C S RREPORT2012

http://www.rinnai.co.jp/

Corporate Social
Responsibility
Reportt 2012
R
ibilit R

2012.09

Contents
Rinnai Group CSR

1Top Message

4

Special FeatureSpecial Feature: The Environment

6

Special Feature 1: Heat and Comfortable Lifestyles

12Special Feature 2: Quality

15

Special Feature 3: Contributing to Local Communities

20

Management System

24

Social Report
With Our Customers

30

With Our Employees

53With Our Shareholders and Investors

69

With Our Business Partners

72

With Our Communities and Society

77

Environmental Report
Environmental Policy

82

Basic Environmental Activity

83

Environmental Management System

84

Environmental Action Plan and Results

89

Environmental Accounting

93

Developing Environmentally Conscious Products

95

Environmentally Conscious Monozukuri

110

Environment Education and Promotion of Awareness

125

Chronology of Environmental Activities at Rinnai

129

Major Award Winning History

131

Summary of Rinnai Group132

Supplemental Data: Factories (including Group Companies)
Oguchi Factory, Seto Factory, Aichi Factory, Asahi Factory,
Yanagisawa Manufacturing Co., Ltd., Rinnai Technica 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.

136

CSR Report 2012┃Rinnai Group CSR

Rinnai Group CSR
Every company under the Rinnai Group umbrella subscribes to the corporate mission and enduring emphasis
set out by Rinnai at its establishment, and from the perspective of a comprehensive heat-energy appliancemanufacturer, corporate social responsibility (CSR) means contributing to comfortable lifestyles around theworld and a cleaner, greener global environment.

Schematic diagram of company idealsCompany Motto
Harmony:
Develop personal character of the highest caliber
Spirit:Base your efforts on a consistent philosophy
Sincerity:
Know the fundamentals and consider issues with
precision and clarity

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

1

CSR Report 2012┃Rinnai Group CSR

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

Quality

Contributing to local
communities

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

Approach to CSR
Rinnai’s corporate mission hinges on the use of heat to provide society with comfortable lifestyles. This
perspective infuses efforts on a groupwide basis to provide heat-energy appliances with excellent features thatstress safety and peace of mind, comfort and the environment and thereby contributes to better lifestyles forpeople around the world and a better outlook for the planet.
The Group pursues CSR activities through core operations, emphasizing four issues that complement
the three key themes—“heat and comfortable lifestyles,” “quality” and “contributing to local
communities”—that Rinnai set out for itself and the eventual group it would lead.

Rinnai Group and Its Stakeholders

2

CSR Report 2012┃Rinnai Group CSR

CSR Report 2012
Editorial Policy

Rinnai puts out a CSR Report to convey to stakeholders management’s approach to CSR, to describe theactivities undertaken groupwide, and to encourage a deeper understanding of the Group’s operations.
CSR Report 2012 puts a spotlight on CSR activities carried out through the execution of core
operations and aims to promote greater awareness of the Group’s perspective on CSR to as many people aspossible.

ScopeRinnai Group(Rinnai Corporation and companies under the Rinnai Group umbrella in Japan and overseas)Reporting Period
This report focuses on events that occurred in fiscal 2012—April 1, 2011 to March 31, 2012—but also touches
upon measures implemented and recent activities undertaken prior to fiscal 2012 as well as future businessdirection, targets and plans.

Referenced Guidelines
Sustainability Reporting Guidelines (G3.1), the third and most recent generation of guidelines by the Global
Reporting Initiative (GRI)
ISO 26000:2010
Environmental Reporting Guidelines (fiscal 2007), issued by Japan’s Ministry of the Environment
Environmental Reporting Guidelines (fiscal 2005), issued by Japan’s Ministry of the Environment
Note: The GRI comparison table is available on the Corporation’s website.

Publication Schedule
September 2012 (Japanese version)
Previous: August 2011
Next: August 2012 (planned)

Contact

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

3

CSR Report 2012│Top Message

Top Message
Contributing to people’s lifestyles and global environmental protection throughcore businesses
To Start
Undoubtedly, 2011 will be remembered for the many natural
disasters that occurred, particularly the Great East Japan Earthquake
and the tsunami and nuclear accident that followed, as well as thedevastating earthquake New Zealand and extensive flooding inAustralia and Thailand. On behalf of everyone at Rinnai, we would
like to say once again to all those affected by these disasters, ourthoughts are with you and we hope that daily life is steadily gettingback to normal.
Rinnai’s responses in the wake of the Great East Japan
Earthquake speak to a commitment to support basic living standards
and demonstrate a long-held corporate mission to contribute tosociety, specifically, the creation of comfortable living
environments, through core operations. We provided gas cooking
stoves, rice cookers and room heaters for use at evacuation centers,
and played a part in reconstruction efforts, mainly inspection andrepair of hot-water units. We also prioritized the production anddelivery of products for temporary housing.

Susumu Naito, Chairman

Hiroyasu Naito, President

Encouraging Wider Use of High-Efficiency Hot-Water Units and Strengthening
Methods to Ensure Safety and Peace of Mind
Rinnai is a comprehensive heat-energy appliance manufacturer, offering customers everywhere safe,
environmentally conscious products that make life pleasant and convenient. Therefore, we contribute to abetter society through our business activities.
Currently, the domestic gas appliance industry is moving toward a shift in production of all hot-water
units, in principle, from conventional models to the Eco-Jozu format by March 2013. Rinnai, like othermembers of the industry, is shaping the requisite framework for this transition. In addition, we have developed
ECO ONE, a hybrid hot-water and heating system that runs on both electricity and gas for greater efficiency.
ECO ONE boasts primary energy efficiency of 125% and emits about half as much carbon dioxide (CO2) asconventional gas hot-water units. Such features place ECO ONE among the world’s most energy-saving,environmentally friendly products on the market.
Overseas, we sold 5.25 million tabletop stoves in Indonesia in fiscal 2012, paralleling thegovernment’s efforts to promote the use of liquefied petroleum gas (LPG). This is important because wider
use of gas cooking stoves is reducing the amount of firewood used by households, which has in turn limited
the extent of logging activities. The growing popularity of cooking stoves and other gas appliances is therefore
helping to protect the environment.

4

CSR Report 2012│Top Message

Since we manufacture and market heat-energy appliances, it is imperative that we reinforce efforts toensure our products are safe and give customers peace of mind. It only takes one accident to cause loss of life
or loss of property, so we must strive to avert such tragedies. Adhering to the philosophy “Quality is ourdestiny,” we will take a more thorough approach to the establishment of a structure that prevents defective
products from ever leaving our facilities and keep customers apprised of issues that require attention to ensurethat products are used properly. On our own initiative, we have issued warnings and notification regarding theuse of small, open-type water heaters and the need for ventilation when these units are in operation, and we
maintain an inspection system for products, such as gas hot-water units, that have been in use for extended
periods of time. But we intend to enhance these approaches still further.

Providing the Right Products for Each Market, Establishing a Dominant Brand
ProfileRinnai embarked on a three-year medium-term business plan—“Reform and Breakthrough”—in April 2009.
Through this plan, we relentlessly executed measures to eliminate waste, strengthened Group operations, andachieved a certain degree of success in solidifying our position as a comprehensive heat-energy appliancemanufacturer.
At the start of fiscal 2013, in April 2012 we launched a new medium-term business plan, “Jump Up
2014.” Under this plan, our global strategy is to address customer demands common worldwide with anemphasis on ensuring product safety and peace of mind, contributing to comfortable lifestyles and protecting
the environment, while providing products matched to environmental policies and economic progress in eachcountry or geographical region where we have established a presence. Among prevailing themes, we willprioritize the environment and energy-saving features, and toward this end, we will strive to develop productsthat incorporate leading-edge technologies and to boost product quality still further.
In Japan, the Great East Japan Earthquake prompted a new awareness of energy from the perspectiveof emergency preparedness and reduced consumption. For example, different energy sources, including
renewable energy, have attracted wider interest, and the viability of certain concepts, such as all-electric
homes, is being reconsidered. Meanwhile, overseas demand for heat-energy appliances varies depending onfood culture and prevailing access to the necessary sources of energy in each country and geographical region.
We take into account market-specific factors, especially climate and availability of energy sources to ensurethat we are able to provide environmentally conscious heat-energy appliances appropriate to each market.
The products offered by the Rinnai Group are well regarded—a solid reputation that underpins growthin domestic and overseas sales. High-performance features, along with safety and reliability, have contributed
significantly to Rinnai’s enhanced brand value. But to polish this profile to a brighter shine and build astronger presence worldwide, every company under the Group umbrella must adhere to the zero defect policy
and constantly seek to improve quality.
The heat-energy appliances that we make and market have a direct impact on the environment—
worldwide because we have an international customer base—but these same appliances also support thecreation of comfortable lifestyles. The Rinnai Group will strive as an integrated unit to uphold the Rinnai
Spirit, which is built upon three themes: “heat and comfortable lifestyles,” “quality” and “contributing to local
communities,” to cement its reputation as a good corporate citizen contributing to pleasant lifesyles in an ecofriendly world.

5

CSR Report 2012┃Special Feature: Environment

Special Feature:

The Environment
Appliances with little environmental impact aimed atmarkets worldwide to halt global warming
Global warming is a pressing concern that requires action
on a worldwide scale. Industry tends to fall into the
spotlight, in terms of expectations and solutions, buthouseholds are actually a significant factor in global
warming. Therefore, the Rinnai Group is keen to help
households curb emissions through the sale of highefficiency heat-energy appliances to customers all over theworld.
Special Issue: Environment provides a look into
the activities we undertake in Japan and overseas to halt
global warming and showcases scenarios conditioned
upon widespread use of Rinnai-brand products in Japan,
the United States and Australia.

Australia and United States—Major Emitters of CO2, Key Factor in Global
Warming
CO2 is the primary cause of global warming. The level of CO2 in the atmosphere has increased steadily since
the Industrial Revolution, which sparked a rapid rise in the consumption of oil, coal and other fossil fuels.
Currently, the country emitting the most CO2 is China, followed by the United States, the European Union andIndia, in that order. Calculated on a per-capita basis, however, Australia and the United States are among thebiggest CO2 emitters, excluding oil-producing nations Qatar and the United Arab Emirates, which sit at No. 1
and No. 2, respectively.

International Approaches to Halt Global Warming
In countries around the world, governments are diligently implementing policies and programs to deal with
global warming, including initiatives to protect CO2-absorbing forests and reduce CO2 emissions.
The target is to cut greenhouse gas emissions worldwide by at least 50% by 2050, relative to 2005,
and toward this end, Japan aims to limit emissions from domestic sources to just 20% of the 1990 level. To
achieve this long-term goal, the government is endorsing programs that spotlight new technologies,
particularly those utilizing green energy and energy-saving options, and encouraging industry to extend homegrown expertise, including technical support, to developing countries. The government has also formulated
domestic systems, such as Standards of Judgment for Owners of Residential Buildings, under the energy
conservation law, which will promote wider use of high-efficiency equipment and technologies and thereby

6CSR Report 2012┃Special Feature: Environment

trim the amount of energy consumed and the level of CO2 generated in the process. Other activities include
initiatives, such as Cool Biz and Warm Biz, which are part of citizens’ movement Challenge 25.

Group Efforts to Halt Global Warming
In Japan, efforts to reduce CO2 emissions have focusedon industry, which accounts for about 40% of thenation’s energy consumption, and corporate measures
have been relatively successful. Among households,
however, energy consumption is on an upward trend.
Citizens heeded requests to curb energy following theGreat East Japan Earthquake because power plants
faced shortfalls in generation capacity, but the drop wasonly short-lived. The rise in household emissions
reflects an increase in nuclear families and a growing
preference for lifestyles that offer greater comfort andconvenience.

At Rinnai, it is our duty, of course, to prevent global warming by implementing green practices in our
manufacturing processes. But we believe the appliances we provide should be as environmentally friendly as
possible so that customers are able to reduce their own carbon footprint without sacrificing comfort andconvenience. We are taking concrete steps to achieve this objective. Consider residential energy consumption
by application. A breakdown shows that 28.7% of the total goes toward heating water and 25.1% towardheating rooms. A lower level of CO2 emissions from households requires that less energy be consumed for hot
water and room heating. By 2013, all gas hot-water units for the Japanese market will, in principle, be made to
the Eco Jozu standard, which targets heating efficiency of about 95%. Our development of ECO ONE, ahybrid hot-water and heating system featuring heat pump technology utilizing ambient heat, is a primeexample of how efforts to improve upon the Eco Jozu format will help consumers trim their carbon footprint.
Overseas, we are working on the development of products that address requirements specific to conditions indifferent countries and regions while exerting little impact on the environment.

The following materials served as reference for content on this page.
• “Stop the Global Warming 2012,” issued by the Global Environment Bureau of Japan’s Ministry of theEnvironment• Ondanka kara Chikyu wo Mamoru Tekiou e no Chousen 2012 (“Appropriate Measures to Save the World
from Global Warming 2012”), by the Cabinet Office, Ministry of Education, Culture, Sports, Science &Technology, Ministry of Health, Labor and Welfare, Ministry of Agriculture, Forestry and Fisheries,
Ministry of Land, Infrastructure and Transport, and Ministry of the Environment• Japan Center for Climate Change Actions Japanese-language home page (http://www.jcaa.org/)

7

CSR Report 2012┃Special Feature: Environment

Special Feature:

The Environment
Premise: Using Hot-Water Units Can Reduce Greenhouse Gases
Switching all hot-water units to high-efficiency models should have a good CO2-reduction effect
The Rinnai Group is involved in the development, production and sale of highly efficient and environmentfriendly heat-energy appliances. We envisioned two CO2-reduction scenarios, highlighting hot-water units
in several product categories, and over the next two pages we present the results for Japan as well as theUnited States and Australia, two countries with high per-capita CO2 emissions.
These scenarios assume that all hot-water units installed in homes are high-efficiency models, and actual amounts may
differ from industry estimates. Furthermore, such estimates should not be considered numerical targets of the Company
or of the Group. Note that the breakdown of hot-water units in homes as well as the amount of CO2 emitted by thedifferent kinds of hot-water units are based on estimates determined by Rinnai.

Japan
Use of Eco Jozu could have reduced output equivalent to 0.6% of total CO2
emissions, ECO ONE would have achieved reduction equivalent to 2.6%
In Japan, hot-water units using primarily gas, electricity or
kerosene have become mainstream. In recent years, highefficiency hot-water units—Eco Jozu, using gas; Eco Cute,using electricity; and Eco Feel, using kerosene—haveappeared on the market and even the national governmentis offering incentives to encourage more homeowners andbuilders of new homes to install these eco-friendly
appliances. The proliferation rate has stalled around 10%,but improvement is expected. With this in mind, we
considered two scenarios: one that presumes all hot-water
units are high-efficiency models rather than conventionalgas, electric and kerosene models; and the other that
presumes all existing hot-water units are the ECO ONE
hybrid hot-water and heating system.

Scenario 1
If all conventional gas, electric and kerosene hot-water units had been replaced with highefficiency hot-water units
Currently, the domestic gas appliance industry is pushing for Eco Jozu to become the de facto standard, in
accordance with national policy promoting widespread use of high-efficiency hot-water units. Assuming that
all home-use hot-water units running on gas, electricity or kerosene had been Eco Jozu models, which are
more eco-friendly and emit less CO2 than conventional units, and the only hot-water units in operation had
been Eco Jozu or ECO ONE, Eco Cute and Eco Feel, then Japan could have reduced its fiscal 2010 CO2emissions by about 7.3 million tons, equivalent to 0.6% of total CO2 emissions, which came in at 1,192
million tons.

8

CSR Report 2012┃Special Feature: Environment

Scenario 2
If the switch had been to ECO ONE hybrid hot-water and heating system only
ECO ONE is superior to Eco Jozu and Eco Cute in terms of environmental performance. It augments Eco Jozu
capabilities with heat pump technology that utilizes ambient heat for exceptional energy savings, eco-friendly
qualities and convenience and comfort. If all hot-water units in operation had been ECO ONE, Japan could
have reduced its fiscal 2010 CO2 output by about 31.0 million tons, equivalent to 2.6% of total CO2
emissions—1,192 million tons—that year, and significantly better than the 0.6% under scenario 1 conditions.

United States
Tankless (instant-heating) gas hot-water units are attracting attention. If all hotwater units were tankless models, the reduction effect on total emissions would
have been 1.7%
In the United States, the market favors storage-type hotwater units, split evenly more or less between electric andgas models. Tankless gas hot-water units, which are
mainstream in Japan, are not particularly popular. Even
though gas hot-water units are the preferred choice,especially in areas where power outages are frequent andgas is less expensive, the emphasis is on gas storage-typemodels because they cost about one-third the price oftankless models. However, tankless models have been
attracting greater attention lately because a home with thecorrectly sized tankless hot-water unit will never run out of
hot water, while a storage-type unit could run out of hot
water if a large amount of hot water is used at one time.
With this in mind, we considered two scenarios: one that
presumes all storage-type gas hot-water units were withtankless models; and the other that presumes all existing
hot-water units were tankless models.

9

CSR Report 2012┃Special Feature: Environment

Scenario 1
If storage-type gas hot-water units had been tankless models

The United States’ CO2 emissions could have been cut by 18.0 million tons, equivalent to 0.3% of total
emissions—5,258.0 million tons—in 2009.

Scenario 2
If all hot-water units had been tankless models
Annual CO2 emissions could have been cut by 91.5 million tons, equivalent to 1.7% of total emissions acrossthe country.

Australia
Sale of electric storage-type (tank-based) hot-water units banned; replacement
demand expected to showcase highly eco-friendly gas instant-heating hot-water
units
Australia shows high CO2 emissions on a per-capita
basis. This situation reflects dependence on thermal
power generation, which is a consequence of thecountry’s rich coal deposits and thus easy access tothe feedstock for power generation. Electric storagetype hot-water units were once mainstream in the
hot-water unit market. However, heightened
recognition of the need to protect the environment
encouraged the government to hammer out policies
preventing the sale of electric storage-type hot-water
units. Specifically, the ban stops the sale of such
units for installation in detached homes built in 2012
and will gradually be extended to include multifamily homes. Going forward, electric storage-type
hot-water units already installed will probably be
replaced with more eco-friendly appliances,including gas instantaneous hot-water heaters.
10

CSR Report 2012┃Special Feature: Environment

With this in mind, we considered two scenarios: one that presumes all storage-type electric hot-water units
have been replaced with gas instantaneous hot-water heaters; and the other that presumes all electric storagetype hot-water units have been replaced with solar hot-water systems, which combine solar panels and gas
instantaneous hot-water heaters.

Scenario 1
If all electric storage-type hot-water units had been gas instantaneous hot-water heaters
Australia’s CO2 emissions could have been cut by about 8.5 million tons, equivalent to 2.1% of total
emissions—397 million tons—in 2009.

Scenario 2
If all hot-water units had been solar + hot-water systems

Annual CO2 emissions could have been cut by about 13.3 million tons, equivalent to 3.4% of Australia’s total
emissions.

11CSR Report 2012┃Special Feature: Heat and Comfortable Lifestyles

Special Feature 1

Heat and Comfortable Lifestyles
Heat-optimizing solutions for people in Japan and all over theworld—Product development at Rinnai—
As a comprehensive heat-energy appliance manufacturer, Rinnai has
launched various products that enable users to live a more comfortable
lifestyle. Diverse ideas have gone into products currently in use,prioritizing safety, comfort and efficient use of heat. What is behindthe development if heat-energy appliances at Rinnai? Read on to findout.

Energy savings higher with heat from gas-burning appliances than with heatproduced from electricity
People require heat for many different applications—for a hot shower or to
get warmed up, or for cooking. Safe, easy-to-use appliances are needed toconvert fuel into heat appropriate for the desired purpose.
These days, gas and electricity are used most often as heat sources
for hot water, cooking and room heating. However, the nuclear crisis that
followed the great earthquake and tsunami of March 11, 2011, led to acomplete shutdown of nuclear power plants across Japan, and althoughsome facilities have recently resumed operations, electric power providers
will probably be forced to continue to rely on thermal power generation tomeet demand for electricity.
When electricity is used as the heat source for cooking and roomheating, a loss occurs between the moment the power plant converts its
feedstock into electricity and transmission of that energy. However, whengas is used, it produces heat as soon as it is burned, leading to higher
thermal efficiency. While electricity is an important type of energy, gas
provides better energy savings to households and is considered moreenvironmentally friendly.

Gas stove which is easy to clean

Our top priority is the pursuit of safety and comfort

A product that puts anything, even “environment-friendly,” before safety should never go to market. Rinnai
has always prioritized safety in its product development efforts. An example of this commitment is the “Si”
sensor, incorporated into tabletop gas stoves, to prevent deep-frying oil from catching fire. We also directconcerted effort into other research themes, such as failsafe mechanisms for all gas appliances to ensure safety
even in the event of a malfunction due to deterioration over many years of use, and tabletop stove features toprevent clothing from catching fire.
In the pursuit of comfort, our focus in the hot-water segment has been on controls that do not cause achange in temperature when multiple locations within a home use hot water at the same time, and on
improvements, particularly efforts to bring the difference between the remote control–set temperature and theactual temperature of hot water closer to zero. In the tabletop stove segment, we have adopted shield
construction, which prevents any contents boiling over the edge of a pot from seeping inside the applianceinterior so that cleanup easier, and also heat-off construction, which lowers the temperature of the tabletop—
the glass surface—so that any boiled-over liquid will not burn on. Such features make cooking more enjoyable.

12

CSR Report 2012┃Special Feature: Heat and Comfortable Lifestyles

In-House Perspective

We provide safe, highly efficient gas appliances that make life more enjoyablefor so many people.

Kinji Mori
Executive Officer, Deputy
General Manager of Research& Development Headquarters,
and General Manager of
Product Development Division

Seeking to reduce CO2 emissions, the government and electric powercompanies in Japan had promoted nuclear power, with all-electric homes
falling under the spotlight in recent years. But the events of the Great East
Japan Earthquake made it clear that no one can guarantee the absolutesafety of nuclear power, and changes to Japan’s energy policy have been
the inevitable result. Green energy has attracted attention, especially solar
power and geothermal power, but stable supply is a concern. Thermal
power generation using natural gas as the feedstock could well become
the mainstream source of electricity.
Thermal efficiency at some thermal power plants is around 60%,
but at older facilities the rate hovers in the 30%-40% range. Meanwhile,home-use tabletop gas stoves have a rating of at least 55%. Of hot-water
units, Eco Jozu high-efficiency models boast thermal efficiency around
95%, and the ECO ONE hybrid hot water and room heating systemachieves a rate around 125%. There are more energy savings to be had at
the residential level by burning gas and using that heat than convertinggas to electricity at power plants and then turning electricity into heat forthe desired purpose.
However, high efficiency alone does not necessarily make anappliance good. Above all, an appliance must be safe to use. Rinnai willcontinue to provide to customers everywhere gas appliances that are
efficient and safe and support comfortable lifestyles.

Japan’s gas appliance performance attracts overseas attention, tooJapan’s gas appliances perform to a standard comparable to that ofoverseas products. In many countries, the common way to adjust thetemperature of hot water is by increasing or decreasing the flow fromthe hot-water and the cold-water faucets by varying degrees until thedesired temperature is reached. In Japan, however, hot water is set atthe preferred temperature digitally by remote control.
Also, Rinnai boasts sophisticated technologies and know-how,amassed over many years, including expertise to keep water fromfreezing in cold climates and to circumvent malfunctions even due to
Hot-water unit remote control
rain and salt damage. Rinnai-brand products boast excellent levels of
used overseas
convenience, durability and performance, thanks to electronic control
technology as well as gas- and liquid-control technology, mainly forcity gas and water. It is these technologies that provide a key advantage
in the pursuit of a wider presence in global markets.
But technologies, no matter how sophisticated, are of little value if product development is not wellmatched to market conditions and consumer needs in specific countries and regions. For instance, it takes a
few moments for hot water to start flowing, so in areas such as Australia, with little rainfall and a national
obligation to conserve water resources, hot-water units have to be constructed so that no water is wasted. And
in countries, particularly China, where people like to cook over high heat and grilled fish is not a common
dish, we swapped out the grill area that is standard in Japan for a large high-heat burner, and in India, where
simmered dishes, such as curry, are popular, we installed numerous small burners. Such designs reflect aconcerted effort to develop products well suited to the food culture of the specific market where suchappliances are sold.
Heat is indispensible to a comfortable lifestyle. As a comprehensive heat-energy appliancemanufacturer, Rinnai offers market-optimized products that enable people everywhere to utilize heat matched
to local requirements, and this leads to comfortable lifestyles.

13

CSR Report 2012┃Special Feature: Heat and Comfortable Lifestyles

In-House Perspective

Rinnai offers the world gas hot-water units boasting sophisticated Japanesetechnology

Chikara Tsuge, Section Chief,
Water Heater Development
Section, Product Development
Division, Research &Development Headquarters

Promising overseas markets for Rinnai’s gas hot-water units are theUnited States and China, that remarkable economic powerhouse. The
United States, in particular, presents considerable underlying demand forthe instantaneous hot-water units so common in Japan. Currently, such
units comprise a very tiny portion of the U.S. market, where storage-type
hot-water units are prevalent, but greater environmental awareness andbudget-consciousness could precipitate a switch.
Rinnai’s hot-water units are regarded highly for top-level quality.
Americans who are used to storage-type units seem surprised that there is
way they will not run out of hot water and that hot water comes out of thefaucet at the desired temperature right away. These features are due totechnologies we have accumulated in Japan where high performance is animperative. We will continue to develop technologies matched to thenational and regional requirements of customers, and we will apply
technologies acquired in Japan to provide increasingly better products.

14

CSR Report 2012┃Special Feature: Quality

Special Feature 2

Quality
Adhering to the corporate philosophy “Quality is our destiny,”
we strive for zero-defect status.
Guided by the corporate philosophy “Quality is our destiny,” weseek to maintain zero-defect status. Products—developed,
manufactured and sold—end up with customers, and we undertake
various activities to ensure that our products will perform as
promised. The people in charge of each stage of a product’s precustomer life were asked about their thoughts on quality. Theircomments are presented below.

Development
Design/Testing

A company that does not prioritize quality cannot survive
Products are imbued with quality through designs that anticipate theunexpected
It is said that when a product malfunctions, the problem can betraced back to something that could have been prevented at thedesign stage. So at Rinnai, we emphasize approaches right from theproduct development stage to ensure zero defects. We have toconsider two factors: the safety of gas appliances is paramount, ofcourse, but these products must also satisfy market demands for
comfort and convenience.
The structure of gas appliances is becoming increasingly
complex and diversified, which requires swift responses
incorporating technologies from different fields. At one time,
responses were like that arcade game—whack-a-mole—and weaddressed a product defect if and when it appeared. But thatapproach has been replaced by a more proactive method hinging on
designs that anticipate the unexpected. We strive to add quality to
products right from the design stage, mainly through simulations
and learning from past defects to confirm the appropriateness ofdesign features. We also apply verification methods to identify
points for improvement and prevent potential problems from ever
happening. A company that does not prioritize quality loses the trustof its customers and without such trust cannot survive in thebusiness world. It is important to raise awareness and recognition ofquality within the Rinnai Group and promote zero defect design
while conveying our quality emphasis to younger generations ofdesign engineers.

Product testing at the
Research & Development
Headquarters

Masanori Shimizu,
General Manager ofComponent Technology
Development Division,
Research & Development
Headquarters

15

CSR Report 2012┃Special Feature: Quality

Production
Production
Technology

5Ms define in-house design of production equipment
Aim for zero defects that track back to facilities
At Rinnai, the design of production facilities for manufacturing
gas appliances is an in-house activity. The Research &Development Headquarters works with factories and production
technology divisions to build zero-defect production facilities.
Recently, we have been trying our hand at equipment for
imaging and for process monitoring. That said, we still checkprocessing tools and other equipment for signs of deteriorationand strive to eliminate defects that track back to facilities.
We want to improve the design of facilities andequipment so that we stop defective units from appearing duringmass-production stages, such as assembly and processing, but
we are also looking into ways to make operations easier for
production line workers.
Production requires a 5M perspective: man, machine,material, method and measurement. It is our mission to pursue
defect-free manufacturing with the 5Ms in mind, and that is why
we choose to design our own facilities. Whether the operations
are at home or abroad, the approach is the same. If a problem
appears, it has to be resolved quickly, and efforts are directed
toward maintaining zero defect status at production facilities.

Production Technology
CenterNaoki Oshima, Project
Leader, Plant Equipment
Section, Machine
Laboratory, Production
Engineering Division,
Production Headquarters

Production
Assembly

Improved construction and devices that prevent careless mistakes
have been successful
Going forward, strive to eliminate defects caused by human error
Production comprises a manufacturing stage, to turn out
functional components and other parts, and an assembly stage, toput all the pieces together. Even if the parts are manufactured toquality standards, a mistake at the assembly stage will lead to a
defective appliance. So you could say that efforts to enhancequality at the assembly stage are also indispensible to production.
The assembly side of production is concerned about five
types of leaks: gas, water, electricity, exhaust and wavelength.
Through feedback to the development and design division on
construction susceptible to defects and the introduction of FP
devices* to prevent careless mistakes, critical problems are nolonger an issue and the number of in-process defects has
decreased. But little slip-ups, such as a crooked label, caused byhuman hands do happen, so we are taking new approaches, suchmechanization of steps that can be executed by machine.
Increased mechanization, however, hinders the transfer of knowhow accumulated by experienced workers to the younger

Seto Factory assembly
line

16

CSR Report 2012┃Special Feature: Quality

generations of factory employees, so we are looking into ways topass along techniques and expertise from one generation to thenext.
*FP (fool proof) device: A device that neutralizes a dangerous situationor prevents a defect even if a machine is inadvertently operated
incorrectly; or, a device that prevents incorrect operation of a machine
to begin with.

Katsunori Kumagaya,
Project Leader,No. 2 Manufacturing Unit,
Seto Factory

Sales
Logistics

Even if numbers are low, a misdelivery is still a misdelivery
Promoting activities aimed at zero misdeliveries
Rinnai does not outsource its logistics function but rather
chooses to keep it in-house. This is essentially a reflection of ourcommitment to quality—to enhance quality even in suchoperations as delivering products to customers.
The Integrated Logistics Center opened in April 2008. It
takes in products from four Rinnai factories and Group
companies for distribution throughout Japan. We take various
steps to prevent misdeliveries, including the introduction of a
product inquiry system using quick response—QR—codes,
which has contributed to a reduction in misdeliveries.
Even though the number of misdelivered products has
dropped, some still occur. And a customer who happens toreceive the wrong appliance is undoubtedly unhappy.
Understandably, from a customer’s perspective, misdeliveries
should not happen at all. To bring misdeliveries to zero, we areworking to further refine the current system, with an emphasis
on procedures to eliminate human error.

