Rinnai Report 2021 (Integrated Report)

Introduction

Environment

SocialGovernance

Data

Corporate Message

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

At present, the Rinnai Group has bases in 18
countries and regions, and deploys products in over
80 countries throughout the world. Rinnai offers
optimal solutions suitable for lifestyle cultures, climate
conditions and energy requirements in each countryof the world to contribute to the realization of healthy
and comfortable lifestyles and sustainable societies
for people throughout the world.

01

Rinnai Report 2021

02

Introduction

Corporate Mission and Vision

Environment

SocialGovernance

Data

Rinnai Report 2021 (Integrated Report)

Fundamental Concept

Quality is our destiny

Editorial Policy
Rinnai produced the Rinnal Report 2021 (Integrated Report) to convey tostakeholders management’s approach to the realization of a sustainable society,to describe the activities undertaken Groupwide, and to encourage a deeper
understanding of the Group’s operations to as many people as possible.

Rinnai’s Activities

Company Motto

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

Highly important activities(stakeholder perspective)

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

Rinnai Report 2021 (Integrated Report)

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

Spiritual support of Rinnai—Rinnai’s Corporate Mission—

Expectations and attractiveness that
we keep promising with our customers

Specific rules of day-to-day corporate activities

Rinnai Group Profile
Value Creation Process
Message from the President
Medium-term Management Plans
Message from the General Manager of Corporate
Planning Headquarters
Identifying Material Issues

Environment
29
31

Response to Global Environmental Problems

33
35
37

Global Deployment of Rinnai Group Water Heaters

Responses to the Task Force on Climate-related Financial
Disclosures
Environmental Impact within Rinnai’s Value Chain
Environmental Initiatives
Environmental Management, Prevention of Global Warning, Resource
Recycling, Pollution Prevention, Protecting Biodiversity, Environmental
Communication

55
57
58
59
61
63

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

August 2021 (Japanese version)
Previous: September 2020, Next: August 2022 (planned)

Important Points Regarding Future Outlook
Rinnai Code of Conduct

Message from the President of a US Subsidiary

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

Editorial Policy / Contents

100 Years of History

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

Publication Schedule
Brand Promise

25
27

Corporate Mission and Vision

SocialThis report focuses on events that occurred in fiscal 2021—April 1, 2020, to
March 31, 2021—but also touches upon measures implemented and recent
activities undertaken since fiscal 2021 as well as future business direction,
targets, and plans.

Company
Motto

Corporate Message

Scope

Reporting Period

Schematic Diagram of Company Ideals

01
03
05
09
11
13
19
23

Highly important activities(Rinnai Group perspective)

Brand Promise —Rinnai’s Corporate Mission—

Creating a healthier way of living

Abridged version
booklet form

Contents

Defining “Improved Quality of Life”
Reducing Stress through Improved Convenience
Increasing the Safety of Living Spaces
Contributing to Health Promotion
Resilience
Safe and Secure Initiatives
Smooth Provision of Information through the Internet,
After-Sales Services, Inquiries Response and Support System, Initiatives
for Inspections,73

Communication with Employees
Efforts as An Outstanding Health Management Company,
Enhancement of Health Promotion Activities,
Personnel Training, Rinnai Response to the Spread of COVID-19, WorkLife Balance, Industrial Relations and Human Rights, Fair and Diversified
Employment, Occupational Health and Safety

87

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

Governance
97
99
101
102
106
107

Management Structure
Leadership
Message from an Outside Director
Compliance
Risk Management
Information Security

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

03

Rinnai Report 2021

04

Introduction

Environment

SocialGovernance

Data

100 Years of History (Part 1) 1920–2004
Rinnai commemorated the 100th anniversary of its founding on September 1, 2020.

Historical Overview

Phase 1

Phase 2Phase 3Phase 4Phase 5

Founding and Postwar Reconstruction

Establishing a Corporate Foundation

Promoting Business Activities Overseas

Becoming a Listed Company

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

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

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

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

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

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

2005¥202.0 billion
1989

1980

¥48.3 billion

Performance¥98.4 billion

1967¥5.6 billion

1951

Rinnai & Co. founded.
1921●1920 The Rinnai-type kerosene gas stove registeredas a utility model is launched.
●1923 Gas tabletop stove, gas ranges, gas oven, gas
water heater and other product deliveries to gas
companies across Japan as overseas exports
begin.
●1937 Sales of oil and gas stoves across north China
market from base in Tianjin City are launched.

¥21 million
1951–
●1957

1967–

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

●1967
●1971
●1972

1980–
Technology Development Center opens.
Development and sales of high-speed gas
convection range, Convec.
The company receives the Ota Award fromthe Japan Gas Association for its high-speed
gas convection range, Convec.

Technologies andProducts

Rinnai-type kerosene gas stove

Management andOrganization

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

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

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

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

Gas instantaneous water heater, UT●1979

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

1989–

2005 (FY)●1990 The Tsukuba Research Center (now Tsukuba
Training Center) opens.
●1998 Gas fan heater and air purifier are combined together.
●1999 A highly efficient condensing gas water heater
is launched.
●2000 The company receives the Ministry of international
Trade and Industry’s Energy Conservation Award for
its highly efficient condensing gas water heater.
●2003 The company receives the Energy Conservation
Grand Prize (Chairman’s Prize) from the Energy
Conservation Center for its glass-top stoves with
inner flame burners.

Highly efficient condensing gas water heater

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

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

Rinnai Report 2021

06

Introduction

Environment

SocialGovernance

Data

100 Years of History (Part 2) 2005–2020
Promoting Medium-term Business Plans Under a New Structure

Medium-term
Business Plans

Phase 6

Phase 7

Phase 8Phase 9Phase 10

V-Shift Plan

Reform & BreakthroughJump UP 2014

Evolution and Succession 2017

G-shift 2020[2006–2008][2009–2011][2012–2014][2015–2017][2018–2020]

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

Under the medium-term business plan launched in 2009
entitled “Reform & Breakthrough,” the Company aimed
to become a comprehensive heat energy appliancemanufacturer contributing to people’s lifestyles
throughout the world, establishing a presence with aunique business model appealing to both people andbusiness partners.
While accelerating manufacturing that placed toppriority on the environment, the Company aimed for a leancorporate structure and the thorough elimination ofwasteful business activities. At the same time,cooperation and collaborations were strengthened
among Group companies in Japan and overseas,
sharing the same ideals in an effort to promote theconsolidation of a structure as a comprehensive heat
energy appliance Group.

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

The Company views “succession” as indispensable forits business. With its origin in the concept “quality is ourdestiny,” Rinnai’s mission is to “utilize heating to provide
society with a comfortable way of life” in all global markets.
At the same time, with regard to “evolution,” in orderto respond to liberalization in the energy markets,
shrinking workforces and other rapid changes in thebusiness environment, this plan targeted business model
innovations through the promotion of productsophistication in Japan and, overseas, the smoothhorizontal deployment of technologies and products
created by Group companies. The plan also aimed toestablish the Rinnai brand as a comprehensive heat
energy appliance manufacturer.

Focused on the 100th anniversary of Rinnai’s founding, thisplan introduced the Group slogan “innovating technologies
for the next generation and strengthening overseas growthstrategies to leap forward as a global brand.”The “G-shift” medium-term business plan namerepresents three core policies aimed at promoting global
strategies leveraging the Group’s network, the shift to a newgeneration that passes on traditions accumulated overthe past 100 years and breaks common sense, andthe establishment of a corporate governance systemmeeting the demands of society and modern times. In 2019,
the Company formulated the brand promise “Creatinga healthier way of living” to further clarify its stance.

■Domestic sales¥40.6 billion■Overseas sales¥344.3 billion

Performance

49%
Operating income
Operating margin

2006

Technologies andProducts

Management andOrganization

07

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(FY)

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

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

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

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

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

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

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

●2013 The Akatsuki Factory opens.
●2013 The Rinnai Parts Center opens following businessintegration.
●2014 Brivis Climate Systems Pty. Ltd. in Australia is
acquired.

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

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

Rinnai Report 2021

08

Introduction

Environment

SocialGovernance

Data

Rinnai Group Profile● Manufacturing and sales companies

Corporate Data (As of March 31, 2021)◎ Sales companies

RinnaiWorldwide○ Other business□ Overseas representative office

Incorporated

September 1, 1920

Established

September 2, 1950

Paid-in capital(As of April 1, 2021)

SOUTH KOREA

Head office2-26, Fukuzumi-cho, Nakagawa-ku,
Nagoya 454-0802, Japan

Telephone(From outside Japan): +81-52-361-8211● Rinnai Korea Corporation● RB Korea Ltd.

CHINA

Rinnai UK Ltd.

◎● Mikuni RK Corporation● Shanghai Rinnai Co., Ltd.

Number of Group companies◎ Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

Rinnai Italia s.r.l.

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

●Rinnai Corporation
・Branches:

Rinnai Canada Holdings Ltd.

Rinnai Hong Kong Ltd.
◎

Dubai Representative Office●
Rinnai (Thailand) Co., Ltd.
◎●
Rinnai (Malaysia) Sdn. Bhd.

Hokkaido, Kita-Tohoku, Sendai, Niigata,
Tokyo, Kita-Kanto, Higashi-Kanto,

Rinnai Vietnam Co., Ltd.

Minami-Kanto, Tokai, Shizuoka,●
Rinnai Holdings (Pacific)
Pte Ltd.

◎

Rinnai Manufacturing Malaysia Sdn. Bhd.
P.T. Rinnai Indonesia

Hokuriku, Nagano, Osaka, Keiji, Hyogo,
Chugoku, Shikoku, Fukuoka
・Factories and related centers:
Technology Development Center
Production and Technology
Development Center●

Integrated Logistics Center

INDONESIA

East Japan Logistics Center
Rinnai Parts Center

AUSTRALIA● Yanagisawa Manufacturing Co., Ltd.

Seto Factory○ Gas Appliance Services Corporation

Akatsuki Factory

Net Salesby Region
Total● Rinnai Technica Co., Ltd.
● Gastar Co., Ltd.

China
¥41.1 billion● RB Controls Co., Ltd.

● Rinnai Precision Co., Ltd.

344.3

● RT Engineering Co., Ltd.

¥

● Noto Tech Co., Ltd.

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

Rinnai Brasil Heating Technology Ltd.

billionAustralia¥24.3 billion●

Oguchi Factory● Rinnai Australia Pty., Ltd.

Others ¥19.1 billion

South Korea¥28.3 billion

・Domestic sales offices:●Rinnai Taiwan Corporation

Indonesia¥11.2 billion

Rinnai America Corporation●

Tohoku, Kanto, Chubu, Kansai, Kyushu□

46 (domestic 12, overseas 34)◎

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

◎

10,386 (consolidated), 3,722 (non-consolidated)◎ Rinnai Plus Corp.

● Shanghai RB Controls Co., Ltd.

◎ Rinnai Treading B.V.

Number of employees● RS Korea Ltd.

¥6,459,746,974

United States¥36.9 billion

Japan¥183.1 billion

Rinnai New Zealand Ltd.
●◎
Central Heating New Zealand Ltd.

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

Kitchen AppliancesHome Heaters

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

Commercial-Use Equipment, Others

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

Others ¥33.4 billion

Commercial-use equipment¥7.7 billion
Home heaters¥19.0 billion

Net Salesby Product
Total

Gas fun heater A-style(JAPAN)

344.3¥

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

High-efficiency gas
tankless water heater(UNITED STATES)

Drop-in gas hob(stovetop)(INDONESIA)

Fanned flue heater(UNITED STATES)

Kitchen appliances¥88.4 billion
Commercial-use gas rice cookers(JAPAN)billionWater heaters andheating systems¥195.7 billion

Rinnai Report 2021

10

Introduction

Environment

SocialGovernance

Data

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

Rinnai Group Value Creation Process

External Environment / Social Issues

Value Provided

Business Activities

Climate change /global warming

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

Product usage risks

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

Work style changes
cause decrease inquality of lifestyles

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

Main products and services

Creation of products
and services that are safe,
secure, andenvironmentally friendly

Environmental
contribution(local production / in-house production)

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

Invested Capital (Fiscal 2021)
Human capitalIntellectual capital

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

10,386 people
101 people¥99 million

Gas stoves, range hoods, water heaters,
hot water floor heaters, gas clothes
dryers, dish washers

Consolidated net sales¥344,364 million
Operating income¥40,690 million

0 people
499 people

Operating income ratio¥7,906 million
17 companies

11.8%

15 companies

Financial capital

ROE
ROIC
Equity ratio

Manufactured
capitalRinnai Group production bases:
25 companies(number of companies) *1
Production group staff (Rinnai non-consolidated) *1:
1,583 people
Capital expenditure (Rinnai non-consolidated):¥6,169 million

Natural capital

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

Social andrelationship capital

Fiscal 2021 Achievements

8.4%
17.6%
68.8%

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

1,100,713 GJ
162,990 m3
595,343 m3

Safety andpeace of mind
Supporting lifestyles thatenable the prevention andavoidance of various
potential risks in the home

Net income attributable toowners of the parent company¥27,581 million
Net assets (equity ratio)¥371,318 million (68.8%)

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

Dividend per share*1 As of March 31, 2021

Risks
[Domestic] Expansion of thermal energy
systems centered on electric power[Domestic] Price reduction of gas
appliances due to customer requests[Domestic] Declining birthrates, an aging
population, and a decreasing number ofhouseholds
Decreasing working hours and intensifying
competition for securing human resources(annual) ¥125
Opportunities
Growing demand for energy-saving
products by strengthening environmental
policies
Increasing needs for safety and accident
prevention as social issues[Overseas] Expansion of natural gas use[Overseas] Improving living standards
Progress in evaluation of corporate ESG
initiatives

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

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

Social issue recognition

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

Amount contributed toreducing CO2 emissions*4.50 million tons
Announcements of productrecalls due to defects:
0 case*Consolidated basis

11

Rinnai Report 2021

12

Introduction

Environment

SocialGovernance

Data

Message from the President

Cost Reductions and Expanding Demand Result in Record-high Performance
I would like to start by expressing my sincerest

loss since our public listing. However, we madecondolences to everyone who succumbed to COVID-19

exhaustive efforts to realize Groupwide cost reductions

and extend my deepest sympathies to those affected

and captured stay-at-home demand driven by theand their families. I would also like to convey my heartfelt

impact of stimulus payments and other benefits.

gratitude to all staff at medical institutions, government

In Japan, we saw extremely robust sales of high-value-

agencies and other organizations engaged in daily

added water heaters, gas clothes dryers contributing toefforts to prevent the further spread of infection.

shorter laundry times, and built-in hobs (stovetops) with

The global economy continues to be dramaticallyaffected by COVID-19, and despite growing signs of a

automatic cooking functions.
At the same time, overseas sales of tankless water

gradual resumption in economic activities, conditions

heaters were firm in the United States and Australia. In

remain serious. Amid these circumstances, the Rinnai

the United States, an increasing number of people

Group commemorated the 100th anniversary of its

migrated from city centers to suburban areas, and in line

founding in September 2020. This is wholly the result ofwith an increased demand for pre-owned homes, there

tireless efforts by our predecessors and the unwavering

was a growing trend in the purchase of tankless watersupport of our stakeholders.

heaters to replace conventional water heaters, evenIn fiscal 2021, the final year of the “G-shift 2020”

when products were on backorder status. In China,

medium-term business plan, under the slogan “heat andinternet sales in particular expanded, while in Indonesia,

lifestyles” and “health and lifestyles,” we provided existingsales of built-in hobs (stovetops) were strong, as

products and services while making an effort to create

operating income increased on vigorous worldwide

original products and services incorporating new

stay-at-home demand. As a result, net sales in fiscal 2021

technologies into Rinnai core technologies. At theamounted to ¥344,364 million (up 1.1% year on year), with

beginning of the fiscal year, in light of the impact ofoperating income of ¥40,690 million (up 18.2%), resulting

COVID-19, we anticipated recording the first operatingin record-high performance.

Creating a Healthier Way of Living
Toward a New ERA for Rinnai Creating Healthy

Kenji Hayashi, Representative Director and Chairman

and Comfortable Lifestyles

President

13

Hiroyasu Naito

The 100 Anniversary Commemoration Ceremony held on September 1, 2020, was streamed online to all Rinnai
workplaces due to COVID-19

Hiroyasu Naito, Representative Director, President andExecutive President

Rinnai Report 2021

14

Introduction

Environment

SocialGovernance

Data

Message from the President continued

In the 15 Years Since Being Appointed President, Rinnai Has Undergone Enormous
Changes Enabling the Company to Gain a Firm Footing
Since joining Rinnai, I have had the privilege of gaining

year amid the impact of harsh winter conditions amongexperience in sales, development, manufacturing, quality

other factors.

assurance and a variety of other divisions, and I feel

We have completed five medium-term businessblessed to have grasped a sense of each workplace.

plans during the past 15 years, changing direction in

After being appointed President in 2005, we transitioned

the initial “V-shift Plan” with a focus on profit structure.

from an initial focus on sales as the top priority to an

Next, under the “Reform & Breakthrough Plan,” we raisedemphasis on profits. This was the result of a strong shock

the operating margin into the 10% range. Under

I received upon visiting a retailer selling Rinnai products

the “Jump UP 2014” and “Evolution and Succession” plans,at giveaway prices with a mountain of products stacked

we increased the overseas sales ratio to approximately

up in the backroom. I decided “we must enhance added

50%. The “G-shift 2020” plan prepared for our 100thvalue and ensure profits,” which led to a significant

anniversary while simultaneously aiming to build thechange in policy. Despite this sudden change, we were

Rinnai brand. Overall, I think we have been able tofortunate not to have recorded an operating loss thatsteadily gain a firm footing during the past 15 years.

Medium-term Business Plan Trends(Consolidated)
Net sales¥236.7 billion
Operating income¥15.0 billion
Operating margin
6.4%

Reform &Breakthrough(Consolidated)
Net sales¥246.6 billion
Operating income¥26.6 billion
Operating margin
10.8%

3rd
Jump Up2014(Consolidated)
Net sales¥295.0 billion
Operating income¥30.7 billion
Operating margin
10.4%

Evolution andSuccession

2017(Consolidated)
Net sales¥347.0 billion
Operating income¥32.8 billion
Operating margin
9.5%

Changes in business conditions
expected to accelerate in the futureG-shift 2020
(Consolidated)
Net sales¥344.3 billion+¥131.4 billion*
Operating income¥40.6 billion+¥30.4 billion*
Operating margin
11.8%+6.9 points*

100th anniversary

1stV-Shift
Plan

2nd

5th

4th

Overseas sales ratio
48.9%+16.0 points**Comparison to 2006

Fiscal 2007

Fiscal 2009

Fiscal 2012

Fiscal 2015

Fiscal 2018

Fiscal 2021

Strengthening corporate structure through the past five business plans (15 years)• Efforts to achieve carbon neutrality• Transformation of needs andentrenchment of “new normal”• Progressive digitalization

Expansion of Business Scale
In terms of business domain expansion, the United

e-commerce events, with plans to complete Phase 2

States and China will become important strategic

construction at the Fengxian Factory in February 2023.

markets going forward. In the United States, we

Rinnai products with a high market share inestablished an Innovation Center in 2020, and while

countries throughout the world incorporate advanced

aiming to enhance our local technological capabilities

technological capabilities backed by complex functions

and competitiveness, we have also begun to focus

no other company can easily replicate. Going forward,

attention on the Central and South America regions

we will also enhance our brand power overseas on thewhere we have yet to develop business. Construction ofbasis of outstanding product appeal.

the Griffin Factory is scheduled for completion in
October 2021, which will enable us to meet growing“heat and lifestyles,” we will also maintain a strong

demand for tankless water heaters.

awareness of “health and lifestyles.” In terms of the

In China, which has emerged as the world’s largest

revolution of our corporate structure, we will make efforts

market due to the expansion of its middle class, we will

to become more consumer-oriented, mainly through thestrengthen marketing efforts in particular, aiming toestablishment of new sections including a New Business

differentiate Rinnai from global competitors. In theStrategy Office and Marketing Office, as well as new

growing China e-commerce market, the internet sales

marketing approaches involving the ascertainment ofratio is also on the rise and we have captured the top

user needs and measures aimed at enhancing our brandshare of water heater sales proceeds at large

image through products.

Revolution of Corporate Structure
Positioning of new medium-termbusiness plan
Aiming to be the brand of choice in the
new rapidly changing era, we havepositioned the next five years as a period
for delivering growth and implementing
reforms from medium- and long-term
perspectives.
Fiscal 2022~Fiscal 2026
New Medium-Term Business Plan

Formulation of the New Medium-term Business Plan “New ERA 2025”

Amid an increasing focus on ESG, the SDGs andSince being appointed President, I have promoted thesustainability, the valuation of intangible assets such astransition to a Company that generates profits, and going

human resources, technologies and brands, collectively

forward, we will continue aiming to further enhance ourreferred to as “non-financials” is changing—this is theearning power through initiatives focused on high-value-essence of Rinnai’s strengths. I take pride in the fact that alladded product strategies and rigorous cost reductions.

Rinnai employees are facing the right direction, as seen in

We will also increase the return on invested capital (ROIC)

their commitment to compliance and the advanced

through the efficient investment of management capital.

technologies that underpin our product quality.

Going forward, we must optimally allocate capital while

Since our beginning, in the pursuit of quality, Rinnai has

steadily capturing risk premiums in line with an increasing

visualized various aspects of its business, promoting digitaloverseas sales ratio. Further, we will increase shareholder“New ERA 2025” is Rinnai’s first five-year medium- to long-term business plan. Starting in 2021, exactly 101 years sincetransformations (DX) in pursuit of a rationalized approach toreturns, aiming for a total return ratio over 40%.

our founding, we view this as a new medium-term business plan for a new ERA in which we aim to achieve:

business, including current efforts to reduce workloads using

Expansion of business scale andRevolution of corporate structure leading to
Advancements in addressing social challenges

IT, and incorporated this experience into everything we do.
Rather than focusing solely on manufacturing activities, welaunched the “Rinnai BiZ” platform as one example ofmarketing efforts directly linked to customers, and aredeveloping a new customer-oriented sales approach.

15

Within business domain expansion, in addition to

Rinnai BiZ display,part of Rinnai’s efforts to promote DX

Rinnai Report 2021

16

Introduction

Environment

SocialGovernance

Data

Message from the President continued

Having continually thought about areas in which toAdvancement in Addressing Social Challenges

At present, decarbonization movements are accelerating

All nations throughout the world are exploring

throughout the world. Up to now, Rinnai materiality has

methods for achieving future carbon neutrality, and to

focused on the environment and initiatives aimed at

this end, Rinnai will propose specific target indicators. In

resolving environmental issues through our core

the United States, the adoption of tankless water heaters,

businesses, including improving functionality, expanding

and in China and Mongolia, the transition from coal tolineups and promoting sales of environmentally friendly

gas as a primary energy source will suppress both CO2

products such as ECO-ONE and Eco Jozu. However,

emissions and PM2.5. In this way, we expect that asgoing forward, we must take even further steps.

Rinnai products spread to all corners of the globe, CO2

For example, major gas companies are launching
initiatives aimed at “methanation,” a process whereby

emissions will be reduced and air pollution issues will
be resolved.

Neither Kanta-Kun nor Micro Bubble Bath units

expand the potential for these products, in addition toare completely new products, but rather, they are“heat and lifestyles,” we came up with the slogan “healthimprovements on existing products. Even though theyand lifestyles.” For example, the Kanta-Kun gas clothes

incorporate only slight changes, they are perceived bydryer offers the advantage of strong antibacterial

consumers as being altogether different. In Japan, whereproperties that surpass those of electric clothes dryers,

reducing the number of hours worked is becoming

enabling people who suffer from hay fever to avoid

an acute problem, the value offered by Kanta-Kun has

line-drying their clothes outside. The Micro Bubble Bathincreased significantly. In other words, this indicates that

unit soothes both mind and body, leaving users feelingcustomers are not satisfied with their current lifestyles.

refreshed. Each of these products contributes to

In identifying potential issues such as these, we want toresolving issues related to modern human “healthdevelop products that enhance quality of life enabling

and lifestyles.”advancements in addressing social challenges.

CO2 and hydrogen are used to create methane. If these
efforts are successful, conventional gas appliances will
be able to utilize methane, which will reduce CO2
emissions. To realize zero CO2 emissions, we must
explore the potential of all types of energy equipment. To
this end, Rinnai established the Integrated Strategy
Division, a specialized unit promoting the verification ofvarious methods contributing to the realization of acarbon-free society.
ECO ONE hybrid water heater and heating system

Gas clothes dryer Kanta-kun

Microbubble bath unit

Targeting Sustainable Growth through the Ongoing Provision of Products Essential
for Society
Our challenge for the future is the need to create new

In one sense, Rinnai’s products are unglamorous,

products that will become pillars of our business. In the

but COVID-19 has reminded us that our products are

Japan market going forward, as sales of conventional

essential and needed by people throughout the world.

water heaters and kitchen appliances alone are

I want Rinnai employees to once again feel the joy of

expected to decline, we see a major opportunity to

being involved in work that is indispensable to society.

capitalize on products such as Kanta-Kun and Micro

Having expanded our business domain from “heatBubble Bath units that will become the next pillars of ourand lifestyles” to “health and lifestyles,” going forward,

business. In product development up to now, we have

we aim to realize our brand promise of creating asearched for areas completely different from those inhealthier way of living through dedication to our mission

which we have already found success, but rather thanof enriching people’s lives by creating even moreending this search when we create a hit product, we

appealing products.

want to thoroughly explore peripheral demand as well.

17

Rinnai Report 2021

18

Introduction

Environment

SocialGovernance

Data

Medium-term Management Plans

Review of Previous Medium-Term Business Plan (G-shift 2020)
Fiscal 2019
Sales up;income down

Fiscal 2020
Sales down;
income up

Fiscal 2021
Sales up;income up
Record-highearnings

Japan: Weak performance by main products due to industry shrinkage andprice competition
Overseas: Decline in income due to upfront investments despite ongoing growth in sales
Japan: Improved income amid changing conditions stemming fromconsumption tax hike
Overseas: Performance in some areas weakened by intensifying competitionand depreciation of local currencies
COVID-19 pandemic impacted the entire world
Japan: Performance driven by strong sales of growth items, stay-at-homedemand, and cold snap
Overseas: Sales growth in the United States; recovery in China and elsewhere
exceeded initial expectations

Consolidated net sales■ Initial targets ■ Actual(Billions of Yen)
450
348.0

344.3

FY2020

FY2021150
0FY2019Consolidated operating income■ Initial targets ■ Actual(Billions of Yen)
45.0
34.4
40.6
30.8
30.0
15.0
0

Looking back on Fiscal 2019–Fiscal 2021 (from Apr 1, 2018 to Mar. 31, 2021)• Failed to achieve plan’s initial targets for net sales and operating income
due to major changes in the business environment• Greater-than-expected improvement in profit structure, owing tocorporate efforts including cost reductions• Reached new record-high income, and reinforced the foundation for
the next 100 years

340.4

300

FY2019Operating margin
15.0%

FY20200.0%

New ERA 2025
New Expansion, Revolution and Advancement

FY2021● Initial targets ● Actual

10.1%

11.8%

FY2020

FY2021

10.0%
5.0%

New Medium-Term Business Plan (2021–2025)

We have positioned the year 2021 (101 years since our foundation) as the start of a New ERA.

