Rinnai Report 2023 (Integrated Report)

Introduction

Environment

SocialGovernance

Data

Sustainability Policy

Aiming for the Realization of Healthy
and Comfortable Lifestyles andSustainable Societies

Since its establishment in 1920, Rinnai has contributed to more affluent lives for people aroundthe world by providing products and services suited to the lifestyles, climates, and energy
conditions of each country.

To fulfill our brand promise “Creating a healthier way of living,” we will continue to contribute to
the attainment of a healthy, comfortable lifestyle and sustainable society for people worldwide
by utilizing all energy sources in the areas of heat and lifestyles and health and lifestyles, and bysolving global social issues with our core technologies.

01

Rinnai Report 2023

02

Introduction

Corporate Mission and Vision

Environment

SocialGovernance

Data

Rinnai Report 2023 (Integrated Report)

Fundamental Concept

Quality is our destiny

Editorial Policy
Rinnai produced the Rinnal Report 2023 (Integrated Report) to convey tostakeholders management’s approach to the realization of a sustainable society,to describe the activities undertaken Groupwide, and to encourage a deeper
understanding of the Group’s operations to as many people as possible.

Rinnai’s Activities

Company Motto

和 Harmony:
Develop personal character of the highest caliber

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

Highly important activities(stakeholder perspective)

氣 Spirit:
Base your efforts on a consistent philosophy
眞 Sincerity:
Know the fundamentals and consider issues with
precision and clarity

Brand Promise —Rinnai’s Corporate Mission—

Abridged version
booklet form
Rinnai Report 2023 (Integrated Report)

Rinnai Report(Integrated Report)

Comprehensive
coverage of Group’s
CSR activities

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

Reporting Period

Company
Motto

Spiritual support of Rinnai

This report focuses on events that occurred in fiscal 2023—April 1, 2022, toMarch 31, 2023—but also touches upon measures implemented and recent
activities undertaken since fiscal 2022 as well as future business direction,
targets, and plans.

Referenced Guidelines—Rinnai’s Corporate Mission—

Expectations and attractiveness that
we keep promising with our customers

Rinnai Code of Conduct

Specific rules of day-to-day corporate activities

Brand Promise

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

Publication Schedule
August 2023 (Japanese version)
Previous: August 2022, Next: August 2024 (planned)

Rinnai Human Rights Policy
In accordance with the United Nations Guiding Principles on Business and Human Rights, Rinnai
Corporation established the Rinnai Human Rights Policy and hereby declares that it will respecthuman rights in all its business activities. For details, please refer to the following.
https://www.rinnai.co.jp/en/corp/human-rights/

Sustainability Policy
Corporate Mission and Vision Editorial Policy / Contents
100 Years of History
Rinnai Group Profile
Message from the President
Value Creation Process
Intellectual Capital Supporting Rinnai Growth
Medium-term Business Plans
Message from the General Manager ofMarketing & Sales
27 Message from the President of an Overseas Subsidiary
29 Identifying Material Issues

Environment
Promoting Carbon Neutrality by Expanding Sales of the ECO ONE Hybrid
Water Heater and Heating System Offering the Highest Level ofEnvironmental Performance

Website(Company Information)

Scope

Schematic Diagram of Company Ideals

01
03
05
09
11
17
19
21
25

31 Materiality Special Feature (1)Highly important activities(Rinnai Group perspective)

Creating a healthier way of living

Contents

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

33 Materiality Special Feature (2)Launching Field Test of Japan’s First 100% Hydrogen-burning Water
Heaters at Kitakyushu Hydrogen Town

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

37 Environmental Impact within Rinnai’s Value Chain
39 Environmental Initiatives
Environmental Management, Prevention of Global Warning,
Resource Recycling, Pollution Prevention, Protecting Biodiversity,
Environmental Communication

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

Social63 Materiality Special Feature (3)Microbubble Baths Help Hydrate the Skin and Promote Better Sleep