Reading QR code

Kizuki Kawabata,
Manager, Integrated
Logistics Center,
Logistics Control Office,Production Headquarters

17

CSR Report 2012┃Special Feature: Quality

Always striving to satisfy customers
Installation and Making the installation process even better
Sales

MaintenanceIn the installation process, the most inexcusable mistake is notconnecting the appliance to the gas outlet correctly. We are
meticulous about inspections and procedures to prevent this, andit rarely happens anymore. The next biggest problem is improper
installation. This includes the way the appliance looks inside theroom where it has been installed. For instance, is the remotecontrol for the hot-water unit crooked or nice and straight on thewall?
Quality means safety, comfort and satisfaction from a Installing a hot-water unit
customer perspective, and we strive to provide gas appliances ofthis type of quality. Toward this end, we put a lot of effort intotraining and instruction programs for our installation associates
across Japan. We carefully track the status of associates to findout, for example, if they take and place orders for customers
properly and execute installation work correctly, if they have thenecessary qualifications to do the required installations, and if
their credentials are current. We help associates enhance theircapabilities so that the quality of installation work is consistent
everywhere in Japan.

Koji Ejiri, Manager,
Installation and
Maintenance Office,Sales and Administration
Division, Marketing andSales Headquarters
After-sales
services
Inspection andrepairWe strive to improve repair capabilities and customer service skills,
which underpin the Rinnai brand
When a Rinnai appliance does not perform as it should, technicalservice personnel like me visit customers—the end-users—to fix
the problem. Customers turn on a Rinnai appliance every day, so
we are available daily throughout the year, except on New
Year’s Day, to deal with problems. It is our mission to meet the
expectations of customers who have purchased a Rinnai productbecause they trust the name. Our response when an appliance is
not working right can polish—or tarnish—the reputation of the
Rinnai brand. We go about our business, well aware that we fly
the Rinnai flag. As a representative of the brand, we
communicate with customers to pinpoint problems, inspect andrepair appliances and take them through a test run, and thencarefully explain what we have done. We also study for tests
under the repair accreditation system to upgrade repair
techniques and participate in service technology courses toimprove proficiency and knowledge. At the same time, we
attend training and lectures on compliance, service etiquette andcustomer satisfaction to develop better customer service skills.

Yoshiyuki Matsumoto,Chief Technical Services
Officer, Rinnai Service
Shop (Techno Chubu
Company Ltd.)18

CSR Report 2012┃Special Feature: Quality

After-sales
services
Product
MaintenanceParts delivered as requested
Correct type and quantity ensured through proper system andtraining
At Rinnai, the parts for gas appliances are made available
through a post-production supply structure lasting, in principle,
five to 10 years and in some cases a dozen or so years. So that
customers are able to use our products for many years in comfort
and safety, we maintain a structure to deliver parts quickly whenneeded. This is the quality aspect of after-sales service.
The Parts Center handles more than 100,000 parts.
Because the number is so big, we have a system to pick, wrap Stocked service parts atand send out these many products. At the Parts Center, we have the Parts Center
to ensure that the right parts in the right quantity are delivered totheir specified destinations on time. We promote approaches toenhance quality, such as code of practice manual—a written
account of job descriptions—and work instructions based on a
document “Basic Rules on Quality” that sums up Rinnai’s quality
perspective.

Koji Kawaguchi, Section
Chief, Components
Center, Production
Headquarters

19

CSR Report 2012│Special Feature 3 — Contributing to Local Communities

Special Feature 3

Contributing to Local
Communities
Safe, user-friendly gas tabletop stoves for Indonesia—Contributing to better lifestyles
Rinnai has subsidiaries in 16 countries and special administrative
regions, and through this overseas network, the Company
promotes product development, manufacturing, sales and services
matched to each market. Special Feature 3 spotlights one of thesemarkets—Indonesia—and provides a look at demand conditionsin this country, which has been enjoying notable economic growth
in recent years, and the activities of PT Rinnai Indonesia.

Blessed with mineral resources
Indonesia—Marking stable economic growth
Indonesia, located at the southern edge of Southeast Asia, is about sevenhours from Japan by air on a Tokyo (Narita)-to-Jakarta route. The islandof Bali, a popular destination for Japanese travelers, is part of Indonesia.
The country comprises some 17,500 islands scattered over 1.89
million square kilometers, an area about five times the size of Japan.
Tropical rainforests cover 60% of the archipelago. The population—nearly
240 million people, or 60 million households—lives on about 9,000
islands, with Java, accounting for 7% of the nation’s land mass, being
home to more than 130 million people. Indonesia is a republic and its
people are ethnically and culturally diverse, with some 490 distinctgroups. People of Malay extraction make up the majority, while about 3%
Indonesia is a key ASEAN
of the population are of Chinese ancestry. The constitution recognizes
economy.
religious freedom: 87% of the population is Muslim, 11% is Christian, 1%
is Buddhist and less than 1% is Hindu.
Indonesia is blessed with mineral resources, such as oil and natural gas, but in recent years the country
has become an importer of oil owing to expanding consumption of fossil fuels. The country also has rich
deposits of tin, bauxite, copper and coal. In addition, palm trees thrive in the equatorial climate, underpinninga large palm oil industry. Gross domestic product is on an upward trend—US$3,010 in 2010 and US$3,543 in
2011—and the International Monetary Fund forecasts a 6.3% year-on-year improvement in the GDP for 2012.

Rinnai Indonesia celebrates 25th anniversary in 2013
Rinnai Indonesia was established in March 1988 and will mark its 25th
anniversary in 2013. About 30 years ago, Rinnai began exporting finishedproducts made in Japan but then switched to knock-down production—
key components exported and then assembled into finished products
locally—to meet demand in Indonesia. Gradually, the volume of knockdown units grew, and Rinnai, anticipating further growth, formed a joint
venture with Indonesian clients. The following year, 1989, productioncommenced at a newly built factory. Today, the company is a solid
member of the Rinnai Group, with sales of around ¥9.3 billion yen in2011. Its core products—tabletop and built-in stoves—have captured 60%of the local market.

PT. RinnaiIndonesia’s Cikupa Plant

20

CSR Report 2012│Special Feature 3 — Contributing to Local Communities

Employee Interview

We provide products that contribute to better lives for the people.
We also seek to contribute to the development of our country, particularly
through job security.
Lenbach Sastra, President, PT. Rinnai Indonesia
Although Indonesia is an oil-producing nation, domestic demand for the energy source has grown along witheconomic development, leading to a persistent shortage of crude oil. What Rinnai Indonesia can do in thesecircumstances is provide gas appliances that do not burn oil. It is our mission to produce high-quality gas
stoves and other appliances that are safe to use and offer peace of mind and also meet the needs of as many
people as possible.
Indonesia has garnered attention as an emerging nation, but the required infrastructure, such as road
networks, to sustain economic growth are not in place. In addition, the country does not even have the rightenvironment to ensure enough job opportunities for all the people with the desire to work. I believe that
increased factory production and the hiring of people in the surrounding neighborhoods will lead to better
employment conditions for Indonesians and also underpin development of the country itself throughimproved social infrastructure.
Rinnai Indonesia must continue, as a comprehensive heat-energy appliance maker, to provide highquality, suitably priced products matched to market needs. This may require a step outside the gas appliancerealm to something completely new, like electric water heaters. Whatever the field may be, we will
constantly strive to contribute to better lives for Indonesians by providing products that offer greater comfort
and convenience along with excellent safety features.

Government policy encourages wider use of LPG tabletop stoves
Replacement demand fuels Rinnai’s market share
In Indonesia, civilians—that is, households—use mainly kerosene and LPG as energy sources for heating andcooking. However, for a long time, the utilization rate of LPG was stuck around 10%, and kerosene-burning
stoves became a common sight in kitchens across the country. The government, too, encouraged citizens to
use kerosene through various initiatives, including subsidies to the poorer classes.
In 2005, with the cost of subsidies exacting a considerable toll on limited public resources, theIndonesian government initiated a kerosene-to-LPG conversion program for households. LPG carried arelatively lower subsidy burden. Under the program, 3kg gas cylinders, single-burner cooking stoves and gas
regulators were supplied to 54 million households free of charge to encourage citizens to give up kerosene andswitch to LPG.
The single-burner cooking stoves delivered to households were made by local manufacturers. But justas the program started, a lucrative trend emerged: The market was keen to replace these appliances with
Rinnai-made, high-quality, two-burner models which offered more convenience than the single-burnercooking stoves. Rinnai Indonesia’s sales soared. This turned into a huge opportunity for the company toexpand sales of its gas cooking stoves. Indeed, the company’s sales hovered around 450,000 units in 2005,
and by 2011 sales were around 5.25 million units.

Construction starts at new plant for tabletop stoves
Production capacity to hit 11 million units by 2014
Rinnai’s core products for the Indonesian market are kitchen appliances, including the aforementioned
tabletop stoves.
Currently, the government census puts the number of households in Indonesia at 60 million. Tack on demand
from five million commercial users of gas burners, such as office kitchens, food wagons and small eateries,
and the size of the market could actually be 65 million. Suppose that the replacement timeframe for gas
tabletop stoves is five years; annual demand would be 12 million units. Also consider that two million couples

21

CSR Report 2012│Special Feature 3 — Contributing to Local Communities

get married each year. Putting both estimates together, annual demand could range between 12 million and 14
million units.
Keen to capitalize on this market potential, Rinnai Indonesia brought the Balaraja Plant into operationin May 2012. Completion of the new plant should enable the company to gradually boost tabletop stove
production capacity from the current 5.5 million units to 11 million units by 2014. Interestingly, RinnaiIndonesia boasts the world’s largest tabletop stove production capacity.

Rinnai tabletop stove sold inIndonesia.

Ceremony in December 2011 tomark annual production exceeding
five million units.
Hiroyasu Naito, president of
Rinnai (left), congratulates Bapak
Rachman Sastra, chairman of
Rinnai Indonesia

Balaraja Plant
operated by Rinnai Indonesia

Production of gas cocks starts in Indonesia
Provide products that the market wants
The production of key components by Rinnai or companies under the Group umbrella is fundamental to theconcept of monozukuri (manufacturing). Previously, Rinnai Indonesia imported gas cocks (valves), used intabletop stoves, from Rinnai (Thailand) Co., Ltd. However, increased production and risk management
considerations prompted a decision to begin production of gas cocks in Indonesia, starting in 2011. The newplant is to make gas cocks, too, and will satisfy more than half its own requirements once operations get intofull-swing. Through this approach, key components will be available either through in-house production at
Rinnai Indonesia or through imports from Group companies.
The gas tabletop stoves made and sold by Rinnai Indonesia are very nearly a necessity of a life inIndonesia. More people are apparently joining the ranks of the middle class, but more than just a few people
work at jobs that pay just ¥15,000 - ¥17,000 a month. The price of a gas tabletop stove is pegged to regional
annual income and set at a price anyone can afford: ¥2,000 - ¥3,000. Going forward, the policy will highlight
prices, systems and specifications matched to market conditions to enable consumers to purchase theappliances whenever they want.
Indonesia’s population currently stands at about 240 million people. With expansion estimated at fivemillion people every year, in 50 years’ time, the population of Indonesia could be around 500 million. Unlike
Japan, with its graying population and falling birthrate, Indonesia has a noticeably large number of young
people. An overwhelmingly large percentage of the general population lives below the poverty line, and thenational government has prioritized measures to improve living standards and ensure that the poor haveenough food to eat.
Indonesia has been able to maintain stable growth of late and should be able to sustain this trend into
the future. But further development is contingent upon the establishment of social infrastructure, particularly
roads, highways and subway networks, ports and water and sewage systems. If the government can ensure thenecessary infrastructure, it will encourage vigorous industrial activity and make Indonesia more appealingfrom an investment perspective. Within this environment, Rinnai Indonesia will continue to provide safe,
easy-to-use products to the people of Indonesia to contribute to more comfortable lifestyles.

22

CSR Report 2012│Special Feature 3 — Contributing to Local Communities

In-House Perspective

I strive to improve processes with safety as my top priority. I will continue to do
my part to support corporate growth.

SURAKMAN
Assistant Supervisor,
Balaraja Plant, RinnaiIndonesia
Employee since 1994

I transferred from the Cikupa Plant when the Balaraja Plant came on line, andcurrently I am responsible for the gas cock production division. My training
has included technical instruction in 2008 and again in 2011 at Rinnai Seiki
Co., Ltd., in Japan.
Gas cocks are diecast aluminum products. During the castingprocess, temperature and condition of materials may cause tiny holes to formin the aluminum. The gas appliances made by Rinnai Indonesia are notallowed to leak, so no hole can escape detection, no matter how small it may
be. We conduct thorough inspections and strive to prevent defective products
from shipping out at a later stage, but we also strive to improve the diecastingprocess and reduce the occurrence of defects at all. We have steadily
achieved good results.
Rinnai Indonesia has charted increases in production volume, and I
feel my work has a very positive impact the company’s development. I am
proud to have contributed to the process of establishing the Rinnai brand soprominently in Indonesia. Going forward, I will do my utmost to support
further growth of the company. I also hope that Rinnai will expand its
presence to neighboring countries, as well.

23

CSR Report 2012│Management System

Management System
Corporate Governance
Toward Enhanced Transparency
From the perspective of a sharper competitive edge for the Group and sustained improvement in corporate
value, Rinnai has made efforts to augment practices and enrich the scope of corporate governance a top
management priority. We aim to reinforce the functions of corporate structures, such as the Board of Directors
and the Board of Auditors, and seek a higher level of management transparency, which will be achieved
through quick and accurate disclosure of pertinent information to various stakeholder groups and throughaccess to a wide range of information.

Internal Control System
We regard the following four items as the aims of our internal control as we seek to reinforce our management
system and fulfill our social responsibilities. Through means such as risk management and internal auditing
we revise as necessary the basic policy on establishment of an internal control system that we instituted in
May 2006, in our efforts to reinforce this system.
Objective of the Internal Control System
1. Effective and efficient operations.
2. Reliable financial reporting.
3. Adherence to laws and regulations affecting business activities
4. Safeguarding assets
To respond to the Internal Control Report System under the Financial Instruments and Exchange Act, which was
first applied in April 2008, our Group ensures the reliability of our financial reporting by having the Internal
Control Office, an independent division, select Group companies and business processes that will have a material
impact on our entire financial reporting on a consolidated basis, and evaluate the effectiveness of their organization
and application.

Structure for Monitoring Management Performance
Rinnai has four corporate auditors, two of whom are outside auditors.
Corporate auditors attend important meetings, including those of the Board of Directors.
They also monitor internal control status—that is, progress on the establishment of internal controls
and implementation of associated practices—with a focus on the results achieved by directors and executive
bodies, and they check on the status of operations and asset management at the head office and principal
branches.
In addition, an external accounting firm undertakes accounting audits and verifies thesoundness of accounting-oriented internal controls from a third-party perspective.

24

CSR Report 2012│Management System

Board of Directors
The Board of Directors has decision-making authority for important management issues affecting Rinnai andoversees the execution of duties by directors. The Board has six members and as a rule meets once a month.
Some directors below the rank of president hold concurrent positions as executive officers and are responsible
for conveying the content of Board decisions to the managers of divisions under their respective supervisionand for executing operations. In addition, general groupwide meetings as well as parent-only meetings areheld every three months so that directors can pinpoint the status of issues affecting operations and share
information on pertinent topics. Moreover, to clarify the management responsibilities of each business yearand gain trust from shareholders, Rinnai regulates the term of director to be one year.

Director Compensation
The limits of compensation for Directors and Auditors are determined in accordance with the resolution of thegeneral meeting of shareholders. Moreover, the Rinnai’s internal regulations stipulate fundamental mattersrelated to Directors’ compensations including the method of determination, revision and reduction. Based onthese, the amounts of compensation for Directors are resolved at the Board of Directors and the amounts ofcompensation for Auditors are determined through the deliberations by Auditors. Directors are paid a fixedamount commensurate with assigned duties. Please note that Rinnai terminated the retirement benefit systemfor directors, following approval of a proposal put forward at the General Meeting of Shareholders on June 27,
2008.

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

Corporate Governance Structure

25

CSR Report 2012│Management System

Risk Management
Risk Management Promotion System
As social structures become more complex, the risks faced by companies become more diverse. In thisoperating environment, the Rinnai Group strives to manage existing and emerging risks to support global
business development and ensure stable business activities that sustain the trust of customers and society as awhole.
The Risk Management Committee, chaired by the president, meets regularly. The committee assigns adivision to oversee each risk with the potential to influence our corporate survival, credibility, businesspursuits and assets (for instance, a division to oversee activities for preventing fires and explosions, measures forearthquake-proofing of buildings, measures for preventing leakage of confidential information, and measures for
reducing traffic accidents), and is also tasked with risk-lowering duties, such as formulating preventative
measures, resolving issues before they turn into crises, minimizing losses and defining strategies to avert thereoccurrence of any risks that became a reality. Methods for hedging risk are promoted laterally throughout
the Group.
In our efforts to secure workplace safety and prevent accidents we designate the 27th of each month as
Safety Day. On this day, safety patrols are conducted at the Technology Development Center and factories. As ameasure for reducing on-the-job accidents and injuries, we have established the Anzen Dojo (a safety training hallwhere potential workplace events are simulated) at each factory as a place for safety education.

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

Promotion of Businesses Continuity Plan
When companies have no sufficient measures for natural disasters such as earthquakes and storms and theprevalence of infectious diseases, the business operations may be suspended for a long time, result in asignificant damage and give a serious impact on stakeholders. As a company which produces thermal energy
appliance to support people's lifestyles, we believe it is our responsibility to maintain the stable supply of our
products even under such circumstances.
In anticipation of highly probably large-scale disasters, including major earthquakes foreseen in the
Tokai, Nankai and Tonankai areas, and based on our experience with last year’s Great East Japan Earthquake,
we are planning to use alternative raw material suppliers and other alternative procurement sources. We alsouse multiple procurement sources daily so that we can continue to supply our products promptly even if there
are events that prevent production and supply of important products needed by our customers. We position
such business continuity management (to ensure quick recovery of important operations) as a top management
priority, and are working on creation and review of business continuity plans mainly for production divisions
in Japan.
26

CSR Report 2012│Management System

Compliance
Compliance Promotion System
To remain a sound corporate group which wins the trust of society, Corporate Ethics Committee headed by our
President as its chairman was established in April 2004. For the prevalence of compliance as part of ourcorporate culture, all employees strive to perform social responsibilities and promote the creation of
workplace that encourages people to actively engage in their work.

Corporate Ethics Committee
Chairman(President)

Measurements

Committee members
Secretariat office(Selected from(Legal department)each headquarters)• Establishment, revision, training andenforcement of "Code of Ethics"• Establishment and operation of"Corporate Ethics Helpline"• Investigation of violation of "Code of
Ethics”
Deployment

Each department

Rinnai Group “Code of Ethics”"Code of Ethics" is a small booklet which combined "Corporate Philosophy" and "Rinnai Code of Conduct"
which is the detailed behavior standards that all executives and employees shall obey.
The Compliance Committee member allocated to each workplace provides all employees in theworkplace with “Code of Ethics” training each year for its enforcement. The “Code of Ethics English version”
was issued and distributed among overseas Group companies, and local language versions were distributed toGroup companies in China, South Korea, Thailand, Vietnam, Brazil and Indonesia. Currently, at each of the 17
overseas Group companies staff members in charge of training implement employee education concerning the“Code of Ethics.”

Booklets of "Code of Ethics"
of various countries

A “Code of Ethics" training session
in Vietnam

27

CSR Report 2012│Management System

Promotion of Compliance Activities
Compliance education activities
In our company, president himself takes an initiative sending messages on corporate ethics to employees toimprove the employees' awareness towards compliance. Moreover, regarding the laws that each department
has deep relationship with, legal department is taking a lead to provide legal education every year. At theProduction Headquarters, for instance, training on the “Act against Delay in Payment of Subcontract Proceeds,
Etc. to Subcontractors” was conducted with case studies. In fiscal 2012, a total of 1,226 employees took thetraining and deepened their knowledge of the law.
As a new initiative, at eight sites in Japan we provided compliance education to 130 representatives
from an affiliated after-sales service company. We also conducted compliance education for the Compliance
Committee member of each division and job-class-specific compliance education.

Legal education

Education of staff of the after-sales
service company

Compliance committee member
training

Fiscal 2012, Actual of number of training attendants
Name of course
Number of attendants
Legal education
1,226 people
Compliance committee member training
41 people
Ethic education by layer
311 people

Comment from an Employee Who Provided Legal Education
I spent about three months providing legal education at branches, sales offices andprincipal offices all over Japan. In questionnaires conducted after each session,
participants had such comments as, “It was a good opportunity because I usually have nochance to learn about laws” and “I would like a longer session,” which made me realize
the importance of legal education and mployees’ growing concerns about laws. I would
like to continue to provide legal education by responding to the requests of eachheadquarters.
Minako Baba, Legal Division

Information Distribution to All Employees
Every October is designated Corporate Ethics Month, and we promote activities toenhance awareness of ethics in the workplace. A message on corporate ethics from thepresident himself is uploaded to an intranet, and compliance-themed posters are
displayed in all offices.
On our intranet we also post a law-oriented section for frequently asked
questions as well as information about law revisions. We send a range of information
to employees in our domestic Group companies.
Compliance education
poster28

CSR Report 2012│Management System

Confirmation and Modification of Compliance Activities
Each year, we conduct a questionnaire of employees about compliance to determine how deeply ingrained ourCorporate Philosophy has become and to uncover latent risks in all workplaces. Based on the results, we
implement measures for raising awareness of compliance among employees.
In fiscal 2012, breaking down the penetration rate for each component of our corporate philosophy,
we found that 99.6% of respondents were familiar with the corporate motto and 97.0% recognized our
corporate mission. We will continue to actively promote compliance activities to maintain these high levels.

Facilitation of Internal Reporting System
If, in the course of business activities, an employee at adomestic company under the Group umbrella suspects
possible breach of laws or the internal rules or unfair
practices, and it is difficult to approach a superior or the
person responsible for the division with such suspicions,the employee may report the perceived infraction to the
Corporate Ethics Helpline.
In this system, we stipulated that the person who reported
the incident will not receive any unfair treatment by thefact that he/she consulted the matter and we also pay afull attention to the protection of privacy of the person
who made the report.
In fiscal 2012, the helpline received 2 calls for
consultation and report. Appropriate measures have beentaken, including investigation and confirmation of thefacts in these cases of alleged misconduct.

Outbreak ofproblems in thecourse of routine
business

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

SolvedNot solved
Corporate Ethics Helpline

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

Protecting Personal Information
Rinnai applies internal rules based on the Act on the Protection of Personal Information. In addition, "Privacy
Policy" was stipulated as guidelines for the handling of personal information and posted on our website.
Utilizing these, we strive to ensure appropriate storage and handling of customer data and protection thereof.
Accordingly, we established the position of Chief Privacy Officer at the head office and require
privacy officers at all workplaces, including the offices of Group companies in Japan for the education of theinternal rules for employees who handle personal information, and the establishment of physical and technicalsystem to insure the safe management of personal information in each workplace.
The privacy officer also conducts an internal audit once a year at each workplace on the managementof personal information. In fiscal 2012, we implemented audits by the Legal Division as well as those by
privacy officers.
In fiscal 2012, there was no incidence of personal information leakage.

29

CSR Report 2012│With Our Customers

With Our Customers
Measures for Quality
Basic Stance on Quality
Since our establishment, at Rinnai, we have always been executing our business operations being passionate
about quality for our customers to safely use our products with peace of mind.
Indeed, our policy on quality-infused by the corporate philosophy "Quality is our destiny"-stresses
efforts to provide customers with highly safe and satisfactory products. This enduring commitment gives
customers complete peace of mind in selecting and using Rinnai products.
Basic Philosophy on Quality

Policy on Quality"Quality is our destiny"

We provide highly safe productsthat meet customers' requirements.

Voluntary Action Plan for Product Safety
In June 2007, we formulated a voluntary action plan for product safety along with a promotion strategy thatwould give substance to activities based on the action plan. We encouraged divisions to embrace the action
plan and its associated promotion strategy, confirmed that divisions were on board, and wrapped up theprocess in February 2008. Currently, the Quality Assurance Headquarters oversee the voluntary action plan for
product safety, verify implementation status as appropriate, and guide efforts to uphold our policy on quality
day in and day out.

Product Development in Pursuit of Safety and Peace of Mind
The nature of our business-making and marketing gas appliances-demands monozukuri (manufacturing)prioritizing safety. We deliver products developed and manufactured in accordance with industry
specifications and safety standards.
Safety is ensured through assessments specific to each stage of the commercialization process,including design reviews that evaluate product performance and reliability.
Issues that crop up on a day-to-day basis are communicated to the relevant divisions and resolved.
However, issues of a particularly serious nature are reported to the president and executive officers at themonthly meeting of the Quality Committee along with associated updates on response measures and otheractions taken to address problems.
The Seven Key Elements of Quality
1. Good function and performance
2. Easy to use
3. Safe
4. Nice exterior features
5. Reliable
6. Environmentally compatible
7. Up to legal and self-imposed standards

30

CSR Report 2012│With Our Customers

Monozukuri which assures high quality
In-house development of core technology
To assure our products to achieve high quality and safety, we pay considerable attention to our coretechnology including "combustion control technology", "heat exchange technology" and "fluid-control
technologies used for gas and water" and critical security components are developed and manufactured by ourgroup companies. By achieving high-precision heat control using sensors and electronic units, we are pursuingabsolute safety and zero defects.**Zero defects: No failure, no defect products and no fault
Integrated production system
Critical security components which affect the quality of products are manufactured with an integrated
production system from a raw material processing phase to an assembling phase paying extra-attention to
manufacturing technique. Moreover, important production equipment, dies and IT system are all developed
within the Group. We have been manufacturing high quality products by arranging the production of bothcritical security components and manufacturing tools within our group companies.

Information disclosure on “Safety and Peace of Mind”
In the event, however remote, that a Rinnai productmalfunctions during use or an accident results from a defective
Rinnai product or insufficient service thereof, we promptly
report the details to the competent authorities in accordancewith prevailing laws and regulations. Even when it is unclear
whether or not an accident is attributable to one of our
products, we still provide pertinent information on our website
to alert customers and appliance installation and repair
providers to a potential safety issue.

Invigorating Quality Improvement Activities
Seeking to enhance the problem-solving skills of each and every employee and invigorate the organization, we
began promoting small group quality control circles. Involving our group companies, we are actively
promoting this QC program. We award to the best circles at the company-wide QC circle conference in
September.

Company-wide QC circle conference

31CSR Report 2012│With Our Customers

CS Policy
Based on our corporate philosophy "Quality is our destiny", we "sincerely, promptly and adequately handle
our customers' requests and offer consultation" and "provide satisfying, assuring and reliable services to ourcustomers" as our policy.

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

32

CSR Report 2012│With Our Customers

Inquiry Response and Support System
Customer CenterWe established the Customer Center to receive any inquiries, comments, requests and complaints by phone.
Valuable comments from our customers are shared with our product development, sales and service
departments as feedback and utilized to further improve our customers' satisfaction. In fiscal 2012, about 1
million calls were made to our toll-free number and about 5,500 comments were forwarded through our
website.
In fiscal 2012, "Rinnai West Japan Customer Center" started its operation in Aichi plant, and we completed toshift the functions from four customer centers in the Western Japan (Chubu, Kansai, Hiroshima and Kyushu)
to the newly opened center. Our customer service capability will be reinforced by having two centralized
customer service centers including the "East Japan Customer Center" which started its operation in 2009.

We strive to reflect upon our customers' feedback on our products and services day in day out.

Applying customer comments to products and services

33

CSR Report 2012│With Our Customers

Our Customers' Comments(Introduction of customers' comments and inquiries forwarded through our website in fiscal 2012)

1. By customer
The breakdown of inquiries from customers is 83% from individuals and 17% from companies.

2. By content
There are the three major topics: (1) Product in use: 44%, (2) Product that a customer is consideringpurchasing: 36%, (3) Parts & products: 9%

3. By model
Many inquiries were kitchen appliances-related. : (1) Kitchen appliances: 43%, (2) Hot-water units: 31%

34

CSR Report 2012│With Our Customers

Strengthening our capability to respond to our customers
Responding to our customers' request who would like to solve
their issues by themselves, "FAQ" is listed on our website.
In fiscal 2012, we increased the number of FAQ
information by product type to 351 this year from 323 of thelast year. In addition, we listed more information on our new
product, hot-water unit with the gas/solar hybrid system, tostrengthen our customer service.
*FAQ: Frequently Asked Questions
In fiscal 2012, 77% people gave a favorable evaluation on our FAQ section.
We continue adding the contents to the section to be more useful to our customers.

Evaluation on our inquiry handling

Online provision of customer support and proposals for lifestyle comfort
For our customers to use our products for a long time, we directly
provide parts that our customers can replace by themselves andcleaning products through our online shopping site, "R.STYLE(RINNAI STYLE)".
In fiscal 2012, we boosted sales of kitchen-use products andgoods that increase lifestyle convenience and comfort when usedwith our products. In October 2011, we also celebrated the fifth
anniversary of “R.STYLE” and the number of registered members of
the online shopping site surpassed 100,000. We therefore further
increased contact with customers who use Rinnai products.

35

CSR Report 2012│With Our Customers

Utilizing our customers' comments forwarded through website to improve the Company
We have received many comments at “R.STYLE (RINNAI STYLE)”
about our products and services from customers who used the online
shopping site. (We received a total of 5,676 comments in fiscal 2012).
In fiscal 2012, we launched Himawari Messenger, an internal
website for sharing customer comments. This site is aimed at ensuringthat customer comments are quickly communicated to divisions andreflected in improvement measures to be taken there. All customer
comments are shared companywide on the site the morning after they arereceived, and then begin to be reflected in improvement measures at eachdivision. Improvements made are posted on “R.STYLE” and reported
back to customers.

Creating a new relationship with younger customers
In November 2011, we began sales of HOWARO, a gas stove intended forcustomers in their 20s and 30s, via a dedicated website. The foremost
objective of the product is to collect comments and other informationfrom actual purchasers and users and analyze this to identify their needs
and find previously unknown information about these younger customers.
HOWARO was created based on the requests of younger customers. The
top panel of the stove is made of enamel and colored off-white. The stoveis accented with knobs that come in five different colors to choose from.
We will make use of the information obtained through sales of HOWARO
for our future products and for increasing the number of Rinnai fans.
Comment from an Employee in Charge of HOWARO
We provide customers in their 20s and 30s who are first-time purchasers of gas
stoves with products that can be used with a sense of security, even by first-timeusers, and which give customers the enjoyment of choosing their preferred color. We
value customers’ first encounters with gas stoves, and thereby increase the amount of
Rinnai fans among younger people.
Mari Ando, E-business Promotion Office

Providing product safety information
We promptly disclose product safety information to our customers tocall for their attention, and immediately provide measures such as
checking and repair. We believe it is important to rapidly provide
customers with the information they need in the event of a disaster,in addition to giving them daily alerts and accident information.
In fiscal 2012, we posted information on our website aboutfreezing of hot-water units to inform customers of how to prevent
freezing-related breakage.

