our CSR activities, in the interests of the continued development of both the Rinnai Group and all of its
stakeholders. As well as enhancing our corporate value, we believe that ongoing activities such as these help our
stakeholders to grow and contribute to the creation of a more sustainable society.
We make every effort to identify social challenges relating to the Rinnai Group, through day-to-day
communication activities with stakeholders coupled with study and analysis of applicable guidelines and SRI
indices. We also identify CSR material issues in relation to our management strategies, revolving primarily
around corporate planning divisions.

20

CSR Report 2016│Identifying CSR Material Issues

Determining and Identifying CSR Material Issues
We have determined social challenges relating to the Rinnai Group, analyzed their level of importance tostakeholders and the Group, and identified CSR material issues.
As well as being matters of interest to stakeholders, these are high-impact issues that are also positioned as toppriorities within the Rinnai Group’s management strategy.

21

CSR Report 2016│Identifying CSR Material Issues

Focus of Initiatives
Environmental Initiatives
CSR Material Issues- Energy consumption- CO2 emissions

Roughly half of all energy consumed by Japanese households is used for hot
water and heating. Reducing energy consumption and CO2 emissions in the
hot water and heating sector is therefore a top priority.

Target Area and Stakeholders
Target area: Global (Main focus of initiatives: Japan)
Target stakeholders: All
Details of Initiatives
We intend to develop and encourage households to use water heaters and heating units with an emphasis onenergy saving and environmental performance, in an effort to reduce energy consumption and reduce household
CO2 emissions.
Target Indicators
Amount it contributes to reducing CO2 emissions by using the productInitiatives Delivering Safety and Peace of Mind
CSR Material Issues- Consumer safety- Improving quality

Reducing kitchen fires and fatal bathroom accidents is naturally an
important priority alongside eliminating accidents resulting from productdefects.

Target Area and Stakeholders
Target area: Japan
Target stakeholders: Customers
Details of Initiatives
We are working towards achieving “zero defects” by eliminating defects at every stage of the product lifecycle—
from development, production, and sale through to obsolescence—and pursue a range of activities to publicize
information and raise awareness of preventing accidents in the home.
Target Indicators
Improvements in the service person questionnaire evaluation results and number of certified service persons

22

CSR Report 2016│Management System

Management System

Corporate Governance
Basic Policy
From the perspective of a sharper competitive edge for the Group and sustained improvement in corporate value,
Rinnai has made efforts to augment practices and enrich the scope of corporate governance top management
priorities. We aim to reinforce the functions of corporate structures, such as the Board of Directors and the Audit &Supervisory Board, and seek a higher level of management transparency, which will be achieved through quick andaccurate disclosure of pertinent information to various stakeholder groups and through access to a wide range of
information.

Board of Directors
The Board of Directors has decision-making authority for important management issues affecting Rinnai andoversees the execution of duties by directors. The Board has eight members (including two outside directors) and as
a rule meets once a month. Moreover, to clarify the management responsibilities of each business year and gain
trust from shareholders, Rinnai regulates the term of director to be one year.

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 managers of the divisions responsible so that they can be implemented. Quarterly company-wide
management meetings and individual management meetings are also held to confirm how business is progressing
and to share information on the challenges faced.

Structure for Monitoring Management Performance
Audit & Supervisory Board has four Board Members, two of whom are outside members. Audit & Supervisory
Board Members attend important meetings, including those of the Board of Directors. They also monitor internal
control status—that is, progress on the establishment of internal controls and implementation of associatedpractices—with a focus on the results achieved by directors and executive bodies, and they check on the status ofoperations and asset management at the head office and principal branches. In addition, Deloitte Touche Tohmatsu
LLC undertakes accounting audits and verifies the soundness of accounting-oriented internal controls from athird-party perspective.

23

CSR Report 2016│Management System

Reason for Choice of Current Corporate Governance Structure
The Company appoints two outside members to both the Board of Directors and the Audit and Supervisory Board.
We consider neutral and objective monitoring of management by outside parties to be an important element ofgood corporate governance, and believe that outside directors and auditors fulfill this role and ensure thatmanagement monitoring by outside parties functions properly.

Development and Strengthening of Internal Controls
Internal controls are developed in accordance with our “Basic Policy on Development of Internal Control System,”
which was adopted by the Board of Directors to ensure that business is executed appropriately and efficiently. The
state of implementation is confirmed by means including risk management and internal audits, and the content of
the basic policy is revised regularly every year.
To respond to the internal control reporting requirements under the Financial Instruments and Exchange Act, theInternal Control Office (an independent division) reviews the Company’s basic policy of internal controls, andassesses the effectiveness of development and functioning of controls to ensure the reliability of financial reports.

Director and Auditor Compensation
The maximum amounts of compensation paid to directors and auditors and other related matters are determined byresolutions of general meetings of shareholders. Our internal regulations provide for basic matters concerning
directors’ compensation, including method of determination, revisions, and reductions, and the amounts paid aredetermined in accordance with these provisions by resolution of the Board of Directors in the case of directors’compensation, and through deliberations by the auditors in the case of auditors’ compensation. At Rinnai, directors
are paid a fixed amount commensurate with their assigned duties. (We did have a retirement benefit system fordirectors, but this was terminated at the general meeting of shareholders held on June 27, 2008.)
Any directors or auditors who receive total consolidated compensation of ¥100 million or more are listed
individually in the financial statements. Note that the details of compensation paid to directors of the company infiscal 2016, ended March 31, 2016, are for compensation paid to the seven internal directors, and compensation inthat year came to ¥383 million. (This figure does not include salaries paid to directors who serve concurrently as
employees.)

Information Disclosure
For timely and appropriate disclosure of important information on the Group, we facilitated the internal regulations
and established "Disclosure Policy", which is listed on our website, as the guidelines for information disclosure.

Risk Management
Risk Management Policy
As social structures become more complex, the risks faced by companies are becoming more diverse. As the
Rinnai Group continues to expand its business globally within this environment, we are committed to risk
management in order to ensure stable business activities that sustain the trust of customers and society as a whole.

Risk Management Promotion System
A “Risk Management Committee” made up mainly of executive officers and divisional heads and chaired by thepresident meets regularly to identify key risks with the potential to impact on our survival, credibility, businessactivities, and assets. It also determines the divisions with primary responsibility for each risk, develops
mechanisms to prevent them from materializing, rapidly resolves crises, minimizes any damage that may occur asa result, and prevents recurrences. The committee works with all divisions and group companies to head off risks
and enhance risk response capabilities.
24

CSR Report 2016│Management System

Identified Risks (Examples)










Risk of non-compliance or management in violation of applicable legislation, etc.
Risk of destruction or damage to factories, buildings or production facilities due to a disaster or accident
Risk of suspension or delays with raw material procurement activities
Risks relating to the environment
Risk of bodily injury
Risks relating to information leaks
Risk of damage to mission-critical systems
Risk relating to social media
Risks relating to infection from new strains of influenza, norovirus, etc.

Promotion of Businesses Continuity Plan
When companies have no sufficient measures for natural disasters such as earthquakes and storms and theprevalence of infectious diseases, the business operations may be suspended for a long time, result in a significant
damage and give a serious impact on stakeholders. As a company which produces thermal energy appliance tosupport people's lifestyles, we believe it is our responsibility to maintain the stable supply of our products evenunder such circumstances.
We have positioned business continuity management as our of top priorities, in the event of any risks tothe production or supply of important products required by our customers, and are constantly working toformulate and review business continuity plans (BCP), particularly for our domestic production divisions. Basedon our experiences from the Great East Japan Earthquake on March 11, 2011, and the Kumamoto earthquakes ofApril 14, 2016, we are exploring alternative raw material suppliers and procurement sources, and continue to use
multiple procurement sources on a daily basis, so that we are prepared for any large-scale earthquakes in the
future, including the Nankai Trough.

Stable Procurement
See page 94 “Measures for Risk Management and Stable Procurement”.

Information Securities Measures
While society becomes more demanding toward company’s security reinforcement issues, our Group as a wholepromotes the adequate management of security systems by strengthening the awareness for proper information
handling through the establishment of the rules for confidential information management and the personal
information management. User authentication technology was adopted company-wide to manage accesses to IT
system and an entry/withdrawal management system with ID cards has been introduced to various businesslocations including Technology Development Center one by one.
In addition, to avoid information leakage, we have been enforcing a strict management of the external use
of personal computers, encryption of data stored in media to be used outside of the office, unauthorized access byoutsiders and virus and spam countermeasures.

25

CSR Report 2016│Management System

Compliance
Compliance Promotion System
To remain a sound corporate group which wins the trust of society, the Corporate Ethics Committee wasestablished in April 2004 headed by our President as its chairman. To promote compliance as part of ourcorporate culture, individual employees strive to live up to their social responsibilities and create a workplace thatencourages people to actively engage in their work.

Corporate Ethics Committee
Committee members(Selected fromeach headquarters)

Chairman(President)

Measurements

Secretariat office(Legal department)• Establishment, revision, training andenforcement of "Code of Ethics"• Establishment and operation of “Corporate
Ethics Helpline”• Investigation of violation of "Code of Ethics”
Deployment

Each department

Rinnai Group “Code of Ethics”
The Rinnai “Code of Ethics” is a small booklet which combines Rinnai’s Corporate Philosophy and Code of
Conduct, which embodies the detailed behavioral standards that all executives and employees are required to obey.
The Compliance Committee member allocated to each workplace provides all employees in the workplace with
“Code of Ethics” training each year for its enforcement.
The English-version “Code of Ethics” was issued and distributed to the 18 overseas Group companies,
and local language versions were distributed to Group companies in China and South Korea.

“Code of Ethics” booklets
of various countries“Code of Ethics” training sessions at P.T. Rinnai Indonesia (left)
and Rinnai Brasil Heating Technology Ltd. (right)

26

CSR Report 2016│Management System

Compliance Promotion Activities
Compliance Traini
Within the company, the President himself takes the initiative by sending messages on corporate ethics to
employees to improve their awareness of compliance issues.
Moreover, regarding specific laws that individual departments have close relationship with, the Legal
Department takes the lead by providing legal education every year. In fiscal 2016, a total of 577 Group employees
undertook training to improve their knowledge of the law. We also provide ethical education for new recruits andfor employees in specific job classes every year, with a total of 213 employees attending sessions in fiscal 2016.
We also provide compliance-related information to employees at group companies in Japan via otherchannels, including the Group’s intranet, which we use to publish information on topics such as legal revisions
and articles explaining law that applies to our operations.

Legal education

Number of compliance training participants in fiscal 2016
CourseParticipants
Legal training
577
Ethical training
213

Confirmation and Modification of Compliance Activities
Every year, we conduct employee questionnaires to ascertain how deeply ingrained elements of our Corporate
Philosophy have become. In fiscal 2016, these showed that 99.7% of respondents were familiar with the corporatemotto and 99.6% understood our corporate mission. We will continue to actively promote compliance activities tomaintain these high levels.

Facilitation of Internal Reporting System
If, in the course of business activities, an employee at adomestic company under the Group umbrella suspects
possible breach of laws or the internal rules or unfair
practices, and it is difficult to approach a superior or the
person responsible for the division with such suspicions,the employee may report the perceived infraction to the
Corporate Ethics Helpline.
In this system, we stipulated that the person who reported
the incident will not receive any unfair treatment by thefact that he/she consulted the matter and we also pay a full
attention to the protection of privacy of the person who
made the report.
In fiscal 2016, the helpline received eight reports
and requests for advice. Appropriate measures have beentaken, including investigation and confirmation of the facts
in these cases of alleged misconduct.

* Breaches of laws, regulations, internal rules and ethics* Confirmation of illegal activities
Found it hard to consult
with a supervisor
Consult with a supervisor or the
person responsible for the division

SolvedNot solved
Corporate Ethics Helpline

27

CSR Report 2016│Management System

Reward and Disciplinary Committee
To maintain fair working environment, we apply strict measures to an employee who breached the internal rules,
Code of Ethics or committed unfair practices based on the working rules under the guidance of the Reward andDisciplinary Committee.

Protecting Personal Information
Rinnai applies internal rules based on the Act on the Protection of Personal Information. In addition, our Privacy
Policy was instituted for the handling of personal information and posted on our website. Utilizing these, we
strive to ensure appropriate storage, handling and protection of customer data.
Accordingly, we established the position of chief privacy officer and privacy officer at the head office
and require the appointment of privacy officers at all workplaces, including the offices of Group companies inJapan, to educate employees who handle personal information, and to establish physical and technical systems toinsure the safe management of personal information in each workplace. The privacy officers also conduct aninternal audit once a year to verify the quality of personal information management in each workplace.
In fiscal 2016, a problem arose with our system for managing customer information and some customer
registration information was lost while this was being dealt with. We deeply regret any inconvenience caused tocustomers as a result.

Compliance Violations
There were no serious compliance violations in fiscal 2016.

28

CSR Report 2016┃Major Award Winning History

Major Award Winning History
Rinnai received following awards from April 2015 to August 2016.

Rinnai Corporation
June
2015

Aichi Invention Award 2015 from Aichi Invention Association

September

Good Design Award 2015

January

Selected as a 2016 Health & Productivity Company by the Ministry of Economy, Tradeand Industry and the Tokyo Stock Exchange

AugustAppropriate Packaging Award of Japan Packaging Contest 2016

2016

Rinnai Technica Co., Ltd.
2015

October

Certified as a Kakegawa Health Promotion Practice Office by Kakegawa city, Shizuoka
prefecture

Rinnai America Corporation
2015

AugustPartners of Choice Awards sponsored by David Weekley Homes
Rinnai Korea Corporation

March

Brand Survey by KMAC: Korea’s Most Admired Companies
No.1 at the residential boiler section

June

Korean Standard-service Quality Index (KS-SQI) by Korean Standards Association:
No.1 at the service (Boiler) section

2016

P.T. Rinnai Indonesia
September

Platinum Award in the tabletop cooker category of the 2015 Indonesia Best Brand Awards
sponsored by SWA

NovemberIndonesian Customer Satisfaction Award 2015 in the Gas Stove category

2015

Rinnai Holdings (Pacific) Pte Ltd.
2016

May

Regional Award of BEI ASIA AWARDS

Rinnai Australia Pty., Ltd.
2015

October

The Best Supplier Award in the water heaters/heating units category sponsored by
Plumbing Merchants Association

Brivis Climate Systems Pty Ltd
2015

June

Good Design Award in the Hardware and Building category

Rinnai Brazil Heating Technology Ltd.
2015

July

Superior Enterprise Award as a 40th anniversary company by the State of Sao Paulo29

CSR Report 2016│Environmental Initiatives

Environmental Initiatives

Innovative Home Scenarios Offeredby Third-generation ECO ONE

Water and room heating account for more than half of the energy
consumed by Japanese households, so reducing the amount of CO2
emitted from homes is an urgent priority. In 2020, all newly
constructed houses must comply with energy-efficiency standards set
by the Ministry of Economy, Trade and Industry. As moves to reduce
residential CO2 emissions gather pace, more and more people areturning to our ECO ONE hybrid water heater with heating system,
which reduces primary energy consumption*1 by around 40% andthus contributes to declines in CO2 emissions. In this section, we
introduce environmental initiatives pursued by Rinnai, as well as theimage of an innovative home created through such initiatives.
*1 Primary energy consumption: Refers to the amount of energy (hot water) obtained from coal, petroleum, natural gas, and thelike when in their natural state. This allows different appliances, including those powered by electricity, gas, and petroleum, tobe compared under similar conditions. Recently adopted as an evaluation standard for energy-efficient homes.
*2 Source: “Energy White Paper 2016” (Agency for Natural Resources and Energy)

Towards 2020: Challenge to Double Our Contribution to CO2 Emissions Reduction
Heat-energy appliances, such as ECO ONE, emit the greatest volumeof CO2 during actual consumer usage in all stages of their life cycles,from procurement of materials to final disposal. Suppression of
global warming, therefore, requires two important goals—
improvement of energy efficiency (including combustion efficiencyof the appliances themselves) and proliferation of environmentallyfriendly products.
According to the CO2 reduction contribution*3 index, and using
2005 as the base (zero) year, we have been making steady progress,
with a 250,000-ton contribution in 2010 and an 880,000-ton
contribution in 2015. Our medium-term environmental target for2020 is 1.6 million tons, and to this end we will pursue initiatives
aimed at saving energy in homes and cutting CO2 emissions.
*3 CO2 reduction contribution: The amount of CO2 emissions reduced thanks to improved performance of Rinnai-brand water
heaters, compared with fiscal 2005.
Calculation criteria Target products: Water heaters sold by Rinnai Corporation in Japan
Usage period: 10 years
30CSR Report 2016│Environmental Initiatives

ECO ONE: World’s First System to Combine a High-efficiency Gas Water Heaterwith Heating System and a Heat Pump
ECO ONE, which provides water and floor heating energy, is a hybrid water heater with heating system combined
an electric heat pump with a high-efficiency gas water heater. Born in 2010, ECO ONE uses both gas andelectricity as power sources and has continued leading the industry in terms of environmental performance anddesign. For the example, the second-generation ECO ONE received an Energy Conservation Prize, and the third
generation earned a Good Design Award.

31

CSR Report 2016│Environmental Initiatives

Many Convenient Functions for Multiple Scenarios
Rather than compromising to save energy, you can now do so with comfort. This is ECO ONE’s greatest attraction.
It has evolved into a water heater with heating system that provides reliable comfort both in normal and emergency
situations.
[Typical scenarios]

Can be controlled at any time
Bath can be filled or reheated using a
dedicated application from asmartphone or tablet device.

Connected to solar power
generation system
Compares and automatically makes
optimal selection during solar power
generation time zone after comparing
electricity unit sale price and gas unit
price

Water heated even when energy islimited (during disasters, forexample)The system obtains power from astorage battery, a valuable life
resource at times of disaster.

Third-generation ECO ONE:
Better Performance and Design Based on “Future Home” Perspective
The third-generation ECO ONE—developed and created with production technologies based on the concepts ofenvironmental friendliness, luxury, and aesthetics—has better energy efficiency and a sleeker external appearance
than its predecessors. Here, we introduce the thoughts incorporated into the new ECO ONE’s creation.

32

CSR Report 2016│Environmental Initiatives

From the left: Taiki Harada, Product Technology Development
Office, Production Engineering Division; Katsunori Maekawa,
Design Office, Research & Development Headquarters; andSatoshi Chikamawari, New Technology Design Office, No. 1
Product Development Division, Research & Development
Headquarters

Eco-friendly Product Designed from the Customer’s Viewpoint
To encourage more people to select ECO ONE, we focused on
external appearance and design from the customer’s viewpoint whendeveloping the third generation. Specifically, we assumed that thesystem may be installed in easily visible places, such as entranceways
and gardens, so we adopted a “champagne metallic” color that goes
well with the exterior walls of Japanese homes. To achieve bothdesign appeal and durability, we eliminated the seam lines between
outside components.
On the environmental front, we prioritized efficiency with respect toprimary energy, an evaluation standard for energy-efficient homes.
We also removed the cosmetic exterior cover and changed thethickness of the outer plates to make the system lighter.

Multiple Variations to Suit Diverse Living Environments
To facilitate installation, we have allowed flexible configurations of the main components that constitute ECO
ONE, so it can be set up in cramped spaces and adapted to multiple usage requirements(geographical conditions, such as climate and/or high-density dwellings, as well as heating equipment to beconnected). Customers can also select the location of the exhaust outlet. In these and other ways, we areworking to enhance the variations for adaptability to various installation locations.

Third-generation ECO ONE: Perfected Using Our Knowledge and Processing Technologies
We were particularly adamant about removing the seam lines between outside components, so we used large
single-piece plates. This was not possible with previous models, but we deployed our amassed expertise andknowledge about monozukuri (craftsmanship) in order to achieve an attractive appearance by eliminating theseam lines. Using our own processing technologies led to a successful outcome. This passionate approach of ourdevelopment and design team, embodied in ECO ONE, was also embraced by our technology team, which refinedprocessing technologies at the manufacturing stage to successfully complete a more advanced generation of ECO
ONE.
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CSR Report 2016│Environmental Initiatives

Quest for Sustainable Social and Living Environments:
Helping Create Energy-efficient Homes
The Japanese government has announced reduction targets for greenhouse gas emissions aimed at protecting ourplanet. Achieving those targets requires the greatest possible reduction of primary energy consumption in people’s
homes. To this end, we are promoting the proliferation of energy-efficient homes as outlined below.

Low-carbon Buildings
Low-carbon buildings are structures that are specially engineered to limit CO2 emissions. The home, which serves
as the foundation of our lives, uses large amounts of energy, such as electricity and gas. In addition to increasing
the insulation levels of buildings, therefore, we need to introduce advanced energy-saving equipment andmachines in order to make the entire house energy efficient.

Net Zero Energy House (ZEH)
A net zero energy house (ZEH) is one that ultimately emits zero net energy, meaning that the amount of energy it
produces is more than or almost the same as the amount of energy it consumes. There are expectations that thisconcept will spread among detached houses in Japan.

Creating low-carbon homes or ZEH requires the installation ofenergy-efficient equipment and machines in all types of housing
configurations, including detached houses and multiple-dwellingcomplexes, and a public certification system has been launched toencourage proliferation of such homes. Multiple-dwelling complexes
have particularly stringent energy-efficiency standards that include
efficiency targets for each story and room. Structures that meet thesestandards are certified as “low-carbon buildings,” and purchasers ofsuch properties are eligible for special housing loans and other formsof economic assistance.

Meets Stringent Energy-efficiency Standards Even with Floor Heating Installed
Featuring extremely low levels of primary energy
consumption, ECO ONE meets energy-efficiency
standards for low-carbon buildings and ZEH, eventhose that use hot water for floor heating in addition tonormal uses. By promoting the spread of hot waterbased floor heating, we will strive to create energyefficient homes that provide comfortable living withoutcompromise.

34

CSR Report 2016│Environmental Initiatives

List Residence Yoga: Multiple-dwelling Complex in Which All Units have ECO
ONE + Floor Heating (Japan’s first residential complex with all-low-carbon units)
List Residence Yoga is a condominium complex in which all units feature ECO ONE and hot-water-based floor
heating. It is Japan’s first residential complex to be certified as a low-carbon building. In addition to benefiting
the global environment, low-carbon buildings provide great advantages to purchasers, including reduced utility
costs and preferential treatment in such areas as taxation and loan interest rates.

Condominium building containing 48 units in Yoga, a leafy sub-urban part of Setagaya-ku, Tokyo. Convenient tothe city center, Yoga is very popular for people of all generations. With third-generation ECO ONE systems inevery unit, the complex is attracting significant media publicity and widespread attention.

Appeal of ECO ONE and Expectations of Rinnai(in the words of List Residence Yoga’s development managers)
Easily meets standards for low-carbon buildings
ECO ONE a powerful weapon for energy-efficient homes
List Residence Yoga is a condominium complex targeting people raisingchildren and those in the post-retirement stage of life. With acquisition of
low-carbon building certification as a sales point, we designed the complex
on the condition that ECO ONE—most superior water heater with heating
system in terms of primary energy efficiency—would be installed in all units.
To confirm compliance with low-carbon building standards, inspections wereconducted at all of the 48 units in the complex. Thanks to the excellent
performance of ECO ONE, our initial plan required almost no modification,
and we were able to obtain low-carbon building certification. A representativeof a company to which we requested CO2 emission calculations said, “It’samazing that a condominium building with floor heating could receive
certification. Normally that would be impossible.” With the third-generation
ECO ONE, the equipment itself is compact enough to allow horizontal
configuration, making it easier to install and leaving wider living spaces foroccupants.
Our company focuses on the environment and is involved in numerous
projects that meet energy efficiency standards. Accordingly, we share thesame corporate approach as Rinnai with respect to “making a social
contribution through environmentally friendly products.” We feel a kindred
spirit as partners with similar aspirations. We hope that Rinnai will continue
providing the world with high-performance, safe, wonderful products likeECO ONE that reflect the needs of society.

Naoaki Yasunaga,
Deputy Manager,
Tokyo Development Business
Dept., List Development Co., Ltd.

Yosuke Tosaka,
Manager,Tokyo Development Business
Dept., List Development Co., Ltd.

