CSR Report 2019
Rinnai Corporate Social Responsibility Report 2019C o r po rate M e ss ag e

Aiming for the Realization of
Healthy and Comfortable Lifestyles
and Sustainable Societies
Since its founding in 1920, the Rinnai Group has
contributed to comfortable lifestyles for people aroundthe world through the provision of gas stoves, water
heaters and heating systems. At present, the Rinnai
Group has bases in 17 countries and regions, and deploys
products in over 80 countries throughout the world.
Rinnai offers optimal solutions suitable for lifestylecultures, climate conditions and energy requirements ineach country of the world to contribute to the realizationof healthy and comfortable lifestyles and sustainable
societies for people throughout the world.

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02

CSR Report 2019

Corporate Mission and Vision

C o r p o rate
S o c i al
Re s p o n s i b i l i t y

Fundamental Concept

Quality is our destiny

Contents

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

Rinnai’s Activities

Company Motto

We produce an abridged version of our CSR Report in booklet form. Information not contained in the booklet—such as Company initiatives, specificdetails, and related data—is posted in the Company Information section of
our website.
Highly important activities(stakeholder perspective)

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

Creating a healthier way of living

Schematic Diagram of Company Ideals

CSR Report 2019
Rinnai Corporate Social Responsibility Report 2019

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

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

Brand Promise—Rinnai’s Corporate Mission—

Rinnai Code of Conduct

03

13 Environmental Impact within Rinnai’s Value Chain
15 Stakeholder Engagement
17 Value Creation Process

Special Issue 01[Healthy lifestyles]
21 Contributing to healthy and comfortable lifestyles
through the diffusion of gas clothes dryers

This report focuses on events that occurred in fiscal 2019—April 1, 2018, to March
31, 2019—but also touches upon measures implemented and recent activities
undertaken since fiscal 2019 as well as future business direction, targets, and plans.

[Approaches to safety and peace of mind]

Referenced Guidelines

Publication ScheduleSpecific rules of day-to-day corporate activities

1 1 Rinnai Group CSR

Special Issue 02

Spiritual support of Rinnai

Expectations and attractiveness that
we keep promising with our customers

09 Rinnai Group Profile

Reporting Period

GRI Standards, ISO 26000: 2010
Environmental Reporting Guidelines (2018), issued by Japan’s Ministry of the Environment
Environmental Accounting Guidelines (2005), issued by Japan’s Ministry of the Environment
IIRC, The International Integrated Reporting Framework

Company
Motto

03 Corporate Mission and Vision
Editorial Policy / Contents
05 Top Message

Abridged version
booklet form

Highly important activities(Rinnai Group perspective)

Brand Promise —Rinnai’s Corporate Mission—

01 Aiming for the Realization of Healthy
and Comfortable Lifestyles andSustainable Societies

September 2019 (Japanese version)
Previous: July 2018, Next: July 2020 (planned)

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

27 Approaches to providing customers with safety
and peace of mind by improving the safetyfunctions of our gas stoves

Special Issue 03[Approaches to environmental protection]
33 Initiatives to prevent global warning throughenergy-saving water heaters

39 Communication with Employees
43 Communication with Stakeholders

47 Management Structure
52 Data Collection

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R i n n a i C S R R e p o r t 2 01 9

Top Message“Health & Lifestyles” are our new keywords for the realization of better andmore sustainable societies
Rinnai has been supporting better lifestyles since its

Japan, sales in the United States have risen steadily as afounding in 1920, offering a wide range of products

result of proactive launching of new products, while inincluding water heaters, kitchen appliances, and home

Asian countries competition remains fierce.
Under such conditions, during fiscal 2019 (ended

heaters, and expanding as a company with a focus on
the keywords of “safety and peace of mind,” “comfort,”

March 31, 2019), the initial year of our “G-shift 2020”and “environment.” Today, the Rinnai Group has officemedium-term business plan, Rinnai pursued newlocations in 17 countries and regions including Japan,

measures focusing on the keywords of “Heat &and sells products in more than 80 countries worldwide.

Lifestyles” and “Health & Lifestyles,” helping to raise the

We provide optimal solutions to fit the culture andstandard of living in global markets, and incorporating

lifestyles, climate, and energy situation in each country,

and applying new technologies to our core expertise

conducting business under a policy of contributing toto create original products and services. In terms ofbetter lifestyles for local societies.

business results, sales rose steadily on expansion ofoverseas businesses in such markets as China and the

The business environment for Rinnai has changed
in recent years. Greater awareness of environmental

United States, though operating income declined on

responsiveness and energy efficiency in Japan has

sluggish sales of high-value-added products in Japan,

driven expanded sales of high-efficiency gas waterand higher sales promotion costs overseas. As a result,heaters. Sales have also been positive for kitchen

net sales in fiscal 2019 amounted to ¥348,022 million (upproducts and gas clothes dryers. Overall, however,

0.3% year on year), with operating income of ¥30,879

business conditions remain strained due to the impact of

million (down 6.0%).

energy liberalization and higher material costs. Outside

President

05

Hiroyasu Naito

Medium-Term Business Plan “G-shift 2020”(Global, Generation, Governance)
Targets of the Plan

GlobalGlobal shift means deploying the Group’s
network to promote strategies and focus ondeveloping Rinnai as a world-renowned brand.

“G-shift 2020”
Generation shift means
shift to a new generationthat breaks common sense
while inheriting the tradition
cultivated over 100 years.

Governance shift meansbuilding management
frameworks suited to the times
and organizational structuresthat encourage growth.

Generation

Governance(Billions of yen)

Fiscal 2019
(Results)

Fiscal 2020
(Targets)

Fiscal 2021
(Targets)

348.0

356.0

372.0

Domestic

172.5

176.0

178.5

Overseas

175.5

180.0

193.5

50.4%

50.6%

52.0%

Operating income

30.8

32.0

34.0

Operating income ratio

8.9%

9.0%

9.1%

Consolidated
Net sales
Breakdown“We deliver high-value-added productsthat support the environment andbetter health, aiming to be thepreferred brand throughout the world.”

Overseas sales ratio06

R i n n a i C S R R e p o r t 2 01 9

Top Message

A mission to deliver more comfortable and convenient lives for customers, andsupport the realization of sustainable societies

A new corporate logo for a new Rinnai, to be a globally recognized brand
Rinnai has designated “branding promotion” as a priority

improvements to systems that reward forward-thinking

Along with creating products that are safe, trusted,measure in the “G-shift 2020” medium-term businessemployees, and implementing job rotations to foster

Development Goals (SDGs) and environmental, social,

and reliable, Rinnai also focuses on making housework

plan, aiming to enhance its value as a global brand. We

broader knowledge and flexible thinking. At the sameand governance (ESG) criteria, we believe that theeasier by developing new products that enhance

adopted a new corporate logo from April 2019, updatingtime, we of course retain the values Rinnai has held up to

exceptional environmental performance of Rinnaicomfort and convenience, such as gas clothes dryers

the basic design elements (visual identity) to express thenow, the stance that “Quality is our destiny,” a strictproducts offers a major advantage in terms of realizingthat shorten laundry times, and built-in hobs (stovetops)

Rinnai brand worldview. We also formulated a “brandadherence to compliance, and an “at home” corporate

better and more sustainable societies. Our ECO ONE

with automatic cooking functions. Of these, gas clothes

promise” to our customers and society, “Creating aculture, while also aiming to promote diverse work styles

hybrid water heater and heating system, using bothdryers that quickly dry clothes using air warmed with gas

healthier way of living,” clarifying our commitment toand enhance productivity.

natural gas and electricity as heat sources, received thehave been particularly popular in two-income

building a brand recognized worldwide. The new logo

Environment Minister’s Prize at the Cool Choice Leaders

households. In fiscal 2019, we added 3 kg and 8 kg types

symbolizes a new-born Rinnai, aiming to foster an image

on September 1, 2020. We have designated a three-year

Award 2018 sponsored by Japan’s Ministry of theto the lineup along with the standard 5 kg type, in order toof a brand that creates healthy and comfortable lifestyles.

period before and after that date, from 2019 to 2021, as

Environment, earning praise for the exceptional energy

meet diverse home needs. We also hope to expand use

We also adopted “Health & Lifestyles” as a new theme

an “anniversary period” during which we will conduct a

efficiency of its hot water supply. Rinnai also pursuesof these dryers in commercial facilities struggling withalongside the established “Heat & Lifestyles,” showing

variety of activities to express gratitude to our manyenvironmental measures apart from productlabor shortages, such as nursing care homes and beauty

that we provide innovative products and services beyond

customers and stakeholders, and pave the way for thedevelopment, such as holding seminars to support theparlors.

just heating equipment, and expressing our desire tonext 100 years.

Amid the current focus on the UN’s Sustainableestablish a strong brand that is preferred and chosenwidespread adoption of the net zero energy house (ZEH).

Looking toward the 100th anniversary approachingin 2020 and the future beyond, by providing convenient

by customers.

Expanding our business domain in anticipation of future growth

Rinnai will mark the 100th anniversary of its founding

To strengthen our brand power, we are relying on ourand accessible products of exceptional safety and quality,

employees to take the initiative and freely express ideas,

Rinnai will contribute to comfortable lives for its

Considering the current business environment, Rinnai

product designs and technologies of Japan provides aembracing the challenge of creating exceptional products

customers, and the realization of a sustainable society.

is pursuing measures in Japan to expand its businesssolid foundation for growth. In the United States, we

without fear of failure. To encourage this desire, we are

I deeply appreciate your continued support of the Rinnai

domain in anticipation of future growth. Our Businessbegan local manufacturing of gas tankless water heaters

actively pursuing such measures as making

Group.

Planning Division, newly established in 2018, focusesin April 2018, with a new factory scheduled to begin

on marketing to uncover latent needs, developing new

operations in 2021. By strengthening our local production

business opportunities outside the conventional

structure, we are aiming for steady growth worldwide.

framework, and product planning from a longer-term
perspective. Completely separate from the sales anddevelopment divisions and accumulating information in
non-conventional ways, this division works to expand
Rinnai’s business domain from among a wide range ofConventional logo

New logo

100th Anniversary slogan and logo

options, including developing original business models,
Anniversary slogan

technical innovation in partnership with other companies,
and application development for new technologies.
Outside Japan, despite the uncertainty in the
Chinese economy that has continued since the end of
2018 due to trade friction with the United States, we

The new Rinnai logo is rendered in a robust, modern gothic
font, with a slightly wider shape. The sharp edges havebeen rounded to create a design with a relaxed, friendly,
human atmosphere, expressing the Rinnai brand as“Creating a healthier way of living” for the world of tomorrow.