36

CSR Report 2012│With Our Customers

Inspection and Repair Services
For a long-term use without accidents- Inspections like a yearly medical check-up for appliances In April 2009, Consumer Product Safety Act was revised and a safety inspection system for products inlong-term use went into effect.
Some accidents linked to the deterioration of our products over long-term use have been reported. To
make customers realize that appliances, like most products, have a particular service life and to encouragecustomers to have their Rinnai products inspected regularly, we send out the necessary information and extend
advice through the Product Inspection Center. These efforts are aimed at preventing unforeseen accidents.
We enhance our maintenance inspection system with our qualified service specialists. In addition, we
provide our original services extending a warranty period to three years for the customers who purchased our
home-use hot-water unit and completed customer registration.
In April 2011, we also introduced a voluntary inspection system (Safety Inspection) for our outdoor hot-water
units, in accordance with the law. This system has been gradually expanded; for instance, indoor hot-water andheating units were added to the subjects of legal inspection in July 2011.

Fundamental stance toward inspection
Through inspections, we will enhance our customer support services.
Five focused points of our fundamental stance
1. Good inspection (Good inspector, good handling, legal knowledge, and inspector report)
2. Look through our customer's eyes (Usage of aged products, and reflection of customers'comments on products)
3. Customer satisfaction (Appropriate and caring information offering)
4. Proposal to assure peace of mind (Proposal to bring peace of mind before a product breaks,
not after it broke)
5. Trust building (On our appreciation for our customers' long patronage)37

CSR Report 2012│With Our Customers

Overview of our maintenance and inspection system

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

What is the "safety inspection system for products in long-term use"?
The "safety inspection system for products in long-term use" started in April 2009 is a system to encourage theregistration of users and charged inspection for "Specified Maintenance Products" that may cause problems
due to the age-related deterioration and may damage and may give serious damage to the life or health of
consumers.

Rinnai products corresponding to safety inspection systemndoor-type gas instant hot water
heaters (for city gas, and LP)

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

Dishwashers (built-in)

38

CSR Report 2012│With Our Customers

Flow of Safety Inspection System for Products in Long-term Use

Suppliers

Owners

Always explain the systemat time of sale or delivery.

Listen to the explanation
about the system at thetime of purchase

Owners (and Suppliers)

Registration

Rinnai

Owner’s Card
(packed withproduct)

Mail

Inspection
reminders sent by
mail to registeredappliance owners

Online registration
Registrationof changes

By phone

Information
Management

By card enclosed with notification
By phone

Inspection

On-site inspection

By card enclosed with notification

Recommendation of “Safety Inspection”
In consideration of the safety inspection system for products in long-term use, we recommend "Safety
Inspection" for products that fall outside the scope of the system.

The scope of the safety inspection• Outdoor-type gas hot water
heaters and bath water heaters(Including hot-water and heating
units, and heat sources only forheaters)• Gas heaters• Built-in-stoves

Gas hot-water units
Gas bath heating systems
Gas heat source for hot-water units
and heaters
Gas heat source only for heaters

Gas fan heaters
Gas fan-forced heaters
Gas stove
Gas dryer

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

39

CSR Report 2012│With Our Customers

First step is user registration
User registration is the important “first step” to connect customers with Rinnai. When there is a user
registration card attached to a product, please make sure to register. User registration can be submitted via theInternet or by entering required information on the user registration card and dropping it into a mailbox.
Customers can also request that retailers enter information on the user registration cards and/or send the cards
to Rinnai for them.
Information regarding inspections is detailed in our catalogs and on our website. We also actively
request that customers register with us during maintenance visits and other such situations in which our staff
have the opportunity for face-to-face interaction with customers.
[Activity to promote user registration]

Action items
Notification at retail location

StatusAt locations such as mass retailers, we post the information of
the safety inspection system for products in long-term use.
For the user who registered, we extend a warranty period tothree years.
Subject: Home-use gas appliances (Excluding business-use
appliances and electronic appliances)

Extension of warranty

An example of POP at a store
The staffs provide user registration information to ourcustomers utilizing maintenance and installation opportunities.

Notification utilizing maintenance andinstallation opportunities

Leaflet40

CSR Report 2012│With Our Customers

Notification of the completion ofregistration

To a customer who registered, we send a registration
completion notice to his/her registered address.

Notification utilizing retailers’
As a measure for promoting user registration by customers, we
opportunities to contact customers directly show retailers examples of best practices by retailers that havehigh user registration rates for customers they have contacted
directly.

Questionnaire for customers who submitted user registrations
In July 2011, we conducted a questionnaire for customers who had submitted user registrations (N = 2,778).
We received comments such as, “In addition to explanations, the user registration card needs to be improved
to make registration even easier” and “You need to boost your efforts to let customers know that retailers willsubmit user registrations for them.” Three years after the inspection system was introduced, we will continue
to encourage customers to submit user registrations.

41

CSR Report 2012│With Our Customers

42

CSR Report 2012│With Our Customers

Flow after user registration until an inspection
Based on the user registration information, we mail notifications to designated addresses when an inspection
period approaches. Moreover, we provide inspections to our products which are already in use.
[Establishment of inspection period]
Designedstandard
service life*

10-yearproduct

3-yearproduct

Target product

Home-use gas
hot-water units
Electric
dishwasher anddryer
Commercial-us
e indoor-type
gas hot water
heaters

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

Production

0-6 months
in advance

Purchase

Registration1

Notification

Inspection
periodInspection2

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

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

The period for legal inspection of commercial-use equipment produced in April 2009 started in October 2011,
so we began sending notices on the inspection to applicable customers. About 70% of customers who
responded to the notices applied for the inspection, suggesting their high interest in the inspection system.
However, only about 20% of customers who submitted registrations applied for the inspection. Accordingly,
we will strengthen measures for informing customers of the system, aiming for (1) a higher registration rateand (2) a higher rate of inspection applications.

Information about the inspection reminder function posted on the website
In November 2011, we posted information about the inspection reminder function on our website.
This function reminds users of legally mandated “specified maintenance products” of the period for theirinspections after they are used for 10 years under normal conditions. Users are reminded of the period in ways
such as a blinking light or indication on the remote control. This function also encourages users who have notsubmitted user registrations to submit them and apply for inspections.

Efforts to coordinate an inspection system
To adequately implement inspection, Product Inspection Center keeps improving its inspection system.
In addition to the legally required check points of an inspection system, we also set up voluntary monitoring
items to facilitate a reliable inspection system.
[Legally required check points of an inspection system and the current status of our company]*In this context, the applicable law and ministerial ordinance are "Consumer Product Safety Act" and"Ordinance of Ministry of Economy, Trade and Industry for specific products that require maintenance",
respectively. (As of March 31, 2011)43

CSR Report 2012│With Our Customers

Legally required check points of an inspection system and the current status of our company
Applicable law andministerial
ordinance
Article 32-19 andArticle 18,
paragraph (1) of thelaw; Article 13, item
1 of the ordinanceCheck points ofinspection
systemArrangement ofplaces ofbusiness that
conduct
inspections

Article 32-19 andArticle 18,
paragraph (1) of thelaw; Article 13, item
2 through 4 of theordinance

Establishment
and publication;
notification of
inspection fees

Details

Current status of our company

Places of business that
conduct inspections shall besuitably arranged so that
inspections are efficiently
conducted. Specialists forthe inspections shall be
secured at each place ofbusiness.
Inspection fees that do not
exceed the proper cost of
efficient inspection shall beestablished. Criteria used
for determining the fees
shall be publicized.
Notification of the
breakdown and roughstandards of the fees shallbe given prior to theinspection.
Manuals shall be createdbased on inspection
standards and retained by athird-party organization.

Number of places of businesswhere inspections were conducted:
81 in Japan
Number of service specialists
qualified for the inspections: 557

Article 32-19 andArticle 18,
paragraph (2) of thelaw; Article 13, item
5 and 6 of theordinance

Preparation andmethod ofmanagement ofmanuals
necessary for aninspection

Article 32-19 andArticle 18,
paragraph (3) of thelaw; Article 13, item
7 and 8 of theordinance

Holding ofcomponents
necessary forthe maintenanceof the subject
products andprovision of theinformation
thereofThe period for holding thecomponents shall be set andthe components shall beheld accordingly.
Notification of the status ofholding of the components
shall be given prior to theinspection.

Article 32-19 andArticle 18,
paragraph (4) of thelaw; Article 13, item
9 of the ordinance

Provision of
information
about productsthat are in theirinspection
periodProvision oftechnologicaltraining

The information shall bemade accessible on theInternet, etc.

Article 32-19 andArticle 18,
paragraph (5) of thelaw; Article 13, item

A technological training
session shall be regularly
held to provide training tocontractors and takeCriteria used for determining theinspection fees, inspection fee
amounts, contact for inquiries, andother information are madeavailable on our website.
Notification: We provide
notification when we receive
applications for the inspection.
Preparation: We have prepared 10
manuals (eight for gas equipment
and two for electric equipment).
Retention: We have the following
organizations retain the manuals.
For gas equipment: Japan Gas
Appliances Inspection Association(JIA)
For electric equipment: Japan
Electrical Safety & Environment
Technology Laboratories (JET)
Setting of the period: We will holdthe components until the inspection
period expires (9-11 years after
manufacturing).
Notification: We provide
notification when we receive
applications for the inspection. We
also disclose, on our website,
information on components
necessary for product maintenance.
We inform customers of productsthat are currently in their inspection
period. (Search by model name ispossible.) We also provide theinformation via product catalogs.
Technological training session: We
provide training for qualifying as
inspection service specialists.

44

CSR Report 2012│With Our Customers

10 of the ordinancemeasures for securing theirtechnological skill levels.

Article 32-19 andArticle 18,
paragraph (5) of thelaw; Article 13, item
11 of the ordinance
Article 32-19 andArticle 18,
paragraph (5) of thelaw; Article 13, item
12 of the ordinance

Recording of
inspection
results
Notification of
inspection
results

Inspection results shall berecorded and retained forapproximately three years.
Inspection requestors shallbe appropriately notified ofinspection results.

Measures for securing level oftechnological skills: We evaluate
trainees’ skills at the time of thetechnological training session. We
also manage renewal of thequalification and provide training
for improving skills.
Recording: We record inspection
results in the detailed statement ofinspection results.
Period of retention: 7 years
Notification: We provide
notification of inspection results bydelivering a detailed statement toeach requestor. We also show therequestor appropriate options totake in line with the results. We
inform them that frequent voluntary
inspections are necessary even after
the inspection has been completed.

[Voluntary system action items and the current status]
Action items

Rinnai's current status

Enhancement of provision of information

We post the detailed information on maintenance andinspection system for our products for a long period oftime on our website. The information includes the
products that are out of scope of legally mandatory
products (specific products that require maintenance).

Enhancement of items to be inspected

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

Inspection quality improvement

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

Warning after the inspection

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

45

CSR Report 2012│With Our Customers

Trend of users who arranged inspection
Through inspection, we try to improve our customer support.
Aiming at further improvement, we will keep searching the best way to execute inspection using questionnaire
results obtained from users during inspection as reference.
From questionnaire for product users, N = 816 (Varies among the items)

46

CSR Report 2012│With Our Customers

Results of the questionnaire we conducted in fiscal 2012 allowed us to confirm issues that customers and weshould place more emphasis on in inspections.
To questions concerning product replacement, about 60% of the respondents said they “Will replace itafter it breaks down.” The reason given by approximately 50% of such respondents was “mottainai.” Theproportion of respondents who answered that they “Will replace it when it becomes old, before it wears down
due to age” was under 20%.
The notion of mottainai represents an important element of Japanese culture. The inspection system,
however, is aimed at preventing accidents caused by deterioration of products due to aging. Therefore,“inspection of a product before it breaks down, not after” is essential for ensuring users’ safety. So we strive tohave customers better understand the importance of the inspection while also improving the inspection
system.
Questionnaire survey for users who arranged inspection of small hot-water heaters(Researched from June 2009 to April 2011)47

CSR Report 2012│With Our Customers

To realize our customers' "comfortable lifestyle" we are doing our best to provide services that
customers can trust and use.

Free inspection of small, open-type water heaters
In 2007, one of our small, open-type water heaters malfunctioned and caused an accident. To prevent areoccurrence of this kind of accident, we continue to offer free inspections to customers using small,
open-type water heaters, including the RUS-5RX, produced between July 1991 and January 1995, and theRUS-51BT, produced between May 1994 and January 1997.
Notification on our website
We show subject products and contact for inquiries on our website. To see the information, click on the banneron the top page.

48

CSR Report 2012│With Our Customers

Immediate offering of after-sales service
About 700 service specialists provide repair service nationwide every day. To realize "comfortable lifestyle",
we are trying to complete an after-sales service inspection on the day or by the next day.
To improve the operational skills of service specialists, we were the first to introduce a mobile PDA
terminal. This allows service specialists to confirm order status onsite, thereby facilitating immediate service
to our customers.

49

CSR Report 2012│With Our Customers

Training of service specialists
Introduction of a service specialist certification system
In fiscal 2012, we introduced and began implementation of aservice specialist certification system for service skills fordishwashers. With our employees serving as trainers, service
specialists from each base took examinations on rules, theory andpractical skills, and a total of 207 service specialists who scored
70 points or above were certified as service specialists fordishwashers and received certificates. In the next fiscal year, we
will begin increasing subject products and we continue toencourage service specialists to obtain certification.
Special training for focused productsFirst, we ask opinions from our service specialists for the service for focused products. Then, collecting andreflecting comments from onsite staff, staff in charge of development and manufacturing at factory perform as
instructors at a training session.
Moreover, after a training session, the confirmation test is provided to see the degree of understandingof service specialists, check and follow insufficient areas to nurture our service specialists.

Pursuing the higher customer satisfaction towards our services
We conduct "Voice of Customer Questionnaire" to our customers who received our repair service requestingthem to evaluate the satisfaction rate for our repair visit. Customers' evaluation results will be sharedinternally to efficiently utilize the questionnaire results.
In fiscal 2012, a total of 11,000 customers answered the questionnaire and evaluated our services
highly, with the average score of over 92 points.

50

CSR Report 2012│With Our Customers

Communication with Our Customers
We hold exhibitions all over Japan where the public can get a closer look at the excellent features of our
products. For customers, these exhibitions are opportunities to try out top-of-the-line products to experience
the safety of "Si" sensor-equipped tabletop gas stoves and other features that make cooking and cleanup less ofa chore, and to realize the energy savings afforded by hot-water/heating systems and the comfort of floor
heating. For us, these exhibitions open lines of communication to customers wider.
Since the Great East Japan Earthquake, interest is growing in ways of using energy. We have responded bysuggesting the best mix of energy to our customers. Above all, while most newly built houses in the Tohoku
region have been “all-electric” houses, there has been a movement to review what energy to use due to theimpact of the earthquake, in addition to high demand for heating given the region’s colder climate. In fiscal
2012, we gave presentations and onsite lectures on the ECO ONE hybrid hot-water unit (which combines thebenefits of gas and electricity) as a product that provides comfortable heating with low energy consumption.
We presented to homebuilders and retailers in the Tohoku area and other regions. Our Tohoku Branch built a
new showroom and held promotional events and briefing sessions at display houses so more customers could
gain experience with the product.
In addition to exhibitions of our own, we participate in events that highlight regional characteristics, such as
joint fairs sponsored by retailers who sell our products. Our presentations are interesting but also provide
customers with ideas on how gas appliances can make life more comfortable.

Events held in Tohoku region

Showroom in Tohoku

Examples of other events we held in fiscal 2012
In November 2011, we ran a two-day confectionary-making class for parents and children at an exhibition
held by Sanwa Group, an LP agent of our Fukuoka sales office. We prepared three built-in stoves and threetable stoves, and allowed parents and children to experience the performance and ease of cleaning of the latest
products. Using these stoves, the participants cooked: 1) sweet bread (Dutch oven), 2) sweet pies (two-side
griller) and 3) crepes (temperature adjustment function). While they prepared the confectionaries weintroduced how to use the products.
In March 2012, we held an event called Yoru Cafe (night cafe) jointly with Saibu Gas Co., Ltd. byinviting about 20 people from five kitchen manufacturers. At this casual event we showed participants how to
use the Dutch oven and served them dishes cooked in it. We also held a bingo contest and other events, and in
this friendly atmosphere the participants enjoyed the dishes cooked in the Dutch oven.

51

CSR Report 2012│With Our Customers

Products Born with Our Customers’ Comments
To provide "The products needed by customers", our product planning staff directly visit the houses of ourcustomers to listen to their requests and complaints about our products.
By reflecting the voice of customers in the planning of new products, we're trying to develop new products
which satisfy the needs of customers.

Universal design applied for a hot-water unit remote control
Usability of the remote control is an important element of hot-water units and our existing remote controls arehighly acclaimed in this area. In response to population aging, which is expected to continue, in February
2012 we launched the new MBC-220VC hot-water unit remote control, in which we applied a range ofimprovements (including the size of display characters, layout and voice guidance) by applying universal
design and reflecting customer comments. As a provider of “products needed by customers,” we will continue
striving to develop products that satisfy customers.
Customer comments we reflected in the new remote control
・ I can’t read the remote control display without
glasses, which I don’t wear in the bathroom.
・ I don’t understand the meaning of kyuto ondo (watertemperature) and furo ondo (bath water temperature).
I don’t know how to set them either.
・ I don’t know why I cannot use the furo yoyaku (timer
function) unless I set the current time.
・ I don’t understand the meaning of yusen (priority).
(MBC-120VC previous remote control)

Features of the new MBC-220VC remote control
・ The characters for temperature indication are 60% larger and the buttons 50% larger, ensuring ease ofuse for elderly users and those with weak eyesight. The LCD panel features a wider viewing angle.
・ The kyuto ondo (water temperature) and furo ondo (bath water temperature) are separated into different
groups and indicated in an easy-to-understand manner.
・ Voice guidance offers detailed instructions to help operate the unit.
・ The Tsugi Navi Sign flashes to indicate the next button to press.
・ Larger buttons on the new MBC-220VC remote control

New MBC-220VC series remote control

Modified Buttons

52

CSR Report 2012│With Our EmployeesWith Our Employees
We strive to create an atmosphere in which employees can be happy and productive-a corporate climate that
motivates each and every employee to do well and enables individuals to demonstrate their full potential. We
also seek to maintain workplace environments that keep employees safe and healthy, both physically andmentally.
For our employees to be able to work with a sense of achievement and accomplishment, we provide support
through our personnel system as well as various welfare programs to take care of employees' health and caterfor their families. Moreover, for each employee to fully demonstrate his/her capability, we try to create afamily-like office culture, and improve and maintain our workplace to be safe, secure and healthy. We believethat the source of motivation for employees to grow and fully demonstrate their skills is "the provision of theopportunities to improve" and "the sense of achievement and accomplishment". To increase the satisfactionlevel of our employees, we are promoting the following four items as our foundation:(1) Provision of opportunities for our employees to grow [Rank-specific training programs, specialization
courses, On-the-Job Training (OJT) guidance, appropriate staff allocation and rotation](2) Evaluation and reward which is fair and convincing (Performance appraisal, interview system, salary
increase and benefit improvement)(3) Creation of family-like working environment (Improvement of office building, working environment andfacilities, annual events, club activity support, and interdepartmental cooperation)(4) Welfare program for employees and their families (Welfare program options, health support, corporate
pension and events with the Rinnai Employees' Association)

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

OJT Personnel Training
We position human resources as our most importantmanagement resource and we offer personnel training toassist employees to fully demonstrate their capabilities.
Our main training is "OJT (On-the-Job Training)"wherein a supervisor guides his/her team member
through an actual job. In addition, we provide arank-specific training program, which supports the
improvement of each employee as an individual bygrouping them according to job responsibility, and a
specialization course, which promotes our employees tobe highly specialized in their area. These threeprograms form three pillars of Rinnai's training system.

Three Pillars of Rinnai's Training System
OJT

Rank-specificTraining Program

Specialization
CourseThe Rinnai Spirit
53

CSR Report 2012│With Our Employees

Moreover, we are conducting a level-up training
program for group leaders who have been promoting
our business plan since fiscal 2011. We plan andprovide high quality internal training programs.
<Major Rank-specific Training Programs in Fiscal 2011>
Training

Subject

Content

New
employeetraining
program

New employeesNew
employeefollow-up
training

Generalists intheir 1st or 2nd
year, clericalemployees(technicalemployees) intheir 1st or 2ndyear
S4 level qualified
employees

Basic training for professionals (manners, awarenessas a professional), Fundamental training for Rinnai
employees (company overview, the Rinnai Spirit,
corporate ethics, personnel system, policy on quality
and environment), IT skills and mental healthS4 levelqualified
employeetraining
M6 levelqualified
employeetraining
M6 levelqualified
employeefollow-up
training
Performance
reviewertraining

Training for increasing motivation to work andraising professional awareness(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)

Reconsolidation of fundamentals (corporate ethics
and management policy), Recognition of his/hercharacteristics (to improve the strength) and thereinforcement of awareness of management (creationof management plans)M6 level qualified Reconsolidation of corporate ethics and management
employees
policyUnderstanding duties of managerial supervisors(rules of employment, Labor Standards Act, handlingof problematic employees)
Understanding of management
Reaffirming shared goals
M6 level qualified Reconsolidation of values concerning managers’
employees
actions
Reviewing the efficiency of the entire workplace
Managers whoneed toreview/interview
their teammembers

Reconsolidation of personnel system, objectives of
performance review and its method, and actualinterview sessions (coaching and listening)

New employee training program

Number oftrainees
135 people

189 people

97 people

51 people

50 people

66 people

President's speech

54

CSR Report 2012│With Our Employees

Career Development Review and Support
Visualizing skills of individual employees and guiding their growth (capability evaluations and feedbackof the results in one-on-one interviews)
For each training program to function effectively, it is essential to match the capability required by theorganization and the goals set by the employees.
Therefore, Rinnai prepares a "Skills Map" and a "Capability Evaluation Sheet" to define the skills andcapabilities required by each department and to clarify the goals and capabilities the company expects theemployees to achieve. Based on these tools, our employees understand their current roles and responsibilities.
Employees also have a one-on-one interview with their supervisor, during which they receive the results of
their performance evaluation and are informed of the company's future expectations of them. They then set up
their own goals to challenge every year.
Supervisors, to actively perform the responsibility to navigate the growth of their staff, carefully
review each staff's progress and contribution (performance evaluation) and adequately inform the staff of theresults of the evaluation through one-on-one interviews or performance appraisal feedback meetings.

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

Development of Global Human Resources
We aim to develop human resources who can demonstrate their abilities beyond national boundaries andimprove the capabilities of Rinnai Group employees all over the world. Therefore, the management divisions,product development divisions, and manufacturing divisions are developing their own training courses and
OJT programs implemented via employee exchange. We provide opportunities for Japan-based employees intheir 20s (at the earliest) to be assigned to overseas Group companies, which improves their ability to adapt toforeign cultures and their international business sense through actual overseas work experience.
(1) Management Department
At the management division of the Head Office, we regularly visit our overseas locations to provide
instruction on management and accounting and to develop human resources. We also launch business reformprojects when specially requested. Under such projects, specialists from Japan develop local executives
through planned visits to overseas location that provide them with instruction on methods for improvement ina way that allows them to achieve results through practical operations.
55

CSR Report 2012│With Our Employees(2) Product Development, and Production Department
We actively promote human resource exchanges between Japan and overseas locations, with about 20
employees participating each year. Staff members from our overseas Group companies receive OJT in Japanfor about one year, learning practical skills and what to improve at their own companies at the development
divisions, factories, and management divisions in Japan. Japan-based employees assigned overseas practiceproduct marketing and handling of quality issues, as well as improvement of factories’ manufacturing andproduction systems. Through these activities, they hand down the key themes that constitute our corporate
culture and expertise on Japanese-style monozukuri and quality assurance to local managerial staff.

Comment from an Employee Stationed Overseas
I have been working in Shanghai for two years as a secretary supporting thepresident’s management tasks. I am also involved in a broad range of business
operations, including sales activities for Japanese companies, so my days areproductive. Chinese society is highly competitive, so I have to function at full
throttle both mentally and physically. I actually sometimes have to take day trips
to locations 2,000 km away for sales activities. My days here are filled with new
discoveries because this is such a huge country where languages, culture, andbusiness practices differ among the areas. This builds my ability to think before
acting, instead of making snap decisions. I will continue to make use of myphysical and mental strength, and level-headedness, that I acquire in this country.
Takahiro Isogai, Shanghai Rinnai Co., Ltd.

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

Training

Visual manual56

CSR Report 2012│With Our Employees

Training at Each Location
Each location has set up a "monozukuri legacy station", which accumulates and maintains stored process
technologies and new techniques as well as intangible assets, essentially, the insights gained on-site byexperienced employees. This station is a place where newly assigned employees can acquire monozukuri
basics. It is also a place for sharing and conveying the essence of monozukuri and training employees in suchareas as improved efficiency and enhanced production management.

"Level-up Station" (Aichi Factory)"Coating training station"(Seto Factory)

New Engineer Training
New employees who are assigned technical jobs at the Technology Center and Production Technology Center,
before their actual allocation to each department, receive onsite training at the Research and Development
Headquarters and Production Engineering Division as well as practical manufacturing training at factories andproduction Group companies to learn about the importance of monozukuri including product and technology
development.

Studying the structure ofdish washer

Studying the structure ofplug of gas appliances

Studying about gas combustion

57

CSR Report 2012│With Our Employees

Work-Life Balance
Support for Work-life Balance
For all Rinnai employees to perform well attaining the sense of accomplishment and fulfillment balancing
work and personal life for each lifestyle, we continue to enhance our personnel system to support all
employees of any gender and nationality through their lives.
In fiscal 2013, we are planning to extend the period of childcare leave and childcare shortened work
hours, which many employees use, to strengthen support for working women. We will also actively develop
and apply measures for supporting health management.
< Major Programs and Measures in Fiscal 2012 >Number of users
Program andmeasureContent

FiscalFiscal

2012

2011

47

49

33

24

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

25

Family-care shortened
work hours

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

0

0Work 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.

20Come Back program

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

03

Volunteering
support system

This is to support our employees' volunteer activities as a part ofsocial responsibility activities to contribute for communities as agood corporate citizen.

10Club activity support
systemThe Company supports the employees to be engaged in sports
and cultural activities out of office hours to promote the sense ofunity and communication among employees and in workplace.

454

447

Childcare leave

Childcare shortened
work hours

Family-care longleave
Nursing leave andFamily-careleaveAn employee who lives with and is the caretaker of a childyounger than 12 months of age can take leave until the childturns 1, or alternatively until the child is aged 1 year and twomonths.
In the event that an employee is the caregiver of a child thathasn't been enrolled in an elementary school, or is the caregiverof a family member that requires nursing, the employee inquestion will be exempt from working late shifts (10:00PM 5:00AM) with the exception of cases wherein the employee's
absence would preclude or inhibit the continuation of normal
business operations

58

CSR Report 2012│With Our Employees

Measure to reduce
working hours(Flexible working
hours)
Measure to reduce
working hours (Noovertime day)
Measure to increase
the ratio of consumed
paid-leave

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

Production divisions
Management
divisions

Every Wednesday is set as "No overtime day" to encourage
employees to leave early.

Applicable to certain
departments

To promote the utilization of paid-leave, we encourage
employees to take at least one day per each half fiscal year, total
2 days a year, as "Refreshing paid-leave"

Applicable to all
departments

Comment from an Employee who Uses Childcare Leave Program
I am now on my third childcare leave. I wanted to have three children while
continuing to work, and those in my workplace willingly accepted this wish.
The number of women who take childcare leave and return to work has
increased dramatically, and the Company’s systems have been improved. Of
course, it is not easy to raise children while also working, but I spend
enjoyable days with my three children thanks to the understanding of mycoworkers and cooperation from my family.
Tomomi Yamada, Electronics Development Division, Research & Development Headquarters

Measures to Enrich Our Employees' Family LivesThe Rinnai Employees' Association is the lead organizer of courses for employees on the themes "Education
for the Soul" and "Passion for Life." These courses are intended to prepare people for the different stages thatlife will take them through, with a focus on ethics, communication skills, life planning and money matters. Of
the firm belief that a positive perspective on work is essentially a reflection of a happy home life, we
encourage employees to take advantage of opportunities, such as barbecues and sports days, where they cangather as families with families. These events foster a sense of harmony among colleagues.
<Major Programs in Fiscal 2012>
Item
Overview
Nationwide events inJapan

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

Training seminars by
age group

Training seminars focusing on the "Education for the soul" that supports
employees to develop attractive personalities as members of society* Nationwide Events- Chubu Sports Festival (Oguchi Sogo Ground) ······························ Number of participants:
1,481- Walking Festival (Higashiyama Zoo and Botanical Gardens) ·············· Number of participants:
1,448-Kanto Festival (Kasai Rinkai Park)············································· Number of participants:
192-Kansai Festival (Expo '70 Commemorative Park) ·························· Number of participants:
198-Nationwide event (Barbecue) Sapporo, Tohoku, Niigata, Shizuoka, Hokuriku, Hiroshima, Takamatsu andKyushu ·········································································· Total Number of participants: 571

59

CSR Report 2012│With Our Employees

Chubu Sports Festival

Nationwide event (Barbecue) (Tohoku)
30th Walking Festival

This annual walking event is designed to let employees enjoy time with their families and raise theirawareness of health. The venue this time was the Higashiyama Zoo and Botanical Gardens where, under thetheme of “biodiversity,” participants enjoyed environmental quizzes and games while walking the
10,000-step (approx. 4.1 km) course. A total of 1,448 employees and family members participated in the 30th
annual event.

* Training seminars by age group- Personality design seminar ························ Number of participants: 70- Life design seminar ································· Number of participants: 55- Self-finding seminar ································ Number of participants: 81- New employee communication seminar ········· Number of participants: 136

Personality design seminar

New employee communication seminar

60

CSR Report 2012│With Our Employees

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

Support for Work-life Balance
Our Group considers respect for human rights and individuality as one of its main pillars for performing its
social responsibilities as a company. We therefore strictly prohibit any form of discriminatory treatment basedon gender, age, nationality, physical characteristics, or any other attributes of individuals. We also refer to theideas of the United Nations framework and ISO26000 and reflect them in the Rinnai Group Code of Ethics. To
promote and enforce the contents of the Rinnai Group Code of Ethics among all Group employees, acompliance committee member is allocated to each workplace to regularly conduct education on corporate
ethics. At rank-specific training programs, we also educate our employees based on their roles and job
responsibilities.