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

73 Rinnai’s Human Capital Strategy
Rinnai’s Human Capital Strategy, Personnel Training, Development of
Global Human Resources, Health Management Initiatives, Occupational
Health and Safety, Work-Life Balance, Industrial Relations and Human
Rights, Promotion of Diversity, Net Sales per Employee, Increasing
Employee Engagement

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

Governance
99
101
103
104
105
109
110
112

Management Structure
Leadership
Skills Matrix of Directors
Messages from Newly Appointed Outside Directors
Compliance
Risk Management
Information Security
Stakeholder Engagement

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

03

Rinnai Report 2023

04

Introduction

Environment

SocialGovernance

Data

100 Years of History (Part 1) 1920–2004

Historical Overview

Phase 1

Phase 2Phase 3Phase 4Phase 5

Founding and Postwar Reconstruction

Establishing a Corporate Foundation

Promoting Business Activities Overseas

Becoming a Listed Company

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

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

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

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

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

In fiscal 1989, for the first time the Company achieved its
long-sought after sales target of ¥100 billion, and incommemoration of its 70th anniversary a year later, plans
were made to construct a new Head Office building thatwas completed in 1994.
In terms of products, the Company promoted
added value through safety functions that included gas
water heaters equipped with carbon monoxide sensors
and hobs (stovetops) equipped with a tempura oil fire
prevention function. In response to the rapid developmentof China and ASEAN countries, the Company establishedjoint manufacturing bases and acquired quality andenvironmental management certifications, including ISO
9001 and 14001 series in promotion of initiatives
undertaken as a global corporation.

2005¥202.0 billion

1989

Performance¥98.4 billion

1980¥48.3 billion

Net sales
1967¥5.6 billion

1951

Rinnai & Co. founded.
1921

Technologies andProducts

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

Rinnai-type kerosene gas stove

Management andOrganization

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

●1957

1967–

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

●1967
●1971
●1972

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

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

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

1980–

1989–

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

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

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

(FY)

Highly efficient condensing
gas water heater

Gas instantaneous water heater, UT
●1979

2005

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

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

Rinnai Report 2023

06

Introduction

Environment

SocialGovernance

Data

Medium-term Business Plans

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

Phase 7

Phase 8Phase 9Phase 10Phase 11

V-Shift Plan

Reform & BreakthroughJump UP 2014

Evolution and Succession 2017

G-shift 2020

New ERA 2025

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

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

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

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

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

Domestic sales

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

Celebrating its 100th anniversary in 2020, Rinnai formulated a new
Medium-Term Business Plan covering the five-year period from fiscal
2022 to fiscal 2026 as it heads toward its next century.
We have positioned the year 2021 (101 years since ourfoundation) as the start of a New ERA. We will achieve Advancementin addressing social challenges through Expansion of business scaleand Revolution of corporate structure.
In anticipation of changes in the business environment that
include efforts to achieve carbon neutrality, the transformation ofneeds and the entrenchment of the “new normal” and digitaladvances, Rinnai aims to be the brand of choice and positions this asa period for delivering growth and implementing reforms froma medium- to long-term perspective.

¥425.2 billion¥41.4 billion

Overseas sales

Performance

56%

New ERA 2025
New Expansion, Revolution and Advancement

Operating income

Operating margin

Management andOrganization

Technologies and Products

2006

07

2007

2008

2009

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

2010

2011

2012

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

2013

2014

2015

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

2016

2017

2018

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

2019

2020

2021

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

2022

2023

2024

2025

2026 (FY)●2022 Launched sales of Leggiero waterless cooking pots.
Leggiero receives the Red Dot Design Award 2022.
●2022 Successfully developed 100% hydrogen combustion technology
for residential water heaters.

●2022
An ultra fine bubble water
heater launches.

●2022 Rinnai wins the Energy Conservation Award (the Prize of DirectorGeneral of the Agency for Natural Resources and Energy) for ECO
ONE hybrid water heater with heating systems.
●2006 Shanghai Rinnai Thermo Energy Engineering Co., Ltd.
is established.
●2008 Rinnai Italia S.r.l. is established.
●2008 The Integrated Logistics Center opens.