Anniversary logo

Connected in passion
for the next 100 years

believe that our manufacturing incorporating the sensible

07

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R i n n a i C S R R e p o r t 2 01 9

Rinnai Group Profile
Rinnai Worldwide

Corporate Data (As of March 31, 2019)● Manufacturing and sales companies ◎ Sales companies ○ Other business □ Overseas representative office (As of April 1, 2019)

Incorporated

September 1, 1920

Established

September 2, 1950

Paid-in capital

SOUTH KOREA● Rinnai Korea Corporation● Shanghai Rinnai Co., Ltd.

◎◎◎ Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

46 (domestic 15, overseas 31)●Rinnai Corporation◎ Hainan Rinnai Minsheng Kitchen Appliances Sales Co., Ltd.

・Branches:Home heaters¥19.6 billion

Rinnai Canada Holdings Ltd.
Rinnai America Corporation●

Tohoku, Kanto, Chubu, Kansai, Kyushu
Rinnai Hong Kong Ltd.
◎□

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

● Rinnai Taiwan Corporation◎

Rinnai Holdings (Pacific)
Pte Ltd.

Hokkaido, Kita-Tohoku, Sendai, Niigata,
Minami-Kanto, Tokai, Shizuoka,
Hokuriku, Nagano, Osaka, Keiji, Hyogo,
Chugoku, Shikoku, Fukuoka
・Factories and related centers:
Technology Development Center
Production and Technology
Development Center●
P.T. Rinnai Indonesia

Integrated Logistics Center
East Japan Logistics Center
Rinnai Parts Center

AUSTRALIA

Kitchen appliances¥88.3 billion

・Domestic sales offices:Tokyo, Kita-Kanto, Higashi-Kanto,

Oguchi Factory● Rinnai Australia Pty., Ltd.

Seto Factory○ Gas Appliance Services Corporation

Akatsuki Factory●

Others ¥28.9 billion

Commercial-use equipment¥8.4 billion

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

● Yanagisawa Manufacturing Co., Ltd.
● Gastar Co., Ltd.

● RB Controls Co., Ltd.

South Korea¥32.9 billion● Rinnai Precision Co., Ltd.
● RT Engineering Co., Ltd.
● Noto Tech Co., Ltd.
◎ Rinnai Net Co., Ltd.
○ Rinnai Enterprises

Rinnai Brasil Heating Technology Ltd.
●

348.0

¥

billionWater heaters andheating systems¥202.6 billion(Year ended March 31, 2019)

China¥46.0 billion

Total

348.0

¥
Australia¥24.9 billion

Rinnai New Zealand Ltd.

Total

Net Salesby Region● Japan Ceramics Co., Ltd.
● Techno Parts Co., Ltd.

Net Salesby Product(Year ended March 31, 2019)

Others ¥20.7 billion

Indonesia¥12.1 billion● Rinnai Technica Co., Ltd.

billionUnited States¥30.3 billion

09

10,613 (consolidated), 3,702 (non-consolidated)◎ Rinnai Plus Corp.

● Shanghai RB Controls Co., Ltd.

Rinnai Italia s.r.l.

(From outside Japan): +81-52-361-8211● Mikuni RK Corporation

CHINA
Rinnai UK Ltd.

Telephone
Number of Group companies● RS Korea Ltd.
◎

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

Number of employees● RB Korea Ltd.

¥6,459,746,974

Head officeJapan¥180.8 billion

Water Heaters and Heating Systems

Kitchen AppliancesHome Heaters

Commercial-Use Equipment, Others

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

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

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

Industrial ceramics machines, commercial-use ranges,commercial-use cookers, gas clothes dryers, components, and others

Eco Jozu, gas water heater with bathfilling system(JAPAN)DELICIA built-in gas hob (stovetop)(JAPAN)Gas fun heater A-style(JAPAN)Gas clothes dryer 8 kg type
(JAPAN)

High-efficiency gas tankless water heater(UNITED STATES)

Drop-in gas hob (stovetop)(INDONESIA)

Fanned flue heater(UNITED STATES)

Commercial-use connected water heating
system(AUSTRALIA)

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R i n n a i C S R R e p o r t 2 01 9

Rinnai Group CSRWith the creation of healthy and comfortable lifestyles as its corporate mission, Rinnai promotes CSR activities
through business focused on ESG throughout the entire Group.

Heat and Lifestyles

Quality

We deploy our advanced heat-related technologies andWe adhere to the fundamental concept that “Quality

know-how to develop products that people can use in a

is our destiny.” To this end, we pursue a “zero defects”

safe, comfortable, and efficient manner. In this way, weobjective when designing, making, and selling ourhelp people lead abundant lifestyles.

products, to ensure they remain fault-free until they
are no longer used by the customer.

Quality Policy

Based on our fundamental concept, “Quality is our destiny,” under our Quality Policy, our Group
employees strive to improve design quality, manufacturing quality, and sales quality with acustomer-oriented approach.

Quality Policy

Customer Orientation

To provide products with satisfaction and ahigh level of safety to customers

To offer products with safety and peace of mind; To disseminate safe
usage; An enriched service bodyour environmental initiatives, we promote all-hands environmental activities with full
Environmental For
participation based on an environmental action plan (”7E Strategic Initiatives”) aiming for its
Policyaccomplishment in 2020, under the following basic environmental philosophy.

Approach to CSR
The Group pursues CSR activities basedon the three commitments it hasemphasized since its foundation—“heat and lifestyles,” “quality,” and“contributing to local communities”—
complemented by “the environment,”

Basic Philosophy on the Environment

Environmental Slogan

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

Our actions are imbued by the wisdomof many and undertaken with due
consideration to the sustainability of apeople- and earth-friendly environment.

7E Strategic Initiatives
Green Activities Involving All
Employees in All Business Areas

1for a total of four key themes.

Develop and provide environmentallyconscious products
5 Emphasize

2 Promote green procurement

E-Service
E-Procurement (Installation(Procurement) and repair)

3 Promote activities

with reduced
environmental
impactE-Factory(Factories)

Contributing to Local Communities

The Environment

In principle, we focus on local production and local sales

We reduce greenhouse gas emissions by developing,in advancing our overseas business. Our aim is to help

manufacturing, and selling residential appliances, which

improve the lives of local people around the world by

are kitchen appliances, water heaters and heating

delivering products and services that meet the climates,

appliances, with exceptional energy efficiency.

E-Office(Offices)
E-Marketing(Sales)4 Sell environmentallyconscious products;
Encourage customers
to be moreenvironmentally aware

environmentallyconscious installation
and repair services

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

6 Promote activities with

reduced environmental
impact at our offices

7

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

lifestyle cultures, and customs of various nations andregions.
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R i n n a i C S R R e p o r t 2 01 9

Environmental Impact within Rinnai’s Value Chain
Rinnai promotes environmental impact reduction initiatives through the value chain (see Note 1) in consideration ofsocietal demands and impact on the environment. In particular, the largest amount of CO2 emissions come fromproduct usage, with environmental impact occurring in the procurement phase being the next largest factor.
Focusing efforts on these two points, we are engaged in reducing environmental impact.
Note 1: A series of business activities and value creation processes that companies conduct to provide customers value in the form of products and services.

Rinnai’s Value Chain

Demands andExpectations from Society(Overseas / Japan)

INPUT
Main resources consumed(Raw materials and energy)

Procurement

Development and Manufacturing

Sales, Logistics, and Services

Product Usage

Disposal

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

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

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

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

EnergyWater• Energy; 1,192,078 GJ• Ground water: 233,140 m3

EnergyWater

EnergyWater

EnergyWater• Public water: 625,939 m3

CO2 Emissions (Emissions Ratio)

OUTPUT
Rinnai’s environmental
impactInitiatives Rinnai
conducts throughbusiness

866,847 t(7.31%)—

40,254 t (0.34%)
Scope 2
73,181 t (0.62%)
Scope 1

Solid waste

Wastewater

31,352 t

846,122 m³(Includes valuable substances)(0.07%)

Scope 3 (Category 11)(Concerns emissions from Japanese water heaters)(0.05%)———
Promotion of environmentallyconscious design

Pursuit of environmental
performance and streamliningof manufacturing processes

Spread of environmentallyfriendly products

Proposal of reasonably
achievable ecological lifestyles

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

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

Sales: Strive to spread products that
contribute to energy efficiency inthe water heater and heating fields

Product Usage:We are teaching customers the environmental
friendliness of our products and promoting theirecological use through Company-sponsored
product events.
Proposal of sustainable, comfortable, and green
lifestyles through use of energy-saving products
Through various events, we will appeal to all of
our end users the environmental performanceof our products and how to use them with theenvironment in mind.

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

5,414 t10,825,493 t (91.34%)

Supply chain management

Rinnai’s estimates based on the “Basic Guidelines for Calculating Green House Emissions Through the Supply Chain”[Target scope]	Rinnai Corporation and consolidated subsidiaries (development / manufacturing), Rinnai Corporation (procurement / sales / logistics / services / product usage / disposal)[Target period] Domestic: Fiscal 2019 (April 2018–End of March 2019)
Overseas: January 2018-End of December 2018
[CO2 emissions (units)]: tCO2e, (%) represents the emissions ratio within each process.

13

8,838 tLogistics: We are promoting logisticalstreamlining.
Services: Elevate the Rinnai brand withsecurity activities through a wealthof service maintenance andinspections

Disposal: Application of design for theenvironment, e. g., to makeproducts easy to disassemblein accordance with productassessment standards

The value chain is the chain of business activities and processes undertaken by acompany to generate and deliver value (products and services) to the customer.
Indicators marked with a check have received a third-party guarantee from,
Lloyd s Register Quality Assurance Ltd. (LRQA).

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R i n n a i C S R R e p o r t 2 01 9

Stakeholder Engagement
Means of Communication
Rinnai places great importance on daily communication with customers, employees, shareholders, investors,• Customer Center• Exhibitions / Other events• After-sales services(inspection and repairs)• Official online shopping site
“R.STYLE”• New Year meetings(policy presentations)• New product workshops
utilizing internal facilities• Corporate site
• Product information sitebusiness partners, local communities, and the general public in an effort to further evolve our business activities
and improve levels of satisfaction. Comments and requests from customers through channels such as exhibitions
and our online shopping site are used to help improve our products and services. We exchange information withour business partners on subjects such as management policies and products and work together to mutually
improve quality through our Level-Up activities.