Establishment of Good Labor Relations
The Employees of the Company are "members of the Rinnai Employees' Association" which functions as theorganization to represent entire employees.
Based on mutual understanding and trust, the Company and the Association establish healthy andsound labor relations openly exchanging opinions on management issues, labor condition, workplaceenvironment and compensations and discussing improvement plans.
Moreover, the Company makes effort to provide safe working environment without any concern to theemployees of our business partners, etc. in addition to our employees. We also actively arrange and offer
welfare programs and various events and programs for our employees and their families.

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

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

61

CSR Report 2012│With Our Employees

Increase in the Allocation/Promotion of Female Employees(1) Current status of positions held by female employees
The ideas and comments from women are very important to our products. Many women aredemonstrating their capabilities in various roles, demonstrating their strengths especially in the productplanning department, sales planning promotional department, fixed customer sales department andproduction department. Moreover, the ratio of women in total generalists (core job positions) is also
increasing every year and the Company actively assigns women to management positions.
In Japan, as of April 2012, the Company had 53 female managers (2.3% of total managing positions),
doubling the number in 2006. As an entire Group, we have 47 female workers in management roles.
(2) Enhancement of Support Programs for Working Women
For women to keep working for the Company after getting married, we provide various working styles
and support programs.
<Major Programs>(i) Career track conversion system
A system which allows employees to convert from generalist to administrative positions when theemployees who don't wish to relocate for job assignment or request for the shortened working hours
A system which allows employees to convert from generalists to clerical employees (when they do
not wish to relocate for job assignment or if there is a request for shortened working hours), or fromclerical employees to generalists (because of superior work performance)(ii) Reemployment system (Come Back Program)A program that allows a former employee to come back to the same workplace of the Company as afull-time employee(iii) Childcare leave and Family care long leave
Programs to support employees to raise children(iv) Shortened work hour system
A program to support employees to raise children and care their family members(v) Flexible working hours system
A program to support employees to raise children, care their family members and work within
restricted time(vi) Work from home program
A program to support employees to raise children, care their family members and recover from
diseasesComment from Female Manager
In 2004, I was assigned as a General Manager, my current position, 20
years after joining the company. I am in charge of duties such as businessplans, financial management, management of the performance of eachdivision, and external relations. I obtain valuable knowledge andexperience by working with my team. The greatest task I am involved in
now is building an organization in view of the future of this rapidly
growing company. There are many difficulties and challenges, but I findthe task worthwhile because it motivates me to develop myself.
Mishela Oktora, General Manager, P.T. Rinnai Indonesia

62

CSR Report 2012│With Our Employees

Fair and Diversified Employment
View toward Employment
We respect the diversity of individuals and provide employees with various job opportunities and a working
environment where they can demonstrate their various capabilities.
Rinnai Group Code of Ethics stipulates that "Any discriminatory act toward an individual based on
gender, age, nationality or physical characteristics, etc. is prohibited". Based on this, we maintain fair andequitable hiring practices, in line with prevailing business plans and recruitment needs.
In addition, we actively engage in mid-career hiring to capitalize on the accumulated experience andknowledge of individuals who showed they can make a contribution to our success. We hire about 40
mid-career skilled employees every year.

Reemployment of Retired Employees and Support for Demonstration of their Abilities
Rinnai promotes a reemployment program for employees who retired due to the age limit in order tocontinuously 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 152 employees working under thisprogram.
We provide our employees with opportunities to continue working until age 64, by concluding
renewable one-year reemployment contracts with those who have reached the mandatory retirement age of 60.
On April 1, 2012 we raised the age limit for reemployment to 65, one year before law mandates it, on April 1,
2013.
This reemployment program provides employees with purpose and motivation in life as aleader/mentor and maintains and improves the corporate culture and dynamics within the workplace.

Promotion of recruitment of handicapped employees
Since fiscal 2009, we have promoted recruitment of handicapped employees in a planned manner bycooperating with the public employment security office and schools for the disabled. In the initial year, theemployment rate of persons with disabilities at the Company was only 0.79%, so out of a sense of social
responsibility (sense of urgency) we took a more active stance toward recruiting handicapped people.
In July 2008, the public employment security office greatly assisted us with recruitment ofhandicapped people. The office allowed us to hold an exclusive job interview meeting at which weinterviewed a total of 28 applicants and employed 15. We later began to recruit new graduates from schools
for disabled students and implemented an internship program for second-year students of those schools. The
number of newly recruited disabled employees has been increasing each year.
The Customer Center we established in fiscal 2011 has toilets and ramps for wheelchair users, andbarrier-free elevators; thereby improving the Company’s internal facilities for handicapped employees. The
employment rate of persons with disabilities at the Company has consequently been significantly improved to
1.65%. We will continue to promote recruitment activities and improve the workplace environment towardachievement of the legally mandated minimum employment rate of 1.8%.

63

CSR Report 2012│With Our Employees

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

Basic Policy on Safety and Hygiene
An essential requirement in business is the assurance of the health and safety of employees, via the provisionof a hazard-free and hygienic work environment. As Rinnai constantly strives to protect the life and healthof all employees we give top priority to the sanitary condition and safety of the workplace. This corporate
mantra extends to our customers, to whom we strive to provide "safety and peace of mind".
Fiscal 2013 Basic Policy on Safety and Hygiene
1) Assuredly undertake risk assessment (safety activities based on consideration of risks)
2) Promote improvement of mental health (application of mental health guidelines, mental health education)3) Observe laws, regulations, and internal rules (reviewing safety and hygiene manuals and rules)
4) Improve the health management system (treatment after health checkups, provision of health counseling)

Status of On-the-Job Accidents and Injuries
In fiscal 2012, we made efforts to achieve the goal of zero accidents under the Rinnai Company-wide Healthand Safety Committee, serving as the administrative organization of group companies in Japan. Unfortunately,
however, we recorded a total of 31 on-the-job accidents (one more than in the previous year).
(The severity rate was 0.001%, up 0.006 points from the previous year. The frequency rate was 3.9%, up 0.21
points from the previous year.)
Broken down by division and percentage, 29 of the accidents took place in production divisions (93%)
and two occurred in sales divisions (7%). The most frequent were as follows.
1st: Cutting hand, arm, leg, or foot from contact with equipment or material: 9 cases (29%)
2nd: Cutting or bone fracture of a body part caught in equipment, jig, or tool: 8 cases (26%)
3rd: Bone fracture of hand, arm, leg, or foot due to fall: 8 cases (26%)
In response, under the improvement plan for fiscal 2013, we will comprehensively review what protective gear towear at each workplace and for each type of work, establish rules and standards based on the results of the review,
and make it a top priority to comply with the rules and standards.
With regard to the on-the-job accidents occurring in the previous year, each Group company will assoon as possible take measures for preventing their recurrence. The entire group will thus make concerted
efforts to ensure prevention of accidents toward achieving the goal of zero accidents.

64

CSR Report 2012│With Our Employees

Accident Prevention Measures
To give our No.1 priority to work safety and peace of mind, the Group promotes various accident prevention
measures under the guidance of the "Risk Management Committee" headed by the President.
(1) Activities to prevent fire and explosion: Enforcement of safety inspection of environmental safety
equipment (gas feeders and furnaces, etc.) and test and evaluation equipment, and the improvement
and renewal of equipment as our top priority(2) Reduction of risk of earthquake damage: Preventing objects in factories and office buildings fromfalling over, dropping, and scattering(3) Production site onsite guidance: Horizontal development of the production sites under the guidance of
the Safety and Health Committee of Production Group(4) Training for clerical work staff and new employees: KYT training for new employees including amonthly information sharing session regarding on-the-job accidents, designed to promote work-safety
awareness.
(5) Implementation of emergency drill: "Earthquake and fire drill" more than once a year
*KYT: Kiken Yochi (danger prediction) Training

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

Emergency drill

Promotion of Traffic Safety
To minimize traffic accidents involving employees, various measures and education programs are provided.
Every year, we obtain a certificate of driving record from each employee who was granted permission to drive
a company car or commute by car. This is to accurately grasp employees' traffic accidents and violation of
traffic rules to improve the self-awareness and management of the employees. We apply with the Japan Safe
Driving Center for issuance of a certificate of the driving record of each employee who is granted permission
to drive a company car or commute by car. The certificate is also handed to the relevant employee. This is togain an accurate understanding of employees’ traffic accident records and violation of traffic rules in order toimprove employees’ self-awareness and management.
In particular, it is mandatory for employees in sales divisions to report accidents and violation of rules.
Depending on the details, an employee may receive a suspension of the permission to drive a company car or
may require taking a safety seminar provided by an external agent.
Moreover, new employees receive an actual driving lesson using a company car receiving cooperationfrom a driving school, a program which encompasses risk anticipation training using video, education of
traffic rules and regulations and an aptitude test to improve their awareness of safe driving.

Driving training at a
driving school

Risk anticipation training
using video

Education by employees
who commute by car
65

CSR Report 2012│With Our Employees

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

Support for Health Promotion
Through the alliance with the Rinnai Health Insurance Society, we provide a range of medical support services
to our employees and their dependent families which include regular checkups as well as detection
examinations for various types of cancer (including prostate, intestinal and breast cancer checks). Thoroughphysical examinations are also available.
In addition, should an employee require further examination, we will organize additional consultation
with one of our industrial doctors.
For patients with lifestyle diseases, specific health guidance and an individual follow-up are provided to makesure the employee is fully recovered. We plan to introduce Helicobacter pylori screening, kidney examination,and hepatitis C screening as new examinations in fiscal 2013. We are expanding our medical support services
each year.
For physical fitness, we are also eager to financially support sporting events organized by theemployee union and voluntary club activities for employees all over Japan (49 clubs including soccer, baseball,golf, cycling, table tennis, bowling, and distance running) to promote employees’ health.

Mental Health Care
We strive to cultivate a positive atmosphere in the workplace by caring for themental health of employees as well as their physical wellbeing. This effort
focuses on early stress detection and preventative measures.
In fiscal 2012 we held three courses: a mental health care workshop,
mental health care workshop for managers, and mental health care workshop for
managerial supervisors. Three domestic Group companies also introduced theirown workshop programs. As a result, a total of 23 workshops were held and 597
employees participated. In fiscal 2012, we started providing a mental healthcounseling service by a contracted external organization. This service lets
individual employees to receive face-to-face or telephone counseling from
Mental health careexternal specialists about their personal problems. During the fiscal year,
workshop
telephone counseling was used for 103 cases and face-to-face counseling for nineusers. In fiscal 2013, we will expand this service to domestic Group companies tostrengthen our efforts to prevent mental illness.
Outline of our Education System
Education programs for all employees
New employees
When joining the company; once

Managerial supervisor
Line care
Basic program

Applied program
Self management
All employees

Self care

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

External care

Industrial doctors, health supervisors, labor managers, Personnel Affairs Division, etc.

Internal care

Joining the Company

Retirement
66

CSR Report 2012│With Our Employees

Human Resource and Personnel Related Data
We disclose human resource and personnel related data including the number of employees and the status of
fulltime employees.

Number of full-time employees (consolidated, year-end)
Fiscal 2010

Fiscal 2011

Fiscal 2012

2,330
1,115
1,025
583
2,483
1,089
8,586

2,358
1,085
1,061
590
2,698
1,199
8,958

2,376
1,073
1069
578
2,834
1,208
9,107

Male
FemaleMale
Domestic Group
Companies
FemaleMaleOverseas Group
Companies
FemaleTotal
Rinnai Corporation

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

Japan
Asia excluding
Japan
EuropeOther(Oceania,
South-America)
Total

Male
FemaleSub-total
Male
FemaleSub-total
Male
FemaleSub-total
Male
FemaleSub-total

Fiscal 2010

Fiscal 2011

Fiscal 2012

Composition

3,332
1,682
5,014
2,081
919
3,000
115
40
155
287
130
417
8,586

3,402
1,659
5,061
2,253
1,016
3,269
123
38
161
322
145
467
8,958

3,428
1,637
5,065
2,377
1,011
3,388
121
40
161
336
157
493
9,107

55.6%
37.2%
1.8%
5.4%
100%

67

CSR Report 2012│With Our Employees

Number of employees (non-consolidated)
Full-time
employees

MaleFemaleMale
Newly recruitedemployees
FemaleMale
Mid-career
recruitment
FemaleAverage working years
Average age (years old)
Separation rate (%)
Paid leave utilization ratio (%)
Employment rate of persons withdisabilities (%)
Number of employees who used childcare
leave
Number of employees who usedshortened work hours
Number of employees who used nursing
leave and family-care leave
Number of employees who used thework-from-home program
Number of on-the-job accidents
Annual average training time per
employee **Excluding division-specific training

Fiscal 2010

Fiscal 2011

Fiscal 2012

2,307
1,099
137
107
35
17
13.6
35.6
0.23
31.8

2,341
1,069
107
42
12
24
13.4
35.2
0.23
34.1

2,359
1,059
82
54
12
13
13.7
35.7
0.18
37.5

1.45

1.42

1.65

35

49

47

9

24

33

2

5

2

0

0

2

41

29

31

5.2

4.4

4.4

68

CSR Report 2012│With Our Shareholders and Investors

With Our Shareholders and Investors
We disclose fair and impartial information in a timely and appropriate manner, and through open channels toshareholders and investors we pursue investor relations (IR) activities that foster greater trust.

Information Disclosure, Dividend and General Shareholders’ Meetings
Concept for Information Disclosure

In accordance with the “Rinnai Code of Ethics” and our “Disclosure Policy”, Rinnai has a basic policy toaccurately and impartially disclose the corporate information related to the Group's business description andactivities without delay.
Our announcement of financial results are posted on “TDnet” in compliance with the disclosure
standards set by the Tokyo Stock Exchange, and our securities report is publicized on “EDINET” operated by
the Financial Services Agency. This information is posted on "IR Information” page on our corporate website.
In addition, Rinnai has started posting the presentation material for information meeting to announce thefinancial results beginning with the presentation of financial results at the end of fiscal 2011. Our English
website also posts the material and IR information for fair and timely disclosure.

Our Policy on Dividend

One of our top management priorities is to sustain a stable
return of profits to shareholders. Several factors play into thecalculation of dividends, such as consolidated performance,
return on equity and financial status.
Seeking to enhance corporate value, management looks
at retained earnings with a view to the long term, effectively
applying this source of capital toward R&D, capital spending
and investments accompanying the expansion of sales at home
and abroad.
The annual dividend for fiscal 2012 was ¥56per share,up ¥8 per share from fiscal 2011.
This marked the tenth consecutive year of higher dividends.

General Shareholders’ Meetings

To encourage more shareholders to get fully involved in discussions about agenda items put before the generalshareholders’ meeting and to draw more shareholders to the meetings, we send out the convocation noticethree weeks in advance of each annual meeting.
In addition, we upload an English language translation of the convocation notice to our website on thesame day that the Japanese original is released to ensure that all shareholders have equitable and expeditious
access to pertinent information. Resolutions achieved at the general meeting of shareholders are also available
on our website, in both English and Japanese.
Share Information
Number of authorized shares
200,000,000 shares
Number of outstanding shares
54,216,463(Including treasury stock)
Number of shareholders
4,137

69

CSR Report 2012│With Our Shareholders and Investors

IR and Communication Programs
Policy on IR Activities
Rinnai believes that it is important to gain a deep understanding of our stakeholders including shareholders
and investors toward our business activities and strategies to establish a good relation based on the sharedrecognition. To do so, we will do our best to arrange timely, fair and immediate disclosure of our company
information to build a bidirectional relationship. We believe that this will eventually increase our corporate
value.

Communication with Institutional Investors and Analysts
In addition to the biannual information meetings that explain business results and other small meetings, Rinnai
visits each institutional investor and accepts telephone interviews. These activities are designed to provide
clarification of our business results to institutional investors and analysts and to actively exchange views withthem. In fiscal 2011, the Company arranged a presentation session for overseas investors and an increased
number of factory tours.
We have also begun conducting a regular questionnaire on our IR activities, starting from the fiscal 2011
year-end results presentation held on May 2011. The survey was distributed among institutional investors andanalysts who participated in the meeting. We use the collected comments to improve our IR activities.

Factory tour
Principal IR activities in Fiscal 2012
Number of activities held

Total number ofattendance

Individual meeting

2（2）
80

229
140

Interview
Telephone meeting
Small meeting
Factory tour

37
21
19（1）
6

43
24
114
33

Presentation for overseas investors

1（1）

24

Total

166

607

IR activities
Information meeting* Numbers in parentheses ( ) are the number of IR meetings that the President participated.

70

CSR Report 2012│With Our Shareholders and Investors

Communication with Individual Investors
In fiscal 2012, we held individual investor seminars to deepen each individual investor’s understanding
toward our business in two cities, Tokyo and Nagoya, and received the attendance of 637 investors. During theseminars, we gave a concise explanation of our corporate philosophy, management policies, businessstrategies and overseas operations for individual investors to understand our extensive activities. A regularquestionnaire for attendants is conducted to improve our communication measures.

Individual investor seminar

External Evaluation

Selection as a SRI Index Constituent ShareIn the operation of funds, such as investment trusts, “socially responsible investment (SRI)” has recently
attracted considerable attention. SRI doesn’t only assess a target company’s financial conditions such as its
business results but also its environment protection activities and social programs.
Rinnai has been receiving high evaluation from external assessment bodies as a company which has been
actively promoting CSR for sustainable development and has been selected as one of the constituent shares of“FTSE4 Good Index Series” for the eight consecutive year since 2004.

* FTSE4 Good Index: It is a SRI index operated by FTSE group, which is alimited partnership jointly invested by The Financial Times and London Stock
Exchange Group in the U.K.

71

CSR Report 2012│With Our Business Partners

With Our Business Partners
We disclose fair and impartial information in a timely and appropriate manner, and through open channels toshareholders and investors we pursue investor relations (IR) activities that foster greater trust.

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

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

Rinnai's Stance on the Relationship with Our Business Partners
Our suppliers provide us with the raw materials and many of the components that go into the products wemake. They are business partners indispensible to the creation of products that attract consumers to the
Rinnai name. At Rinnai, we believe that building stable, long-term relationships with our suppliers andgrowing with them as they grow with us is vital to the creation of better products.

72

CSR Report 2012│With Our Business Partners

Realization of Fair-and-Square Transactions
In accordance with the Rinnai Code of Conduct in the Rinnai Group Code of Ethics, our supplier acceptanceprocess is applied uniformly, whether the company is an old-time supplier or seeking to become a supplier.
Our evaluations are fair, giving equal opportunity to any and all companies with the right stuff,
whether 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
We request our business partners to independently establish a quality assurance system and assure theimplementation of the system to help us achieve our policy on quality, “We provide highly safe products thatmeet customers’ requirements.”
We provide opportunities for suppliers to learn more about our perspective on quality and the basis ofmonozukuri at Rinnai through annual events including a get-together at the beginning of the year and policy
information meetings and regular meetings of the Supplier Liaison Group. These meetings are also ideal forgathering information through suggestions from suppliers and promoting dialogues based on submitted
questions. Indeed, these meetings promote a stronger commitment to teamwork.
In fiscal 2013 we introduced a system for developing information cooperation with our business
partners, under which we provide these partners with the latest information on the Company via the Internet
and have them register their own information.
We also promote green procurement processes with an emphasis on environmentally friendly supply
chain management. We formulated E-Procurement Standards and work together with our business partners to
pursue monozukuri with an environmental conscience. This includes implementation of proper environmental
management and environmentally friendly approaches toward materials as well as parts production and use.
We have also introduced controls for chemical substances contained in materials and parts, in accordance with
the Chemical Substance Management Rank Guidelines for Products*1.
*1: Policy to eliminate or reduce the use of six substances listed in the Reduction of Hazardous Substances (RoHS) Directive

Improvement Activities with Our Business Partners
In 2009, Rinnai started a “Level-Up Workshop” to provide our business partners with guidance on how to
improve onsite operations and to help them nurture the company heads of the next generation. Under theguidance of Rinnai, the workshop is held to discuss ideas to improve actual operations and management
methodologies a few times a month. For improving onsite operations, we instruct our business partners
directly at their production sites to improve their level of monozukuri. For educating executive candidates,
Rinnai’s staff in charge of this project provides individual consultation to the business partner to improve theskills and knowledge required of executives.
By helping our business partners in this way with both the education of executive candidates and improvementof onsite operations, we aim for overall improvement of our business partners’ competence.

73

CSR Report 2012│With Our Business Partners

Comment from Our Business Partner
We receive information about new product plans and future directions in ourdaily communications, and this is a great help when we formulate our businessplans. In interacting with other companies at the Level-Up Workshop, we havedeveloped a network with them and are better able to recognize our own
strengths. Inspection tours to other companies’ factories give us the chance tomake many new discoveries. We have also developed a sense of camaraderie ascompanies providing the same level of products (parts) to the same customers.
We make achievements through friendly competition with one another.
Mr. Minoru Kano, Executive Managing Director, Chuokoki K.K.

Measures for Risk Management and Stable Procurement
During a time of unprecedented natural disasters, including last year’s Great East Japan Earthquake andflooding in Thailand, we continued to produce and provide our products to customers by seeking cooperationfrom our business partners affected by the disasters, who quickly recovered from their operations,preferentially supplied us with stock parts, as well as replacing some parts with equivalent alternatives.
As the supply chain expands all over the world, it is nearly impossible to reduce risks independently and it isessential to jointly take measures with our business partners.
Joint measures we currently promote with our business partners include dispersion of production sites,
acquisition of detailed information about secondary processors and companies engaged in later processing,organization of information about assets, including metal molds, and formulation of business continuity plans.

Promotion of Acquisition of ISO9001 and ISO14001 Certifications
To ensure provision of high-quality, safe, environmentally friendly products, all our domestic factories
acquired ISO9001 certification (for quality management systems) in 1995 and ISO14001 certification (forenvironmental management systems) in 2003. We have been operating the management systems to improve
the quality of our products and the environment.
We also ask our business partners to understand our approach to quality and the environment and toobtain ISO9001 and ISO14001 certifications or establish equivalent management systems, and we help them
operate the systems.

74

CSR Report 2012│With Our Business Partners

Working with Logistics Partners to Improve Logistics
Integrated Logistics Center
In April 2008, we newly opened the Integrated Logistics Center that
centralizes the products of four principal factories to establish streamlined
logistics system which is closely linked to the production and sales. Throughthis center, we aim to improve the quality of logistics and services.
We are receiving more orders for system products and there is agreater demand for a wider variety of products with smaller lot sizes.
Moreover, we need to cope with more diversified requests from ourcustomers such as shortened lead time before the delivery, and a delivery tolocations where the product must be actually installed. Before the center was
opened, our operations in Aichi, where our production are mainly based, had
to be supported by up to 14 logistics centers to store the products. However,in fiscal 2011, due to the results of company-wide effort to reduceinventories, we were able to successfully centralize our logistics bases into
two. This successfully achieved high efficiency in logistics and contributed
for the reduction of the environmental burden.
The Integral Logistics Center has introduced item-by-item control
with QR code and an inspection system. QR codes, which identify eachproduct, are affixed to all products and utilized in many processes in thelogistic centers such as when products are brought in and out. By reading thedata of QR code, we have drastically improved the quality of logistics bypreventing errors and improving the traceability of each item. In addition, thecombined use of wireless terminals, real-time operation instruction andactual result collection resulted in a significant improvement of theoperations.

Integral Logistics Center

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

Communication with Logistics Partners
Every April, we hold a logistics policy information meeting to help service providers gain deeper insight into
the logistics policy, targets and measures of our company and logistics department. In addition, we arrange aquarterly quality conference to reduce environmental burden related to the transportation and storage of
products, and to improve the quality. In fiscal 2011, followed by our logistics partners’ presentation, we
discussed actual issues and confirmed countermeasures. We also visit their working sites regularly to shareissues with them and help them make improvements.

Our Logistics Partners' Measures to Improve their Logistics Quality
In May 2010, eight mixed consignment carriers* of our logistics partners voluntarily established a “Logistics
Working Group” for quality improvement. To promote the improvement of logistics quality and safe
transportation, the Working Group is tackling the issues that are common with mixed consignment carriers
through information exchange and improvement activities with the leadership of onsite staff. The Working
Group started delivering tangible results such as Specific measures taken by the Working Group in fiscal 2012
include regular visits to premises where cargo is shipped or received, creation of awareness posters, andcountermeasures against incorrect deliveries. The Working Group is contributing to the improvement of thelogistics services of our company as well as the performance level of each carrier.
*Mixed consignment carrier: Services to transport consignment collected from any number of consigners, oran operator that offers the services.
75

CSR Report 2012│With Our Business Partners

Communication with Logistics Partners
In fiscal 2012, upon the request of our logistics partners,
we made it possible to print addresses and names ofdelivery destinations in kanji (Chinese characters) on
invoices (delivery statements), on which it had
previously only been possible to print katakana
characters. We have also improved our shipping labels(tags) by allowing the printing of kanji. This has madeprinted characters more legible and facilitated checking
by our logistics partners, resulting in reduction ofincorrect deliveries caused by characters being misread.
We will continue to improve our logistics bycooperating with our partners for further efficiency inlogistics operations.

Measures to reduce shipping amountThe company is designated as a specified shipper under the revised Rationalization in Energy Use Law.
Therefore, by cooperating with our logistics partners we strive to reduce CO2 emissions through suchmeasures as eco-friendly driving and establishment of appropriate transportation routes. In fiscal 2011, weconsolidated our logistics bases and eliminated and consolidated warehouses that were scattered around Japan.
This enabled us to achieve a reduction of intra-company transportation and more efficient transportation ofcollected cargo, and to reduce the impact on the environment. Our next environmental measures include theincrease of combined shipments grouping products shipped to the same destination and reduction of thetransportation routes not heading directly to the final destination.
In addition, we consolidated our logistics bases into two in Aichi, where our four factories arelocated and streamlined warehouses spread around Japan. This eliminated redundant inventory at logistic
centers, the production that is neither urgent nor important, and so called “horizontal transportation"*.
Moreover, improved logistics efficiency contributed to cost reduction and minimization of environmental
burden. Our next measures include the following two: to increase combined shipments grouping products
shipped to the same destination; and to reduce the transportation routes that are not directly heading to thefinal destination.

Trend of shipping volume and CO2 emission
Fiscal
2007

Fiscal
2008

Fiscal
2009

Fiscal
2010

Fiscal
2011

Fiscal
2012

Shipping volume
7,888
7,042
6,519
6,483
6,333
6,687
(ton x km)
CO2 emission volume
11,747
11,22810,013
9,901
9,837
10,238(TCO2 )* Horizontal transportation: transportation that doesn’t include final destination (customer site), suchas the route between Rinnai factory and its warehouse76

CSR Report 2012│With Our Communities and SocietyWith Our Communities and Society
We disclose fair and impartial information in a timely and appropriate manner, and through open channels toshareholders and investors we pursue investor relations (IR) activities that foster greater trust.

In Touch with the Community
Easter Event at a Welfare Facility
In April 2012, Rinnai Brazil Heating Technology Ltd. held an Easter event at a welfare facility forhandicapped children (APAE) in Mogi das Cruzes. Staff members of the company gave Easter eggs
(chocolates) to children and became better acquainted with children and facility staff, together with volunteer
staff who wore suits of a rabbit, a popular symbol of Easter.

Support for the Restoration of the Nakagawa Canal
The Nakagawa Canal that runs near our headquarters used to be alive as a transportation route connecting thePort of Nagoya and the center of Nagoya city for foreign ships to proceed. With the development oftransportation by railroads and automobiles, the utilization of canal transportation diminished greatly. In 2010,
the Nakagawa Canal celebrated the 80th anniversary of its creation. To commemorate, an art event, “TheNakagawa Canal Art”, was held in October 2010 based on a plan to restore the Nakagawa Canal as the newcore of the Nagoya-city.
Rinnai’s Chairman Naito was appointed as an Honorable Chairman of the Nakagawa Canal Art
Planning Committee. The committee arranged various events to add a new value to the water area of the
Nakagawa canal. The events included a fantastic digital light art show, “Digital Hanging Scroll” projected
onto the walls of warehouses and a live performance combining Japanese traditional performance, Noh, andmodern music.
As a local company, last year we began support of a joint government-community-industry project for
restoring the Nakagawa Canal, and Rinnai’s Chairman Naito was appointed as an Honorable Chairman of the
Nakagawa Canal Art Planning Committee. Events at the canal included a fantastic digital light art show, a “digital
hanging scroll” projected onto the walls of warehouses along the Nakagawa Canal, and inside the warehouses a live
performance of modern music and a violin concert by children who are students of local violin class.
In this way, we continue to promote and encourage community members to come together to utilize
and contribute to the restoration of the Nakagawa Canal.

“Digital Hanging Scroll” Projected on the Wall of Warehouses
Produced by Akira Hasegawa(Photo: by Yoshiyuki Hata)

Suzuki Method Violin Concert

77

CSR Report 2012│With Our Communities and Society

Participation in the Cosmos Project
People begin mowing grass, sowing seeds,
and watering the area each June so that
cosmos flowers bloom in a variety of colors
along the Nakagawa Canal in the autumn.
Rinnai staff members participate in thisCosmos Project every year, planting andraising flowers together with student
volunteers, employees of other local
companies, and local residents.

Support for fund raising for cystic fibrosis patients
Cystic fibrosis is a hereditary disease and there are many
patients who are suffering from this disease in the UnitedStates. Rinnai America Corporation is supporting thefund-raising for cystic fibrosis patients through walking
events and auctions.
A walking event

Participation in the program of “Habitat for Humanity” and“Happiness-sharing ‘N’ Campaign”
Since 1994, Rinnai Korea Corporation has been participated in Habitat’s
home building program for humanity offering gas stoves to families thatlive in the houses every year. Rinnai Korea also participates in the“Happiness-sharing ‘N’ Campaign” promoted by the Korea National
Council on Social Welfare (a program under which approximately 1% ofsales of products and services with the N Mark as the “symbol of sharing”
is gathered as funds for aiding social welfare organizations in need ofsupport.
In fiscal 2012, we planned and held the “Happiness-sharing ‘N’Free Cooking Class” jointly with the Mapo Community Rehabilitation
Center. The monthly class, held six times in July-December, was aimed at
helping people with intellectual disabilities with rehabilitation, and at
fostering their independence. Residents of Mapo Ward with intellectual
disabilities were invited (25 people each class).