We will achieve Advancement in addressing social challenges through Expansion of business scale

8.9%
FY2019and Revolution of corporate structure.

External Business Trends and Rinnai Group Strengths

Corporate Vision
Brand Promise

Global• Increase in world population and continuous economic growth in emerging countries• Accelerating movement to achieve carbon neutrality to combat global warming• Changes in lifestyles due to advances in digital technology• United States: Strong housing market; China: Expansion of gas infrastructure to regional cities

Creating a healthier way of living

Leverage our core technologies
to achieve business expansion n four business fields
Diversification, Hybrid

Gas
EnergySocial Challenges Rinnai should embraceJapan• Increase in double-income households due to the declining population and number of households• Gas appliance market expected to remain flat amid decreasing number of housing starts• Increases in frequency and magnitude of natural disasters• Changes in people’s values and behaviors◆ Improve quality of life
◆ Help resolve global environmental problems

19• Local production bases; strong
overseas network• Firmly established brand image forhigh-quality products• Solid financial baseFluid control

Ideas

Heat and Lifestyles
100 years ofaccumulated wisdom Business domains
Combustion
Heat exchange

Basic Policy
Quality is our destiny

Manufacturing

Technology-oriented Core technologies

Corporate Vision• In-house development and automation equipment of key units, andin-house production of molds• Hybrid technologies for energy saving and core technologies for heating• Superior manufacturing capabilities with state-of-the-art factories andunique manufacturing affiliates• Nationwide sales channels and spaces for experiential proposals

Health and lifestyles(Electricity, natural energy, hydrogen etc.)

We will utilize various kinds of energy resources andour own core technologies to address social
challenges in our business field “heat and lifestyles”“health and lifestyles” and achieve a sustainable,
steady, long term growth.

Consumer-oriented
Social challenge-oriented

Electronic
control, IoTManagement style

Focus on P/L androbust management

Focusing on B/S
Improve capital productivity
Strengthen strategic investments

Leverage expertise in Japan, United States, and China
to expand business scale worldwide
Revolutionize corporate structure to achieve sustainable growth

Rinnai Report 2021

20

Introduction

Environment

SocialGovernance

Data

Medium-term Management Plans

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

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

Expansion of business scale. Expand regional domains. Expand business domains

Revolution of corporate structure

Numerical Targets for Fiscal 2026 (Consolidated)
Expansion of business scale

Expand regional domains
Expand business domains

Net Sales, Operating Income, ROIC Plan (image)Consolidate Net Sales: ¥450 billion(Japan: ¥200 billion;
overseas: ¥250 billion)

Net sales

Operating income

ROIC(Billions of yen)

500

20.0%

450.0

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

Advancement in addressing
social challenges

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

Improve quality of life
Help resolve global
environmental problems

400

300

16.0%

200

14.0%

100

12.0%

50% up40.6

Contribution to CO2 emission reduction:

7 million tons

18.0%

365.0
344.3

50.0

41.0

0

• Become more consumer-oriented

10.0%
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2021 2022 2023 2024 2025 2026
Targets• Make focused investments in intangible assets• Enhance profitability

21

2Expand R&D domains and build next-pillar businesses

3

Strengthen manufacturing system to support long-term profits

4

Strengthen global framework

5

Deploy digital transformation (DX) to achieve business restructuring and strengthen
cyber-security measures

6

Proliferate the Rinnai brand both internally and externally7

Improve the value of our human resources

8

Improve our ESG (environment, social, governance) evaluation

ESG
item

Main initiatives

Connection with Medium-TermBusiness Plan
(three key strategies)

Environment

Expand range of products that improve quality of life and benefit the environment

Popularize energy-saving water heaters to reduce
CO2 emissions
2025 target: 7 million tons
Develop and promote energy-saving equipment
Expand R&D investments targeting a carbon-free society

Advancement in addressing social challenges(help resolve global environmental problems)Expansion of business scale(regional expansion)
Revolution of corporate structure(focused investments in intangible assets)

Social1

Connection between Medium-Term Business Plan and ESG

Create products that improve quality of life
Make efforts to improve human resource value
Invest in human resource growth, review personnel
system, and promote health management
Create environments for diverse work styles

Advancement in addressing social challenges(improved quality of life)
Expansion of business scale(expansion of business domains)
Revolution of corporate structure(becoming more consumer-oriented)
Revolution of corporate structure(focused investments in intangible assets)

Governance

Eight Priority Measures

Instill compliance
Strengthen cybersecurity measures
Implement each principle of Corporate Governance CodeIntroduce performance-linked and stock-based
compensation
Establish Nomination Advisory Board and Compensation
Advisory Board

Revolution of corporate structure

Benefiting SDGs

Rinnai Report 2021

22

Introduction

Environment

SocialGovernance

Data

Message from the General Manager ofCorporate Planning Headquarters

We will continue striving for “advancementin addressing solving social challenges”
to continue to be a “company of choice”
in the world.
Takuya Ogawa“Become More Customer-oriented” and “Make Focused Investment in Intangible Assets”
One of the important themes of the new medium-term business plan is “revolution of corporate structure” and “become morecustomer-oriented” is a pillar of that theme.
While we feel that we have achieved a certain degree of success with recent hit products related to saving time and improving
health, we will promote value creation by strengthening our marketing capabilities and building new lines of communication withcustomers. While capturing the needs of the market through the establishment of a new marketing office, we will seek ways to provide
useful information and services in the entire process from product selection to use, inspection, trouble-shooting, and disposal within

Senior Executive Officer
General Manager of Corporate Planning Headquarters

the move toward digital transformation (DX).
With regard to “make focused investment in intangible assets,” up to now our investment has been concentrated in tangible
assets such as production

Previous G-Shift 2020 and New “New ERA 2025” Medium-term Business Plans

facilities and products, but we

Human Resources

Information Technology

believe we need to invest more

(Investment targets)
Formulate engagement improvement measures;
establish system for self-growth evaluations; build
education system; establish workplace environmentsthat welcome new work styles(Investment targets)
Develop information infrastructure for strengthening
global cooperation; develop technologies for digitaltransformation

Core Technology (Know-how)Branding(Investment targets)
Build advanced manufacturing system; enhance R&D
system focusing on “heat and lifestyles” and “health andlifestyles”(Investment targets)
Popularize global brand image externally;strengthen internal branding

Rinnai’s previous medium-term business plan, G-shift 2020 (fiscal 2019- fiscal 2021), had a rigorous start due to a shrinking domestic

intensively in intangible assets

market and resulting price competition, as well as the front-loaded burden overseas of investments. Yet we ultimately achieved record

such as human resources,

profits through thorough cost reduction efforts and by capturing stay-at-home demand in Japan and abroad. As the culmination of

information technology, core

the 100th anniversary of our founding, we made progress in improving our profit structure and strengthened our earning power overtechnology (know-how), andthe past three years.

branding as a means to

In formulating New ERA 2025, our new medium-term business plan, we considered the significant changes in the businessstrengthen our corporate

environment that should be expected in the future, such as the advent of carbon neutrality, the new normal society, and the advance ofstructure from here on.

digitalization. As a result of active discussions through Rinnai, we decided to set a five-year period (fiscal 2022- fiscal 2026) as the planhorizon because we believe there are many issues that cannot be addressed in a near-sighted manner and that must be tackled froma medium- to long-term perspective.

“Enhance Profitability” and “Capital Policy”“Advancement in Addressing Solving Social Challenges”

While the revised Corporate Governance Code also requires us to understand the cost of capital and disclose our basic policy on

Among the three strategic stories of the new medium-term business plan, “Advancement in addressing social challenges” is positioned

capital measures, we first defined the required cash level as ¥180 billion (working capital plus flexible funds for disaster response, etc.)

as the top priority, and in order to achieve it, I believe we must simultaneously work toward “Expansion of business scale” andbased on our business performance and financial position as of the end of fiscal 2021. And for the portion exceeding that, we have

“Revolution of corporate structure.”established a policy of capital allocation during the medium-term business plan period of up to ¥125 billion for investment in future

As for efforts to “improve the quality of life” in “Advancement in addressing solving social challenges,” we need to provide
the optimal products for each country as we expand our offerings around the world. We have set four criteria for quality-of-life
improvement: 1) reduced stress through improved convenience, 2) Increased safety of living spaces, 3) improved levels of hygiene andgrowth and strategic expenses, and more than ¥60 billion for shareholder returns. The total return ratio of over 40%, which is a measureof shareholder return, is double the ¥30 billion of the past five years.
We have been using financial indicators such as ROE and ROIC in the past, but in addition to the existing management policy ofhealth, and 4) enhanced resilience and clarified the specific applicable products for each region. This will lead to “Expansion of

focusing on sales and profits, the new medium-term business plan sets the basic policy of capital policy as “to secure a sound financial

business scale.” In addition, to enhance our contribution to “improve the quality of life,” we will also focus on “broadening our reach” tobase, invest for future growth and provide stable returns to shareholders.” With ROIC as the most important indicator, we will aim for

more countries by expanding into existing and new markets in addition to our key strategic markets in the United States and China.

well-balanced management looking out over the coming 10 and 20 years.

As the same time, we have worked to “help resolve global environmental problems” as a materiality item, but with the Japanese
government’s declaration of carbon neutrality for 2050, we are now undertaking even deeper discussions. In the future, residential

We will continue to be a company of choice by contributing to improving the quality of life for people around the world and toresolving various social issues, including carbon neutrality.

energy sources are expected to shift to hydrogen, renewable energy (electricity), and carbon-free gas (methanation). Rinnai, as an
Cash Flows for Past 5 Years

equipment manufacturer, must keep a close watch over trends in such energy infrastructure.
That said, to develop and provide

Present

regardless of which scenario
materializes, we will invest in what we
can do quickly, such as accumulatingknowledge in each field and enhancing

Infrastructure forhouseholds

more thermally efficient equipment

Low-carbon economy(Fiscal 2017–2021 results)

Decarbonized economy (Carbon neutral)

contribute to a decarbonized society.

23

Inflows

Investments

Fossil fuels

Carbon-free gas

Renewableenergy¥76.6 billion

Hydrogen

1. Popularize energy-efficient appliances( ECO ONE, Eco Jozu)
2. Discontinue non energy-efficient appliances
3. Develop new energy-efficient appliances

Develop electric
appliances, such as
IH equipment andheat pumps

Establish technology for
100% hydrogen
combustion equipment(for fuel cell back-up)

Operating cash flows¥200.0 billion

Shareholder return(Dividends, share buybacks)¥30.0 billion
Other ¥1.9 billion
Accumulated cash
and deposits¥77.5 billion

Outflows
Necessaryinvestments forbasic scenario¥80.0 billion

Outflows(Tangible/intangible fixed assets)

Operatingcash flows¥186.1 billion
Our Initiative

Rinnai will have a great opportunity to

Inflows

Future (~2050)

talent for research. By proactively
responding now, I am confident that

Cash Flows for Cash Flows for Fiscal 2022–2026

Appropriation of
cash carried forward¥65.0 billion

Growth investments
Strategic spending¥125.0 billion or less

Investments
based on capital
productivity

Shareholder return¥60.0 billion or more

Targeting a total return
ratio of more than 40%

Rinnai Report 2021

24

Introduction

Environment

SocialGovernance

Data

Message from the President of a US Subsidiary

We will develop our overseas businessand deliver the Rinnai brand promise topeople around the world.
Frank Windsor President, Rinnai America Corp

It is also worth noting that in many cases, sales agents and house builders have the decision-making power as towhich manufacturer’s water heater is installed. Rinnai has exclusive sales contracts with 12 of the top 14 house builders
in North America, so when a decision is made to install a tankless water heater, Rinnai’s models are always chosen.
Furthermore, Rinnai America is upgrading its headquarters to a state-of-the-art training and research and development(Innovation) center, where it will invite partners in sales and installation and provide a full slate of hands-on training.
At the newly established Innovation Center, we will work to differentiate ourselves from our peers by incorporating the
feedback and ideas we have gained through contact with these excellent installers, based on collaboration with our talented
development department in Japan. In particular, as skilled workers tend to be in short supply, it is becoming increasingly
important to develop products that reduce the time and effort needed for installation.

Rinnai America Going Forward
Strong Performance Amid the COVID-19 Pandemic
In recent years, the Rinnai Group’s overseas sales have comprised just under 50% of its total sales. Yet with the declining
birthrate, an aging population, and other issues in the Japanese market, it is difficult to hope for sustained high growth there.
In this respect, Rinnai America is well positioned to lead the Group’s overseas business, and we recognize that it plays a very
important role in terms of the Group’s growth strategy (namely the “Expansion of Business Scale” pillar in the new medium-term
management plan, New ERA 2025).
In fiscal 2020, the novel coronavirus (COVID-19) pandemic had a tremendous impact on the North American market.
First and foremost, we gave top priority to the health and safety of our employees, and also endeavored to support our business
partners in various ways so that they could continue their business. Although orders decreased significantly at the beginning of
the fiscal year, sales rebounded strongly thanks to stay-at-home demand from June onward, due partly to residential-use
products accounting for 80% of our business. And at the end of the year, we were able to substantially beat the previous year’s
results and ultimately increase our market share in all product categories.

Strengthening Functions as a Business BaseIn April 2018, we began production of the first tankless water heater (instantaneous water heater) in North America. The policyof “local production for local consumption,” where production is done close to the customer market, is aimed not only at
mitigating foreign exchange and supply chain risks, but also at demonstrating Rinnai’s commitment to its partners andconsumers in North America to be a company that contributes to the local community through employment, tax payments, andso forth. In North America, about 10 million water heaters are sold each year, of which about 86% are tank-based heaters that
store hot water in a tank for use. Since 2015, Rinnai America has been actively advertising its tankless models through televisioncommercials, printed materials and online media in an effort to raise consumer awareness of the advantages of tanklessmodels, which are highly environmentally friendly, save space, and never run out of hot water.
The “Try Rinnai Tour” installed a tanklesswater heater in a large van that embarked
on a promotional tour across North
America

Rinnai has a solid reputation for high quality backed by advanced technologies both in Japan and overseas. From 2018, Rinnai
America has introduced high-efficiency water heaters that are equipped with a condensing technology nicknamed Eco Jozu inJapan, which reduces CO2 emissions by recovering and reusing the heat from exhaust gas, to further add value to the tanklesswater heater market.
In North America, awareness of climate change and decarbonization is increasing, and some local governments are
moving to ban the installation of gas appliances in new homes. However, the thermal efficiency of our condensing water heaters
is an exceptionally high 96%, and with coal-fired power generation still prevalent, it is difficult to say unconditionally that using
gas is bad. For its part, Rinnai America will contribute to a decarbonized society through the Group’s comprehensive
capabilities, including the expansion of its product lineup using electrification and heat pumps.
Since fiscal 2020, Rinnai America has been responsible for the development of the Latin American market, which waspreviously the responsibility of the Overseas Business Headquarters at Rinnai in Japan. We will continue to work diligently tocontribute to the Group in its “Expansion of Business Scale: Regional Domains,” one of the pillars of New ERA 2025.
The Rinnai Group has formulated its brand promise, “Creating a healthier way of living,” with the goal of contributing topeople’s healthy and comfortable lives.
Our focus now is to improve people’s lives by changing the way water is heated in their homes through the widespread useof tankless water heaters.
To achieve this goal, Rinnai
America will contribute to the health
Rinnai America Sales: Results and Projections(Billions of yen)
and comfort of people’s lives, not only100
through collaboration with Rinnai’s
80
headquarters in Japan, but also with60
other overseas Group companies, aswell as through strategic alliances
40
with external organizations and20companies in North America.

0
2011

SENSEI high-efficiency gas tanklesswater heater

25

Installation of connected water heating system

2013

2015

2017

2019

2021

2025

Entrance of Rinnai America Headquarters

Rinnai Report 2021

26

Introduction

Environment

SocialGovernance

Data

Identifying Material Issues
We make every effort to identify social challenges relating to the Rinnai Group, through day-to-day communication

Material Issue Targets and Results
Deep Involvementwith SDGs

activities with stakeholders coupled with study and analysis of applicable guidelines and ESG indices. We also
identify CSR material issues through the Rinnai Group value creation process in relation to our management
strategies, revolving primarily around our Corporate Planning Division.

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

Step 1

Step 2Outline existingengagement

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

Step 3
Analyze international
standards andguidelines

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

Step 5

Step 6

Study othercompanies

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

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

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

Energy consumption
CO2 emissions

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

Target area: Global
Target stakeholders: All

Material Issues

Main Target Indicators

Consumer safety
Improving quality

Number of defects that have
led to product recall
announcements

2021 target

5.15

million tons

2025 target

7.00

CO2

million tons

2020 results: 4.50 million tons

Deep Involvementwith SDGs

0

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

cases2020 results: 0 cases◇ Health◇ Housework time reduction□ Work-life balance○ Waste○ Harmful chemicals○ Energy consumption○ CO2 emissions◇ Consumer safety◇ Improving quality○ Biodiversity□ Child labor / forced labor□ Stable procurement□ Support for cultural activities
and the arts

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

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

The Sustainable Development Goals (SDGs)□ Other issues◇ Pandemic□ Communicating with suppliers□ Investing in local communities

High

Main Target Indicators

Toward the achievement of a sustainable society

Determining and Identifying Material Issues

Classification of Issues

Material Issues◇ Marketing communication

Very highSDGs items related to value provided in Rinnai’s value creation process
Environmental Providing lifestyles that reduce energy
consumption and impact on the global
contribution environment in daily life
Safety andsecurity

Supporting lifestyles by preventing andavoiding risks inherent in households

Quality of life

Proposing lifestyles in which the burden ofhousekeeping and time spent onhousehold chores are reduced.

Rinnai Report 2021

28

Introduction

Environment

SocialGovernance

Data

Environment

Response to Global Environmental Problems

The 2016 Paris Agreement has accelerated CO2 emissions reductions and zero CO2 emissions (carbon
neutral) movements in each country throughout the world. Rinnai, which mainly handles gas appliances, will
pursue the potential of various types of energy equipment bearing in mind the shift from a “low-carbon society”
at present to a “decarbonized society” in the future.

CO2

Rinnai Product Mix Image for Achieving a “Decarbonized Society”

Reduction in CO2 during
product usage

Our products: Composition of energy used (%)

100%

2021 Goals

5.15
7.00
million tons
2025 Goals

Low-carbon society

Carbon-free society (carbon neutrality)
Expansion of hydrogen
infrastructure

Hydrogen(Hydrogen combustion
appliances)

Proliferation ofrenewable energy
Expansion of cleaner
fossil fuels

Fossil fuelsGas appliances

Renewable energy(Hybrid and electric appliances)

Carbon-free gas(Gas appliances)

2020

2050

million tons

Regarding energy equipment that will realize a “decarbonized society” in the future, Rinnai quickly ascertains
changing conditions while promoting technological developments, and at the same time, under the current
medium-term business plan (fiscal 2022–2026), we will expand our product lineup and promote sales ofenvironmental products aimed at near-term efforts to realize a low-carbon society.

Products Corresponding to Medium-term Business Plan Initiatives
Goal

Main products(reflecting the energy situation in each country and region)

Details of environmental contribution

Eco Jozu , ECO ONE (Japan)
Tankless gas water heaters (United States, Australia)

1

2

29

Reduce CO2
emissions

Reduce PM2.5
emissions

Highly energy-efficient water heaters help reduce CO2 emissions

Gas water heaters (China)
Condensing boilers (South Korea)
Gas tabletop stoves (Indonesia)

Gas stoves with high combustion efficiency help reduce CO2 emissions

Solar hot water panels (Brazil)

Using solar heat to supply hot water helps reduce CO2 emissions

Boilers (China, Mongolia)

Switching from coal boilers to gas boilers helps reduce PM2.5 emissions

Rinnai Report 2021

30

Introduction

Environment

SocialGovernance

Data

Environment

Responses to the Task Force on Climate-related
Financial Disclosures

Strategy
Impact on Rinnai
Risk of procurement cost increases in line with raw
Raw materialmaterial costs that are passed on through carbon
procurement risks
pricing (carbon taxes and emissions trading) to
associated with climate
suppliers of materials that emit large amounts ofchangegreenhouse gases.

With the aim of creating a virtuous circle of the environment and the economy which assumes a sustainable company,
Rinnai expressed its support for the recommendations issued by the Task Force on Climate-related Financial Disclosures(TCFD), a taskforce established by the Financial Stability Board (FSB) in August 2020. We are promoting the disclosure of
the financial impact on the Company caused by climate change and our approaches to resolve these issues.

Transition
risks

Sharing of risks andopportunities related
to climate change

Leadership
Team
ReportCorporate Planning Headquarters
Environment Division

Environment Management
Committee

Opportunities

Rinnai’s response

Large

Low

• Convert to recyclable materials• Reduce procurement costs throughindependent efforts

Small

Low

Develop water heaters able to restrict
the amount of water used.

MediumAscertain changing conditions related toenergy while developing andestablishing technologies focused on
essential products.

Risk that the sale of water heaters potentiallyusing large amounts of water resources will be
restricted as a result of global water shortage
problems.

Gas water heater
regulations in line withfossil fuel regulations

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

Physical risks fromnatural disasters

Risk of supply chain distribution disruptions due tothe impact of natural disasters (floods, torrential
rains, water shortages and other events).

Large

MediumEnhance response capabilities withbusiness continuity planning (BCP),
including decentralized materials
procurement sources and production
bases.

Risk of increased
operating costs

Risk that air conditioning and cooling equipment
operating costs will increase due to a rise inaverage temperatures.

MediumLow

Promote the introduction of residential
power generation through sustainableenergy and other measures.

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

Current “low-carbon society” initiatives require
higher efficiency energy-saving water heaters.
Additionally, the advance of technologies such as
decarbonized gas for realizing a “decarbonizedsociety” will require more efficient energy-saving
water heaters than in the past.

Large

MediumPromote the expansion of productlineups and sales of more efficientenergy-saving water heaters.

MediumTarget areas where environmental
regulations have not yet tightened,
expanding the adoption of products
corresponding to usage environments in
those areas.

Physical risks

Risk Management
Committee

Degree ofurgency

Water heater
regulations as a resultof water resource
depletion

Governance
Rinnai’s Corporate Planning Headquarters and the Environment Division are taking the lead in compiling ESG-related
issues and allocating them to the relevant departments to undertake improvement initiatives. In addition, the Environment
Management Committee is the secretariat for ISO14001 operation and promotes initiatives related to risks andopportunities associated with climate change and reports such activities to the leadership team.

Financial
impactAdoption of gas boilers
In areas where coal boilers are used, gas boilers
in line with tighteningthat do not generate PM 2.5 will be required.
environmental
regulations (PM 2.5)

Large

MediumInitiatives to overcome climate change issues

ISO14001

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

TCFD Recommended Disclosures and Content of Rinnai’s Disclosure

Recommended disclosures

Content of Rinnai’s disclosure

Governance

Environmental management
https://www.rinnai.co.jp/csr/manage_system/

Strategy

Value creation process
https://www.rinnai.co.jp/csr/value/

Risk management

Risk management
https://www.rinnai.co.jp/csr/risk_manage_system/

Metrics and targets

Value creation process
https://www.rinnai.co.jp/csr/value/
Approaches to preventing global warming through energy-saving
water heaters
https://www.rinnai.co.jp/csr/reduction/

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

31

Rinnai Report 2021

32

Introduction

Environment

SocialGovernance

Data

Environment

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

Rinnai America Corporation Initiatives

Shanghai Rinnai (China) Initiatives

81

Thermal efficiency:%(high-efficiency model: 92%)

Thermal efficiency:

60%

Tank water
heaters

Tanklesswater heaters

are commonplacein the United States

Source: Statistics compiled by the
Air-Conditioning, Heating andRefrigeration Institute (AHRI) in
the United States

Water heater shipments in the Unites States

Water heater shipmentsin the Unites States

promoted by
Rinnai America

1,200

10%

1,000

8%

Tank water heaters

800

6%

600
4%

400
200

Tankless water heater ratio

Planned expansion of the Fengxian Factory

Experience centers where consumers handle products asthey consider purchases

2%

Tankless water heaters

02007 2008 2009 2010

2011

2012

The water heater market in North America is dominated by storagetank-type units that are not very energy efficient. Rinnai has beenpromoting the conversion to tankless water heaters that are highly
energy efficient. Efforts to boost awareness over many years arebearing fruit and sales volumes for tankless water heaters havebeen rising recently. Rinnai America will help ease the impact on the
global environment through the wide diffusion of highly efficienttankless water heaters.
To meet the rapidly growing demand for tankless water
heaters in the enormous US market, Rinnai opened an innovation
center to quickly develop products meeting consumer needs, andat present, we are engaged in the construction of a local Rinnaiowned factory to expand local production that, up to now, has been
conducted at a leased facility.

2013

2014

2017

2016

2017

2018

2019 2020

0%

Live sales event
streamed online
Innovation center environmental testing room

Scheduled construction of local production facility in Griffin

33

Rinnai owns a development and production base in Shanghai
and is expanding sales throughout China. Unlike in Japan, gas
pipe infrastructure in China is not widespread, thus the use of
convenient and efficient gas water heaters is not yet possible inunderdeveloped areas.
As gas pipeline development spreads and people’s living
standards improve, Rinnai will promote sales centered on gas
water heaters, the adoption of which will increase going forward.
In anticipation of growing demand, we are planning to expand
manufacturing facilities while continuing to increase businessscale through the establishment of experience centers in major
cities where consumers can actually handle products as they
consider purchases.