Employees

Shareholders
Investors

Business Partners

Community, Society(Including government)

CSR Report 2018 Questionnaire Results n=323
Sections of Interest (Printed Edition)
Chinese Air Pollution (PM2.5) Countermeasures

Corporate Mission and Vision

Global Warming Countermeasures

Message from the President

Customer Safety and Peace-of-Mind

Rinnai Group Business

Consumer Safety Initiatives

Rinnai Group CSRWith Employees

The Rinnai Groups Value Chain

Communication with Stakeholders

Stakeholder Engagement

Management Structure

Identifying CSR Material Issues

15

10

20

• Customers who have had repairs done are surveyed to gauge their satisfaction with elements of service such as “ease of getting through byphone” and “politeness of operators.” Details of responses are then fed back to operators so that they can remedy unsatisfactory areas.
• The Maintenance Check Call Center was established to handle inquiries regarding inspection notifications, inspection notice functions, andschedule inspections. A simple explanation of the inspection system is provided to customers who are not registered owners and guidanceis provided to receive inspections for safety.
• We provide guidance on legal compliance inspections for customers who registered their products in accordance with the “long-term use
product safety inspection system” as they reach their 9th year of use. For products not applicable under legal compliance inspection
regulations, we strive to improve customer safety by sending safety inspection notifications based on the “long-term use product safety
inspection system.”• Rinnai conducts web-based questionnaires (customer satisfaction surveys) with customers who make purchases on our website. These
questionnaires concern purchased products, service window support, the sales site itself, and product delivery and packaging. The
Company provides all related offices with feedback regarding questionnaire results and conducts initiatives to improve issues related toresponses that indicate low customer satisfaction.

• Individual discussions• Workplace meetings• Training / Events• Corporate ethics advisory
service• In-house intranet / In-housenewsletter• Information exchange with
employee unions• In addition to regular interviews targeting all employees, we conduct feedback interviews regarding personnel evaluations, pre-partum andpostpartum childcare leave, and interviews when returning to work. By creating rules for interviews with employees in Japan and thosetransferred overseas, we are strengthening our support for individual growth and workplace communication to create a better work
environment.

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

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

• Participation in local / community
development activities• Support for cultural activities
and the arts
• Employee volunteer activities• Support for extracurricular school
activities (factory tours, etc.)• We are asked by people living near our plants and offices to assist with events and festivals aimed at enlivening their communities, and we
actively assist and take part in such events as a member of these communities.

• To collect and accurately respond to requests from employees in all departments, the Company regularly holds conferences between its
Personnel Department and employee unions, the results of which are used to revise internal systems and improve work environments.
• Rinnai conducts nursing care seminars and provides nursing care-related information based on nursing care questionnaire results. The
Health Support Office plays a central role in promoting employee health through health campaigns that check blood vessel age, bonedensity, iron content, and skin age as well as walking seminars for weight loss and physical fitness.
• Since 2005, we have been operating a corporate ethics advisory service. This internal reporting system enables employees to reportfraudulent activity and violations of laws, ordinances, or internal regulations in cases when consulting with their superiors is problematic.

• We regularly organize facility and factory tours for institutional investors to give them a better understanding of our strengths andcompetitive advantages, and to outline our approach to manufacturing and technical capabilities.
• We hold results briefings and individual IR meetings to answer inquiries and explain our underlying thinking on dividend policy.

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

• Rinnai continues to support exchanges with citizens and creative activities by collaborating with cultural and artistic activities conducted in
the area surrounding the Nakagawa canal, where our head office is located.
• In response to requests for assistance with community learning and school education, we organize events such as seminars on the history of
manufacturing at Rinnai and factory tours for schoolchildren.

Selected Questionnaire Feedback (Excerpt)

Realizing a Better Society0• We conscientiously answer a range of inquiries from customers concerning products and parts, and post frequently asked questions (FAQ)on our website.

• We are expanding Hot.Lab, our hands-on product induction facility, and working to increase customer knowledge and understanding
regarding our merchandise.

Customers (Users) (Distributors)

Communication with
Our Stakeholders

Opinions and Issues Raised and Our Responses

30

40

50 (%)

0

10

20

30

40

50 (%)• I think that setting and evaluating targets in terms of basic units is good, but I
would like you to make efforts to regulate and reduce total amounts.
(Male, 60s, customer and individual consumer)• This is good because I think companies that value their employees takegood care of their customers. I hope complaints from customers are taken
seriously within even greater response. (Male, 50s, customer and individual
consumer)• I would like to see a graph on the ratio of female employees and executives.
Regarding the issue of disabled employment numbers, it is necessary toprovide the private sector with a fair number, so I think that this point needs
special consideration. (Female, 40s, customer, individual consumer)• As with most companies, the internal relationship between partner
employees and non-regular employees was unclear. In terms of creating a
corporate culture of products selling safety, I would like a little more
information regarding flat and direct communication and the flat,
comfortable relationship between employees and partner employees.
(Female, 30s, customer, individual consumer)• I think that women’s opinions should be emphasized based on their work
content, but data such as the ratio of women in managerial positions was notprovided. (Female, 50s, customer, individual consumer)16

R i n n a i C S R R e p o r t 2 01 9

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

Rinnai Group Value Creation Process

External Environment / Social Issues

Business Activities

Climate change /global warming

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

Product usage risks

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

Work style changes
cause decrease inquality of lifestyle

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

Value Provided

Main products and services

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

Environmental
contribution(local production / in-house production)

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

Invested Capital (Fiscal 2019)
Human capital

Employees*1:
Employed (Rinnai non-consolidated) *1:
Training and development expenses:(Rinnai non-consolidated) *1
Overseas trainees (Rinnai non-consolidated):

Intellectual capital

Development headquarters staff:(Rinnai non-consolidated) *1
R&D expenses (Rinnai non-consolidated):ISO 9001 certification acquisition:(number of companies) *1
ISO 14001 certification acquisition:(number of companies) *1

10,613 people
131 people¥159 million
13 people

Rinnai Group production bases:
24 companies(number of companies) *1
Production group staff (Rinnai non-consolidated) *1: 1,856 people
Capital expenditure (Rinnai non-consolidated):¥6,602 million

Natural capital

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

Social andrelationship capital

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

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

7.0%
4.8%
69.4%

1,192,078 GJ
233,140 m3
625,939 m3

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

Decreasing working hours and intensifying
competition for securing human resources

17

Operating income¥30,879 million

Net income attributable toowners of the parent company¥20,480 million
Net assets (equity ratio)¥320,696 million (69.4%)
Dividend per share(annual) ¥94*1 As of March 31, 2019

[Domestic] Declining birthrates, an aging
population, and a decreasing in the numberof households¥348,022 million

8.90%

14 companies

Manufactured
capital[Domestic] Price reduction of gas
appliances due to customer requests

Consolidated net sales¥7,031 million
17 companies

ROE
ROA
Equity ratio[Domestic] Expansion of thermal energy
systems centered on electric powerGas stoves, range hoods, water heaters,
hot water floor heaters, gas clothes
dryers, dish washers

Operating income ratio

336 people

Financial capital

Risks

Fiscal 2019 Achievements

Opportunities
Growing demand for energy-saving
products by strengthening environmental
policies
Increasing needs for safety and accident
prevention as social issues[Overseas] Expansion of natural gas use[Overseas] Improving living standards
Progress in evaluation of corporate ESG
initiatives

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

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

Social issue recognition

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

Amount contributed toreducing CO2 emissions byusing the product2.54 million tons
Announcements of productrecalls due to defects: 0 case18

R i n n a i C S R R e p o r t 2 01 9

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

CSR Material Issue Targets and Results

activities with stakeholders coupled with study and analysis of applicable guidelines and ESG indices. We also

Deep Involvementwith SDGs

identify CSR material issues through the Rinnai Group value creation process in relation to our management
strategies, revolving primarily around our Corporate Planning Division.

Identification Process● Conduct stakeholder questionnaire withthe aim of reviewing our CSR Report● Ascertain matters of interest to
stakeholders based on questionnaire
results and opinions expressed● Analyze trends such as changing perspectives
on ESG and matters of public interest (Dow
Jones Sustainability Indices, FTSE4Good
Index Series, Toyo Keizai Corporate Social
Responsibility Survey, etc.)● Determine social challenges relating to the
Rinnai Group, and analyze their level ofimportance to stakeholders and Rinnai● Examine consistency with Rinnai management
strategy and identify CSR material issues

Material Issues

Main Target Indicators

Energy consumption
CO2 emissions

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

Target area: Global(Main focus of initiatives: Japan)
Target stakeholders: All2020 target

3.32(see Note 1)

million tons

2030 target

6.04

million tons

CO2

2018 results: 2.54 million tons

Note 1: The target range was revised from 1.6 million tons to 3.32 million tons. (Added U.S. market)

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Outline existingengagement

Review CSR Report,(previous year s
version)Analyze international
standards andguidelines

Analyze ESG indicesand questionnaires

Study othercompanies

Determine social
challenges and identify
material issues● Outline communication activities withstakeholders● Ascertain opinions and matters of interest
to individual stakeholders● Analyze CSR-related international
standards and sustainability
reporting guidelines (ISO 26000,
GRI G4 Guidelines, etc.)● Study CSR management practices,
key stakeholders, and material issues● Analyze methods of reporting CSR
activities

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

High<Importance to stakeholders>

Very highClassification of CSR Issues○ Environmental issues◇ Customer issues

Main Target Indicators

Consumer safety
Improving quality

Number of defects that have
led to product recall
announcements

We are working toward achieving zero
defects by eliminating defects at every
stage of the product lifecycle—fromdevelopment, production, and salethrough to obsolescence—and pursue
a range of activities to publicize
information and raise awareness of
preventing accidents in the home.

Target area: Global
Target stakeholders: Customers

Deep Involvementwith SDGs

0case2018 results: 0 cases

VOICE
Creating Sustainable Value with the Rinnai Spirit□ Other issues

To increase the convenience of using heat, water and air, which are basic elements of people’s lifestyles,○ Waste○ Harmful chemicals○ Drainage□ Industrial relations□ Work-life balance◇ Housework time reduction○ Energy consumption○ CO2 emissions◇ Consumer safety◇ Improving quality○ Biodiversity□ Child labor / forced labor□ Stable procurement□ Support for cultural activities
and the arts

○ Conserving resources□ Occupational health and safety□ Protecting privacy◇ Repair and inspection services□ Wages and welfare□ IR communication activities□ Fair trade□ Work style reforms□ Diversity□ Support for school education /vocational training□ Preventing corruption○ Transport and transfer◇ Enhancing Customer Center
services□ Training and education□ Dividend policy□ Surveying and evaluating suppliers□ Communicating with suppliers□ Investing in local communities

Material Issues

Rinnai has a long history of ongoing technological innovations and the provision of world-first productsthat place the highest priority on quality and safety.
As we insist on quality and safety, we have developed our own core technologies. We are also
focused on manufacturing innovations and contribute to modern society through activities rooted in the

Masao Kosugi
Director and Senior Managing
Executive Officer,
General Manager of Corporate
Planning Headquarters

countries that need our products and services. Our unwavering pursuit of this spirit with a sense of unity
throughout the Group and collaboration among departments since our founding is the essence of
Rinnai’s corporate stance. We will never compromise our dedication to maintaining this spirit as thedriving force behind our value creation.
To ensure eternal symbiosis between the earth and humans, we will deepen our consideration for
the environment in the product lifecycle. We want to change people’s lifestyles around the world using◇ Marketing communication

innovation to provide more comfort and health in line with the joys and preferences of each person’s
individual lifestyle. This is our wish, and we will continuously evolve the value creation process andenhance our ongoing ability to design services that will continue to provide value to our customers
throughout their lives and in line with environmental changes, innovate the proprietary development,

High

19

<Importance to the Rinnai Group>

Very highproduction, sales, logistics, and management business models we have cultivated up to now.