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

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

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

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

●2021 Rinnai wins the “Minister of the Environment Award (Large
company category)” at the highest award of the Environmental
Persons Development Awards.
●2021 Rinnai America acquired Industrias MASS S.A. de C.V. (Mexico).
●2021 Announced the Rinnai Group Path to Becoming Carbon-Neutral
and Rinnai Innovation Manifesto 2050 (RIM 2050).
●2022 Established the ESG Committee in April.
●2022 The Kasugai Logistics Center opens.

Rinnai Report 2023

08

Introduction

Environment

SocialGovernance

Data

Rinnai Group Profile● Manufacturing and sales companies

Corporate Data (As of March 31, 2023)◎ Sales companies

RinnaiWorldwide○ Other business□ Overseas representative office

Incorporated

September 1, 1920

Established

September 2, 1950

Paid-in capital(As of April 1, 2023)

SOUTH KOREA● Rinnai Korea Corporation● RB Korea Ltd.

CHINA

Rinnai UK Ltd.

◎◎ Rinnai Plus Corp.

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

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

Rinnai (Malaysia) Sdn. Bhd.

◎●

11,150 (consolidated), 3,587 (non-consolidated)
46 (domestic 12, overseas 34)

UNITED STATESJAPAN◎ Hainan Rinnai Minsheng Kitchen Appliances Sales Co., Ltd.

Rinnai (Thailand)Co., Ltd.

(From outside Japan): +81-52-361-8211◎◎ Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

Dubai
Representative
OfficeTelephone

Rinnai Canada Holdings Ltd.

● Shanghai RB Controls Co., Ltd.

□

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

Number of Group companies◎ Guangzhou Rinnai Gas and Electric Appliance Co., Ltd.

◎

Head office

Number of employees● Mikuni RK Corporation¥6,484,416,754● Rinnai Technica Co., Ltd.

P.T. Rinnai Indonesia

South Korea¥32.0 billion● RB Controls Co., Ltd.

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

●

Rinnai Manufacturing Malaysia Sdn. Bhd.

Others ¥30.5 billion● Gastar Co., Ltd.

●Rinnai Taiwan Corporation
Rinnai Vietnam Co., Ltd.
Rinnai Holdings (Pacific)
Pte Ltd.

◎

Indonesia¥16.2 billion

Rinnai America Corporation●● Industrias Mass, S.A. de C.V.

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

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

China
¥66.1 billion○ Rinnai Enterprises
●

425.2

¥

billion

INDONESIA
Rinnai Brasil Heating Technology Ltd.

AUSTRALIA●● Rinnai Australia Pty., Ltd.
○ Gas Appliance Services Corporation

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

Kitchen AppliancesHome Heaters

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

Commercial-Use Equipment, Others

Fan heaters, fanned flue heaters, infrared heaters, andothersJapan¥196.8 billion

United States¥55.7 billion

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

Water Heaters and Heating Systems

Australia¥27.6 billion

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

Others ¥42.1 billion

Commercial-use equipment¥10.6 billion
Home heaters¥21.9 billion

DELICIA built-in
gas hob (stovetop)(JAPAN)Net Salesby ProductTotal

Gas clothes dryer(JAPAN)Gas fan heater A-style(JAPAN)

425.2¥
Kitchen appliances¥91.7 billion
Eco Jozu, gas water
heater with bath-fillingsystem(JAPAN)09

High-efficiency gas
tankless water heater(UNITED STATES)

Dishwasher(JAPAN)

Fanned flue heater(UNITED STATES)

Duct-type air-conditioning andheating system (AUSTRALIA)

billionWater heaters andheating systems¥258.6 billion

Rinnai Report 2023

10

Introduction

Environment

SocialGovernance

Data

Message from the President

We will pursue product quality andattractiveness to achievesustainable growth as a company
with a strong brandPresident