Retail store renovations

In terms of water heater sales, online purchases are onemeans of selling in this market, and Shanghai Rinnai is proactively
engaged in online sales efforts. In China, the unofficial holidays“Singles’ Day” and “618” are major sales events for general
consumables during which Shanghai Rinnai conducts sales
promotions streamed live online featuring famous influencers.
These efforts resulted in Rinnai products ranking first in water
heater sales. Online sales account for 30% of Shanghai Rinnai
sales overall, thus the Rinnai Group will establish e-commerce(EC), digital transformation (DX) and other online technologies tobuild on these business achievements.
Within business activities in China, promoting the sales of gas
water heaters and gas boilers is understood as contributing to theglobal environment as much as the expansion of energy-efficientequipment, thus we will promote various business developments
along these lines.

Rinnai Report 2021

34

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Impact within Rinnai’s Value Chain

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

Rinnai’s Value Chain

Demands and Expectations
from Society(Overseas / Japan)

INPUT
Main resources consumed(Raw materials and energy)

Procurement

Development and Manufacturing

Sales, Logistics, and Services

Product Usage

Disposal

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

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

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

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

EnergyWater• Energy; 1,100,713 GJ• Ground water: 162,990 m3

EnergyWater

EnergyWater

EnergyWater• Public water: 595,343 m3

CO2 Emissions (Emissions Ratio)

OUTPUT

848,727 t(7.38%)

Rinnai’s environmental impact—

Initiatives Rinnai conducts
through business

35,161 t (0.31%)
Scope 2 68,606 t (0.6%)
Scope 1

Solid waste

Wastewater

29,726 t

741,609 m³(Includes valuable substances)

Supply chain management

Pursuit of environmental
performance and streamliningof manufacturing processes

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

Development: Develop products with superior
environmental performancethat meet the climate andneeds of the region
Manufacturing: We are pursuing efficient processes,
minimizing invested resources andenergy, and promoting activities that
contribute to emission regulations
for CO2, waste products andchemical substances.

Rinnai’s estimates based on the “Basic Guidelines for Calculating Green House Emissions Through the Supply Chain”[Target scope]	Rinnai Corporation and consolidated subsidiaries (development / manufacturing), Rinnai Corporation (procurement / sales / logistics / services / product usage / disposal)[Target period] Domestic: Fiscal 2021 (April 2020–End of March 2021)
Overseas: January 2020-End of December 2020
[CO2 emissions (units)]: tCO2e, (%) represents the emissions ratio within each process.

35

9,384 t(0.08%)—
Spread of environmentallyfriendly products
Sales: Strive to spread products that
contribute to energy efficiency inthe water heater and heating fields
Logistics: We are promoting logisticalstreamlining.
Services: Elevate the Rinnai brand withsecurity activities through a wealthof service maintenance andinspections

Scope 3 (Category 11)

5,937 t10,497,104 t (91.31%)(Concerns emissions from Japanese water heaters)—(0.05%)—

Proposal of reasonably
achievable ecological lifestyles

Promotion of environmentallyconscious design

Product Usage: We are teaching customers the environmental
Disposal: Application of design for thefriendliness of our products and promoting theirenvironment, e. g., to makeecological use through Company-sponsored
products easy to disassemble
product events.
in accordance with product
Proposal of sustainable, comfortable, and green
assessment standards
lifestyles through use of energy-saving products
Through various events, we will appeal to all of
our end users the environmental performanceof our products and how to use them with theenvironment in mind.
The value chain is the chain of business activities and processes undertaken by acompany to generate and deliver value (products and services) to the customer.
Indicators marked with a check have received a third-party guarantee from,
Lloyd s Register Quality Assurance Ltd. (LRQA).

Rinnai Report 2021

36

Introduction

Environment

SocialGovernance

Data

Environment
Environmental Initiatives

Environmental Management
Promotional Framework for Environmental Activities

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

Basic Philosophy on the Environment

Environmental Slogan

Rinnai’s basic philosophy is to embrace environmental
protection on a global scale and contribute to society
through the pursuit of excellent, people- and planetfriendly technology, and product development,
production, sales, and service infused with a senseof humanity.

Our actions are imbued by the wisdom of many andundertaken with due consideration to the sustainability ofa people- and earth-friendly environment.

Medium- to Long-term Environmental Direction
In addition to announcing the New ERA 2025 medium-term business plan, Rinnai has begun examining theenvironmental long-term target of “carbon neutrality in 2050.” In addition to environmental indicators promoted thus far,we will formulate new substantive reduction targets and promote efforts toward their achievement.

Headed by the President, the Environment Management
President
Committee guides corporate efforts. This committee isEnvironment Management Committee
chaired by the executive officer responsible for the
Chairman of the Committee: Executive officer in charge of environmental issues
Execution and improvement of environmental management systems
environment and has the participation of representatives
from all divisions. Its mandate is to promote environmentEnvironment Divisionoriented activities from a “big picture” view.
The Environment Management Committee discusses
and decides important items including basic environmental
Marketing &Logistic Control Office Head
Research & Development
Factories
Office Sales Headquarters
Parts Centers
Headquarters
policies, targets and medium- to long-term plans. The
Production Engineering Divisioncommittee thoroughly informs individual divisions ofEnvironmental Management Promotion Systemdecisions made by the committee and promotes concrete
activities in line with annual plans. We review our objectives as necessary and diligently strive to meet our targets
quarterly. To perform specific activities, each division has a liaison group and holds routine meetings to make issues
known to everyone in the respective division and continue improvement activities.

ISO 14001 Certification
Promoting 7E Strategic Initiatives in All Divisions
As a manufacturing company, Rinnai is advancing detailed 7E strategic initiatives in each division and all product lifecycle
processes (development, procurement, production, sales, usage and disposal)

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

Link: destination: Data Book Environmental Data, 7E Strategic Initiatives
Link destination Data Book Environmental Data Page 123 Status of Acquisition of Certifications

1

Develop and provide environmentallyconscious products
52

Promote green procurement

3

Promote activities
with reduced
environmental
impact4

37

Sell environmentallyconscious products;
Encourage customers
to be moreenvironmentally aware

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

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

E-Mind (Employees)tartivi B usinaltie s
e s s a n d e n v i ro n m e n t r a t e c
as whoe e l s of s a m e c o r p

Emphasize
environmentallyconscious installation
and repair services

6 Promote activities with

reduced environmental
impact at our offices

7

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

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

External Environmental Audits

Rinnai Report 2021

38

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Training

Environmentally Conscious Design (Product Assessment)

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

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

Training for Internal Auditors

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

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

Compliance with Legal Regulations
While compliance with legal regulations is a given, Rinnai sets more stringent voluntary standards and engages in daily
supervision, conducts periodic measurements and implements thorough environmental audits. We are working on thecreation of a rapid response mechanism to prevent recurrence in the unlikely event that a violation or complaint were tooccur.
In fiscal 2021, values exceeding regulatory standards were detected at some manufacturing sites. We investigatedthe cause, implemented measures to ensure proper management and submitted improvement reports to relevant
government agencies. The results of subsequent water quality analyses confirmed that values were within voluntarystandards without further problems.

39

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

Supply Chain Management
Amid rapid changes in the social environment aimed at realizing a sustainable society, to continue doing business into the
future, Rinnai must contribute to the environment both as a Group and through the supply chain. In addition tocommunicating Rinnai’s green procurement policies to our suppliers, through daily exchanges, we promote
improvements that contribute to environmental management and lead to reduced greenhouse gas emissions.
In recognition of these efforts, in fiscal 2021 Rinnai received a rating of “A-” in the Supplier Engagement Rating
conducted by CDP, an international non-profit organization that addresses climate change and other environmental
issues.

Rinnai Report 2021

40

Introduction

Environment

SocialGovernance

Data

Environment
Prevention of Global Warning
Major changes in climate patterns due to global warming and other factors are threatening the building ofsustainable societies.
Rinnai will formulate long-term targets focused on 2050 and work toward establishing sustainable businesscorresponding to a new era.

Towards 2050
To realize carbon neutrality in household heat utilization, we must undertake measures based on national policies, atheme closely connected to operators of energy infrastructure-related businesses. To create a sustainable society, Rinnai
will continue to establish technologies as an equipment manufacturer enabling the provision of valuable heat utilization to
consumers at all times. We are also promoting discussions pertaining to taking on the challenge of achieving “threezeroes” by 2050: Zero CO2 emissions from product usage, offices and factories, and the product lifecycle.

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

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



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

The Challenge of Zero CO2 Emissions from Product Usage
Amid global movements to curb rising temperatures, Rinnai views these
efforts in terms of risks and opportunities as it takes on the challenge ofrealizing zero CO2 emissions from product usage by 2050. Based on theidea that “environmentally friendly products can contribute to the
Solar power generator
ECO ONEenvironment only when they become widespread,” we will accelerate the(Storage of solar
power-generated
energy)evolution of technologies such as latent heat recovery high-efficiency
Storage battery electric vehicle (EV)water heaters and the ECO ONE hybrid water heater and heating system.
ECO ONE is positioned as the product with the lowest primaryenergy consumption among water heaters. Going forward, Rinnai will
Future scenario of ECO ONE self-consumption model
make possible the highly efficient self-consumption of surplus energy
from solar power generation, and at the same time, by linking storage batteries and solar power generators, we willcontinue making improvements enabling more efficient use of energy, solidly contributing to the promotion of net zeroenergy housing (ZEH).

Orientation toward 2050
While promoting the development of technologies realizing decarbonization, Rinnai established the goal of a “sevenmillion-ton contribution to CO2 reductions by 2025” as our most recent orientation in terms of product usage. We will
accelerate Group environmental contributions in each country by moving forward by five years the reduction contribution
target we had aimed to achieve in 2030.
Regarding the setting of targets from 2025 onward, Rinnai will consider the shift from current “reduction contribution
amounts” to “real reduction amounts” as we advance toward the realization of carbon neutrality in 2050.

41

Energy-conservation Initiatives
In terms of the latest energy conservation achievements, Rinnai reduced its basic unit of energy consumption2 by 9.8%
compared to the base year reduction target of 4%. We achieved this goal at all bases by promoting further energy
conservation efforts focused on production equipment, lighting and air conditioning, while attempting to thoroughly
reduce loss in each manufacturing process. As we advance toward the next milestone in 2025, Rinnai will continue efforts
targeting a 6% reduction in the basic unit of energy consumption compared to 2019.
2. Per-unit standard of energy consumption as defined by Rinnai

The Challenge of Zero CO2 Emissions in the Product Lifecycle
Aiming to mitigate climate change risks, in addition to CO2 emissions from household product usage, Rinnai believes
there is room for reductions in terms of CO2 emissions associated with the procurement of materials and parts, logistics,
the movement of people and product disposal. Accordingly, we will promote optimized energy conservation and CO2
reduction activities in each process, aiming for zero CO2 emissions throughout the product lifecycle. Rinnai will formulate
and consider specific plans for 2030 and beyond, with a focus on 2050.
Examples of potential approaches for achieving these goals
Procurement

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

Logistics

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

DisposalPromote comprehensive recovery schemes within construction and operations, etc.

Rinnai Report 2021

42

Introduction

Environment

SocialGovernance

Data

Environment
Resource Recycling
From the perspective of intergenerational equity toward the creation of a sustainable society, there is a requirement
to consume resources only to the extent that the resource needs of future generations may be met. Rinnai is

Industrial Waste Processing

working to reduce the amount of waste generated (including valuables) in its business activities as well as theamount of clean water and groundwater used.

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

Primary Initiatives

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

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

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

Rinnai Receives the Packaging Category Award
Rinnai’s “Package Improvement of Water Heaters for Export” won the Packaging Category Award (Industrial Packaging
Award) at the Japan Packaging Contest 2020 organized by the Japan Packaging
Institute. The water heater body and front panel, which previously had been individually
packaged, were slimmed down to “single-package specifications” to reduce thenumber of parts and improve transportation and storage efficiency.
300-gram reduction in cardboard used (7.5% reduction)
Transportation and storage efficiency improved by approximately 50%

43

When reaching agreements with waste processing
subcontractors, Rinnai conducts strict inspections involving
elements such as their financial condition and on-site
confirmations. In addition, we visit our processing
subcontractors each year to verify that they are conducting
appropriate waste disposal. Once there, we confirm how
manifests that contain information regarding different varieties
of waste, their disposal methods, and processing statuses arebeing administered. We also conduct on-site confirmations
regarding waste processing and exchange relevant
Regular patrol at waste treatment plant (RT Engineering Co., Ltd.)
information with the subcontractor.
In fiscal 2021, the Company visited 34 locations to verify that proper waste management was being conducted.

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

On-Demand Instruction Manuals
At Rinnai Brasil Heating Technology Ltd., when creating instruction manuals, a system has been established whereby
maintaining stock is unnecessary thanks to the introduction of printers synchronized with production lines. Even in theevent of sudden revisions, being able to respond in real time means that only the necessary sections of the instruction
manual need to be printed, avoiding a substantial amount of resource waste. Further, instruction manual content wasrevised to reduce the amount of paper used by approximately one ton (70%) annually.

Efforts to Realize Paperless Workplaces through the Promotion of Digital Transformation
As part of Rinnai’s promotion of digital transformations (DX)2 in offices, at RB Controls Co., Ltd., a mechanism was createdadding an order management system time stamp function, converting 12,000 order forms that up to now had been in
hardcopy form to an electronic data storage format. This has reduced the amount of paper used to zero and increased
work efficiency by improving the searchability of required data and shortening the time required to transfer data.
2. In response to dramatic changes in the environment, digitized data and digital technologies are being used to innovate business models and transform business itself,organizations, processes, corporate cultures and climates to establish competitive advantages. (Reference: “Guidelines for Promotion of Digital Transformations [DX Promotion
Guidelines],” Ministry of Economy, Trade and Industry)

Rinnai Report 2021

44

Introduction

Environment

SocialGovernance

Data

Environment

Semi-closed Processing of Waste Liquid

Concern for Water

To enhance resource recycling in factories, it is important to build a mechanism for processing or reusing all factory waste
without any waste generation. Wholly-owned subsidiary Noto Tech Co., Ltd., has successfully realized the in-houseprocessing of waste liquid that had been previously outsourced by revising the process flow in its enameling lines. Further,
these improvements have enabled waste liquid to be used as a “coagulant chemical” at wastewater treatment facilities,
contributing to substantially reduced environmental impacts and costs. The effects are annual reductions in emissions
amounting to 150 tons (60%) and 4,200 m3 (90%) of water.

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

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

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 endof-life gas and oil appliances. Thus far, the committee has conducted examinations in various formats, including
questionnaires, verification testing at recycling plants and processing condition confirmation. Through these efforts, thecommittee has confirmed that used gas and petroleum equipment have been properly disposed of and that the recycling
rate has been maintained at a high level.

Recycling Home Electrical Appliances
Japan’s Home Appliance Recycling Law went into effect in 2001 with the goals of reducing the amount of waste going tolandfills and incinerators and to promote more effective use of resources. Since then, old appliances thrown out by
consumers have been recycled into new products. Rinnai now has two products—a unit-style air conditioner and aclothes dryer—that fall under the category of recycled products.
Report on Recycling Specified Household Appliances (link: https://www.rinnai.co.jp/csr/result/index.html) (in Japanese only)

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 todesignated businesses that undertake associated services on the Company’s behalf.

45

Efforts to Reduce Environmental Burdens through Painting Line Improvements
As part of Rinnai’s environmentally friendly manufacturing initiatives,
we make an effort to save water and reduce environmental burdens
through conservation activities on painting lines at Group production
bases.
At Yanagisawa Manufacturing Co., Ltd., we repeatedly engage intrial and error to revise chemical selection and optimize cleaning
methods, while maintaining or increasing processing capacity
compared to before improvements were implemented, leading toannual reductions in environmental burdens amounting to 50% lower
emissions, a 220% reduction in CO2 and a 7% decrease in water usage.

Pre-painting processing line (Yanagisawa Manufacturing Co., Ltd.)

Assessing and Understanding Water Risk
As the world’s population increases and urbanization and industrialization continue to progress, there is concern thathumanity may face water shortages. To respond to business risks associated with water, Rinnai is identifying businesslocations with high water risk both domestically and internationally using a water risk assessment tool known as
Aqueduct*3 and sharing the results of analyses performed with the tool. Rinnai, while focusing on the risk conditions
in each region, views reducing water usage as an opportunity to cut manufacturing costs and is working to mitigate waterrisk while also reducing manufacturing costs. In addition, Rinnai is working to protect water resources in its supply chain inrecognition of the impact water shortages can have on materials supplied by business partners.
We have therefore set criteria related to water resources in the Green Procurement Standards Guide, which outlines
the environmental activities that we ask our business partners to participate in.
*3 Aqueduct: A water risk atlas and information tool provided free of charge by the World Resources Institute (WRI)

Rinnai Report 2021

46

Introduction

Environment

SocialGovernance

Data

Environment
Pollution Prevention
Some chemical substances can have a negative impact on ecosystems and human health if they are not managed
appropriately and accumulate as environmental pollution over long periods of time. Aiming to minimize the use ofMain Initiatives to Reduce Harmful Chemical Compounds

chemical substances that may affect people and global environments (atmosphere, water areas, and soil), Rinnai
conducts management in accordance with both customer demand and each individual country’s regulations
throughout the lifecycles of its products.

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

Initiatives to Reduce the Environmental Impact at Factories
To minimize the impact on the environment, Rinnai is reducing andAtmosphereeliminating the use of hazardous chemical substances through suchinitiatives as reviewing the chemical compounds used in the relevant
manufacturing processes and improving processing equipment. At
Products
Chemicaleach manufacturing site, we check and manage the amounts handled,
substances
Waste
released, and transferred of the 462 Class 1 chemical substances
designated under the PRTR1 Law, for which 500 kg or more is handled
Water areas
Soileach year.
In fiscal 2021, we achieved a 7.1% year on year reduction in theFlows of Release and Transfer of Chemical Substances (PRTR Substances)amount of hazardous chemical substances handled2 compared tothe targeted 4% reduction from the base year. This achievement reflects the successful implementation of planned daily
improvement efforts at production bases.
1. Pollutant Release and Transfer Register. For chemicals specified as hazardous substances, businesses are required to compile and submit documentation on the amount ofspecified chemical substances released into the environment (atmosphere, water and soil) or removed as waste.
2. Per unit standard for amount of hazardous chemical substances handled, established by Rinnai.

Preparing for Emergencies
All offices run annual drills premised on adverse events, such asenvironmental accidents. To minimize environmental pollution risk, wehave also reviewed procedures setting out actions to take in theevent of a crisis and have prepared emergency provisions.

Scenes from emergency response training

Inspection of Environmentally Critical Facilities
We prioritize inspection of facilities that have a risk of impacting theenvironment and safety, conducting inspections on suchenvironmentally critical facilities on a regular basis. We work toprevent serious accidents that could have an impact on theenvironment by inspecting individual facilities, verifying measuring
equipment is working as expected, and conducting simulations ofemergency situations

Routine inspection

47

Rinnai Report 2021

48

Introduction

Environment

SocialGovernance

Data

Environment
Protecting Biodiversity
Protecting the biodiversity that underpins social sustainability has become an urgent priority for humankind.
Recognizing that business activities and biodiversity are interwoven, we support the Declaration on Biodiversity by

Rinnai’s Biodiversity Conservation Activities Recognized as “Good Practice”

Japan Business Federation (Keidanren) and are working to protect the environment.

Approach to Protection of Biodiversity
We have incorporated “consideration for biodiversity” into our ISO 14001 environmental policy and are pursuing action inaccordance with the following principles.

In recognition of Rinnai’s efforts toward biodiversity conservation, we were selected for the“Good Practice” award at the July 2020 Aichi-Nagoya Biodiversity Best Practice Awards
organized by Aichi Prefecture and the City of Nagoya. This award reflected a strong
evaluation of our consideration for the environment and focus on heirloom vegetables andlocal dishes related to biodiversity, as well as our ability to work together on area mapping inorder to raise awareness about the environment among employees.

Rinnai Principles on Biodiversity

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

2. Cultivation ofawareness

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

3. Pursuit of businessactivities contributing
to biodiversity

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

4. Disclosure of
information

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

Extermination of Specified Invasive Species

Business Activities and Biodiversity
Relationship between the Rinnai Group’s Business Activities and Biodiversity
Business activities
CO2

Use of mineral
resources

Greenhouse effect gas
Use of energy

Design, manufacturing

Chemicals(fuels, electricity)

NOx
Use of biologicalresources

Raw materials
procurement

Transportationand sale

Soot and dust

Impact on Biodiversity

OutputRelease into the atmosphere

Input
Dependence on Ecosystem Services

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

During Environment Month in June, Rinnai works together withlocal government bodies, volunteers, and employees ofneighboring companies to collect and dispose of the specified
invasive species Coreopsis lanceolata. Specified invasive
species are living organisms that the Japanese government
has determined to pose a risk of harm to ecosystems when
they are introduced from other regions. Their cultivation,
preservation, import, transport, and breeding are prohibited.
In fiscal 2021, Rinnai collected and properly disposed ofCoreopsis lanceolata while paying careful attention to safety bylimiting the area and number of participants to prevent the
spread of COVID-19.

Extermination of specified invasive species Coreopsis lanceolata

Waste
Use of water
resources

Collection, disposal,
and recycling

Use of products
by customers

Drainage
Noise and vibration

Use of land

49

Rinnai Report 2021

50

Introduction

Environment

SocialGovernance

Data

Environment

Nijyu-maru Project1 Registration Efforts
The Rinnai Group endorses the Nijyu-maru Project organized by the Japan Committee for
the International Union for Conservation of Nature (IUCN-J) and promotes global biodiversity
conservation activities. “Nijyu-maru Project Registration” pertains to initiatives in line with the
20 goals outlined in the “Aichi Targets,” which are global objectives adopted at the 2010
Tenth Meeting of the Conference of the Parties to the Convention on Biological Diversity heldin Nagoya, Aichi Prefecture. Thus far, five projects have been registered.
1. Nijyu-maru Project: A framework in which citizens’ organizations, companies, local authorities, and others state and register theirdeclaration to do what they can to contribute to the Aichi Biodiversity Targets (Nijyu-maru Declaration)「愛知ターゲット」の「愛知ター ゲット」の目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と消費」

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

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

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

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

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

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

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

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

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

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

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

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

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

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

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

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

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

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

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

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

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

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

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

51

Rinnai Report 2021

52

Introduction

Environment

SocialGovernance

Data

Environment
Environmental Communication
We use regular communication and exchange events as a means of building awareness of the Rinnai Group’s
environmental activities in order to deepen our ties with and be a trusted member of our local communities.

Rinnai Group Environmental Awards Programs

Furthermore, Rinnai sets June as Environment Month and holds various environment-related events to further

News release (link destination: https://www.rinnai.co.jp/releases/2021/0325/) (Japanese language only)

のコエ
賞者
受

経営層や他部門にアピールでき、取組に対する社内の評価が上がった環をバランス良く進め
経営
よう
境と
！

リンナイグループ
環境大賞2020
取 組 大 募 集！

2020 年 2月〜6月5日（金）必着

募集期間

環境大賞、優秀賞、奨励賞、努力賞

表彰
のコエ
賞者
受

応募資格

受賞をきっかけに
チームの環境コスト意識が変わってきた国内外グループ全従業員
受賞者
のコ
エ

長年調整を重ねてきた
改善担当者を褒めることができた

応募前の
個別相談も
受付中！
お早めに！

詳しくは、応募要項をご覧下さい
公開場所

ポータルサイト ＞ 共通 ＞ 環境 ＞ 環境部からのお知らせ ＞ 環境大賞

http://rweb.rinnai.co.jp/portal/kankyou/02_keihatsu/rinnai_environmental_award/rinnai_environmental_award.html

In-house award andsubmission awareness poster

In-house Environmental Newsletter Eco no Coe
Rinnai regularly distributes the in-house environmental newsletter Eco no
Coe to ensure employees around the world stay up to date with Groupenvironmental activities and environmental trends elsewhere in Japan andother countries. This newsletter has been published since 1999 as a means ofenhancing environmental knowledge and awareness, encouraging
communication among employees. In fiscal 2021, topics including the SDGs,
climate change response measures and environmental contributions within
the new normal ushered in by COVID-19 were covered.

vol.61 2020 SUMMER

リ ン ナ イ の 色 ん な 活 動 と「 環 境 」を 結 ぶ

Save t h e ea rt h !

“ Rin n a i” の SDGs 取り組みvol.61 2 0 2 0 S UMME R

これまで様々な改 善を通じて貢 献をしてきたリンナイ。今回は、過 去 のリンナイグループ 環 境 大 賞 の応 募 作 品をはじめ、事 業 内 の 技 術 改 善を中心にS D G sとのつながりを紹 介します。※注

SD Gs (エス・ディ・ジーズ) って実は身近な存 在！

１. 温暖化防止

あなたの行動で世界が 変わる？！
環境・経済・人権をはじめ、世界で起きている様々な社会課題(SDGs)を

タクトタイムの短縮による

みんなで理解し、継続して改善を行っていくことが 大切です。[参考：Vol.54(2018年8月発行)]
ep

stIn recognition of efforts to develop environmental humanresources, Rinnai received the Minister of the Environment Prize(Large Company Category), the top award at the 2020
Environmental Human Resource Development Corporate
Awards, organized by the Ministry of the Environment and theEnvironmental Consortium for Leadership Development(EcoLeaD). This is our third award, following two consecutive
Awards for Excellence in 2018 and 2019. Rinnai was recognized forits “7E Strategy,” which promotes environmental activities
throughout the product lifecycle, as well as employee ideas anddaily improvements that motivate employees, both of which
contribute significantly to the environment and management.