20

R i n n a i C S R R e p o r t 2 01 9

Special Issue

01 [Healthy lifestyles]

Contributing to healthy andcomfortable lifestyles through the
diffusion of gas clothes dryers

Linkage with SDGs

Gas clothes dryers are helping to solve social issues
In recent years, people’s lifestyles in Japan have grown more diverse in line withchanges in the social environment. Yet these changes have also brought new issues
to the fore. The advancing trends of declining birthrates, an increase in the percentage
of elderly citizens, and a decline in the working population have created labor
shortages in a variety of industries. This is particularly apparent in long-term carefacilities due to the rise in the elderly population. In addition, the number of dualincome households has increased with the advent of more working opportunities for
women as well as uncertainty in the future outlook. This has led to many households
having to use their limited free time for household chores and child rearing, whichleaves little extra time in their lifestyles. Against this backdrop, Rinnai’s gas clothes
dryers are attracting attention as a means of helping to alleviate labor shortages andcontribute to reducing the time spent on housekeeping.
Rinnai’s gas clothes dryers use air heated to over 80°C by gas flames to quickly
dry clothes that have been washed and spun. Drying times are cut to one-third
compared with electric dryers, so 5 kg of laundry can be dried in approximately 52
minutes. The dryers thus reduce time spent on household chores and boost work
efficiency at workplaces where there is high demand for washing and drying clothes.
Moreover, the hot air produced by gas flames imparts the same antibacterial effect asdrying clothes in the sun (see Note 1) and also eliminates concern over particles of dust or
exhaust gases affixing to the articles being dried. We therefore expect our gas clothes
dryers to be used widely in medical and long-term care facilities where clothing andbedding must be kept clean.
Note 1:	The number of E. coli counted per dried article (diaper) after drying was zero according to a study by Tokyo Food
Technology Research Institute, Tokyo Food Hygiene Association.

Comparison of drying times (see Note 2)
Gas clothes dryer(Kanta-Kun)
Fully automaticwasher-dryer withelectric heat pump
Fully automaticwasher-dryer
with electric heater

Gas clothes dryer (Kanta-Kun)

5 kg 8 kg 5 kg: c52 minutes, 8 kg: c80 minutes
5 kg: c162 minutes
5 kg: c281 minutes

Note 2:	Conditions: Everyday clothing 8 kg (50% cotton, 50% synthetic textiles)/ 70% dehydration. Calculated with model RDT-80 and standard course.
Gas type: c80 minutes in the case of LPG, everyday clothing 5 kg (50%
cotton, 50% synthetic textiles) / 70% dehydration.
Calculated with model RDT-54S-SV and standard course. Gas type:c52 minutes in the case of LPG.

Konuma Circle Home Special Nursing Care Home for the
Aged, where Rinnai’s gas clothes dryers have been installed21

22

R i n n a i C S R R e p o r t 2 01 9

Special Issue

01 [Healthy lifestyles]

The contribution of gas clothes dryers at long-term care facilities

installed in the laundry rooms of each unit, which
improved the workflow of the caregivers.
By building an environment for quickly drying smalllaundry loads, unit care tailored to the needs of eachresident is achieved. In addition, clothes are dried freefrom the impact of pollen season, yellow sand, andPM2.5 and other forms of air pollution, creating anenvironment such that both residents and caregivers
alike can wear clothes and use towels with a sense ofassurance.
In recent years, there has been a shortage of laborin the long-term care field. According to a survey by theCare Work Foundation, 67.2% of respondents noted“they feel there is a shortage of care providers” and thehighest concern they had with labor conditions at 54.2%
was “there is not enough staff” (see Note 2). Going forward,
through its commercial-use gas clothes dryers, Rinnai
will contribute to resolving the issue of labor shortages at
the front lines of long-term care and the creation of carefacilities that make life easier for their residents.

Gas clothes dryers installed in each laundry room

Note 2:	Source: “Results of Fact-Finding Survey on Long-term Care Work 2018,” Care
Work Foundation

Special Nursing Care Home for the Aged Konuma Circle Home
Two units are used efficiently to quickly dry residents’ clothing

23

VOICE
Efficient washing and drying was achieved to match residents’ lifestylerhythms

Private room

Private room

Laundry room

Private room

KitchenPrivate room

Puramouto Circle Club Social Welfare Service Corporation, which operates Special Nursing Care Home for the Aged
Sakado Circle Home, in Sakado City, Saitama Prefecture, opened in the same city Special Nursing Care Home for the
Aged Konuma Circle Home in February 2018. The new facility is equipped with Rinnai’s commercial-use gas clothes
dryers, which are helping improve labor shortages at theNote 1:	Unit care is long-term care that provides individual care that respects thefront lines of long-term care.
individuality and lifestyle rhythm of the resident while supporting them to
Konuma Circle Home is a three-story senior care
live their daily lives by building relationships with other residents in thecommon spaces that have been provided.
home with a 100-person capacity, with all residents
occupying private rooms. The residents are divided into
Private roomgroups of 10 and each group has common spaces andPrivate room
caregivers assigned to provide unit care (see Note 1). However,there was concern as to whether adequate individual care
Private room
could be provided since the washing and drying of clothes
Common space
Changing
area
Private roomand towels is done to accommodate each resident’s
Bathlifestyle rhythm and traditional large-scale dryers or sun
room
Private room
drying require a lot of time and labor to be spent on
washing and drying. To overcome this, at Konuma Circle
Private room
Home, two gas clothes dryers (22 machines in total) were

Konuma Circle Home is a special nursing care home for the aged established in February 2018 thathouses up to 100 residents all in private rooms. With unit care, we provide care that addresses thelifestyles of each resident, and this means timing the washing and drying of residents’ laundry to match
their lifestyle rhythms. As a result, we do laundry five or six times per day in the mornings alone, so gas

Ayako Kokubu
Deputy Manager, Special Nursing
Care Home for the Aged Konuma
Circle Home,
Puramouto Circle Club Social
Welfare Service Corporation

clothes dryers that dry quickly are very suited to unit care. In addition, regularly washing clothes in smallloads allows for quickly washing clothes that have been soiled and thus prevents lingering odors, which
in turn contributes to maintaining a sanitary environment in the facility.
Gas clothing dryers also contribute to improving the labor shortages at the front lines of long-termcare and create time for caregivers to communicate with residents.

24

R i n n a i C S R R e p o r t 2 01 9

Special Issue

01 [Healthy lifestyles]

Gas clothes dryers cut time spent on housekeeping at dual-income households

to install gas clothes dryers to help reduce the time they
spend on housework. Chuo Jutaku Co., Ltd., a designerand seller of housing in the Polus Group, developed a22-unit built-for-sale housing community called Mind
Square Narimasu Growrich Hills. Each house in thesubdivision is equipped with a 3 kg gas clothes dryer, sothat dual-income households can find extra time to enjoy
life thanks to the time saved on household chores withgas clothes dryers. In addition to saving time on drying,
the compact 3 kg units provide leeway in the living space
and are particularly suited for low-rise housing in theTokyo metropolitan area where floor space is limited.
In 2018, Rinnai launched a compact 3 kg model anda large-capacity 8 kg type to match large-capacity
washing machines to augment its existing standard 5 kg
models. Rinnai will contribute to lifestyles that make work
rewarding by expanding its lineup of gas clothes dryers
to fit a variety of lifestyles.

Mind Square Narimasu Growrich Hills

Rinnai’s gas clothes dryer installed as standard in the built-for-sale houses of the Mind Square Narimasu Growrich Hills community

The number of dual-income households in Japan has been on aconsistent increase in recent years owing to diversification in lifestyles
brought on by a variety of changes in the social environment. As of
2018, there were 12.19 million dual-income households, far more than
the 6.06 million households where only males were working outside
the home (see Note 1).
In Japan, which is known for long working hours, dual-income
couples answered they had approximately 1.3 hours per day of “freetime not spent at work or on housekeeping,” which was lower thanother countries surveyed (see Note 2). In this connection, Rinnai’s gas
clothes dryers are being closely watched as a way of reducing timespent on housework.
Dual-income families find it difficult to do frequent laundry loads,
so they tend to wash and dry large loads in a single session and dry
clothes at night. It takes a long time to complete the process fromwashing through drying and thus they find it difficult to find leeway intheir lives. Such conditions have led many new homebuyers to look25

A 3 kg model gas clothes dryer that gives the feeling of extra room in thechanging area

Free time not spent at work or on
housekeeping by dual-income couples（N=100）(Time)
3.5
3.0
2.5

VOICE

3.19
2.55

Holding expectations for product development that supports daily life andfamilies’ growth

2.45

2.0

1.5

1.5

Debuting in Narimasu, in Tokyo’s Itabashi Ward, Mind Square Narimasu Growrich Hills proposes lifestyles

1.31

of comfort. The project is based on the concept “the evolving lifestyle of the future” by linkage to home

1.0

energy management systems and securing amenity through apps that use Internet of Things (IoT)

0.5

technologies while at the same time cutting time spent on housework with gas clothes dryers.

0.0

Denmark Germany

USA

Republic of Japan
Korea

Juichi Fukunaga
Manager, Tokyo West Office,Mind Square Division, Chuo
Jutaku Co., Ltd.

Notes: 1.	Source: “White Paper on Gender Equality 2019,”
Gender Equality Cabinet Bureau
2.	Survey of perceptions of dual-income households infive countries in “Netsu to Kurashi Tsushin (Heat & Life
Newsletter)” conducted by Rinnai

In this project, we decided to install gas clothes dryers as standard equipment in all 22 units
because demand for this equipment is on the rise. In the past, I had lost sales because the customer was
told that gas clothes dryers could not be installed in that home and I realized that gas clothes dryers are anecessity for working couples. Mind Square Narimasu Growrich Hills is located within convenient reachof central Tokyo, so we envisioned purchases by dual-income families and decided to install gas clothes
dryers as standard equipment. I would like to see Rinnai develop products that contribute creating extra
time in the daily lives of homeowners and an environment in which they can grow and thrive.