Free cooking class

Hosting a Cooking Contest
In April 2011, P.T. Rinnai Indonesia conducted a cooking contest in
Senayan in the center of Jakarta. There were 2,500 participants, the largest
number ever for a cooking contest held in the country. Competition was incooking skills using single-burner stoves. (Rinnai provided 1,300 stoves.)

Cooking contest

78

CSR Report 2012│With Our Communities and Society

Disaster-prevention and crime-prevention activities for local communities
Each Rinnai Group location actively cooperates with disaster-prevention and crime-prevention activities by
the local government and community. In fiscal 2012, we participated in the New Year’s parade of fire
department brigades of Seto City, Aichi Prefecture, and also joined a team for promoting awareness of local
safety that was organized by the city police of Nakagawa, Aichi Prefecture. Other events we took part ininclude a fire drill competition hosted by the Niwa Association for Safety of Hazardous Materials of Niwa
District, Aichi Prefecture.

New Year’s parade of fire
department brigades in Seto City

A team for promoting awareness of
local safety organized by the
Nakagawa city police

Fire drill competition

Communicating with Students
Factory Tours for Students
To encourage interaction with the local community, each factory provides cooperation for a factory tour
program for local elementary school students. Schools utilizes this program as an opportunity for students tolearn about society and monozukuri through the presentation of facilities in production lines, assembly method
and products.

Seto Factory

Asahi Factory

Aichi Factory

Acceptance of high-school student trainee
The Rinnai Group cooperates withinternship programs by each year
proactively accepting high school
students as interns at its offices
and factories.

79

CSR Report 2012│With Our Communities and Society

Seto Factory

Noto Tech

Support for Victims of Disaster
Free maintenance services for products damaged with water disaster during
rainy season and summer
Since the beginning of 1980, Rinnai Korea Corporation has been
dispatching its service group to the areas affected by water disaster toprovide free inspection and repairs for gas cooking stoves and gas boilers
covered by water. During the water disaster in August 2011, a recovery
team consisting of approximately 150 members of Rinnai CS Corporationand the dealer association of the country engaged in activities forsupporting people affected by the disaster.

Support for Sports and Culture
The Group supports events that foster international exchange in the arts and culture as well as sporting events.
Rinnai Corporation, Actual Results in Fiscal 2012

Major financial contribution* Foundation for the Arts, Nagoya* Chubu High-tech Center (CHC)* Japan Academy of Chamber Music*The Nakagawa Canal Art

Major sponsorship* Japan Virtuoso Symphony Orchestra Concert* Nagoya Philharmonic Orchestra* Nagoya School of Music, The Music Competitionof Japan, Award-winning Celebration Concert* Campus Venture Grand Prix, Chubu Area
* Nagoya Shonen Shojo Hatsumei Club (Invention
and Innovation Youth Club)* Toyota International Youth Football Championship* Nippon Domannaka Festival

Rinnai America Corporation: Actual Results in Fiscal 2011
Rinnai America Corporation supported Ragnar Relay, the longest relay in theworld that takes up to 12 runners to finish the course of about 300km in theU.S, by installing shower rooms in several locations.

Rinnai POPS Orchestra Program“Rinnai POPS Orchestra” operated by Rinnai Korea Corporation, isthe only one private orchestra in Korea. It was established in 1986 forthe emotional development in the youth, the contribution for thegrowth of culture in the local community and the improvement of thelevel of culture of the nation. The orchestra provides charity concerts
including a regular concert and concert trip visiting various sites basedon requests and invitation. In 2011, the orchestra held 28 concerts.

80

CSR Report 2012│With Our Communities and Society

Promotion of Greenery Activities“Home Greenery Project”
In 2008, we started “Home Greenery Project” to contribute to the preventionof global warming and provide the sense of enjoyment to participants of the
project. We present young blueberry trees, which are easy to grow and absorb
CO2 well. So far, we have offered about 18,000 of young trees trying to
reduce CO2 with the cooperation of the project participants. In 2011, weselected 1,000 people from the applicants to the project by lottery, andpresented total 2,000 trees bundling two kinds of trees as a set. We used the
young blueberry trees that were planted and grown in the areas affected by
the earthquake in the Tohoku region.

Ground Golf Course Offered to Local Residents
In fiscal 2012, RB Controls Co., Ltd. created a ground golf course on its
premises by greening part of its car parking area. The course is also open foruse by local residents.

Our Employee’s Voluntary Activities
Participation in Environmental Beautification Activities
Each location of the Rinnai Group promotes local environmental beautification activities such as the cleaningof the company vicinity and commuting routes of the employees. Our activities are deeply rooted in each
community.

Activities around Kadoma station by
Yanagisawa Manufacturing Co., Ltd.

Activities around the Asahi
Factory of Rinnai Corporation

Activities around Kakegawa station by
Rinnai Technica Co., Ltd.

Blood Donation Program
Rinnai Korea Corporation participated in a blood donation program as a social
action program in August 2010. With the help of Incheon Blood Center of
Korean Red Cross Society, 26 employees participated in a group blood donation
program. This program will be continued every year. In August 2011, Rinnai
Korea Corporation cooperated with a blood donation initiative as a social action
program, with the help of the Incheon Blood Center of the Korean Red Cross
Society. This program will be continued each year.

81CSR Report 2012│Environmental Policy

Environmental Policy
The Rinnai Group recognizes that tackling issues concerning the global environment is one of our leading
management priorities and pursues the development of business activities that will concurrently contribute toenvironmental conservation and business growth in order to be a business entity that society hopes willcontinue its operations. Toward this end, we have set specific goals for implementing the Basic Environmental
Policy to strengthen and expand environmental protection activities.

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

Environmental Slogan“Our actions are imbued by the wisdom of many and undertaken with due consideration to thesustainability of a people- and earth-friendly environment.”

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

82

CSR Report 2012│Basic Environmental Activity

Basic Environmental Activity“7E” Strategic Initiatives
Green Activities Involving All Employees in All Business Areas
Based on our goal to achieve a sustainable operation, we have been promoting the “7E” Strategic Initiatives.
The employees with a high sense of environmental awareness create environmentally conscious products atgreen factories to provide these products to customers with our confidence. As a monozukuri-driven company,
we pay considerable care to the entire lifecycle of our products—from product development to procurement ofmaterials and components and on through production and then sales, use and disposal. Our consideration goesto each element including “procurement” of materials and components, “factories” as the base of ourmonozukuri, “sales” of our products, “services” related to the products used by our customers, "offices”,
where administration activities take place and “employee”, the foundation of our activities.

83

CSR Report 2012│Environmental Management System

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

Actual Results of Fiscal 2012
To underpin the systematic and continuous development of environment-oriented activities in line with ourstated basic environmental policy, we encourage all members of the Rinnai Group to embrace efforts toacquire and maintain ISO14001 certification. In fiscal 2012, ISO14001 certification was acquired by threesales divisions in Japan – the Kyushu Branch, Hokkaido Branch, and Niigata Branch – and one overseas
office (Rinnai Brasil Heating Technology Ltd.). To further expand our environmental protection activities, wewill continue to promote introduction of environmental management systems to our domestic sales operations
and overseas Group companies.
Locations that newly acquired ISO14001
Domestic Offices

Kyushu Branch

Hokkaido Branch

Niigata BranchOverseas Office

Rinnai Brasil Heating
Technology Ltd.

Certification acquisition status[ISO 14001: 2004] Environmental management system certification acquisition status
Location

Rinnai

Certified year/month

Research and Development Headquarters

October 1997

Production Engineering Division

October 1997

Oguchi Factory

October 1997

Seto Factory

December 2000

Environment DivisionDecember 2000

Aichi Factory

November 2003

Asahi Factory

November 2003

Quality Assurance Division

November 2003

Head Office

December 2008
84

CSR Report 2012│Environmental Management System

DomesticGroup
Company

Overseas
Group
Company

Kansai Branch

May 2010

Logistic Control Office

May 2010

Kanto Branch

May 2011

Chugoku Branch

May 2011

Components CenterMay 2011

Kyushu Branch

April 2012

Hokkaido Branch

April 2012

Niigata Branch

April 2012

Rinnai Technica Co., Ltd.

December 2003

Yanagisawa Manufacturing Co., Ltd.

June 2004

Rinnai Precision Co., Ltd.

December 2005

Japan Ceramics Co., Ltd.

January 2006

RT Engineering Co., Ltd.

March 2006

RB Controls Co., Ltd.

March 2006

Noto Tech Co., Ltd.

January 2007

Rinnai Korea Corporation

July1997

RB Korea Ltd.

October 2006

Shanghai Rinnai Co., Ltd.

December 2008

Rinnai Brasil Heating Technology Ltd.

June 2011

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

Techno Parts Co., Ltd.

Certified year/month
August 2011

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

85

CSR Report 2012│Environmental Management System

Environment Management Activities
The Environment Management Committee discusses and decides
important items including the basic environmental basic policy,
the goal and a medium to long-term plan. The committee
thoroughly informs individual divisions of decisions made by thecommittee and promotes concrete activities in line with annual
plans. We review our objectives as necessary and diligently strive
to meet our targets. 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.

Review meetingby executives

Liaison group

Environmental Audits
External Audits
The ISO 14011 Certification Division undergoes a routine audit, once a
year, by an external screening/registration body to verify that theenvironmental management system is being properly applied. The
routine audit in fiscal 2012 did not turn up any major non-conformances.

External audit

Internal Audits
Auditing team, comprising impartial internal auditors chosen from within the Corporation who have no directconnection to the division under audit, assess conformity to the established environmental management
system and review division activities. Auditors visit worksites of divisions tapped for an audit and perform
detailed inspections. Direct contact between auditors and divisions facilitates greater understanding ofdivision activities and auditor concerns. Internal audits in fiscal 2012 found no major non-conformances.
There were 10 opportunities for improvement and 60 observations. We swiftly addressed these areas to ensurethat they would not develop into problems later on.

Internal audit

Environmental Training
Raising each employee’s environmental awareness is important for promoting environmental activities. To
provide as many employees as possible with opportunities to raise their environmental awareness, we planand offer training programs for developing and fostering human resources who will actually engage inenvironmental activities, as well as new employee training and rank-specific training programs.

86

CSR Report 2012│Environmental Management System

Internal Auditor Training
Internal auditors play a significant role over and above theirefforts to continuously improve the environmental
management system. The execution of audit requires highly
specialized knowledge and communication skill. To upgrade
the skills of internal auditors, we conduct regular training by
in-house instructors on such topics as laws and ordinances,internal regulations, internal audit observations andimprovement measures, and environment- oriented trends. In
fiscal 2012, the courses drew 92 participants.

Internal auditor training

General Environmental Training
We regularly provide general environmental training
to people working for our company cafeteria andbusiness operators who frequently visit our offices,
so that they will engage in the same environmental
activities as our employees do.
DVD on the environmentshown during a training
session (Production
Engineering Division)

Workers in a company
cafeteria receive
environmental training(Asahi Factory)

Eco-Leader Course
In every division, we offer an eco-leader course aimed at developing the skills of environment managers who
independently and energetically promote environmental activities.

Basic course
The one-day course is given by in-house and guest
instructors and covers a wide range of points, fromenvironmental management basics to concrete
examples. In fiscal 2012, 17 people attended the course.

A game on environmental
management strategies being
played with instructions froman external instructor

Intermediate-level course
We held an intermediate-level course for fostering
Eco-Leaders. Aimed at allowing participants tomaster practical energy-saving skills andupgrading their environmental efforts, the course
included a classroom lecture and on-the-job
training for applying the knowledge obtained in
the lecture toward practical operations. The
course was attended by 13 people fromproduction divisions.

Lecture being given by an
external instructor

On-the-job training

Environmental Training for Trainees from Overseas Group Companies
A range of materials are used for training on topics such as
approaches to the environment and basics of environmentallyfriendly monozukuri. Trainees are also given onsite training on
methods of production with environmentally friendly facilities
and methods of improvement based on case examples. We
strive to improve the environmental awareness level of theentire Rinnai Group.

Trainees attend a
lecture on ourenvironmental

Trainees receive
explanations on
our water
87

CSR Report 2012│Environmental Management System

initiatives

recycling system

Enhancing Global Environment Management: Creating an environmental
management system with our business partners
Reinforcement of Chemical Management
All over the world, governments are implementing tougher restrictions on chemicals, and manufacturers are
increasingly required to monitor their use of chemicals used during production processes and the chemical
content in finished products. Chemical substances are known to present certain risks, depending on thecorrelation between the amount of exposure and the harm they could inflict. It is important to identify suchinformation.
In Europe, especially, manufacturers must adhere to strict regulations, such as the Reduction ofHazardous Substances (RoHS) Directive and Registration, Evaluation, Authorization and Restriction ofChemicals (REACH). As a collection of companies, the Rinnai Group must assume a unified approach inmanaging information on the chemicals contained in its products. We must properly address laws andregulations at home and abroad and respond accurately to requests from customers on the chemicals found in
our products. Chemical substances are a critical key component of quality control. They are unseen yet requiremonitoring. To ensure that use of chemical substances that could harm the human body or the environment isminimized in the entire life cycle of products, members of the Chemical Management Project promote
activities to establish and further strengthen the platform for chemical management.
* RoHS Directive: "DIRECTIVE 2002/95/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27
January 2003 on the restriction of the use of certain hazardous substances in electrical and electronic equipment" Since
July 1, 2006, the EU market has been restricting the use of lead, mercury, cadmium, hexavalent chromium,polybrominated biphenyls (PBB) and Polybrominated diphenyl ethers (PBDE) in electrical and electronic equipment.
* The Registration, Evaluation, Authorization and Restriction of Chemicals (REACH): It is a new regulation on chemical
substances in EU that mandates registration, evaluation and authorization of chemical substances manufactured in or
imported to EU.

Rinnai's Procurement Management Standards

E-Procurement Standards

Policy on Chemical
Substance Management

Support to Establish Environment Management System
To promote environmentally conscious monozukuri working with our business partners, we encourage ourbusiness partners to obtain certifications for environment management system including ISO14001, Eco
Action 21 and KES.

88

CSR Report 2012│Environmental Action Plan and Results

Environmental Action Plan and Results
Fiscal 2012 (Year ended March 31, 2012) Environmental Action Plan and Results
Rinnai lists herewith the targets for key activities-environment management and the 7Es (E-Products,
E-Procurement, E-Factory, E-Marketing, E-Service, E-Office and E-Mind)-and the results achieved, as well as
an assessment of progress toward respective goals.
*Progress rating○: Achieved△: Not achieved

×: Not implemented

Activity

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress

Environmental
management
system• ISO 14001 certification for one branch
and two sales offices• ISO 14001 certification for overseas
group offices• ISO 14001 certification obtained forthree divisions - Kyushu Branch,
Hokkaido Branch and Niigata Branch.
• ISO 14001 certification obtained for
Rinnai Brasil Heating Technology Ltd..

○Fiscal 2012 Target

Fiscal 2012 Achievement

Progress• Develop high-efficiency appliances
Develop condensing heat source for thedomestic and overseas markets
Develop gas/solar hybrid hot water
systems• Reduce standby power consumption
Eco-Jozu combi boiler,Eco-Jozu hot waterand heating source
Fan-forced heaters for the domestic market• Develop high-efficiency appliances
Eco-Jozu hot water units, Eco-Jozu
combi-boiler, Eco-Jozu heat source for
hot water and heating system• Reduce standby power consumption
Eco-Jozu combi-boiler, Eco-Jozu heatsource for hot water and heating
system, fan-forced heaters○

Prevent air
pollution• Develop low-NOx Eco-Jozu hot waterunits• Develop low-NOx Eco-Jozu hot
water units
Eco-Jozu hot water units, Eco-Jozu
combi-boiler, Eco-Jozu heat source for
hot water and heating system○

Reduce resource
consumption,
promoterecycling• Conduct product assessments• Develop lightweight Eco-Jozu heatsourceDevelop lightweight Eco-Jozu hot water
units for overseas• Conduct product assessments
Develop lightweight Eco-Jozu heatsource• Develop lightweight Eco-Jozu hot
water units for overseas○

E-Products
Activity

Prevent global
warming

E-Procurement
ActivityGreenprocurement

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress• Green product development(Promote use of materials conforming to
E-Procurement Standard)• Strengthen green procurement
management (chemical management)• Procure and use materials based on
E-Procurement Standards• Establish Chemical SubstanceManagement Office under
Environment Division to strengthenchemical substance management
activities○

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress

E-Factory
Activity
Prevent global
warming• Reduce CO2 emission factor1 by morethan 2% compared to fiscal 2010 level• Cut 3.7% CO2 emission factor
comparing to fiscal 2010
(Total CO2 emissions 1.4% decrease
from the previous year)△

89

CSR Report 2012│Environmental Action Plan and Results

Reduce waste• Reduce waste emission factor*2 by 1% ormore compared to fiscal 2010 level• Sustain/improve zero emission status• Reduce total waste output by 1% or morecompared to fiscal 2011 level• Cut waste emission factor by 3.7%
compared to fiscal 2010
• Zero emissions
Achieved an average recycling rate
among all business facilities at above
99.5%

○

Reducehazardous
chemical
substances• Reduce volume of hazardous chemical
substances as listed on the Pollutant
Release and Transfer Register by 51% or
more• Cut volume of hazardous chemical
substances by 52.8% compared tofiscal 2001○

*1: CO2 emission factor = total CO2 emissions/net sales (100 million yen)
*2: Waste emission factor = total waste emissions/net sales (100 million yen)

E-Marketing, E-Service
Activity

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress

Expand sales ofhigh-efficiency
products• Cut CO2 emissions from high-efficiency
hot water units by 37,000 t-CO2/year• Cut CO2 emissions fromhigh-efficiency hot water units by
36,000 t-CO2/year△

Provideinformation on
environmentallyconscious
products• Introduce and promote awareness ofenvironmentally conscious products at
trade shows• Create and distribute catalogs, flyers andpamphlets• Introduce and promote awareness ofenvironmentally conscious products at
trade shows• Create and distribute catalogs, flyers
and pamphlets○

Activity

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress

Green purchasing• Set green purchasing rate above 90%
for items including those newly added• Green purchasing rate: Achieved 90%
or above (in monetary terms)(including additional items)○

Fiscal 2012 Target

Fiscal 2012 Achievement

Progress

Environmental
information
disclosure• Issue Social & Environmental Reportfor fiscal 2012
• Upload environment-oriented
information on the Rinnai website• Issue Social & Environmental Reportfor fiscal 2012 (August)• Upload environment-oriented
information to the Rinnai website(August)○Environmental
education andawareness• Promote various educational activities
in line with fiscal 2012 plans for the
Corporation and all of its places ofbusiness• Execute new employee training,internal auditor training and
Eco-Leader training○

E-Office

E-Mind, Other
Activity90

CSR Report 2012│Environmental Action Plan and Results

Fiscal 2013 (Year ending March 31, 2013) Environmental Action Plan
We always assume a new perspective in working toward new targets.
In fiscal 2013, the first year to launch the new medium-to long-term plan, “Jump-Up 2014”, we will promote
environmental activities designed to take us further ahead on the environmental road. We aim to expand ourenvironmental management system and enhance our environmental performance.
Activity

Basic Action Plan

Fiscal 2013 Target

Environmental
management
system• Build a groupwide environmental management
system and improve environmental performancethrough cooperative activities.

• ISO 14001 certification for two divisionsone marketing and sales office and one
branches

Activity

Basic Action Plan

Fiscal 2013 Target

Prevent global
warming• Push Eco-Jozu (condensing technology) as thede facto standard, develop high-efficiency
appliances, expand to double-hybrid hot
water/heating systems, develop remote controls
with energy-saving display function andhigh-efficiency appliances, emphasize measures
to reduce standby and in-use power
consumption, and continually develop
energy-saving, industry-leading products• Develop high-efficiency appliances･Eco-Jozu hot water unit, Eco-Jozu hot
water and heating system･Double hybrid hot water/heating system• Reduce standby power consumption• Eco-Jozu hot water unit, heat source for
Eco-Jozu hot water and heating system,
fan-forced heaters for the domestic market

Prevent air
pollution• Develop low-NOx products for domestic andoverseas market• Develop low-NOx condensing hot water
units

Reduceresource
consumption,
promoterecycling• Save resources by making products andcomponents smaller and more lightweight, andstrive to develop products conducive to resource
recycling.

• Conduct product assessments.
･Conducted for all new products• Develop lightweight Eco-Jozu heat source.
Eco-Jozu combi-boiler, Eco-Jozu hot waterand heat source

Basic Action Plan

Fiscal 2013 Target

E-Products

E-Procurement
ActivityGreenprocurement• Work with suppliers and Group companies andpromote procurement of parts with anenvironmental perspective highlighting
resource-saving, energy saving and recycling
potential.

• Green product development.
(Promote use of materials conforming to
E-Procurement Standard)• Enhance green procurement management(chemical management).

E-Factory
Activity

Basic Action Plan

Fiscal 2013 Target

Prevent global
warming• Reduce CO2 emission factor*1 by 5% or morecompared to fiscal 2009 level (by fiscal 2014)• Reduce CO2 emission factor by 3% or morecompared to fiscal 2009 level

Reduce waste• Sustain zero emission status (Recycling rate:
More than 99.5%)• Reduce the waste emission factor*2 by 4% ormore compared to fiscal 2010 level (by fiscal
2014)• Sustain/improve zero emission status• Reduce total waste output by 2% or morecompared to fiscal 2011 level

Reducehazardous
chemical
substances• Reduce PRTR substance handling amounts perunit*3 by 4% or more compared to fiscal 2010
level (by fiscal 2014)• Reduce PRTR substance handling amounts
per unit production by 2% or more comparedto fiscal 2010 level*1: CO2 emission factor = total CO2 emissions/net sales (100 million yen)
*2: Waste emission factor = total waste emissions/net sales (100 million yen)
*3: PRTR substance handling amounts per unit = amounts of PRTR substances handled/net sales (100 million yen)91

CSR Report 2012│Environmental Action Plan and Results
E-Marketing, E-Service
Activity

Basic Action Plan

Fiscal 2013 Target

Expand sales ofhigh-efficiency
products• Expand sales of high-efficiency products
Hot-water units (Eco-Jozu gas/solar hybrid
hot-water system)• Cut CO2 emissions from hot-water units by
49,000 t-CO2/year.

Provideinformation on
Environmentallyconscious
products• Provide information on environmentallyconscious products at trade shows and in printed
materials, such as catalogs, flyers andpamphlets.

• Introduce and promote awareness ofenvironmentally conscious products at tradeshows.
• Create and distribute catalogs, flyers andpamphlets.

Basic Action Plan

Fiscal 2013 Target• Increase green purchasing rate to be at or above
91% for items including those newly added fromfiscal 2012, by fiscal 2015

• Set green purchasing rate at or above 95%
for items including those newly added

Basic Action Plan

Fiscal 2013 Target

E-Office
ActivityGreenpurchasing
E-Mind, Other
Activity
Environmental
information
disclosure• Utilize Social & Environmental Report and
Rinnai website to spotlight environmental
activities and present environment-oriented
information.

• Issue Social & Environmental Report for
fiscal 2013.
• Upload environment-oriented information to
the Rinnai website.

Environmental
education andawareness• Enthusiastically promote environmental
education and awareness activities to employees
and continuously enhance environmental
consciousness.

• Promote various educational activities in linewith fiscal 2013 plans for the Corporation
and all its places of business.

92

CSR Report 2012│Environmental Accounting

Environmental Accounting
To realize continuous growth while promoting environmental management, we must accurately quantify thecost of environmental protection and the results achieved. We must also ensure that our approaches are
effective through appropriate allocation of management resources. We utilize guidelines set by Japan's
Ministry of the Environment as the tools in executing these tasks.
Scope of accounting: Rinnai Corporation
Period of accounting: April 1, 2011 to March 31, 2012

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

Key Activities

Costs

Pollution prevention

Mainly efforts to prevent air and water pollution

2,692

Environmental
protection

Mainly efforts to save energy

18,830Resource recycling

Recycling as well as treatment and disposal of industrial
waste

5,103

Upstream/downstream

Collection/recycling and volume/weight reduction ofmaterials such as product packaging

1,256Management activities

Mainly monitoring and surveillance of environmental
impact7,474

Research and development

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

49,579Community efforts

Mainly community activities andbeautification/greening at places of business andsurrounding areas

In the scope ofoperations

241

Total

85,175

Item

Content

On-site results
Environmental
Protection
EffectUpstream/downstream
results

Environmental
impactreduction
through use of
products(Unit: Ten thousand yen)
Environmental Impact
Reduction

Saving energy reduced
greenhouse gases

367 t CO2/year

Reduction of NOx
with products with
low NOx emissions

149 t/year

High-efficiency
products reduced CO2

71,443 t CO2/year(Unit: Ten thousand yen)

Economic Effects
Accompanying
Environmental Protection
Measures

Item
Costs cut through energy-savings and waste reduction

Economic Effect
1,420

93

CSR Report 2012│Environmental Accounting

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

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

Economic Effect• The economic effects achieved through energy-savings and waste reduction are not increases or decreases inoverall costs but rather an effective amount regarded for its economic benefit through the associatedactivities.
• Deemed effects, such as avoiding risks and enhanced product sales, fall outside the scope of economic
effects because the standard for evaluation is too vague.
• External economic effects, derived mainly through products that reduce environmental impact, also falloutside the scope of economic effects because the results are too difficult to pinpoint.

94

CSR Report 2012│Developing Environmentally Conscious Products

Developing Environmentally Conscious Products
Environmentally conscious design addresses such issues as measures to prevent global warming, to facilitate
resource recycling, and to reduce the use of substances that have a negative impact on the environment. Basedon this perspective and guided by the keywords safety, peace of mind, comfort and convenience, we pursue
the development and design of products that contribute to comfortable lifestyles for our customers.

Efforts to Save Energy and Resources
Optimum Energy Mix of Electricity and Gas
Committed to achieving major improvements in household energy efficiency, we have developednext-generation energy-saving products by combining high-efficiency gas hot-water units and Eco Jozu
technology, as well as heat pump technology, which utilizes air as the heat source.

New Hybrid Hot-Water/Heating System

Heat source and tank (in single unit) (100 liters)
Heat pump unit RHP-R220
Tank (single unit) RTU-R1000

Energy Savings
Attained a primary energy efficiency ratio (*1) of 125% (*2)(*1) Primary energy efficiency: "Primary energy" is theenergy which can be obtained without changing its form of
the way it exists in nature such as coal, oil and natural gas.
“Primary energy efficiency” is an efficiency ratio thathas been converted from the amount of final energy
consumption to its equivalent in the amount ofprimary energy needed to produce the energy.
Higher primary energy efficiency means a lower
energy conversion loss rate, better utilization ofenergy resource and effective energy-saving.
(*2) Compiled by Rinnai based on decision criteria of
residential business owners (IVb region) of the Institute for
Building Environment and Energy Conservation (IBEC).
*Standards of Judgment for Residential Construction
Clients: These energy-saving standards for housing for sales
were newly established for residential construction clients
who design and build houses to reinforce energy-saving
measures.
95

CSR Report 2012│Developing Environmentally Conscious Products

CO2 Emissions Reduction

Annual hot water supply load

4.03Gcal (Rinnai calculation)

CO2 emission coefficientLP gas 2.23kg-CO2/m3(Act on Promotion of Global Warming Countermeasures, Article 3)

Electricity(All power sources)

0.43kg- CO2 /kWh(Ministry of Economy, Trade and Industry: Average emission coefficient
for all power sources from 2004 to 2008 based on a medium-to long-term
evaluation.)

Configuration of Hybrid Hot-Water Unit
(1) When a small amount of hot water is
used:
Operate a heat pump(2) When a large amount of water is
used:
Operate a heat pump and a high-efficiency
hot-water unit, ECO-JOZU.

(3) When a hot-water heater (for floor
heating, bathroom heating, etc.) is used:
Operate a high-efficiency hot-water unit,
ECO-JOZU.

96

CSR Report 2012│Developing Environmentally Conscious Products

Aiming to Realize a Low-Carbon Society with Earth-Friendly Hot-Water Units

Switch to Eco Jozu by 2013 Campaign
Aiming to convert all gas hot-water units to Eco Jozu products by 2013

Rinnai supports the "Switch to Eco Jozu by 2013 Campaign" declared by the Japan Industrial Association of
Gas and Kerosene Appliances and the Japan Gas Energy Promotion Association. We are promoting our
product development to convert all gas hot-water units to high-efficiency hot-water units, "Eco Jozu", which
are energy-saving and environment-friendl, by March 2013. To cope with various installation requirements andneeds—such as for detached homes, multiple dwelling buildings, and commercial premises—since 2009 Rinnai hasdeveloped its Eco Jozu E-series of products. These include the RVD-RUFH range of hot-water, bath, and heating
systems; the RUF range of hot-water and bath systems; and the RUX dedicated hot-water system.