35

CSR Report 2016│Efforts to Make Products Better

Efforts to Make Products Better
Efforts in Design for the Environment
We follow Design for the Environment (DfE) principles, in accordance with our in-house “Product Assessment Rules” so
as to make appliances more energy- and resource-efficient and recyclable. We assess the environmental impact of
products at every stage of their lifecycle, from planning and design, to develop appliances with a smaller environmental
footprint than previous models.

dDesign for the Environment Guidelines (excerpt)
・Resource conservation
・Reduction of environmental impact at the manufacturing stage
・Reduction of environmental impact of products in use
・Potential for recycling
・Safety・Simplified collection and transportation

Energy- and Resource-Savings in the Bathroom and Kitchen
ECO ONE Hybrid Water Heater with Heating System
Energy-saving and environmentally friendly- Primary energy efficiency when heating water: 138%
- R32 used as refrigerant for heat pump (reduces global warming

Made in Japancoefficient to approximately one-third of conventional refrigerant(R410A))

Resource saving- Approximately 20kg lighter pump (approximately 25% smaller thanour previous model)- Miniaturized heat pump (approximately 25% smaller than ourprevious model)

ECO ONE
Hybrid water heater with heating system

Heat Source for Gas Water Heaters with Heating Systems
Energy-saving- Energy efficient
Water heating side: 95%
Space heating side: 89%

Made in Japan

Environmentally friendly- Low NOx emissions: 60ppm or lessResource-saving- Approximately 6kg lighter (approximately 13% lighter than ourprevious model)

RUFH-E2406AW2 Series
Highly efficient gas water heaters withheating systems

36

CSR Report 2016│Efforts to Make Products Better“Bath Hotto” Bathroom Heater/Dryer
Energy-saving- This system features an “Eco drying mode,” which slowly dries clothes withcool air before running a drying cycle, as well as a heat-saving function thatkeeps the bathroom warm. These features cut energy consumption andreduce running costs by about 32% over our previous model.
Resource-saving- Designed to facilitate shared use of the ventilation fan, the main unit isabout 3kg (22%) lighter than our previous model.
- About 29% smaller in volume than our previous model.
Comfort- Low-temperature device specifications facilitate connection to ECO ONE
hybrid water/space heating system.

Made in Japan

Bathroom heater/dryer withsplash-mist sauna(RBHM-C419K1P)

Water-Saving Dishwasher/Dryers
Water-saving
The installation of two pumps specifically for the washing nozzles at top
and bottom ensures cleaning performance while saving water and also
facilitates various washing cycles.
- Saves about one liter of water compared with our previous models.

Made in Japan

Environmental performance- Can be used with baking soda detergent that is friendly to people as well as
the environment.
Water-saving dishwasher/dryer(RKW-404LPM)

Efforts to Improve Packaging
We are promoting the use of packaging made with easy-to-recycle cardboard. We are also working to expand the use of
returnable packaging with an eye to the reuse of packaging materials, while reducing the weight and volume of
packaging through effective utilization of packaging materials.
Example 1: Returnable packaging
By integrating the container and cushioning material, we reduced the number of packaging components used andcut packaging weight by about 50% (2.5 kg/unit). This packaging design won an award in the Large and Heavy
Duty Equipment Packaging Category in the 2014 Japan Packaging Contest.

37

CSR Report 2016│Efforts to Make Products Better

Example 2: Fan heater packaging specifications revised
The eight parts that made up the bottom box were integrated into one piece, reducing the weight by about 16%(350g/unit). The external dimensions of the outer box were also reduced, by approximately 25% (in volume).
BeforeAfter

Fewer parts used and weight reduced byapproximately 16%
Bottom consisting of eight parts

Bottom integrated into a single piece

Product in packaging

Packaging specifications simplified and size reduced
by approximately 50%

Example 3: Packaging for gas fireplace (New Zealand)
Rinnai New Zealand developed a new kind of packaging for gas fireplaces that can be repurposed by customers andtheir families after delivery, rather than thrown away as in the past. The outer box in which the gas fireplace wasplaced can be reassembled into a castle for kids to play in, and even features turrets and a functioning door.
This design won third prize in the Graphic Category of New Zealand’s Best Design Awards of 2014.

After assembly

Corrugated fiberboard packaging

On display at an exhibition

38

CSR Report 2016│Efforts to Make Products Better

Product Recycling Initiatives
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 end-of-life gas and oil appliances. In
addition to using questionnaires, the committee conducts recycling verification tests at recycling plants, as necessary, andconfirms and shares information on the status of disposal. Surveys confirmed that end-of-life gas and oil appliances arebeing properly disposed of and that the recycling rate remains high. These results will be useful in product design andimprovement activities.

Recycling Household Electrical Appliances
Japan’s Home Appliance Recycling Law went into effect April 2001 with the goals to reduce the amount of waste goingto landfills 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.
Recycling Containers and Packaging
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 to designated businesses
that undertake associated services on the Corporation’s behalf.

39

CSR Report 2016│Environmental Management System with Our Suppliers

Environmental Management System with Our Suppliers
Promoting Management of Chemical Substances Present in Products
The impact that chemicals have on humans and the global environment varies according to their toxicity and levelof exposure or ingestion. To protect their citizens’ health and also the global environment, countries around theworld are developing legislation that governs the management of chemicals used during the manufacture of
products and chemicals in products, and Europe has particularly tight controls in the form of standards such as
RoHS and REACH.
The Rinnai Group practices strict management of chemical substance present in products with its
suppliers not only in order to comply with all relevant legislation, but also to minimize use of chemicals thatmight affect people and the environment at all stages of the product lifecycle so as to supply products that areboth safe and environmentally friendly.
Principal EU regulations
・RoHS: Directive on the restriction of the use of certain hazardous substances in electrical and electronicequipment
・REACH: Registration, Evaluation, Authorization and Restriction of Chemicals
We manage the chemicals present in products by following “Chemical substance management policy” that regulate
the chemicals present in materials procured by us in accordance with “E-Procurement Standards” for green
procurement. We also monitor regulatory developments around the world and are committed to practicing stricter
chemical management in collaboration with other members of the Rinnai Group and our suppliers.

E-Procurement Standard [Ver.3] (left)
and Policy on Chemical Substance Management [Ver.3.0]

Practical training(Shanghai Rinnai Co., Ltd.)

Making Our Supply Chains More Environmentally Friendly
In order to enhance environmental performance throughout our supply chains, we work with suppliers to protect
the environment and make manufacturing processes more environmentally friendly.
Sharing our knowledge of the challenges faced at each stage in order to improve the flow of goods andmaterials from procurement through to production and distribution, we have pursued activities such as thefollowing to mitigate the impact on the environment (by reducing carbon dioxide and waste emissions, saving
water, and so on). These activities have also contributed to lower energy costs, shorter lead times, andimprovements in quality.

40

CSR Report 2016│Environmental Management System with Our Suppliers

Example 1: Improvements to printed materials
User manuals and other printed materials that are directly handled by thecustomer are sorted, packed, and shipped to factories with the utmost care, bothto avoid getting them creased or dirty and to make sure that they do not become
mixed up with other printed materials.
Working with 13 plants and offices, including the printers that produce
user manuals and wiring diagrams, we are making improvements to printing andlogistics processes too, as a result of which we have succeeded in reducing theamount of excess packaging generated upstream and mitigating the impact on theenvironment, while at the same time maintaining the quality of the printed
Adoption of simpler packaging
materials that we use.
Examples of improvements:
Effects:
・Direct printing of covers
・Reduction in CO2 emissions: Approx. 42 tCO2/year
・Standardization of labels
・Reduction in waste (paper) emissions: Approx. 22ｔ/year
・Adoption of returnable packaging

Example 2: Development of next-generation connectors
We partnered with connector, harness, and wire manufacturers to develop a next-generation connector.
Transcending the boundaries between firms, we worked on a solution put forward from an assembly
manufacturer’s perspective to develop a connector that reduces the impact on the environment throughout the
supply chain.

Connectors in a range of colors

Meeting with suppliers

Advantages of the new connectors:
・Increased range of colors prevents mis-connections during assembly work.
・Adoption of a coloring scheme during the connector production process and reduced use of packaging lessen
the environmental impact of manufacture.
Effects:
・Reduction in waste emissions: Approx. 21 t/year
・Reduction in water consumption: Approx. 19,000 ℓ/year

Example 3: Screws redesigned to suit our products
Having taken a closer look at the tens of thousands of tiny screws we use at
the factory every day, we worked with suppliers to devise screw
specifications to suit our products.
By uniquely modifying the screws we use, we have managed to improvethread fastening performance while saving resources (by using fewer
materials) and energy (by speeding up the fastening process). Packaging
methods have also been rethought to make them easier to perform.
Effects:
・Reduction in raw materials: Approx. 2t per
year
・Reduction in electricity consumption:
Approx. 5,300 kWh/year
・Reduction in CO2 emissions: Approx. 2t
CO2 per year
・Reduction in packaging: Approx. 2t per
year

Inserting screws

Revising packing methods

41

CSR Report 2016│Environmental Management System with Our Suppliers

Example 4: Packing production method revised
We have made changes to how we make and distribute the packing used in water heaters to reduce the impact on
the environment and improve workability.
Examples of changes:
・Cutting layout optimized
・Gluing and cutting processes integrated (reducing lead time)・Packaging specifications changed (to streamline sorting and shipping work)
Steps in packing production process

Packing method changed

Effects:
・Reduction in CO2 emissions: approximately 2t-CO2/year
・Reduction in waste emissions: approximately 7t/year

42

CSR Report 2016│Environment-Conscious Monozukuri

Environmentally Conscious Monozukuri
Rinnai is committed to reducing its impact on the environment by pursuing all kinds of technological innovations
and exercising all the manufacturing expertise and experience of appropriate working procedures that it has
accumulated since its inception.

Impact on the Environment of the Rinnai Group
Quantitatively monitoring environmental impact is crucial to protecting the environment.
We have begun to monitor the environmental impacts of our business activities throughout our supply chains.

Supply Chain CO2 Emissions
We have begun estimating our emissions following the Japanese Ministry of the Environment’s Basic Guidelines on
Accounting for Greenhouse Gas Emissions Throughout the Supply Chain. Focusing on the 11 categories that produce
the greatest emissions (use of products sold), we are taking targeted action to reduce emissions.

Emissions by Scope in Fiscal 2016
Scope
Scope 1
Scope 2Category

1
2
Scope 33
4
5
6

Purchased goods and services
Capital goods
Fuel- and energy-related activities (not included inscope 1 or scope 2)
Upstream transportation and distribution
Waste generated in operations
Business travel

CO2 emissions (t)35,61236,006768,241
29,203

Percentage
0.4%
0.4%
7.6%
0.3%

2,711

0.0%

10,433
743
579

0.1%
0.0%
0.0%
43

CSR Report 2016│Environment-Conscious Monozukuri

7
8
9
10
11
12
13
14
15

Employee commuting
Upstream leased assets
Downstream transportation and distribution
Processing of sold products
Use of sold products
End-of-life treatment of sold products
Downstream leased assets (downstream)
Franchises
Investments
Total of Scopes 1, 2, and 3

1,738
ー
ー
ー
9,173,479
9,324
ー
ー
ー
10,068,069

0.0%
ー
ー
ー
91.1%
0.1%
ー
ー
ー
100%

*Scope 1: Emissions from operations that are owned or controlled by the reporting company.
*Scope 2: Emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting
company.
*Scope 3: All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both
upstream and downstream emissions.
*Scope of accounting
Rinnai Corporation and consolidated subsidiaries (Development / Manufacturing] (Scopes 1 and 2)
Rinnai Corporation (Procurement / Sales / Logistics / Product Usage / Disposal) (Scope 3)*Subject Period: fiscal 2016 (April 2015 to March 2016)
・The CO2 conversion coefficient used to calculate CO2 emissions is calculated in accordance with the Guidelines on Accounting forGreenhouse Gas Emissions from Businesses (Ministry of the Environment, July 2003). However, the values published by suppliers
are used for town gas and methane gas.
・The calorie conversion coefficient is calculated based on the Table of Standard Calorific Values by Energy Source (Agency for
Natural Resources and Energy, February 2002 edition). However, the values published by suppliers are used for town gas andmethane gas, and 9.84 MJ/kWh is used for electricity.
kg-

Electricity

0.378

Electricity

9.84

MJ/kWhTown gas

46.10

MJ/m3

LPG

50.20

MJ/kg

CO2/kWhGas

Oil

Town gas

2.197

kg-CO2/m3

LPG

3.000

kg-CO2/kg

Butane3.000

kg-CO2/kg

Butane

50.20

MJ/kg

Methane2.020

kg-CO2/m3

Methane

40.90

MJ/m3

Heavy oil

2.710

kg-CO2/L

Heavy oil

39.10

MJ/L

Kerosene

2.489

kg-CO2/L

Kerosene

36.70

MJ/L

Light oil

2.619

kg-CO2/L

Light oil

38.20

MJ/L

Gasoline

2.322

kg-CO2/L

Gasoline

34.60

MJ/L

▲CO2 conversion coefficients (kgCO2/unit)

Gas

Oil

▲Calorie conversion coefficients (MJ/unit)

44

CSR Report 2016│Environment-Conscious Monozukuri

Efforts to Prevent Global Warming
As a “specified business operator” under the revised Act Concerning the Rational Use of Energy, we are pursuingenergy efficiency improvements in line with an established energy management policy and targets.

Action to Conserve Energy
We believe that streamlining the manufacturing process improves productivity and slashes total energy needs.
Adopting an end-to-end approach to production that embraces every process from pressing to assembly andpackaging, we are working to reduce the time that products and supplies are at a standstill somewhere, whether
when being transported, awaiting work on the production line, or being stored in a warehouse, in recognition of thefact that all kinds of losses lead to energy losses.

CO2 Emission Intensity *1 Reduced by 24% (Scope: Rinnai)
Our “7E Strategic Initiatives” environmental action plan set a target of reducing CO2 emission intensity by at least
6% relative to fiscal 2010, ending March 31, 2010, by fiscal 2016, ended March 31, 2016, and in fiscal 2016 weachieved a 24% reduction.

(*1) CO2 emission intensity: CO2 emission intensity per standard unit defined by Rinnai. The target is to achieve a reduction of at least
1% per annum.
Scope of accounting: Rinnai Corporation

45

CSR Report 2016│Environment-Conscious Monozukuri

Results of Activities
Upgrades/new
installations(investments)

Upgrading to high-efficiency lighting and air conditioning systems, upgrading tohigh-efficiency vending machines, etc.

Optimization(administration)

Reducing lighting, controlling temperature and limiting usage of air conditioning,
introducing a voluntary ban on using elevators, configuring office equipment to turnoff or switch to standby mode if left unused for prolonged periods, reducing usageof photocopiers (double-sided printing, using condensed printing settings), reducing
usage of drinks machines, etc.

Optimization(manufacturing)

Optimizing set pressure and start/stop times on compressors, improving furnace
efficiency in order to reduce operating times, reusing exhaust heat from boilers, etc.

OthersIntroducing early-morning overtime scheme and reducing late-night overtime (noneed for air conditioning in early morning), issuing peak alerts via powermonitoring system, bringing forward and extending “Cool Biz” operations,eliminating air leaks, organizing “waste patrols”, using green curtains and bamboo
screens to reduce strain on air conditioning, etc.

Summer Power-Saving Activities at All Plants and Offices
We have waged ongoing campaigns to save power (primarily by cutting electricity consumption) at all our operations
since fiscal 2012, ended March 31, 2012. These have incorporated action to improve use of lighting and air
conditioning in all our workplaces, resulting in summertime power savings of 1.56 million kWh.

Replacement of conventional lights with
LED ones (Rinnai Brazil)

A patrol checking for air leaks(RT Engineering)

A green “curtain” of plants
at one of our offices

Use of Renewables
The Rinnai Group is working to increase use of renewable energy sources, such as solar and wind power, at all its
operations in Japan and around the world. In fiscal 2015, we generated 60,000 kWh from renewable sources.

Photovoltaic system(Tohoku sales branch)

Photovoltaic system and solar waterheating(Shanghai Rinnai Co., Ltd.)46

CSR Report 2016│Environment-Conscious Monozukuri

Wind and photvoltaic system(head office parking area)

Photovoltaic system(Technology Center)

Improvements to Logistics
We are pursuing action to improve logistics operations in accordance with a plan for rationalization of energy use
formulated as a “specified consigner” under the Act on Rational Use of Energy. (link)

Action to Promote Eco-Driving
Please see page 47 “Safe and Eco-Friendly Driving Initiatives”

Action on Waste and Water Resources
Reduced Waste Output and Zero Emissions
We strive to maintain zero emissions*1 and reduce waste output.
*1 Definition of zero emissions: More than 99.5% of waste is recycled (including heat recovery)

Efforts to Curb Generation of Waste [waste reduction
activities]- Don’t buy something that will end up as garbage: abolition of theexcessive packing in cooperation with clients- Return reusable items to respective point of purchase: usage of returnable
materials for transportation in cooperation with clients- Reuse: improvement of reuse ratio of residual chemicals- Don’t make waste: improvement of available percentage of materials- Recycle/ reduce volume: improvement of fractionation method, transaction
with superior waste disposers

Returnable packaging (Rinnai Brazil)

47

CSR Report 2016│Environment-Conscious Monozukuri

Waste Emission Intensity (*2) Reduced by 17% (Scope: Rinnai)
Our “7E Strategic Initiatives” environmental action plan set a target of reducing waste emission intensity by 5%
relative to fiscal 2011, ending March 31, 2011, by fiscal 2016, ended March 31, 2016, and we achieved a reductionof 17% in fiscal 2016. Total waste emissions are down 4.7% from fiscal 2011, and are being steadily reduced
compared to the base year.

(*1) Waste emission intensity: Waste emissions per standard unit defined by Rinnai. The target is to achieve a reduction of at least
1% per annum.
Scope of accounting: Rinnai Corporation

Improvement of Production Process Yields
We are working to increase effective utilization of pressed parts (materials) by a number of strategies in order toreduce the impact on the environment.
These include:- Modification of pressing processes and die constructions to enable stable production of quality products- Use of computer-aided engineering (CAE) to minimize scrap emissions and trim the dimensions of materials
usedImprovement of Recycling Quality
We are working to raise the “quality” of our recycling in order to make more effective use of waste as fuel and otherresources. We are doing this in several ways, including by revisiting how materials are sorted and collected, and byshifting from thermal recycling to material recycling.

Industrial Waste Disposal
We rigorously screen waste disposal contractors before signing contracts, including checking business conditions
and making onsite visits. To ensure that waste is being disposed of properly, we send representatives to visit
contractors every year, to carry out visual confirmation and exchange information on matters such as types of waste,
waste manifest management for disposal methods and conditions, and standards of waste disposal. In fiscal 2016,
we confirmed that 38 contractors were conducting waste management in an appropriate manner.

48

CSR Report 2016│Environment-Conscious Monozukuri

Visiting disposal sites

Waste being sorted at a disposal site

Polychlorinated Biphenyl Waste Management
Polychlorinated biphenyls (PCB) are used for purposes such as insulating oils and are subject to the Act on Special
Measures concerning Promotion of Proper Treatment of PBC Wastes, which requires companies to reinforce storage
and safely dispose of PCB by the end of March 2027. Although we are continuing with measures aimed at disposingof PCB as soon as possible, in the meantime, we are taking steps to prevent leaks in the event of equipment failure
during storage, keeping PCB under lock-and-key to prevent loss or damage, and monitoring equipment using
nameplates, until disposal of PCB can be completed.
We are also taking measures to ensure that scrap appliances found to contain trace elements of PCB are
adequately stored and appropriately disposed of at facilities certified by the Minister for the Environment fromfiscal 2011 onwards.

Protecting Water Resources
We recognize that water resources are an important resource, and are taking steps to reduce use of utility water andgroundwater. We routinely take active steps to save and recycle water, and also strive to manage wastewater so thatemissions do not harm the environment.

Water Consumption Intensity (*2) Reduced by 25% (Scope: Rinnai)
Our “7E Strategic Initiatives” environmental action plan set a target of reducing water consumption intensity by atleast 5% relative to fiscal 2011, ending March 31, 2011, by fiscal 2016, ended March 31, 2016, and we achieved a
25% reduction in fiscal 2016. Total water consumption is down 23.5% from fiscal 2011, and is being steadily reduced
compared to the base year.

(*2) Water consumption intensity: Water consumption per standard unit defined by Rinnai. The target is to achieve a reduction of at least
1% per annum.
Scope of accounting: Rinnai Corporation

49

CSR Report 2016│Environment-Conscious Monozukuri

Action to Save Water
Improvements such as the following have been made to paint processes to make them more environmentallyfriendly, resulting in water savings and also reduced use of chemicals to treat wastewater.
Water conservation activities are a key ongoing theme of environmental training throughout the Rinnai
Group’s manufacturing operations, and they are producing excellent results.
Key improvements include:- Changes to methods used to feed water to head-end processes- Installation of systems for recirculating and filtering virtually all chemicalsolution in tanks- Use of treated wastewater in office washrooms, etc.
- Regular checks for and in-house repair of leaks from pumps, etc.
Effects of environmental improvements made by group companies involvedin manufacturing:- Reduction in water consumption: Approx. 22,000 m3/year- Reduction in waste emissions: Approx. 40 t/year

Wastewater treatment plant(Yanagisawa Factory)

Wastewater Quality Management
To ensure that the water treated at wastewater plants causes no harm to rivers, it is constantly monitored before
discharge to ensure that its pH is kept to within even stricter limits than required by law.

Water monitoring unit

Analyzing wastewater

Efforts to Prevent Pollution
Reducing or Eliminating Use of Harmful Chemical Substances
Failure to conduct proper management of certain chemical substances could lead to environmental pollution.
Accumulation of such substances over a long period may also affect the health of people and the ecosystem. To
minimize the impact of such substances on the environment, we take measures for reducing or eliminating use ofharmful chemical substances in our production processes, such as reviews of materials containing certain
substances and improvement of processing facilities.

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CSR Report 2016│Environment-Conscious Monozukuri

Management of Usage Amount of Chemical Substances
At each production site, we check and manage the amounts handled, released, and transferred of the 462 Class 1
chemical substances designated under the PRTR law, for which 500 kg or more is handled each year.

Hazardous Chemical Usage Intensity (*1) Reduced by 21% (Scope: Rinnai)
Our “7E Strategic Initiatives” environmental action plan set a target of reducing hazardous chemical usage intensity
by at least 5% from fiscal 2011, ending March 31, 2011, by fiscal 2016, ended March 31, 2016, and we achieved a
21% reduction in fiscal 2016.

(*1) Hazardous chemical usage intensity: Usage of hazardous chemicals per standard unit defined by Rinnai. The aim is to achieve a
reduction of at least 1% per annum.
Scope of accounting: Rinnai Corporation

Example: Reduction of use of cleaning thinner
As part of our efforts to make paint lines more environmentally friendly, we have rethought the layout andcapacities of equipment (such as paint valves) and changed piping lengths to reduce rinse times. The result has been
an approximately 45% reduction in the amount of waste cleaning solution used and a reduction in the amount of
PRTR chemicals contained in cleaning solution.
Effects:
Reduction in cleaning thinner usage: 4.5 t/year (-45%)
Reduction in PRTR chemicals: Approx. 360 kg/year51

CSR Report 2016│Environment-Conscious Monozukuri

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

Emergency response drill

Environment-Focused Equipment Inspection
To prevent accidents that would impact the environment, we identify equipment with the potential to adversely
affect the environment and run concerted environment-focused inspections on these pieces of equipment on anannual basis. We make every effort to preempt and prevent serious accidents that could impact on the environment,
through measures such as inspecting individual items of equipment, checking that measuring instruments arefunctioning correctly, and running emergency simulations.

Equipment inspection

52

CSR Report 2016│Environment-Conscious Monozukuri

Protecting Biodiversity
As one of the cornerstones of sustainability, protecting biodiversity is one of humanity’s most urgent priorities.
The natural environment and ecosystems are susceptible to impact as a result of the location of our facilities, theprocurement of resources for our business activities, and the emission of environmentally hazardous substances
into the atmosphere, soil and water. As a company, we recognize that our business activities are inextricably
linked to biodiversity, and that we need to think about ways to sustainably access the benefits that ecosystems
provide.
The Company approved the "Declaration on Biodiversity by Nippon Keidanren (the Federation of
Economic Organizations). We organize internal seminars to raise employee awareness of the relationship between
our business activities and biodiversity. We also promote activities that help to preserve biodiversity (carbon
dioxide, waste, atmosphere, water, etc.), by reducing environmental impact for instance.