1

Sustainable
Development
Goals(持続可能な開発目標)だよ！

2015 年に国 連が採 択した 2030 年までの「世界共通の目標」です。地球で起きている
社会課題ごとに、17 のゴールと、169 のター
ゲットで構成されています。
ep

2

例えば…

企業が積極的に 「SDGs」の活動をしているんです！
トヨタ自動車「水素」を活用した●

ゼロエミッション(CO2ゼロ)、
資源の循環・利活用、他

3

難しいって
思ってたけど、身近な取組みもあるね！

キヤノン

スターバックス
●

2020年までにプラスチック●

コーヒーの豆カスを飼料やエネルギー多様化の促進●

ep

生産性の向上(CO 2 ▲100％)
給湯器製造の「乾燥水抜き検査工程」において、許容範囲を見極め、過剰品質にな

みんな覚えてる？
「SDGs」
ってなんだっけ？
世界共通の目標なんです！

st

Rinnai Receives the Minister of the Environment Prize, the Top Award at the 2020 Environmental
Human Resource Development Corporate Awards

The Rinnai Group Environmental Awards are held annually to recognize outstanding
environmental activities and stimulate more action on the environment throughout the Group.
These awards recognize major contributions to environmental conservation and regional
communication and are open to all bases in Japan and throughout the world. The 11th awards
ceremony was held at the Rinnai Group New Year Convention, at which Rinnai’s CEO
presented the awards. In fiscal 2021, there were a record 134 entries submitted, from which one
Grand Prize and 11 category-specific awards covering manufacturing, offices, logistics andsocial contributions were selected.

stenhance the environmental consciousness of its employees

ストローの使用廃止「つくる・売る・廃棄する」の製品●

ライフサイクル全体で、低炭素・肥料にして食品の循環、他

資源循環・有害物質・生物多様性の4領域の環境取り組み、他

らない仕組み(不要工程の廃止など)を構築
し作業効率をアップさせた。(瀬戸工場)

クールビズの推進

軽油使用量の削減

こまめなフィルター清
掃 で エアコンの 効き目アップ。扇風機の活(CO 2 ▲15%)用で冷たい空 気を循環させて冷 房 効 率を
上げる。
体感温度を
下げる工夫をしよう！

アメリカ向け給湯器
Nシリーズ

２. 資源循環廃棄物

納品形態の変更による

水梱包改善による

冷却水の循環水化で大幅な節水

廃材量の削減(▲75%)

不良ゼロ(▲95%)

取引先からの納品形態を鋼板からコイル材に変更し、必要な大きさに合わせてカットで組立時に底面の引っ掛かりをなくすよう形状を見直し、立ち上がり性をダイカスト金 型 の加工ラインで使用する冷 却 水を、長改善させた。

時間の放水から循環利用できる仕組
みに変更した。
（台湾林内）

きる仕組みとした。さらに、カット後の余白部分も活用。

世界中のたくさんの目標…

(リンナイブラジルヒーティ
ングテクノロジー㈲)どこから取り組んでいけばいいの？

定期便1便削減による荷物用の重量把握システムを導入し、積載量の見える化・最適化で便数の削減に貢献。

( ア ー ル・ビ ー・コント
ロールズ㈱)

右図を見てみましょう。SDGsがめざす「次世代に渡って経済と社会が続く」には、「環境配慮」が基盤であることが分かります。

環境に対する目標の達成が、SDGs達成の基盤(一番下)になるんだねココ!
小さなことからコツコツと！
積み重ねを大切にしていこう。

SDGsウェディングケーキ
出所：Stockholm Resilience Centre

鉄板

コイル材

不良ゼロの
ワンタッチ組立を実現!!

Eco no Coe cover (theme: SDGs)

Factory Tours
Community Cultivation of Heirloom Vegetables1
Rinnai conducts factory tours enabling stakeholders to learn about our environmental and other activities and efforts.
Held online, these tours are an opportunity to provide an insight into factory operations and facilitate an understanding of
Rinnai environmental, quality, safety and manufacturing activities through question-and-answer sessions.

Rinnai cultivates heirloom vegetables that have been a part of life in Aichi Prefecture since
the Edo Period. To date, we have distributed heirloom vegetable seeds to more than
1,000 employees and their families. By personally cultivating, harvesting and eating thesevegetables, we provide opportunities to interact with local food culture and nature whileinteracting with green spaces.
1. Heirloom vegetables: Vegetables that have been a part of life in the region for a long time, including vegetables from Kyoto andKaga.

Cleanup and Greening Activities around Company Sites
Online factory tour

53

Introducing the Company to local high school students

Photos posted by employees

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

Rinnai Report 2021

54

Introduction

Environment

SocialGovernance

Data

SocialDefining “Improved Quality of Life”

Rinnai’s Definition of “Improved Quality of Life”
Rinnai develops products closely related to people’s lives, including water
heaters for heating water, kitchen appliances for cooking andCriteria

air-conditioning appliances for heating rooms. In providing products witheven greater value, we support people’s lives as well as facilitate an

Gas tankless water heaters (USA)improved quality of life.
For example, in the United States, where tank water heaters areused, problems occur when all the hot water is used up and only cold

Main products

1

Reduced stress throughimproved convenience

Gas clothes dryers(Japan, China, South Korea)

water comes out. The advantage of Rinnai tankless water heaters is that

Endless supply of hot water thanks to gas water heaters

Reduced housework burden thanks to gas clothes
dryers and dishwasher/dryers

Gas dishwasher/dryers (Japan, China)

hot water is always available immediately when needed, which
contributes to reduced stress in everyday life.
Rinnai recognizes that making people’s lives more comfortable andenjoyable is the major mission of our brand promise “Creating a healthier

Details of improvement

2

Increased safety ofliving spaces

way of living.” To this end, we will expand sales to offer products that

Wireless LAN-compatible remote controls(Japan)Remote control and monitoring functions

Gas stoves with sensors (Japan, ASEAN)

Stoves equipped with sensors ensure prevention
against fires

Micro Bubble Bath units (Japan)

Micro Bubble Bath units have health improvement benefits

Air purifiers (China)

Increased hygiene levels thanks to better air quality

Gas and electric water heaters (ASEAN)

Water heaters installed in houses that previously did nothave them

ECO ONE (Japan)

Hot water supply even in times of disasterGas stoves (ASEAN)

Cooking possible even during electricity blackouts

improve people’s lives with health, quality and comfort while providing
enjoyment and excitement.
3

4

Improved levels of hygieneand healthEnhanced resilience

By broadly expanding products defined as “improving quality of life,” we envisage making people’s lives more comfortablethroughout the world, which we will manage as a business performance indicator. Our aim is to increase sales of productsthat improve quality of life by 50% in fiscal 2026 compared to fiscal 2021.

55

Rinnai Report 2021

56

Introduction

Environment

SocialGovernance

Data

SocialReducing Stress through Improved Convenience

Increasing the Safety of Living Spaces

Surveys on stress reveal that housework such as washing dishes and doing laundry are bothersome aspects of people’s
everyday lives. Rinnai recognizes that reducing the burden of housework will lead to improved quality of life.

In Japan, to prevent stove fires caused by tempura oil, laws* have been enacted mandating the installation of safety
sensors on all gas stove burners since 2008. With the spread of stoves equipped with safety sensors, the number of fires
caused by gas stoves is decreasing.

“Which of the following types of housework are a source of stress?”(%)
50

Survey on perceptions related to stress from the Netsu to Kurashi Tsushin (Heat & Life Newsletter) in May 2018(Multiple responses, N = 4,879)

Note: Household gas stoves have become subject to government-designated regulations (indication of PSTG or PSLPG) by the Gas Business Act, and the Act on the Securing
Safety and the Optimization of Transaction of Liquefied Petroleum Gas. Accordingly, all burners are required to be fitted with an “oil overheating prevention device” and a“flame-failure device” since October 1, 2008.

36.4
6,000

21.3

20

19.9

18.3
12.4

11.5

11.3

10

10.0

Reducing the Stress of Washing Dishes

Rinnai provides dishwasher/dryers to reduce the stress of
washing the dishes. Dirty dishes are placed in the machine andwith the push of a button they are automatically washed, rinsed
and dried in 1–2 hours. Even in Japan, which has high living
standards, the penetration rate is less than half, thus we believe
there is still room to expand the provision of these appliances inJapan as well as the rest of the world.
Furthermore, these appliances use about 80–90% lesswater than handwashing, while reducing the cost of
dishwashing soap and water by approximately 50–60%,
contributing to resource conservation.

57

Housework is nota source of stress

Other

Putting clean dishes away

Shopping

Changing the sheets,
making the bed

Drying laundry

Folding andputting away laundry

Sorting anddisposal of garbage

Washing dishes

Cooking

Cleaning0

Tidying up andorganizing the house

2.0

Reducing the Stress of Drying Laundry

Rinnai offers gas clothes dryers to reduce the stress of drying
laundry. This appliance is able to dry five kilograms oflaundered clothing in approximately 50 minutes (drying clothes
in about one-third the time required when using an electric heatpump clothes dryer). This enables a reduction in the amount ofwork involved in washing and drying laundry, which in turn
reduces the burden of housework.
The powerful heated air generated by gas eliminates
unpleasant odors associated with line drying, while also making
each individual fiber stand up, resulting in laundry that is fluffierthan sun-dried laundry. In proposing optimal laundry drying
methods, Rinnai will contribute to improving quality of life.

5,000

4,000

3,000

2,000

1,000

Mandatory sensor installations

23.5

Number of fires caused by gas stoves

30

5,713

27.5

(Source: Ministry of Internal Affairs andCommunications Fire Prevention White Paper andMinistry of Economy, Trade and Industry materials)

80%

74.8%

70%
60%
50%

2,497

40%
30%
20%
10%

0

0%

‘05 ‘06 ‘07 ‘08 ‘09

‘10

‘11

‘12

‘13

‘14

‘15

‘16

‘17

‘18

Sensor-equipped gas stove penetration rate

39.9
40

‘19

Rinnai has been engaged for some time in thedevelopment of safety sensors, establishing a trackrecord of fire prevention activities through sales
promotion and promulgation efforts. Further, in South
Korea, mandatory safety sensor requirements similar
to those in Japan have been mandated since 2014,
achieving similar results. Rinnai is promoting efforts
encouraging the adoption of these products toprevent residential fire incidents, which have becomea social challenge.

As living standards improve throughout the world, and cookware is
expected to increase in line with demands for more abundant lifestyles,
Rinnai will leverage technological developments accumulated indeveloped countries to provide products with a high degree of safety inorder to meet growing demands.
Gas stoves with sensors in China

Rinnai Report 2021

58

SocialContributing to Health Promotion
In April 2019, Rinnai formulated its brand promise, “Creating a healthier way of living” and renewed its brand logo. The newlogo is symbolic of the new Rinnai and is intended to invoke a brand image of creating healthy and comfortable lifestyles.
We have added a new theme of “health and lifestyles” to the past theme of “heat and lifestyles.” In addition, as one
message in promoting the theme of “health,” in April 2020 we launched sales of the microbubble bath unit.

Generating the Industry’s Highest Level of Microbubbles
As a method for generating microbubbles, in addition to the pressurized dissolution method used in conventional
products*1, the incorporation of a method whereby hot water is swirled inside the dissolution tank enables the dissolutionof even more air. Nozzle components that generate bubbles have also been improved, increasing the number of bubbles
in microbubbles to approximately twice that of conventional products, generating 30,000 bubbles per cubic centimeter(cc) of water, resulting in double the whiteness. This generates approximately 2.7 times more ultrafine bubbles*2 thanconventional products, or 2.42 million bubbles per cc of water.
In developing the pressurization and rotation technologies used in this product, another achievement is therealization of a more compact dissolution tank. In shrinking the tank size to just 30% of conventional tanks, Rinnai wasable to develop a Microbubble Bath Unit with a built-in water heater (conventional products use external water heaters,
thus in addition to units with external water heaters, we also sell units with built-in water heaters).

What are microbubbles?
Microbubbles are ultrafine bubbles measuring 1-100μm in
diameter. They have low buoyance and spread out and gently rise
like a milky cloud. As time passes, they float to the surface andbecome even finer bubbles as they contract in water.
Microbubble bath unit
By affixing a microbubble bath unit between the bathtub and thewater heater with dedicated circulator fittings (a device to spray
hot water into the bathtub), microbubbles are generated andproduce a variety of health benefits for the bather.

Number of microbubbles 30,000 (per cc)

2.42 million ultrafine bubbles (per cc)

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

Change in averageskin temperature (˚C)

+1.6
+1.4

<Amount of Bubbles>

Conventional
products

800
Turbidity / degrees(˚C)<White turbidity>
Microbubble Bath Units

30

2,500

25

600

More than double
the white turbidity

400
200

Thousands/cc

Effect and efficacy of microbubbles: Hot bath effect20

Number of microbubbles

15

Approximately

0

50

100

Elapsed time / seconds

+1.2

150

Number of ultrafine bubbles
1,500

10
5

0

2,000

two times more

1.6

3.0

About
1,000
500

2.7 times more

91

242

0

0

Conventional products

Microbubble Bath Units

Bubble effusion image

1. Conventional products: Rinnai Bihakuyu (UF-MBU2) released in 2007
2. Ultrafine bubbles: Fine bubbles with a diameter of 1 μm

+1.0±0Prebathing

Start of rest
(Third minute ofbathing)

Rest for10 minutes
Plain bathwaterRest for20 minutes

Rest for30 minutes

VOICE
Developing the Microbubble Bath Unit

Microbubble bathing
The previously developed microbubble generator Bihakuyu unit was a product based on an extremely

Experiment parameters Research by Toho Gas Co., Ltd. and Nihon Fukushi University in fiscal 2019.
		
Subjects: Seven healthy women in their 30s
		Bathroom environment: Room temperature 29˚C, humidity 97%
		Bathing method: Whole-body bathing for 10 minutes with bathwater at 40˚Cstrong concept, from which our desire to excite customers with the generation of even more bubbles
resulted in the development of the Microbubble Bath Unit.
To generate even more bubbles, we both confirmed our progress using computer-assisted
engineering (CAE) and created multiple prototypes with which we repeatedly engaged in product

Since the bubbles envelop themselves around the bather’s body, the transmission of heat from the bath water to the body
becomes gentler causing body temperature to rise gradually. As the body releases heat gradually after leaving thebathtub, there is a sustained sense of warmth.

59

Kazuyuki Amemiya
Element Development Division,
Appliance Technology
Development Officetesting. This enabled us to increase the number of bubbles in actual measurements, as well as produce
cloudy hot water making the effect clearly visible, which I think was a great achievement.
Going forward, I hope to continue daily development efforts to continue providing products
enabling as many people as possible to live comfortable, quality lifestyles.

Rinnai Report 2021

60

Introduction

Environment

SocialGovernance

Data

SocialResilience
A hot water heater that is resilient to disasters,
ECO ONE is a hybrid hot water and heating
system that protects and supports people’s lives.

The ECO ONE Hybrid Water Heater andHeating System as a Disaster Countermeasurein the Event of an Emergency

Disasters strike unexpectedly. Consumers canprepare for emergencies by installing hot water
heaters that can work with both gas and electricity,and thus diversify risk so lifestyles can be sustainedeven when lifelines are limited.

Electricity

Gas(High-efficiency
water heaters)(Heat pumps)

Highly efficientand energy-saving

Powerful andspeedyIt boosts the efficiency ofelectrical energy by using
hot air.

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

What ECO ONE can do during a disaster

When the power is cut off

When the water is cut off

If there is power generation from cars or solar panels,
gas can be used to heat waterElectricity

In recent years, several natural disasters have occurred in Japan, serving as an opportunity to think more deeply aboutrisk countermeasures in the event of a disaster and heightening the momentum to prepare for them on a daily basis.
June 2020	Earthquake on eastern coast of Chiba Prefecture (maximum
seismic intensity 5 lower)
July 2020	Torrential rains across various regions measuring the highest
amount of rain ever recorded
July 2020	Typhoon Haishen caused damage in Kyushu and Tohoku regions

Total (n =1,403)

47.6

Gas

ECO ONE

When both electricity and gas
are stopped

Hot water can be supplied with electricity alone

If there is a storage battery, water can be heated with electricity
Supplying
hot water
withelectricity

35.9
31.1
46.1

20%

36.5

21.4

34.9
23.5

11.8

35.1

16.0

13.6

16.7

19.8

Power outage
countermeasures
Propane gas equipment
facilitating gas storage

0%

ECO ONE

Gas

Electricity

Solar power
generation

Storagebattery

ECO ONE

Gas

45.1

40%

Water outage countermeasures
Gas outage countermeasures

Total (n =1,403)

Source: EnviroLife Research Institute, Inc., 2019

61

Have
experienced
water
outages43%

Cigarette sockets

When the gas is cut off

Electricity

Equipment incorporating a
rainwater tank that can also be used
as an emergency water supply

Have experienced
power outages
70%

Have notexperienced
water
outages57%

51.0

Water servers and otherequipment that can also
store drinking water

Have notexperienced
power outages
30%

Experience withwater outages

60%

Residential planner damage (n = 206)

All-electric equipment that
does not use gas

Experience withpower outages

Overall damage (n = 1,403)

Eco Cute and other equipmentthat can also be used as an
emergency water supply

According to a survey, 70% of all respondents have experienced power outages
during a disaster. 43% have experienced water outages, with the data indicatingthat situations where lifeline services are interrupted occur frequently. As
countermeasures in the event of a power outage, there are requests forequipment “using sunlight and storage batteries to ensure basic life needs aremet” (51.0%) as well as equipment that “can also be operated using gas without
relying solely on electricity” (47.6%).

Power outage
response units

Consideration of Requests for Residential “Equipment” in the Event of a Disaster

Ability to resume normal
daily life using large
capacity storage batteries

70% of People Have Experienced Power Outages and 40% Water
Outages When Lifelines are Cut During a Disaster

Equipment that can also be
operated using gas without
relying solely on electricity

March 2020	Earthquake in Noto region of Ishikawa Prefecture (maximum
seismic intensity 5 upper)
April 2020	Earthquake in Chubu region of Nagano Prefecture (maximum
seismic intensity 4)

Ability to meet basic life
needs using sunlight,
storage batteries, etc.

Major Natural Disasters in Recent Years

ECO ONE

Hot water in the tank can be used as domestic waterhttps://www.jkk-info.jp/publicity/deteil/id=107

Image of hybrid lifestyleduring power outages
During a disaster, by using solar power generationand ECO ONE, electricity can be used to preserve
foods and for nighttime lighting while gas is used
for heating water and cooking.

Solar power generation

Emergency powersource up to
1,500W

Gas water heating
possible
Cooking is also
possible

Night-time lighting Information
Food
preservation (rechargeable gathering
LED, etc.)
CookingHeating water

ECO ONE

Gas

Rinnai supports customers’ safety and endeavors to help them live comfortable lives with peace of mind by providing
products like ECO ONE and the functionality built into its various products.

Rinnai Report 2021

62

Introduction

Environment

SocialGovernance

Data

SocialSafe and Secure Initiatives

Smooth Provision of Information through the Internet

After-Sales Services

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

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

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

smoothly provide information in consideration of customer internet utilization circumstances.

Microcomputer Meter Reset Process Introduction

Prompt After-Sales Services

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

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

Creating an After-Sales Services Structure Incorporating Customer Feedback

Microcomputer meter reset process introduced on the Rinnai corporate website

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

Customer feedback questionnaires are provided
to customers requesting repair services. This
questionnaire assesses repair visit response
times and other factors determining the degreeof customer satisfaction with Rinnai repair
services. Customer assessment results areprovided as feedback and the results ofquestionnaires are utilized effectively throughout
the Company.
In fiscal 2021, 21,000 customers completed
questionnaires, which rated our after-sales
services an average of 94.9 points.

Degree of customer satisfaction with repair services
Comprehensive evaluation of service response

95.1

From repair request to completion of repair

94.9
92.7

Cleaning up after repair and maintenance

98.6

Description of repair details
Prior explanation of problem or issue

93.1

Greetings and display of identification

92.9
95.0

Courtesy, attitude and language

93.7

Telephone response before visit

98.4

Condition of equipment after repair
88

90

92

94

96

98

100 (Points)

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

63

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

Rinnai Report 2021

64

Introduction

Environment

SocialGovernance

Data

SocialInquiries Response and Support System

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

The Customer Center handles inquiries from customers via toll-free telephone numbers and emails. In fiscal 2021,
approximately 840,000 toll-free calls and 12,000 email inquiries were received.

safety and reliability.”
According to comments and assessments from
customers in the fiscal 2020 customer questionnaire,
80% of customers complimented Rinnai on thepoliteness and promptness of our response to theirinquiries. Comments that were critical of our response areprovided as feedback and used to improve our services.

Basic Policies

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

Rinnai Customer Center

Customers’ Inquiries

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

Other 10%

Other 8%Air conditioners

Replacement purchases

8%

Customer Center

Catalog requests

1%
Air conditioners

1%

Inquiry
classification

Kitchens

39%

Consultation
desk

Analysis ofcustomerfeedback
Identification andanalysis ofimportantquality issues

Service system enhancements

Executives
Analysis and identification results

CustomerCenterDaily information

Consultationdesk• Repair requests• General product inquiries• Technical consultations• Customer consultations(Fiscal 2021)

Customers

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

11%

Industrial 0%

Relevant
departments

Feedback to
manufacturing
divisions
Information
sharing

Complaints 1%
Construction
methods

Inquiry
details

Products 34%(Fiscal 2021)

3%
Hot water supplies

Repairs42%

42%Frequently Asked Questions (FAQ)
In response to customer desires to solve problems on
their own, Rinnai created a “Frequently Asked
Questions” page on its corporate website, with manycustomers taking advantage of how-to videos thatapproximately 76% of respondents said resolved
their issue.

FAQ (Japanese language only)

65

Rinnai Report 2021

66

Introduction

Environment

SocialGovernance

Data

SocialInitiatives for Inspections

Rinnai Products Affected by the Product Safety Inspection System for Long-Term Use

Indoor instant gas
water heater

Indoor bath heater with gas
burner

Built-in dishwasher

Course of Events Leading up to Inspections under the Product Safety Inspection System for Long-Term Use
Customer receives an explanation
regarding the system at time ofpurchase

Note: Revisions to the Consumer Product Safety Act were announced on July 27, 2021, and enacted on August 1, 2021.
For details, please see “Regulatory Revisions Related to Legal Compliance Inspections” on the Rinnai website (Japanese
language only)

In April 2009, Rinnai put its product safety inspection system for long-term use into effect to comply with revisions to
the Consumer Product Safety Act. We offer notifications regarding legal compliance inspections for customers who
registered their products in accordance with this system once they reach their 10th year of use. This system aims toencourage customers to have their products appropriately inspected and maintained before they deteriorate and failure
rates rise. To maintain products through maintenance and replacement, we provide safety inspection guidance regarding
our outdoor water heaters in accordance with laws and ordinances. Additionally, we recommend that customers who
regularly use target products receive inspections and make sure they understand that these products have standard
lifespans.
The Rinnai Group aims to enhance its maintenance checksystem, which employs qualified personnel to conduct
appropriate inspections. At the same time, we offer uniqueservices, such as extending product warranties for customers
who registered their household hot-water equipment with us
for an additional three years.
In addition, we work to increase customers’
understanding of our inspection program and prevent
accidents by providing information through our website andconsultations via our maintenance and inspection call centers.

67

Maintenance and Inspection
System of Long-Term Use
Products
Product safety inspection
system for long-term use
Legal inspections
conducted in accordancewith the Consumer Product
Safety Act

Safety inspections
conducted under the
product safety inspection
system for long-term use

A notification regarding inspection
timing is mailed to the customer(via standard mail or email)Staff member records necessary
information when the customer
applies for an inspection via telephone

1

2

3

4

5

6

Explanation
regarding thesystemOwnerregistration

Notification of
inspection

Application
for inspection

Processing of
application

Inspection

Owner registration conducted by thecustomer (via standard mail or online)

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

Personnel visits thecustomer’s homeand conducts
inspection on theappointed day

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

Heat source device for water heating systems(FF-type) added to target products in July 2011

The Consumer Product Safety Act requires
owner registrations and (fee-based)
inspections of products marked as “specified
maintenance products” to prevent mishaps
due to degradation.

To prevent product mishaps due todegradation, we recommend that ourcustomers register and receive (fee-based)
inspections for products with “safety
inspection marks,” in accordance with laws
and ordinances.

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Introduction

Environment

SocialGovernance

Data

SocialAbout Inspections

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

Inspection work is carried out based on established inspection procedures. The accuracy of the inspection is managed
by checking the total number of work slips submitted to the customer and double checking to automatically check
whether the input data is correct when it is entered into the dedicated system. In addition to explaining the details ofinspections to customers, we also explain available options that customers should take into consideration in accordancewith the inspection results. In the unlikely event that a product is deemed unsafe to use, details regarding follow-up
inspections are mailed at a later date in an effort to prevent accidents. We strive to improve the quality of inspections
through efforts including instructing inspectors based on statistically managed data.

Customer Feedback Regarding Inspections• From appointment to completion of inspection, all work conductedaccording to the inspection manual to promote higher CS

1

Qualityinspection

Quality inspector,
quality support, legal
compliance, inspector
report2• Train qualified inspection personnel through skills management, regulartraining and technical support for inspection engineers

Customerfocus

Reflecting actual
usage and customer
feedback into products• Customer feedback is collected at the time of inspection and isincorporated into the inspection system and products• Website content expanded and manual updated to provide appropriate
information to customer inquiries received by telephone

3

Customersatisfaction

Appropriate and polite
provision of
information, etc.

• When making an appointment for inspections, we not only provide
explanations based on legal compliance and appropriate treatment
standards, we also conduct a preliminary survey, and if there is apossibility that the equipment is no longer usable, to reduce theinconvenience to customers before the inspection, we offer the customer
the option of inspection, repair or replacement• When registering a new product, we send confirmation of registration andask that customers confirm the information they submitted, establishing ameans of providing appropriate information such as a survey in the event
notification was not received. With regard to products that will require
specific maintenance with the enactment of new laws, we also send
notifications to customers and request that they register their products

Future Initiatives

4

5

69

• Check progress of inspection to ensure appropriateness, confirm all
inspection work to prevent inspection errors• Engage in customer safety activities such as alerting customers after
inspections whose equipment is prohibited from usage

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

Traditionally, manufacturers have been mainly engaged in activities such as the development, manufacturing, sales, andrepair of products. However, since the establishment of the inspection system, manufacturers have also become involved
in inspections and other customer safety activities.
In order to prevent product-related accidents due to deterioration over time, it is necessary to understand theinspection system and further strengthen inspection-related efforts. Nearing the time when full-scale inspections are
required, the number of inspections substantially increases. Utilizing the results of inspections to understand how
equipment deteriorates over many years of usage, Rinnai will make an effort to strengthen its customer safeguardsystems and reflect this understanding in future inspection notifications.

Rinnai’s Response

Safetyguidance

Establish
trust

Provide safety
guidance before
product failure, notafter• We provide guidance so that products are inspected before they fail orafter the inspection date has passed to prevent degradation. If there is no
response from the customer, inspection notifications are mailed again one
year later (targeting products requiring specific maintenance)

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

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Introduction

Environment

SocialGovernance

Data

SocialEfforts to Coordinate an Inspection System

Inspection System Maintenance Items Required by Law and Rinnai’s Response

To adequately implement inspection, our 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 reliableinspection system.

Voluntary System Action Items and the Current Status
Action Items

Rinnai’s Current Status

Enhancement of provisionof information

We post the detailed information on maintenance and inspection system for our
products for a long period of time on our website.