Hiroyasu Naito

Another Record High for Earnings, but Profit
Margin Improvement is an Issue
In fiscal 2023, the fiscal year ended March 31, 2023, the Rinnai Group saw salesof hot water heaters and other products grow in Japan and overseas as the global
economy continued to normalize from the COVID-19 pandemic. At the same time,
the rise in raw materials and other costs surpassed our expectations and had
a significant impact on our earnings. In fiscal 2023, net sales were ¥425,229 million(up 16.1% year on year), operating income was ¥41,418 million (up 15.5%), ordinary
income was ¥44,565 million (up 14.1%), and net income attributable to owners of
the parent company was ¥26,096 million (up 9.9%).
Although net sales, operating income, and ordinary income reached newrecord highs, profit margins fell below the upwardly revised plan figures due tohigh costs, and our initiatives to improve in profit margins treaded water. Supply
chain disruptions, which had been an issue, have been resolved, and the Group ismaking progress in establishing a more resilient production system.
Since we will be manufacturing both components and products with moreinventory than ever before, we will need to formulate a strategy going forward that
accounts for higher procurement costs related to materials and parts, as well as
the rising costs of personnel and raw materials.

11

Rinnai Report 2023

12

Introduction

Environment

SocialGovernance

Data

Message from the President

Progress in the Second Year of New ERA 2025
Advancement in addressing social challenges—Adapt to the energy transition and step into the future
Rinnai has formulated the Rinnai Innovation Manifesto

Concept model of hydrogen water heater

Another effective way to reduce environmental

new products, and I look forward to hearing our

100% hydrogen combustion water heaters. We have also

2050 (commonly known as RIM 2050), a policy to achieve

impact is to switch from conventional water heaters to

employees’ free and open-minded inspirations.

begun joint development with Toyota Motor Corporation

carbon neutrality by 2050. And in its New ERA 2025

the highly efficient Eco-Jozu water heater. We intend to

medium-term business plan, Rinnai is working to enhanceincrease awareness of the availability of subsidies byhydrogen energy technologies and are preparing

its lineup of environmentally friendly products to contributepublicizing the fact that single function hot-water units,a structure that will allow us to introduce technologies

Rinnai will continue its research and development

to resolving social issues. Recently, demand has been

which account for less than 10% of all hot-water unit

and equipment as soon as the infrastructure is in place.

based on the possible paths for energy at this turning

growing for ECO ONE, a gas-electric hybrid water heater

replacements, are eligible for government support for

We have launched proof of concept tests in Japan atpoint, so that we can expand our business regardless ofwith heating systems that we have offered for many years.

energy-saving home renovations. Meanwhile, in

Kitakyushu Hydrogen Town and overseas in Australia forwhat technology ends up dominating.

Sales in fiscal 2023 were up 28.2% versus the previous

overseas markets, the switchover from storage tank-year, marking a record high. This product combines

type water heaters, the most widespread type in the

Eco-Jozu, a highly energy-efficient gas water heater, with

United States, to tankless water heaters (instantaneousa highly energy-efficient electric-powered heat pumpwater heaters) and beyond that to Eco-Jozu will lead towater heater and achieves a substantial reduction ina significant reduction in CO₂ emissions. We areenvironmental impact. ECO ONE is eligible for subsidies

targeting the new housing start market for this transition

from the Japanese government as part of a project toin the United States.

save energy consumed in the supply of hot water, and thiswill also encourage its widespread use.
I am confident ECO ONE installations will expand

Rinnai established a dedicated business unit in April
2023 to further strengthen its ability to develop
environmentally friendly products. Until now, Rinnai has

overseas as well. In Europe, electric hot water andspecialized in the manufacture and sale of gas

heating systems are currently being used, but it is difficult

appliances, but from now on it will need to develop andto maintain sufficient warmth with these in cold climates.

manufacture products that are not focused exclusively

As such, there is a trend to re-evaluate the use of high-on gas. Rinnai’s basic stance is to challenge all its

efficiency gas. Even in Europe, where environmental

employees to come up with various ideas and create

restrictions are advancing, I believe people there will

We are also making steady progress in accumulating

for hydrogen-powered cooking equipment and are aiming
to introduce this technology at Toyota Woven City.