Eco Jozu High-Efficiency Hot-Water Units: Main Functions and Models
Main Eco Jozu Series

Functions
Hot water supply

Bath-filling

Hot-water heaterGas hot-water, bath, and heating systems
RVD-E series
RUFH-E series

Hot-water and bath systems
RUF-E series

Gas hot-water systems
RUX-E series

Eco Jozu Configuration(*1) Eco Jozu: High-efficiency gas hot-water systems that enhance heat efficiency by collecting and reusing
heat that would normally be discharged into the atmosphere.
97

CSR Report 2012│Developing Environmentally Conscious Products

RVD-E Series (Gas Hot-Water, Bath, And Heating Systems)
Energy conservation
Hot-water supply 95%

Heat efficiency

Bath-filling

89%

RVD-E2401AW2-1

Resource conservation
Lightweight

45kg  34kg (11kg less than existing Rinnai model)

Compact

Height: 75cm  60cm (15cm less than existing Rinnai model)

Comment from Product Designer
We are currently developing environmentally friendly products thatconserve energy and are compact and lightweight, in preparation for
March 2013, when the Eco Jozu series of high-efficiency hot-water
systems will become the de facto standard. To promote the proliferationof Eco Jozu, with its superior environmental performance, we focusedon the important issue of enhancing ease of installation by making theunits compact and light in weight. To this end, we reassessed every
single specification and harnessed our knowledge about component
layouts, including attachability. At present, we are doing our utmost toaddress the diversity of installation scenarios.
Takeshi Kawashima, Project Manager, Hot Water Unit Development
Product Development Division, Research & Development Headquarters

RUF-E Series (Gas Hot-Water and Bath Heating Systems)
Energy conservation
Hot-water supply 95%
Heat efficiency
Bath-filling
92% (first in industry)RUF-E2401AFF

RUX-E Series (Gas Hot-Water Systems)
Energy conservation
Heat efficiency Hot-water supply 90%

Resource conservation
Lightweight
28.0kg  19.5kg (8.5kg less than existing Rinnai model)
Compact

Height: 60cm  53cm (7cm less than existing Rinnai model)

RUX-E2400W

98

CSR Report 2012│Developing Environmentally Conscious Products

Diverse Installation Scenarios

RUF-TE Series(Gas Hot-Water and Bath Heating Systems for Existing Multiple-Dwelling Units PS)
Hot water and bath heating systems for PS installation in existing
multiple-dwelling units where conversion to Eco Jozu has not progressed
due to difficulty in accessing drain-water.
Energy conservation
Lightweight

Hot-water supply 95%
Bath-filling
92% (first in industry)Power consumption

No. 24: 105W (convention models: 150/170W)* PS (pipe shaft): Space provided in multiple-dwelling buildings to accommodate
pipes/wires (such as water supply/sewage pipes and electric wires) acrossmultiple stories.
* Drain water: Water that remains after heat contained in steam exhaust iscollected using secondary heat exchanger (the steam, having lost its heat,condenses to become water)

RUF-TE24005AW
RUF-TE24005AW

RUXC-E3200W Series (Commercial-Use Condensing Hot-Water Systems)
A single 3200W unit can be installed in small-scale premises, such as hairand beauty salons and restaurants. Or two units can be simply joined by acable to provide 6400W. For facilities requiring large volumes of hot water,such as sports gyms and elderly care centers, up to six units can be
combined to provide a maximum of 19200W.
Energy conservation
Heat efficiency

Hot-water supply 95%

Environmental performance
Fitted with low-NOx burner system (maximum 60ppm NOx density)

RUXC-E3200W

Series Linked System

99

CSR Report 2012│Developing Environmentally Conscious Products

Energy-Saving Operation Support Function
Remote control 200V series hot-water and heating terminal･Universal design ensuring ease of use (kitchen remote control, bathroom remote control)･Visualization of energy consumption (kitchen remote control)*Measurement of electricity usage requires the RECU-2000 unit, sold separately.

Energy conservation
Heat efficiency

Approx. 75% reduction (vs existing Rinnai models)* Due to use of organic EL in the bathroom remote control display panel, back-lighting is not necessary.

Terrestrial digital HD TV for bathrooms (12V)

Energy conservation
12V power consumption

Approx. 42% reduction (vs existing Rinnai models)100

CSR Report 2012│Developing Environmentally Conscious Products

Safety and Peace of Mind, Comfort and Convenience
Kitchen Appliances
Verie: built-in stove with non-water, double-sided griller

Heat resistance
The space between the bottom of the pan and the glass top is expanded, which helps disperse and release heatand control the surface temperature of the glass top. This prevents spills and boil-overs from scorching thesurface.

Heat sink
The concave and convex on the back diffuse heat and control the temperature of the burner ring.

Structure of back of burner ring101

CSR Report 2012│Developing Environmentally Conscious Products

Smoke elimination function
The dedicated burner helps eliminate smoke and odors; typical nuisances when cooking fish.
Smoke is reduced by 81% (*1); odors are reduced by 99% or more (*2) (compared with our conventional
product)(*1) Rinnai determined the value from the smoke emitted when four sanma (saury pike) were grilled in a double-sided,
high-heat mode for 13 minutes.
(*2) A collaborative study by Rinnai and Daido University determined the value from the odor emitted when two dried
horse mackerel were grilled in a double-sided, high-heat mode for seven minutes.

Far-infrared ceramic burnerWith far-infrared and near-infrared effects, ingredients can be steadily grilled from within.

*Topics
In June 2011, our smoke-elimination gas far-infrared griller won the 2011 Excellent Product and Technology
Award from the Japan Far Infrared Rays Association.
Improved maintainability
The anti-splatter cover to prevent oil from splattering over the inside of the griller is made larger and easier toremove.

102

CSR Report 2012│Developing Environmentally Conscious Products

The flat-shaped grid has no legs and is easier to wash in the sink and scratch-resistant. The fluorine-processed
grid is also easier to remove stains from.

Built-in gas stoves for ASEAN regions

Energy saving
Heat efficiency

44%  48% (Compared with natural gas)

Resource saving
Stove burner

Weight trimmed by approx. 250 grams (Compared with our conventional product)*Mold burner remodeled into a stainless burner

Rinnai Korea Corporation’s gas built-in stove

Energy saving
Heat efficiency

46%  52% (Compared with LP gas)

Resource saving
Stove burner
Safety and security
Top plate temperature

Weight trimmed by approx. 210 grams. (Compared with ourconventional product) *Mold burner remodeled into a stainless burner

190°C  150°C

103

CSR Report 2012│Developing Environmentally Conscious Products

Built-in dishwasher/dryer

Plasma cluster operation
The ions in plasma clusters powerfully control
grease and odor and keep the dishwasher clean
after use.

*Plasmacluster technology: Plasma discharge creates high-concentration plasma cluster ions and eliminates fungi,
floating bacteria and other contaminants.
*Plasmacluster mark and Plasmacluster is a registered trademark of Sharp Corporation.

Double-sterile steam cleaning
The dedicated heater generates a high amount of high-temperature steam, twice – before washing and before
the heat rinse. Fine steam particles permeate the grease that can then be removed after soaking. Spraying
sterile steam also boosts the sterilization effects.
Sterilization

After cleaning, the number of remaining bacteria drops to nearly 1/100.
(Compared with our conventional product)*Test period: Japan Food Research Laboratories*Method: agar plate incubation*This model has RKW-402LP-ST only.

No. 10100614001-02 December 8, 2010

104

CSR Report 2012│Developing Environmentally Conscious Products

Baking soda washing mode
The built-in dishwasher can be cleaned with baking soda, a natural substance used in cooking and otherapplications. You can feel safe using it to wash baby bottles and children’s dishes.
*Baking soda is an inorganic substance present in thenatural world called sodium hydrogen carbonate(NaHCO3) and also exists in the ocean and in organisms.
It is harmonious with the Earth and people.

Purification

Sodium bicarbonate water is a weak alkali component and has purifying effects
for removing acidic dirt such as grease and fingerprints.

Deodorization

The neutralizing effects of baking soda facilitate absorption and elimination ofodors.

Environmental impact
of Baking soda

Effluents resulting from baking soda washing are decomposed into
environmentally non-harmful components. They can effectively control thedeterioration of water quality and the propagation of microorganisms.

*Available in two different modes: baking soda and dedicated detergent

Air-Conditioning System
Gas fan heaters
Plasmacluster technology
This technology controls the effects of allergens
generated from the excrement and dead bodies ofindoor ticks. It also decomposes and removes
floating fungi and controls adhesion of cigaretteodor.
Plasmacluster mark and Plasmacluster isa registered trademark of Sharp
Corporation.
Eco-operation function
When the room temperature reaches a preset value, the value is automatically lowered by one degree twice ina 30-minute interval (cumulative combustion time) and the combustion is stopped to prevent excessing
heating. This function improves heating efficiency.

*Since the heater operates in a low-noise ignition mode, there is no annoying ON/OFF noise.
105

CSR Report 2012│Developing Environmentally Conscious Products

Convenient functions
The light indicates the status of the heater’s operation.

The swing function allows the heater to be manually rotated 20 degrees from side to side.

The operation panel exemplifies our consideration of usability.

Commercial-Use Units
Commercial-use kitchen unit
The commercial-use unit is safe, clean and comfortable to use.

106

CSR Report 2012│Developing Environmentally Conscious ProductsSpace-saving
The installation area is reduced by nearly 20%. (Compared with our conventional product)
The efficient utilization of space below the gas range and walls and the ergonomic arrangement of cooking
appliances help reduce the installation area.

Improving cooking efficiency
Layout and options can be chosen in accordance with the store’s possible options and type of business. Thisboosts work efficiency in terms of the arrangement of machinery and storage space.

Moving distance while cooking

Nearly 30% decrease (when cooking 10 items for lunch)

Effective space for cooking

Nearly six-fold increase (0.18 m2 → 1.08 m2)*The values for moving distance and effective space are based on measurements of our test kitchen.

Cool and comfortable: Suzuchu
With an air heat-insulation structure, Suzuchu or suzushiichubo (cool kitchen) cools the kitchen while
controlling thermal radiation from the appliance.

107

CSR Report 2012│Developing Environmentally Conscious Products

Packing
We promote packages which only use corrugated board to reduce the use of styrene foam and waste-related
issues. In addition, we are also expanding our use of returnable packing to reuse packing materials and reduce
the amount of packing used.

Containers and Packaging Materials of Hot Water Units
We reviewed container and packaging materials used for hot water units and consequently reduced the amountof packaging materials we use and improved the efficiency of transportation and storage.

Styrene Foam Use Trend (Volume)

Recycling
Recycling of Used Products
Recyclable materials such as iron and copper constitute roughly 80% toupward of 90% (by weight) of materials used for gas appliances. Usedgas appliances that do not require installation work are collected andprocessed via local governments’ routes. Those that do require
installation work are collected and processed via companies that
perform such work.

Plant where recycling
demonstration tests are conducted
108

CSR Report 2012│Developing Environmentally Conscious Products

The Environmental and Recycling Committee of the Japan
Industrial Association of Gas and Kerosene Appliances, of which
Rinnai is a member, regularly conducts a questionnaire for finding how
used gas and kerosene appliances are processed. Recycling
demonstration tests at recycling plants and confirmations andinformation exchanges concerning processing are also undertaken asnecessary. The survey of Rinnai in fiscal 2012 confirmed that used gas
and kerosene appliances are processed appropriately and a highrecycling rate is maintained. We also make use of the results of thesurvey for designing and improving our products.

Used appliances being thrown into
a crusher

Recycle Household Electrical Appliances
Japan's Home Appliance Recycling Law went into
effect April 2001 with the goals to reduce the amountof waste going to landfills and incinerators and topromote more effective use of resources. Since then,appliances that consumers no longer want to use havebeen recycled into new products. Rinnai now has two
products-a unit-style air-conditioner and a clothes
dryer-that can be redirected from the waste pile.

Unit-style air-conditioner

Clothes dryer

Rinnai Products Subject to the Home Appliance Recycling Law and Guideline Values
Product

Recycling Rate Statutory Guideline Value

Unit-style air-conditioner

70%

Clothes dryer

65%

Used Products Recycled into New Products at Rinnai
Product

Unit-style
air-conditioner

Clothes dryer

Number of units brought to designated collection points

4,302 units

1,050 units

Number of units processed for recycling

4,283 units

1,028 units

Weight of units processed for recycling

175.1 tons

34.9 tons

Weight of recycled materials

161.6 tons

31.8 tons

92%

91%

Recycling rate

* Rinnai's bathroom and kitchen televisions are incorporated into the building architecture. Consequently, theyfall outside the liquid-crystal television receiver category added to the national recycling law in April 2009.

Recycle Containers and Packaging
The Containers and Packaging Recycling Law obligates manufacturers and user businesses to recycle productcontainers and packaging discarded by households in an effort to make more effective use of resources. In
accordance with the law, Rinnai has contracted a designated corporation that recycles containers andpackaging on the Corporation's behalf.

109

CSR Report 2012│Environment-Conscious Monozukuri

Environmentally Conscious Monozukuri
Since its establishment, Rinnai has been accumulating its outstanding Monozukuri technology and work
methodology that shall be followed. By sharing and passing this culture over generations, we have beenrealizing a wide range of technology innovation that fundamentally supports our vigorous
environment-friendly business activities.

Environmental Footprint in Monozukuri

110

CSR Report 2012│Environment-Conscious Monozukuri

Pursuit of Monozukuri Reforms
Since its establishment, Rinnai has been accumulating its outstanding
Monozukuri technology and work methodology that shall be followed. By
sharing and passing this culture over generations, we have been realizing awide range of technology innovation that fundamentally supports ourvigorous environment-friendly business activities.

Production Technology Center

Reducing Environmental Burden by Streamlining Monozukuri
To ensure optimal processing methods and logistics for monozukuri, we have consolidated our monozukuri
facilities that had been dispersed across different locations, and used streamlining to make processes better
integrated with each other. For processing, we have promoted in-house processing to improve ourtechnologies and quality. For logistics, we have reduced waste such as that in transportation loss and quality
problems. With these streamlining efforts, we have been striving to reduce the environmental burden.

Example of improvement in the processing of hot water units for the United States
Rinnai Technica Co., Ltd. (Kagekawa, Shizuoka Prefecture), which
produces hot water units for the United States, does not have large
processing facilities. Therefore, side panels for the main bodies of hot
water units were processed at and supplied by the Seto Factory (Seto,
Ehime Prefecture). This led to extra transportation (transportation loss).
Because the side panels were supplied as semi-processed goods due totransportation problems related to quality and load efficiency, thecompany also faced the issue of extra inspection (quality loss).
Forced-draft-balanced
flue (FF) internal unit

WD:
External unit

To secure quality and establish an efficient manufacturing method, Rinnai Technica made a servo press
designed for maximum energy conservation, thereby reducing the environmental burden of the facilities
themselves. The company also established an integrated production system that includes pressing, plating, andassembly (streamlining), thereby reducing waste associated with transportation and acceptance inspections ofcomponents.
Major environmental features of the new pressing machine･Shorter process enabled by use of a composite mold･Reduces environmental burden by differentiating the timing ofprocessing among processes･The unit collects compressed air used for processing in an air tank andreuses it, instead of discharging it into the atmosphere.
New pressing machine111

CSR Report 2012│Environment-Conscious Monozukuri

Promotion of Facility Maintenance and Improvement Activities (TPM
Activities) by All Staff Members

Environmental Effects
 Environmental effects of the new pressing
machine (compared with previous machine)
Energy-saving effect: approx. 20% reduction
in total amount of energy consumption
Space-saving effect: approx. 20% reductionin area occupied by equipment

 Energy-saving effectenabled by reduction oftransportation loss
CO2 emission reduction
result: approx. 60
t-CO2/year

Pressed materials being
sent to the next process

Comment from a Facility Designer
Devising measures for preventing wastage of energy is fundamental for
promoting environmentally friendly facility design. We reduced waste by
expanding our vision for the design, reflecting it in the monozukuri flow ofthe entire Group in consideration of quality loss and transportation loss;
rather than simply reflecting the vision as is in the facilities. We want toremain conscious of the flow of goods and continue striving to improve
work efficiency and reduce environmental burden in order to help reduce
loss within the entire Group.
Yusuke Mizuguchi
Manager, Facility and Machine Section, Machine Office
Production Engineering Division, Production Headquarters
For the burning process in enameling, it is important to maintain a balance between heat efficiency andcombustion state. For this reason, each day we take a range of improvement measures for promoting
maintenance of facilities and effective use of energy. We regularly check and analyze the condition of theinterior of the burning furnace to maintain the stability of burner flames and make effective use of exhaust
heat, thereby significantly reducing environmental burden. To facilitate the participation of all staff members
in facility maintenance and improvement activities, we have created a text providing key points of advice onthemes such as “method of working” and “proceeding with process improvement,” and made them accessible
to staff members.
CO2 emission reduction result

approx. 130 t-CO2/year

Waste reduction result

approx. 450 kg/year112

CSR Report 2012│Environment-Conscious Monozukuri

Topic
For the improvement we made for our burning furnace for the enameling process, we received the Shigen
Junkan-gata Monozukuri Kenkyu-kai [study group for resource recycling monozukuri] President Award at the
Shigen Junkan-gata [resource-recycling] Monozukuri Symposium IMS 2011*1 hosted by the city of Nagoya,
Nagoya Chamber of Commerce and Industry, and other organizations.
*1: The Shigen Junkan-gata Monozukuri Symposium is a project that introduces initiatives taken in monozukuri forrecycling resources and energy and curbing global warming, and grants awards to outstanding initiatives.

Inside a burning furnace
heated to red heat

Onsite training

Award certificate(Shigen Junkan-gata Monozukuri
Kenkyu-kai President Award)

Efforts to Prevent Global Warming
Observance of Energy-Saving Laws
In April 2010, the revised Act on the Rational Use of Energy, which mandates that each company manage andreport its use of energy, came into full force. Since Rinnai was designated as a “specified business operator”
under the law, we have established an energy management system headed by the executive officer in charge ofthe environment as the energy management control officer. Under this system, we have set energy
management policies and targets and been striving to improve the efficiency of energy usage.

Challenge 25 Campaign
The Rinnai Group was one of the first members to join the Challenge 25
Campaign, a national program by the Ministry of the Environment to prevent
global warming. Under the program we actively promote measures forpreventing global warming.

113

CSR Report 2012│Environment-Conscious Monozukuri

Promotion of Energy-Saving Measures at Domestic Factories and Offices
In response to the power shortage following the Great East Japan Earthquake that struck in March 2011, theRinnai Group has been promoting energy-saving measures, giving special priority to reducing power
consumption, in our efforts to comprehensively eliminate waste.

Development of the Electricity Forecast System (Seto Factory)
Visualization of use of main energies
Reduction of power consumption

5,800 kWh/year

CO2 emission reduction result

approx. 2 t-CO2/year

Electricity Forecast System

Reduction of compressor discharge pressure (Aichi Factory)
Reduction of power consumption

7,000 kWh/year

CO2 emission reduction result

approx. 3 t-CO2/year
Reviews of establishedstandards

Installation of a motion sensor (Head Office showroom)
The sensor reduces power consumption by ensuring that lights are shut off
while there is no one in the room.
Reduction of power consumption

8,635 kWh/year

CO2 emission reduction result

approx. 3 t-CO2/year
Head Office showroom

Use of natural energy (roof of the Technology Development Center)
A solar power generator is mounted on the roof, and the generated power isused for lights and other equipment in the Technology Development Center.
Generated power

5,569 kWh

CO2 emission reduction result

approx. 2 t-CO2*Applicable period: November 2011 - March 2012

Solar generator panels

114

CSR Report 2012│Environment-Conscious Monozukuri

Green Curtain
We produce green curtains out of morning glories and goya (bitter gourd) over portions of exterior wall
surfaces at factories and offices.

Yanagisawa Manufacturing Co., Ltd.

Techno Parts Co., Ltd.

Japan Ceramics Co., Ltd.

Improvement Month (Oguchi Factory)
The Oguchi Factory sets every August as Improvement Month. Based on thetheme of “environment and safety,” the factory solicits improvement proposals
from employees and each division promotes measures during the month by
setting its own targets.
Number of proposals: 305
Awareness poster for
Improvement Month

Mottainai Patrol by female employees (Technology Development Center)
Female employees conduct patrols of the premises to aid in eliminating wasted
energy and space in workplaces. From the perspective of women, who
generally have a better eye for detail, they look for mottainai (wasteful) items.
The patrol’s findings are immediately reported to staff in charge of
maintenance at the workplaces and reviewed.
In fiscal 2012, there were 27 findings in three patrols.
Mottainai Patrol

Dedicated areas for working overtime or on holidays(Technology Development Center)To reduce waste of energy used for air conditioners and lighting, theTechnology Development Center has designated dedicated areas for working
overtime or on holidays. The act of moving to a dedicated area strengthens
employees' awareness that they are working extra hours, and this has led togreater work efficiency of individual employees.
Dedicated work area

Other initiatives taken at our factories and offices

・Reducing wasted power by controlling the use of air conditioners, refraining from using elevators, using PCs
in power-saving mode, powering down devices whenever they are not in use, reducing the number of lights,
making sure to keep lights off during lunch breaks, etc.
・Introduction of energy-saving lights, high-efficiency air conditioning systems, etc.
・Early start and extension of the “cool-biz” period
Results of power-saving efforts at our offices and factories nationwide during the summer(July-September)
Reduction of power consumption

420,000 kWh

Number of power-saving items

228*The amount of saved power is equivalent to 6.6% theamount used in the same period of the previous year.

115

CSR Report 2012│Environment-Conscious Monozukuri

Promotion of Energy-Saving Measures at Overseas Production Sites
Use of natural energy (Shanghai Rinnai Co., Ltd.)
Solar heat panels and photovoltaic panels were installed on therooftop of the factory to reduce energy consumption. The
generated power is used internally for lighting. Hot watersupplied at the company is also heated by using the solar heatpanels.
Reduction of power consumption

4,500 kWh/year

Reduction of gas consumption

6,000 m3/year

CO2 emission reduction result

approx. 15 t-CO2/year

Solar heat panel and photovoltaic panels

Switch to power-saving boiler (Rinnai Korea Corporation)
To reduce energy consumption, the company has replaced its
boiler that provides heat in the winter, which was installed in abasement room of its Welfare Building, with an energy-saving,high-efficiency condensing boiler.
Reduction of gas consumption

11,790 m3/year

CO2 emission reduction result

approx. 26 t-CO2/year

High-efficiency condensing boiler*The results are for the November 2011 - March 2012 period, when the heater was used.

Improving Logistics
Working with Logistics Partners
Responding to new requirements associated with the amended energy conservation law, which went into force
in April 2006, Rinnai has promoted improvements based on a rationalization plan for energy used in logistics
activities that was formulated from the perspective of an owner of goods. We properly monitor the status ofenergy used in procurement and product shipment activities, and work with our logistics partners to reduce theamount of energy consumed reviewing our operations from various viewpoints and ideas such as the loading
efficiency.

Major Activities
・Review of product delivery routes
・Effective use of round-trip transportation services
・Expansion of consolidated transport between groups
・Increasing the number of stacks per paletteFiscal 2012 results
Specific energy consumption

98.9% compared to the previous year

*Specific energy consumption = Amount of consumed energy (crude oil equivalent, in kl)/Net sales (100 million yen)116

CSR Report 2012│Environment-Conscious Monozukuri

Other Examples of Logistics Improvement
Reducing CO2 emissions by changing method of using highway transportation
services (RB Controls Co., Ltd.)To use highway transportation services effectively, the company studied thenumber of transportation services used each day, transportation routes (travel
distance), load capacity (load efficiency), and other elements, and madeimprovements including optimization of the number of services and routes.
Thanks to the improvements, transshipments and travel distance were reduced
compared with fixed-route transportation via multiple terminals. The numberof services used per day was also reduced, resulting in improved load
efficiency.
CO2 emission reduction result

approx. 2 t-CO2/year

Integrated Logistics Centerof RB Controls Co., Ltd.

Reduction of reverse transport
By reviewing locations of warehouses, we reduced the frequency of reverse transport *1 which occurred
frequently, especially in the Kanto region. This led to a reduction in CO2 emissions created by transportationfrom shipping destinations to warehouses.
CO2 emission reduction result

approx. 14 t-CO2/year

Introduction of environmentally friendly vehicles
By collaborating with gas companies, we are promoting replacement of our existing commercial-use vehicles,
which we use for sales activities and other work, with low-emission vehicles.

117

CSR Report 2012│Environment-Conscious Monozukuri

Efforts to Reduce Waste
Reduced Waste Output and Recycle
Zero Emissions
We strive to maintain zero emissions and reduce waste output.
Waste Output
Fiscal 2012 actual results

Emission factor: 3.7% reduction (from fiscal 2011 level)* Definition of zero emissions: More than 99.5% of waste is recycled, leaving just 0.5% or less in waste destined for thelandfill.
* Waste emission factor = total waste emissions/net sales (100 million yen)

Efforts to Curb Generation of Waste
Reduce Waste

Process Waste Economically Don't buy something that will end up as garbage
 Don't make waste
 Return reusable items to respective point ofpurchase Reuse Recycle

 Reduce volume
 Cut unit cost of processing fees Turn waste into a valuable commodity Boost the value of valuable commodities

Improvement of recycling quality
We treat waste thermally. To use such waste as raw materials or other resources, we promote activities for
improving the quality of recycling by means such as reviewing the methods of waste collection andseparation.
As a measure for recycling waste into a valuable resource, we have changed the method of treating glass
waste from thermal treatment to crushing, and reuse the crushed glass as a base roadbed material laid underasphalt. (Oguchi Factory)
Amount of collected glass waste

approx. 4 t/year
Recycling box

We conducted separate collection of motors and transformers, which use a great deal of copper wire, andrecycled them into valuable resources. (Asahi Factory)
Amount of copper wire (wiring
materials) collected

approx. 1 t/year

Recycling box

Motor andtransformers
collected

118

CSR Report 2012│Environment-Conscious Monozukuri

Stopped using large corrugated cartons as returnable containers
To reduce the amount of waste, we reviewed the way single gas stoves are transported from the factory to
storage warehouses. We introduced wheeled platforms and stopped the use of large corrugated cartons,
which are treated as waste after use.
Reduction of use of corrugated cartonsapprox. 26 t/year

BeforeUse of large corrugated

After

Use of wheeled

Reduction of plastic string
Corrugated cartons carried on wheeled platforms used to be fixed to each other with plastic string in orderto prevent collapsing. We changed the shape of the corrugated cartons in a way that they can be stacked on
the wheeled platform in rows with no gaps between them. This enabled us to stop using plastic string, andhas also shortened the time taken to load and move the cartons.
Reduction of plastic string

approx. 1 t/year

BeforeAfter

Cartons are fixed to eachother with plastic string
Number of cartons loaded onwheeled platform: 20

Plastic string eliminatedNumber of cartons loadedon wheeled platform: 36

Industrial Waste Disposal
Before outsourcing waste to a business specializing waste processing, we run
meticulous backchecks, including business status, and make on-site visits toconfirm conditions. To ensure that waste is being properly disposed of bycontracted providers, we send representatives annually to the sites for visualconfirmation and to exchange information with service providers. In fiscal
2011, we verified that 42 providers were performing waste management
operations in an appropriate manner.

Facility rounds
RT Engineering Co., Ltd.
119

CSR Report 2012│Environment-Conscious Monozukuri

Polychlorinated Biphenyl Waste Management
Polychlorinated biphenyls (PCB), used primarily in the insulating oils ofelectrical transformers, capacitors and ballasts, are subject to the Law
Concerning Special Measures for Promotion of Proper Treatment of PCB
Waste (PCB Special Measures Law), which makes rules on the storage of
PCB-containing equipment tougher and gives companies until July 2016 tosafely dispose of PCB waste or consign the duty to a certified service
provider.
Rinnai is moving to address its responsibilities as quickly as possible.
PCB-containing equipment in storage is kept under lock-and-key to prevent
loss or damage, and equipment still in use is carefully monitored, mainly
through tagging, so that we can respond appropriately in the event ofequipment failure, however remote that may be. As for disposed electric
appliances in which traces of PCB were confirmed, we will also properly
store and process them at facilities which are running certified by Ministerfor the Environment from fiscal 2011.
*Treatment of high-concentration PCB waste stored at Rinnai and RT Engineering
Co., Ltd., was completed as of March 2009.

Oguchi Factory
Storage for electric appliancesin which a trace of PCB was
found

Chemical Substances
Failure to conduct proper management of certain chemical substances could lead to environmental pollution.
Accumulation of such substances over a long period may also affect the health of people and the ecosystem.
To minimize the impact of such substances on the environment, we take measures for reducing or eliminating
use of harmful chemical substances in our production processes, such as reviews of materials containing
certain substances and improvement of processing facilities.
Fiscal 2012 result

Amount of harmful chemical substances handled: 52.8% reduction(from fiscal 2002 level)

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

120

CSR Report 2012│Environment-Conscious Monozukuri

Case example of reduction of chemical substances (Oguchi Factory)
We succeeded in reducing the amount of paint used at this factory. We minimized the loss of paint by studying
optimal processing conditions, such as the balance between the air pressure of the spray gun and discharge
amount, the distance and angle between the spray gun and the painted surface, and the travel speed of thespray gun, based on the production capacity required for the painting process at the factory and the shapes ofcomponents subject to processing.
Reduction of paint use

approx. 30% (from fiscal 2010 level)

Reduction of amount of harmful chemical
substances

approx. 800 kg/year

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

Emergency response drill

Storage of supplies
for emergency use

Environment-Focused Equipment Inspection
To prevent accidents that would impact theenvironment, we identify equipment withthe potential to adversely affect theenvironment
andrunconcerted
environment-focused inspections on thesepieces of equipment on an annual basis. We
strive to prevent the occurrence of serious
accidents with environmental repercussions
through such approaches as independent
inspections of equipment, operating tests
for measuring instruments, and emergency
simulations.

Round-check of high-priority
facilities (Noto Tech Co., Ltd.)

Waste water treatment
facilities of Rinnai Korea
Corporation

121

CSR Report 2012│Environment-Conscious Monozukuri

Utilization of Water
Consideration for Water
Recognizing water as our valuable resource, we strive to reduce the consumption of both clean water and well
water. We also manage the water we discharge to ensure that it will not have an impact on the environment.

Management of quality of discharged water
We strive to save and reuse water as aprecious resource. At the same time, we
continually monitor the quality of water
treated at our wastewater treatment facilities.
To ensure that the water will not pollute
rivers, etc., we monitor water quality basedon our voluntary standards for pH, which arestricter than the legal standards.
Water quality monitoring
equipment

Staff member checking thewater quality

Utilization of Rainwater
We collect rainwater and reuse it for watering plants and for other purposes. Rainwater is stored in water tanks
selected in consideration of previous rainfall amounts, roof size, and other aspects. The water is sprinkled
automatically at specified intervals and used for other purposes.
*When not enough rainwater is stored, well water is supplied automatically so plants’ growth is not affected.

Automatic rainwater sprinkling system(Oguchi Factory)

Stored rainwater is used for the vegetable garden on the roof
(Aichi Factory)122

CSR Report 2012│Environment-Conscious Monozukuri

Biodiversity
Nature provides humankind with immeasurable benefits. The ecosystem, as the source of these benefits, is
now deteriorating, and our vital task is to implement measures for protecting the ecosystem.
The natural environment and ecosystem are likely to be affected by the locations of factories and offices,
resource procurement in business activities, and release of environmentally hazardous substances into theatmosphere, soil, and water. Accordingly, at each of our offices and factories, we strive to reduce theenvironmental burden in ways such as strengthening control of the amount of environmental pollutantsreleased and transferred. We therefore promote activities for protecting biodiversity, which is essential for
ensuring the sustainability of society.

123

CSR Report 2012│Environment-Conscious Monozukuri

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

Measurement of soot andsmoke (Noto Tech Co., Ltd.)

Environmental Rounds of Production Sites
We routinely perform environmental audits of production sites of domestic Group companies through site
visits. Audits include confirmation of management status of facilities, waste, hazardous substances, and otheraspects, and status of compliance with laws and regulations. We also check activities for reducing
environmental burden and provide instructions and support as necessary, in an effort to standardize andimprove environmental protection efforts at each production site.