Enhancement of items
to be inspected

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

Inspection quality
improvement

Warning after the inspection

The inspection results of all items are checked to see if there is any judgment
error to assure technology standards. The inspection completion rate ismonitored all the time not to delay the inspection schedule.
When an inspection result concludes the prohibition of the use of a product,
we will provide the follow-up of the inspection by calling or writing to the user.

“Law” refers to the “Consumer Products Safety Act” and “Ministerial Ordinance” refers to “Ministerial Ordinance on Ministry of Economy,
Trade and Industry-Related Specific Maintenance Products.” Information is as of March 31, 2021.

Applicable Law

SystemMaintenance Items

Details

Law: Article 32-19 and
18-1
Ministerial Ordinance:
Article 13-1

Establish
inspection offices

Arrange offices appropriately to ensure
efficient implementation of inspections.
Secure engineers for each office.

Law: Article 32-19 and
18-1
Ministerial Ordinance:
Article 13-2–4

Public display
and notificationof establishedinspection costs

Establish costs that do not significantly
exceed the appropriate cost when theinspection is conducted efficiently,
publish standards for determining
inspection costs, and give prior noticeof costs before the inspection, including
the breakdown of the inspection costs
and notification of the standards forcost determination.

Law: Article 32-19 and
18-2
Ministerial Ordinance:
Article 13-5–6

Preparation andmanagement of
guidance
necessary for
inspection

Prepare guidance based on inspection
standards and store with a third-party
organization.

Law: Article 32-19 and
18-3
Ministerial Ordinance:
Article 13-7–8

Ownership ofmaintenanceparts andprovision of
information

Establish and maintain a maintenanceperiod. Prior to inspection, notify
customer with regard to themaintenance status.

Law: Article 32-19 and
18-4
Ministerial Ordinance:
Article 13-9

Providinginformation
about items
during theinspection period

Make this information available to readon the internet

Law: Article 32-19 and
18-5
Ministerial Ordinance:
Article 13-10

Implement
technical training

Regularly hold technical seminars,
conduct courses for contractors andtake measures to ensure technicalstandards.

Law: Article 32-19 and
18-5
Ministerial Ordinance:
Article 13-11

Recordinspection results

Record inspection results and store
them as a guide for three years.

Law: Article 32-19 and
18-5
Ministerial Ordinance:
Article 13-12

Conveyinspection

Rinnai’s Response
Inspection offices: 81 locations across Japan
Certified inspectors: 663 people
Standards for determining inspection costs,
inspection costs and contact information is
published on the Rinnai corporate website

Notification: Sent when request for inspection isreceived.

12 types of guidance have been created (gasappliances: 10; electrical appliances: 2)

Inform the customer who requested
the inspection of the results in an
appropriate manner.

Guidance is managed as follows:
Gas appliances: Japan Gas Appliances
Inspection Association (JIA)
Electrical appliances: Japan Electrical Safety &Environment Technology Laboratories (JET)
Maintenance period: Conducted from 9–11 years
after production.
Notification: Sent when request for inspection isreceived. Information regarding maintenanceparts are also published on the Rinnai corporatewebsite.
Information regarding maintenance schedules
for products is provided on the Rinnai corporatewebsite (searchable by model number). This
information is also listed in the productcatalogues.
Technical training: Inspection certification
training provided to employees.
Ensuring technical standards: In addition toevaluating skills at technical seminars, we
conduct qualification renewal management andskill enhancement training.
Inspection results are recorded on written
inspection result statements.
Results are stored for seven years
Communications: Written inspection result
statements are provided to customers. This
report indicates options available based on the
results of the inspection. Moreover, customers
are informed if frequent inspections are required,and in the event the use of a product becomesprohibited, the inspection will be followed up bya phone call or in writing.

Additionally, Rinnai is considering statutory revisions in light of public comments on statutory revisions concerning the product safety inspection system for long-term use, and even in
the event that Rinnai products falling under said laws (Specific Maintenance Products) are removed from the scope of applicability, we will continue to conduct inspections voluntarily
in an effort to strengthen customer safeguard systems.

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Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Employees

Enhancement of Health Promotion Activities

Efforts as An Outstanding Health Management Company

Rinnai believes healthy employees are important to enable the continued support of healthy customer lifestyles, thus we
conduct various measures to protect the health of employees. As a result, Rinnai was selected as an Outstanding HealthManagement Company 2021 (Large Enterprise Category), sponsored by the Ministry of Economy, Trade and Industry, inrecognition of our efforts to promote health as a company practicing excellent health management.

Rinnai’s Primary Initiatives
Rinnai’s policies for promoting and maintaining employee health are stipulated in the Rinnai
Group Code of Ethics and the business plan for the Human Resources Division. The Human
Resources Division has established dedicated departments (a health and welfare team and ahealth support office) as part of Rinnai’s three-pronged approach to supporting employee
health involving the health insurance union, the employee union, and the Company.
Mental Health Measures
We conduct mental health seminars according to occupational level, including self-care
employees for all employees and line care seminars for managers and supervisors.
In addition, we aim to have over 95% of employees undergo stress checks.
Measures to Prevent Lifestyle-related Diseases
We provide guidance to prevent the onset and progression of diabetes and hypertension to
those who are insured but not currently receiving treatment. We also hold such events as sports
festivals and walking festivals.
Measures Against Metabolic Syndrome
We aim for a 5 percentage-point year on year increase in those who are no longer diagnosed
with metabolic syndrome and are implementing specific health guidance for employees aged
35 and older.

73*U nder the Health & Productivity Stock
Selection program, METI and the TSE
have jointly been selecting companies
that strategically carry out efforts
regarding their employees’ health froma management perspective as “Health& Productivity Stocks”. The program
selects outstanding listed companies
engaging in a health and productivity
management program and introducesthem as attractive companies forinvestors who prioritize theimprovement of corporate value from along-term perspective. Through thiseffort, the aim is to raise social
recognition of enterprises engaging in
health and productivity management
and to thereby encourage enterprises
to further engage in health andproductivity management.

In 2013, Rinnai established the Health Support
Office where fulltime public health nurses provide
individual health guidance and consultations aswell as information related to personal health, suchas countermeasures for preventing lifestylerelated diseases, and conduct health promotion
seminars to support mental and physical health.
In fiscal 2021, we incorporated online
interviews and provided more detailed care totarget employees to prevent the taking of leave
due to mental stress, and at the same time, we
strengthened support systems enabling a smooth
return to the workplace for employees who hadtaken leave. We expanded the scope of mental
Health consultation by a full-time public health nurse
health seminars and enhanced support for
employees with cancer, incurable diseases and other physical ailments as well as those with mental health issues. In
addition to conducting stress checks on individual employees, we are also working to systematically reduce employee
stress and create a comfortable workplace by conducting group analyses of results from each division.
In addition to the aforementioned efforts, in order to encourage employee health promotion activities, we haveestablished a Health Management Promotion System and in the Rinnai Code of Conduct ethics statement, we declare
our intention to “create work environments that are safe as well as physically and mentally healthy and comfortable.”
Based on these principles, we are engaged in three-fold activities in collaboration with employee unions and healthinsurance unions. As a concrete example, we co-sponsor events such as health seminars, a Walking Grand Prix andsmoking cessation campaigns. In addition, we collaborate with a dietitian in our employee cafeteria to provide healthymenus offering reduced sugar options and plenty of vegetables. We also conduct health campaigns at all factories tocheck blood vessel age, bone density, blood iron levels and skin age with the aim of raising health awareness. Additionally,
we hold walking seminars to promote health and raise awareness regarding weight loss and physical fitness.
Rinnai received Sports Yell Company certification in recognition of efforts such as conducting radio calisthenics atthe start of the work day, holding various sports events such as the aforementioned Walking Grand Prix, supporting
various sports club activities and supporting the use of sports facilities.
Health Management Promotion System
Person responsible for health management(President and CEO)

Promotion and evaluationof health businessSports communication
Cooperation
event

Employee union

Cooperation

Personnel affairs
division

Data-based insurance
business

Health insurance
association

Health and safety committee(Each office)Employees

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Introduction

Environment

SocialGovernance

Data

SocialPersonnel Training

Career Development Review and Support

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

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

Major Rank-specific Training Programs
Training

75

Subject

Content

New employee training
program

New employees

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

New employee follow-up
training

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

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

S4 level-qualified employee
training

S4 level-qualified employees

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

M6 level-qualified employees

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

M6 level-qualified employee
follow-up training

M6 level-qualified employees

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

Reviewer training follow-up
training

Employees whose duties require them tointerview subordinates and review theirperformance

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

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

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

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

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Introduction

Environment

SocialGovernance

Data

SocialDevelopment of Global Human Resources

Rinnai Response to the Spread of COVID-19

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

In response to the spread of COVID-19, Rinnai established a Countermeasures Headquarters centered on the existingrisk management system with the Rinnai President heading the Countermeasures Headquarters and the General Affairs
Manager in charge of crisis management. Based on conditions in each country, this system enables Rinnai to promptly
disseminate information on response procedures as action guidelines for employees.
To prevent the spread of infections, we continue to expand work from home and staggered working hour systems
while making daily improvements to new work styles, including a new meeting structure using an online videoconferencing system and the creation of a working structure that avoids crowds.

VOICETransferred from the Production Engineering Division to an Overseas
Group Company
After nearly 25 years in the Production Engineering Division, where I was involved with in-houseequipment design, new product production design and other operational and managerial
responsibilities, I have been working at Rinnai America since January 2018.
At Rinnai America, to promote the local production of tankless water heaters, I have been
involved as the local project leader in preparations for the new Rinnai-owned factory to further
expand local production in addition to the management of a leased facility launched in
Rinnai America

Hidekatsu Naruse(Second from right in front row)

April 2018.
With a total investment of over ¥7.0 billion for the new factory, I find it rewarding to be

Office environment while employees are telecommuting (Rinnai America)

Barriers introduced in cafeterias to prevent infections (Rinnai Taiwan)

involved in such a big project, and at the same time, I am delighted to be able to ensure highly
convenient tankless gas water heaters spread across the United States. That being said, thislocal launch required my involvement in a variety of fields other than engineering with which
I had no previous experience, such as human resources, accounting, safety and theenvironment. Further, the approach to many aspects of this project were very different fromthe way things are done in Japan, so even after three years, I am still learning new things ona daily basis.
Going forward, I want to continue contributing to the further development of Rinnai
America, which has just commenced production.

The implementation of COVID-19 countermeasures has provided a good opportunity to revise workstyles andintroduce new programs and systems required for changing awareness surrounding work.
Through virtual business meetings, we have reduced ancillary work required for business trips, transportation andpreparations, and by reducing analog approvals and procedures using paper, we are promoting paperless workplaces,
reducing approval lead times and realizing other operational improvements. Further, with the spread of telecommuting
and online meetings, the effective use of communication tools is advancing as intangible aspects of work that had beendifficult to change in the past but are now starting to evolve. Rinnai will continue promoting these improvements,
inculcating a new corporate culture and a new normal.

From the Overseas Business Headquarters to the United States andHong Kong
After joining Rinnai and working for four years in the Overseas Business Headquarters at theJapan Head Office, where I was involved in export operations focused on East Asia and Europe
as well as product planning, I spent two years in the United States where my experience mainly
involved market trend research. I then returned to the Japan Head Office, where I spent two
years engaged in sales to distributors. At present, I am working in Hong Kong, where I am
engaged in general corporate management, market trend research and sales activities.
Rinnai Hong Kong Ltd.

Shunsuke Tsutsumi(Left)

Working overseas in a different language and culture makes daily communicationsa challenge, but I feel that struggling to think about what and how to convey what needs
to be communicated in a language other than my own is good practice for grasping
the essence of things.
Furthermore, thanks to my experience in multiple countries, I feel I have gained a higher

Changes in meeting format using communication tools

Meeting attended by both telecommuters and office workers

perspective while discovering differences between countries and regions.
Going forward, to play an even more active role globally, rather than being bound by one
set of values, I want to experience a variety of cultures and ways of thinking in order to become
an employee who is able to create new value.

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Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

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

Formulation and Implementation of the General Employers Action Plan
Rinnai formulated the General Employers Action Plan (Fifth Period: Fiscal 2020– Fiscal 2022) basedon the Act on Advancement of Measures to Support Raising Next-Generation Children.

Program and MeasureChildcare leave

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

Fifth Period General Employers Action Plan

1. Plan period
April 1, 2019 to March 31, 2022

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

2. Details

Sick or injured childcare leave program

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

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

Extended family care leave

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

<Measures>

Family care shortened work hours

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

Childcare shortened work hours

Objective 1:• Expand more flexible work styles(Extended period of shortened working hours system, etc.)

79

Family care leave

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

Work from home program

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

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

Measure to reduce working hours(Flexible working hours)

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

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

• Improve management awareness(Develop training programs and consistently conduct interviews before maternity leave, duringchildcare leave and after returning to work)
Objective 2:

To promote initiatives expanding work-life balance<Measures>• Promote work load reduction activities(establish satellite offices, review internal rules, etc.)• Provide business management support for managers(further improvement of attendance system)• Promote the acquisition of paid leave

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Introduction

Environment

SocialGovernance

Data

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

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

Respect for Human Rights and Individuality
The Rinnai Group considers respect for human rights and individuality as one of its main pillars for performing its social
responsibilities as a company. We therefore strictly prohibit any form of discriminatory treatment based on gender, age,nationality, physical characteristics, or any other attributes of individuals. We also refer to the ideas of the United Nations
framework and ISO 26000 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 and materials are published on the Company intranet.
At rank-specific training programs, we also educate our employees based on their roles and job responsibilities.
Rinnai aims to create workplace environments and climates that allow its employees to feel glad to be working for theCompany. We collect opinions regarding the Company from each workplace and hold regular joint labor management
conferences along with employee unions. The goal of these conferences is to make improvements to the Rinnai Group.
We move forward with improvements by sharing issues unique to each business location and conducting systemrevisions. The Company has conducted activities aimed at promoting the use of paid leave, established a new regional
allowance system, and held nursing care seminars. Rinnai also provides financial support for health enhancement events
held by employee unions, such as sport or bowling competitions and walking festivals. Finally, we collaborate with
employee unions to provide workplace tours to employees’ families at our development locations and factories. Throughthese tours, we educate employees’ families about what we and their employee family members do.

Major Programs in Rinnai Employees’ Association
Item

81

Overview

Nationwide eventsin Japan

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

Training seminars
by age group

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

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

Measures to Prevent Harassment
To maintain a working environment that our employees find comfortable, we take measures to prevent any infringementof human rights, including sexual harassment and power harassment. With regard to sexual harassment and power
harassment, we produced a checklist of detailed examples of harassment that is posted on the Companywide intranet
for self-assessment.
Furthermore, we also provide newly assigned department managers with harassment education to reinforce its
prevention.
We also revised our in-house rule to prevent any harassment related to pregnancy, childbirth, child care leave or
family care leave. We clearly determined the detailed act of prohibiting harassment and disciplinary action based on therules of employment if an employee violates any of these.

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Introduction

Environment

SocialGovernance

Data

SocialFair and Diversified Employment
Formulation and Implementation of the General Employers Action Plan

View toward Employment

Rinnai formulated the General Employers Action Plan (Third Period: Fiscal 2021– Fiscal 2022) basedon the Act on Promotion of Women’s Participation and Advancement in the Workplace.

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

Third Period General Employers Action Plan

To improve the employment environment so that women can play an active role, Rinnai
has formulated the following action plan.
1. Plan period
April 1, 2020 to March 31, 2022

2. Company issues

Increase of Female Employment and Support for Their Active Role
Ideas and comments from women are absolutely crucial to our products, particularly as they use so many of our 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 planning and promotion departments, fixedcustomer sales departments, and production departments. At Hot.Lab, our interactive facility, female employees called
Life Creators demonstrate and promote our products to customers. Life Creators across the country gather every year to
exchange their opinions. They share their opinions on product functions, designs, and methods of demonstration tocontribute to the development of new products and the improvement of product promotion.
In addition, the fixed customer sales department proactively engaged in sales promotions from a female perspective
targeting customers such as retail stores and house makers.

(1) Although the proportion of female graduates hired has increased, there is a difference in the number of years
employed between men and women. Systems and environments must be developed so that employees stay
employed longer.
(2) The percentage of women in managerial positions is low. It is necessary to increase the number of women inpositions one level below section chief and increase the number of women promoted to managerial positions.

3. Goals, initiative details and implementation timeframes
Goal 1: R educe the difference in average years of service between men and women from 5.7 years to

4.8 years.
Initiative details: R educe the number of retirees due to childcare, family care or other factors through systemrevisions.
New: Support for employees working shortened hours.
New: Expansion of telecommuting system.
Goal 2: Increase the percentage of women in general positions (non-managerial positions) from 5.7%

to 6.5%.
Initiative details: Reduce the number of retirees due to workplace culture, childcare and family care.
Ongoing: Support for returning to work after maternity leave (usage and revision of interview check sheet used
before and after returning).
Ongoing: Promotion of female employee roundtable discussions at each business site (understanding requests
for work details and environment and network formation support).
New: Appeal to female general employees using in-house newsletters and other means of communication.

VOICE
Engaging in Product Development Encouraged by Customer Feedback

Goal 3: I ncrease the percentage of women at the section chief level from 4.5% to 6.0%.
I work in a division engaged in the development of kitchen appliance products.

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

Our work involves products in new fields, such as the design of the “Cocotte
Plate,” a container that can be used in grill boxes or on stovetops, as well as thedevelopment of the “+R RECIPE” app linking stoves with smartphones tofacilitate automated cooking.
Many daily work activities are entrusted to me, and although the
responsibility is great, I find my work to be very rewarding. At each step of theprocess, I feel that doing rewarding work leads to self-confidence and I am

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

grateful to have been given an opportunity to play an active role. The

83

development of new products always involves some difficulties, but I will continue

Product Development Division II,
Kitchen Appliance Development Officestriving to deliver quality products through the encouragement of our customers.

Mayuko Umeda(1) Percentage of women at the section chief level 4.5%
(2) Difference in average years of service between men and women

5.7 years

Rinnai Report 2021

84

Introduction

Environment

SocialGovernance

Data

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

Basic Policy on Safety and Hygiene

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

An essential requirement in business is theassurance of the health and safety of
employees, via the provision of a hazard-freeand hygienic work environment. As Rinnai
constantly strives to protect the life and healthof all employees, we give top priority to thesanitary conditions and safety of the workplace.
This corporate mantra extends to ourcustomers, to whom we strive to provide “safety
and peace of mind.”

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

Fiscal 2022 Basic Policy on Safety and Hygiene

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

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

Promotion of Traffic Safety

Computer operations

85

Weeding activities

We carry out various educational activities with the aim of raising employee awareness of traffic safety and contributing to
the local community. As a “Zero Day” activity, employees themselves stand on the streets and call out to passers-by. We
hold lectures by police officers in collaboration with local police stations, and for new employees, we rent out a driving
school and hold practical training and risk prediction courses. Furthermore, through the periodic acquisition of driving
record certificates, we ascertain the status of employee safe driving behaviors and provide individual guidance assituations demand. We have also introduced the systematic installation of drive recorders on all Company-owned
vehicles in addition to introducing a safe driving eco-drive promotion system (telematics) to promote employee traffic
safety and eco-friendliness from practical as well as theoretical perspectives.

Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Stakeholders
Communication with Shareholders and Investors

Aiming for Longer-Term Business Growth and Stable Shareholder Returns
IR Activities for Institutional Investors and Analysts
Although it is not possible to carry out satisfactory IR activities
due to COVID-19, our annual financial results announcements are
conducted online (livestreamed at the end of the fiscal year) tomaintain communications with institutional investors and analysts
as in the past. Further, with regard to IR coverage, Rinnai is shifting
to a method involving direct responses using video conferencing
in addition to conventional conference calls. Going forward, we
will gather opinions received from analysts and strengthencommunications with senior management while searching foradditional approaches appropriate to current conditions.
Financial results briefing for institutional investors and analysts

Fiscal 2021 Activities
IR interviews conducted a total of 164 times
Telephone interviews: 127 times
Online coverage: 37 times
Fiscal 2021 interim results briefing (livestream): 80 attendees
Fiscal 2021 year-end results briefing (livestream): 90 viewers
We disclose information in an appropriate, timely, fair, and impartial manner, and engage in IR activities with an emphasison two-way communication in order to earn the trust of shareholders and investors. In an effort to provide ourshareholders and investors with direct updates on our business activities, and to ensure that information is disclosed

IR interviews

quickly and fairly, we provide information via channels such as results briefings for analysts and institutional investors(twice a year), biannual shareholder reports, press releases and presentation materials for results briefings on our website,
our business growth strategies from a longer-term perspective and to hold expectations for stable shareholder returns.

Dividend Increases for 19 Consecutive
Fiscal Years
One of our top management priorities is to sustain astable return of profits to shareholders. When deciding
on dividends we consider consolidated performance,
return on equity, financial status, and have increased
our annual dividend for 19 consecutive fiscal years
since fiscal 2003. Additionally, in the fiscal year ending
March 31, 2022, Rinnai plans to provide an interim
dividend of ¥70 and a year-end dividend of ¥70,
amounting to a full-year dividend of ¥140.

Dividend per share
(Yen)
150
125

120

90

InterimYear-end

60

30

20

24

26

28

30

36

40

42

48

56

60

68

76

82

86

90

94

98

0
(FY) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202087

Investor Opinions at Fiscal 2021 Year-End
Rinnai received many inquiries regarding the recently announced new
medium-term business plan from institutional investors and analysts at
the fiscal 2021 financial results announcement. There was also
substantial interest in how the business environment is changing due
to current conditions. Thus we explained how, despite the inability to
sufficiently conduct economic activities in fiscal 2021 due to COVID-19,
we were able to maintain business efforts and achieve record-highprofits.

Institutional Investor Question Topics

Other topics
8%
External
environment
19%
Material
costs

Performance
28%

Fiscal year-end
results

Markets andcompetitors
Growthproducts
Core
products
Products
22%

Next fiscal year
plans

Decarbonizationand our IR calendar. Through various opportunities to meet with them, shareholders and investors are able to understandCapital policy andshareholder returns
Strategies
and numbers
New medium-termbusiness plan 23%

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Customers

Promoting Digital Transformations (DX) with the “Rinnai BiZ”
Platform Linked to Customers
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 themost out of their purchases for as long as possible. The site
started in October 2006 as an online shopping site for genuine
parts for 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 2021, the number of registered members
exceeded 870,000, providing even more opportunities forcontact with users of our products. To keep in touch with
R.STYLE online shopping site (Japanese language only)
members’ needs, we conduct online questionnaires (annuallymore than 10 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.

Developing More Intimate Communication through the Living Information Column“Rinnai BiZ” provides a variety of online services enabling the connection of sales promotions to Rinnai customers—
namely, businesses selling gas and other fuels and residential equipment and machinery.

This platform provides functions and content including replacement productsearches, technical information, inventory searches, user experience articles,
videos, catalogs and other elements to create a service supporting businesses
with their daily sales activities. With a focus on online usage, this platform canalso distribute a large amount of video content from dedicated servers, services
can be accessed from the LINE platform, and users can check the latest
information using Rinnai BiZ Email.
Through efforts such as these, Rinnai will continue to explore areas in which
digital transformations (DX) can be leveraged to further pursue enhanced pointsof contact with customers.

Interface optimized for PC and smartphones

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

Specialized app enabling receipt of notifications

89

Rinnai Report 2021

90

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Business Partners

Promoting Online Communications Amid Covid-19
Rinnai Group Purchasing Policy
To grow along with our suppliers, we emphasizetransactions based on a fair and impartial assessment
and selection process and respect for laws andregulations and corporate principles, in accordance with
the Rinnai Group Purchasing Policy.

Rinnai Group Purchasing Policy

We will give equal opportunity to all companies athome and abroad and undertake fair evaluations to
procure excellent parts that meet our requirements.

Rinnai’s Stance on the Relationship with Its Business Partners
Meeting using online video conferencing

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

Provide appropriate
information

Rinnai

In 2020, the global spread of COVID-19 imposed severe
limitations on communications in terms of face-to-facemeetings with business partners. This also led to material
supply problems as overseas urban areas went into lockdown
and economic trends underwent drastic changes.
Communication with business partners had been
increasingly important even before COVID-19, thus Rinnai has
been strengthening supply stability and quality management
through the proactive use of online technologies. Due to
COVID-19, meetings conducted through business trips andface-to-face meetings were held online to the fullest extent
possible. Rather than reducing communication, online
meetings have actually increased the frequency ofcommunications with business partners in distant locations.
Regarding quality control, we switched process audits
previously conducted during business trips to online audits.
This ensures greater quality control and enables a higher
frequency of auditing, especially for business partners locatedoverseas or in other distant locations.
Going forward, Rinnai will continue efforts to create
environments and strengthen communications with business
partners.

Results

Monozukuri
supportec t ivttraateea Cooperation
Cr

Improve quality,
reduce costs

uc t s

Products,
monozukuri proposals

Suppliers

Realization of Fair-and-Square Transactions
Process audit using online tools

prod

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

Communication with Our Business Partners

VOICE
Using the Internet to Enhance Communication
Because of COVID-19, our company has also transitioned to doing business utilizing IT communication
technologies. We proactively use these technologies for meetings with Rinnai and when making
preparations for production overseas. Despite the long distances involved, we have more frequent
opportunities to communicate than in the past, and operational efficiency is on the rise. Although there
are still many situations requiring business trips and face-to-face meetings, we will utilize various IT
Shinano Kenshi Co., Ltd.
Director

Masato Sato91

equipment to enhance cooperation with Rinnai.

Since last year, insufficient supplies of semiconductors, plastics and othermaterials have been a major problem throughout the world. Rinnai strives
to ensure stable procurement by requesting that suppliers in constrained
industries secure materials and hold briefing sessions to provide
information on medium- to long-term supply and demand forecasts.
Rather than holding large-scale briefing sessions, as a COVID-19
countermeasure, we livestreamed briefing sessions online to avoid close
contact with other people. Rinnai will utilize online technologies to promote
the smooth and rapid sharing of information with suppliers whilestrengthening our preparedness to mitigate business risks such as aconstrained procurement environment and natural disasters.