26

Linkage with SDGs

Unwavering focus on preventing
malfunctions and building products thatare resilient to natural disasters“Quality is our destiny” is the fundamental concept of the
Rinnai Group and this guides our endeavors to deliverproducts to our customers that provide them with safety
and peace of mind through monozukuri (craftsmanship)
aimed and securing high quality. We aim for zero defects(ZD) (see Note 1) in all processes in the product lifecycle toSpecial Issue

02 [Approaches to safety and peace of mind]

Approaches to providing customers withsafety and peace of mind by improving thesafety functions of our gas stoves

ensure that our products continue to offer safety and peaceof mind from the time they debut on the market, they areused by customers, and through to the end of their useful
lives. Rinnai’s related departments work to enhance quality
in all their business activities toward this end.
In addition, “consumer safety and improving quality” is
one of the materiality targets in Rinnai’s CSR activities anda key target is “Zero cases of defects that lead to recall
notices”. In fiscal 2019, we achieved this target with zerocases occurring.
We take exhaustive measures to prevent the kind of
defects that result in recalls. At the same time, we areconstantly working to develop products that provide
customers with safety and peace of mind by improving theirconvenience and safety features during times of disaster,such as hot water heaters that operate even under power
outages and gas stoves that shut the gas off automaticallyduring earthquakes of intensity 4 or higher.
Note 1:	Zero defects (ZD): No defects, no inferior products, no faults

CSR materiality target indicator
Zero cases of defects thatlead to recall notices
Fiscal 2019 results:

27

0 cases28

R i n n a i C S R R e p o r t 2 01 9

Special Issue

02 [Approaches to safety and peace of mind]

Approaches to prevention of fires through the diffusionof Si sensor stoves
Gas stoves are the source of most fires that occur in the home, and it is said that inJapan many such fires are caused when using oil to deep fry the Japanese dishtempura. Fires not only destroy precious assets, but in a worst-case scenario they
can lead to fatalities.
To help prevent kitchen fires in Japan, it has been legally mandatory for all
burners on gas stoves made after 2008 to be fitted with safety sensors (see Note 1).
We have been working to prevent fires with safety technologies, namely “oiloverheating prevention devices” and “flame-failure devices,” which are compliant withgovernment standards. In addition, our gas stoves are equipped with convenient“support” functions that assist in cooking and are called intelligent “Si sensor stoves”
that take fire prevention to the next level.
The number of fire cases caused by gas stoves has been steadily decreasing
every year thanks to the proliferation of gas stoves with Si sensors. The number ofcases of fire caused by gas stoves was previously over 5,000 per year, but that had
decreased to approximately 2,600 per year in 2017. The proliferation of gas stoves
with Si sensors increased to an approximately 59% share of the industry.
Building on over a decade since the debut of Si sensor stoves, Rinnai not only
meets government mandated standards but also has developed and installed suchproprietary functions as those that turn off the gas to prevent food from being burned
onto pots and pans and automatic high-temperature adjustment and thus provide
products that are even more safe and convenient.
Note 1:	Household gas stoves have become subject to government-designated regulations (indication of PSTG or PSLPG) by
the Gas Business Act, and the Act on Securing Safety and Optimization of the Transaction of Liquefied Petroleum Gas.
From this, it has been required that all burners are fitted with an “oil overheating prevention device” and a “flame-failure
device” since October 1, 2008.

Number of cases of fires caused by gas stoves and rate of adoption rate ofgas stoves with Si sensors (see Note 2)(Number of fires)
6,000

(%)
100
■ Number of fires

5,000

ー Adoption rate of gas stoves with Si sensors

4,000
3,000

50

2,000
1,000
0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0
2017 (Year)

Note 2: Fire Prevention White Paper, Ministry of Internal Affairs and Communications
	Based on shipment statistics from the Japan Industrial Association of Gas and Kerosene Appliances and the number ofhouseholds in Ministry of Internal Affairs and Communications statistics, Rinnai has compiled the adoption rate of gas
stoves with Si sensors.
Oil overheating prevention device (temperature
sensor)Flame-failure device

29

30

R i n n a i C S R R e p o r t 2 01 9

Special Issue

02 [Approaches to safety and peace of mind]

Automatic shut-off sensors during earthquakes of intensity 4 or higher havebeen adopted in volume zone models

Control board for a gas stove containing an earthquake detection program

To overcome this, Rinnai conducted repeated tests
to enable the sensor to discern vibration of the gas stove
during daily life and from earthquakes. After spending
considerable time, we were able to develop programmingthat made earthquake detection with an accelerometer
possible. In addition, the use of an accelerometer inearthquake detection has improved the detection
accuracy of long-period vibrations, which had previously
been difficult to detect.
There are some issues remaining in the expansion
of “Yure Pita” functionality, such as the need to improve
earthquake detection accuracy in tabletop gas stoves,which are installed in a variety of environments. However,
we will continue to incorporate new technologies andwiden the application of “Yure Pita” functionality as part ofour endeavors to improve the safety functions of our gas
stoves.

A three-axis accelerometer used todetect shaking caused by earthquakes

Mytone, a built-in gas stove in the mass-market price segment

Some Rinnai gas stoves have a function called “Yure Pita,” which automatically extinguishes flames when the unit detects
earthquakes of intensity 4 or higher, in addition to the safety functions of the Si sensors, and thus enhances safety during
earthquakes. To boost the safety of gas stoves against earthquakes, which have become more prevalent in recent years,
Rinnai has worked to overcome a range of issues and in 2018 added the “Yure Pita” function to its Mytone line of massmarket built-in gas stoves.
Up to now, the “Yure Pita” function was installed within the gas stove’s earthquake stoppage device. It worked byautomatically shutting off the stove when a steel ball moved from its fixed position within the device due to an earthquake.
Yet this method resulted in higher product prices and therefore we were only able to add this functionality to upper-end
models.
To also add advanced functionality in our mass-market models, we changed the detection method for shaking caused
by earthquakes from physical earthquake detection using
Change in earthquake detection method
steel balls to detection with digital processing using a threeaxis accelerometer. By incorporating an earthquake sensor+Z+Y+X
in the control boards of the gas stoves, Rinnai was able toreduce the costs of introducing this functionality and made its
adoption possible in mass-market models. There were also-X-Yvarious issues with using a three-axis accelerometer to-Z
Steel balldetect earthquakes. In particular, the sensor would mistake(Previous)(Following change)
vibration caused by frying pans and the like during cooking
Earthquakes detected throughEarthquake detected
the movement of a steel ballwith digital analysis using a sensor
for an earthquake and turn off the flames.

31

Bringing safety features and quality developed in Japan to overseas markets
We are expanding the safety functions in our gas
stoves to overseas markets, particularly to China,
South Korea, and other parts of Asia. Temperature
sensors became mandatory in gas stoves sold inSouth Korea from 2014. In China, there has been
rising demand for gas stoves with temperature
sensors in tandem with higher living standards
brought on by economic growth. In 2019,
Shanghai Rinnai developed an original model
drop-in gas stove with temperature sensors ineach hob.
Rinnai is bringing safety features developedin Japan to overseas markets and the high-quality
products that embody a focus on craftsmanshipto customers around the world.

A drop-in gas stove developed by Rinnai Korea with temperature sensors in each hob

A drop-in gas stove with temperature sensors in each hob that is an original model of
Shanghai Rinnai

32Special Issue

03 [Approaches to environmental protection]

Initiatives to prevent global warning throughenergy-saving water heaters
Linkage with SDGs

Aiming to contribute a 6.04 million ton reduction in CO2 by 2030
Looking at the breakdown of energy consumption by Japanese households, water heating and heating
account for over 50%, and water heating alone accounts for the largest percentage at 29.1%. In addition,
CO2 emissions of water heaters throughout their lifecycles are highest at their usage stage (please refer topage 13). As a result, to contribute to preventing global warming through its business activities, Rinnai
believes it is important to boost energy efficiency and develop and promote the adoption ofenvironmentally conscious products that help accomplish this through improving the combustion
efficiency of its hot water heaters and the like. Rinnai is working toward the prevention of global warming by
setting “energy consumption and CO2 emissions” as CSR material issues and the “amount contributed toreducing CO2 emissions by using the product” as a target indicator (see Note 1).
Toward this end, Rinnai in Japan is promoting energy savings in the home by contributing to thedevelopment of net zero energy houses (ZEHs) through such energy-saving water heating systems as the
ECO ONE hybrid water heater with heating system. In overseas markets, Rinnai has been promoting theconversion of storage tank-type water heaters to gas tankless water heaters. In fact, Rinnai was able tocontribute a 2.54 million ton reduction in CO2 in fiscal 2019. Rinnai’s long-term target is a 6.04 million ton
contribution to CO2 reduction by 2030, which will contribute to the achievement of Goal 13 of the SDGs,
which is to take specific action to combat climate change.
Note 1: Reduction in CO2 emissions (estimated) resulting from improvements to performance in Rinnai’s water heaters compared with products sold in 2005

CSR materiality target indicator
Power & lighting, etc.
33%

Heatingwater
29%

Percentage ofhousehold energy
consumption by usage(2017)
Cooling2%

Cooking10%

Heating
26%

Amount contributed to reducing
CO2 emissions by using the product2030 

3.32 million tons
6.04 million tons

Fiscal 2019 (actual)2.54 million tons

2020 

Source: “Energy White Paper 2019,” Agency for Natural Resources and Energy

33

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R i n n a i C S R R e p o r t 2 01 9

Special Issue

03 [Approaches to environmental protection]

Rinnai’s activities aimed at diffusion of Net Zero Energy Houses

An energy-saving home designed by Yawata HomeAs a part of measures to prevent global warming, in Japan energy-saving efforts in housing and buildings are progressing
along with the government’s target to have over 50% of built-to-order housing built by housing makers be ZEHs by 2020.
The Ministry of Economy, Trade and Industry (METI), the Ministry of Land, Infrastructure, Transport and Tourism(MLIT), and the Ministry of the Environment are coordinating to promote the spread of ZEH through subsidies for ZEH
buildings. As of the end of October 2018, however, 57.1% of ZEH builders and planners (see Note 1) had no track record with
ZEHs. We therefore believe more intensive efforts will be necessary to achieve the government’s target for 2020.

The top reasons cited by builders for having no
track record in ZEHs were “customer’s budget,” “could
not gain the understanding of customers,” and“inadequate systems” (see Note 2). In this connection,
Rinnai is developing energy-saving gas water heaters
and has started “Club GREEN,” a series of support
activities for ZEH builders. We hold ZEH seminars forbuilders and assist with applications to receive subsidies
and support with the calculations of utility cost
reductions gained from installing ECO ONE and other of
Rinnai’s energy-saving water heating systems. In theseways, we not only support builders but also promote
understanding among customers. We have held ZEH
support seminars with increasing frequency since 2016,
and convened such seminars 37 times in fiscal 2019.
Furthermore, MLIT’s “Regional housing greening
project” promotes ZEH among small- and mid-sizedbuilders by forming groups among business operators
involved in wooden housing and builders and creating
applications for subsidies at the group level. Rinnai also
assists in preparing the documentation necessary for
applying for subsidies and therefore contributes toreducing the burden on small- and mid-sized builders
with the aim of increasing the number of ZEHs.