Promotion of Cleanup Activities around Our Sites
The Rinnai Group organizes periodic cleanups along commuting routes and around its plants. These arecarried out by employees as part of efforts to protect the surrounding natural environment, and a total of 1,445
employees took part in these activities in fiscal 2016.

Cleanup activities underway around our plants and offices

53

CSR Report 2016│Environment-Conscious Monozukuri

Status of Legal Compliance
Naturally, we comply with laws and regulations, but we seek to do better than the minimum required and have set
our own benchmarks as targets to achieve. We also perform checks, mainly daily monitoring, routine evaluations
and environmental audits, and strive to reduce the release of hazardous chemicals and other pollutants into the airand local water systems. We reinforce equipment operation and maintenance practices and take preemptive action
if facility status looks as though it may exceed the level we deem permissible. If we can meet our own toughstandards, we will surely meet the levels required by government.

From the left, measurement of soot and smoke, water quality, and odor measurement

Status of Compliance with Laws and Regulations
There were no violations of pollution control or other environmental legislation in fiscal 2016.

54

CSR Report 2016│Measures to Improve Logistics

Measures to Improve Logistics
The Company promote its energy-use rationalization plan as a specified shipper under the revised Rationalization
in Energy Use Law. We appropriately administrate and review the energy use status concerning product logistics,
in cooperate with logistics partners. From multilateral viewpoints, we implement measures for logistic efficiency to
reduce energy use.

Improvements to Logistics
The Group’s products are produced at plants located mainly in Japan and then distributed around Japan and toother countries in Asia, Europe, North America, and beyond.
Our Integrated Logistics Center monitors primarily the logistics routes used by the Group’s manufacturing
operations in Japan, distribution volumes, and carbon dioxide emissions. At the same time, it is working to raise
work efficiency and improve operations by, for example, delivering products in sets and reducing shipments back
upstream in order to improve transportation efficiency, reduce the impact on the environment, and cut costs.
In 2014, we merged our logistics operations in Aichi Prefecture, where our manufacturing operations areconcentrated, into two centers. Since then, we have been systematically consolidating core warehouses dispersed
across Japan, and as a result have succeeded in reducing holdings of overlapping inventories, non-essential andnon-urgent production, and “horizontal transportation.”**”Horizontal transportation”: transportation that doesn’t include final destination (customer site), such as the route between Rinnai
factory and its warehouse

Trend of Shipping Volume and CO2 Emission
Fiscal year ended
March 31

Shipping volume(ton x km)
CO2 emission
volume (TCO2 )Fiscal
2009

Fiscal
2010

Fiscal
2011

Fiscal
2012

Fiscal
2013

Fiscal
2014

Fiscal2015

Fiscal
2016

6,519

6,483

6,333

6,687

6,587

6,836

6,763

6,429

10,013

9,901

9,837

10,23810,44010,967

10,756

10,545Initiatives Being Pursued- Expansion of consolidated shipping within the Group- Review and adjustment of product delivery routes- Effective use of round-trip shipments- Modal shift*- Increase in stacking per pallet- Encouragement of eco-driving*Modal shift: Shift of transportation from roads to other forms ofbulk transportation (rail or sea).
Improve carry efficiency by the shape change
of a corrugated cardboard

55

CSR Report 2016│Measures to Improve Logistics

Example: Fuel consumed during transportation reducedby switching to consolidated shipping
The adoption of consolidated shipping by manufacturing affiliates RB
Controls and Noto Teck to distribute products has reduced the number ofround-trip journeys required between Ishikawa and Aichi by one and cut
emissions by 62 tCO2 per year.

RB Controls, logistics center

Communication with Logistics Partners
Once a year, we hold a logistics policy information meeting to help service providers gain deeper insight into thelogistics policy, targets and measures of the Company and logistics department. In addition, we arrange quarterly
partnership meetings to reduce environmental impact in relation to the transportation and storage of products, andto improve the quality. We also visit partners’ working sites regularly to share issues with them and help themmake improvements.

Example: Action to improve logistics quality
Product code (with QR code)

System of item-by-item control and inspection using QR codes introduced
QR codes, which identify each product, are affixed to all products and utilized
in many processes at logistic centers such as when products are brought in andout. By reading the data of QR code, we have drastically improved the qualityof logistics by preventing errors and improving the traceability of each item.
In addition, the combined use of wireless terminals, real-time operation
instruction and actual result collection is contributing to improved work
efficiency.
Action to eliminate mis-shipments
Responding to the needs of our logistics partners, we are switching to use of
kanji instead of katakana for delivery invoices and shipping labels in order toimprove readability and eliminate mis-shipments caused by mis-readings.

Product Label
Information includes
product code, gas type,production number,production date,
production line, etc.

56

CSR Report 2016│Measures to Improve Logistics

Safe and Eco-Friendly Driving Initiatives
We have introduced a system for quantifying and centrally
managing fleet operations at our sales offices and other relevant
operations, and we are also working to make employees moreaware of how they can drive in a safer, more efficient, andeco-friendly manner. The system is designed to automaticallyemail managers if a driver drives too fast, accelerates rapidly,or brakes suddenly, and this has improved average fuelefficiency by approximately 5% per annum since it was
introduced. The system is also helping to reduce traffic
accidents and violations on public roads, and we plan to roll out
similar initiatives company-wide in the future.

Company vehicles (Chubu Branch)

Driving Seminars
We bring in outside instructors to teach regular “safe and eco-friendly driving seminars” for employees who use
company vehicles (mainly in sales and management) with the aim of preventing traffic accidents and preventing
global warming. A total of 32 employees have attended these seminars, which provide instruction in and explain
topics such as the basics of traffic safety and ways of practicing eco-friendly driving.

A “safe and eco-friendly” driving seminar (left) and anti-idling reminder at our Chugoku Sales Office (right)

57

CSR Report 2016│Environmental Education and Promotion of Awareness

Environment Education and Promotion of Awareness
Fully Inclusive Environmental Activities
The Rinnai Group engages in activities designed to enhance environmental protection and raise environmental
awareness at individual plants and offices. Every June is designated “Environment Month,” during which time
various participatory environmental awareness-raising activities are organized.

Rinnai Group Environment Awards Programs
The Rinnai Group Environmental Awards are held annually to recognize outstanding environmental activities andstimulate more action on the environment throughout the Group. These awards recognize major contributions to theenvironment and society, and are open to all our operations in Japan and around the world. The seventh awards
ceremony was held at the Rinnai Group Convention.
A record 103 entries were received in fiscal 2016, from which 10 prize winners in categories including
Manufacturing, Offices, Sales, and Contribution to Society were selected.

Award ceremony (left), and panel display showing outstanding achievements

Rinnai Group Environmental Grand Prize Results for Fiscal 2016
Prize

Category

Recipient

Theme of activity

First Prize

Manufacturing andlogistics

Product Preparation Dept.,
Seto Factory

Environmental improvements to printed
materials (materials to products)

Second Prize

Product and production
technology design

Product Development Div. I
Research & Development
Headquarters

3rd generation Eco-One hybrid
water/space heating system

Second Prize

Overseas

Rinnai Brasil

Elimination of use of solar panel paintSecond PrizeContribution to society

Ms. Mayuko Hanai,
Information System Div.,
Corporate Planning
Headquarters

PR activities undertaken by “vegetable
sommeliers” to promote local production
and consumption

Second PrizeManagement and sales

Sales Promotion Office,Planning Div.,RB Controls Co., Ltd.

Marketing of bathroom lighting system(“line lighting”)

Third Prize

Product and production
technology design

Product Development Div.,RB Controls Co., Ltd.

Development of compact recessed LED
lighting (75 mm diameter)

Third Prize

Manufacturing and logistics

Facility and Machine Dept.,
Machine Office,Production Engineering Div.

Attainment of 100% yield in stainlesssteel pipe production

58

CSR Report 2016│Environmental Education and Promotion of Awareness

Third Prize

Manufacturing and logistics

Technology Management
Dept., Production EngineeringDiv.

Wastewater treatment technology andcosts

Third Prize

Manufacturing and logistics

Heat exchange dept.,
First Manufacturing Dept.,
Seto Factory

Reduction of swarf generated byhollowing of materials

Third PrizeManagement and sales

Information Systems Div.,RB Controls Co., Ltd.

Reduction of electricity consumption by
server virtualization

Learning from Other Companies: Visits to Environmental Pioneers
Persons in charge of environmental issues regularly visit
other companies that are pioneers in the field of action
on the environment. During these visits, they see andlearn about these companies’ environmental
technologies and facilities, share views with theircounterparts, and use this knowledge to improve
day-to-day environmental protection at Rinnai. (About
once a year)

Group photo

Environment Cards Distributed to All Employees
To keep all our employees abreast of the Rinnai Group’s environmental policies, we issue everyone with pocket-sized“Environmental Cards” that summarize our basic environmental philosophy, environmental slogan, and 7E strategic
initiatives. These cards have space on the back for employees to write their own personal goals for environmental
action in the home and the workplace in order to help make them more eco-conscious.
Individual plants and offices also implement their own innovative schemes to raise awareness of the environment andcosts, such as by issuing handy cards that show environmental costs at a glance.

Environment Card

Cards outlining environmental costs

59

CSR Report 2016│Environmental Education and Promotion of AwarenessEncouragement of Communication on the Environment among Employees
We publish a regular in-house environmental newsletter Eco no Coe to keep our employees around the world up
to date with the Group’s own environmental activities and environmental trends elsewhere in Japan and othercountries. Published since 1999 as a means of raising environmental knowledge and awareness and encouraging
communication on the subject among employees.

Eco no Coe, Summer Issue

Eco no Coe’s Campaign:
Activities to Raise Environmental Awareness through Cultivation of Heirloom Vegetables
As part of our program of activities to raise environmental awareness, we have organized an “Heirloom Seed Campaign”
incorporating a questionnaire on regional food culture, and seeds for growing heirloom vegetables that have been traditionally grownin Aichi Prefecture were sent to questionnaire respondents. The idea behind the campaign is that by growing these heirloom
vegetables, participants will have the opportunity to learn about and rediscover the value of food culture and the natural environment
at the local level.
Showcasing the cultivation of these vegetables from seeds and the recipes that can be made using them in Eco no Coe wasfound to generate more communication on environmental activities.
This inhouse campaign was undertaken referring to a “Green Echo Activity” by the Environmental Partnership Organizing
Club.
Looking ahead, we will expand awareness-raising activities of this kind in keeping with the goal of Green Echo Activities.

Odakana grownin the workplace

Odakana ohitashi

Picking Aodai cucumbers

Aodai cucumber
aemono* Heirloom vegetables
Vegetables such as Kyo-yasai and Kaga-yasai that have long been grown locally.
*Environmental Partnership Organizing Club (“EPOC”)
A private organization involving leading companies in the Chubu region around
Nagoya. Spanning a range of different industries and lines of business, these companies
work together on activities to build a recycling-oriented economy and society.
*Goal of Green Echo Activities
To expand environmental action by developing environmental awareness in three steps:“feeling,” “thought,” and “action.” Green Echo Activities commenced in fiscal 2015.

60

CSR Report 2016│Environmental Education and Promotion of AwarenessEncouraging Eco Friendly Commuting
The Technology Development Center encourages employees tovoluntarily commute in an eco-friendly manner by designating certain
days as “no car days.” On these days, employees come to work by
public transport or bicycle in order to reduce carbon dioxide emissions
and the noise pollution caused by traffic congestion near the center.
This not only reduces the impact on the environment, but also provides
employees with healthy moderate exercise.
- Reduction in CO2 emissions: Approx. 1t CO2/year

Bike racks
at the Technology Development Center

Green Purchasing
Plants’ and offices’ procurement managers are encouraged to buy “green” by purchasing environmentally friendly
office supplies such as recycled paper. Our “7E Strategic Initiatives” environmental action plan adopts the “green
purchasing rate” as an indicator of offices’ environmental performance, and we are working to keep this rate at 91%
or over every year.
* “Green procurement” and “Green purchasing”: “Green procurement” is to acquire goods directly related to our production activity,and “Green purchasing” means purchase of office-related supplies and facilities. We define products that are covered by the Green
Purchasing Act or that bear the Eco Mark, Energy Star Mark, etc. as “green supplies,” and encourage their purchase and procurement.

Participation in Environmental Exhibitions
Please see Page 115 “Exhibit at Eco Products 2015”.

61

CSR Report 2016│Environmental Management System

Environmental Management System
Rinnai maintains an environmental management system based on ISO 14001. We effectively utilize thismanagement system and constantly strive to promote environment management practices aimed atenvironmentally conscious monozukuri and to raise environmental performance. Our goal is to contribute to
the formation of a society capable of sustainable development.

Approach to the Environment
Rinnai has adopted an environmental basic philosophy, environmental slogan, and “7E Strategic Initiatives”
environmental action plan (fiscal 2016 to fiscal 2018) in accordance with its Environmental Basic Policy, and theseguide the implementation of environmental activities undertaken with the involvement of the entire workforce in all
business domains.
Recognizing that our activities have a close bearing on the global environment, we pursue company-wide action
to not only reduce greenhouse gas emissions generated during use of our products but also to mitigate their impact
at every stage of the lifecycle, from development, procurement, and production all the way through to distribution
and disposal.

ISO 14001 Certification
To underpin the systematic and continuous development of environment-oriented
activities in line with our stated basic environmental policy, we encourage allmembers of the Rinnai Group to embrace efforts to acquire and maintain
ISO14001 certification.

Hokkaido Sales Office62

CSR Report 2016│Environmental Management System

Promotional Framework for Environmental Activities
Headed by the President, the Environment Management Committee guides corporate efforts to achieve targets
based on environmental policy. This committee is chaired by the executive officer responsible for theenvironment and has the participation of representatives from all divisions. Its mandate is to promote
environment-oriented activities from a big-picture view.

Environment Management Activities
The Environment Management Committee discusses anddecides important items including the basic environmental
basic policy, the goal and a medium to long-term plan. The
committee thoroughly informs individual divisions ofdecisions made by the committee and promotes concrete
activities in line with annual plans. We review ourobjectives as necessary and diligently strive to meet ourtargets. To perform specific activities, each division has aliaison group and holds routine meetings to make issues
known to everyone in the respective division and continue
improvement activities.

Environmental Management Committee (left)
and a divisional liaison group

External and Internal Environmental Audits
The ISO 14011 Certification Division undergoes a routine audit, once a year, by an external screening/registrationbody to verify that the environmental management system is being properly applied. The routine audit in fiscal
2015 did not turn up any major non-conformances.

External audits

63

CSR Report 2016│Environmental Management System

As part of internal audits, Auditing team, comprising impartial internal auditors chosen from within the Corporation
who have no direct connection to the division under audit, assess conformity to the established environmental
management system and review division activities. Auditors visit worksites of divisions tapped for an audit andperform detailed inspections. Direct contact between auditors and divisions facilitates greater understanding ofdivision activities and auditor concerns. Internal audits in fiscal 2016 identified no major non-conformances, threeareas for minor improvements, and 40 observations. The areas for minor improvements and observations wereimmediately addressed.

Internal audits

Environmental Training
Raising each employee’s environmental awareness is important for promoting environmental activities. To
provide as many employees as possible with opportunities to raise their environmental awareness, we plan andoffer training programs for developing and fostering human resources who will actually engage in environmental
activities, as well as new employee training and rank-specific training programs.
Main environmental trainings
Environmental training for environmental internal auditors
Environmental training for person in charge of environmental issues
Environmental training for Group employees in Japan and abroad
Environmental training for new employees

Environmental training for person
in charge of environmental issues

Internal Auditor Training
Internal auditors play a significant role over and above their efforts tocontinuously improve the environmental management system. The execution ofaudit requires highly specialized knowledge and communication skill. To
upgrade the skills of internal auditors, we conduct regular training by in-house
instructors on such topics as laws and ordinances, internal regulations, internal
audit observations and improvement measures, and environment- oriented trends.
Internal audit workshops

35 participants
Internal Auditor Training

64

CSR Report 2016│Environmental Management System

Environmental Training for Trainees from Group Companies in Japan and Abroad
To raise the standard of practice in the Group as a whole, we provide trainees with regular environmental training.
This covers topics including our approach to the environment, approaches to environmentally friendly
manufacturing, and case studies illustrating how improvements can be made.
In fiscal 2016, training focused on methods of improving wastewater treatment and flows of supplies and products.

Employees receiving environmental training

65

CSR Report 2016│Environmental Management System[ISO 14001: 2004] Environmental management system certification acquisition status
Location

Rinnai

DomesticGroup
Company

Overseas
Group
Company

Certified year/month

Research and Development Headquarters

October 1997

Production Engineering Division

October 1997

Oguchi Factory

October 1997

Seto Factory

December 2000

Environment DivisionDecember 2000

Asahi Factory

November 2003

Quality Assurance Headquarters

November 2003

Head Office

December 2008

Kansai Branch

May 2010

Logistic Control Office

May 2010

Kanto Branch

May 2011

Chugoku sales office

May 2011

Rinnai Parts CenterMay 2011

Kyushu Branch

April 2012

Hokkaido sales office

April 2012

Niigata sales office

April 2012

Tohoku Branch

May 2013

Shikoku sales office

May 2013

Higashikanto sales office

April 2014

Kitakanto sales office

April 2016

Gastar Co., Ltd.

October 2001

Rinnai Technica Co., Ltd.

December 2003

Yanagisawa Manufacturing Co., Ltd.

June 2004

Rinnai Precision Co., Ltd.

December 2005

Japan Ceramics Co., Ltd.

January 2006

RT Engineering Co., Ltd.

March 2006

RB Controls Co., Ltd.

March 2006

Noto Tech Co., Ltd.

January 2007

Rinnai Korea Corporation

July1997

RB Korea Ltd.

October 2006

Shanghai Rinnai Co., Ltd.

December 2008

Rinnai Brasil Heating Technology Ltd.

June 2011

Rinnai New Zealand Ltd.

July 2013

Environment Management System "Eco Action21"
Location Name
Domestic Group Company

Techno Parts Co., Ltd.

Certified year/month
August 201166

Fiscal 2016 Environmental Action Plan and Performance
Targets, performance, and assessments in key areas of activity in fiscal 2016
(7E Strategic Initiatives: E-Products, E-Factories, E-Marketing, E-Services, E-Offices, E-Mind)
Key to self-assessment of annual target attainment (attainment rate)○100％ △at least 70%

Scope: Rinnai Corporation
Field of Activity

E-Marketing(Sales)
E-Service(Installation & Repair)Fiscal 2016 Target

Fisccal 2016 Results●Reduction in CO2 emissions by water heaters throughincreased sales of high-efficiency products (Note 1):-60,000 tCO2/year reduction●CO2 emissions during use by customers●Provision of information on DfE products

・Products exhibited and awareness of themraised at exhibitions in Japan and other countries
・Catalogs, leaflets, and pamphlets produced
and distributed・Showcasing and raising of awareness of products at
exhibitions
・Production and distribution of catalogs, leaflets, andpamphlets●Prevention of global warming
・Development of high-efficiency appliances
・Reduction of standby electricity consumption-54,000 tCO2/year

Assessment△○●High-efficiency appliances developed
・Gas water heater for overseas markets●Standby electricity consumption reduced
・Gas bath water heater○・Forced flue heater●Prevention of atmospheric pollution
・Continued development of low-NOx water heaters●Low NOx water heaters developed
・Gas water/space heat source
・Gas bath water heater

E-Products(Product Development)○

・Gas water heater●Resource conservation and recycling
・Continued product assessment
・Resource conservation through weight- andwater-saving measures●Products assessed●Lighter products developed・Hybrid water/space heater system
・Gas water/space heat source
・Bathroom heater
・Fan heater○●Water-saving products developed
・Dishwasher/dryer●Packaging simplified●Green product development and green procurement
management
E-Procurement●Disclosure of environmental information
・Publication of fiscal 2016 CSR Report
E-Mind(Employees)

・Disclosure of environmental information on website●Training organized in accordance with company andplant/office-level annual plans
・Reduction of CO2 emission intensity●Materials procured and used following EProcurement Standards●Infrastructure for managing chemical substancesdeveloped and collaboration with suppliers
strengthened
・Fiscal 2016 CSR Report published (October)・Environmental information published on website(October)●Internal auditors trained, etc.

●Reduced by 24% from fiscal 2010

At least -6% relative to fiscal 2010

E-Factories(Production)○

・Maintenance of zero emissions(recycling rate of 99.5%+)●Zero emissions maintained and improved:・Reduction of waste emission intensity●At least -17% relative to fiscal 2011

○
○
○
○

At least -5% relative to fiscal 2011

(Note 2)・Reduction of water consumption intensity●At least -25% relative to fiscal 2011

At least -5% relative to fiscal 2011
●Pollution control (Note 3)●At least -21% relative to fiscal 2011○

・Reduction of hazardous chemical usage intensity
At least -5% relative to fiscal 2011

E-Offices●Maintenance of office supplies and equipment green
purchasing rate of 91%+○

●Green purchasing rate: 95.4％ (based on value)○(Note 1) High-efficiency products = hybrid water/space heaters, Eco-JOES, etc.
(Note 2) Intensity = load per standard unit defined by Rinnai (target reduction of at least 1% per annum)(Note 3) Hazardous chemicals = Class I designated chemical substances as defined by the PRTR Act

67

"7E Strategic Initiatives" Environmental Action Plan and Fiscal 2017 Targets
Divisions and group companies working together on 7E Strategic Initiatives to take environmental performance to the next level
Scope: Rinnai Corporation
Field of Activity

E-Marketing(Sales)
E-Service(Installation & Repair)

E-Products(Product Development)"7E Strategic Initiatives" Environmental Action Plan
(fiscal 2016- fiscal 2018)●Contribution to 1,600,000 tCO2 reduction in CO2 emissions in water
heater segment by 2020 through increased sales of high-efficiency
products (Note 1)●Contribution to reduction of CO2 emissions in water heater
segment: 1,200,000 tCO2/year●Provision of information on DfE products via channels including
exhibitions, catalogs, leaflets, and pamphlets●Showcasing and awareness raising at exhibitions in Japan andoverseas●Production and distribution of catalogs, leaflets, and pamphlets●Prevention of global warming
Action to develop high-efficiency appliances using condensing
technology and reduce electricity consumption during standby and use,and continued development of energy-saving "front-runner" products●Development of high-efficiency appliances using condensing
technology●Action to reduce electricity consumption during standby and use●Development of high-efficiency water heaters for overseas
markets●Reduction of standby electricity consumption- Clothes dryers for overseas markets- Gas water/space heat source●Energy conservation and recycling●Product assessment
Energy conservation by making products and parts lighter and more(of all new products)
compact, etc. and continued development of recycling-friendly products ●Development of lighter products- Tabletop gas stove for overseas markets- Gas water/space heat source●Development of water-saving appliances- Dishwasher/dryer●Simplification of packaging●Collaboration with suppliers and group companies to procure
environmentally friendly parts (resource/energy saving, recycling, etc.)●Development of green products(promotion of use of materials in accordance with EProcurement Standards)●Maintenance and reinforcement of green procurement
management (chemicals management)●Promotion of measures to monitor suppliers' CO2 emissions●Disclosure of environmental information
Disclosure of environmental information on products, environmental
activities, etc. via CSR Report and website●Publication of Fiscal 2017 CSR Report●Disclosure of environmental information on website●Environmental training and awareness raising
Active environmental training and awareness-raising activities targetedat employees, and continued raising of environmental awareness●Promotion of various training activities in accordance withcompany-wide and plant/office-level annual plans●Reduction of CO2 emission intensity●At least -7％ relative to fiscal 2010

E-Procurement

E-Mind(Employees)

Fiscal 2017 Targets

At least -8% relative to fiscal 2010 by fiscal 2018

E-Factories(Production)(Note 2)

E-Offices(Offices)●Maintenance of zero emissions (recycling rate of 99.5%+)●Reduction of waste emission intensity
At least -7% relative to fiscal 2011 by fisccal 2018

●Maintenance and improvement of zero emissions●At least -6％ relative to fiscal 2011

●Reduction of water consumption intensity
At least -7% relative to fiscal 2011 by fiscal 2018

●At least -6％ relative to fiscal 2011

●Reduction of hazardous chemical (Note 3) use intensity
At least -6% relative to fiscal 2011 by fiscal 2017

●At least -6％ relative to fiscal 2011

●Green procurement rate of 91%+ (maintenance)(including expanded product categories)●Green purchasing rate of 91%+ including expanded productcategories(Note 1) In the E-Marketing category, "contribution to reduction of CO 2 emissions by products" has been adopted as a new performance indicator to accelerate energy
conservation in the home, and action will be taken to achieve the targets shown by 2020.
*High-efficiency products = hybrid water/space heaters, Eco-JOES, etc.
(Note 2) Intensity = load per standard unit defined by Rinnai (target reduction of at least 1% per annum)(Note 3) Hazardous chemicals = Class I designated chemical substances as defined by the PRTR Act

68

CSR Report 2016│Environmental Accounting

Environmental Accounting
To realize continuous growth while promoting environmental management, we must accurately quantify thecost of environmental protection and the results achieved. We must also ensure that our approaches are
effective through appropriate allocation of management resources. We utilize guidelines set by Japan’s
Ministry of the Environment as the tools in executing these tasks.
Scope of accounting: Rinnai Corporation
Period of accounting: April 1, 2015 to March 31, 2016

Cost of Environmental Protection(Unit: Ten thousand yen)
Breakdown of Costs forEnvironmental Protection

Key Activities

Costs

Pollution
prevention

Mainly efforts to prevent air and water pollution

3,377

Environmental
protection

Mainly efforts to save energy

1,242

Resource
recycling

Recycling as well as treatment and disposal of industrial waste

3,833

Upstream/downstream

Collection/recycling and volume/weight reduction of materials
such as product packaging

897

Management activities

Mainly monitoring and surveillance of environmental impact

9,558

Research and development

R&D on environmentally conscious products addressing
energy- and resource-saving features and reduction and/or
elimination of hazardous chemical substances

108,941

Community efforts

Mainly community activities and beautification/greening at
places of business and surrounding areas

212

In the scope ofoperations

Total

128,060

Item
On-site results
Environmental
Protection
EffectUpstream/downstr
eam results

Environmental
impact reduction
through use of
products

Content(Unit: Ten thousand yen)
Environmental Impact
Reduction

Saving energy
reduced greenhousegases

331 t-CO2/year

Reduction of NOx
with products with
low NOx emissions

68 t/year

High-efficiency
products reduced CO2

60,914 t-CO2/year(Unit: Ten thousand yen)
Economic Effects
Accompanying
Environmental Protection
Measures

Item
Costs cut through energy-savings and waste reduction

Economic Effect
1,307

69

CSR Report 2016│Environmental Accounting

About Environmental Protection Costs• R&D costs are associated with the development of environment-related, leading-edge technologies and products
for the heat-energy appliance market as well as products that, based on Rinnai’s standards, mark an
improvement over existing products.
• Costs covering other applications, which include non-environment-oriented activities, are apportioned according
to internal rules.
• The calculations above exclude depreciation and amortization expense.