Status of Compliance with Laws and Regulations
In fiscal 2012, there were no violations of environment-related laws such as pollution control laws.
Major related laws
Air pollution

Air Pollution Control Act

Water pollution

Water Pollution Control Act, Sewerage Act

Land subsidence

Industrial Water Act

Noise and bad odors

Noise Regulation Act, Vibration Regulation Act, Offensive Odor
Control Act

Hazardous substances

Poisonous and Deleterious Substances Control Act

Employee safety

Industrial Safety and Health Act (Ordinance on Prevention of Hazards
due to Specified Chemical Substances, Ordinance on Prevention ofOrganic Solvent Poisoning)Fire Service Act (Articles concerning hazardous materials)

Prevention of global warming

Law Concerning the Promotion of the Measures to Cope with Global
Warming
Act on the Rational Use of Energy

Waste

Waste Management and Public Cleansing Act

Ecosystem

Act on Confirmation, etc. of Release Amounts of Specific Chemical
Substances in the Environment and Promotion of Improvements to theManagement Thereof, Act on Special Measures concerning Promotionof Proper Treatment of PCB Wastes

124

CSR Report 2012│Environmental Education and Promotion of Awareness

Environment Education and Promotion of Awareness
Activities during Environment MonthWe set every June as “Environment Month” to increase awareness of the environment for each employee andimplement and enhance various environmental protection and conservation activities at the factories andoffices.

Rinnai Group Environment Awards Programs
Seeking to invigorate employees' environmental activities and promote access to excellent approaches within
the Group, we established “Environment Awards Programs”, effective from fiscal 2011. These awards
programs recognize activities undertaken by domestic companies under the Rinnai umbrella to protect theenvironment and conserve resources over a one year period. The second prize-giving ceremony took place at“Company-wide QC Circle Competition”.
Development ofEnvironment
condensing hot-water units
Prize(Eco-Jozu E series)
Other prizes

9 prizesAward presentation

Other Factory Visit

Announcement andexplanations of award-winning
activities

We visit other companies' factories to learn
about their advanced environment-conscious
measures.

Explanations given by abusiness partner about its
environmental initiatives

Participants observing roof
greening

Walking Festival
In May 2012, an event for learning aboutbiodiversity protection with families was plannedand held as part of the Walking Festival (at a10,000-step course in Higashiyama and theHigashiyama Zoo and Botanical Gardens) organizedby the Rinnai Employees’ Association.
Number of participants

1,448

Event participants
walking on the course

Participants reading a quiz
question on biodiversity
protection

125

CSR Report 2012│Environmental Education and Promotion of AwarenessEncouragement of Eco-Friendly Commuting
At the Technology Development Center, we plan and practice No-car Days toreduce CO2 emissions and noise caused by commuting by car and to reduce theimpact of traffic jams. On No-car Days, employees who commute by car are
encouraged to practice eco-friendly commuting such as the use of public
transportation and ride-sharing with other employees. Information abouteco-friendly commuting practiced by each employee is entered on dedicatedwebsite of the Technology Development Center for management andaggregation. In fiscal 2012, eco-friendly commuting was practiced on specified
days of the week and resulted in CO2 emissions reduction of approximately 1
t-CO2/year. Eco-friendly commuting also helped employees improve their healthsince it leads to moderate exercise.
CO2 emission reduction
resultBicycle parking area for
employees

approx. 1 t-CO2/year

Environment Policy Card
We distribute an “Environment Card” that lists selected Environmental Policy
to employees to promote their awareness toward environment conservation
activities. The back of the card is for them to fill in “My Environment
Challenge Declaration”.

Environment Card

Disclosure of Information about our Environmental Activities (once a year)
We published our first Environmental Report in 2000. This marks our 13th such report. In 2006, the scope ofthe report was expanded to include society-oriented content and its name was changed to the Environmental
and Social Report, and then to the current Social & Environmental Report in 2007. We began publishing an
English version of the report in 2010.

CSR report

CSR information
126

CSR Report 2012│Environmental Education and Promotion of AwarenessInformation about Environmental Activities at our Main Production Sites
In 2010, we began disclosing information about environmental
activities at our main production sites in Japan. The
information, which is disclosed on the Environmental Reportpages of our website’s CSR Information section, includes
activities at each site for reducing environmental burden, dataon the results of such activities, risk management status
including emergency response, and communication with local
communities.
The website gives environmental information about our
main production sites (four factories and eight Group
companies engaging in production).
Environmental dataon our main production sites

Issuance of Environment Company NewsWe periodically issue “Environment Company News” to share internal
environmental measures and introduce domestic and international trends
on environment activities. This is to promote the communication among
employees and encourage them to be more environment-conscious.

Environment Company News

“Safe and Eco-Friendly Drive Seminar”
For the prevention of car accidents and global warming, we invited aguest instructor and held a “Safe and Eco-Friendly Drive Seminar” foremployees in sales and management divisions who use a company car. It
is on the guidance and explanation on “the basics of traffic safety” and“actual training of eco-friendly training” and 50 employees attended theseminar.
Safe and Eco-Friendly Drive
Seminar

Green purchasing
For the purchase of office supplies and office automation equipment, we encourage employees to give priority
to purchasing environment-friendly products that are qualified under the Law Concerning the Promotion of
Procurement of Eco-Friendly Goods and Services by the State and Other Entities.
* “Green procurement” and “Green purchasing”: “Green procurement” is to acquire goods directly related to our
production activity, and “Green purchasing” means purchase of office-related supplies and facilities.

127

CSR Report 2012│Environmental Education and Promotion of Awareness

Visiting Local Dealers with a Vehicle Dedicated for Holding Training Sessions(Rinnai Brasil Heating Technology Ltd.)In Brazil, demand for durable, weatherproof, high-efficiency
hot water units has been growing each year. Rinnai Brasil,
which locally manufactures and sells high-efficiency hot water
units, solar hot water panels, and other products, visits dealers
in each area using a vehicle equipped with actual devices andenabling training sessions. The sessions are aimed at allowing
dealers in each area to perform sales activities and installation
work with proper understanding of installation, construction,and maintenance methods. Manuals are used for providing
dealers with explanations about products. Dealers also learn
how to operate and handle hot water units by using the actualunit mounted on the vehicle.

Vehicle dedicated for training

Hot water
unit

Overseas Exhibitions
Exhibition at Feicon Batimat, an international construction industry trade fair(Rinnai Brasil Heating Technology Ltd.)At Feicon Batimat, an international constructionindustry trade fair held in São Paulo each year, Rinnai
Brasil Heating Technology Ltd. exhibited hot water
units, solar panels, and other products it manufacturesand sells locally, and introduced environmental
features of the devices to constructors and builders.

International construction industry trade fair in São Paulo

Exhibition at the HOMEDEC Home Decoration Exhibition(Rinnai (Malaysia) Sdn. Bhd.)
Rinnai (Malaysia) Sdn. Bhd. exhibited its products at the HOMEDEC Home Decoration Exhibition, which is
Malaysia’s largest trade fair for the household products industry. Staff members explained environmental
features, comfort, and safety of Rinnai kitchen appliances and other products to visitors. One of our kitchen
appliances won the HOMEDEC Good Design Award.

HOMEDEC venue

HOMEDEC Good Design Award
given for Rinnai kitchen appliance

Exhibition at the International Food Industry Exhibition, Seoul 2011
(Rinnai Korea Corporation)
Rinnai Korea Corporation hosted a booth at the International Food
Industry Exhibition, Seoul 2011. Rinnai's environmentally friendly
products for commercial use, such as steam ovens, dishwashers,
rice cookers, and fryers, were introduced to many visitors, who
included buyers.

International Food Industry Exhibition,
Seoul 2011128

CSR Report 2012┃Chronology of Environmental Activities at Rinnai

Chronology of Environmental Activities at Rinnai
March

1993

December

1994

July

1996

March
March
June

1997

October
December
April

1998

September
October
April

1999

July
September
October
February

2000

2001

2003

May
AugustDecemberJanuary
June
June
OctoberNovember

2004
2005
2006

October
June
September
October
September

2008

2009

October
DecemberFebruary

Drafted Environmental Preservation Action Plan; established Environment Committee
Won prize at 4th Energy Conservation Vanguard 21 for gas-blast type high heat griller
RGM-4, 6, 8.
Market debut: low-NOx burner built-in hot-water unit (NOx at less than 60ppm)
Won top prize at 1st Eco-Design Awards, sponsored by Tokyo Gas, Osaka Gas and Toho
Gas for hot-water unit, fan heater and small hot-water heater.
Won special prize at 2nd Eco Design Awards for tabletop cooking stove.
Market debut: absorption-type gas air-conditioner (non-CFC)
Oguchi site acquired ISO 14001 certification covering factory, Production Engineering
Division and Research & Development Headquarters.
Won prize at 8th Energy Conservation Vanguard 21 for tabletop oven RSBN-096.
Won grand prize for gas clothes dryer and special awards for small hot-water heater andfor absorption-type gas air-condition at 3rd Eco-Design Awards.
Market debut: fan heater with air-purifier that traps dust and removes odors.
Market debut: Yukko V Series, featuring no styrene packing, low stand-by power
consumption and low NOx emissions.
Oguchi Factory (approved facility under revised Energy Conservation Law) registered as
type 2 designated energy management factory.
Established Environment Division.
Market debut: Ecomax burner and Eco burner-equipped gas cooking stove.
Market debut: condensing hot-water unit boasting 95% heat efficiency and NOx emissions
under 30ppm.
Won Minister of Economy, Trade and Industry award for condensing hot-water unit atministry's 10th Energy Conservation Awards.
Drafted Rinnai Environmental Action Principles.
Published inaugural issue of Environmental Report.
Seto Factory Environment Division acquired ISO 14001 certification
Won Chunichi Newspaper Prize portion of Chunichi Industrial Technology Awards forcondensing hot-water unit.
Won Technology Grand Prize from Japan Gas Association for condensing hot-water unit.
Won Technology Prize from Japan Gas Association for condensing hot-water unit.
Won Electric Equipment Packaging Category Award in Good Packaging division at 2003
Japan Packaging Contest for built-in 75cm-wide glass-top gas cooking stove.
Quality assurance divisions at Aichi Factory and Asahi Factory acquired ISO 14001
certification.
Won Logistics Award at Japan Packaging Contest 2004 for bathroom heater/dryer.
Won Technology Grand Prize from Japan Gas Association for development of latent heatrecovery high-efficiency hot water/heating unit.
Got involved in Team Minus 6%, a national movement to prevent global warming.
Won Electric Equipment Packaging Category Award in Good Packaging division at Japan
Packaging Contest 2006 for gas fan heater.
Gas tankless water heater sold in the United States captured 2008
Super Nova Star Award (Stars of Energy Efficiency) in the United States from the Alliance
to Save Energy.
Won Electric Equipment Packaging Category Award in Good Packaging division at Japan
Packaging Contest 2008 for gas fan heater.
Head office acquires ISO 14001 certification.
Market debut: Eco-Jozu condensing hot-water/heating unit RVD-E Series.

129

CSR Report 2012┃Chronology of Environmental Activities at Rinnai

January2010

February
April
DecemberJanuary
April

2011

May
June

2012

April

Market debut: Eco-Jozu condensing combi boiler RUF-E Series boasting bathwater heating
efficiency rate of 92%.
Won silver at Aichi Environment Awards, sponsored by Aichi Prefecture, for global
promotion of high-efficiency combustion appliances and systems, including latent heatrecovery hot-water units.
Market debut: high-efficiency Hybrid Hot-Water Unit ECO ONE.
Market debut: light-weight and compact Eco-Jozu hot-water unit "RUX-E Series"(Hot-water unit exclusive use).
Market debut: Eco-Jozu hot-water/heating unit RUFH-E2402 Series.
Market debut: “kaecco” Eco-Jozu combi boiler (RUF-TE Series) designed for existing
apartments (put in existing PS).
Market debut: hybrid hot-water/heating system ECO ONE for colder regions.
Won Technology Grand Prize from Japan Gas Association for development of gas
hot-water system SOLAMO to use solar heat.
Won Aichi Invention Award, sponsored from Aichi Invention Association, for developmentof low-NOx burners for household gas hot-water units.
Market debut: new hybrid hot-water/heating system ECO ONE.

130

CSR Report 2012┃Major Award Winning History

Major Award Winning History
Rinnai received following awards from April 1, 2011 to June 30, 2012.

Awards and Prizes for Rinnai Corporation
December
2011
September
June
October
September
2010

AugustJuly
June
February

Resource Circulation Monozukuri Symposium 2011
Resource Circulation Monozukuri Association, Chairman Award, for energy saving atenameled combustion furnaces.
Good Design Award 2011
Aichi Invention Award 2011
The Japan Gas Association , Technology Grand Prize 2011
Infrared Ray Association Product Excellence 2011, Technology Award
Japan Packaging Contest 2010, Electric Equipment Packaging Category AwardGood Design Award 2010
Japan Manual Awards, Paper Manuals Division, Operations Manuals, No.1 Category, Most
Outstanding Manual in Category
Kids Design Award 2010
The Japan Gas Association, Technology Grand Prize 2010, Technology Prize 2010
Aichi Environmental Award, Silver Award

Awards and Prizes for the Group Companies—Rinnai Korea Corporation
Korean Industry Customer Satisfaction Index Survey (KCSI) by Korean Management
Association Consulting (KMAC)
October<Home-use boiler section> No.1 - Home-use boiler
Korean Good Design Award 2011 by Korean Design Promotion Association
Smart boiler, commercial-use steam convection oven

2011
February
and
March
2010

October

2011 Brand Survey by KMAC
Korea's most admired company <Home-use boiler section> No.1 - Home-use boiler
Korea Best Brand Award <Gas stove section> No.1 - Gas stove
Korean Industry Customer Satisfaction Index Survey (KCSI) by KMAC
<Home-use boiler section> No.1 - Home-use boiler—Rinnai America Corporation2012 Green Builder Readers' Choice Awards by Green Builder
2012 January
Greenest Hot Water system - Tankless Water Heater
The 2010 MVP AWARD by BUILDING PRODUCTS (Housing equipment magazine)
2010
AugustMVP AWARD Winner - Condensing Tankless Water Heater—P.T. Rinnai Indonesia
Indonesia Best Brand Award by SWA (Economic magazine)
2011
July
<Table stove section> Gold Award - Table Stove
Indonesia Best Brand Award by SWA (Economic magazine)
2010
July
<Table stove section> Gold Award - Table Stove—Rinnai (Malaysia) Sdn. Bhd.
HOMEDEC Good Design Award by HOMEDEC Home Decoration Exhibition
2011
April
- Built-in-stoves—Shanghai Rinnai Co., Ltd.
Shanghai City Quality Gold Award by Shanghai Cit
2011
April
- product services, production factory, management and others—Rinnai UK Ltd.
2010

April

H&V News Award 2010 by Thermal Energy Appliance Industry Association<Commercial appliance section> Best Product Award - Condensing hot water units
131

CSR Report 2012┃Summary of Rinnai Group

Summary of Rinnai GroupCorporate Data
Company name

Rinnai Corporation
2-26, Fukuzumi-cho,
Nakagawa-ku, Nagoya454-0802, Japan

Incorporated

September 1, 1920

Established

September 2, 1950

Telephone:+81-52-361-8211

Paid-in capital

Chairman

Susumu Naito

Main businessPresident

Hiroyasu Naito

Number of groupcompanies

Head office¥6,459,746,974(As of March 31, 2012)
Development, manufacturing andsales of heat-energy appliance43 (domestic 14, overseas 29)

Products
Kitchen appliances

Hot-water units Hot-water units Hybrid hot-waterand heating
system Gas/solar
hot-water system
 Gas boilers i, etc.

 Table stoves Built-in-stoves Built-in-range
 Dishwashers
 Rice cookers, etc.

Air-conditioning
and heating units






Fan heaters
Fan-forced heaters
Fireplace
Infrared heaters,etc.

Commercial-use
equipment

 Rice cookers
 Grillers
 Fryer Ranges Steam oven, etc.

Others Clothes dryers
 Infrared burners
 Components, etc.

132

CSR Report 2012┃Summary of Rinnai GroupRinnai Group Network

Medium-Term Business Plan “Jump Up 2014”
Rinnai Group formulated its new medium-term business plan, entitled Jump Up 2014, covering the three-year
period from April 2012 to March 2015. We will also reinforce our corporate foundation underpinned by coremanagement issues, “three jump up” priorities, in order to build a long-term growth trajectory. Under the plan, we
will target further groundbreaking progress as a comprehensive manufacturer of heating appliances that takes theenvironment and energy-saving into account and contributes to society.

133

CSR Report 2012┃Summary of Rinnai GroupConsolidated Financial Data (Years ended March 31)
Net Sales (Billions of yen)250

248.7 236.7

226.1

239.4 246.6

200
150
100
50
0
Fiscal Fiscal Fiscal Fiscal Fiscal
2008 2009 2010 2011 2012
Net Sales by Business Segment (Billions of yen) (Year ended March 31, 2012)

Net Sales by Region (Billions of yen) (Year ended March 31, 2012)134

CSR Report 2012┃Summary of Rinnai GroupOperating Income (Billions of yen)

30
25.2

Ordinary Income (Billions of yen)
26.6

30

26.8

25

25

21.4

20.3

20

20
15

28.9

15.3

15.1 15.0

12.9

15

10

10

5

5

0

0
Fiscal Fiscal Fiscal Fiscal Fiscal
2008 2009 2010 2011 2012

Net Income (Billions of yen)

Fiscal Fiscal Fiscal Fiscal Fiscal
2008 2009 2010 2011 2012
Number of Employees

20
15.5

16.8

9000
7390

7772

8206 8394 8678

15
11.6

10

6000

8.2

3000
5

3.8

0

0
Fiscal Fiscal Fiscal Fiscal Fiscal
2008 2009 2010 2011 2012

Fiscal Fiscal Fiscal Fiscal Fiscal
2008 2009 2010 2011 2012135

CSR Report 2012│Factories:Oguchi Factory

Oguchi Factory
Location:
Number of
employees:
Business:
Major production
items:

Kaechi, Oguchi-cho, Niwa-gun, Aichi
819 (as of the end of March 2012)
Manufacture of gas equipment
Table stoves, built-in-stoves,dishwashers and built-in-ranges
October 1997

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

450.6

72.9

6

Other fuels(kl) (crude oil
equivalent)
38

Emissions into the air
CO2 emissions(t-CO2)
3,421

NOx emissions(t)
2.7

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)5,436.2

0.0

Amount ofintermediate
processing of waste(t)
0.0

Substances subject to the PRTR law
Class I designated chemical
substance name

Number

53
80
87
296
300
309
405
412

Ethylbenzene
XyleneChromium and chromium (III)compounds
1,2,4-trimethylbenzene
TolueneNickel compounds
Boron compounds
Manganese and its compounds

Baking furnace
BoilerSubstance
Soot and dust
NOx
Soot and dust
NOx

Recycling
percentage(%)

5,436.2

100.0

Amount of emission/discharge
a. Emissions b. Discharge c. Discharge
into the air
into public
into the soil
watersat therelevant
office(except d.)
1,200.0
0.0
0.0
2,000
0.0
0.0

Air
Equipment

Amount of recycled
waste
(t)

National
0.25
180
0.10
150

d. Landfill
at therelevant
office(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)

0.0
0.0

0.0
0.1

0.1
91

0.0

0.0

0.0

0.0

2.0

110

130
1,700
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
0.0
0.0
0.0

0.0
0.0
1.1
2.5
20

400
66
170
630
360

Regulation value*1
Prefectural
Voluntary
0.25
0.16
180
108
0.30
0.08
150
96

Actualvalue*2
0.008
99.8
0.004
68.9

*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm*2 Actual values for NOx and soot/dust indicate
the maximum measurements versus theregulation values for the relevant type ofequipment.

136

CSR Report 2012│Factories:Oguchi Factory

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

National‒
5.7 - 8.7
300
300
5
30
3
2
10
10
150
20
220

Regulation value
Municipal Voluntary‒‒
5.7 - 8.7
5.8 - 8.7
300
240
300
240
5
4
30
24
3
2.4
2
1.6
10
8
10
8
150
120
20
16
220
176

Maximum
437
7.9
170.0
120.0
<1
7.0
0.09
1.00
0.47
0.19
53.0
6.2
23.0

Actual value
Minimum
0
6.9
19.0
26.0
<1
2.0
0.02
0.12
0.05
0.01
9.4
1.4
2.9

Mean
151
7.2
75.5
58.1
<1
4.5
0.06
0.30
0.23
0.06
30.0
3.6
9.5

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

TopicsEnergy saving efforts
 Month for improving safety and the environment
August of each year is designated as the month for improving safety and theenvironment. We ask for reports of best practices, and each department sets atarget.
Number of eco-friendly practices reported: 305

Efforts to reduce chemical substances
The proper balance between the air pressure and discharge quantity of a paint gun, the proper distance fromthe coated surface, the angle, operation speed and other optimal conditions for processing were determined inaccordance with such factors as the production capacity required for a factory’s coating process and the shapeof the components processed. The amount of coating materials used was successfully reduced by minimizing
the loss of these materials.
Reduction of use of coating materials: approx. 30% (versus fiscal 2009)
Reduction of hazardous chemical substances: approx. 800 kg/year

137

CSR Report 2012│Factories:Oguchi FactoryCommunication with local communities
 Receiving the Resource-Recycling Monozukuri Society Chairman Award
Our eco-friendly practice with enamel baking furnaces received the Resource-Recycling Monozukuri Society
Chairman Award at the Resource-Recycling Monozukuri Symposium IMS 2011 organized by the municipal
government of Nagoya-shi, the Nagoya Chamber of Commerce & Industry and other organizations.
Resource-recycling monozukuri symposium:

Designed to introduce and commend, in terms of monozukuri (manufacturing), thebest practices for the recycling of limited resources and energy and the reduction of
global warming

Reduction of CO2 emissions: approx. 130 ton-CO2/year
Reduction of waste: approx. 450 kg/year

Glowing furnace burner

On-the-job training

Resource-Recycling Monozukuri
Society Chairman Award certificate

 Factory visits by local elementary schoolchildren
We welcome factory visits by local elementary schoolchildren as part of their social studies. The pupils
experience the joy of monozukuri by learning about the structure, operation, safety and convenience ofbuilt-in-stoves, ovens, dishwashers and other familiar items and observing the manufacture of components
and products up close.

Listening to a brief explanation ofmonozukuri

Visiting Anzen Dojo(safety seminar)

Visiting the production line

138

CSR Report 2012│Factories:Seto Factory

Seto Factory
Location:
Number of
employees:
Business:
Major production
items:

Anada-cho, Seto-shi, Aichi
758 (as of the end of March 2012)
Manufacture of gas equipment
Hot-water units, hot-water and heating
units and gas/solar hybrid hot-water
systems
December 2000

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

647.6

59.5

33

Other fuels(kl) (crude oil
equivalent)
18

Emissions into the air
CO2 emissions(t-CO2)
3,898

NOx emissions(t)
3.1

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)2,366.3

0.0

Amount ofintermediate
processing of waste(t)
0.0

Substances subject to the PRTR law
Class I designated chemical
substance name

Number

53
80
87
300
308
309

Ethylbenzene
XyleneChromium and chromium (III)compounds
TolueneNickelNickel compounds

Substance

BoilerSoot and dust
NOx

Recycling
percentage(%)

2,366.3

100.0

Amount of emission/discharge
a. Emissions b. Discharge c. Discharge
into the air
into public
into the soil
watersat therelevant
office(except d.)
834.6
0.8
0.0
1,069.3
0.8
0.0

Air
Equipment

Amount of recycled
waste
(t)

National
0.10
150d. Landfill
at therelevant
office(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)

0.0
0.0

0.0
0.0

244.8
144.8

0.0

0.0

0.0

0.0

0.0

0.0

1,470.0
0.0
0.0

0.8
0.0
0.0

0.0
0.0
0.0

0.0
0.0
0.0

0.0
0.0
0.0

927.7
0.0
0.0

Regulation value*1
Prefectural
Voluntary
0.30
0.05
150
79

Actualvalue*2
0.002
33.7*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm*2 Actual values for NOx and soot/dust indicate
the maximum measurements versus theregulation values for the relevant type ofequipment.

139

CSR Report 2012│Factories:Seto Factory

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS
n-Hex mineral oil
n-Hex vegetable oil
CopperZinc
Soluble ironSoluble manganese
NitrogenPhosphorus

Regulation value
National Prefectural Voluntary‒‒‒
5.8 - 8.6
5.8 - 8.6
6.0 - 8.4
160
25 (20)
20
(120)
160
25 (20)
20
(120)
200
30 (20)
20
(150)
5
2
1.6
30
10
8
3
1
0.5
2
2
1
10
10
2.5
10
10
2.5
120 (60)120 (60)30
16 (8)
16 (8)
4

Actual value
Maximum Minimum
101
16
8.0
7.5

Mean
45
7.7

1.9

< 0.5

1.1

5.3

0.6

1.9

7

<1

3

< 0.5
< 0.5
0.04
0.15
0.1
0.1
8.1
1.7

< 0.5
< 0.5
0.01
0.01
N.D.
N.D.
0.2
0.1

< 0.5
< 0.5
0.02
0.04
N.D.
N.D.
2.1
0.4

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

TopicsEnergy saving efforts
 Introduction of power forecast system
To facilitate emergency power saving in the event of a shortage in the electricity supply following the Great
East Japan Earthquake, the Demand Control System for monitoring the status of energy consumption bymajor pieces of equipment is used to indicate the current electricity consumption in different colors. The
System has been improved and enables the electricity surplus ratio to be read on computers and monitors.
Each individual in the factory can be further motived by keeping up-to-date with the results of the powersaving they have planned and implemented.
Reduction of electricity consumption: 5800 kWh/year
Reduction of CO2 emissions: approx. 2 ton-CO2/year

The screen shows the electricity consumption status.

140

CSR Report 2012│Factories:Seto Factory Energy-saving illumination
The mercury lamps used in Building 2 have been replaced by energy-saving metal halide lamps. We havealso reduced the number of lamps in the areas that require less lighting. This has resulted in reduced
electricity consumption.
Reduction of electricity consumption: 56,000 kWh/year
Reduction of CO2 emissions: approx. 21 ton-CO2/year

The number of lamps has been reduced to save energy.
Resource saving efforts
 Efficient use of materials
To ensure the efficient use of materials in packing punching, we have minimized the amount of wastematerial by adjusting, within the processing conditions of our equipment, the size of the purchased material
to the cutting layout with an optimal combination of punching shapes.
Reduction of material consumption: approx. 10% versus previous year
Consideration for water○ Controlling water discharge
Water is a valuable resource. We discharge water by consistently monitoring values, using our own standards
for pH that are more rigorous than those required by the law, to ensure that the water processed at effluent
treatment facilities does not affect rivers and other waters, as well as attempting to save and reuse water.

Water pollution monitor

Inspection of water
quality141

CSR Report 2012│Factories:Aichi Factory

Aichi Factory
Location:

Sumiike-cho, Nakagawa-ku,
Nagoya-shi, Aichi
271 (as of the end of March 2012)

Number of
employees:
Business:
Major production
items:

Manufacture of gas equipment
Table stoves, remote controllers for
hot-water units
November 2003

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

62.8

4.5

2

Other fuels(kl) (crude oil
equivalent)3

Emissions into the air
CO2 emissions(t-CO2)348

NOx emissions(t)
0.3

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

86.5

0.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

86.5

100.0

TopicsEnergy saving efforts
 Energy saving through the reduction of the compressor’s discharge pressure
To minimize losses from excessive air supply settings, we have reduced electricity consumption byresearching and analyzing the status of our air use and reducing the compressor’s discharge pressure to alevel that is suitable for practical use.
Reduction of electricity consumption: 7,050 kWh/year
Reduction of CO2 emissions: approx. 3 ton-CO2/year

Compressor

142

CSR Report 2012│Factories:Aichi Factory Energy saving with heat-barrier film
As a means of saving energy in summer, a heat-barrier film has been affixed to the windows facing South inour cafeteria through which glaring sunlight entered. This has helped reduce the load on the air-conditioners,
and also reduce our gas consumption. (*)The figures below were recorded from July to October 2011, during
which time air-conditioners were in constant use.
Reduction of gas consumption: 228 cubic meters/year
Reduction of CO2 emissions: approx. 0.5 ton-CO2/year

The windows with the heat-barrier film on it

Heat-barrier film

Resource saving efforts
 Efficient use of water
We pursue the efficient use of water by, for example, using rainwater to water the plants in the rooftop
garden and other places.

This tank is used to store rainwater.

Rooftop garden

Communication with local communities
We welcome factory visits by local elementary schoolchildren as part of their social studies. The pupils
experience the fun of monozukuri by learning about the structure, operation, safety and convenience offamiliar table-top stoves and observing the manufacture of components and products up close.
Number of participants: 44

Pupils during the factory visit

143

CSR Report 2012│Factories:Asahi Factory

Asahi Factory
Location:
Number of
employees:
Business:
Major production
items:

Nishiyama-cho, Owariasahi-shi, Aichi
260 (as of the end of March 2012)
Manufacture of gas equipment
Fan heaters, clothes dryers, bathroom
heaters/dryers, fan-forced heaters andinfrared heaters
November 2003

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

143.7

17.9

2

Other fuels(kl) (crude oil
equivalent)9

Emissions into the air
CO2 emissions(t-CO2)966

NOx emissions(t)
0.8

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

587.6

0.0

Amount ofintermediate
processing of waste(t)
0.0

Substances subject to the PRTR law
Class I designated chemical
substance name

Number

53
80
296
300

a. Emissions
into the air

Ethylbenzene
Xylene1,2,4-trimethylbenzene
Toluene670.0
1,200.0
180.0
3,000.0

Air
Equipment

Substance

Drying furnaces

Soot and dust
NOx

National
0.2
230

Amount of recycled
waste
(t)

Recycling
percentage
(%)

587.6

100.0

Amount of emission/discharge
b. Discharge c. Discharge
into public
into the soil
watersat therelevant
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

Regulation value*1
Prefectural
Voluntary
‒
0.108
‒
200

Actualvalue*2
0.027
90.3

d. Landfill
at therelevant
office
0.0
0.0
0.0
0.0

(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)
6.0
6.0
6.0
6.0

1,300.0
1,300.0210.0
5,600.0*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm*2 Actual values for NOx and soot/dust indicate
the maximum measurements versus theregulation values for the relevant type ofequipment.