Expanding the Scale of Business: Growing by Developing Business in Tandemwith Trends in Each Country
Rinnai is also focusing on expanding the scale of its

Our e-commerce business has been very strong

business overseas. As the world moves toward carbon

in China. Fortunately, we have not been significantly

neutrality, some countries are shifting to electric heataffected by the intermittent lockdowns caused by thepump water heaters, but it is also a fact that others are

COVID-19 pandemic, and we were able to outperform

focusing on the diffusion of gas water heaters. We willin gas water heater sales in fiscal 2023. We attribute thisdevelop our business based on our contribution to theability to surpass our competitor, the market leader inattainment of carbon neutrality, taking into account the

China, to our partnership with a Chinese company withenvironmental measures that each country is required toa strong e-commerce presence. We will continue to work

take depending on its circumstances and situation.

together to achieve a better balance of profits as well

Overseas, we have positioned the United Statesas sales.

and China as priority markets. In the United States,
demand for instantaneous water heaters has grown tocontinue to live not in an all-electric world but a hybrid

the extent that we have a backlog of orders. That said,

one that also uses gas. Although it is difficult to anticipate

we expect demand to slow down over the near term as

the speed of the diffusion of this technology both inconditions in the housing market began to deteriorate inJapan and overseas, we will continue our initiatives tothe second half of 2022. It is also true that some states

ensure we are ready to respond adequately when theare stepping up environmental measures, such as

time comes. We currently do not make our own heatbanning the installation of gas lines in new buildings.

pump hot water heaters for ECO ONE, so we need to

Despite these challenges, we believe the US market,

invest in the research, development, and manufacturing

which is much larger than the Japanese market, holdsof heat pump units. This will be a major investment, but

great promise and we will aggressively pursue market

we will certainly proceed with it.
ECO ONE X5 contributes to achieving carbon neutrality

13

Announced the successful development of hydrogen combustion technology(May 2022)

share there.

Trade show in the United States (June 2023)

Rinnai Report 2023

14

Introduction

Environment

SocialGovernance

Data

Message from the President

Rinnai will Contribute to Society by Thinking Through its Own Aspirations
Rinnai’s fundamental concept is to enhance corporate

From fiscal 2024, Rinnai has added two Outside

value through profit growth, and we will actively invest in

Directors, including one woman. We will strive to improvethe basic scenario of the medium-term business plan

our corporate value through the more transparent operationand growth areas with optimal allocation. The research,of the Board of Directors and diverse discussions

development, and manufacture of heat pump units that

including women. Furthermore, one of the new Outside

I discussed earlier is part of this thinking. Assuming these

Directors is an expert in investor relations and will be able

growth investments are implemented as planned, ourto strengthen Rinnai’s dialogue with the capital markets.

visitors to experience the appeal of the products firsthand.

cash holdings in fiscal 2026 are expected to be lower

I believe this will enable us to identify issues and makeWe are also working on digital transformation (DX) to

than the projected amount of ¥180 billion, owing to an

improvements in a better way.

Phase 2 of Shanghai Factory Construction

Revolution of Corporate Structure: Toward a Company and Products with Brand Strength
Rinnai has a long-standing commitment to high-quality
manufacturing as a company that supports people’s daily
lives. In addition to this, we are now focusing on improving

create new value through innovative customer

increase in shareholder returns. ROIC is estimated to be

The ESG Committee has already extracted key

our brand strength to transform into a company thatconnections that have never been witnessed before. We

below the projected value of 19.0% (fiscal 2026) due toissues from the opinions of shareholders and investors

provides high value-added products that are moreare currently exploring the optimal ways to analyze andthe search for an appropriate level of inventory to makeand is working on them. In addition to this work, it is also

attractive to consumers. In our medium-term business

utilize data for Rinnai by learning from companies thatgrowth resilient and the execution of growth investments.

important is to think exhaustively about what we shouldplan, we have set a goal of a revolution in our corporate

excel in the application of customer data.