About Success of Environmental Protection Efforts• The success of environmental protection efforts through energy-saving efforts and waste reduction is not achange in overall volume but rather the assumed effect achieved through associated activities.
• The success of environmental protection efforts through the use of products with the capacity to reduce
environmental impact is not an industry result but rather a year-on-year comparison based on Rinnai’s sales ofsuch products. We determined these estimates based on annual volume over normal usage.

Economic Effect• The economic effects achieved through energy-savings and waste reduction are not increases or decreases inoverall costs but rather an effective amount regarded for its economic benefit through the associated activities.
• 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.
• External economic effects, derived mainly through products that reduce environmental impact, also fall outside
the scope of economic effects because the results are too difficult to pinpoint.

70

CSR Report 2016┃Chronology of Environmental Activities at Rinnai

Chronology of Environmental Activities at Rinnai
March

Drafted Environmental Preservation Action Plan; established Environment Committee

DecemberWon prize at 4th Energy Conservation Vanguard 21 for gas-blast type high heat griller
RGM-4, 6, 8

1993
1994

July

Market debut: low-NOx burner built-in water heater (NOx at less than 60ppm)

1996

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

March

Won special prize at 2nd Eco Design Awards for tabletop cooking stove

June

Market debut: absorption-type gas air-conditioner (non-CFC)

October

Acquired ISO 14001 certification at Oguchi factory

DecemberWon prize at 8th Energy Conservation Vanguard 21 for tabletop oven RSBN-096

1997

April

Won top prize for gas clothes dryer and special awards for small hot-water heater and forabsorption-type gas air-condition at 3rd Eco-Design Awards

OctoberMarket debut: Yukko V Series, featuring no styrene packing, low stand-by power
consumption and low NOx emissions

1998

July

1999

2000

Established Environment Division

SeptemberMarket debut: Ecomax burner and Eco burner-equipped gas cooking stove

OctoberMarket debut: condensing water heater boasting 95% heat efficiency and NOx emissions
under 30ppm

February

Won Minister of Economy, Trade and Industry Award for condensing water heater atministry's 10th Energy Conservation Awards

May

Drafted Rinnai Environmental Action Principles

AugustPublished inaugural issue of Environmental Report

January

Won Chunichi Newspaper Prize portion of Chunichi Industrial Technology Awards forcondensing water heater

June

Won Technology Grand Award from Japan Gas Association for condensing water heater

June

Won Technology Award from Japan Gas Association for development of glass-top gas
cooking stove

October

Won Electric Equipment Packaging Category Award in the Good Packaging division at
Japan Packaging Contest 2003 for built-in 75cm-wide glass-top gas cooking stove

October

Won Logistics Prize at Japan Packaging Contest 2004 for bathroom heater/dryer

June

Won Technology Grand Award from Japan Gas Association for development of latent heatrecovery high-efficiency hot water/heating unit

2001

2003

2004
2005

SeptemberParticipated in Team Minus 6%, a national movement to prevent global warming

2006

October

Won Electric Equipment Packaging Category Award in the Good Packaging division at
Japan Packaging Contest 2006 for gas fan heater

2008

September

Gas tankless water heater sold in the United States captured 2008 Super Nova Star Award71

CSR Report 2016┃Chronology of Environmental Activities at Rinnai(Stars of Energy Efficiency) in the United States from the Alliance to Save Energy

2009

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

January

Market debut: Eco-Jozu water heater with bath-filling systems RUF-E SeriesParticipated 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 appliances and systems, including latent
heat recovery water heaters

2010

2011

2012

April

Market debut: Eco One hybrid water heater with heating systems for colder regions

May

Won Technology Grand Award from Japan Gas Association for development of gas
hot-water system SOLAMO to use solar heat

June

Won Aichi Invention Award sponsored by Aichi Invention Association for development of
low-NOx burners for household gas water heaters

December

Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the
IMS2011 16th Resource Recycling Manufacturing Symposium for energy saving measuresconcerning enamel combustion furnaces

June

Won Technology Award from Japan Gas Association for “kaecco” Eco-Jozu combi boiler
designed for existing apartments (put in existing PS)
Won Aichi Invention Encouragement Award sponsored by Aichi Invention Association for
A-Style Gas fan heaters

October

Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2012 for Eco
One hybrid water heater with heating systems

December

Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the
IMS2012 17th Resource Recycling Manufacturing Symposium for our development ofhome-use hybrid water heater with heating systems

June

Won Technology Award from Japan Gas Association for “Jikabi-No-Takumi” new gas ricecooker, and new Delicia built-in stove
Won Aichi Invention Encouragement Award sponsored by Aichi Invention Association for
Dishwasher with baking soda wash mode

December

Won the Chairman Award of Nagoya Industries Promotion Corporation at the IMS2013
18th Resource Recycling Manufacturing Symposium for improvement of logistic
efficiency and reduction of waste disposal by reviewing of packing production process

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

Won Aichi Invention Award sponsored by Aichi Invention Association for development offire power adjustments for gas stoves
Won Technology Grand Award for Jikabi-No-Takumi gas rice cooker, and won
Technology Award for Speedy Kanta-Kun gas cloth dryer from Japan Gas Association

AugustWon Large and Heavy Good Packaging Prize at Japan Packaging Contest 2014 for
returnable package

DecemberWon 2014 Energy Saving and New Energy Grand Prize in Kitaguni (northern area inJapan) for Eco One hybrid water heater with heating systems for Hokkaido region
Won the Chunichi Shimbun Award at the IMS2014 19th Resource Recycling

2013

2014

72

CSR Report 2016┃Chronology of Environmental Activities at Rinnai

Manufacturing Symposium for our development of an eco-friendly water heater withbath-filling systems
April

Market debut: Eco One third generation hybrid water heater with heating systems

June

Won Technology Award from Japan Gas Association for gas cord cover
Won Aichi Invention Award sponsored from Aichi Invention Association for two burners
for stoves in a vertical double stages

November

Won Good Design Award 2015 for Eco One hybrid water heater with heating systems
Won Invention Encouragement Award at the Chubu Region Innovation Award for gas
stove burners above and below

March

Won With Gas Grand Prize by Osaka Gas for LiSSe Gas stove cooker with Si sensor

May

Acquired a certificate of a low-carbon building as Japan’s first residential complex inwhich all units have ECO ONE and floor heating

July

Participated in COOL CHOICE campaign, a new national movement to global climaticchanges and reducing greenhouse effect gas

AugustMarket debut: gas fun heater, power consumption: -47%, the lightest in the industry: 7.9kg(compared with the Company’s current model: -16%)
Won Good Packaging Prize at Japan Packaging Contest 2014 for a bottom tray with parts
box for important attachments

2015

2016

73

CSR Report 2016┃Scope of Calculation for Environmental Data

Scope of Calculation for Environmental Data
Target period: From April 1, 2015 to March 31, 2016
Disclosed page

Scope of calculation-

・Rinnai Corporation and its
consolidated subsidiaries[Product development andmanufacturing]・Rinnai Corporation[Procurement, sales, logistics,
product usage, disposal]

Supply Chain CO2 Emissions

Emissions by Scope・Rinnai Corporation and its
consolidated subsidiaries[Scope 1 and 2】
・Rinnai Corporation [Scope 3]

Efforts to Prevent Global
Warming,
Action on Waste and Water
Resources, Efforts to Prevent
Pollution

Energy volume and consumption rate
・CO2 emission
・Waste emission
・Water consumption
・Hazardous chemical usage

Rinnai Corporation

Improvements to Logistics

Shipping volume and CO2 emission

Rinnai Corporation

Impact on the Environment of
the Rinnai Group

Environmentally
Conscious
Monozukuri

Data name＜E-Marketing＞
・Reduction in CO2 emissions, etc.
"7E Strategic
Initiatives"
Environmental
Action Plan

"7E Strategic Initiatives"
Environmental Action Plan and
Performance＜E-Factories＞
・CO2 emission intensity
・Waste emission intensity
・Water consumption intensity
・Hazardous chemical usage intensity

Rinnai Corporation＜E-Offices＞
・Green purchasing rate

Environmental
Accounting-

Cost of Environmental Protection
・Pollution prevention cost・Environmental protection cost・Resource recycling cost
・Upstream/downstream cost・Management activities cost・Research and development cost・Community efforts・Responding cost to environmental
damage・Other cost
Environmental Protection Effect・On-site results・Upstream/downstream results

Rinnai Corporation
・Oguchi Factory
・Seto Factory
・Asahi Factory・Rinnai Parts Center
・Production Engineering Division
・Research & Development
Headquarters
・Environment Division

Economic Effects Accompanying
Environmental Protection Measures74

CSR Report 2016┃Scope of Calculation for Environmental Data

Rinnai Corporation
・Oguchi Factory
・Seto Factory
・Asahi Factory

Reports by main
officeConsolidated subsiiaries（Main offices in Japan）
・Yanagisawa ManufacturingCo., Ltd.
・Rinnai Technica Co., Ltd.
・RB Controls Co., Ltd.
・Japan Ceramics Co., Ltd.
・Rinnai Precision Co., Ltd.
・RT Engineering Co., Ltd.
・Noto Tech Co., Ltd.
・Techno Parts Co., Ltd.

・Energy use
・Emissions into the air
・Discharge of waste・Substances subject to the PRTR

law

・Rinnai Corporation and its
domestic consolidated subsidiaries

・Air
・Water discharge

75

CSR Report 2016│Initiatives for safety and peace of mind

Initiatives for safety and peace of mind

Creating Safe, Reliable, Comfortable, Healthy Living Spaces
Targeting “Temperature-barrier-free Homes”
When it comes to heating the home, most Japanese houses have room-by-room heating as opposed to the Westernconcept of “heating the entire house.” However, regional and seasonal factors lead to major temperature differences
between rooms, giving rise to issues related to comfort and health.
Nevertheless, it is possible to make even Japanese homes “temperature barrier free” by eliminating
temperature differences between rooms. This can be done by combining gas water heaters with heating systems andhot-water-based terminals. Rinnai is promoting the spread of “temperature-barrier-free homes” in Japan through thedevelopment, manufacture, and sale of high-efficiency gas water heaters with heating systems and peripheral
equipment.

Launch of High-Efficiency Gas Water Heater with Heating System:
Most Compact and Lightest in the Industry and Compatible with Varying
Installation Requirements
A high-efficiency gas water heater with heating system can deliver hot water to the kitchen and bathroom,
automatically fill a bathtub, reheat bathwater, and provide hot-water-based room heating—all from a single unit.
Rinnai has been selling high-efficiency gas water heaters with heating systems for some time. Our RVD-E Series,
launched in July 2015, is the lightest and most compact in the industry*, and is attracting attention for its flexibility
with respect to varying installation requirements. We will continue promoting the spread of high-efficiency gas
water heaters with heating systems and bathroom heater/dryers (for warming up cold bathrooms), as well as floor
heaters (that warm the room upward from the feet), room heaters, and other hot-water-based equipment. Our aim isto help create comfortable, healthy living environments.

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CSR Report 2016│Initiatives for safety and peace of mind

Rinnai Has a Mission: To Convey Japan’s Bathing Culture to the WorldIn the Western world, “bathing” generally means taking a shower. There arepractically no nations or regions that have the “soaking in the bath” culture thatis normal in Japan. Immersing in the tub up to the shoulders greatly helps with
fatigue recovery. The pressure of the water improves blood flow in the body’s
bloated areas, and the buoyancy relieves muscles tension and promotes
relaxation. When the autonomic nervous system is disturbed by stress,
moreover, soaking is said to provide relief by acting on the parasym-pathetic
nervous system.
However, soaking in the bath also comes with risk. We need to be most
mindful of“heat shock.” Major air temperature differences between the living room anddressing room/bathroom place a burden on the body. This can cause bloodpressure to rise sharply, potentially resulting in a stroke, loss of consciousness,or even drowning. The trick is to douse with warm water first to prevent bloodpressure increases, or warm up the air temperature of the dressing room andbathroom. Others include keeping the bathwater temperature at an optimal level(40˚C) and avoiding soaking for long periods (10–15 minutes is ideal).
We believe there is latitude for water heating equipment to become moreadvanced in the future. It would be nice to incorporate artificial intelligence toprovide advice on the best water temperature considering the bather’s physicalcondition, for example, or let the bather know when it’s time to get out. I want
this wonderful aspect of Japanese culture-soaking in the bath—to spread acrossthe world.

Shinya Hayasaka,
Spa Therapy Specialist, Human
Sciences Professor, Tokyo City
University

Bathroom Heater/Dryer: Helping Suppress Heat ShockAround 19,000 people in Japan die each year while bathing. A major cause is heat shock due to temperature
differences between the living room, dressing room, and bathroom. This can result in myocardial infarction andcerebral vascular disorders, leading to loss of life. Such problems or temporary loss of consciousness can cause people
to keel over and sometimes even drown in the bathtub.
Installing a bathroom heater/dryer, which allows the bathroom to warm up, is an effective way to prevent heatshock. Our latest bathroom heater/dryer, launched in April 2016, has an automatic interlocking function*, which
automatically warms the bathroom if its temperature falls below 15˚ when while the bathtub is being filled. A “lowtemperature” alert also appears on the remote-control screen when the bathroom temperature falls below 15˚. We
recommend the use of bathroom heaters.
* Available only on heat source equipment fitted with automatic interlocking function in combination with remote control.

77

CSR Report 2016│Measures for Quality

Measures for Quality
Basic Stance on Quality
Rinnai is focused on manufacturing safe products that provide peace of mind for customers because we view gas
appliances in the same way as airplanes. If a problem occurs with either, it could lead to a major accident. Heating
appliances such as gas appliances have the capability of causing burns, carbon monoxide poisoning, a fire, explosion
and more if there is even a slight defect or problem or if they are mishandled. In the worst case scenario, an accident
may even lead to death. In the past tabletop stoves have been the cause of fires and more recently deaths caused by
the rapid change in temperature (“heat shock”) in the bath tub have become a major problem. There is no way wecan maintain sustained growth as a manufacturer unless we fulfill our basic mission as a manufacturer to deliver safe
products that provide peace of mind for customers.
In order to not have any defective products go out into the world and prevent any accidents caused by our
products, it is necessary for us to ensure our product’s safety and peace of mind from their creation, to their use andultimate disposal. That is why we are moving forward with our own unique product manufacturing that focuses onsafety and peace of mind while proactively teaching consumers how to use our products safely even after the products
are in their hands.

Basic Philosophy on Quality

Policy on Quality"Quality is our destiny"

We provide highly safe productsthat meet customers' requirements.

Pursuit of “Zero Defects”
Our basic policy for manufacturing includes “in-house product design,” “in-house development and manufacturingof critical maintenance parts” and “in-house design of production equipment.” The most significant points are the inhouse development and in-group production of core heat technologies and critical maintenance parts and the in-house
design of production equipment. During the design phase, we not only ensure the safety and peace of mind of our
products but also are able to quickly get down to the root cause of a defect or problem to fix it in the event a problem
does occur. We are also making an effort to not produce any defects (zero defects) in all phases from manufacturing(development and production), to the sale, use and after-sales service for products and their ultimate disposal.
When we say quality, that doesn’t simply mean no defects or problems. We believe we can provide more
comfortable lifestyles for our customers through heating appliances such as gas appliances and this is another facetof the quality we offer.
New environmental testing facility: Developing products suited to living environments
across all parts of the nation
Gas appliances are expected to fulfill three roles: (1) Be used safely from time ofpurchase until usefulness has ended; (2) Provide certain functions regardless of
installation environ-ment; and (3) Function properly until its job has ended. To
investigate whether or not its products meet these criteria, the Rinnai Group
performs numerous performance assess-ments to identify areas for improvement andassure overall reliability.
In July 2015, we established a new environmental testing facility within ourTechnology Center. In the facility, we have built a comprehensive environmental
testing chamber that replicates various climatic conditions, from low to hightemperatures. We are even building a detached house inside the chamber so we candetermine the impact of external temperature fluctuations on our gas appliances. We
can also make modifications in such areas as insulation materials, wall thickness,and room size, enabling us to make more meticulous evaluations.
Environmental testing facility

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CSR Report 2016│Measures for Quality

Product Development in Pursuit of Safety and Peace of Mind
There are a variety of dangerous events that can occur with gas appliances such as gas leaks, incomplete combustion,burns, fires, etc. The mission given to development divisions is how well they can eliminate the causes of these
dangers and create a safe gas appliance. Up until now our appliances have been equipped with a number of different
safety devices. Examples would be a flame-failure device and a temperature sensor for gas tabletop stoves to prevent
fires when cooking tempura, and a CO sensor equipped to water heaters with special installation conditions.
Design divisions ensure from the design phase that safety is incorporated into the product by making surethe safety functions operate correctly in the use environment, the safety performance is maintained throughout thelife of the product, and the fail-safe features to safely stop the appliance in the event it not working correctly basedon the concept of proactive prevention of unforeseen accidents so that the safety features are maintained from firstuse until the end of the products life. Design divisions also conduct various analysis using simulations and tests using
strict evaluation standards and after the results are confirmed during a meeting the structure for moving on to the next
set is established. This is the method currently being used to eliminate all defects that occur during the design phase.
We are also actively sharing product development information and training employees on safe product development
by holding quality meetings to never reproduce past defects again and holding study sessions to convey past knowhow to the next generation of employees.

Manufacturing Technology which Assures High Quality
Rinnai’s basic philosophy regarding production technology is to produce a sound product instantaneously after the
fabrication phase. We utilize an in-house completion model to manufacture quality products.
Manufacturing divisions are involved from the product planning and design phases to utilize their wealth of knowhow related to fabrication and manufacturing to ensure that development from our in-house technology andproduction equipment achieves the intended performance, the product is safe and provides peace of mind forcustomers and the product is designed to be easy to manufacture for employees. Production starts after production
processes are carefully established and reviewed with development divisions. The production equipment is designed
and manufactured within the company with the 5M in mind (Man, Machine, Material, Method and Measurement).
We work to prevent defects that are caused by inadequate equipment. The manufacturing scene is currently putting
effort into improvement activities such as QC and improvement proposals with the aim of creating a strong
manufacturing scene. We aim to create a work environment than is better each day by finding excess and waste in
manufacturing processes and solving them one by one through the continuation of steady efforts. We believe
manufacturing starts with creating great people and we place a focus on developing talented individuals who can
succeed the concepts, skills and technologies of our manufacturing process.
Meanwhile, manufacturing at overseas locations must take into account the local market in that country
or region. Japan’s level of quality is one of the highest in the world and is highly thought of abroad. For example,
when the production of gas cocks at Rinnai Indonesia started, local staff visited Japan to thoroughly learn ourphilosophy behind manufacturing. They prepared the production line with Japanese staff members and launched theirown production line in Indonesia. We will continue to build a high quality manufacturing system that is safe andprovides peace of mind for our customers both in Japan and abroad based on our philosophy that “Quality is ourdestiny.”“Kodokan” training dojo established to provide quality-related education through hands-on experience
In 2009, we established a training dojo called Kodokan at our Oguchi
Factory, with the aim of eliminating product defects at the assembly
stages. Employees about to engage in new tasks handle real products,
equipment, and jigs* and learn
quality-related educational rules in an easy-to-understand manner while
also practicing their screw-tightening skills. In addition to new staff, we
also subject experienced employees to repeated basic and applied
education in order to maintain and improve their quality-related
awareness.
* Jig: Device used to guide a tool to the work position during
processing/assembly
Kodokan79

CSR Report 2016│Measures for Quality

Koji Ito,No. 2 Manufacturing Dept.,
Oguchi Factory

Understanding of the importance of rules;
fostering a commitment to quality
We expand in-house manufacture to promote appropriate processing method(processing technology, quality enhancement) to newly designed key units
and components. Based on the integrated production system from press work
to processing and assembly, we tackle with the daily improvement efforts to
reduce the “carrying, waiting time, inventory” loss time, with awareness of“various loss time produces energy loss”. At the production of ECO JOZU
highly efficient water heaters, we changed the consolidation method of thesecond heat exchanger, which recovers an exhaust heat efficiently, fromwelding method to caulking method.

Making Improvements with Our Suppliers
See page 94 “Communication with Our Business Partners”

Invigorating Quality Improvement Activities
We operate a system of small-group quality control circles as a means of raising every single employee’s problemsolving skills and stimulating groups as a whole. These are being actively promoted at group companies too, and agroup-wide “QC Circle Convention” is held every September to recognize the best circles.

Company-wide QC circle conference

80CSR Report 2016│Consumer Safety

Consumer Safety
Making Possible Safe and Healthy Lifestyles
Tabletop with Si Temperature Sensors Prevent Fires
Tabletop gas stoves are the source of most fires that occur in the home,
and it is said that in Japan many such fires are caused when using oil todeep fry the Japanese dish tempura. Kitchen fires caused by tempura oilsometimes spread to other rooms. They not only destroy precious assets,
but in a worse-case scenario they can lead to fatalities.
To help prevent kitchen fires in Japan, it has been legally
mandatory for all burners on gas tabletop stoves made after October
2008 to be fitted with safety sensors. These gas tabletop stoves withsensors are called “Si sensor stoves.”
As a manufacturer with a large share of the gas stove market, Rinnai believes it has fulfilled its
responsibility by promoting the widespread adoption of such products that offer enhanced safety. Because of thelong replacement cycle for gas stoves, many customers are unfamiliar with the safety provided by Si sensor stoves.
To encourage customers to consider replacement, we provide information on the safety of Si sensor stoves throughvarious means, including exhibitions, catalogs, and the Rinnai website.