Online briefing to secure parts

RinnaiBusiness partners(43 companies)

Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

SocialCommunication with Local Communities and Society

Contributing to the Development of Human Resources Leading the
Next Generation through Academic-Industrial Alliances

Contributing to Regional Artistic and Cultural Development
Nakagawa Canal Restoration and Cultural/Artistic Assistance Project (ARToC10)

Through an academic-industrial alliance between Rinnai and the Nagoya University of Arts and Sciences, from April 2020
we conducted a 15-session course entitled “Companies and Society: The Role of Companies in Society.” Students gained
an understanding of Rinnai’s social contribution activities and stakeholders, from which ideas were generated andpackage media created to visualize them. Within this process, Rinnai employees discussed these ideas with students andtook steps in several processes to create even better materials. The resulting deliverables were presented to Rinnai
employees and ultimately the public through displays at various exhibitions.
Although it was not possible for students and Rinnai employees to engage in face-to-face discussions in theclassroom and on factory tours due to COVID-19, we deepened mutual understanding through discussions in an online
class format.

Launched in 2010, “ARToC10” is a project for subsidizing cultural and artistic activities that enhance the attractiveness of
the Nakagawa canal as part of canal restoration efforts that began in fiscal 2013. Rinnai has donated ¥10 million every
year, providing a total of ¥100 million in subsidies for the management of this project. Each year, multiple individuals andgroups apply for subsidies, and this year, the “Moonlight Mobile Theater” was selected to receive funding.
For four days spanning Friday, September 19, to Sunday, September 21, 2020, the Nakagawa Canal Restoration andCultural/Artistic Assistance Project (ARToC10) subsidy recipient “Moonlight Mobile Theater” held outdoor performancesin the parking lot of a former Rinnai parts center. Going forward, Rinnai will continue to support regional revitalization
through art.

Regardless of external circumstances, Rinnai will make full use of new methods of communication with stakeholders
to disseminate ideas for human resource cultivation and community development.

Introducing Rinnai initiatives to students

Online discussion
Stage set up in the parking lot of a former Rinnai parts center“Moonlight Mobile Theater” outdoor performance (photo credit: Ryosuke Sato)

Rinnai Corporation, Actual Results in Fiscal 2021

VOICE
Pursuing Possibilities for a Plentiful Future through Practical Exercises
Nagoya University of Arts and Sciences’ Department of Design’s Design Produce Course aims to“envision an even better future and create new value that can be shared with others.” To this end,
students engage in practical exercises based on issues uncovered in the real world.

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

These exercises are a valuable opportunity for students to understand what corporations are, andin so doing, understand the structure of how society works.
Nagoya University of Arts andSciences
School of Media and Design
Department of Design
Associate Professor

Tomoho Taniguchi

93

Further, there are many aspects in which the Rinnai brand promise of “creating a healthier way ofliving” coincide with the image of the “plentiful future” that students seek, and by providing employeeswith feedback through student proposals, we begin to see answers to the difficult question “what does
a plentiful future look like?”

Social Contribution Amounts in Fiscal 2021

• Social contribution activities funding: ¥13,707,000• Political donations:¥730,000

Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

SocialGlobal Social Contribution Activities

Stakeholder Engagement

United States

Rinnai places great importance on daily
communication with customers,
employees, shareholders, investors,
business partners, local communities,
and the general public in an effort tofurther evolve our business activities andimprove levels of satisfaction. Comments
and requests from customers throughchannels such as exhibitions and ouronline shopping site are used to help
improve our products and services. We
exchange information with our business
partners on subjects such as
management policies and products andwork together to mutually improve
quality through our Level-Up activities.

On March 8, 2021, which is “International Women’s Day,” Rinnai America
took pictures of working women and posted their activities on social
media. Rinnai America also provides women’s daily necessities to welfareorganizations free of charge and engages in other daily efforts to promote
the active participation of women and gender equality.
International Women’s Day social media positing

South Korea
In August 2020, Rinnai Korea dispatched an emergency recovery teamto an area affected by torrential rains and assisted with laundry support
efforts using gas clothes dryers. Rinnai Korea also entered into a social
contribution business agreement with the Incheon Metropolitan City
Social Welfare Library Association, donating tabletop cooking stoves in
April 2021 to homes damaged by fire in Yeonsu-gu, Incheon.

(Users) (Distributors)

Employees

Communication with
Our Stakeholders
Shareholders
Investors

In February 2020, Shanghai Rinnai provided 100,000 facemasks to the
Wuhan area where COVID-19 was rampant. Shanghai Rinnai also received aletter of appreciation for inventory procurement and installation of a water
heater with a heating system despite the spread of COVID-19 when doctors
were unable to shower due to a broken water heater at a Wuhan hospital.

Business
Partners

Community, Society(Including government)

Water heater with heating system installation at a
hospital in Wuhan

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

• 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 that they
can remedy unsatisfactory areas.
• The Maintenance Check Call Center was established to handle inquiries regarding inspection notifications, inspection
notice functions, and schedule inspections. A simple explanation of the inspection system is provided to customers who are
not registered owners and guidance is provided to receive inspections for safety.
• We provide guidance on legal compliance inspections for customers who registered their products in accordance with the“long-term use product safety inspection system” as they reach their 9th year of use. For products not applicable underlegal compliance inspection regulations, we strive to improve customer safety by sending safety inspection notifications
based on the “long-term use product safety inspection system.”• Rinnai conducts web-based questionnaires (customer satisfaction surveys) with customers who make purchases on our
website. These questionnaires concern purchased products, service window support, the sales site itself, and productdelivery and packaging. The Company provides all related offices with feedback regarding questionnaire results andconducts initiatives to improve issues related to responses that indicate low customer satisfaction.
• We are expanding Hot.Lab, our hands-on product induction facility, and working to increase customer knowledge andunderstanding regarding our merchandise.

• Individual discussions• Workplace meetings• Training / Events• Corporate ethics advisory
service• In-house intranet /In-house newsletter• Information exchangewith employee unions• In addition to regular interviews targeting all employees, we conduct feedback interviews regarding personnel evaluations,pre-partum and postpartum childcare leave, and interviews when returning to work. By creating rules for interviews with
employees in Japan and those transferred overseas, we are strengthening our support for individual growth and workplacecommunication to create a better work environment.
• To collect and accurately respond to requests from employees in all departments, the Company regularly holds
conferences between its Personnel Department and employee unions, the results of which are used to revise internal
systems and improve work environments.
• Rinnai conducts nursing care seminars and provides nursing care-related information based on nursing care questionnaire
results. The Health Support Office plays a central role in promoting employee health through health campaigns that checkblood vessel age, bone density, iron content, and skin age as well as walking seminars for weight loss and physical fitness.
• Since 2005, we have been operating a corporate ethics advisory service. This internal reporting system enables employees
to report fraudulent activity and violations of laws, ordinances, or internal regulations in cases when consulting with theirsuperiors is problematic.

Customers

Laundry assistance using gas clothes dryers

China

Means ofCommunication• General shareholders’meetings• Results briefings• Factory tours• Investor relations (IR)meetings• Questionnaires• We carefully explain our “Evolution and Succession 2017” medium-term business plan at results briefings and individual IR
meetings, and endeavor to improve understanding of the Group’s management policy and strategy.

• New Year meetings• Policy presentations for
suppliers• Level-Up Workshop• Online communication
tool, “R-LINE”• Rinnai responds to inquiries from suppliers regarding its production system and trends as needed, informing them ofimportant information, such as changes in production plans, through the communication tool R-LINE. We also explain thisinformation through our Supplier Liaison Group meetings.

• 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 our approach to manufacturing and technical capabilities.
• We hold results briefings and individual IR meetings to answer inquiries and explain our underlying thinking on dividend
policy.

• Responding to requests from suppliers for advice on, e.g., improving quality and productivity, we organize Level-Upworkshops and help suppliers to make improvements in the workplace.

• Participation in local / community • We are asked by people living near our plants and offices to assist with events and festivals aimed at enlivening theircommunities, and we actively assist and take part in such events as a member of these communities.
development activities• Support for cultural activities and • Rinnai continues to support exchanges with citizens and creative activities by collaborating with cultural and artistic
activities conducted in the area surrounding the Nakagawa canal, where our head office is located.
the arts• Employee volunteer activities• In response to requests for assistance with community learning and school education, we organize events such as• Support for extracurricularseminars on the history of manufacturing at Rinnai and factory tours for schoolchildren.
school activities (factory tours,
etc.)

Results of Questionnaire Regarding Rinnai Report 2020 (Integrated report) n=269
We sent a questionnaire to readers of our 2020 Rinnai Report and asked them to vote on topics they found interesting.
We intend to incorporate the results of this questionnaire in our next edition.

BrazilAs Rinnai Brazil employees were working from home due to COVID-19,
in June 2020, the company utilized unused company funds (lunch
subsidies) to donate food to eight suburban areas where a growing
number of people were in need, including homeless support
organizations, orphanages and senior care facilities.

Food donations

Rinnai Report 2020

Response rate

Corporate Message
Corporate Mission and Vision Editorial Policy / Contents
Message from the President
Rinnai Group Profile
History Viewed from Changes in Medium-Term Business Plans
Value Creation Process
Message from the General Manager of Corporate Planning Headquarters
Rinnai Group CSR
Identifying Material Issues
Special Issue 01 [Environment]
Special Issue 02 [Quality]
Special Issue 03 [Safety and Peace of Mind for Consumers]
Special Issue 04 [Health]GovernanceCommunication with Stakeholders
Data Collection

0

95

10

20

30

40

50(%)

Rinnai Report 2021

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Introduction

Environment

SocialGovernance

Data

GovernanceManagement Structure
Audit System for Monitoring and Supervising Management

Basic Principles

01

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

02

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

03

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

04

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

05

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

06

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

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

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

Nomination Advisory Board and Compensation Advisory Board
Corporate Governance Structure
General Shareholders’ Meeting
Election and dismissal

Election and dismissal

Cooperation

Audit & Supervisory Board

Accounting Auditor

Cooperation

Election and dismissal

Nomination/Compensation
Advisory Committee

AdviceAudit

Corporate Lawyer

Board of Directors

Election, dismissal,
and administration

Election, dismissal,
and administration

AdviceDirection

PresidentInternal Control Office

ReportReport

Audit

ReportManagement

ReportReportAudit

Internal
Audit

Related Committees
Corporate Ethics Committee
Risk Management Committee
Environment Management
Committee and other

Executive Officers
ReportBusiness Divisions

97

Consultation andrecommendation

Rinnai established a Nomination Advisory Board and Compensation Advisory Board comprising a majority of outside
independent directors as an advisory body to the Board of Directors to ensure a higher degree of objectivity and transparency
in the process of determining nominations and compensation for senior management and directors. In determining candidates
for directors, Audit & Supervisory Board members and executive officers, as well as compensation for directors and executive
officers, the Board of Directors will make the final decision based on discussions by both advisory boards.

Direction

Management

Director Compensation
Compensation limits for Directors and Auditors are determined inCompensation Amounts for Directors and Auditors(Fiscal 2021)
accordance with the resolution of the general meeting ofshareholders. Rinnai internal regulations also stipulate fundamental
Total amount of
Category
Persons
compensation paid
matters related to Directors’ compensations, including determination
Directors
procedures, revisions, and reductions. Based on these, the amount7¥289 million(of which are(2)(14)
of compensation for Directors is resolved by the Board of Directors
outside directors)
and the amount of compensation for Auditors is determined through
Auditors
4¥41 million(of which aredeliberations by Auditors. Directors are paid a fixed amount(2)(10)
outside auditors)commensurate with assigned duties.
Total
11¥330 million
In light of changes in the business environment surroundingsalaries do not include employee salaries for directors who also serve
the Company and corporate governance requirements, the decision Director
as employees. As of March 31, 2021, there were seven directors (including two
outside directors) and four auditors (including two outside auditors).
was made to implement an annual bonus plan and restricted stockcompensation plan starting in fiscal 2022 with the aim of promoting the steady creation of corporate value over the medium tolong term.

Rinnai Report 2021

98

Introduction

Environment

SocialGovernance

Data

Governance
Leadership (As of June 29, 2021)
Board of Directors

Audit & Supervisory Board Members

Kenji Hayashi

Haruhiko Ishikawa

Representative Director, Chairman of the Board

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

Career Summary and Current Position in the Corporation:
Apr. 1972 Joined Rinnai Corporation
Sep. 1978 Director
Feb. 1980 Director, and General Manager of Corporate Planning OfficeJun. 1983 Managing Director, and General Manager of Production Technology Division
Jul. 1992 Managing Director, and General Manager of Related Business DivisionJun. 2005 Director, Managing Executive Officer, and General Manager of Related Business DivisionJun. 2006 Representative Director, Vice Chairman of the Corporation
Apr. 2017 Representative Director, Chairman of the Board (current)

Hiroyasu Naito

Representative Director and President and Executive
President

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

Nobuyuki Matsui

Outside director, Independent officer

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

Tsunenori Narita

Representative Director and Executive Vice President,
President’s assistant

Career Summary and Current Position in the Corporation:
Apr. 1967 Joined Rinnai Corporation
Jun. 1988	Director, General Manager of Technology Research Headquarters andconcurrently General Manager of Quality Guarantee DivisionJun. 2001 Managing Director, General Manager of Production Headquarters
Jun. 2005	Director, Managing Executive Officer, and General Manager of
Production Headquarters
Nov. 2005	Director, Managing Executive Officer, in charge of domestic business,and concurrently General Manager of Marketing & Sales Headquarters
Apr. 2006	Director, Senior Executive Officer, in charge of domestic business, andconcurrently General Manager of Marketing & Sales Headquarters
Apr. 2009	Director, Executive Vice President; responsible for Research &Development Headquarters, Production Headquarters, Overseas
Business Headquarters and Customer Division, and General Manager
of Marketing & Sales Headquarters
Apr. 2010	Representative Director, Executive Vice President; responsible for
Research & Development Headquarters, Production Headquarters,
Overseas Business Headquarters and Customer Division, and General
Manager of Marketing & Sales Headquarters
Oct. 2010	Representative Director, Executive Vice President; responsible for
Research & Development Headquarters, Production Headquarters,
Overseas Business Headquarters, and General Manager of Marketing& Sales Headquarters
Apr. 2016	Representative Director, Executive Vice President, President’s
Assistant, in charge of Production Headquarters and Overseas
Business Headquarters
Apr. 2018	Representative Director, Executive Vice President, President’s
Assistant (current)

Takashi Kamio

Outside director, Independent officer

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

99

Standing Audit & Supervisory Board Member

Masaaki Matsuoka

Outside Independent Audit & Supervisory Board
Member

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

Katsuhiko Shinji

Standing Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Apr. 1981 Joined Rinnai Corporation
Dec. 2000 President of Shanghai Rinnai Co. Ltd.
Jun. 2004 Director of Rinnai Corporation; President of Shanghai Rinnai Co. Ltd.
Jun. 2005	Executive Officer of Rinnai Corporation; President of Shanghai Rinnai
Co. Ltd.
Apr. 2009	Executive Officer, Deputy General Manager of Overseas Business
Headquarters in Charge of Asia, Rinnai Corporation; President of
Shanghai Rinnai Co. Ltd.
Apr. 2011	Executive Officer of Rinnai Corporation; President of Shanghai Rinnai
Co. Ltd.
Apr. 2019	Assistant to General Manager of Overseas Business Headquarters,
Rinnai Corporation
Jun. 2019 Audit & Supervisory Board member (current)

Ippei Watanabe

Outside Independent Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Apr. 1978	Registration of attorneys
Joined Saji & Ohta Law firm
Jun. 1991	Established Ohta & Watanabe Law firm (currently, TRUTH & TRUSTLaw Office) (current)
Jun. 2016 Audit & Supervisory Board Member (current)
Current Representation in other companies
Outside director at Howa Machinery, Ltd. (Audit and supervisory committee
member)Executive Officers

Kinji Mori

Hideyuki Shiraki

Chuji Nakashima(excluding concurrent directors)

Managing Executive Officer
General Manager of Quality Assurance
Headquarters, and General Manager ofEnvironment Division

Managing Executive Officer
General Manager of Marketing & Sales
Headquarters

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

Kazuto Inoue

Hirohisa Ooi

Takuya Ogawa

Managing Executive Officer
General Manager of Production Engineering
Headquarters

Senior Executive Officer
General Manager of Production
Headquarters

Senior Executive Officer
General Manager of Corporate Planning
Headquarters

Yoshihiko Takasu

Kazuhiko Matsumoto

Masanori Shimizu

Senior Executive Officer
General Manager of Overseas Business
Headquarters

Executive Officer
General Manager of Seto Factory, Production
Headquarters

Executive Officer
Deputy General Manager of Quality
Assurance Headquarters, and General
Manager of Quality Assurance Division

Kenichi Ebata

Katsunori Tanioka

Hiroyuki Hoyano

Executive Officer
General Manager of General Affairs Division

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

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

Atsuo Kashima

Kenji Endo

Hayao Nishizawa

Executive Officer
General Manager of Accounting Division

Executive Officer
President of RB Controls Co., Ltd. andPresident of Noto Tech Co., Ltd.

Executive Officer
President of Shanghai Rinnai Co., Ltd.

Rinnai Report 2021 100

Introduction

Environment

SocialGovernance

Data

Governance

Message from an Outside Director

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

Rinnai Group Code of Ethics

Nobuyuki Matsui
Outside director, Independent officer

Contributing to a New Era of Change as an Outside Director
Since its founding, Rinnai has developed its gas appliance manufacturing business based on the fundamental concept,

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

“Quality is our destiny.”
Within a free and open atmosphere, the Board of Directors discusses important matters related to corporate
activities as well as receiving monthly reports on domestic and overseas businesses. When necessary, the relevantbusiness units hold advance briefings and site tours for outside directors in an effort to ensure ideal information sharing
on a daily basis.

윤리강령

Code

Code

ics

of Ethof Ethics

2019.4

In particular, I applaud the fact that the content of the new medium-term business plan has been fully communicatedto senior management and front-line managers alike through advance briefings, and that the results can be clearly

Code of Ethics summary (English, Chinese and Korean)

tracked through concrete performance metrics.

Code of Ethics summary awareness meeting(Rinnai Thailand)

In the four business segments of water heaters and heating systems, kitchen appliances, home heaters, andcommercial-use equipment, Rinnai is continuing to make efforts to increase added value in both manufacturing and sales
from the perspective of profitability. I find it encouraging that the results of new product development to meet market
needs, which are linked to the medium-term business plan, are materializing in terms of both volume and value.
I am impressed by management’s stance of addressing the needs of the market head-on, rather than simply selling
products at low prices in response to the slump brought by the coronavirus disaster. As the background to this, I feel that
we should not overlook the fact that Rinnai’s management philosophy, including the company motto, brand statement,
and code of conduct, has become embedded throughout the Rinnai Group Code of Ethics, which is distributed to all
Rinnai employees, including not only manufacturing and technical staff but also administrative and sales staff.
Going forward, it will be important to develop human resources to respond to the increase in headcount required

Compliance Education Activities
Rinnai’s Legal Division conducts legal education every year with regard to laws closely related to operations conductedby business divisions. Rinnai also conducts compliance education every year during employee training for new recruits
and by rank, with 213 employees attending in fiscal 2021. Most education was conducted online in fiscal 2021 to preventthe spread of COVID-19. In addition, we share a variety of information with domestic Group employees via our in-house
intranet, where we post data such as information regarding legal reforms, legal commentary concerning our operations,and examples of violations that occurred at other companies.

to handle the growing ratio of overseas business as Rinnai’s business expands. It is also vital to explore more detailed
market needs and develop products that meet those needs in line with the actual living conditions of each overseas
region. Rinnai must also urgently identify new market needs caused by lifestyle changes in Japan and overseas ina post-coronavirus world and by DX, and to develop technologies to address them. The latter will require not only
technological expertise, but also talent from outside of Rinnai’s traditional business domains, such as those withskills in psychology, design, and game sense. It will be a great pleasure to contribute to this new era of change as
an outside director.

101

Rinnai Report 2021 102

Introduction

Environment

SocialGovernance

Data

GovernanceConfirmation and Modification of Compliance Activities

Compliance Violations

Every year, we conduct employee questionnaires to ascertain how deeply ingrained elements of our Corporate
Philosophy have become. In fiscal 2021, these showed that 99.8% of respondents were familiar with the Company Motto,
98.8% of respondents recognized Rinnai Brand Promise, and 97.4% understood our Corporate Mission. All responses
were higher than those in the previous fiscal year.
We will continue to actively promote compliance activities to maintain these high levels.

In fiscal 2021, there were no serious compliance violations.

Facilitation of Internal Reporting System
If, in the course of business activities, an employee at a domestic company under the Groupumbrella suspects possible breach of laws or the internal rules or unfair practices, and it isdifficult to approach a superior or the person responsible for the division with suchsuspicions, the employee may report the perceived infraction to the Corporate Ethics
Helpline.
Established in November 2005, the Helpline accepts inquiries from within and outside
the Company. In this system, we stipulated that the person who reported the incident will
not receive any unfair treatment by the fact that he or she reported the matter, and we also
pay full attention to the protection of privacy of the person who made the report.
In fiscal 2021, the helpline received two reports and requests for advice. Appropriate
measures have been taken, including investigation and confirmation of the facts in thesecases of alleged misconduct.

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

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

Protecting Personal Information
Rinnai has established internal rules based on the Act on the Protection of Personal Information. We also established a
Privacy Policy as a guideline for handling personal information that is published on our website (https://www.rinnai.co.jp/
en/policy/privacy/). Through these efforts, we strive to properly manage, use and protect personal information.
Specifically, a Personal Information Protection Manager is appointed at the Head Office to maintain and teachinternal rules. Personal Information Protection Committee members are assigned in each workplace and domestic Group
company to provide guidance on methods and procedures to the person in charge of handling personal information.
In addition, the Personal Information Protection Committee member conducts internal audits once each year under
the direction of the Personal Information Protection Manager regarding the management status of personal information ineach workplace.
In fiscal 2021, there were no personal information leakage incidents.

Executive Structure

Corporate Ethics Helpline

Disciplinary Actions

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

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

103

Rinnai Report 2021 104

Introduction

Environment

SocialGovernance

Data

GovernanceRisk Management
Basic Principles of the Internal Control System

Risk Management Policy

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

As society becomes increasingly complex, companies face a variety of risks. Against this backdrop, the Rinnai Group is
promoting its business on a global scale and is implementing risk management to ensure it remains trusted by its
customers and society and conducts business activities in a stable fashion.

(1 ) To enhance the stability and efficiency of business operations;(2) To ensure the reliability of financial reports;(3) To comply with laws and regulations affecting business operations and internal regulations;(4) To maintain assets

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

Promotion of Business Continuity
When companies do not have sufficient measures for natural disasters such as earthquakes and storms and the prevalenceand spread of infectious diseases, business operations may be suspended for a long time, resulting in significant losses andhaving a serious impact on stakeholders. As a Company that produces thermal energy appliances to support people’s
lifestyles, we believe it is our responsibility to maintain the stable supply of our products. We position cases where there is arisk of interruption in the manufacture or supply of products vital to customers as important issues for business continuity
management and are formulating and reviewing business continuity planning (BCP).

Promotion Structure
Rinnai’s Risk Management Committee is comprised mainly of executive
officers and divisional heads with the President serving as Chairman. The
Committee meets regularly to identify key risks having the potential toimpact the Company as an ongoing concern, its credibility, businessactivities, and assets. The Committee also determines which businessdivisions have a primary responsibility for each type of risk. It also develops
mechanisms to prevent risks from materializing, rapidly resolves crises,
minimizes any damage that may occur as a result, and preventsrecurrences. The Committee works with all divisions and Group
companies to mitigate risks and enhance risk response capabilities.

Risk ofnon-compliance ormanagement inviolation of applicablelaws

Risk of fire, explosion
accidents, andnatural disasters

Important Identified
Risks (Partial)

Risk of suspension ordelays affecting raw
material procurement
activities

Risks related tothe environment

Risks related tooverseassubsidiaries
Risk of damage to
mission-critical systems

Risks related to
information leaks

Rinnai Efforts to Prevent the Spread of COVID-19
More than a year has passed since the outbreak of COVID-19 and there are still no signs of abatement. The Group
maintains its infection control activities in consideration of conditions in each country and in line with official government
pronouncements.
Within the Company, senior management sets countermeasure polices that are understood by employees who act
in compliance with them. Rules are changed as the situation unfolds to prevent further infections.
(Main countermeasures)• Hand washing, gargling, use of facemasks and hand sanitizer, and thorough ventilation in all workplaces• Daily temperature readings and reports on the number of feverish people (temperatures taken before entering Rinnai facilities, etc.)• Cafeteria layout revisions (no face-to-face contact, no talking during meals)• Avoidance of internal meetings, use of online meetings, and in principle, no visits with customers• Recommend working from home or staggered work hours, use of personal vehicles to commute, etc.

105

Rinnai Report 2021 106

Introduction

Environment

SocialGovernance

Data

Governance
Information Security
Information Security Policy

Implementation of Information Security Measures

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

A variety of measures are implemented to prevent information leaks. These include protection against hacking fromoutside sources, anti-virus measures, encryption of data before information assets are removed from company premises,
control of devices such as USB memory sticks, and measures against spam. Access is rigorously controlled at all plants
and offices, and entry and access to sensitive areas is also controlled.

Information Security Education and Training Activities
Information Security System Maintenance

107

Chief Information
Security Officer

Head Office Information
Security Manager

IT Security Office

Head Office Information
Security Manager

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

Information Security System Diagram

The Rinnai Group conducts information security education every year toensure that all employees are fully aware of the importance of information
security measures and properly handle information assets used in businessactivities.
In fiscal 2021, we conducted education on the themes of “cyberattack
incidents and precautions for avoiding damage.” Education is provided to all
employees who use personal computers via e-learning.
In addition, we regularly conduct cyberattack email training in an effort
to hone employee experience so that we can respond promptly whenproblems related to information security occur.

Information security education for newly hired employees

Information Security Countermeasures Status Verification
The Rinnai Group conducts inspections of and exchanges opinions on the status of information security measures atdomestic and overseas Group companies. We conduct verifications from multiple perspectives and conduct diagnoses
of information security countermeasure levels at each Group company.
We also set goals for information security measures, and in consideration of these goals and the level diagnoses
results, we are promoting an enhanced level of information security countermeasures throughout the entire Rinnai Group.
Additionally, in order to objectively evaluate information security initiatives, Rinnai’s Product Inspection Center
acquired ISMS certification (ISO 27001). To facilitate even more appropriate handling of important information from
customers, we created an information security management system and promote ongoing improvements to information
security countermeasures.