I would like to mention that Rinnai has added ROE

do from the perspective of Rinnai’s place in society andOver the past few years, Rinnai has continued toas a new management indicator. We aim to achieve 8%

the Company’s sustainable growth, and to tackle on

The acquisition of land and buildings in Minami-Aoyama,

grow despite the dramatic social and economic changes

in fiscal 2026 and will make further improvements during

these issues on our own. Based on this basic stance, we

Minato Ward in Tokyo in April 2023 is one facet of this goal.

it has experienced in both Japan and abroad. Investment

the next medium-term business plan duration. We will

will promote dialogue with our stakeholders, provide highFor some time, there have been high expectations forin our employees, who are responsible for our business

improve ROE by building a business foundation forvalue-added products, and contribute to a society that is

Rinnai to develop super-luxury kitchen products for upper-

activities and are the source of the Company’s vitality, issustainable profit growth and increasing Rinnai’s

facing many challenges.

end consumers. Most system kitchens offered in Japan

exceptionally important. In April 2023, the Company

dividend payout ratio to around 40% in fiscal 2026 fromthat combine attractive interior design aesthetics andimplemented a transfer of restricted stock incentives to its

the current level of around 30%.

quality are made by overseas manufacturers. As such,

Employee Stock Ownership Plan. We began conducting

many customers have expressed concerns about

an employee engagement survey in fiscal 2022, and one

breakdowns and maintenance, which has led toof the Company-wide issues highlighted was the lack ofa demand for Japanese products. To address such needs,

a framework to encourage employee growth. We expect

Rinnai has launched high-end models under its G:LINEthat the restricted stock incentives will be closely linked toseries and is looking to expand its product lineup and

Rinnai’s performance and growth potential, allowing

develop even higher quality models. Minami-Aoyama is

employees to sense their own contributions and providing

an ideal location for capturing the latest information on

an opportunity to boost their motivation.

structure to “become more consumer-oriented.”

market trends for luxury lines and is also a favorable

In terms of addressing issues raised in thelocation for the sales perspective of the business. I am

employee engagement survey, we aim to improve thecertain that our employees will develop the ability to thinkpercentage of positive responses by 15 percentage

about and judge what higher value-added products lookpoints by fiscal 2026 versus the results of the first survey

like in this kind of setting.

implemented in fiscal 2022 by sharing the issues

We also envision the opening of a showroom, notsimply to display products, but to provide a realistic

We look forward to your continued guidance andsupport.

identified across the Company and by each organizationand implementing improvement measures.

experience of the lifestyle they embody and to allow

15

Rinnai Report 2023

16

Introduction

Environment

SocialGovernance

Data

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

Rinnai Group Value Creation Process

External Environment / Social Issues

Value Provided

Business Activities

Climate change /global warming

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

Product usage risks

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

Work style changes
cause decrease inquality of lifestyles

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

Consolidated net sales

Creation of products
and services that are safe,
secure, andenvironmentally friendly¥425,229 million

Environmental
contribution(local production / in-house production)

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

Invested Capital (Fiscal 2023)
Human capitalIntellectual capital

Financial capital

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

11,150 people
103 people¥127 million

Research & Development Headquarters staff:(Rinnai non-consolidated) *1
Production Engineering 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
ROE
ROIC
Equity ratio

501 people¥41,418 million
Operating income ratio
9.7%¥26,096 million

173 people

Net assets (equity ratio)¥8,104 million
17 companies
15 companies
7.4%
13.3%
66.6%

Rinnai Group production bases:
23 companies(number of companies) *1
Production group staff (Rinnai non-consolidated) *1:
1,559 people
Capital expenditure (Rinnai non-consolidated):¥14,934 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”

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

1,155,651 GJ
220,458 m3
742,154 m3

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

Increasing needs for safety and accident
prevention as social issues[Domestic] Declining birthrates, an aging
population, and a decreasing number ofhouseholds[Overseas] Expand use of natural gas andhydrogen[Overseas] Improving living standards
Progress in evaluation of corporate ESG
initiatives

Dividend per share(annual) ¥160
Products contributing to improved
quality of life

Products that benefit the
global environment

Opportunities[Domestic] Expansion of thermal energy
systems centered on electric power¥407,199 million (66.6%)

Sales Approx. ¥124,000 million*1 As of March 31, 2023

Decreasing working hours and intensifying
competition for securing human resources