Information about Si Sensor on Gas Built-in Hob (stovetops) Catalog

Website Draws Attention to Safety
With the proliferation of smartphones and tablets, more and more people are connecting to the Internet. For
this reason, we provide various information about the safe use of gas appliances via our corporate website.
How to restore microcomputer meter after an earthquake
In addition to measuring gas consumption volumes, a microcomputer
meter is used to suspend gas supply automatically in the event of strong
earthquake of 5˚ magnitude or higher. Our corporate website describes
the steps for correctly restoring the microcomputer meter after such anearthquake.

“Product Safety Inspection Month”
The Minister for Economy, Trade and Industry has designed Novemberof each year as “Product Safety Inspection Month.” Accordingly, Rinnai
steps up safety-related educational activities in that month. On our
corporate website, we have sections containing information on productrecalls, points to note for long-term-use products, correct product usage
methods, and the like. In this way, we are working to increasecustomers’ awareness about safety.
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CSR Report 2016│Consumer Safety

Disclosure of Information on Safety
Notice Regarding Product Safety
The wear and deterioration of parts that occurs when products are used for a long time can lead to fires and injuries.
Incorrect use is also dangerous as it can cause breakdowns and injuries to users. To ensure safe use by our customers,
we label our products and provide information in user manuals to warn about incorrect use and how to avoid accidents
arising from careless use. Specific examples are also published on our website, where we provide clear, easy tounderstand information on how to prevent accidents.

Important Notice Regarding Product Safety

Problems that could be caused by incorrect usage

Disclosure of Information on Accidents Involving Our Products
In the event of a serious accident involving one of our
products, we immediately inform the authorities as
required by law. We also actively disclose information
directly to customers on our website in order to alert
them as soon as possible and keep them appropriately
informed in light of the severity and frequency of thetype of accident concerned.

Information on Accidents
Involving Our Products82

CSR Report 2016│Inquiry Response and Support System

Inquiry Response and Support System
CS Policy
In keeping with our corporate philosophy that “Quality is our destiny,” we aim to respond sincerely, promptly, andappropriately to customer requests and queries, and to provide reliable services that deliver satisfaction and peaceof mind to the customer.

Fundamental Policy
1. We—that is, any department of our Company— identify comments and requests from our customers as our
top priority.
2. We understand that customers’ complaints are addressed to the entire Company and the whole organization
shall be responsible for them until the cases are closed.
3. We take customers’ comments seriously and share them within the Company to utilize as precious
information to improve our products and services.
4. We always abide by laws and regulations and we don’t give in to unreasonable demands.
5. We strictly protect the personal information of our customers by observing related laws, regulations andRinnai’s Personal Information Protection Regulations.

Customer CenterWe established the Customer Center in an effort toimprove customer satisfaction even further, by
accepting a range of inquiries, comments and requests,
either directly from customers or via channels such as
telephone or our website. The numerous invaluablecomments we receive are then fed back to the relevant
division, so that they can be used to identify andrectify issues, in areas such as product development,
quality control, sales and service standards.
We strive to incorporate customer comments
into our products and services on a daily basis

The Customer Center handles requests received from customers via our toll-free number, website and otherchannels. In fiscal 2016, we received approximately 800,000 calls from customers and around 4,714 comments
via our website.
In fiscal 2016, we received the following scores based on customer questionnaires.
- Ease of contacting Customer Center via toll-free number
79.0 points- Politeness of telephone operator
83.0 points- Overall score
81.0points*We have revised the evaluation categories on questionnaire cards since last year.

Customer center83

CSR Report 2016│Inquiry Response and Support System

Our Customers’ Comments (Customers’ comments and inquiries through our website in fiscal 2016)

The breakdown of inquiries from customers is 76% from individuals and 24% from companies.

There are the three major topics: (1) Product in use: 34.0%, (2) Product that a customer is considering purchasing:
32.9%, (3) Parts & products: 19.3%

Many inquiries were kitchen appliances-related.: (1) Kitchen appliances: 42.4%, (2) Water heater and bath-related
products: 27.3%

84

CSR Report 2016│Inquiry Response and Support System

Enhancement of Online Support
Responding to customers who have told us thatthey want to be able to troubleshoot some issues
for themselves, we have added a Frequently
Asked Questions section to our website.

83.3% of users have expressed satisfaction withthe content of our FAQs, and the number ofvisitors accessing the FAQs page is rising
constantly. Content will continue to be frequently
updated and expanded to further assist ourcustomers.

After-Sales Service
Our after-sales services are geared to delivering peace of mind to users and ensuring everyday comfort for all ourcustomers.

Speeding Up After-Sales Service
We have around 700 service engineers repairing products across Japan. To ensure minimum disruption to our users,
customer service requests are confirmed via mobile terminal and we aim to complete inspections the same day or the
day after a service request has been made.

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CSR Report 2016│Inquiry Response and Support System

Evaluating Performance Based on Service Specialist Questionnaire Cards
We place a strong emphasis on customer satisfaction and are committed to meeting customer requests andanswering their inquiries precisely, swiftly, and faithfully in order to “deliver safe, reliable, and satisfying service.”
When repairs are performed, consumers are asked to fill in “customer feedback questionnaires” to tell us how
satisfied they were with the experience, and the results are fed back to the relevant departments. In fiscal 2016, a
total of 22,000 questionnaires were completed by consumers, and average satisfaction was 94.4 (out of 100).
Satisfaction has been at least 90 every year since 2007.

Supplies of Service Parts
As a rule, we keep gas appliance parts for 5 to 10 years (and in some cases for longer) after production ends. Being
able to deliver these parts promptly when needed is essential to good after-sales service and ensuring that customers
can get safe, pleasant, and long use out of their purchases.
At the Rinnai Parts Center that stores and supplies parts, the process of picking, packing, and sending out
parts is heavily systematized due to the large numbers of parts handled. It is crucial that the right types and numbersof parts be supplied on time. Improvements in quality are pursued in a range of ways, including by ensuring that work
is performed in accordance with standard operation manuals that document work and pamphlets that lay down basic
rules on quality.

86CSR Report 2016│Inspection and Repair Services

Inspection and Repair Services
Inspections Like a Yearly Medical Check-Up for Appliances
For a Long-Term Use Without Accidents
In April 2009, Consumer Product Safety Act was revised and a safety inspection system for products in long-term
use went into effect.
Some accidents linked to the deterioration of our products over long-term use have been reported. To makecustomers realize that appliances, like most products, have a particular service life and to encourage customers tohave their Rinnai products inspected regularly, we send out the necessary information and extend advice throughthe Product Inspection Center. These efforts are aimed at preventing unforeseen accidents.
We enhance our maintenance inspection system with our qualified service specialists. In addition, we
provide our original services extending a warranty period to three years for the customers who purchased our homeuse hot-water unit and completed customer registration.
In April 2011, we also introduced a voluntary inspection system (Safety Inspection) for our outdoor hot-water units,in accordance with the law. This system has been gradually expanded; for instance, indoor hot-water and heating
units were added to the subjects of legal inspection in July 2011. Currently, we began putting in place an extended
inspection framework in preparation for full-scale inspections in the near future.

Approach to Relations with Suppliers
Through inspections, we will enhance our customer support services.
Five focused points of our fundamental stance
1. Good inspection (Good inspector, good handling, legal knowledge, and inspection report)
2. Look through our customer’s eyes (Usage of aged products, and reflection of customers’ comments on products)
3. Customer satisfaction (Appropriate and caring information offering)
4. Proposal to assure peace of mind (Proposal to bring peace of mind before a product breaks, not after it has broken)
5. Trust building (Showing our appreciation for our customers’ long patronage)

Efforts to Coordinate an Inspection System
To adequately implement inspection, Product Inspection Center keeps improving its inspection system.
In addition to the legally required check points of an inspection system, we also set up voluntary monitoring items
to facilitate a reliable inspection system.

87

CSR Report 2016│Inspection and Repair Services

Voluntary System Action Items and the Current Status
Action items

Rinnai’s current status

Enhancement ofprovision of
information

We post the detailed information on maintenance and inspection system for our products for along period of time on our website. The information includes the products that are out of
scope of legally mandatory products (specific products that require maintenance).

Enhancement of
items to beinspected

In addition to the items of which inspection is legally required (specific products that require
maintenance), we set safety inspection products including home-use outdoor gas hot-water
units, built-in-stoves and gas fan heaters.

Inspection quality
improvement

The inspection results of all items are checked to see if there is any judgment error to assure
the technology standards. The inspection completion rate is monitored all the time not todelay the inspection schedule.

Warning after theinspection

When an inspection result concluded the prohibition of the use of a product, we will provide
the follow-up of the inspection by calling or writing to the user.

Overview of Our Maintenance and Inspection System

For the safe use of products, we recommend an inspection in 9 - 11* years after the production.
*For home-use appliances (Professional use: 2.5 to 4.5 years)
Designedstandard
service life*

Target product

Home-use gas hotwater units
Electric dishwasher
and dryer
Commercial-use
3-year product indoor-type gas hot
water heaters
10-yearproduct

Inspection
period9-11 years
after
production
2.5-4.5 years
after
production

0-6 months
in advance

Production Purchase

Registration1

Notification

Inspection
periodInspection2

Suspensionof useWhen you receive a notice, please apply for an inspection.
You can also request an inspection during the time of 1 and 2.

“Designed standard service life” is a period that a product should be safely used without any problems under the normal
circumstances with proper handling and maintenance. This is defined for each appliance. Please note that this is not the same
as free warranty period. In addition, products that fall outside the scope of legal inspection (specific maintenance products)
use the terminology, “Standard service life as designed”.

Users are encouraged to have their equipment inspected during the two-year inspection period. If we do not receivea reply in response to the initial inspection notice, the user will be sent a repeat inspection notice by mail when
there is one year remaining before the end of the inspection period, so that they can continue to use their equipment
safely.
88

CSR Report 2016│Inspection and Repair Services

The period for legal inspection of commercial-use equipment produced in April 2009 started in October 2011, so
we began sending notices on the inspection to applicable customers. About 70% of customers who responded to
the notices applied for the inspection, suggesting their high interest in the inspection system. Accordingly, we will
strengthen measures for informing customers of the system, aiming for (1) a higher registration rate and (2) ahigher rate of inspection applications.

Maintenance and Inspection System of Long-Term Use Products
Rinnai products corresponding
to safety inspection system

The Maintenance and Inspection System ofLong-Term Use Products started in April
2009 is a system to encourage theregistration of users and charged inspection
for "Specified Maintenance Products" that
may cause problems due to the age-related
deterioration and may damage and may
give serious damage to the life or health of
consumers.

Indoor-type bathwater heaters
with gas burners(for city gas,and LP)

Indoor-type gas instant
hot water heaters(for city gas, and LP)

Dishwashers(built-in)●Flow of Maintenance and Inspection System of Long-Term Use Products
Suppliers

Owners

Always explain thesystem at time of saleor delivery.

Listen to the explanation
about the system at thetime of purchase

Owners (and Suppliers)
RegistrationRegistratio
n ofchanges
Inspection

Owner’s Card
(packed withproduct)
Onlineregistration
By phone

Rinnai
Mail

Information
Management

By card enclosed with notification

Inspection
reminders sent
by mail toregisteredappliance

On-siteinspection

By phone
By card enclosed with notification

Recommendation of Anshin Tenken (Safety Inspection)
In consideration of the Maintenance and Inspection System of Long-Term Use Products, we recommend
Anshin Tenken (safety inspection) for products that fall outside the scope of the system.

The scope of the Anshin Tenken (safety inspection)•Outdoor-type gas water heaters and bath water heaters(Including hot-water and heating units, and heat sources
only for heaters)
Gas water heaters
Gas bath heating systems
Gas heat source for water heaters
Gas heat source only for heaters• Gas heaters
Gas fan heaters
Gas fan-forced heaters
Gas stove
Gas dryer•Built-in-gas-stoves

Built-in-gas-stoves
Built-in-gas-oven* Some products are out of scope.

89

CSR Report 2016│Inspection and Repair Services

From Registration to Inspection
Based on data provided by registered users, we mail inspection notices* to the designated address when therelevant inspection period approaches. We also carry out inspections for products that are already in use,with orders taken via our Product Inspection Center.
*Products subject to inspection notices: Any gas hot-water unit with a user registration card attached

Promotion of Owner Registration
User registration is the important “first step” to connect customers with Rinnai. Information regarding inspections
is contained in our catalogs and on our website. We also actively encourage customers to register with us during
repair visits and other situations in which our staff have the opportunity to interact directly with customers.

Inspection Reminders Provided by Remote Controls and Indicator Lamps
We posted information on our website about the inspection reminder function that some of our products* comewith. This function reminds users of legally designated “specified maintenance products” that their products aredue for inspection after the equivalent of 10 years of normal use, and users are alerted to this fact by their remotecontrol, a blinking indicator on the product, or similar means. This function also serves to encourage unregisteredusers to register and request an inspection. This is just one example of our commitment to developing products thatdeliver peace of mind to the customer.
*Specified maintenance products other than water heaters for commercial use.
In the case of registered users
The user is sent an inspection notice through the mail shortly before an inspection is due.
In the case of unregistered users
The inspection function notifies the user that an inspection is due. (Users can inquiry about user registration andinspection by telephone. )Customer Trends in Response to Inspections
Inspections are used as an opportunity to enhance customer support. When our engineers visit, for example, users
are asked to fill in a questionnaire to help us constantly monitor customer opinion of our inspection services andidentify areas for improvement.

Free Inspection of Small Open-Type Water Heaters
In 2007, one of our small, open-type water heaters malfunctioned and caused an accident. To prevent areoccurrence of this kind of accident, we continue to offer free inspections to customers using small, open-typewater heaters, including the RUS-5RX, produced between July 1991 and January 1995, and the RUS-51BT,
produced between May 1994 and January 1997.
Expanding eligibility for inspections: We carry out inspections for small, open-type water heaters that do not havean “inspected” sticker affixed, even if they were manufactured before April 2009 (including two models that haveexperienced problems).
Precautions after inspections: In cases where usage of a product is prohibited as a result of an inspection, we
follow up on the relevant inspection at a later date, by telephone or in writing.
Information on affected products and contact details for inquiries are provided on our website.

90

CSR Report 2016│Communication with Our Customers

Communication with Our Stakeholders

Communication with Our Customers
Surveys of Customer Satisfaction and Improvement of Products and Services
Communication with our users allows us to monitor levels of satisfaction with our products and services, areas ofdissatisfaction, and ways in which we can improve them.
As of the end of June 2015, we had received 6,000 reviews from users of our Cocotte and Cocotte Dutch Oven
grill accessories for the DELICIA built-in hob launched in August 2014. Rated for satisfaction on a five-point scale,the Cocotte scored 4.38 and the Cocotte Dutch Oven 4.48.
In answer to the commonest request from reviewers of the Cocotte and Cocotte Dutch Oven, which was formore recipes, in September 2015 we launched the Bon appétit!! 100 CUISINE cookbook especially for the DELICIA
grill. In this and other ways, we are responding to customer feedback to further improve satisfaction with our products
and services.

DELICIA built-in hob

Bon appétit!! 100 CUISINE
cookbook

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 most out of their purchases for as long as possible.
The site started in October 2006 as online shopping site for the genuine exchangeable parts of Rinnai products.
The range of offerings 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.
In March 2016, the number of registered members exceeded 400,000, providing even more opportunities forcontact with users of our products. To keep in touch with members’ needs, we conduct online questionnaires(annually 26 times) and use the data obtained to design products that meet these needs and resolve issues that theyraise. We will continue to expand direct contact with customers in our quest to deliver better service.

R.STYLE online shopping site

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CSR Report 2016│Communication with Our Customers

Using Online Customer Feedback Internally to Make Improvements
The extensive feedback provided by customers using the
R.STYLE shopping site is shared between divisions via ourinternal Sunflower Messenger site so that it can be analyzed andaddressed to enhance quality, expand service and support, anddrive other improvements. As of the end of fiscal 2015, we havereceived a total of 40,901 comments to date.

Sunflower Messenger

Developing a High Powered yet Simple Stove
We receive many inquiries from customers on our website requestinga high powered yet simple stove. In December 2015, we released theVamo, tabletop gas stove available exclusively on the Internet tomeet this need.
We pursued the simplest yet sleek design with a focus oncooking and incorporated a 4,000kcal/h high powered burner that is
the industry leading power* of a tabletop stove for home use.
* Industry's highest powered burner as of April 2016 for gas tabletop
stove for home use. Research conducted by Rinnai.

Providing Useful Everyday Information via Social MediaIn May 2014 we launched “Goto-kun’s Daily Recipes,” a recipe site for smartphones to help people decide what tocook. The site provides a daily selection of seasonal recipes, along with detailed instructions and lots of photos, toassist people struggling to decide what to cook on any given day.
We also launched an official R.STYLE Facebook page in June 2014. The aim is to create more points of contact
with new customers, by providing useful everyday information in areas such as cleaning and storage, as well as theaforementioned daily recipes.

Goto-kun’s Daily Recipe site, andRinnai Style Face Book site (right).

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CSR Report 2016│Communication with Our Shareholders and Investors

Communication with Our Shareholders and Investors
Policy on Information Disclosure
We disclose information in an appropriate, timely, fair and impartial manner, and engage in IR activities with anemphasis on two-way communication, in order to improve mutual understanding and build trusting relationships
with shareholders and investors.
In accordance with the Rinnai Group Code of Ethics and our Disclosure Policy, we adhere to theprinciple of disclosing corporate information in an appropriate, timely and fair manner, including details of theGroup’s management and business activities.

IR Activities – Communication with Shareholders and Investors
In an effort to provide our shareholders and investors with direct updates on our business activities, and to ensurethat information in disclosed quickly and fairly, we provide information via channels such as results briefings foranalysts and institutional investors (twice a year), biannual shareholder reports, press releases and presentationmaterials on our website, and our IR calendar. We also post IR information, including results and shareholder
reports, on the English version of our website in the interests of timely disclosure.

“Information for Shareholders and Investors” on our website, presentation materials, and our shareholder report

General Shareholders’ Meetings
We held the general shareholders’ meeting for our 66th term at the Meitetsu New Grand Hotel in Nakamura-ku,
Nagoya, on June 28, 2016. To encourage more shareholders to get involved in discussions and attend meetings,
we send out notices to convene earlier than the legally required date. We strive to provide information toshareholders on the current state of our business in an easy-to-understand manner using business reports withslides and other media at general shareholders’ meetings. Shareholders that have difficulty attending the generalshareholders’ meetings are able to exercise their right to vote on the Internet. We also make every effort tocommunicate the company’s current situation to shareholders in a straight-forward manner, through shareholders’report featuring photos, graphs, and charts for instance.

Communication with Institutional Investors and Analysts
In addition to biannual presentations outlining our results, we discuss our
performance and actively exchange opinions with institutional investors andanalysts through activities such as small meetings, visiting individual investors
and accepting telephone interviews. We also take part in conferences organized
by securities firms, in an effort to expand our IR activities. We organize factory
tours every year as an opportunity to provide a better understanding of ourcommitment to monozukuri (manufacturing).
Factory tour

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CSR Report 2016│Communication with Our Shareholders and Investors

Results Briefings for Individual Investors
We take part in events such as seminars for individual investors in order to giveinvestors a better understanding of our business activities. We use
accompanying materials to provide simple explanations of our corporate
philosophy, management policies, business strategies and overseas operations,
to give investors a wide-ranging insight into our activities.

Seminar for individual investors

Our Policy on Dividend
One of our top management priorities is to sustain a stable
return of profits to shareholders. Several factors play into
the calculation of dividends, such as consolidated
performance, return on equity and financial status.
The annual dividend for fiscal 2016 was ¥82 pershare, up ¥6 per share from fiscal 2015.
This marked the 14th consecutive year of higher dividends.

Share Information (As of March 31, 2016)
Number of authorized shares: 200,000,000 shares
Number of outstanding shares: 52,216,463(Including treasury stock)
Number of shareholders: 3,831

International Assessment of CSR Performance
Rinnai has been selected for inclusion in the
FTSE4Good Global Index, a worldwide socially
responsible investment (SRI) index, for elevenconsecutive years since 2004.

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CSR Report 2016│Communication with Business Partners

Communication with Business Partners
Rinnai Group Purchasing Policy
To grow along with our suppliers, we emphasize transactions based on a fair and impartial assessment andselection process and respect for laws and regulations and corporate principles, in accordance with the Rinnai
Group Purchasing Policy.

Rinnai Group Basic Policy“We will give equal opportunity to all companies at home and abroad
and undertake fair evaluations to procure excellent parts that meet our requirements.”

Rinnai’s Stance on the Relationship with Our Business Partners
Our suppliers provide us with the raw materials andmany of the components that go into the products wemake. They are business partners indispensable to thecreation of products that attract consumers to the Rinnainame. At Rinnai, we believe that building stable, longterm relationships with our suppliers and growing withthem as they grow with us is vital to the creation of
better products.

Realization of Fair-and-Square Transactions
In accordance with the Rinnai Code of Conduct in the Rinnai Group Code of Ethics, our supplier acceptanceprocess is applied uniformly, whether the company is an old-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 athome 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, wellconsidered decision.

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CSR Report 2016│Communication with Business Partners

Communication with Our Business Partners
We provide opportunities for suppliers to learn more about our perspective on quality and the basis of monozukuri
at Rinnai through annual events including a get-together at the beginning of the year and policy information
meetings and regular meetings of the Supplier Liaison Group. These meetings are also ideal for gathering
information through suggestions from suppliers and promoting dialogues based on submitted questions. Indeed,
these meetings promote a stronger commitment to teamwork.
We are similarly committed to using online resources to effectively and quickly coordinate information
with as many suppliers as possible, using an interactive information-sharing tool called R-LINE to enhance our
preparedness for business risk during a disaster.

Policy information meetings

Improvement Activities with Our Business Partners
We organize Level-Up Workshop events with our business partners, toprovide guidance on improving capabilities and training next-generation
leaders. The aim is for business partners to appreciate the benefits ofimprovements, through direct guidance with onsite operations for
instance, and to improve their level of monozukuri (manufacturing).
Specialist members of staff also provide individual consultations for nextgeneration leaders, to enhance essential skills and knowledge.
Our aim in providing onsite and management support in this way
is to improve overall standards at each of our business partners.

Level-Up Workshop

Measures for Risk Management and Stable Procurement
We are committed to risk management and stable procurement of parts and materials, so that we can ensure
customer satisfaction and reliably supply the safest possible products. With changes in demand and market
globalization however, our supply chain is increasingly expanding all over the world, making it virtually
impossible to reduce risks on our own. It is therefore essential to take joint measures with our business partners.
We are currently implementing joint measures such as dispersing production sites to guard against unforeseen
circumstances, gathering information on secondary processors and companies carrying out later processing,maintaining information on dies, leased equipment and other assets, and formulating business continuity plans(BCP), with our business partners.
We are also able to quickly arrange alternative production and equivalent parts in the event of a natural
disaster or other such unforeseen circumstances, so that we can minimize any impact on production activities.

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CSR Report 2016│Communication with Business Partners

Promotion of Acquisition of ISO9001 and ISO14001 Certifications
To ensure provision of high-quality, safe, environmentally friendly products, all our domestic factories acquired
ISO9001 certification (for quality management systems) and ISO14001 certification (for environmental
management systems).
We also ask our business partners to understand our approach to quality and the environment and toobtain ISO9001 and ISO14001 certifications or establish equivalent management systems, and we help them
operate the systems.

Communication with Logistics Partners
We hold a logistics policy information meeting to help service providers gain deeper insight into the logistics
policy, targets and measures of the Company and logistics department. In addition, we arrange partnership
meetings to reduce environmental impact in relation to the transportation and storage of products, and to improve
the quality. We also visit partners’ working sites regularly to share issues with them and help them make
improvements.