144

CSR Report 2012│Factories:Asahi Factory

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

Regulation value
National
Municipal Voluntary‒‒‒
5.7 - 8.7
5.7 - 8.7
5.9 - 8.5
300
300
210
300
300
210
5
5
3.5
30
30
21
3
3
2.1
2
2
1.4
10
10
7
10
10
7
240
240
168
32
32
22.4
220
220
154

Actual value
Maximum Minimum
64
26
7.3
6.6
140.0
52.0
57.0
16.0
1.8
< 0.5
8.8
2.4
N.D.
N.D.
0.45
0.09
0.20
0.10
N.D.
N.D.
46.0
22.0
4.1
2.0
22
14

Mean
34.9
7.0
83.2
34.8
0.8
5.5
N.D.
0.23
0.15
N.D.
33.8
3.0
18

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

TopicsEnergy saving efforts
 Energy saving through the replacement of coating equipment
We have reduced the consumption of energy and water by replacing the old coating pretreatment apparatus
with a new one that is smaller overall and is capable of saving more energy and water.
Reduction of electricity consumption: 19,251 kWh/year
Reduction of gas: 6,323 cubic meters/year
Reduction of CO2 emissions: approx. 21 ton-CO2/year
Reduction of water: 2,133 cubic meters/year

Pretreatment equipment
Resource saving efforts
 Improvement of recycling quality
Motors and transformers with numerous copper wires were collected separately so that they could be treatedas valuable resources.
Amount of motors and transformers collected: approx. 1 ton/year

A space for storing the motors andtransformers is provided.

Motors145

CSR Report 2012│Factories:Asahi Factory

 Controlling water consumption
To reduce the water consumption, our control of water consumption has been reinforced with measures
including the installation of a remote water meter transmitter in the cooling tower that consumes a large
amount of water.

Remote water meter transmitter

Water meter receiver

Efforts to reduce chemical substances Reuse of thinners for cleaning
The process of coating uses numerous different colors. Each time the colors are changed, the coating pumpand other pieces of coating equipment must be cleaned. The thinners used in the cleaning process containhazardous chemical substances. When switching to a frequently used standard color, we try to reuse thinners
that have already been used for the same color change. By doing so, we have reduced the use of the thinners.
Reduction of hazardous chemical substances: approx. 2.8 tons/year
Communication with local communities
 Factory visits
We welcome factory visits by local elementary schoolchildren as part of their social studies. We
communicated the fun of monozukuri by explaining the structure of familiar fan heaters and showing them
how the products are assembled.

Pupils during a factory visit
Beautification activity
The employees’ commuting routes, parking lots and the microbus stop around the Fujigaoka Station arecleaned on a regular basis.
Number of participants: approx. 200 in total

Cleaning of a commuting route

Cleaning of the microbus stop146

CSR Report 2012│Factories:Yanagisawa Manufacturing Co., Ltd.

Yanagisawa Manufacturing Co., Ltd.
Location:
Number of
employees:
Business:
Major production
items:

Yanagi-machi, Kadoma-shi, Osaka
291 (as of the end of March 2012)
Manufacture of gas equipment
Commercial-use appliances
June 2004

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

187.5

30.5

1

Other fuels(kl) (crude oil
equivalent)
61

Emissions into the air
CO2 emissions(t-CO2)
1,544

NOx emissions(t)
1.2

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

455.1

0.0

Equipment

Substance

Amount ofintermediate
processing of waste
(t)
0.0

Air

BoilerDrying furnaces

Soot and dust
NOx
Soot and dust

National
0.15
150
0.15

Amount of recycled
waste
(t)

Recycling
percentage
(%)

455.1

100.0

Regulation value*1
Prefectural
Voluntary
0.1
0.1
150
150
0.10
0.1

Actualvalue*20.003
18.8
0.0175*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm*2 Actual values for NOx and soot/dust indicate
the maximum measurements versus theregulation values for the relevant type ofequipment.

147

CSR Report 2012│Factories:Yanagisawa Manufacturing Co., Ltd.

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

Regulation value
National
Municipal Voluntary‒‒‒
5.0 - 9.0
5.0 - 9.0
5.9 - 8.5
600
600
300
600
600
300
5
5
5
30
30
24
3
3
3
2
2
2
10
10
3
10
10
10
240
240
120
32
32
22.4
220
220
154

Actual value
Maximum Minimum
8
3
8.1
7.3
43
5.5
22
2
3.5
1
14.9
2.7
0.1
0.03
0.39
0.05
0.14
0.1
0.1
0.03
26
12
14.8
2.8
2.0
1.0

Mean
8
7.6
17.8
9.2
1.5
6.5
0.07
0.18
0.11
0.07
17.7
7.3
1.7

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

TopicsEnergy saving efforts Elimination of air leakages
To reduce energy loss, we make the rounds of the factory and check for air leakages from plumbing, hoses
and other parts during its regular non-operating hours. If detected, air leakages are reported to the site
maintenance person for repair.

Workers make the rounds and check for air leakages.
 Green curtain initiative
As a summertime energy-saving activity, every year we create what we call the green curtain by growing
goya (bitter gourds) and other plants that effectively help to reduce the loads on the air-conditioners byabsorbing CO2 through photosynthesis and reducing the amount of sunlight streaming into the officebuilding.

Green curtain
Waste management
Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes requires the
improvement of the storage and disposal of the polychlorinated biphenyl (PCB) used in insulating oil forcondensers and transformers, by July 2016. We are taking action to dispose of these materials promptly.
Until the disposal is complete, they will be stored in a stainless container or similar for the purpose of
preventing leakages in case the equipment breaks. These materials are also stored in the warehouse, which islocked to prevent the materials from going missing.

148CSR Report 2012│Factories:Yanagisawa Manufacturing Co., Ltd.

Stored PCB

A chart of PCB storage status

Resource saving efforts
Used sheets of paper are shredded and reused as package cushioning materials for warm water mats, one of
our commercial items.

Cushioning materials made from shredded sheets of paper
Anti-pollution efforts
 Emergency drill
The environmental accident drill is performed. We also review the written procedures for emergency actions
and take preventive measures such as equipment inspections to minimize the risks to the environment.

Emergency drill for action against chemical leakage
Beautification activity
The employees’ commuting routes and the area around the factory are cleaned on a regular basis.

Colleagues participating in thebeautification activity

Cleaning of our commuting routes andsurroundings

149

CSR Report 2012│Factories:Rinnai Technica Co., Ltd.

Rinnai Technica Co., Ltd.
Location:
Number of
employees:
Business:
Major production
items:

Sakagawa, Kakegawa-shi, Shizuoka
446 (as of the end of March 2012)
Manufacture of gas equipment
Hot-water heaters, hot-water units andheat exchangers for hot-water units
December 2003

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)LP gas
(t)

284.1

364

Other fuels(kl) (crude oil
equivalent)
34

Emissions into the air
CO2 emissions(t-CO2)2,249

NOx emissions(t)
2.0

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

934.1

0.9

Amount ofintermediate
processing of waste(t)
0.6

Amount of recycled
waste
(t)

Recycling
percentage
(%)

932.6

99.8

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

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

Regulation value
Prefectural Voluntary‒‒‒
6.3 - 8.1

Maximum
53
7.4

Actual value
Minimum
20.3
7.2

Mean
37.5
7.3

25 (20)20 (15)

5.9

1.0

2.6

‒

20 (15)

5.3

1.4

3.4

50 (40)30 (20)

< 2.7

< 2.0

< 2.2

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

TopicsEnergy saving efforts
 Efforts in press forming
We alter procedures by implementing measures such as reducing the load on the motor of the press-forming
equipment and changing the press-forming timing to reduce the peak load. Ingenuity is exercised in
improving our equipment. For example, mold changes have been sped up. By doing so, we have reduced ourenergy consumption in parallel with efforts to improve safety. (Cooperation with the Production Engineering
Division of Rinnai Corporation)
 Ecological effects of new press machinery (comparison with conventional processed products)
Energy saving effects: total energy consumption reduced by nearly 20%
Space saving effects: area of equipment installation reduced by nearly 20%
 Energy saving effects in the reduction of losses from transportation
Reduction of CO2 emissions: approx. 60 ton-CO2/year

150

CSR Report 2012│Factories:Rinnai Technica Co., Ltd.

A new press machine

The worker is removing
components

 Switch to energy-saving fluorescent lamps
To reduce electricity consumption, the set of eight 110-watt lamps used in the assembly factory has been
replaced with a double connection set of sixteen 32-watt lamps.
Reduction of electricity consumption: 700 kWh/year
Reduction of CO2 emissions: approx. 0.3 ton-CO2/year

Fluorescent lighting in the assembly factoryCommunication with local communities
 Factory visits by employees’ families
In August, we collaborated with the Rinnai Corporation Shizuoka satellite office to plan and organize a factory
visit and BBQ for staff members and their families. This was intended to be an opportunity for the families to
see the workplace of their loved ones, deepen their understanding of our work and interact with otherfamilies.
Number of participants: 300

Families during the factory visit

BBQ Beautification activity
We support and participate in the annual activity to clean the area around Kakegawa Station. We also clean
the area around the factory on a regular basis.
Frequency of our participation in the beautification activity: 4 times/year

Colleagues cleaning the street.

151

CSR Report 2012│Factories: RB Controls Co., Ltd.

RB Controls Co., Ltd.
Location:

Head officeKannondo-machi, Kanazawa-shi, Ishikawa
Kanaiwa Factory
Kanaiwa Higashi, Kanazawa-shi, Ishikawa
Tsurugi Factory
Oyanagi-machi, Hakusan-shi, Ishikawa
610 (as of the end of March 2012)

Number of
employees:
Business:
Major production
items:

Manufacture of gas equipment components
Electronic units, remote controllers,
high-pressure units and audio & video equipment
March 2006

Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use

Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas
(t)

527.3

2.2

237

Other fuels(kl) (crude oil
equivalent)
28

Emissions into the air
CO2 emissions(t-CO2)
2,823

NOx emissions(t)
2.5

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

323.2

21.6

Amount ofintermediate
processing of waste(t)
3.7

Amount of recycled
waste
(t)

Recycling
percentage
(%)

297.9

92.2

Substances subject to the PRTR law
Kanaiwa Factory

Number

31
37
186
265
355
448

Class I designated chemical
substance name

Antimony and its compounds
Bisphenol A
Methylene dichloride
TetrahydromethylphthalicanhydrideBis (2-ethylhexyl) phthalate
Methylenebis (4,1-phenylene)
diisocyanate

Amount of emission/discharge
a. Emissions b. Discharge c. Discharge
into the air
into public
into the soil
watersat therelevant
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

d. Landfill
at therelevant
office(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)

0.0
0.0
0.0

0.0
0.0
0.0

2,300.0
16,000.02,400.0

0.0

0.0

0.0

0.0

0.0

15,000.0

0.0

0.0

0.0

0.0

0.0

580.0

0.0

0.0

0.0

0.0

0.0

4,200.0152

CSR Report 2012│Factories: RB Controls Co., Ltd.

Tsurugi FactoryClass I designated chemical
substance name

Number186

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

448
460

Amount of emission/discharge
a. Emissions b. Discharge c. Discharge
into the air
into public
into the soil
watersat therelevant
office(except d.)
0.0
0.0
0.0

d. Landfill
at therelevant
office(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)

0.0

0.0

2,100.0

0.0

0.0

0.0

0.0

0.0

35,000.0

0.0

0.0

0.0

0.0

0.0

480.0

TopicsEnergy saving efforts
 Reduction of losses resulting from heat dissipation
We reduced energy consumption by affixing heat insulating materials to the surfaces around our equipment
to reduce losses resulting from heat dissipation from solder baths, industrial dryers and other pieces ofequipment for making electronic substrates.

Heat insulating materials to prevent losses resulting from heat dissipation
Cooperation with our logistic partners
 Streamlining transportation and deliveries through the use of delivery rounds
Numerous delivery destinations are concentrated in Aichi. Transportation and deliveries to Aichi involve theuse of numerous delivery services and the consumption of a great deal of energy. To reduce CO 2 emissions,
we reduced the overall travel distance by minimizing losses from logistics and using delivery rounds as well
as direct shipments.
We will continue to exercise consideration to ensure proper assortment and transshipment in accordance withexisting delivery rounds in an effort to reduce losses from transportation/delivery and also further reduce theenvironmental load.
Reduction of CO2 emissions: 15.9 ton-CO2/year(*) Calculated with light oil 2.64 kg-CO2/liter.

Logistic center
Efforts to reduce hazardous chemical substances Reduction of consumption of cleaning solutions
We reduced the consumption of cleaning solutions (methylene chloride) by replacing the washable nozzles offilling machinery to inject urethane resin for the protection of electronic components with a disposable type.
Reduction of consumption of cleaning solutions (methylene chloride):approx. 900 kg/year (a reduction of almost 30% versus the previous year)

153

CSR Report 2012│Factories: RB Controls Co., Ltd.

Urethane resin filling machine
Communication with local communities
 Interaction within the factory premises(1) Vegetables are grown on the factory premises with the aim of helping to create opportunities for interaction
between our staff members and their families.
Crops such as sweet potatoes, green soybeans and corn are grown, and these are used as cooking ingredientsat our annual cultural festival.

Growing vegetables
Vegetable garden
Varieties cultivated: sweet potatoes, green soybeans, corn, goya (bitter gourds), cucumbers, tomatoes,
green peppers, sweet peppers and eggplants, among others(2) Our factory has a courtyard where staff members can take breaks and develop friendships.

Our courtyard(3) Our factory’s parking lot includes a lawn that is available to local people for ground golf.

Ground golf field

154

CSR Report 2012│Factories: Rinnai Precision Co., Ltd.

Rinnai Precision Co., Ltd.
Location:

Head office
Shimobata, Oaza Honjo, Komaki-shi,
Aichi
Kani Factory
Himegaoka, Kani-shi, Gifu
573 (as of the end of March 2012)

Number of
employees:
Business:
Major production
items:

Manufacture of gas equipment components
Valves and cock parts

Acquisition of
ISO14001 certification:

December 2005

Data on environmental load by site
Energy use
Electricity(10,000 kWh)City gas (13A)(10,000 m3)

LP gas(t)

1,276.8

123.5

138

Other fuels(kl) (crude oil
equivalent)
81

Emissions into the air
CO2 emissions(t-CO2)8,141

NOx emissions(t)
6.5

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)1,830.6

1.5

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage(%)

1,829.1

99.9

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

Regulation value
National Prefectural Voluntary‒‒‒
5.8 - 8.6‒
6.0 - 8.4
160 (120)
25 (20)25 (20)160 (120)
25 (20)25 (20)200 (150)‒
25 (20)

Actual value
Maximum Minimum
32
5
8
6.8
‒
‒
18.0
4.4
‒
‒

Mean
25
7.5
13
12.0
<1

Maximum

Actual value
Minimum

Mean

‒
7.5
8.7
9.6
16.0

‒
5.4
0.5
1.6
1.0

19.0
6.6
2.7
4.1
2.8

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

Kani Factory
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
WrittenVoluntary
agreement‒‒‒
5.8 - 8.6
5.8 - 8.6
5.8 - 8.6
160 (120)1515
160 (120)30
30
200 (150)30
30
National■ The unit of the amount of discharge is m3/day■ The values are expressed in mg/L except forpH■ Water discharge standard:River effluent standard* pH: Concentration of hydrogen ions
* BOD: Biochemical oxygen demand* COD: Chemical oxygen demand* SS: Concentration of aqueous suspended
solids* N.D.: Equal to or less than the minimum
determination limit(undetectable)* Values in parentheses are daily mean values.

155

CSR Report 2012│Factories: Rinnai Precision Co., Ltd.

TopicsEnergy saving efforts
 Energy saving through equipment renewal
When the air-conditioner at our die factory was renewed, our gas air-conditioner was
replaced with a new one that is capable of saving more energy. By doing this, wereduced energy consumption.
Reduction of gas consumption: 5,069 cubic meters/year
Reduction of CO2 emissions: approx. 11 ton-CO2/year
Gas air-conditioner
 Visualizing energy consumption
We visualize gas consumption by mounting gas meters on the melting furnace for molding, a piece ofequipment that consumes a particularly large amount of energy. This helps strengthen our energy control andreduce gas consumption.

Gas meters are mounted separately.
Environmental education activities
 Appearance on a radio program for energy-saving education
In August 2011, our colleagues appeared on the 11th broadcast of Gifu FM’s radio program to teach listeners
how to change their lives to save energy and do something beneficial for the environment. Sponsored by theJapan Center for Climate Change Actions, the program introduced our office’s good ecological practices in
the operation of air-conditioners, for example.

Shot taken during the broadcast in August 2011156

CSR Report 2012│Factories: Rinnai Precision Co., Ltd.

 Environmental education for staff members
Our environmental efforts require all our colleagues to boost their environmental awareness. The
environment is also included as part of our new employee training program, etc. in an effort to give many of
our colleagues an opportunity to boost their environmental awareness.

New employees receiving environmental education
Anti-pollution efforts
 Emergency drill
The environmental accident drill is performed annually. We also review the written procedures for
emergency actions and take preventive measures such as equipment inspections to minimize the risks to theenvironment.

Emergency drill

157

CSR Report 2012│Factories: RT Engineering Co., Ltd.

RT Engineering Co., Ltd.
Location:
Number of
employees:
Business:

Kamiike-cho, Toyota-shi, Aichi
187 (as of the end of March 2012)
Manufacture of gas equipment andcomponents
Table stoves and pipe/press
components
March 2006

Major production
items:
Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use
Electricity(10,000 kWh)City gas(10,000 m3)

LP gas
(t)

196.7

12.7

4

Other fuels(kl) (crude oil
equivalent)
21

Emissions into the air
CO2 emissions(t-CO2)
1,086

NOx emissions(t)
0.9

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

872.3

1.8

Amount ofintermediate
processing of waste(t)
3.9

Amount of recycled
waste
(t)

Recycling
percentage
(%)

870.5

99.8

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

Regulation value
National
Municipal Voluntary‒‒‒
5.0 - 9.0
5.7 - 8.7
5.7 - 8.7
600
300
300
600
300
300
5
5
5
240
150
150
32
20
20

Actual value
Maximum Minimum
27.5
10
7.3
5.8
2.7
0.7
12
<1
0.6
< 0.5
19.0
17.0
0.42
0.01

Mean
22
6.5
1.6
< 3.8
< 0.5
18.0
0.10

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

158

CSR Report 2012│Factories: RT Engineering Co., Ltd.

TopicsWaste-related efforts
 Waste recycling
We reviewed the segregation and collection of used batteries and fluorescent lamps so that they can berecycled for quality improvements. Today, these practices are assigned directly to a recycling manufacturer.

Fluorescent lamp disposal
Battery sorting machinemachine
The photographs above were taken
at the assigned recycling manufacturer.
 Visiting the industrial waste disposal centerWe visit the industrial waste disposal center annually to confirm that the industrial waste is disposed ofappropriately and to exchange related information.

Shots from a visit to the disposal center

Anti-pollution efforts
 Emergency drill
The environmental accident drill is performed. We also review the written procedures for emergency actions
and take preventive measures such as equipment inspections to minimize the risks to the environment.

Emergency drill for the effluent treatment device

159

CSR Report 2012│Factories: RT Engineering Co., Ltd.

Communication with local communities Participation in the resource streamlining project established by the municipal government of
Toyota-shi
Through comprehensive efforts such as contributions to resource efficiency and energy saving, theToyota-shi resource streamlining project is aimed at achieving compatibility between the reduction of theenvironmental load by means of energy saving, resource saving and waste generation control, among otherthings, and cost reduction for improving corporate competitiveness. We supported the project, which we
considered to be a model project of the Environmental Model City Action Plans, and took on numerous
challenges.
Examples of suggestions for improvement: Collection of heat generated from the boiler
Change of lighting equipment
Review of the amount of chemicals used in effluent treatment

Meeting regarding theresource streamlining project* Resource streamlining project
One of the Toyota Environmental Model City Action Plans, the project is designed to help achieve compatibility between the
reduction of the environmental load by means of energy saving, resource saving and waste generation control, among other things, andcost reductions for improving corporate competitiveness.

Beautification activity
The staff commuting routes, parking lot and the area around the factory are cleaned on a regular basis.
Frequency of cleaning activity: four times a year160

CSR Report 2012│Factories: Japan Ceramics Co., Ltd.

Japan Ceramics Co., Ltd.
Location:
Number of
employees:
Business:

Himegaoka, Kani-shi, Gifu
80 (as of the end of March 2012)
Manufacture of gas equipment
components
Ceramic plates for burners, industrial
burners
January 2006

Major production
items:
Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use
Electricity(10,000 kWh)LP gas
(t)

132.8

170

Other fuels(kl) (crude oil
equivalent)
375

Emissions into the air
CO2 emissions(t-CO2)
1,870

NOx emissions(t)
1.7

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill
(t)

181.0

3.0

Amount ofintermediate
processing of waste(t)
0.0

Amount of recycled
waste
(t)

Recycling
percentage
(%)

178.0

98.3

Substances subject to the PRTR law

NumberClass I designated chemical
substance name

53
80
300
412

Ethylbenzene
XyleneTolueneManganese and its compounds

a. Emissions
into the air

3,700.0
4,000.0
13,000.0
0.0

Amount of emission/discharge
b. Discharge c. Discharge
into public
into the soil
watersat therelevant
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

d. Landfill
at therelevant
office

0.0
0.0
0.0
0.0

(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)
0.0
0.0
0.0
0.0

980.0
930.0
1,700.0
2,100.0

Air
Equipment

Substance

Baking furnace

Soot and dust
NOx
SOx

National
0.2
400
0.49

Regulation value*1
Prefectural
Voluntary
‒
0.13
‒
90
‒
0.3

Actualvalue*20.006
35< 0.01*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm
Sox: m3N/h*2 Actual values for NOx, Sox, and soot/dust
indicate the maximum measurements versus
the regulation values for the relevant type ofequipment.

161

CSR Report 2012│Factories: Japan Ceramics Co., Ltd.

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
National
WrittenVoluntary
agreement‒‒‒
5.8 - 8.6
5.8 - 8.6
5.8 - 8.6
160 (120)30
15
160 (120)‒30
200 (150)
40
30

Actual value
Maximum Minimum
5.9
7.7
6.1
‒
40.0

4.6
6.9
0.8
‒
1.0

Mean
5.4
7.3
2.3
2.9
11.8

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

TopicsEnergy saving efforts
 Green curtain initiative
As a summertime energy-saving activity, every year we create what we call the green curtain by growing
goya (bitter gourds) and other plants that effectively help to reduce the loads on the air-conditioners byabsorbing CO2 through photosynthesis and reducing the amount of sunlight streaming into the office building.
Another example of our ingenuity is the improvement of drainage with the use of ceramic balls, an item wedevelop by leveraging the porous properties to enhance plant growth.

Green curtain

A view of the green curtainfrom inside the office building

Resource saving efforts
 Recycling plastic wrap
We reviewed the segregation and collection of plastic wrap used for packaging shipped products in an effort
to ensure that the waste that would otherwise end up in landfill can be effectively reused as resources. The
recycling of plastic wrap has been a success.
Amount of plastic wrap collected: approx. 780 kg/year

Plastic wrap used for shipments

162

CSR Report 2012│Factories: Japan Ceramics Co., Ltd.

 Effective use of unneeded calcium carbonate
The process of manufacturing hot-water unit components generates calcium carbonate in powder form. In thepast, this substance was treated as industrial waste and was disposed of accordingly. Since calcium carbonate
has the ability to improve acid soil, we utilize the substance effectively as a landscaping material,
maximizing soil stabilization and the white color unique to calcium carbonate, by dispersing it over thepremises of our office and our affiliates’ offices.
Amount of powdered calcium carbonate: approx. 2 tons/year

Landscaping materials using calcium carbonate in powder form(*The photographs were taken at Rinnai Corporation’s Technology Development Center)

Communication with local communities
 Factory visits by local high-school students
We welcome factory visits by local high school students as part of their field trips. The visitors experience
the fun of monozukuri by observing up close how the ceramics products and components used for familiar
items such as table stoves, built-in stoves and infrared heaters are manufactured.
Number of participants: 5High school students during a factory visit Beautification activity
We take part in the annual local activity to clean the Kani River. We also plant trees on the factory premises
and clean the area around the factory on a regular basis.
Number of participants: approx. 40/year

Well-trimmed flowers

Our colleagues clean the areaaround the factory.

163

CSR Report 2012│Factories: Noto Tech Co., Ltd.

Noto Tech Co., Ltd.
Location:

Mu Fujii, Nakanoto-machi,
Kashima-gun, Ishikawa
206 (as of the end of March 2012)

Number of
employees:
Business:

Manufacture of gas equipment
components
Enamel components, press
components, resin components andelectronics components
January 2007

Major production
items:
Acquisition of
ISO14001 certification:

Data on environmental load by site
Energy use
Electricity(10,000 kWh)LP gas
(t)

248.7

1,072

Other fuels(kl) (crude oil
equivalent)
122

Emissions into the air
CO2 emissions(t-CO2)
4,452

NOx emissions(t)
4.0

Discharge of waste
Amount of waste
generated(t)

Amount of waste
into landfill(t)2,652.6

346.9

Amount ofintermediate
processing of waste(t)
5.1

Amount of recycled
waste
(t)

Recycling
percentage(%)

2,300.6

86.7

Substances subject to the PRTR law

Class I designated chemical
substance name

Number

31
71
80
265
296
309
405

Antimony and its compounds
Ferric chloride
XyleneTetrahydromethylphthalicanhydride
1,2,4-trimethylbenzene
Nickel compounds
Boron compounds

Amount of emission/discharge
a. Emissions b. Discharge c. Discharge
into the air
into public
into the soil
watersat therelevant
office(except d.)
0.0
0.0
0.0
0.0
0.0
0.0
6.2
0.0
0.0

d. Landfill
at therelevant
office(Unit: kg)
Amount of transfer
a. Transfer
b. Transfer
to sewers
outside therelevant
office(except a.)

0.0
0.0
0.0

0.0
0.0
0.0

170.0
0.0
0.0

0.0

0.0

0.0

0.0

0.0

0.0

7.1
0.0
0.0

0.0
25.0
260.0

0.0
0.0
0.0

0.0
0.0
0.0

0.0
0.0
0.0

0.0
740.0
4,300.0

Air
Equipment

Substance

Baking furnace

Soot and dust
NOx

National
0.25
180Regulation value*1
Prefectural
Voluntary
0.25
0.22
180
160

Actualvalue*2
0.008
33*1 Units of regulation values
Soot and dust: g/m3N
NOx: ppm*2 Actual values for NOx and soot/dust indicate
the maximum measurements versus theregulation values for the relevant type ofequipment.

164

CSR Report 2012│Factories: Noto Tech Co., Ltd.

Water discharge
Substance
Amount of discharge
pH
BOD
COD
SS

Regulation value
National Prefectural Voluntary‒‒‒
5.8 - 8.6
5.8 - 8.6
5.9 - 8.2
160 (120)
80 (60)40 (30)‒‒140 (100)200 (150)
120 (80)
40 (30)

Actual value
Maximum Minimum
150.0
70.0
7.2
6.9
30.0
6.0
52
14
4.0
2.0

Mean
103.0
7.1
13.2
23
3.2

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

TopicsWaste-related efforts
 Qualitative improvement of recycling
We are committed to the qualitative improvement of recycling of waste that we generate. After researching
the assigned disposer’s practices and reviewing waste segregation and collection procedures, we successfully
introduced a shift from thermal recycling to material recycling in handling leftovers from substrates and fromelectronic component terminals. The shift to material recycling also turned waste into valuable resources.
Quantity of leftovers collected from substrates:

approx. 500 kg/year (metal collected: copper)

Quantity of leftovers collected from electronic component terminals:
approx. 2 tons/year (metals collected: copper and iron)Leftover from a substrate

Leftover from an electronic
component terminal

Communication with local communities
 Local high school students’ job experience
We welcome local high school students on a ten-day corporate long-term seminar as part of their job
experience. By experiencing the processing of the rice kettles we manufacture, the students learned about thebasics of monozukuri and about our focus on quality and ecological consideration.

Students experiencing monozukuri

165

CSR Report 2012│Factories: Noto Tech Co., Ltd.

 Factory visits
We welcome factory visits by local high school students as part of their field trips. The visitors experience
the fun of monozukuri by observing up close how the products and components used for familiar items suchas table stoves, built-in stoves and ovens are transformed into finished products.
Number of participants: 30

Students during a factory visit

Anti-pollution efforts
 Emergency drill
The environmental accident drill is performed. We also review the written procedures for emergency actions
and take preventive measures such as equipment inspections to minimize the risks to the environment.

Emergency drill

Observance of laws
Besides observing laws, we set more rigorous standards for our usual monitoring and regular measurements.

Smoke measurement

166

CSR Report 2012│Factories: Techno Parts Co., Ltd.

Techno Parts Co., Ltd.
Location:

Head office
Fukuzumi-cho, Nakagawa-ku, Nagoya-shi, Aichi
Ichinomiya Office
Nishiougaido Aza Toukouji, Ichinomiya-shi, Aichi
Sango Office
Tsunoda, Sango-cho, Owariasahi-shi, Aichi
Ida Office
Ida-cho, Owariasahi-shi, Aichi
Komaki Office
Oaza Mitsubuchi, Komaki-shi, Aichi
Number of468 (as of the end of March 2012)
employees:
Business:
Assembly and processing of components ofheat-energy appliance
Major production
Components of gas equipment and home
items:
electric appliances
Acquisition ofJuly 2011

Ichinomiya Office

Komaki Office

Ida Office

Sango Office

ISO14001 certification:

Data on environmental load by site
Energy use
Electricity(10,000 kWh)
78.9

City gas (13A)(10,000 m3)
5.3

LP gas(t)
0.9

Emissions into the air
CO2 emissions(t-CO2)418

NOx emissions(t)
0.3

Discharge of waste
Amount of waste
generated(t)
95.6

Topics
We undertake numerous different environmental efforts in accordance with Eco Action 21, an ecologicalmanagement system.
* Eco Action 21 is a certification and registration system that is based on guidelines formulated by the Ministry of the Environment
with the aim of improving the effects and efficiency of ecological commitments to develop a sustainable society.

Energy saving efforts
 Green curtain: Sango Office
In the green curtain activity, the Sango Office grows goya (bitter gourds) and morning glory along the wall ofpart of the office building. These plants facilitate the absorption of CO 2 through photosynthesis and reduce
the amount of sunlight streaming through the window in summer. They help reduce the use of
air-conditioners, thus saving energy.

167

CSR Report 2012│Factories: Techno Parts Co., Ltd.

Green curtain
 Energy saving with fluorescent lamps: Ichinomiya Office
The Ichinomiya Office reduced electricity consumption by replacing the fluorescent lamps used along theassembly line with new ones that are capable of saving more energy.
Reduction of electricity consumption: 2,206 kWh/year
Reduction of CO2 emissions: approx. 8 ton-CO2/year Energy saving in vending machines
The vending machines in all the company’s offices have been replaced with new ones that are capable ofsaving more energy.
Number of vending machines replaced: 9

Vending machine168