Rinnai Report 2021 108

Introduction

Environment

SocialGovernance

Data

Data Collection
Eleven-Year Financial Summary
FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Net sales(Millions of yen)

239,436

246,636

251,832

286,981

295,022

319,935

330,256

347,071

348,022

340,460

344,364

Operating income(Millions of yen)

25,23826,63426,35134,01830,787

34,59334,05632,84930,87934,422

40,690

(%)

10.5

10.8

10.5

11.9

10.4

10.8

10.3

9.5

8.9

10.1

11.8

Ordinary income(Millions of yen)

26,82428,90729,06436,91032,93835,80735,28034,28633,31835,67942,400Net income attributable to owners of theparent company(Millions of yen)

15,51016,807

19,371

23,254

20,64722,71022,322

21,194

20,48021,561

27,581

Total net assets(Millions of yen)

141,110

154,737

178,007

232,635

261,414271,709290,638

307,965

320,696

340,959

371,318

Total assets(Millions of yen)

221,495

238,853

262,590334,382355,140

368,084

402,107422,422430,885

450,486

497,291

Net assets per share(Yen)

2,798.07

3,070.14

3,516.11

4,245.48

4,742.42

4,924.24

5,245.62

5,589.17

5,819.80

6,140.52

6,660.40

Net income per share(Yen)

311.52342.60394.86454.74397.03436.71429.27410.41398.45419.49536.62Equity ratio

(%)

62.0

63.1

65.7

66.0

69.4

69.6

67.8

68.0

69.4

70.1

68.8

Return on equity

(%)

11.2

11.7

12.0

11.8

8.8

9.0

8.4

7.6

7.0

7.0

8.4

Cash flows from operating activities(Millions of yen)

27,536

23,07422,87236,45325,671

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

Cash flows from investing activities(Millions of yen)

(10,634)(16,222)(12,607)(32,908)(23,649)(17,770)(17,732)(12,190)(7,288)(7,124)(15,820)

Cash flows from financing activities(Millions of yen)

(16,958)(3,937)(5,002)

13,183(8,659)(6,554)(5,217)(11,725)(6,150)(6,436)(7,269)Cash and cash equivalents at end of year

(Millions of yen)

46,14548,64855,03074,27969,34079,60095,297

101,697

116,133

140,138

166,524

Capital expenditures(Millions of yen)

7,590

9,378

8,222

12,43913,774

16,93820,664

16,105

13,481

10,58013,301

Research and development expenses(Millions of yen)

6,934

7,665

8,060

8,380

8,895

9,113

9,340

9,918

9,503

9,308

11,802

Operating income margin

Dividends

(Yen)

48

56

60

68

76

82

86

90

94

98

125

Payout ratio

(%)

15.4

16.3

15.2

15.0

19.1

18.8

20.0

21.9

23.6

23.4

23.3

Number of outstanding shares(Shares)

54,216,463

54,216,463

54,216,463

52,216,463

52,216,463

52,216,463

52,216,463

51,616,463

51,616,463

51,616,463

51,616,463

Closing price at the end of the period

(Yen)

5,520

5,960

6,770

9,070

8,910

9,940

9,230

10,100

7,830

7,650

12,390(Millions of yen)

299,275

323,130

367,045473,603465,249

519,032

481,958

521,326

404,157

394,866

639,528

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

109

Rinnai Report 2021

110

Introduction

Environment

SocialGovernance

Data

Data Collection
Financial Data

Consolidated

Rinnai Corporation

Results of profit
and loss

Domestic
consolidated andaffiliated companies
Overseas
consolidated
companies

Total

Consolidated

Rinnai Corporation

Sales by product

Domestic
consolidated andaffiliated companies

Overseas
consolidated
companies

Total

Rinnai America

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

Rinnai Indonesia *(Millions of yen)

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

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

246,636
26,63428,907
16,807183,091
18,04522,573
13,86997,082
2,071
2,270
1,238
76,806
6,179
7,077
5,345
356,979
26,29731,921
20,452
121,028
78,792
16,681
6,846
23,28688,00566,34812,296
2,638
13,803
24,412
26,0481,308
1,605
43,70744,058
11,661
7,244
4,570
9,271
156,476
104,058
20,8498,813
66,782
11,584242
243
174
14,996
3,137
3,877
2,704
12,907556
650
549
20,574
717
598
643
-

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

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

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

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

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

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

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

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

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

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

111

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112

Introduction

Environment

SocialGovernance

Data

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

Male
FemaleMale
FemaleMale
Female

Total

Executive Position

Fiscal 2019

Fiscal 2020

Fiscal 2021

2,594
1,108
1,362
682
3,404
1,463
10,613

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

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

Asia, excluding Japan

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

Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

Fiscal 2019

Fiscal 2020

Fiscal 2021

Composition

3,956
1,790
5,746
2,612
1,138
3,750
191
90
281
601
235
836
10,613

3,956
1,790
5,746
2,498
1,137
3,635
215
101
316
582
228
810
10,507

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

—
—
55.0%
—
—
34.1%
—
—
3.1%
—
—
7.8%
100%

Fiscal 2019

Fiscal 2020

Fiscal 2021

625
432
1,057
695
357
1,052
681
231
912
577
87
664
16
1
17
2

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

Under 30

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

30–39

40–49

50–59

60 or older
Number of non-Japanese employees

Fiscal 2021
Female ratio

32%

31%

33%

29%
31%

Number of employees who
used the work from home
program

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

Average age (Years old)

113

Fiscal 2020

Fiscal 2021

Male
FemaleSubtotal
Male
FemaleSubtotal

81
50
131
3
6
9

62
22
84
2
6
8

66
35
101
0
1
1

Subtotal

691

Subtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

283
16.6
12.7
15.5
39.3
34.0
37.7

189
17.3
13.3
16.1
39.7
34.5
38.2

194
17.9
14.2
16.8
40.1
35.3
38.7

Ratio of Women (%)

676

0

0.44

0

36

0

0

0

25

0

0

0

14

0

0

Fiscal 2019

Fiscal 2020

Fiscal 2021

2.7
20.0
10.5
57.1
66
2.05
26
0.70
13
82
0
117
117
100
100
100
0
109
109
1
53
54
1
3
4
0
2
2
0
0
0

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

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

Male

1

59*

835

(Of which non-applicable to infection
countermeasures) 0 people

Female

2

14*

247

(Of which non-applicable to infection
countermeasures) 6 people

Subtotal

3

73

1,082

*General Managers, Factory General Managers, Branch General
Managers, Deputy Branch General Managers, Managers

Working Hours and Average Wages

Number of Employees (Non-consolidated)
Fiscal 2019

Male

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

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

Non-Japanese3

Voluntary termination rate (%)
Paid leave

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

FemaleSupervisory position
Of which are generalmanagers or higher* End-FY2021 Compiled from
Director
the Rinnai Corporation
Of which are
executive directors
Managerial Position
Appointment Status(People)Newly recruitedemployee retention

Male
FemaleSubtotal

Newly recruitedemployees in April 2018

Employees retention in
April 2021

81
50
131

71
41
112

Fiscal 2019

Fiscal 2020

Fiscal 2021

2,097.0
217.0
18.7
6,201,012
309,750
242,850
277,744

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

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

Fiscal 2019

Fiscal 2020

Fiscal 2021

Annual total actual working hours per employee (Hours)*1
Annual non-scheduled working hours per employee (Hours)*1
Average overtime per month (Hours)*1
Average wage (Yen)*1
Highest wage at 30
Average wages at 30 years old
Lowest wage at 30(Yen)
Average wage at 30

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

5

6

2

0

0

0

14
1.0

14
1.0

13
0.7

* 1. Excluding managers* 2. In fiscal 2019, subsidiary Noto Tech Co., Ltd., exceeded the standards for wastewater and submitted an improvement report to the local government.
The results of water quality analysis after countermeasures were implemented confirm that the standards have been maintained without any problems.

Rinnai Report 2021

114

Introduction

Environment

SocialGovernance

Data

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

Basic Environmental Activities and Targets for Fiscal 2019–2021
Field
Environment
marketing (Sales)
Environmental
services(Construction andrepair)Environmental
products (Productdevelopment)

Environmental
procurement

Basic Environmental Activities (“7E Strategy”)(2018–2020)

Fiscal 2021 Results

Field• 4.50 million tons of CO2 reduction contribution whenusing products

Environmental minds(Regional
communities andemployees)

Expanding Sales of Environmentally Friendly Products(Japan & Overseas)

Energy Consumption and CO2 Emissions Levels
Continuously develop high-efficiency equipment for
Zero-Energy Homes (ZEH) and products that use lesspower during both standby and use• Developing highly efficient gas water heaters andkitchen equipment

Conserve and Recycle Resources
Continuously evaluate each product’s environmental
impact from its design stage through its lifecycle anddevelop smaller and lighter products• Implementing designs to reduce the weight of water
heaters and gas stoves• Received the Japan Packaging Contest “Packaging
Category Award (Industrial Packaging CategoryAward)” for exported water heater packaging
improvement

Promote Supply Chain Management
Conduct environmental conservation activities incooperation with business partners, and continuously
conduct green procurement management incompliance with regulations in each country• Conducting the management of Rinnai Green
Procurement Standards Guide (Material procurement
and use, including new parts)• Increasing cooperation with business partners andimproving the management level of chemical
substance• Received an A- rating on the CDP Supplier
Engagement Rating (SER) evaluation

Environmental
factories
Environmental offices

Basic Environmental Activities (“7E Strategy”)(2018–2020)
Communication of ESG-related Information
Rinnai continuously engages in dialogues withstakeholders to deepen understanding, as well as
efforts that contribute to environmental brand
improvement.

Fiscal 2021 Results• Received the Silver Prize at the Sustainability Website
Awards 2021
• Participating in various external evaluations• Conducting online factory tours

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

• Implementing efforts to exterminate specified invasive
species at multiple worksites• Holding events to get closer to greenery by cultivating
heirloom vegetables• Received the Good Practice award at the AichiNagoya Biodiversity Best Practice Awards

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

Reduce basic unit of energy consumption*2 by morethan 4% compared to fiscal 2017 by fiscal 2021

Reduced by 9.8% compared to fiscal 2017

Reduce rate of waste discharge*2 by more than 4%compared to fiscal 2017 by fiscal 2021
Maintain and advance zero-emissions initiatives
Realized recycling rate of 99.5% or higher

Reduced by 2.6% compared to fiscal 2017
Realized recycling rate of 99.8%

Reduce rate of water use*2 by more than 4% comparedto fiscal 2017 by fiscal 2021

Increased by 7.9% compared to fiscal 2017

Reduce rate of harmful chemicals*2 handled by morethan 4% compared to fiscal 2017 by fiscal 2021

Reduced by 7.1% compared to fiscal 2017

Scope: Rinnai Corporation
Reporting Period: April 1, 2020 to March 31, 2021
Notes: 1. CO2 reduction contribution = Reduction in CO2 emissions compared to products sold in 2005 resulting from improved performance of Rinnai water heaters (estimated)
Concerns emissions produced through markets in Japan and overseas.
2. Basic unit: Burden per unit standard determined by Rinnai.

115

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Introduction

Data Collection

Electricity

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

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

for the use of equipmentin each facility
for vehicle use

LPG
ButaneAcetylene
Ethylene
Heavy oil
Heating oil

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

Light oil

Scope of Accounting
Rinnai Corporation and consolidated subsidiaries
Company Name
• Rinnai Corporation• Yanagisawa Manufacturing Co., Ltd.
• Rinnai Technica Co., Ltd.
• Gastar Co., Ltd.
• RB Controls Co., Ltd.
• Rinnai Precision Co., Ltd.
• RT Engineering Co., Ltd.
• Japan Ceramics Co., Ltd.
• Noto Tech Co., Ltd.
• Techno Parts Co., Ltd.
• Rinnai Net Co., Ltd.
• RG Co., Ltd.
• Rinnai Enterprises• Rinnai Holdings (Pacific) Pte Ltd.
• Rinnai Hong Kong Ltd.
• Guangzhou Rinnai Gas and Electric Appliance Co., Ltd.

Gasoline
Total• Rinnai Italia S.r.l.
• Rinnai Canada Holdings Ltd.
• Shanghai Rinnai Thermo Energy Engineering Co., Ltd.
• Rinnai America Corporation• Rinnai Australia Pty., Ltd.
• Shanghai Rinnai Co., Ltd.
• Rinnai Korea Corporation• P.T. Rinnai Indonesia• Rinnai New Zealand Ltd.
• Rinnai Taiwan Corporation• Rinnai (Thailand) Co., Ltd.
• Rinnai Brasil Heating Technology Ltd.
• Rinnai Viet Nam Co., Ltd.
• Rinnai Manufacturing Malaysia Sdn. Bhd.
• RB Korea Ltd.
• Gas Appliance Services Corporation

Governance

Data

Third-Party Assurance

Domestic: From April 1, 2020 to March 31, 2021
Overseas: From January 1, 2020 to December 31, 2020

✓ Thisicon indicates that a measure has been third-partyassured by Lloyd’s Register Quality Assurance (LRQA).

Global Warming Prevention
Total amount ratio of the entire value chain(CO2 emissions) * 1
Scope 3 Category 1
Purchased goods / services

1,192
1,101

Eco-friendly products(contribute to reduction of CO2 emissions)(1,000 tCO2e)
8,000

850,000 t

7,000(7.38%)

1,000
6,000

600

11,500,000 t

Fiscal 2020
117,642.1

Fiscal 2021
Assurance✓□
122,561.4

kNm3

11,220.3

10,391.1

10,461.1

✓
□

kNm3
km3

1.4
35.0

1.2
38.7

0.5
46.1

✓
□
✓
□

t

2,843.1

2,538.0

2,338.6

✓
□

t
t
t
t
kl
kl

1.0
16.5
7.7
0.03
0.18
21.3

1.4
13.8
7.7
0.07
0.18
18.5

1.9
15.2
7.5
0.04
0.18
15.6

✓
□
✓
□
✓
□
✓
□
✓
□
✓
□

kl

136.1

107.2

88.1

✓
□

kl

431.3

419.6

359.3

✓
□

kl

5.5

5.1

4.7

✓
□

kl
GJ

2,098.7
1,192,078

1,819.3
1,106,557

1,420.2
1,100,713

✓
□
✓
□

Scope

Unit

Scope 1*1
Scope 2*2

6
7

Purchased goods andservices
Capital goods
Fuel- and energy-related
activities
Upstream transportationand distribution
Waste generated inoperations
Business travel
Employee commuting

8

Upstream leased assets

1
2
3
4
5

tCO2e

Downstream
transportation anddistribution
Processing of sold10
products
11 Use of sold products
End-of-life treatment of
12
sold products
Downstream leased
13
assets
14 Franchises
15 Investments
Total of Scope 1, 2, and 3

Fiscal 201940,25473,181

Fiscal 2020
36,723
66,239Fiscal 2021
35,161
68,606Percentage
Assurance
✓
□
0.31%
✓
□
0.60%

866,847

821,979

848,727

7.38%−

25,92821,07823,661

0.21%

−

3,263

4,379

4,386

0.04%

−

8,838

8,377

9,384

0.08%

−

565

5,668

1,036

0.01%

−

530
1,592
Included in
Scope 1535
1,598
Included in
Scope 1

531.18
1,586
Included in
Scope 1

0.00%
0.01%

−
−

−

−

Not applicable

−

−

−

−

−

Not applicableNot applicable−−

10,825,493

10,511,507

10,497,104

91.31%

✓
□

5,414

5,942

5,937

0.05%

−

Not applicableNot applicableNot applicable−−Not applicableNot applicable
11,851,905

Not applicableNot applicable
11,484,025

Not applicableNot applicable
11,496,120−−
100.00%−−*1 Scope 1: The volume of greenhouse gases that are leaked directly into the Earth’s atmosphere from sources related to Rinnai’s business activities*2 Scope 2: The volume of emissions that occur during electricity and heat generation phases when using electricity and heat supplied by third parties*3 Scope 3: The volume of emissions that occur during business activities conducted throughout Rinnai’s supply chain (excluding those in Scope 1 and 2)

5,150

800
Total of Scope 1, 2, 3

Fiscal 2019
123,664.3

9

Reporting Period

Total energy used

Unit
MWh

CO2 Emissions

Scope 3*3

1,107

SocialEnergy Consumption
Scope

(TJ)
1,200

Environment

4,300

4,500

4,000

Shipping Volume and CO2 Emissions

400
2,000

Scope

200
0

0
Fiscal 2019

Fiscal 2020

Fiscal 2021

Scope 3 Category 11
Use of sold products

10,500,000 t (91.31%)

117

Fiscal 2020 Fiscal 2021

Fiscal2022(Target)Fiscal2026(Target)

Unit

Fiscal 2019

Fiscal 2020

Fiscal 2021

Shipping volume

Millions tons/
km

58.15

58.37

65.24

CO2 emissions

tCO2e

8,838

8,377

9,384

Rinnai Report 2021

118

Introduction

Environment

SocialGovernance

Data

Costs (Millions of yen)
Fiscal 2020

Fiscal 2021

Data Collection

Resource Recycling, Pollution Prevention, and Protecting Biodiversity

Environmental Accounting
Breakdown of Costs forEnvironmental Protection

Solid waste

Water used

(kg)
400

(1,000 m3)
1,000
859
31

31

30

808

800

758

200

180

400

15

31

11

Resource
recycling

Recycling as well as treatment anddisposal of industrial waste

102

117

103

Upstream/downstream

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

11

12

13

Management activities

Mainly monitoring and surveillance ofenvironmental impact

150

109

119

Research and development

Research and development onenvironmentally conscious products

1,149

733

1,243

Community efforts

Environmental communication withlocal regions and beautification/
greening at places of business andsurrounding areas

2

2

3

100

200

0
Fiscal 2020

Environmental
Mainly efforts to save energy
protection

230

20

Fiscal 2019

37

300

600

10

Fiscal 2021

Mainly efforts to prevent air and waterpollution

27

In the scope ofoperations

360

Fiscal 201944

(Weight of exterminating specified invasive species)(1,000 t)
40

30

Pollution
prevention

Biodiversity(includes valuable substances)

Key Activities

0
Fiscal 2019

Fiscal 2020

Unit

0

Fiscal 2021

Fiscal 2019

Fiscal 2019

Fiscal 2020

Fiscal 2020

Fiscal 2021

Fiscal 2021

Waste generated (Including valuables)

Thousand tons

31

31

30

Recycled waste

Thousand tons

31

29

28

Waste into landfill

Thousand tons

1.2

1.8

1.2
Key Activities

Water withdrawal

Thousand m3

859

808

758

Discharge of water

Thousand m3

846

778

742

Hazardous chemicals* use

t

36

33

97

Weight of exterminating specified invasive species

kg

180

360

230

Number of people participated in the extermination of
specified invasive species

Persons

63

89

42

Environmental protection
effectUnit

Fiscal 2019

Environmental Impact Reduction
Fiscal 2020
Fiscal 2021

CO2 emissions
reductions

Thousand tCO2e

2.0

6.0

3.5

Waste curtailment

Thousand tons

0.4

0.3

0.5

Water saving

Thousand m3

6.7

17.0

31.8

• Environmental protection effect are not increases or decreases in overall costs but rather an effective amount regarded for its economic benefit through the associated activities ofeach site.

* Class I designated chemical substance stipulated by the Pollutant Release and Transfer Register (PRTR) Law, Scope: Rinnai Corporation (Manufacturing sites)

Economic EffectAccompanying
Environmental
Protection Measures

Key Activities
Reduced expenses through energy
conservation, waste curtailment, andwater saving

Fiscal 2019

Economic Effect (Millions of yen)
Fiscal 2020
270

Fiscal 2021

295

538

• The calculations above exclude depreciation and amortization expense.
• The economic effects achieved through energy-savings and waste reduction are not increases or decreases in overall costs but rather an effective amount regarded for its
economic benefit through the associated activities of each site.
• Deemed effects, such as avoiding risks and enhanced product sales, fall outside the scope of economic effects because the standard for evaluation is too vague.

119

Rinnai Report 2021 120

Introduction

Environment

SocialGovernance

Data

Data Collection
Chronology of Environmental Activities at Rinnai
1993
1994
1996
1997

1998

March
June
October
DecemberWon special prize at 2nd Eco-Design Awards for tabletop cooking stove
Market debut: Absorption-type gas air conditioner (non-CFC)
Acquired ISO 14001 certification at Oguchi Factory
Won prize at 8th Energy Conservation Vanguard 21 for tabletop oven RSBN-096

April Won top prize for gas clothes dryer and special awards for small hot-water heater and for absorption-type gas air conditioner at 3rd
Eco-Design Awards
October Market debut: Yukko V Series, featuring no styrene packing, low stand by power consumption and low NOx emissions

2000

FebruaryMay
June
August2003

Won Minister of Economy, Trade and Industry Award for condensing water heater at Ministry's 10th Energy Conservation Awards
Drafted Rinnai Environmental Action Principles
Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Published inaugural issue of Environmental Report

2017

January Presented a talk on Rinnai’s environmental activities at the 20th Dialogue and Exchange Event hosted by EPOC
Won the Energy Center Director’s Award at the Energy Conservation Awards for third-generation ECO ONE hybrid water and spaceheating system
March Conducted inspections regarding conversion to ISO 14001:2015 standards
June Environment Month events:
Organized action to eradicate a specified invasive species (Coreopsis lanceolata)
Organized an exchange event (visit) with a corporate environmental pioneer
3,922 Rinnai employees participated in the My Action Declaration’s five actions to protect
biodiversity backed by the Japan Committee for the United Nations Decade on Biodiversity (UNDB-J)
November Rinnai Kansai branch office received Eco-Drive Excellent activity certificate in the general division of the 2017 Eco-drive Activity Concours,
sponsored by the Foundation for Promoting Personal Mobility and Eco-Drive Ecological Transportation

2018

January Held the eighth Rinnai Group Environmental Awards during our New Year’s celebration
February Won first prize in the Aichi Environmental Awards for our development of the ECO ONE, which is an extremely energy-efficient water heaterand heating system that cleverly and optimally uses diverse energy
April Published fourth edition of our Green Procurement Standards Guide
June Environment Month events:
Removed Coreopsis lanceolata coreopsis plants, an invasive species, and held an Environmentally Progressive Company Inspection
Council (exchange meeting)Exterminated the specified invasive species Coreopsis lanceolata
September Held internal study groups on ESG and the SDGs (invited outside lecturers)
December Participated in the EcoPro 2018 exhibition

2019

January 9th Rinnai Group Environmental Award Ceremony held during the New Year's ceremony
February Received the “Minister of the Environment Award,” the top award at the COOL CHOICE LEADERS AWARD 2018 sponsored by the
Ministry of the Environment (development of ECO ONE)
Received the “Excellence Award” at the 22nd Environmental Communication Awards sponsored by the Ministry of the Environment (CSR
Report 2018)
May Received the “Excellence Award” from the Ministry of the Environment(Medium-term management plan G-shift 2020 “Development of human resources to promote environmental management andcontribution”)
Ranked 26th overall at the 22nd Environmental Management Ranking hosted by The Nikkei, which evaluates the environmental
management level of Japanese companies
June Monthly environmental events• Held environmentally advanced company exchange meetings (inspection meetings)• Exterminated the specified invasive species Coreopsis lanceolata
September Received “Honorable Mention” at the 2nd EcoPro Awards sponsored by the Industrial Environment Management Association of Japan(for the development of “optimal hot water supply and heating systems” according to energy and environmental conditions in each country
and region)
November Received an Award at the Biodiversity Action Awards 2019 (Let’s grow heirloom vegetables together) organized by the Japan Committee
for the United Nations Decade on Biodiversity (UNDB-J)
December Participated in the EcoPro 2019 exhibition

June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2006
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Gas tankless water heater sold in the United States captured 2008 Super Nova Star Award (Stars of Energy Efficiency) in the UnitedStates from the Alliance to Save Energy
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2008 for gas fan heater
February Market debut: Eco-Jozu hot-water/heating unit RVD-E Series
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer

2010

January Market debut: Eco-Jozu water heater with bath-filling systems RUF-E Series Participated in Challenge 25 campaign, a national movement
to prevent global warming
February Won Silver Award at Aichi Environmental Award 2010 sponsored by Aichi Prefecture for global promotion of high-efficiency combustion
appliances and systems, including latent heat recovery water heaters
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the first Rinnai Group Environmental Awards ceremony

2011

April
May
June
September
DecemberMarket debut: Eco One hybrid water heater with heating systems for colder regions
Won Technology Grand Award from Japan Gas Association for development of gas hot-water system SOLAMO to use solar heat
Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the second Rinnai Group Environmental Awards ceremony
Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 16th Resource Recycling Manufacturing
Symposium for energy-saving measures concerning enamel combustion furnaces

2012

June
September
October
December

Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the third Rinnai Group Environmental Awards ceremony
Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2012 for Eco One hybrid water heater with heating systems
Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 17th Resource Recycling Manufacturing
Symposium for our development of a home-use hybrid water heater with heating systems

2013

May Acquired a certificate of a low-carbon building as Japan’s first residential complex in which all units have ECO ONE and floor heating
June Environment Month events: Issued new environmental cards to all Rinnai employees Organized an exchange event (visit) with a corporate
environmental pioneer
July Participated in COOL CHOICE campaign, a new national movement to global climatic changes and reducing greenhouse effect gas
August Won Good Packaging Prize at Japan Packaging Contest 2014 for a bottom tray with parts box for important attachments
September Held the seventh Rinnai Group Environmental Awards ceremony
December Won Nagoya Municipal Industrial Research Institute Director’s Award (for improvements targeting paper use along the supply chain) at 21st
Resource Recycling Monozukuri Symposium IMS

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Participated in Team Minus 6%, a national movement to prevent global warming

2009

2016

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2003 for built-in 75
cm-wide glass-top gas cooking stove

2005

2007

April Market debut: Eco One third-generation hybrid water heater with heating systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the sixth Rinnai Group Environmental Awards ceremony

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
October Won Logistics Prize at Japan Packaging Contest 2004 for bathroom heater/dryer
December Created the Green Procurement Standards Guide (first edition)

2008

2015

Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Established Environment DivisionMarket debut: Ecomax burner and Eco burner-equipped gas cooking stove
Market debut: Condensing water heater boasting 95% heat efficiency and NOx emissions under 30 ppm

2004

2006

January Won top energy conservation award at METI Award in the fiscal 2013 Energy Conservation Awards for Eco One hybrid water heater withheating systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
August Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2014 for returnable package
September Held the fifth Rinnai Group Environmental Awards ceremony
December Won 2014 Energy Saving and New Energy Grand Prize in Kitaguni (northern area in Japan) for Eco One hybrid water heater with heating
systems for the Hokkaido region
Won the Chunichi Shimbun Award at the IMS 19th Resource Recycling Manufacturing Symposium for our development of an eco-friendly
water heater with bath-filling systems

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

June
July
September
October

2001

2014

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

1999

2002

121

March Drafted Environmental Preservation Action Plan; established Environment Committee
December Won prize at 4th Energy Conservation Vanguard 21 for gas-blast type high-heat griller RGM-4, 6, 8

June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the fourth Rinnai Group Environmental Awards ceremony
December Won the Chairman Award of Nagoya Industries Promotion Corporation at the IMS 18th Resource Recycling Manufacturing Symposium for
improvement of logistic efficiency and reduction of waste disposal by reviewing of packing production process

2020

January
May
June
July
October

2021

January Held the 11th Rinnai Group Environmental Awards during the Company’s New Year’s celebration
Received the “Silver Prize” at the Sustainability Website Awards 2021 organized by the CSR Communications Association
March Received the “Minister of the Environment Award (Large Enterprise Category)” at the 2020 Environmental Human Resources
Development Corporate Awards organized by the Ministry of the Environment
June Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata
July Conducted a lecture on Rinnai’s environmental efforts at the “Environment and Manufacturing Conference” organized by the Nagoya
Industries Promotion Corporation

10th Rinnai Group Environmental Award Ceremony held during the New-Year Convention
Received the “Excellence Award” in the Ministry of the Environment’s 2019 Environmental Persons Development Awards
Environment Month events: Exterminated the specified invasive species Coreopsis lanceolata
Selected as “Good Practice” at the Aichi-Nagoya Biodiversity Best PracticeReceived the Japan Packaging Contest “Packaging Category Award (Industrial Packaging Category Award)” for exported water heater
packaging improvements

Rinnai Report 2021 122

Introduction

Environment

SocialGovernance

Data

Data Collection
Certification Acquisition Status

Data by Site (Fiscal 2021 Results)✓ CO2 emissions

Environmental Management System International Standard [ISO 14001:2015]
Location

Rinnai

Domestic Group companies

Overseas Group companies

Site name

Certified Year/Month

Scope 2
(tCO2e)Energy use(GJ)

Amount of waste
into landfill(Thousands of tons)

Amount ofrecycled waste(Thousands of tons)

October 1997

Oguchi Factory

Oguchi-cho, Niwa-gun, Aichi

1,925

1,909

55,779

5.2

5.1

0.019

Production Engineering Division

October 1997

Seto Factory

Seto-shi, Aichi

1,699

3,693

67,717

2.3

2.3

0

Oguchi Factory

October 1997

Akatsuki Factory

Seto-shi, Aichi

760

1,517

27,801

1.3

1.3

0

Seto Factory

December 2000

Environment DivisionDecember 2000

Technology Development Center

Oguchi-cho, Niwa-gun, Aichi

2,176

2,360

64,593

0.1

0.1

0.002

Quality Assurance Headquarters

November 2003

Head Office and Sales Offices*2

—

3,378

2,163

72,737

0.6

0.5

0.01

Head Office

December 2008

Yanagisawa Manufacturing Co., Ltd. Kadoma-shi, Osaka

696

673

20,123

0.4

0.4

0

Chube Branch

December 2008

Rinnai Technica Co., Ltd.