Forklift Contest
We stage a regular forklift contest for employees of our group companies and logistics partners. The aim of the contest
is to make the workplace safer and more secure by driving home the basic rules on forklift truck operation and raisinghandling skills. The fifth forklift contest was held at our Integrated Logistics Center in May 2015, and a total of 26
competitors took part: 14 from the Rinnai Group and 12 from our logistics partners.

Forklift contest

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CSR Report 2016│Communication with Our Employees

Communication with Our Employees
Basic Policy
We are working to develop a cheerful and satisfying work culture that motivates employees and helps them maximize
their potential, and a workplace environment that keeps employees safe and healthy.
We offer both personnel system support and various health and family-friendly fringe benefits tomotivate employees and provide them with greater job satisfaction. We also strive to create a homely atmosphereand to improve and maintain a safe and healthy workplace so that every single employee can get the most out of hisor her abilities.
We believe that motivation, job satisfaction, and space for growth hold the keys to employees’
development and maximization of their potential. To further raise employee satisfaction, therefore, we are pursuing
action in the following four areas.
(1) Provision of opportunities for personal growth (level-specific training, specialist training, practical on-thejob training, optimal placement, rotation)(2) Fair and acceptable assessment and remuneration (performance evaluation, face-to-face interview system,
improvement of salaries and allowances)(3) Development of a homely working environment (improvement of company buildings and environment,
regular events, support for club activities, inter-division collaboration)(4) Fringe benefit support including family-friendly benefits (optional fringe benefits, health support, company
pension, events arranged with employees’ union)

Personnel Training
We defined our fundamental human resources policy as "Nurture and encourage our employees to have a highlevel of morality and keep challenging their own goals continuously making effort." We guide and train our
employees to be able to demonstrate their initiative to drive the Company while giving priority to our Corporate
Philosophy embodied in our Company Motto, "Harmony, Spirit and Sincerity", which Rinnai has been pursuing
since its establishment in 1920, and our Corporate Mission, "Rinnai utilizes heating to provide society with a
comfortable way of life."
We provide our employees with numerous opportunities to grow as an individual such as rank-specifictraining programs, specialization courses, OJT trainings and a rotation training program, which covers workplaces
at home and abroad.

OJT Personnel Training
We position human resources as our most important management resource
and we offer personnel training to assist employees to fully demonstrate
their capabilities.
Our main training is on-the-job training (OJT), wherein asupervisor guides his/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 themaccording to job responsibility, and a specialization course, which promotes
our employees to be highly specialized in their area. These three programs
form three pillars of Rinnai’s training system. Moreover, we are conducting
a level-up training program for Group leaders who have been promoting ourbusiness plan since fiscal 2011.

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CSR Report 2016│Communication with Our Employees<Major Rank-specific Training Programs in Fiscal 2016>
Training

Subject

Content

Numberoftrainees
130
people83
peopleNew employee
training programNew
employees

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

New employee
follow-up training

Generalists intheir 1st year,
clerical
employees(technicalemployees) intheir 1st year

Training for increasing motivation to work and raisingprofessional awareness(Reconsolidation of what was learned in the new employee
training program; employees who joined the company inthe same year gather and share information about theircurrent status)

S4 level qualified
employee training

S4 levelqualified
employees

M6 level qualified
employee training

M6 levelqualified
employees

M6 level qualified
employee followup training

M6 levelqualified
employees

Reconsolidation of fundamentals (corporate ethics andmanagement policy), Recognition of his/her characteristics(to improve the strength) and the reinforcement ofawareness of management (creation of management plans)
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
Reaffirming shared goals
Reconsolidation of values concerning managers’ actions
Reviewing the efficiency of the entire workplace

New employee training program

116
people49 people

49 people

President’s speech

Career Development Review and Support
Visualizing skills of individual employees and guiding their growth (capability evaluations andfeedback of the results in one-on-one interviews)
For each training program to function effectively, it is essential to match the capability required by theorganization and the goals 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 andresponsibilities. Employees also have a one-on-one interview with their supervisor, during which theyreceive the results of their performance evaluation and are informed of the company's future expectations ofthem. They then set up their own goals to challenge 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 theresults of the evaluation through one-on-one interviews or performance appraisal feedback meetings.
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CSR Report 2016│Communication with Our Employees

Support for Self-Directed development
To support each employee to acquire higher specialist knowledge, skills and culture and support their growth
as an individual, we actively provide programs including foreign language education, correspondence
courses, external open seminars, technical proficiency examinations, license acquisition courses, andcommunication with people in different companies/industries. We provide rank-specific training programs tocreate opportunities to be aware of aspects for strengthening one’s sense of humanity. To employees whowish to develop themselves, we actively provide programs including foreign language education,correspondence courses, external open seminars, technical proficiency examinations, support for attending
national license acquisition courses, and communication with people in different companies/industries.
In addition, for the young employees who have a strong desire to work overseas, we arrange andoperate a short-term overseas working and training program that is available for them via application. This is
to develop human resources that can globally demonstrate their capabilities working at our overseas
locations. Currently, a total of six young engineers are working 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 can demonstrate their abilities at a
global level.

Development of Global Human Resources
We aim to develop human resources who can demonstrate their abilities beyond national boundaries andimprove the capabilities of Rinnai Group employees all over the world. Therefore, the management
divisions, product development divisions, and manufacturing divisions are developing their own training
courses and OJT programs implemented via employee exchange. We provide opportunities for Japan-based
employees in their 20s (at the earliest) to be assigned to overseas Group companies, which improves theirability to adapt to foreign cultures and their international business sense through actual overseas work
experience.
(1) Management Department
At the management division of the Head Office, we regularly visit our overseas locations to provide
instruction on management and accounting and to develop human resources. We also launch business reformprojects when specially requested. Under such projects, specialists from Japan develop local executives
through planned visits to overseas location that provide them with instruction on methods for improvement
in a way that allows them to achieve results through practical operations.
(2) Product Development, and Production Department
We actively promote human resource exchanges between Japan and overseas locations, with about 20
employees participating each year. Staff members from our overseas Group companies receive OJT in Japanfor about one year, learning practical skills and what to improve at their own companies at the development
divisions, factories, and management divisions in Japan. Japan-based employees assigned overseas practiceproduct marketing and handling of quality issues, as well as improvement of factories’ manufacturing andproduction systems. Through these activities, they hand down the key themes that constitute our corporate
culture and expertise on Japanese-style monozukuri and quality assurance to local managerial staff.

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CSR Report 2016│Communication with Our Employees

From Our Employees Seconded Overseas (1)I have been on loan to Rinnai Australia from the Production
Engineering Division for about a year now, and since I arrived I’ve
been responsible for production readiness at our new plant. Drawing on
my experience of quality control techniques in Japan, I devise control
methods to ensure that products are always made the same way and seethat these methods are followed on the factory floor to ensure that
production facilities and workers produce good quality products.
As there are fewer personnel here than in Japan, you have to havebroad knowledge of die pressing, welding, and product assembly. Everyday is a learning experience and I’m learning many new and valuable
things. Obviously there can be communication problems due tolanguage and cultural differences, but these only serve as a reminder ofthe importance of mutual understanding.

Masayuki Toda
Rinnai Australia Pty. Ltd.

From Our Employees Seconded Overseas (2)Having been responsible for operations in East Asia and Europe in theOverseas Business Headquarters for about four years, in 2014 I wasposted to Rinnai America. There I took charge of Asian wholesalers’
accounts in sales, and I also assist operations in areas including logistics,
product planning, accounting, and internal control. Working here has
given me the opportunity to hear directly from our American users andtheir praise for our products. While differences of language, culture, andthinking have sometimes created difficulties, I have found it enormously
rewarding being able to work beside our colleagues on the spot here in
the U.S.
Shunsuke Tsutsumi
Rinnai America Corp

From Our Employees Seconded Overseas (3)I’m in Hong Kong now, having been posted here from the Overseas
Business Headquarters five years ago. My responsibilities in Hong Kong,which I carry out with the assistance of my colleagues at Rinnai Japan andother members of the Rinnai Group around the world, cover operations ingeneral in Hong Kong and Macao, including management of Rinnai Hong
Kong, sales and marketing targeted at our Hong Kong and Macao business
partners, assistance with the development of new products, handling of
quality issues, and general reporting to head office.
As I’m always visiting our agents and dealers that sell Rinnai products andoften have the chance to see inside our suppliers’ and partners’ businesses,
I’m learning a lot about different corporate cultures and ways of thinking
closer to our markets.

Koji Tanaka
Rinnai Hong Kong Ltd.

Succession of Monozukuri, the Spirit of Manufacturing
Training at Production Technology Center"Production Technology Center" established in March 2010 is a place to pursue leading-edge monozukuri,
and an emphasis is 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 talent developing support tool. Utilizing this tool, our staff 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.
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CSR Report 2016│Communication with Our Employees

Training

Visual manualTraining at Production Technology Center
We have set up “monozukuri legacy stations” at each of our facilities to accumulate and maintain intangible
assets, in the form of existing processing technologies, new technologies and “frontline insights” established byexperienced employees. As well as giving newly assigned employees the opportunity to learn the basics ofmonozukuri (manufacturing), we use stations as a means of sharing and conveying the essence of monozukuri andtraining employees in areas such as improving efficiency and reinforcing production management.

Employee conduct display(Oguchi Factory)

Coating training station(Seto Factory)

New Engineer Training
New employees before their actual allocation to each department, receive onsite training at the Research andDevelopment Headquarters and Production Engineering Division as well as practical manufacturing training atfactories and production Group companies, and sales training at the nationwide sales offices to learn about theimportance of monozukuri including product and technology development.

Studying the structure ofdish washer

Studying the structure ofplug of gas appliances

Studying about gas combustion

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CSR Report 2016│Communication with Our Employees

Work-Life Balance
Support for Work-life Balance
For all Rinnai employees to perform well attaining the sense of accomplishment and fulfillment balancing
work and personal life for each lifestyle, we continue to enhance our personnel system to support all
employees of any gender and nationality through their lives.
In fiscal 2013, we are planning to extend the period of childcare leave and childcare shortened work
hours, which many employees use, to strengthen support for working women. We will also actively develop
and apply measures for supporting health management.
< Major Programs and Measures in Fiscal 2016>
Number of users
Program and measureChildcare leave

Content
An employee who lives with and is the caretaker of a childyounger than 12 months of age can take leave until the child turns
1, or alternatively until the child is aged 1 year and two months.

Child nursing leave

In the event that an employee is the caregiver of a child that hasn't
been enrolled in an elementary school, or is the caregiver of afamily member that requires nursing, the employee in question
will be exempt from working late shifts (10:00PM - 5:00AM)
with the exception of cases wherein the employee's absence would
preclude or inhibit the continuation of normal business operations
An employee can take up to ten days leave per year (20 days per
year if nursing two or more children)

Extended family careleave

In principle, total 93 days of leave may be granted per one family
member who falls in to the subject of the care.

Childcare shortened
work hours

Fiscal2016

Fiscal
2015

90

81

69

68

15

2

1

0

0

0

0

0

Family care leave

Any employee who is responsible for a family member that
requires full-time or nursing care may shorten his/her daily
working hours, provided that a minimum of 6 hours are worked
each day. This provision is possible for 93 days per such family
member.
An employee can take up to five days leave per year (10 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.

32Come Back program

The program offers an employment opportunity to our former
employees who had to leave the Company for unavoidable
reasons such as marriage, child-care and family-care, or on his/her
discretion.

00Measure 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.

Family-care shortened
work hours

Production
divisionsManagement
divisionsApplicable tocertaindepartments

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CSR Report 2016│Communication with Our Employees

Measures to Enrich Our Employees’ Family LivesThe Rinnai Employees’ Association is the lead organizer of courses for employees on the themes “Education
for the Soul” and “Passion for Life.” These courses are intended to prepare people for the different stages
that life will take them through, with a focus on ethics, communication skills, life planning and money
matters. Of the firm belief that a positive perspective on work is essentially a reflection of a happy home life,
we encourage employees to take advantage of opportunities, such as barbecues and sports days, where they
can gather as families with families. These events foster a sense of harmony among colleagues.
<Major Programs in Fiscal 2016>
Item

Overview

Nationwide events in 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 the “Education for the soul” that supports
employees to develop attractive personalities as members of society

Nationwide Events
Chubu Sports Festival (Oguchi Sogo Ground)
Walking Festival (Higashiyama Zoo)
Kanto Festival (Kasai Rinkai Park)
Nationwide BBQ event, in Hokkaido, Tohoku, Niigata, Hokuriku,
Shizuoka, Chugoku, Shikoku, and Kyushu

Chubu Sports Festival

Number of participants
1,840
1,304
220
677

Nationwide BBQ event (Hiroshima)

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CSR Report 2016│Communication with Our Employees

33rd Walking Festival
This annual walking event is designed to let employees enjoy time with their families and raise their awareness ofhealth. The venue this time was the Higashiyama Zoo and Botanical Gardens where, participants enjoyedenvironmental quizzes and games while walking the 10,000-step (approx. 4.1 km) course. A total of 1,304
employees and family members participated in the 33rd annual event.

Training Seminar by Age
Personality design seminar
Life design seminar
Self-realization seminar
New employee communication seminar

Life design seminar

Number of participants
47
102
21
128

New employee communication seminar

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CSR Report 2016│Communication with Our Employees

Industrial Relations and Human Rights
At the Rinnai Group, aiming to provide the work environment and culture that employees can feel as "I am happy
to work at Rinnai.", the Rinnai Employees' Association and Personnel Affairs Division regularly convene theLabor-Management Council to confirm and share the information on management policy, actual results, andcomments from each workplace as a periodic improvement activity.
Moreover, our basic stance toward human rights, the respect for each other's personality and the prevention ofharassment is compiled as "Rinnai Code of Ethics" to educate and enforce all employees in the Group. In
addition, we also established the Corporate Ethics Helpline to maintain the sound environment of the workplaces.

Establishment of Good Labor Relations
The Employees of the Company are "members of the Rinnai Employees' Association" which functions as theorganization to represent entire 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 condition, workplace environment andcompensations and discussing improvement plans.
Moreover, the Company makes effort to provide safe working environment without any concern to theemployees of our business partners, etc. in addition to our employees. We also actively arrange and offer welfare
programs and various events and programs for our employees and their families.

Respect for Human Rights and Individuality
Our 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 ideasof the United Nations framework and ISO26000 and reflect them in the Rinnai Group Code of Ethics.
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 to regularly conduct education on corporate ethics.
At rank-specific training programs, we also educate our employees based on their roles and job responsibilities.

Measure to Prevent Child and Forced Labor
As a measure to prevent child and forced labor, “Rinnai Group Code of Ethics, Rinnai Code of Conduct, Article
11 The respect for human rights and each other’s personality (4)” stipulates as “The Company should not allow
any inappropriate labor including harmful and exploitative child labor which lets under-aged children to work,and slavery against the will of employees.” Entire Group abides by and acts on this rule.

Measures to Prevent Harassment
To maintain working environment that our employee find comfortable, we take measures to prevent any
infringement of human rights including sexual harassment and power harassment.
To avoid our employee to commit any harassment without any intention and knowledge, we produced a check listof detailed examples of harassment case that is posted on the company-wide intranet for self-assessment.
Each year we also provide newly assigned section chiefs with harassment-prevention education to reinforce
this prevention.

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CSR Report 2016│Communication with Our Employees

Fair and Diversified Employment
View toward Employment
We respect the diversity of individuals and provide employees with various job opportunities and a working
environment where they can demonstrate their various capabilities.
Rinnai Group Code of Ethics stipulates that "Any discriminatory 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 andknowledge of individuals who showed they can make a contribution to our success. We hire about 25 skilled midcareer employees every year.

Support for More Active Roles for Female Employees(1) Current status of positions held by female employees
Ideas and comments from women are absolutely crucial to our products, particularly as they use so many ofour products on a daily basis. We have female employees playing key roles and demonstrating their individual
abilities across a wide range of areas, especially in product planning and design departments, sales planningand promotion departments, fixed customer sales departments and production departments. The percentage ofwomen in generalist positions (core jobs) is also increasing every year, with the number of women in
executive positions also rising gradually. As of March 2016, the company had three female managers and 65
female employees in managerial positions (2.8% of all generalist positions).
(2) Enhancement of Support Programs for Working Women
For women to keep working for the Company after getting married, we provide various working styles andsupport programs. We have strived to create a work environment where is it easy for women to work and for
those with children by introducing childcare shortened work hours and more days for extended child nursing
care leave in Fiscal 2016.

<Major Programs>
Career track conversion system
Reemployment system (Come Back

A system which allows employees to convert from generalists
to clerical employees (when they do not wish to relocate for job
assignment or if there is a request for shortened working hours),
or from clerical employees to generalists (because of superior
work performance)
A program that enables former employees to return to work as a
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CSR Report 2016│Communication with Our Employees

Program)Childcare leave and Family care longleave
Shortened work hour system
Work from home programfull-time employee
Programs to support employees to raise children
A program to support employees to raise children and care theirfamily members
A program to support employees to raise children, care theirfamily members and recover from diseases(3) Action Plan to Support Programs for Working Women
From fiscal 2017, we implemented the action plan base on the Act on Promotion of Women's Participation andAdvancement in the Workplace.

Reemployment of Retired Employees and Support for Demonstration of their
Abilities
Rinnai promotes a reemployment program for employees who retired due to the age limit in order to continuously
utilize technology and skills that skilled employees possess and to smoothly pass on the skills and the Rinnai
Spirit to following generations. There are currently 175 employees working under this program. We offer oneyear contracts until the age of 65, with a choice of three options, enabling employees to work full time, alternatedays or reduced hours. We also have a 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 purpose and motivation in life as a leader/mentor andmaintains and improves the corporate culture and dynamics within the workplace.

Promotion of Recruitment of Handicapped Employees
Since fiscal 2009, we have promoted recruitment of handicapped employees in a planned manner by cooperatingwith the public employment security office and schools for the disabled. In the initial year, the employment rate ofpersons with disabilities at the Company was only 0.79%, so out of a sense of social responsibility (sense ofurgency) we took a more active stance toward recruiting handicapped people.
In July 2008, the public employment security office greatly assisted us with recruitment of handicappedpeople. The office allowed us to hold an exclusive job interview meeting at which we interviewed a total of 28
applicants and employed 15. We later began to recruit new graduates from schools for disabled students andimplemented an internship program for second-year students of those schools. The number of newly recruited
disabled employees has been increasing each year.
The Customer Center we established in fiscal 2011 has toilets and ramps for wheelchair users, and barrier-freeelevators; thereby improving the Company’s internal facilities for handicapped employees. The employment rateof persons with disabilities at the Company has consequently been significantly improved to 1.82%. We willcontinue to promote recruitment activities and improve the workplace environment toward achievement of thelegally mandated minimum employment rate of 2.0%.

108

CSR Report 2016│Communication with Our Employees

Occupational Health and Safety
The Group gives priority to the assurance of the health and safety of our employees and stakeholders andabides by the laws related to health and safety. In addition, all the employees in the Group strive to create,
maintain and manage a working environment which is safe and sanitary and develop an active organizational
culture which encourages our employees to be physically and mentally healthy.

Basic Policy on Safety and Hygiene
An essential requirement in business is the assurance of the health and safety of employees, via the provision of ahazard-free and hygienic work environment. As Rinnai constantly strives to protect the life and health of all
employees we give top priority to the sanitary condition and safety of the workplace. This corporate mantra
extends to our customers, to whom we strive to provide “safety and peace of mind”.

Fiscal 2014 Basic Policy on Safety and Hygiene(1) Comply with all applicable laws and internal regulations(2) Undertake safety activities based on a clear understanding of risks(3) Maintain two-way communication between managers and workers(4) Improve health management and promote occupational health activities

Status of On-the-Job Accidents and Injuries
In fiscal 2016, we made efforts to achieve the goal of zero accidents under the Rinnai Companywide Health and
Safety Committee, serving as the administrative organization of Group companies in Japan. We recorded a total of
38 on-the-job accidents (12 increase comparing to the previous year).
In response, under the improvement plan for fiscal 2017, we will comprehensively review what protective gearand tools to wear/use at each workplace and for each type of work, establish rules and standards based on the
results of the review, and make it a top priority to comply with the safety rules and standards.
With regard to the on-the-job accidents occurring in the previous year, each Group company will as soon as
possible take measures for preventing their recurrence. The entire group will thus make concerted efforts toensure prevention of accidents toward achieving the goal of zero accidents.

Accident Prevention Measures
To give our No.1 priority to work safety and peace of mind, the Group promotes various accident prevention
measures under the guidance of the “Risk Management Committee” headed by the President.
With the rising frequency of large-scale disasters at home and abroad, the Rinnai Group, aiming to build astrong corporate structure to withstand crisis situations, establishes business continue plans for a quick recovery at
the time of disaster.

109

CSR Report 2016│Communication with Our Employees(1) Activities to prevent fire and explosion: Enforcement of safety inspection of environmental safety equipment(gas feeders and furnaces, etc.) and test and evaluation equipment, and the improvement and renewal ofequipment as our top priority(2) Reduction of risk of earthquake damage: Preventing objects in factories and office buildings from falling over,
dropping, and scattering(3) Production site onsite guidance: Horizontal development of the production sites under the guidance of the
Safety and Health Committee of Production Group(4) Training for clerical work staff and new employees: KYT training for new employees including a monthly
information sharing session regarding on-the-job accidents, designed to promote work-safety awareness.
(5) Implementation of emergency drill: "Earthquake and fire drill" more than once a year
*KYT: Kiken Yochi (danger prediction) Training

With the rising frequency of large-scale disasters at home and abroad, the Rinnai Group, aiming to build a strong
corporate structure to withstand crisis situations, establishes business continue plans for a quick recovery at thetime of disaster.

Emergency drill

Promotion of Traffic Safety
To minimize traffic accidents involving employees, various measures and education programs are provided. We
obtain a certificate of driving record for each employee who is granted permission to drive a company car orcommute by car. This is to accurately gauge the number of employees’ traffic accidents and violation of traffic
rules to improve self-awareness for compliance.
In particular, it is mandatory for employees in sales divisions to report accidents and violation of rules,
given that they spend more time driving than other employees. Depending on the details, we have introduced
a safe driving “eco drive” promotion system at selected facilities, to monitor data on driving practices on adaily basis. For new employees, as well as raising awareness of safe driving, we implement training program
such as driving, risk prediction using moving image, traffic law education, quality test, in cooperation withan outside driving school.

Driver education at a driving school110

CSR Report 2016│Communication with Our Employees

Care for Health
To promote the creation of a vibrant corporate environment wherein people can work healthily -bothphysically and mentally, it is a precondition that each employee to be health conscious and promote soundself-management and health enhancement.
To maintain and improve the health of our employees and their families, through collaboration with the
Rinnai Health Insurance Society, the Company encourages 100% of employees to undergo a medical
checkup and receive consultation from an industrial doctor if the employee requires further examination.
Various measures including mental health care workshops, medical checkup support, support for special
medical checkups (complete medical checkups and cancer screening) and introduction of subsidized sporting
events are also actively implemented.

Support for Health Promotion
Through the alliance with the Rinnai Health Insurance Society, we provide a range of medical support
services to our employees and their dependent families which include regular checkups as well as detection
examinations for various types of cancer (including prostate, intestinal and breast cancer checks). Thoroughphysical examinations are also available. For patients with lifestyle diseases, specific health guidance and an
individual follow-up are provided to make sure the employee is fully recovered.
For physical fitness, we are also eager to financially support sporting events organized by the employee
union and voluntary club activities for employees all over Japan (28 clubs including soccer, baseball, golf,
cycling, table tennis, bowling, and distance running) to promote employees’ health.

Expanding Health Promotion Activities
We have established a Health Support Office and organize employee health promotion activities overseen by
specialist health nurses. We offer health guidance and consultations for individual employees and run health seminars,
to provide information on subjects such as preventing lifestyle-related diseases.
We also organize mental health seminars and run a support program to help employees who have been on long-term
leave to return to work. We provide rehabilitative work-based support so that employees can return to the workplaceas smoothly as possible.
To prevent those working long hours from experiencing health problems, we set out standards that go beyond
legally required standards, and also arrange consultations with health nurses and industrial physicians.
In our employee cafeteria meanwhile, we work with nutritionists to provide menu options that are designed tokeep our employees healthy.