ECO ONE installed in an energy-saving house

A seminor for ZEH builders

Note 1: Housing manufacturers, builders, architectural offices, renovation companies, built-for-sale housing sales companies, etc., that have set adoption targets for ZEH.

Net Zero Energy House (ZEH)

Track record of ZEH builders and planners

In addition to ZEHs achieving major improvements to the insulation
performance of the exterior finish, such houses achieve considerable
improvement in energy savings by installing highly efficient equipment
and systems that maintain the quality of the interior living environments.
Furthermore, by adopting renewable energy, ZEHs aim for zero annual
expenditure for primary energy consumption.
Minimize the requirement Using energy adeptlyfor energy with
with high-performancehigh insulationequipment(houses that are cool in summer
and warm in winter)
Heating
CoolingExhaustLighting
Heating water

35

Reduction

VOICE(as of October 2018) (see Note 2)

Expectations for the development of energy-saving equipment that
contributes to ZEH adoption and product promotion

Track record of 50% or higher
No report of track record

14.1%

8.1%

567 companies

988 companies

Track record of 1-49%
or higher

Working together with Rinnai, we participate in MLIT’s “Regional housing greening project” and propose

20.7%

Registered
ZEH builders
and planners
6,996
companies

Generatingenergy1,448 companies

Track record of 0%

57.1%

3,993 companies
Note 2:	Source: Results of Survey of Supporting Businesses for Net Zero Energy
Houses (2018 edition) from data announced publicly by Sustainable
Open Innovation Initiative

energy-saving housing and zero energy housing that is easy for customers to adopt. Since the initialcosts of ZEHs and other energy-saving houses are higher than that for general housing, subsidies that
help control such initial costs are extremely effective in promoting the diffusion of ZEHs.
We have boosted our track record in ZEH by applying for subsidies in collaboration with Rinnai

Kenji Sohma

since 2016. Yet, showing the benefits of a reduction in customers’ utility bills is necessary when proposing

General Manager, Sales Division,
Yawata Home, Co., Ltd.

ZEH and other types of energy-saving homes to customers. Toward this end, I would hope that Rinnai
develops equipment that saves even more energy and conducts public relations (PR) activities toconvey the attractiveness of such products to even more customers.

36

R i n n a i C S R R e p o r t 2 01 9

Special Issue

03 [Approaches to environmental protection]

The ECO ONE hybrid water with heating system wins the 2018 Cool Choice
Leaders Award (Environment Minister’s Award)
Rinnai’s ECO ONE debuted in 2010 as the world’s first hybrid water with heating system for residential use to combine gas
and electric heat pumps to provide thermal energy for heating water and heated flooring. The system comprises threeunits: a heat pump to boil water with electricity, a tank to store hot water, and an Eco Jozu high-efficiency gas water heater
to support high volumes of hot water usage such as when bath water needs to be reheated.
Since the start of sales in 2010 through today, Rinnai has worked to improve the energy efficiency of its water heatersystems. In fact, the 160l type ECO ONE tank unit launched in August 2017 achieved 13.8 GJ/year in primary energy
consumption for water heating, which is the standard for evaluating energy-saving equipment. This is an impressive 45%
energy savings compared with conventional water heaters. In February 2019, ECO ONE received the Cool Choice
Leaders Award 2018 (Environment Minister’s Award), which is sponsored by the Ministry of the Environment, in
recognition of its high energy-saving capabilities.
In May 2018, Rinnai launched the ECO ONE Plug-in LOWBOY model that does not require dedicated electricalconstruction for the heat pump. This simplifies installation of replacement equipment and allows flexible installation
in a variety of existing homes. It therefore will contribute to energy savings, particularly in smaller homes in the Tokyo
metropolitan area.

Hybrid bath water heating system ECO ONE Plug-in LOWBOY(50l tank unit)

Cool Choice Leaders Award 2018 award ceremony(from left, Minoru Kiuchi, Deputy State Minister of the Environment(at the time of the photo); and Kinji Mori, General Manager of Environment
Department, Rinnai)

Approaches in the U.S. market to promote adoption of gas tankless water heaters

Comparison of primary energy consumption ofheating waters (see Note 1) (GJ/year)
Standard
water heater
Eco Jozu
Mode thermal
efficiency 92.5%

Eco Cute

25.1

14%

21.6

Approximately

16.5

Approximately

34%

13.8

Approximately

45%

JIS3.6160l type

Note 1:	Calculated based on the “Energy Consumption Performance
Calculation Program (Residential Edition Ver 2.3.1” (6 districts)
based on 2016 energy-saving standards published in “Technical
Data Related to Energy Consumption Performance in Buildings,”
compiled by the Building Research Institute (with thecooperation of the National Institute for Land and InfrastructureManagement) (as of December 2017)

ECO ONE 160l type hybrid water heater and heating system

37

In the U.S. market, nine million water heaters are replaced every year, of which about 95% are hot water-storage-type
units, in which hot water is stored in tanks. Among the different types of water heaters, storage gas water heaters areless energy efficient than gas tankless water heaters, so
switching to a gas tankless water heater would contributeto a reduction in CO2 emissions in the United States.
In April 2018, Rinnai America Corporation, a Rinnai
Group company, launched the SENSEI series of gas
tankless water heaters offering improved energy savingsand ease of installation. The SENSEI series of gas
tankless water heaters work even with 1/2-inch gas lines
in certain situations, and the exhaust pipes have been
SENSEI series of highly efficient gas tankless water heaters
improved to function at distances of up to 46 meters,compared with seven meters previously. These
improvements facilitate easy replacement of water
heaters even in locations where installation was difficult
previously.
To boost awareness of tankless gas water heaters,
Rinnai ran the “Try Rinnai Tour” in which seven large vansequipped with gas tankless water heaters travelledaround the United States and Canada to give
demonstrations. Approximately 1,000 events were held
during 2018 to promote the high energy-saving
performance of gas tankless water heaters to many
people in North America.
Large-scale van equipped with gas tankless water heaters38

R i n n a i C S R R e p o r t 2 01 9

Communication with Employees

Communication with Employees

0 1 	Transferring Technologies through Global

Exchanges

In order to develop human resources who can play an active role across borders andimprove the capabilities of employees around the world, the Group has developed abusiness practices program that assigns mutual training programs to management divisions,product development divisions, and manufacturing divisions.
Every year, we accept overseas Group employee trainees, and for a period lasting froma few months up to one year, we pass on manufacturing technologies through training in
manufacturing and production divisions. In 2018, we accepted 13 employees mostly from
Asian countries as overseas trainees.
These activities serve not only as a means for transferring manufacturing technologies
but also play a role as human resource development so that overseas Group employees will
become leaders in local subsidiaries.

VOICE

Andrea Pavarotti
Rinnai Italia
Technical engineer

Learning Good Organizational Culture through Training in JapanI have been working as an engineer at Rinnai Italia since 2015. I received training for several months at
Rinnai for the first time in 2017, and I mainly learned about hot water heater test methods. We have been
receiving training in Japan for the second time since July 2019. In addition to training, we are planning toshare information on the climate and housing conditions in Italy and the certification system for gas
equipment in Europe among the Group.
When I came to Rinnai again, I felt that I came back home. Many Rinnai Japan colleagues are kindand very gentle. They treated me as a colleague of the same team. It reminded me that good andpositive personal relationships are the key to making work successful.
Besides learning skills, I also want to learn Japanese best practices such as 4S, workplacemanners, and good organizational culture through training in Japan, which I want to take back to Rinnai
Italia.

39

40

R i n n a i C S R R e p o r t 2 01 9

Communication with Employees

Communication with Employees

02	Enhancement of Health Promotion Activities

03	Improved Understanding of CSR through In-House Events

Full-time public health nurse providing individual health guidance

Rinnai Group employees engaged in coral reef protection activities

The Rinnai Group established the Health Support Office where full-time public health nurses engage in employee healthpromotion activities. In addition to providing individual health guidance, consultations, and other information related topersonal health, the office supports both health by conducting health promotion seminars.
Aiming for a work environment that does not cause mental disorders, we provide support for a smooth return towork through rehabilitation including mental health seminars for managers and a return-to-work support program for
employees who have taken long-term leave. In fiscal 2019, in addition to interviews during times of mental distress andleaves of absence, we increased the number of interviews after returning to work approximately 1.5 times compared tofiscal 2018 and in addition to preventing leave of absence due to mental health problems, we strengthened our support
system for the smooth return to work for those who took a leave of absence.
For employees who use the cafeteria, we collaborate with dieticians to plan menus that consider employee health,and conduct health campaigns to check vascular age, bone density, iron levels, and skin aging in order to raise awarenessamong employees regarding their health. We also conduct
health creation and walking seminars and raise awarenesswith regard to weight loss and physical strength training.

The Rinnai Group strives to facilitate exchanges between employees and improve understanding of CSR through avariety of in-house events. The Rinnai Group Environmental Award, which is given in recognition of environmental activity
excellence, is held each year, with fiscal 2019 seeing the largest number of applicants ever, a total of 127 employees,
among which 10 were selected for excellence in production, office, sales, and social contribution categories.
Overseas Group companies also hold events aimed at facilitating exchanges between employees and improving
understanding of CSR. Each year in September, Rinnai Australia participates in Steptember, an event that donates tocerebral palsy and supports employee health by encouraging people to walk 10 thousand steps each day, which is also
instrumental in promoting the health of employees and deepening understanding with respect to cerebral palsy.
Each year, Rinnai Thailand employees hold anenvironmental protection event. In August 2018, 50
employees cleaned up the coastline and conducted coral
reef protection activities in order to protect coral reefs.
In May 2019, the Rinnai Group received theEnvironmental Human Resource Development Company
2018 Grand Prize by the Ministry of the Environment for its
environmental human resource development initiatives.