Kakegawa-shi, Shizuoka

1,382

1,350

34,686

1.2

1.2

0.005

Kansai Branch

May 2010

Gastar Co., Ltd.

Yamato-shi, Kanagawa

1,418

1,295

39,745

0.4

0.4

0.001

Logistic Control Office

May 2010

Kanto Branch

May 2011

RB Controls Co., Ltd.

Kanazawa-shi, Ishikawa

894

2,899

35,755

0.4

0.3

0.044

Chugoku Sales Office

May 2011

Rinnai Precision Co., Ltd.

Komaki-shi, Aichi

3,730

6,712

129,617

2.2

2.1

0.004

Rinnai Parts CenterMay 2011

RT Engineering Co., Ltd.

Toyoda-shi, Aichi

287

1,116

15,008

0.2

0.2

0.006

Kyushu Branch

April 2012

Japan Ceramics Co., Ltd.

Kani-shi, Gifu

1,290

973

29,956

0.3

0.2

0.02

Hokkaido Sales Office

April 2012

Niigata Sales Office

April 2012

Noto Tech Co., Ltd.

Nakanoto-cho,Kajima-gun, Ishikawa

1,295

1,220

30,472

1.8

1.6

0.18

Tohoku Branch

May 2013

Techno Parts Co., Ltd.

Aichi

220

253

6,489

0.05

0.05

0.001

Shikoku Sales Office

May 2013

Rinnai Holdings (Pacific) Pte Ltd.

Singapore

36

21

720

—

—

—

Higashikanto Sales Office

April 2014

Kitakanto Sales Office

April 2016

Rinnai Hong Kong Ltd.

Hong Kong

0

2

11

—

—

—

Akatsuki Factory

March 2018

Guangzhou Rinnai Gas andElectric Appliance Co., Ltd.

China

38

67

867

—

—

—

Oguchi Higashi Factry

June 2018

Minami-Kanto Branch

June 2019

Rinnai Italia S.r.l.

Italy

47

21

908

—

—

—

Gastar Co., Ltd.

October 2001

Rinnai America Corporation*3

United States of America

291

1,292

18,137———

Rinnai Technica Co., Ltd.

December 2003

Rinnai Australia Pty., Ltd.*4

Australia

2,220

7,235

64,095———

Yanagisawa Manufacturing Co., Ltd.

June 2004

Shanghai Rinnai Co., Ltd.

China

2,037

9,224

82,030———Rinnai Precision Co., Ltd.

December 2005

Rinnai Korea Corporation

South Korea

Japan Ceramics Co., Ltd.

January 2006

2,468

5,960

92,076———

RT Engineering Co., Ltd.

March 2006

P.T. Rinnai Indonesia

Indonesia

4,188

12,609134,011———

RB Controls Co., Ltd.

March 2006

Rinnai New Zealand Ltd.

New Zealand

210

90

5,311

—

—

—

Noto Tech Co., Ltd.

January 2007

Rinnai Taiwan Corporation

Taiwan720

1,090

20,595———Rinnai Korea Corporation

July 1997

Rinnai (Thailand) Co., Ltd.

Thailand

1,060

1,712

30,511———

RB Korea Ltd.

October 2006

Rinnai Brasil Heating Technology Ltd. Brazil

Shanghai Rinnai Co., Ltd.

December 2008

107

47

4,821

—

—

—

Rinnai Brasil Heating Technology Ltd.

June 2011

Rinnai Viet Nam Co., Ltd.

Viet Nam

517

548

11,030———Rinnai New Zealand Ltd.

July 2013

RB Korea Ltd.

South Korea

71

555

5,112

—

—

—

Rinnai Viet Nam Co., Ltd.

June 2019

Location

123

Scope 1
(tCO2e)Research & Development Headquarters

Environmental Management System “Eco Action21”
Domestic Group
companies

Location

Amount of waste
generated(Including valuables)(Thousands of tons)*1✓

Techno Parts Co., Ltd.

*5

1. In some cases, there is a mismatch between the breakdowns and totals for the amount of waste generated, the amount of waste into landfill and the amount of recycled waste (Unit:
Thousands of tons).
2. Includes the Head Office, nationwide sales offices, logistics centers and the Rinnai Parts Center.
3. Includes Rinnai Canada Holdings Ltd.
4. Includes Gas Appliance Services Corporation.
5. Includes Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

Certified Year/Month
August 2011

Rinnai Report 2021 124

Introduction

Environment

SocialGovernance

Data

Data Collection
Water Discharge*1 (Fiscal 2021 Results)
Site
Oguchi Factory

Seto Factory

Akatsuki Factory

Yanagisawa
Manufacturing Co., Ltd.

Rinnai Technica Co., Ltd.

Water discharge
standard(Water discharge to)
Sewer

River
(Yatoko River)River(Kazunari River)

Sewer

River
(Ota River)

Gastar Co., Ltd., Head
Office and Factories

Sewer

Gastar Co., Ltd.,
Research Building

River(Sakai River)

Rinnai Precision Co., Ltd.,
Head Office and Komaki
Factory

Sewer

Rinnai Precision Co., Ltd.,
Kani FactoryRiver(Kani River)

RT Engineering Co., Ltd.

Sewer

Japan Ceramics Co., Ltd.

Noto Tech Co., Ltd.

River
(Kani River)River(Nagaso River)

Substance*1

PRTR*4 (Fiscal 2021 Results)
Regulation value

Voluntary

Actual value(Maximum)

pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.625(20)
25(20)
30(20)
5.8~8.620
20
20

5.8~8.7240—240
6.0~8.420
20
20
5.9~8.519
19
19

6.8~7.4
91.0—
38.0
6.9~7.8
3.1
5.7
2.0
6.6~7.3
6.0
10.0
less than 1pH

5.0~9.0

5.9~8.5

7.1~7.9

BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

600
—
600
5.8~8.625(20)
160(120)50(40)
5.0~9.0600——
5.8~8.615
2540
5.8~8.6300—
300
5.8~8.6
15
—
30

100
—
100
6.3~8.1
20(15)
20(15)
30(20)
5.2~8.8480——
6.0~8.41220
32
6.0~8.4300—
300
5.8~8.6
15
—
30

6.6
—
120*2
6.8~7.1
20.0*227.0*212
7.4~8.1
7.0——
7.8~8.0
less than 5less than 5less than 5
6.5~7.6
290.0—
4.0
6.1~7.0
8.1
—
1.0

pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.6
15
160(120)30(25)
5.8~8.2
40(30)
160(120)40(30)

5.7~8.2
150—
150
5.8~8.6153030
6.0~8.2
36(27)
140(100)
36(27)

4.6~8.0
15.0
—
340*3
6.5~7.2
8.0
6.2
8.0
7.0~7.4
12.0
18.0
4.0

Amount of emission/discharge
Site

Oguchi Factory

Seto Factory

Akatsuki Factory

RB Controls Co., Ltd.;
Kanaiwa Factory

RB Controls Co., Ltd.;
Tsurugi Factory
Japan Ceramics Co., Ltd.

*3

Noto Tech Co., Ltd.

Class I designated chemical Handling
substance nameamountAir

53

Ethylbenzene

1,500

980

0

71

Ferric chloride

1,100

0

0

NumberPublicwatersAmount of transfer

Landfill

Sewers

Outsidetherelevant
office

0

0

0

430

0

0

0

0

Soil

80

Xylene

2,800

1,800

0

0

0

0

980

296

1,2,4-trimethylbenzene

1,000

1,000

0

0

0

0

0

300

Toluene

2,200

1,400

0

0

0

0

770

309

Nickel compounds

1,300

0

0

0

0

0

140

405

Boron compounds

3,700

0

0

0

0

0

410

53

Ethylbenzene

1,500

1,100

0

0

0

0

360

80

Xylene

2,000

1,600

0

0

0

0

360

87

Chromium and chromium (III)compounds

22,000

0

0

0

0

0

0

300

Toluene

1,200

61

0

0

0

0

1,100

308

Nickel

40,000

0

0

0

0

0

0

53

Ethylbenzene

2,200

2,000

0

0

0

0

180

80

Xylene

4,800

4,600

0

0

0

0

180

296

1,2,4-trimethylbenzene

1,100

1,100

0

0

0

0

21

300

Toluene

2,000

570

0

0

0

0

1,400

31

Antimony and its
compounds

2,000

0

0

0

0

0

190

265

Tetrahydromethylphthalicanhydride

12,000

0

0

0

0

0

0

448

Methylenebis (4,1-phenylene)
diisocyanate

1,000

0

0

0

0

0

0

460

Tritolyl phosphate

1,800

0

0

0

0

0

250

448

Methylenebis (4,1-phenylene)
diisocyanate

37,000

0

0

0

0

0

0

460

Tritolyl phosphate

51,000

0

0

0

0

0

5,000

53

Ethylbenzene

1,400

1,200

0

0

0

0

0.1

80

Xylene

1,800

1,700

0

0

0

0

0.8

300

Toluene

7,600

7,600

0

0

0

0

0.2

412

Tritolyl phosphate

850

0

0

0

0

0

570

31

Antimony and its
compounds

10,000

0

0

0

0

0

0

309

Nickel compounds

790

0

1

0

0

0

200

405

Boron compounds

6,400

0

110

0

0

0

620

*4 Class I designated chemical substance stipulated by the Pollutant Release and Transfer Register (PRTR) Law (Unit: kg), Two significant digits*1. pH: Concentration of hydrogen ions, BOD: Biochemical oxygen demand (mg/l), COD: Chemical oxygen demand (mg/l), SS: Concentration of aqueous suspended solids (mg/l),( ) Daily average*2. As a result of water quality inspections of wastewater, values exceeding the voluntary standard value was detected in BOD at Rinnai Technica Co., Ltd.
While identifying the source together with the measuring company, the maintenance cycle of the septic tank was revised with the intention of replacing the equipment renewal andimprovements such as processing control optimization were implemented because the processing capacity of the septic tank was assumed to be insufficient. Water quality
results after these measures show no problems in terms of maintaining the voluntary standards.
3. Values exceeding regulatory standards were detected at some worksites. We investigated the cause, implemented measures to ensure proper management and submitted
improvement reports to relevant government agencies. The results of subsequent water quality analyses confirmed that values were within voluntary standards without further
problems.

125

Rinnai Report 2021 126

Introduction

Environment

SocialGovernance

Data

Data Collection
Emissions into the Air*1 (Fiscal 2021 Results)
Regulation value

Voluntary

Actual value(Maximum)Combustion furnace Soot and dust

0.25

0.16

0.002

NOx emissions

180

150

64

Soot and dust

0.10

0.08

0.002

NOx emissions

150

96

55

Soot and dust

0.10

0.05

0.002

NOx emissions

150

79

22

Combustion furnace Soot and dust

0.20

0.16

0.003

NOx emissions

230

180

4

Soot and dust

0.1

0.1

0.002

NOx emissions

150

150

23

Combustion furnace Soot and dust

0.2

0.2

0.002

BoilerSoot and dust

0.10

0.08

less than 0.0012

NOx emissions

150

120

31

Combustion furnace Soot and dust

0.125

0.125

0.002

NOx emissions

90

90

8

SOx

0.25

0.25

0.01

Site

Facility

Oguchi Factory

BoilerSeto Factory

BoilerAkatsuki Factory

Yanagisawa Manufacturing Co., Ltd. Boiler

Gaster Co., Ltd.

Japan Ceramics Co., Ltd.

Substance

Scope 2CO2 conversion factors
Domestic emission factors: “Emission Factors by Electricity Utility (for FY2021 Reporting)” in MOE/METI, GHG Emission
Calculation and Reporting Manual (Ver. 4.7)
Overseas emission factors: Latest figures published for electricity utilities, etc., in the countries concerned
Australia

Electricity

0.6700 ~ 1.2000

tCO2e/MWh

New Zealand

0.1940tCO2e/MWh

United States

0.3538 ~ 0.3890

tCO2e/MWhHong Kong

0.7100tCO2e/MWhTaiwan0.5160tCO2e/MWh

South Korea

0.4950tCO2e/MWhIndonesia

0.8770tCO2e/MWhThailand

0.4810tCO2e/MWh

0.7921 ~ 0.8042

tCO2e/MWhBrazil

0.0617tCO2e/MWh

Singapore

0.4085tCO2e/MWhViet Nam

0.8042tCO2e/MWhItaly0.4444tCO2e/MWhChina (Shanghai)*1 Soot and dust: g/m3N, NOx: ppm, SOx: m3N/h

Conditions for Calculations
Scope 1CO2 conversion factors
Emission factor: MOE/METI, GHG Emission Calculation and Reporting Manual (Ver. 4.7)
Heating value: • City gas: 45 MJ/Nm3
		• Methane gas: 39.7 MJ/m3

Gas

Oil

127

Town gas

2.24

tCO2e/1,000 Nm3

Methane2.02

tCO2e/1,000 Nm3

LPG

3.00

tCO2e/tButane3.00

tCO2e/tHeavy oil

2.71

tCO2e/kl

Kerosene

2.49

tCO2e/kl

Light oil

2.58

tCO2e/kl

Gasoline

2.32

tCO2e/kl

Scope 3
• Calculated in accordance with MOE/METI, Basic Guidelines on Calculation of Greenhouse Gas Emissions Throughout
the Supply Chain (Ver. 2.3)
• Conditions for all categories• Emission factors: MOE, Emission Factor Database (Ver. 3.1 )Sustainable Management Promotion Organization’s LCI database IDEAv2 (for calculating GHG emissions in the supply
chain)• Conditions for category 11 (Use of sold products)• Products covered: Water heaters sold by Rinnai• Period: 10 years• Conditions: Conditions defined by Rinnai• Emission factors:• Electricity: 0.570 kgCO2e/kWh• Federation of Electric Power Companies of Japan, Environmental Action Plans in the Electricity Industry,• September 2015 (reference materials: collected data on performance in fiscal 2014)• City gas: 2.21 kgCO2e/m3• Tokyo Gas Co., Ltd., City Gas CO2 Emission Factors (13A, 45 MJ/m3, ordinary households and other customers
receiving low-pressure supply)

Rinnai Report 2021 128

Introduction

Environment

SocialGovernance

Data

Data Collection
Third-Party Assurance Statement

LR Independent Assurance Statement

Relating to Rinnai Corporation’s Environmental Data for the fiscal year
2020
This Assurance Statement has been prepared for Rinnai Corporation in accordance with our contract.

Terms of Engagement

Lloyd’s Register Quality Assurance (LR) was commissioned by Rinnai Corporation (“the Company”) to provide
independent assurance on its environmental data (“the report”) for the fiscal year 2020 1 against the assurance
criteria below to a limited level of assurance and at the materiality of the professional judgement of the verifier
using ISAE 3000 (Revised) and ISO 14064 - 3 for greenhouse gas (“GHG”) data.
Our assurance engagement covered the Company and its consolidated subsidiaries’ operations and activities inJapan and overseas and specifically the following requirements:
 Verifying conformance with the Company’s reporting methodologies for the selected indicators:
 Evaluating the accuracy and reliability of data for only the selected indicators listed below:

Scope 1 GHG emissions (tonnes CO2e)
Scope 2 GHG emissions [Market-based] (tonnes CO2e)
Scope 3 GHG emissions (Category 11) (tonnes CO2e) 4
Energy consumption (GJ) 5
23

Our assurance engagement excluded the data and information of the Company’s suppliers, contractors and any
third-parties mentioned in the report.
LR’s responsibility is only to the Company. LR disclaims any liability or responsibility to others as explained in theend footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all the dataand information within the Report and for maintaining effective internal controls over the systems from which theReport is derived. Ultimately, the report has been approved by, and remains the responsibility of the Company.

LR’s Opinion

Based on LR’s approach nothing has come to our attention that would cause us to believe that the Company has
not, in all material respects:
 Met the requirements of the Company’s reporting methodologies
 Disclosed accurate and reliable environmental data as summarized in Table 1 and Table 2 below
The opinion expressed is formed on the basis of a limited level of assurance and at the materiality of theprofessional judgement of the verifier.
Note: The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited
assurance engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance
obtained in a limited assurance engagement is lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed.








Auditing the Company’s data management systems to confirm that there were no significant errors,omissions or misstatements in the report. We did this by reviewing the effectiveness of data handlingprocedures, instructions and systems, including those for internal verification.
Interviewing with those key people responsible for compiling the data and drafting the report.
Sampling datasets and traced activity data back to aggregated levels;
Verifying the historical environmental data and records for the fiscal year 2020; andBy implementing the Company’s “No Visitor” Policy due to the global infection spread of COVID-19,
conducting the remote verification to Rinnai Technica Co.,Ltd. and Rinnai Corporation Head Office for
confirming the effectiveness of its data management systems via emails and Microsoft Teams.

Table 1. Summary of Rinnai Corporation’s GHG Emissions Inventory in FY 2020
Scope
Energy direct GHG emissions (Scope 1)

The Company has year-on-year demonstrated improvement in its data management system. However, theCompany should further demonstrate the completeness of its future environmental indicators. In particular,
based on the interests of stakeholders, it is expected that the verification of Scope 3 emissions, which is currently
being disclosed, will be expanded. In addition, considering that the company has a product group that uses
fluorocarbons as a refrigerant, consider to understand in scope3 (1) the amount of fluorocarbon leaks in scope 1,and (2) the amount of fluorocarbon-derived CO2 emitted when using and disposing of the products.

LR’s Standards, Competence and Independence

LR implements and maintains a comprehensive management system that meets accreditation requirements for
ISO 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use inaccreditation or other forms of recognition and ISO/IEC 17021-1 Conformity assessment – Requirements for bodies
providing audit and certification of management systems – Part1: Requirements that are at least as demanding as
the requirements of the International Standard on Quality Control 1 and comply with the Code of Ethics forProfessional Accountants issued by the International Ethics Standards Board for Accountants.
LR ensures the selection of appropriately qualified individuals based on their qualifications, training andexperience. The outcome of all verification and certification assessments is then internally reviewed by senior
management to ensure that the approach applied is rigorous and transparent.
This is the only work undertaken by LR for the Company and as such does not compromise our independence or
impartiality.
SignedDated: 24 July 2021

35,161

Energy indirect GHG emissions (Scope 2, Market-based)

68,606

Other indirect GHG emissions (Scope 3, Category 11)

10,497,104

Table 2. Summary of Rinnai Corporation’s Energy Consumption Data in FY2020
Electricity
Town gas

Observations

Tonnes CO2e

for the use of equipment in each facility
for vehicle use

MethaneLPG

for the use of equipment in each facility
for vehicle use

122,561.4

MWh441,221.0

10,461.1

kNm3

470,861.2

GJ
GJ

0.5

kNm3

22.3

GJ

46.1

km3

1,831.3

GJ

2,338.6

t118,803.1

GJ

1.9

t

97.6

GJ

15.2

t

750.5

GJ

Acetylene

7.5

t

375.4

GJ

Ethylene

0.04

t

1.9

GJ

Heavy oil

0.18

kl

7.0

GJ

Kerosene

15.6

kl

574.2

GJ

for the use of equipment in each facility

88.1

kl

3,321.6

GJ

for vehicle use

359.3

kl

13,545.3

GJ

4.7

kl

162.9

GJ

1,420.2

kl

49,137.9

GJ

ButaneLight oil
Gasoline

for the use of equipment in each facility
for vehicle use

Lloyd's Register Group Limited, its affiliates and subsidiaries, including Lloyd’s Register Quality Assurance Limited (LRQA), and their respective
officers, employees or agents are, individually and collectively, referred to in this clause as 'Lloyd's Register'. Lloyd's Register assumes noresponsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in thisdocument or howsoever provided, unless that person has signed a contract with the relevant Lloyd's Register entity for the provision of thisinformation or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract.
The English version of this Assurance Statement is the only valid version. Lloyd’s Register Group Limited assumes no responsibility for versions
translated into other languages.
This Assurance Statement is only valid when published with the Report to which it refers. It may only be reproduced in its entirety.

Jun Yasumoto
LR Lead Verifier
On behalf of Lloyd’s Register Quality Assurance Limited
10th Floor, Queen's Tower A, 2-3-1 Minatomirai, Nishi-ku, Yokohama, JAPANCopyright © Lloyd's Register Quality Assurance Limited, 2021. A member of the Lloyd’s Register Group.

LR reference: YKA4005612

LR’s Approach

LR’s assurance engagements are carried out in accordance with ISAE 3000 (Revised) and ISO 14064-3 for GHG data.
The following tasks were undertaken as part of the evidence gathering process for this assurance engagement:
1

The reporting period is based on the fiscal year of domestic and overseas subsidiary companies: (1) domestic subsidiary companies: FY2020(01/04/2020 – 31/03/2021), and (2) overseas subsidiary companies: CY2020 (01/01/2020 – 31/12/2020)
GHG quantification is subject to inherent uncertainty.
3
The scope 1 GHG emissions cover only energy-oriented CO2.
4
Scope 3 emissions data cover activities associated with the usage of water heaters domestically sold by Rinnai Corporation.
5
The scope includes the breakdown of energy consumption.
2

Page 1 of 3

129

Page 2 of 3

Page 3 of 3

Rinnai Report 2021 130

Introduction

Environment

SocialGovernance

Data

Data Collection
External Acclaim and Recognition

International Recognition for ESG Efforts
Rinnai was selected for inclusion in the FTSE4Good Index Series and theFTSE Blossom Japan Index, the leading environmental, social andgovernance (ESG) investment indices.

Certified by the City of Nagoya as a “Company Promoting
Women’s Activities”
Rinnai was certified as a “company promoting women’s activities,” as part of ascheme operated by the City of Nagoya (Aichi Prefecture) in fiscal 2014.
We have been certified in recognition of three key initiatives aimed at
expanding frameworks, assigning duties, and changing attitudes, to support
female employees so that they play a greater role in the workplace.

Rinnai was selected for inclusion in the “Sompo Sustainability Index”
launched by SOMPO Asset Management Co., Ltd.

Registered by Aichi Prefectural Government as a “Family
Friendly Company”

Selected as a constituent of the S&P/JPX Carbon Efficient Index, which
determines the weight of constituents by focusing on the disclosure statusof environmental information and the level of carbon efficiency (carbon
emissions per unit of revenue).

Evaluation of Climate Change
The Carbon Disclosure Project (CDP), an international non-profit
organization, globally evaluates corporate efforts regarding climate change.
• CDP Climate Change
CDP Climate Change evaluates the corporate response to climate change.
Rinnai has received a B rating.
• CDP Supplier Engagement Rating (SER)
The CDP SER evaluates performance in governance, targets, Scope 3
emissions, and value chain engagement within the CDP Climate Change
Questionnaire. Rinnai has received an A- rating.

131

In March 2014, Rinnai was registered by the Aichi prefectural government as a“family friendly company,” based on its commitment to ensuring that
employees strike a balance between their work and private lives.

Certified as a “General Business Owner Meeting Standards”
In May 2014, Rinnai was certified by the Aichi Labour Bureau of the Ministry of
Health, Labour and Welfare as a “general business owner meeting standards” inaccordance with the Act on Advancement of Measures to Support Raising
Next-Generation Children, and was awarded the “Kurumin” next-generation
certification mark.

Certified as a “Parent-Friendly Company”
In fiscal 2016, we were recognized as a parent-friendly company under
Nagoya’s parent-friendly company accreditation scheme. The purpose of such
schemes is to certify or recognize companies that are working to create
parent-friendly environments.

Rinnai Report 2021 132