111

CSR Report 2016│Communication with Our Employees

Mental Health Care
In fiscal 2016, we organized seven courses; a basic seminar for managers toteach them how to manage and handle members of staff, and an advanced
practical seminar for managers. A total of 315 employees attended 14
seminars in total. We have also introduced an external mental health careservice that employees can consult regarding concerns within their local
community or at home, as well as individual concerns in the workplace.

Self careLine care

New employees
Basic program

All employees
Basic program

Applied program

Managerial supervisor
Basic program

Applied program

Advanced program

Listener program

Internal care

Industrial doctors, public health nurse, health supervisors, labor managers

External care

Mental health counseling service (telephone/face-to-face)

External Acclaim and Recognition
First Company Selected in the Metal Products Category as a 2016 Health andProductivity Company
R innai was selected in January 2016 by the Ministry of Economy, Tradeand Industry and the Tokyo Stock Exchange to a 2016 Health andProductivity Company. Those selected as a Health and Productivity
Company are companies with excellent health and productivity
management* which strategically practice the management of employee’s
health and wellbeing from a manage-ment perspective. This is a project
started in fiscal 2015 to introduce attractive companies to investors thatplace a focus on improving company value from a long term perspective.
Our company is the first to be selected for this in the metal products
category of the Tokyo Stock Exchange for our support of improved
employee health through health checkups, personalized support and mental
health efforts.

Certified by the City of Nagoya as a “Company Promoting Women’s Activities”
Rinnai was certified as a “company promoting women’s activities”, as partof a scheme operated by the City of Nagoya (Aichi prefecture) in fiscal
2014. Certification is granted to companies that are making a concerted
effort to ensure that women can play an active role, with commendations
presented to companies engaging in particularly outstanding initiatives. 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 can play a greater role in the workplace.

112

CSR Report 2016│Communication with Our Employees

Registered by Aichi Prefectural Government as a “Family Friendly Company”
In March 2014, Rinnai was registered by Aichi Prefectural Government as a“family friendly company”, based on our commitment to ensuring that
employees can strike a balance between their work and private lives. Aichi
Prefectural Government has created this registration scheme in order toencourage companies to focus more on work-life balance, and to promote
initiatives on a broader scale.

Certified as “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” in accordance with the Act on Advancement of Measures to
Support Raising Next-Generation Children, and was awarded the “Kurumin”
next generation certification mark. This serves as recognition of our efforts toformulate and implement action plans based on targets such as employing
specialist health nurses, securing childcare leave for male employees, andencouraging employees to take annual paid leave.

Certified as “Parent-Friendly Company”
In fiscal 2015, 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. At Rinnai, we are developing a range ofprograms to facilitate work-life balance, including telecommuting
arrangements and our “Come-Back” reemployment program.

Human Resource and Personnel Related Data
We disclose human resource and personnel related data including the number of employees and the status of fulltime
employees.
Number of full-time employees (consolidated, year-end)
Fiscal 2014

Fiscal 2015

Fiscal 2016

(At March 31, 2014)(At March 31, 2015)(At March 31, 2016)

Male

2,534

2,536

2,495

Female

1,095

1,094

1,084

Domestic Group
Companies

Male

1,108

1,107

1,112

Female

567

567

562

Overseas Group
Companies

Male

2,969

3,032

3,231

Female

1,320

1,346

1,456

9,593

9,682

9,940

Rinnai Corporation

Total

113

CSR Report 2016│Communication with Our Employees

Number of full-time employees by region (consolidated, year-end)
Fiscal 2014
Fiscal 2015

Japan

Asia excluding
Japan
North America, andEuropeOther(Oceania, SouthAmerica)

Fiscal 2016

Composition(At March 31, 2014)(At March 31, 2015)(At March 31, 2016)

Male

3,642

3,643

3,607

-

Female

1,662

1,661

1,646

-

Sub-total

5,304

5,304

5,253

52.8%

Male

2,511

2,549

2,592

-

Female

1,124

1,141

1,171

-

Sub-total

3,635

3,690

3,763

37.9%

Male

92

106

123

-

Female

41

43

46

-

Sub-total

133

149

169

1.7%

Male

366

377

516

-

Female

155

162

239

-

Sub-total

521

539

755

7.6%

9,593

9,682

9,940

100%

Total

Number of employees (non-consolidated)

Male
FemaleMale
Mid-career
recruitment
FemaleAverage working years
Average age (years old)
Separation rate (%)
Paid leave utilization ratio (%)
Employment rate of persons withdisabilities (%)
Number of employees who used childcare
leave
Number of employees who usedshortened work hours
Number of employees who used the workfrom-home program
Number of on-the-job accidents
Newly recruitedemployees

Fiscal 2014

Fiscal 2015

Fiscal 2016

(At March 31, 2014)(At March 31, 2015)(At March 31, 2016)

92
49
6
13
14
35.8
2.3
36.6

73
39
7
6
14.2
36
2.4
41.6

57
39
7
3
14.7
36.5
2.3
42.3

1.74

1.72

1.82

58

81

90

54

68

69

1

2

3

29

26

38

114

CSR Report 2016│Communication with Our Communities and Society

Communication with Our Communities and Society
The Rinnai Group engages in a variety of voluntary and community-based activities in Japan and around theworld in order to make a sustainable contribution to society.

Exhibit at Eco Products 2015
Our company has had exhibits at the Eco Products environmental
exhibition held by Nikkei Inc. and the Japan Environmental
Management Association for Industry since 2013. This exhibitionis special because it is not only for business people and the generalpublic, but also is visited by many elementary and middle school
students studying social studies. Over 1,500 elementary andmiddle school students visited our booth at the 2015 Eco Products
show, and the children were able to learn about how energy is usedin the home and our efforts into developing environmentallyfriendly products.

Joined Water Heater Rack System Donated to Camp Southern Ground
In August 2015, Rinnai America donated a three piece joined water
heater rack system to the Camp Southern Ground which is locatedon a 1.62km2 piece of land near our main office. Camp Southern
Ground is a NPO project launched by Grammy award-winning
artist Zac Brown. The camp was created as a location for children
between the age of 7 and 17 and their families to go learn about
how to live a more healthy life. There are also plans to include a sitewhere there are facilities that children with Asperger's syndrome,
Tourette syndrome, autism and dyslexia can also use in the future.

Mangrove Reforest Effort by Employees
In the past, Thailand had magnificent mangrove forests, but theeffects of salt harvesting areas and shrimp harvesting has decreased
its size, and recently this diverse habitat has come into danger of
becoming lost. Currently, the Thailand govern-ment has been taking
various initiatives to protect the forest and its ecosystem byprohibiting the cutting of mangrove trees.
On August 2, 2015, approximately 50 employees from Rinnai
Thailand took part in an effort by the Ministry of Industry, Thailand
to replant the area, and 150 new mangrove trees were planted.

115

CSR Report 2016│Communication with Our Communities and Society

Support for the Restoration of the Nakagawa Canal

View north from Nagara-bashi Bridge on the Nakagawa Canal

Our head office is located near the Nakagawa Canal, and we are donating¥10 million every year for 10 years (¥100 million in total) to the Nakagawa
Canal Restoration and Cultural/Artistic Assistance Project (known for shortas “Nakagawa Canal ARToC10”) set up in fiscal 2012 to restore the canaland surrounding area.
The aim of the program is to revive the district and make it a cultural and artistic hot
spot by turning the canal into a venue for modern contemporary art. Now in its fourth year, the project has drawn
steadily growing awareness among local residents and artists and triggered interest in the Nakagawa Canal.
In August 2015, an event was held by the Nagoya City Center called, "Are they creating modern art at the
Nakagawa canal!?" which was a PR campaign by ARToC10 at our company's previous parts center near the Nakagawa
canal. A discussion session was held with Rinnai and other local companies providing support to the ARToC10 project
and those receiving aid in fiscal 2015 participating in the session.
The Company has a 96 year history with our headquarters located in Nakagawa ward. Our activities at the
Nakagawa canal are a way for us to give back to the local community who have warmly watched over us and helped us
grow.

Filmusic in Nakagawa Canal / Summer
by cinema skhole promoted by ARToC10
A part of the film was shot at our company’s Chubu branchtraining center and local citizens along with some of ouremployees appeared in the film.

Video installation art + performance entitled “wald”
by the artist Kei Fushiki promoted by ARToC10
Our old parts center was the scene for an artistic video
presentation. Around 340 people came to view the art
presentation during the two days.

116

CSR Report 2016│Communication with Our Communities and Society

Major financial contributions and sponsorships
The Group supports events that foster international exchange in the arts and culture as well as sporting events.

Rinnai Corporation, Actual Results in Fiscal 2016
* Chubu High-tech Center (CHC)* Nagoya Urban Development Public Corporation (support for restoration project on the Nakagawa Canal)* Nagoya Philharmonic Orchestra* Nagoya School of Music, The Music Competition of Japan, Award-winning Celebration Concert* Campus Venture Grand Prix, Chubu Area
* Nagoya Shonen Shojo Hatsumei Club (Invention and Innovation Youth Club)* Jazz for Kids in Nakagawa* Haruhime Dochu (Spring Queen Parade) at Nagoya Castle Culture Forum* Nagoya/Los Angels Basketball Exchange Program for the Junior High Student* Special Olympics Nippon* Youngsters’ Science Festival* Chinese Spring Festival in Nagoya* Nagoya/Boston Museum of Fine Arts

117

CSR Report 2016│Supplemental Data 1

Oguchi Factory
Location
Number of employees
Business
Land area
Total floor space
Commenced operations:
Acquisition of ISO14001
certification:

Kaechi, Oguchi-cho, Niwa-gun, Aichi
852 (as of March 31, 2016)
Manufacture of gas equipment
48,352 m2
37,093 m2
1964
October 1997

Major production items

Gas built-in hobs (stovetops)

Gas tabletop cookers

Built-in ranges

Dishwashers
and others

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

452.4

68.6

5.7

Other fuels(kl)(crude oil equivalent)
29.7

Emissions into the air
CO2 emissions(t-CO2)
3,311

NOx emissions(t)
2.6

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)5,278.8

0.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage(%)

5,278.8

100.0

Substances subject to the PRTR law*

(Unit: kg)

NumberClass I designatedchemical substance
nameHandling
amounta.
Emissions
into the air

53
80
296
300
309
405

Ethyl benzene
Xylene1,2,4-trimethylbenzene
TolueneNickel compounds
Boron compounds

1,500.0
2,100.0
1,200.0
1,500.0870.02,500.0

1,500.0
2,100.0
1,200.0
1,400.0
0.0
0.0

Amount of emission/dischargeb.
c.
d.
Discharge Discharge into Landfill at
into public the soil at the the relevant
watersrelevant office
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

Amount of transfera.
b.
Transfer
Transfer
to sewers
outside therelevant office(except a.)
0.0
16.0
0.0
33.0
0.0
0.0
0.0
130.0
0.0
44.0
0.0
130.0

*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Oguchi Factory 1

CSR Report 2016│Supplemental Data 1

Air
Equipment
Baking furnace
BoilerSubstance

National
0.25
180
0.10
150

Soot and dust
NOx
Soot and dust
NOxRegulation value
Prefectural
Voluntary
0.25
0.16
180
150
0.30
0.08
150
96

Actual
value
0.001
88.7
0.002
70.3

■ Units of regulation values
Soot and dust: g/m3N
NOx: ppm■ Actual values for NOx and soot/dust
indicate the maximum measurements
versus the regulation values for the
relevant type of equipment.

Water discharge
Substance
Amount of discharge
pH
BOD
SS
n-Hex mineral oil
n-Hex animal &vegetable fats
CopperZinc
Soluble ironSoluble manganese
NitrogenPhosphorus
Iodine consumption

National‒
5.7 - 8.7
300
300
5

Regulation value
Municipal Voluntary‒‒
5.7 - 8.7
5.8 - 8.7
300
240
300
240
5
4

Maximum
378
7.5
96
96
< 0.5

Actual value
Minimum
0
7.0
20
17
< 0.5

Mean
116
7.2
55.3
53.9
< 0.5

30

30

24

16.0

< 0.5

8.5

3
2
10
10
150
20
220

3
2
10
10
150
20
220

2.4
1.6
8
8
120
16
176

0.07
0.22
0.60
N.D
60
8.8
23.0

0.02
0.06
0.10
N.D
14
1.9
4.4

0.05
0.15
0.18
N.D
35
4.2
9.6

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge standard:
Sewer discharge standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* SS:
Concentration of aqueous
suspended solids* N.D.: Equal to or less than theminimum determination limit(undetectable)

Environmental Initiatives
Improving environmental friendliness by integrating press processes
We have made improvements to the die facilities used for presswork to help
make our built-in hob manufacturing more environmentally friendly. Working
with suppliers and numerous other stakeholders, we have adjusted how
operations are laid out and raised material feed precision, resulting in shorter
Gas built-in hobs
(stovetops)

lead times and consolidation of storage space.
- Reduction in CO2 emissions: Approx. 4 tons-CO2/year

Grill back plate

Energy conservation patrols stepped up at Oguchi Factory“Energy conservation patrols” are regularly conducted to check for air leaks and other problems, and action is
being taken to enhance worksites’ ability to remedy issues raised by these patrols and improve energy efficiency.
Improvements to operating methods and construction management are implemented with the involvement of all
relevant sections so that they can be introduced throughout the company, resulting in cuts in both energy
consumption and costs at plants.
- Reduction in CO2 emissions: Approx. 4 tons-CO2/year (from lighting energy savings)- Issues identified by patrols:

Energy conservation patrols

290 (improvements achieved in approx. 98% of cases)

Adoption of LED lighting

Operational changes made byindividual sections

Oguchi Factory 2

CSR Report 2016│Supplemental Data 2

Seto Factory
Location
Number of employees
Business
Land area
Total floor space
Commenced operations

Anada-cho, Seto-shi, Aichi
785 (as of March 31, 2016)
Manufacture of gas equipment
42,649 ㎡
27,351 ㎡
1979
December 2000

Acquisition of ISO14001 certification

Major production items

Heating sourcefor gas water heaters

Hybrid water heaters withheating systems

Gas water heaters
and others

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

650.1

59.5

24.7

Other fuels(kl)(crude oil equivalent)
14.9

Emissions into the air
CO2 emissions(t-CO2)
3,879

NOx emissions(t)
3.1

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)1,888.3

0.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage(%)

1,888.3

100.0

Substances subject to the PRTR law

Number

53
80
87
300
308

Class I designatedchemical substancenameEthylbenzene
XyleneChromium andchromium (III)compounds
TolueneNickelAmount of emission/dischargeb.
c.
d.
Discharge
Discharge into
Landfill at
into public
the soil at thethe relevant
watersrelevant office
office(except d.)
2.0
0.0
0.0
2.0
0.0
0.0

(Unit: kg)
Amount of transfera.
b.
Transfer Transfer outside
to sewers
the relevant
office(except a.)
0.0
150.0
0.0
150.0

Handling
amounta.
Emissions
into the air

1,200.01,800.0

1,100.0
1,700.02,700.0

0.0

0.0

0.0

0.0

0.0

0.0

1,200.0
4,500.0

800
0.0

0.0
0.0

0.0
0.0

0.0
0.0

0.0
0.0

420.0
0.0

*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Air
Equipment
BoilerSubstance
Soot and dust
NOx

National
0.10
150Regulation value
Prefectural
Voluntary
0.30
0.05
150
79

Actual
value
0.002
33.9

■ Units of regulation values
Soot and dust: g/m3N
NOx: ppm■ Actual values for NOx and soot/dust
indicate the maximum measurements
versus the regulation values for the
relevant type of equipment.

Seto Factory 1

CSR Report 2016│Supplemental Data 2

Water discharge
Substance
Amount ofdischarge
pH
BOD
COD
SS
n-Hex mineral oil
n-Hex animal &vegetable fats
CopperZinc
Soluble ironSolublemanganese
NitrogenPhosphorus

National

Regulation value
Prefectural Voluntary

Maximum

Actual value
Minimum

Mean

‒

‒

‒

86.0

4.0

48.7

5.8 - 8.6
160 (120)
160 (120)
200 (150)
55.8 - 8.6
25 (20)25 (20)30 (20)2

6.0 - 8.4
20
20
20
1.6

7.7
2.0
7.5
7.0
< 0.5

6.8
< 0.5
1.5
< 1.0
< 0.5

7.3
1.0
2.9
< 1.0
< 0.5

30

10

8

2.2

< 0.5

< 0.5

3
2
10

1
2
10

0.5
1
2.5

0.04
0.25
0.1

N.D.
0.02
N.D.

0.02
0.08
N.D.

10

10

2.5

N.D.

N.D.

N.D.

120 (60)
16 (8)

120 (60)
16 (8)

30
4

11.00
0.81

0.24
0.02

2.43
0.22

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge to: The Yatoko River■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen
ions* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS:
Concentration of aqueous
suspended solids* N.D.: Equal to or less than theminimum determination limit(undetectable)* Values in parentheses are daily meanvalues.

Environmental Initiatives
Environmental improvements targeting printing
Working with 13 plants and offices, including the printers that produce user manuals and wiring diagrams, wehave extended our environmental action into the printing and logistics realms by rethinking operating procedures
such as the following to reduce the impact on the environment. The changes to packaging that have resulted fromthese improvements have served to streamline sorting and shipping work. These environmental improvements
were recognized by the award of the top “Environmental Grand Prize” under our in-house Environmental
Awards Program in fiscal 2016.

Adoption of reusable packaging

Standardization of labelingElectronic chip cover direct
printing- Reduction in CO2 emissions:

Approx. 42 tons-CO2/year- Reduction in discharge of waste emissions:

Approx. 22 tons /year

Resource saving initiatives
Lathe work has been modified to enable delivery of parts processed inadvance to comprise less extraneous material, with the effect thatmachining times have been shortened and swarf emissions have been
considerably reduced
Checking the workmanship of awater supply joint- Reduction in discharge of waste emissions: Approx. 48 tons /year

Seto Factory 2

CSR Report 2016│Supplemental Data 3

Asahi Factory
Location
Number of employees
Business
Land area
Total floor space
Production started
Acquisition of ISO14001 certification

Nishiyama-cho, Owariasahi-shi, Aichi
257 (as March 31, 2016)
Manufacture of gas equipment
17,772 m2
7,619 m2
1960
November 2003

Major production items

Gas fan heaters

Gas clothes
dryersBathroom
heaters/dryers

Fan-forced
gas heaters

Infrared heaters
and others

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

145.6

16.8

2.6

Other fuels(kl)(crude oil equivalent)
4.6

Emissions into the air
CO2 emissions(t-CO2)938.2

NOx emissions(t)
0.7

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

577.7

0.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

577.7

100.0

Substances subject to the PRTR law*

NumberClass I designatedchemical substance
nameHandling
amounta.
Emissions
into the air

53
80
296
300

Ethylbenzene
Xylene1,2,4-trimethylbenzene
Toluene5,300.0
12,000.0
1,500.0
7,200.0600.0
1,200.0120.0
1,500.0

Amount of emission/dischargeb.
c.
d.
Discharge Discharge into Landfill at
into public the soil at the the relevant
watersrelevant office
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

(Unit: kg)
Amount of transfera.
b.
Transfer
Transfer
to sewers
outside therelevant office(except a.)
6.0
1,200.0
6.0
1,200.0
6.0
260.0
6.0
4,800.0*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Asahi Factory 1

CSR Report 2016│Supplemental Data 3

Air
Equipment

Substance

Dryingfurnaces

Soot and dust
NOx

National
0.2
230Regulation value
Prefectural
Voluntary
‒
0.108
‒
200

Actual
value
0.06
39.2

■ Units of regulation values
Soot and dust: g/m3N
NOx: ppm■ Actual values for NOx and soot/dust
indicate the maximum measurements
versus the regulation values for the
relevant type of equipment.

Water discharge
Substance
Amount of discharge
pH
BOD
SS
n-Hex mineral oil
n-Hex animal &vegetable fats
CopperZinc
Soluble ironSoluble manganese
NitrogenPhosphorus
Iodine consumption

National‒
5.7 - 8.7
300
300
5

Regulation value
Municipal Voluntary‒‒
5.7 - 8.7
5.9 - 8.5
300
210
300
210
5
3.5

Maximum
59
7.6
140.0
79.0
< 0.5

Actual value
Minimum
16
6.9
67.0
20.0
< 0.5

Mean
32.8
7.1
92.7
46.6
< 0.5

30

30

21

4.2

1.3

2.6

3
2
10
10
240
32
220

3
2
10
10
240
32
220

2.1
1.4
7
7
168
22.4
154

N.D.
0.4
0.3
N.D.
56.0
4.8
82.0

N.D.
0.1
0.1
N.D.
29.0
2.4
8.8

N.D.
0.2
0.3
N.D.
43.3
3.8
34.2

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge standard:
Sewer discharge standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* SS:
Concentration of aqueous
suspended solids* N.D.: Equal to or less than theminimum determination limit(undetectable)

Environmental Initiatives
Energy saving initiatives- Environmentally friendly clothes dryer manufacturing
As production demand for clothes dryers has risen, we have cut carbon dioxide emissions by making several
modifications to our manufacturing processes. These include operational improvements made to existing drum
processors, the elimination of the need for die changes, and the addition of auxiliary tools. These modifications
have also boosted productivity by about 50%.

Addition of auxiliary tool

Clothes dryers

Inside of a drum

Reduction in CO2 emissions: Approx. 16 tons-CO2/year- Compressor improvements
The compressor control mechanisms used on paint lines have been modified to permit automatic shutdown.
This allows operational parameters such as operating times to be flexibly changed, contributing to improved
energy efficiency.
Reduction in CO2 emissions: Approx. 3 tons-CO2/year
Communicating with local communities
Our employees regularly take part in cleanup activities along commuting routes, parking lots and nearby parks.

Cleanup activities in the area surrounding the factory

Asahi Factory 2

CSR Report 2016│Supplemental Data 4

Yanagisawa Manufacturing Co., Ltd.
Location
Number of employees
Business
Land area
Total floor space
Commenced operations

Yanagi-machi, Kadoma-shi, Osaka
358 (as March 31, 2016)
Manufacture of gas equipment
20,098 m2
19,314 m2
1936
June 2004

Acquisition of ISO14001 certification

Major production items

Commercial-use
high-speed ovens

Commercial-use
kitchen units

Floor heating systems(hot-water mat)Gas rice cookers

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

201.1

34.7

0.1

Other fuels(kl)(crude oil equivalent)
5.3

Emissions into the air
CO2 emissions(t-CO2)
1,535

NOx emissions(t)1.2Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

476.8

0.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

476.8

100.0

Air
Equipment
BoilerDrying furnaces

Substance

National

Regulation value
Prefectural
Voluntary

Actualvalue

Soot and dust

0.15

0.10

0.10

0.003

NOx

150

150

150

3.1

Soot and dust

0.15

0.10

0.10

0.003

Actual value
Minimum
49
6.8
7.5
2.0
1.0
1.0
0.1
1.4
0.5

Mean
62
7.3
20.6
20.6
1.2
2.3
0.4
28.8
3.5

■Units of regulation values
Soot and dust: g/m3N
NOx: ppm■Actual values for NOx and soot/dust
indicate the maximum
measurements versus the regulation
values for the relevant type ofequipment.

Water discharge
Substance
Amount of discharge
pH
BOD
SS
n-Hex mineral oil
n-Hex vegetable oil
Zinc
NitrogenPhosphorus

National‒
5.0 - 9.0
600
600
5
30
2
240
32

Regulation value
Municipal Voluntary‒‒
5.0 - 9.0
5.9 - 8.5
600
300
600
300
5
5
30
24
2
2
240
120
32
30

Maximum
74
7.9
38.0
32.0
2.9
6.8
0.8
92.6
16.8

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge standard:
Sewer discharge standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* SS:
Concentration of aqueous
suspended solids

Yanagisawa Manufacturing Co., Ltd. 1

CSR Report 2016│Supplemental Data 4

Environmental Initiatives
Environmental Initiatives
We are working day in, day out to protect the environment by engaging in continuous energy-saving activities at
our plants and offices and providing regular environmental education for workers.
Some of our activities:- Environmental patrols to eliminate air leaks (performed regularly)- Replacement of old lights with LED ones
- Environmental education for workers (provided regularly)

Environmental patrols

LED lights installed

Regular environmental
education for workers

Resource saving initiatives
Over-sprayed paint is recovered from plant paint lines and reused topaint the rear surfaces of products.
Reduction in in waste discharge: Approx. 75 tons/year(including 34 tons/year reduction in paint waste)
Paint capture equipment installed

Communicating with local communities
Our employees regularly take part in cleanup activities along commuting routes, in the area surrounding thefactory and local train station Kadoma.