Mental health seminar for managers and supervisors

41

Steptember awareness poster(Rinnai Australia)

The Environmental Human Resource
Development Company 2018 Grand Prize trophy42

R i n n a i C S R R e p o r t 2 01 9

Communication with Stakeholders

Communication with Customers

Communication with Business Partners

Customer Satisfaction Research and Product and Service
Improvements

Training Aimed at Improving Productivity and Improvement
Capabilities
The Rinnai Purchasing Department conducted training
on production site improvements for partner companies
over a four-day period from July 23–26, 2018.
The Rinnai Production Engineering Department led
the training, which was attended by 22 people from 14
different partner companies. The first two days of training
were for line managers and the remaining two days werefocused on industrial engineering (IE), which served todeep understanding among both Rinnai and partnercompany personnel with regard to production site
improvements.
Participants learned about 3S5 Sets (see Note 1), quality,

Gas tabletop cooker HOWARO, sold online only

HOWARO, launched in December 2011, is a gas tabletop cooker sold only on the internet using white as the main color tobrighten kitchens. A survey was conducted among customers who purchased HOWARO aimed at improving Rinnai
products and services.
Among responses pertaining to requests and improvements, manycustomers indicated that they “want a double-sided grill” as well as an“enhanced cooking function.” We discovered that customers want models that
more closely align with their lifestyles, including more convenient functions andhigher cooking abilities even among tabletop cookers using white as the maincolor.
In response, we added the HOWARO C plus with an auto-grilling function
in October 2018 and the HOWARO C with a temperature adjustment functionin December 2018 to our sales lineup for a total of three compact models forcustomers to choose from in line with their lifestyle stage, which resulted in aneven greater number of people incorporating the HOWARO series into theirlives.

Training related to the 3S5 Sets

production planning, and other subjects throughpractical training. The event was highly evaluated bymany participants as it is able to be smoothly deployedat partner company production sites.
In addition to workshops, some partner companies
also participated in internal events such as screwmaking contests and lift contests, as Rinnai made every
effort to create an environment where everyone could
grow together with a spirit of coexistence and mutual
prosperity.
Note 1:	Improvement method for maintaining standards mainly applicable toproduction sites. 3S: Sorted, Straight, and Sanitary; 5 Sets: Set position, setform, set quantity, set product, and set time

Productivity improvement training using a mock assembly line

VOICE
Development of Younger Employees through Training
Some of our younger employees participated in the line manager and industrial engineering (IE) training
to improve production sites. In this training, participants engaged in foreman training aimed at ensuring
quality, on-time deliveries, and manufacturing cost control, as well as hands-on training using practicalproblems such as methods for production system improvements, all of which enabled the participants toreturn to our company with a newfound sense of confidence. What was learned in the training was put

Kimihiro Suzumura
Senior Managing Director,
Toko Industries Co., Ltd.

into practice in our assembly line for water heater parts, enabling us to achieve the improvement goals
set out above. We also utilize this training in companywide educational activities led by employees who
participated in Rinnai’s training. In the future, we will continue to participate in this training, especially
younger employees, so that we can continue to improve our level of production.

43

44

R i n n a i C S R R e p o r t 2 01 9

Communication with Stakeholders

Communication with Local Regions and Communities

Communication with Shareholders and Investors

Contributing to the Development of Talent That Will Lead the
Next Generation through Alliances between Industry andAcademia

Expanding Communication of Corporate Value through Field
Trips for Investors—Hifumi’s Social Studies Field Trip in Rinnai——Creating a business model that contributes to society through our core businesses—
Through a collaboration between industry and academia, Rinnai and the Nagoya University of Arts and Sciences helda course conducted over 15 sessions starting in April 2018 pursuing the theme: “Companies and Society: The Role ofCompanies in Regional Society.” Students participating in the course toured Rinnai plants and held discussions with its
employees and created proposals for “business models that contribute to society through core businesses.” As a format
for publishing their results, in October 2018 the students’ proposals were displayed at International Design Center of
NADYA PARK in Nagoya.
Rinnai continues to contribute its know-how and knowledge gained as a company to the field of education whilereflecting the ideas of students as the voice of its stakeholders in its business activities.

A Rinnai employee explaining a product’s functions

Students in discussions with Rinnai employees

Students from the Nagoya University of Arts and Sciences, Department of Design, whoparticipated in a course created via collaboration between industry and academia

Announcing the results at an exhibition

VOICE

Yukiko Tomiyasu
Nagoya University of Arts andSchool of Media and Design,
Department of Design,
Professor

45

In December 2018, Rinnai partnered with institutional investor Rheos Capital Works Inc. to hold “Hifumi’s Social Studies
Field Trip in Rinnai,” which invited investors and their families to a tour of Rinnai Hot Lab Yokohama. Rinnai’s Hot Labs areresearch facilities designed to provide our business partners with firsthand experience in using such products
as the Delicia gas stove that is capable of automated cooking through connectivity to a dedicated recipe app and theKanta-Kun gas clothes dryer that dries clothes quickly and leaves them fluffy to the touch. On the day of the field trip,
representatives from Rinnai’s Corporate Planning Division explained the Company’s unique qualities and its major
products to the investors. After this presentation, participants gained a deeper understanding of Rinnai’s products by
actually experiencing drying a towel with a gas clothes dryer and enjoying a cooking lesson using automated cooking
with a gas stove.
By having investors experience Rinnai’s products at this event, they were able to better understand Rinnai’s products
and the Company’s appeal. Rinnai was also able to gain direct feedback from investors, making the event a meaningful
one for both parties.

VOICE
A valuable experience enabling an understanding of the linkage between
people’s daily lives and corporate activities

Appreciating “Rinnai’s approaches to more fulfilling lifestyles” byexperiencing its products

Nagoya University of Arts and Sciences, Department of Design’s Design Produce Course aims to “envisionan even better future and create new value that can be shared with others.” Toward this end, students
engage in practical exercises based on issues uncovered in the real world. Understanding a company andcreating proposals that benefit it as well as society and customers was a very difficult theme for our thirdyear students who have limited life experience. However, taking Rinnai’s sound corporate activities as casestudies served as a valuable experience toward gaining awareness of the lifestyles in front of them and theirconnection with industry and society.
The students were also fortunate to be at the cusp of Rinnai’s 100th anniversary and witness themoment a company is about to change. Our students will continue to contemplate the big questions theygained from Rinnai, such as “What does it mean to work?” “What is abundance?” and “What is soundness?”

We jointly sponsored an event at one of Rinnai’s Hot Labs, which are facilities where visitors can try its
products. Participants from a variety of backgrounds, including parents with children, and single womenand men took part in the event and were able to hear about Rinnai’s past, present, and future, while
enjoying dishes prepared in the Company’s kitchen.
In 2020, Rinnai will reach the 100th anniversary of its founding, a path that has been marked byremaining in close touch to the lifestyles of people around the world while keeping the belief that “Quality
is our destiny” close to heart. I got the impression firsthand through the smiling faces of the participantsthat Rinnai will through the monozukuri (craftsmanship) of its heating equipment continue to make“stories” in the form of fulfilling lives for people worldwide. We are also focusing on stories that Rinnai
makes through the changes in lifestyle that emerge over the next 100 years.

Daisuke Kurioka
Rheos Capital Works Inc.
Senior Analyst,
Asset Management Division46

R i n n a i C S R R e p o r t 2 01 9

Management Structure

Corporate GovernanceTo hone the Group’s competitive edge and sustain improvement in corporate value, Rinnai has made efforts to

Audit System for Monitoring and Supervising Management

augment corporate governance practices and raise its profile as a management priority. We aim to conduct highly
transparent management by providing swift and precise disclosure of wide-ranging information to all of our diverse
stakeholders while endeavoring to enhance the functionality of internal bodies, such as our Board of Directors andAudit & Supervisory Board.

Basic Principles

01

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

02

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

03

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

04

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

05

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

06

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

Corporate Governance Structure

Accounting Auditor

Cooperation

Election and dismissal

Audit & Supervisory Board
Cooperation

Internal Control OfficeElection and dismissal
AdviceAudit

Board of Directors

Election, dismissal,
and administration
Direction

Corporate Lawyer

Election, dismissal,
and administration

President

AdviceReportReport

Audit

ReportManagement

Audit

Internal
Audit

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

Director Compensation,
General Shareholders Meeting

Election and dismissal

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

ReportExecutive Officers
ReportBusiness Divisions

Related Committees

Corporate Ethics Committee
Risk Management Committee
ReportDisclosure Committee
Environment Management Committee and other
Direction

Management

Compensation limits for Directors and Auditors are
determined in accordance with the resolution of thegeneral meeting of shareholders. Rinnai internal
regulations also stipulate fundamental matters related to
Directors’ compensations, including determination
procedures, revisions, and reductions. Based on these,
the amount of compensation for Directors is resolved by
the Board of Directors and the amount of compensation
for Auditors is determined through deliberations by
Auditors. Directors are paid a fixed amountcommensurate with assigned duties.

Compensation amounts for Directors and Auditors(Fiscal 2019)

Category

Persons

Total amount ofcompensation paid

Directors

7(2)¥285 million(14)(of which areoutside auditors)

4(2)¥44 million
(10)

Total

11

¥329 million(of which areoutside directors)

Auditors

Director salaries do not include employee salaries for directors who also serve as
employees. As of March 31, 2019, there were seven directors (including two outside
directors) and four auditors (including two outside auditors).

47

48

R i n n a i C S R R e p o r t 2 01 9

Management Structure

Compliance

Risk Management

Rinnai Group Code of Ethics

Promotion Structure

The Rinnai Group has compiled behavioral standards that all
executives and employees must obey in the “Code of Ethics,” a small
booklet that includes the “Rinnai Code of Conduct” as a guideline for
specific daily activities. Further, the “Rinnai Code of Conduct Manual”
was created as a tool to deepen understanding of the Rinnai Code of
Conduct.
In addition, an English-language version of the “Code of Ethics”
is issued to overseas Group companies, and local-language versions
were distributed to Group companies. In countries where the official
language is not English, the manual is translated into the local
language of that country.
Each year, Rinnai conducts Code of Conduct awarenessactivities for all employees.

Rinnai’s Risk Management Committee is comprised mainlyof executive officers and divisional heads with the President
serving as Chairman. The Committee meets regularly toidentify key risks having the potential to impact theCompany as an ongoing concern, its credibility, businessactivities, and assets. The Committee also determines whichbusiness divisions have a primary responsibility for eachtype of risk. It also develops mechanisms to prevent risks
from materializing, rapidly resolves crises, minimizes any
damage that may occur as a result, and preventsrecurrences. The Committee works with all divisions andGroup companies to mitigate risks and enhance risk
response capabilities.