Employee cleanup activities

Yanagisawa Manufacturing Co., Ltd. 2

CSR Report 2016│Supplemental Data 5

Rinnai Technica Co., Ltd.
Location
Number of employees
Business
Land area
Total floor space
Commenced operations
Acquisition of ISO14001 certification

Sakagawa, Kakegawa-shi, Shizuoka
583 (as of March 31, 2016)
Manufacture of gas equipment
37,741 m2
11,716 m2
1970
December 2003

Major production items:

Gas waterheaters

Gas instant-heating
hot-water heaters

Gas water heaters foroverseas market

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)LP gas
(t)

294.9

450.0

Other fuels(kl)(crude oil equivalent)
12.8

Emissions into the air
CO2 emissions(t-CO2)2,496

NOx emissions(t)
2.2

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)1,013.8

5.7

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage(%)

1,008.1

99.4

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
National Prefectural Voluntary‒‒‒
5.8 - 8.6‒
6.3 - 8.1
160 (120)
25 (20)20 (15)160 (120)‒
20 (15)200 (150)
50 (40)30 (20)Maximum
143.0
7.7
14.0
9.6
7.8

Actual value
Minimum
2.0
7.0
2.6
1.7
2.0

Mean
61.3
7.4
6.6
5.7
3.5

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge to: The Ohta River■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS:
Concentration of aqueous
suspended solids* Values in parentheses are daily meanvalues.

Rinnai Technica Co., Ltd. 1

CSR Report 2016│Supplemental Data 5

Environmental Initiatives
Energy saving initiatives
We are actively promoting a more environmentally-conscious and safe
factory design in conjunction with establishing our new factory.
- Shortening the distance required to move items inside the factory(Reorganizing the layout of equipment and assembly line)- Shortening the operating time of the compressor- Proactively installing LED lighting- Efficiently using air conditioning (optimization)
Reduction in power consumption:

Approx. 64,000 kWh/year

Reduction in CO2 emissions:

Approx. 24 tons-CO2/year

LED lights installed*Calculation of benefits by improving the compressor and installing LED lighting

Action to save water
Excess supply of cooling water to the cooling towers used by brazing
furnaces has been eliminated by controlling water level, resulting insubstantially lower water consumption.
Reduction in water consumption:

Approx. 1,500 m3/year
Automatic changeover valve

Communicating with local communities
We regularly pick up litter in the areas around Kakegawa Station and Kakegawa Castle, as part of the “Small
Kindness” movement. Total participants to date: 34

Group photo of participants

Cleanup activities

Rinnai Technica Co., Ltd. 2

CSR Report 2016│Supplemental Data 6

RB Controls Co., Ltd.

Location

Number of employees
Business
Land area
Total floor space
Commenced operations
Acquisition of ISO14001
certification

Head office:Kannondo-machi, Kanazawa-shi, Ishikawa
Kanaiwa Factory:
Kanaiwa Higashi, Kanazawa-shi, Ishikawa
Tsurugi Factory:
Oyanagi-machi, Hakusan-shi, Ishikawa
678 (as of March 31, 2016)
Manufacture of gas equipment components
Head office:3,691 m2, Kanaiwa:6,587 m2, Tsurugi: 17,636 m2
Head office:2,892 m2, Kanaiwa:5,890 m2, Tsurugi: 10,495 m2
1971
March 2006

Head office

Kanaiwa Factory

Major production items

Electronic
control units

Bathroomwaterproof TV

High voltage
units

Tsurugi Factoryand Distribution Center

Bathroom LED lights
and others

Data on Environmental Load by Site (Total amount of the Head office, Kanaiwa Factory and Tsurugi Factory)
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

531.6

2.0

273.4

Other fuels(kl)(crude oil equivalent)
21.1

Emissions into the air
CO2 emissions(t-CO2)
2,928

NOx emissions(t)
2.5

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

398.7

14.1

Amount ofintermediate
processing of waste(t)
4.1

Substances subject to the PRTR law*
Kanaiwa Factory

Number

31
265
448
460

Class I designated chemical
substance nameHandling
amountAntimony and its compounds
Tetrahydromethylphthalicanhydride
Methylenebis (4,1-phenylene)
diisocyanate
Tritolyl phosphate

2,400.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

380.4

95.4

(Unit: kg)
Amount of emission/discharge
Amount of transfer
a.
b.
c.
d.
a.
b.
Emissions Discharge Discharge into Landfill at Transfer toTransfer
into the air into public the soil at the the relevant
sewersoutside thewatersrelevant office
officerelevant office(except d.)(except a.)
0.0
0.0
0.0
0.0
0.0
2,400.0

17,000.0

0.0

0.0

0.0

0.0

0.0

17,000.0

2,970.0

0.0

0.0

0.0

0.0

0.0

0.0

2,950.0

0.0

0.0

0.0

0.0

0.0

2,900.0*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

RB Controls Co., Ltd. 1

CSR Report 2016│Supplemental Data 6

Substances subject to the PRTR law*
Tsurugi Factory
NumberClass I designated chemical
substance nameHandling
amountt

186

Methylene dichloride
Methylenebis (4,1-phenylene)
diisocyanate
Tritolyl phosphate

2,790.0448460(Unit: kg)
Amount of emission/discharge
Amount of transfer
a.
b.
c.
d.
a.
b.
Emissions Discharge Discharge into Landfill at Transfer toTransfer
into the air into public the soil at the the relevant sewers
outside thewatersrelevant office
officerelevant office(except d.)(except a.)
0.0
0.0
0.0
0.0
0.0
2,800.0

31,000.0

0.0

0.0

0.0

0.0

0.0

0.0

42,500.0

0.0

0.0

0.0

0.0

0.0

42,000.0*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Environmental Initiatives
Environmental awareness initiatives
We are using our specially designed family of leaf-like environmental characters, the “Happies,” to popularize
action to protect the environment.
(*) Origin of the Happies: Created from a combination of the company name (“RBC”) and the image of a leaf, the Happies walk around tosymbolize the gradual journey towards a more environmentally friendly future.

One of the environmental activities undertaken in the office sector in fiscal 2015 was to consolidate and reduce
the number of servers, from 11 to 3, used by the server system that manages day-to-day information. This has cut
energy consumption and also reduced installation space requirements.
Effect of consolidating servers
Reduction in CO2 emissions:

Increasing greeneryin the workplace

Approx. 16 tons-CO2/year

Our own unique characters
the Happies

Courtyard gardening to foster environmental communication
As part of our efforts to protect the environment, we are creating “courtyard gardens” at plants and offices toprovide relaxing spaces that bring a bit of nature into people’s everyday lives.
Use of these gardens as rest spots has also resulted in increased communication between employees in different
departments, and we aim to continue to create spaces of this kind where people can experience nature in order tofurther the preservation of biodiversity.

Pathway of crushed roof tiles

Bird box

Cherry trees lining the path

Design and popularization of environmentally friendly products (bathroom lighting)
We have developed and are promoting the adoption of a lighting system that makes bathrooms more relaxing. It
is the industry’s first bathroom lighting system to be color variable and operable by wireless remote control. Byrolling out the waterproof remote control and dimmer/color control technologies developed for this system tosimilar products in the future, we aim to make bathrooms more environmentally friendly.
Two industry’s firsts embodied by our new bathroom lighting system:- Color variable- Wireless remote control
CO2 reduction per set:

4 kg-CO2/set
Bathroom lighting systems

RB Controls Co., Ltd. 2

CSR Report 2016│Supplemental Data 7

Rinnai Precision Co., Ltd.

Commenced operations

Head office and Komaki Factory: Shimobata,Oaza Honjo, Komaki-shi, Aichi
Kani Factory: Himegaoka, Kani-shi, Gifu
644 (as of the end of March 2016)
Manufacture of gas equipment components
Head office and Komaki Factory:20,303 m2
Kani Factory: 10,341 m2
Head office and Komaki Factory:20,202 m2
Kani Factory: 5,944 m2
1979

Acquisition of ISO14001
certification

December 2005

Location
Number of employees
Business
Land area
Total floor space

Head office and Komaki Factory

Major production items:
Kani Factory

Gas cock partsGas valve parts

Solenoid water
valve and others

Gas control units

Data on Environmental Load by Site (Total amounts of Head office, Komaki Factory and Kani Factory)
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas(t)

1,415.0

138.0

80.4

Other fuels(kl)(crude oil equivalent)
77.8

Emissions into the air
CO2 emissions(t-CO2)8,803

NOx emissions(t)
6.9

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)2,241.5

9.3

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage(%)

2,232.2

99.6

Water discharge
Head office, Komaki Factory
Substance
Amount ofdischarge
pH
BOD
SS

National

Regulation value
Municipal Voluntary

Maximum

Actual value
Minimum

Mean

‒

‒

‒

20

4

11

5.7 - 8.7300
300

5.7 - 8.7300
300

6.0 - 8.4
300
300

7.4
230.0
8.0

6.8
20.0
1.0

7.1
122.8
2.4

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge standard:
Sewer discharge standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* SS:
Concentration of aqueous
suspended solids

Rinnai Precision Co., Ltd. 1

CSR Report 2016│Supplemental Data 7

Kani Factory
Substance
Amount ofdischarge
pH
BOD
COD
SS

Regulation value
WrittenNational
Voluntary
agreement

Actual value
Maximum

Minimum

Mean

‒

‒

‒

20

5

12

5.8 - 8.6
160 (120)
160 (120)
200 (150)

5.8 - 8.6
1530
30

5.8 - 8.6
15
30
30

7.5
24.0
4.7
17.0

6.6
0.7
4.7
1.0

7.0
4.7
4.7
5.4

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge to: The Kani River■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS:
Concentration of aqueous
suspended solids* Values in parentheses are daily meanvalues.

*A water analysis of wastewater at the Kani Factory detected BOD in excess of the benchmark established by agreement with
the Kani Industrial Park Association. The source was identified and remedial action taken, following which the results of awater analysis showed that BOD is now back within the voluntary limit.

Environmental Initiatives
Energy saving initiatives- Cast melting furnaces make up around 30% of the energy consumed at Rinnai
Precision because of the gas consumed by the furnaces. Upon examining andanalyzing the wasted energy, we discovered it tended to run empty because of alack of materials. Operational measures were implemented to prevent this wasteof resources that led to a reduction in energy consumed. This also led tomaintenance being performed on equipment that controlled the occurrence ofoxidized material on the furnace walls, as an example.
Reduction in gas consumption:

Approx. 40,000 m3/year

Reduction in CO2 emissions:

Approx. 93 tons-CO2/year

Cast melting furnaces- A switch was made from an existing volute pump for supplying coolant for thewasher to a multi-stage pump. This satisfied the necessary water pressure andamount of water for the washer while reducing the amount of energy consumed.
We were also able to save space and ensure power thanks to the multi-stage
pump.
Reduction in power consumption:

Approx. 33,000 kWh/year

Reduction in CO2 emissions:

Approx. 12 tons-CO2/year

Coolant pumpResource saving initiatives- Efforts to reuse unnecessary items
As one of our efforts to efficiently use resources, we don’t demolish unneeded
equipment and instead disassemble and selectively store reusable parts.
Furthermore, a database has been created so that anyone can use the equipment
or when creating jigs.
Inventory management

Communicating with local communities
As a member of the environmental committee at the Kani Industrial Park Union, we have implemented various
efforts.
- Walking around the environment at companies the association is responsible(five companies/year)- Attending environmental committees (twice a year)- Participating in events to clean up the local area

Environmental patrol

Rinnai Precision Co., Ltd. 2

CSR Report 2016│Supplemental Data 8

RT Engineering Co., Ltd.
Location
Number of employees
Business
Land area
Total floor space
Commenced operations
Acquisition of ISO14001 certification

Kamiike-cho, Toyota-shi, Aichi
198 (as of March 31, 2016)
Manufacture of gas equipment andcomponents
12,199 m2
7,026 m2
1950
March 2006

Major production items

Machined copper pipe part

Machined stainless steel part

Machined iron pipe parts

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas(10,000 m3)

LP gas
(t)

216.5

13.0

3.7

Other fuels(kl)(crude oil equivalent)
17.1

Emissions into the air
CO2 emissions(t-CO2)
1,159

NOx emissions(t)
1.0

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

621.2

5.9

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

615.4

99.1

Water discharge
Substance
Amount ofdischarge
pH
BOD
SS
n-Hex mineral oil
NitrogenPhosphorus

National

Regulation value
Municipal Voluntary

Maximum

Actual value
Minimum

Mean

‒

‒

‒

16.5

‒

16.0

5.0 - 9.0
600
600
5
240
32

5.7 - 8.7
300
300
5
150
20

5.7 - 8.0
150
150
2.5
15
10

8.1
8.5
8.0
1.9
0.93
14

6.5
0.8
1.0
0.5
0.75
0.02

7.1
2.3
2.0
0.6
0.84
1.38

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge standard:
Sewer discharge standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* SS:
Concentration of aqueous
suspended solids*Wastewater analysis detected pH and phosphorus levels in excess of our voluntary limits. Working with a testing laboratory,
we identified the sources and took remedial action. Since then, the results of water analysis have shown that water quality
has remained within voluntary limits.

RT Engineering Co., Ltd. 1

CSR Report 2016│Supplemental Data 8

Environmental Initiatives
Resource saving initiatives
We have reduced reject rates during the manufacture of water heater parts byaltering machining methods and the sequence of processes. Eliminating the
cutting process has in addition lowered energy consumption and reduced
swarf emissions to zero.
Reduction in electricity consumption:

Approx. 6,700 kWh/year

Reduction in CO2 emissions:

Approx. 2 tons-CO2/year

Reduction in waste (swarf) emissions:

Approx. 9 tons/year

Water heater component(connecting pipe)

Swarf produced conventionally

Resource saving initiatives
As part of our activities to save water, we have rethought how water is fed topainting pretreatment and parts cleaning processes. The result has been an
approximately 60% reduction in water consumption compared with before
the changes.
Alongside this, we have adopted a method of treating wastewater at ourwastewater treatment plants that is consistent with the quantity emitted,
boosting wastewater risk control and cutting sludge emissions during
treatment.
Reduction in water consumption:

Approx. 630 tons/year

Reduction in sludge emissions:

Approx. 43 tons/year

Wastewater treatment plant(down 60% from before changes)

Communicating with local communities
We have organized factory tours for local junior high school children to provide real-world opportunities forthem to learn about topics such as the basics of manufacturing and concern for quality and the environment.

Tour of assembly building

Junior high school students asking questions

RT Engineering Co., Ltd. 2

CSR Report 2016│Supplemental Data 9Japan Ceramics Co., Ltd.
Location
Number of employees
Business
Land area
Total floor space
Commenced operations
Acquisition of ISO14001 certification

Himegaoka, Kani-shi, Gifu
88 (as of March 31, 2016)
Manufacture of gas equipment components
8,030 m2
5,756 m2
1981
January 2006

Major production items

Ceramic plates
for burners

Industrial burners

Functional coatings

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)LP gas
(t)

183.0

481.1

Other fuels(kl)(crude oil equivalent)
3.4

Emissions into the air
CO2 emissions(t-CO2)2,144

NOx emissions(t)
1.9

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

302.2

68.1

Amount ofintermediate
processing of waste(t)
0.0

Substances subject to the PRTR law*

Number

53
80
300
412

Class I designatedchemical substancenameEthylbenzene
XyleneTolueneManganese and its
compounds

Handling
amount1,800.02,500.0
11,700.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

234.1

77.5

(Unit: kg)
Amount of emission/discharge
Amount of transfer
a.
b.
c.
d.
a.
b.
Emissions Discharge Discharge into Landfill at the Transfer to Transfer outside
into the air into public the soil at the relevant officesewersthe relevant
watersrelevant office
office(except d.)(except a.)
1,500.0
0.0
0.0
0.0
0.0
310.0
2,100.0
0.0
0.0
0.0
0.0
400.0
11,000.0
0.0
0.0
0.0
0.0
1,300.0

1,700.0

0.0

0.0

0.0

0.0

0.0

1,700.0*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Air
Equipment

Substance

Baking furnace

Soot and dust
NOx
SOx

National
0.2
400
0.49

Regulation value
WrittenVoluntary
agreement
0.125
0.125
90
90
0.25
0.25

Actual
value
0.041
18
0.01

■ Units of regulation values
Soot and dust: g/m3N
NOx: ppm
SOx: m3N/h■ Actual values for NOx, SOx, andsoot/dust indicate the maximum
measurements versus the regulation
values for the relevant type ofequipment.

Japan Ceramics Co., Ltd. 1

CSR Report 2016│Supplemental Data 9

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
WrittenNational
Voluntary
agreement‒‒‒
5.8 - 8.6
5.8 - 8.6
5.8 - 8.6
160 (120)
15 (10)15160 (120)‒30
200 (150)
30 (25)30

Actual value
Maximum

Minimum

Mean

10.4
7.4
7.8
12.0
14.0

4.0
6.9
7.8
0.5
1.0

7.1
7.2
7.8
5.1
6.0

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge to: The Kani River■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS:
Concentration of aqueous
suspended solids* Values in parentheses are daily meanvalues.

Environmental Initiatives
Energy saving initiatives- Environmental impact mitigated by installing infrared bake and dry ovens
Grill plate paint used to be bake dried using gas hot-air blowers on a separate
line. By installing infrared ovens on the same line, however, we havesucceeded in shortening baking times, raising productivity, and lowering
carbon dioxide emissions.
Reduction in CO2 emissions: Approx. 102 tons-CO2/year(Approximately 70% reduction compared with previous system)

Baking oven

Communicating with local communities
We participate in local cleanup activities along the Kani River. Our staff members regularly conduct cleanup
activities along commuting routes and in the area surrounding the factory.
(A total of 48 staff members have participated in these activities.)

Cleanup activities
along the Kani River

Cleanup activities along commuting routes

Greening activities are also undertaken by company volunteers.
(A total of 6 staff members have participated in the activities.)

Greening work in progress

Japan Ceramics Co., Ltd. 2

CSR Report 2016│Supplemental Data 10

Noto Tech Co., Ltd.
Location
Number of employees
Business
Land area
Total floor space
Commenced operations
Acquisition of ISO14001 certification

Nakanoto-machi, Kashima-gun, Ishikawa
195 (as of March 31, 2016)
Manufacture of gas equipment components
23,152 m2
13,773 m2
1990
January 2007

Major production items

Enamel components

Gloss enamel countertop

Resin components

Remote controller for bathfilling systems

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)LP gas
(t)

229.4

996.1

Other fuels(kl)(crude oil equivalent)
7.6

Emissions into the air
CO2 emissions(t-CO2)
3,875

NOx emissions(t)
3.5

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

2,119

371

Amount ofintermediate
processing of waste(t)
47

Substances subject to the PRTR law*

NumberClass I designated chemical
substance nameHandling
amount

31
71
309
405

Antimony and its compounds
Ferric chloride
Nickel compounds
Boron compounds

10,200.05,650.0
1,750.0
12,100.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

1,700

80.3

(Unit: kg)
Amount of emission/discharge
Amount of transfer
a.
b.
c.
d.
a.
b.
Emissions Discharge Discharge into Landfill at the Transfer toTransfer
into the air into public the soil at the relevant officesewersoutside thewatersrelevant officerelevant office(except d.)(except a.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.0
0.0
0.0
0.0
820.0
0.0
300
0.0
0.0
0.0
5,500.0*The Class I Designated Chemical Substance regulated by Pollutant Release and Transfer Register (PRTR) Law.

Air
Equipment

Substance

National

Regulation value
Prefectural
Voluntary

Actualvalue

Soot and dust

0.25

0.25

0.22

< 0.001

NOx

180

180

160

30

Baking furnace■ Units of regulation values
Soot and dust: g/m3N
NOx: ppm■ Actual values for NOx and soot/dust
indicate the maximum measurements
versus the regulation values for the
relevant type of equipment.

Noto Tech Co., Ltd. 1

CSR Report 2016│Supplemental Data 10

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
WrittenNational
Voluntary
agreement‒‒‒
5.8 - 8.6
5.8 - 8.2
6.0 - 8.2
160 (120)
40 (30)36 (27)160 (120)‒140 (100)200 (150)
40 (30)36 (27)

Actual value
Maximum

Minimum

Mean

70
7.1
27.0
39.0
3.0

50
6.9
2.0
12.0
1.0

60
7.0
9.8
17.7
2.2

■ The unit of the amount of discharge is
m3/day■ The values are expressed in mg/L
except for pH■ Water discharge to: The Nagaso River■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS:
Concentration of aqueous
suspended solids* Values in parentheses are daily meanvalues.

Environmental Initiatives
Energy saving initiatives
A high efficiency boiler was adopted to reduce energy use in conjunction with
updating the equipment.
Reduction in CO2 emissions:

Approx. 60 tons-CO2/year(Switched the fuel from kerosene to gas)

BoilerPollution prevention initiatives- Emergency drills
We conduct emergency drills so people know what to do in case of an accident, and are reviewing the manuals
that stipulate response procedures. In order to minimize environmental risks, we conduct equipment inspections
and take other preventive measures.

Emergency drill

Communicating with local communities
We organize factory tours for local high school students. We also offer 10-day work experience programs inwhich participants learn the basics of manufacturing as well as about how we continually pursue quality andenvironmental friendliness. Participants: 80

A tour of the manufacturing process for gas stove components

Noto Tech Co., Ltd. 2

CSR Report 2016│Supplemental Data 11

Techno Parts Co., Ltd.
Location
Head office: Fukuzumi-cho, Nakagawa-ku, Nagoya-shi, Aichi
Ichinomiya Office: Nishiougaido Aza Toukouji,
Ida Office: Ida-cho, Owariasahi-shi, Aichi
Ichinomiya-shi, Aichi
Land area: 2,003 m2, building floor space: 1,455 m2

Land area: 4,127 m2, building floor space: 2,549 m2

Akatsuki Office: Akatsuki-cho, Seto-shi, Aichi

Komaki Office: Oaza Mitsubuchi, Komaki-shi, Aichi

Land area: 33,333 m2, building floor space: 3,029 m2

Land area: 2,611 m2, building floor space: 1,776 m2

Asahi Office: Land area: 206.69 m2 *In Asahi Factory (assembly section)
Number of employees

400 (as of the end of March 2016)

Business

Assembly and processing of components of heat-energy appliance

Acquisition of Eco Action 21

July 2011

Major production items

Components of gas equipment and home electric appliances

Data on Environmental Load by Site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

55.1

3.4

0.5

Other fuels(kl)(crude oil equivalent)
0.0

Emissions into the air
CO2 emissions(t-CO2)285

NOx emissions(t)
0.2

Discharge of waste
Amount of waste
generated(t)
66.9

Techno Parts Co., Ltd. 1

CSR Report 2016│Supplemental Data 11

Environmental Initiatives
Energy saving initiatives- Green curtain initiatives
As an energy-saving measure in the summer, we grow “green curtains,” which absorb carbon dioxide during
plant photosynthesis, shield the strong sunlight from coming into the office, and reduce the load on air
conditioners. [Seedling] Bitter gourds

A green curtain

Bitter gourds are harvested
and distributed to employees- Installing motion sensors
We have installed motion sensors in lavatories and changing rooms to preventthe lights from staying on when people forget to turn them off.

Motion sensor

Concern for the Water
Each office implements a variety of measures to save water.
(1) Using rainwater to water our plants and flowers, as well as in our cleanup activities(2) Taking measures to prevent the leakage of water by replacing the float valve in toilet tanks(3) Installing sensors on faucets to prevent employees from forgetting to turn off the faucet (water)(2) Replaced the toilet tank float valves(1) Rainwater tanks(3) Saved water by installing sensors

Techno Parts Co., Ltd. 2