Code of Ethics

Rinnai Group Code of Ethics

49

Risk ofnon-compliance ormanagement inviolation of applicablelaws

Risk of fire, explosion
accidents, andnatural disasters

Risk of suspension ordelays affecting raw
material procurement
activities

Important Identified
Risks (Partial)

Risks related tothe environment

Risks related tooverseassubsidiaries
Risk of damage to
mission-critical systems

Compliance Education Activities

Initiatives Aimed at Reducing Risks during Earthquakes

Rinnai’s Legal Division conducts legal education every year with regard to laws closely related to operations conductedby business divisions. In fiscal 2019, Rinnai provided legal education mainly related to work style reforms, raised
awareness regarding changes to the enforcement of laws, such as regulations pertaining to upper limits on overtime
hours, promoted methods for ascertaining working hours, clarified obligations for taking leave, and conducted education
related to appropriate labor management. In addition, training was provided for internal compliance committee members
by outside lawyers who introduced examples of potential legal violations in the workplace along with examples aimed atdeepening understanding with regard to compliance.
During fiscal 2019, a total of 821 Group
employees participated in training to deepen
their knowledge with regard to laws andregulations. Rinnai also conducts ethics
education every year during employee training
for new recruits and by rank, with 188
employees attending in fiscal 2019.
In addition, we share a variety of
information with domestic Group employees
via our in-house intranet, where we post datasuch as information regarding legal reforms,
legal commentary concerning our operations,and examples of violations that occurred atother companies.
Legal education related to work style reforms

In October 2018, we conducted an earthquake evacuation
drill at the Oguchi Site, which employs a large number of
employees, in an attempt to improve the level of emergency
response through first aid training for injured personnel. In
addition, in March 2019, we conducted tall building
evacuation training using a ladder truck in collaboration with
the Nakagawa Fire Station to reconfirm evacuation methods
under a variety of conditions at our head office.
In 2016, the Rinnai Group introduced a safety
confirmation system to quickly confirm the safety of
employees in the event of a disaster. When a strong
earthquake occurs, a safety confirmation email is sent to all
employees and safety confirmation is conducted according
to instructions in the email. The Rinnai Group strives toreduce risks when disasters occur through regular safety
confirmation tests conducted on an annual basis.

Risks related to
information leaks

Tall building evacuation training using a ladder truck incollaboration with the Nakagawa Fire Station50

R i n n a i C S R R e p o r t 2 01 9

Data Collection

Management Structure

Leadership (As of June 26, 2019)

Board of Directors,
andAudit & Supervisory
Board Members

Financial Data (Consolidated)

Net sales, Operating income ratio

Kenji Hayashi
Representative Director and Chairman(Billions of yen)

(%)

400

15

Hiroyasu Naito

Tsunenori Narita

320

295.0

Representative Director and President
and Executive President

Representative Director andExecutive Vice President
President’s assistant

240

10.4

Masao Kosugi

Yuji Kondo

Director and Senior Managing Executive
Officer
General Manager of Corporate Planning
Headquarters

Director and Senior Managing Executive Officer
General Manager of Overseas Business Headquarters, and General
Manager of Group 1 and Group 3 Sales & Marketing Division
In charge of Business Planning Division

319.9
10.8

Takashi Kamio

Director

Director

Haruhiko Ishikawa

Katsuhiko Shinji

Standing Audit & Supervisory Board Member

Standing Audit & Supervisory Board Member

Masaaki Matsuoka

Ippei Watanabe

Audit & Supervisory Board Member

10.3

9.5

Audit & Supervisory Board Member

Kinji Mori(excluding concurrent directors)

Managing Executive Officer
General Manager of Marketing & Sales
Headquarters

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

Yasuo Koketsu

Greg Ellis

Managing Executive Officer
General Manager of Administration
Headquarters

Managing Executive Officer
President of Rinnai Australia Pty., Ltd.

Chuji Nakashima

Hirohisa Ooi

Kazuhiko Matsumoto

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

Executive Officer
General Manager of Production
Headquarters, and General Manager
of Production Control Division

Executive Officer
General Manager of Seto Factory, Production
Headquarters

Masanori Shimizu

Kazuto Inoue

Hideyuki Shiraki

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

Executive Officer
General Manager of Production
Engineering Division

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

Koji Fujioka

Fuminobu Ishikawa

Kenji Endo

Executive Officer
General Manager of Sales Division,
Marketing & Sales Headquarters

Executive Officer
President of GASTAR Co., Ltd.

Executive Officer
President of RB Controls Co., Ltd. and President ofNoto Tech Co., Ltd.

12

32.9
32 30.7

9

24
16

80

3

8

0

0

0

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal2019

Operating income ratio (Right)

35.8
35.2
34.5
34.0

22.7

20.6

(%)
100

400

34.2
32.8

22.3

33.3
30.8

21.1

20.4

300

261.4

271.7

290.6

69.4

69.6

67.8

307.9

68.0

320.6

69.4

80
60

200
40
100

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal2019

20

0

Fiscal2015■ Operating income ■ Ordinary income■ Net income attributable to owners of the parent company

Fiscal2016

Net assets (Left)

Fiscal2017

Fiscal2018

Fiscal2019

0

Equity ratio (Right)

Sales of water heaters

Sales of kitchen appliances

Sales of air conditioning appliances,
commercial-use equipment, and others(Billions of yen)(Billions of yen)(Billions of yen)

100
202.3

188.2

202.6

88.4

88.3

88.3

60

80

48

150

60

36

100

40

24

50

20

12

0

Terumasa Kaneko(Billions of yen)

40

6

200

Executive Officers(Billions of yen)

8.9

250

Notes: 1. Nobuyuki Matsui and Takashi Kamio (Directors) serve as an outside director.
2. Masaaki Matsuoka and Ippei Watanabe (Audit & Supervisory Board Members) serve as an outside auditor.

51

347.0

Net assets, Equity ratio (see Note 1)

160

Net sales (Left)

Nobuyuki Matsui

330.2

348.0

Operating income, Ordinary income,Net income attributable to ownersof the parent company

Fiscal 2017

Fiscal 20180

Fiscal 2019

Fiscal 2017

Fiscal 2018

Fiscal 2019

0

26.5

27.7

28.9

9.1

9.4

8.4

17.9

19.0

19.6

Fiscal 2017

Fiscal 2018

■ Air conditioning appliances■ Commercial-use equipment

ROE, ROA(see Note 1)

Dividend per share (annual)

(%)

(Yen)

15

120

12
9
6

90
8.8
6.0

9.0
6.3

8.4
5.8

76
7.6
5.1

7.0

86

90

60

Note 1: From this consolidated accounting period,
Rinnai has applied “Partial Amendments to
Accounting Standard for Tax EffectAccounting,” and amounts have been
retroactively adjusted for past fiscal years

30

Fiscal2015
ROE

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal2019■ Others

94

4.8

3
0

82

Fiscal 20190

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal
2019

ROA

52

R i n n a i C S R R e p o r t 2 01 9

Company Data (Rinnai non-consolidated)

Environmental Data

Personnel data
Eco-friendly products

Total energy used(contribute to reduction of CO2 emissions)(see Note 1)(1,000 tCO2e)
6,000

6,040

(TG)
1,200

1,122

Solid waste
1,192

1,171

Newly recruited employees

92

139

131

Mid-career recruitment

15

14

9

Temporary employees

410

379

283

Average working years

15.1

15.4

15.5

Average age (Years old)

36.8

37.1

37.7

Days of paid leave taken

9.3

9.7

10.5

Paid leave utilization ratio (%)

50.3

53.3

57.1

Employment rate of persons with disabilities (%)

1.87

1.90

2.05

Number of occupational accidents *Includes domestic consolidated subsidiaries

32.0

25

26

Number of OJT accidents

2.22

1.99

2.01

Mental health leave

14

17

13

Number of employees who took childcare leaves of absence

61

90

82

Biodiversity protection

Number of employees who used childcare leave

95

107

117

(invasive species eliminated)

Proportion of employees who return to work after taking parental leave (%)

99

100

100

Number of employees who used shortened work hours

106

96

109

Number of employees who used family care leave

16

36

54

Number of employees who used nursing leave

2

4

4

Number of employees who took nursing leaves of absence

0

1

2

Number of employees who used the work from home program

2

3

3

FY2017FY2018FY2019Annual total actual working hours per employee

2,139

2,123

2,097

Annual non-scheduled working hours per employee

237

229

217

Average overtime per month (Hours)

20

19.4

18.7

FY2017FY2018FY2019

8

9

5

0

0

0

Total amount of social contribution activities (Millions of yen)

13

15

14

Expenditures for political contributions and lobbying activities (Millions of yen)

1

1

1

800
600

2,540
2,000

27.8

31.4

28.7

20

400
980

10

1,000

200

0

0

0
Fiscal2017

Fiscal2018

Fiscal
2019

Fiscal2021(Target)Fiscal2031(Target)Applies to: Rinnai Corporation, and from fiscal 2019,
also to Rinnai America Corporation

Water used
(1,000 m3)
969
1,000

Fiscal 2017

Fiscal 2018

Fiscal 2019

Applies to: Rinnai Corporation andconsolidated subsidiaries

(T)
25

935

21.8
20

600

15

400

10

200

5

Fiscal 2018

(kg)
200

859
800

Fiscal 2017

Fiscal 2019

Applies to: Rinnai Corporation andconsolidated subsidiaries

Harmful chemicals handled

180

21.6

19.5

150

100

0
Fiscal 2017

Fiscal 2018

Fiscal 201950

0
Fiscal 2017

Fiscal 2018

Fiscal 2019

0

30
0
Fiscal 2017

Fiscal 2018

Applies to: Rinnai Corporation andconsolidated subsidiaries

Applies to: Rinnai Corporation

Environmental protection results(see Note 2)

CO2 reduction results

Solid waste reduction results

Water conservation results(1,000 tCO2e)3(1,000 t)
4(1,000 m3)
12

Fiscal 2019

Applies to: Rinnai Corporation

Working hours *Excluding managers and supervisors

Other (Compliance, Social contributions)
3.3
2.0

2

1

1.0

3

Applies to: Rinnai Corporation andconsolidated subsidiaries

Criminal charges (Number of cases) for compliance-related accidents and incidents

8

6.7

6

1

Fiscal 2019

0.4

2
0

Fiscal 2017(see Note 3)

2.4

0.6

0
Fiscal 2018

Whistleblowing incidents *Includes domestic consolidated subsidiaries

4

0.8

0
Fiscal 2017

11.0

10

2

FY2019(1,000 t)
40

30
3,320

FY2018(includes valuable substances)

1,000
4,000

FY2017

Fiscal 2018

Applies to: Rinnai Corporation andconsolidated subsidiaries

Fiscal 2019

Fiscal 2017

Fiscal 2018

Fiscal 2019

3. In fiscal 2019, Rinnai subsidiary Noto Tech Co., Ltd., exceeded wastewater standard limits and submitted an improvement report to the government.
The results of water quality analysis after countermeasures confirm that the standards have been maintained without any subsequent problems.

Applies to: Rinnai Corporation andconsolidated subsidiaries

Notes: 1. Reduction in CO2 emissions achieved through improved performance of Rinnai-brand water heaters, compared to products sold in 2005.
2.	Only the amount judged to be the effective amount of each site’s activities is recorded, not the total amount (effects of application cases (total) for the Rinnai Group
Environmental Award (President’s Award) for all domestic and overseas Group sites).

53

54

2019.10
Printed in Japan