Operating income

Net income attributable toowners of the parent company

0 people

Manufactured
capitalRisks

Fiscal 2023 Achievements

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

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

Social issue recognition

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

Sales Approx. ¥176,000 million
Amount contributed toreducing CO2 emissions*5.82 million tons
Announcements of productrecalls due to defects:
0 case* Consolidated basis

17

Rinnai Report 2023

18

Introduction

Environment

SocialGovernance

DataIntellectual Capital Supporting Rinnai Growth

R&D Policy

Intellectual Capital Key Data

The Rinnai Development Division is engaged in the research and development of products, services, and technologies centered on
housing equipment closely linked to people’s lives, with the aim of providing people to lead richer, more enjoyable lives while also ensuring
a sustainable global environment.
Specifically, to make bathroom, living room, and kitchen spaces more comfortable, we will develop products based on the
combustion, heat transfer, fluid control, IoT, and electronic control technologies cultivated up to now, while further incorporating sensing,
network, AI, and other advanced technologies to create new value.
To achieve carbon neutrality, which has become a social issue, in addition to the development of ECO ONE hybrid water heatersystems and other environmentally friendly equipment providing high energy efficiency, we will promote the research and development ofhydrogen combustion and electrification-compatible equipment.
For the ever-growing overseas market, we will promote the development of products and technologies that support local lifestyles inline with the policies of each country by developing global human resources and strengthening cooperation with overseas subsidiaries.

R&D ScopeWith foundational technologies comprising combustion, heat transfer, fluid control, IoT, and electronic control technologies, Rinnai
develops gas burners. electric valves, and other functional components and products that realize water heaters facilitating highly efficient
hot water supplies and kitchen appliances with automatic cooking functions in an effort to create value that leads to improving customer
quality of life and environmental contributions.
Having defined the scope of Development Division activities as the “Rinnai Innovation Circle” leading from foundational technologies
to value provision, our mission is to further expand the framework (RIM) of this scope through innovation.

FY2019FY2020

FY2021

FY2022

FY2023

Number of patent applications

217

203

223

190

200

Number of registered patents

101

170

178

229

179

Number of patents held

2,328

2,300

2,358

2,406

2,350

R&D expenses (Millions of yen)

9,503

9,308

11,802

12,762

13,458

Production Engineering Policy
The Rinnai Production Engineering Division pursues “healthy and comfortable lifestyles for people” and “a stable profit structure”
through the development of manufacturing technologies.
For many years, we have engaged in the research and development of technologies, methods, and mechanisms implemented at
our manufacturing sites that facilitate the delivery of Rinnai Group products and services to customers in a timely manner at reasonable
prices. To responsibly ensure Rinnai’s fundamental concept of “quality is our destiny,” we are enhancing core technologies while
conducting the in-house production of molds, equipment, and information systems, as well as pursuing collaborative creations withbusiness partners.
In recent years, amid the accelerating transition toward digitalization, globalization, and a decarbonized society, we are expanding
our challenge domain to larger themes. Rinnai must transform processing methods for single parts into the assembly and developmentof products themselves, while transitioning from stand-alone facilities to large-scale automation systems encompassing factories,
including those located overseas, as well as global supply chains. To this end, we are strengthening technological fields such as IoT, AI,
robotics, and simulations, while engaging in daily efforts to create systems and develop human resources with the aim of dynamicallyreforming cross-functional business processes and mechanisms.
To maintain our promise of “creating a healthier way of living” for customers throughout the world, Rinnai will continue developing
technologies to deliver quality products that support healthier, more comfortable, and higher quality lifestyles in a timely and reasonable
manner, while growing as a professional Group that continuously takes on challenges with high aspirations.

Core Production Technologies
The Production Engineering Division strives to improve quality based on Rinnai’s fundamental concept of “quality is our destiny.”
Defining production design, material technologies, processing technologies, inspection and analysis technologies, molding and casting
technologies, automation technologies, production system technologies and digital technologies as our “core production
technologies,” we are working to improve and implement these core technologies at all manufacturing sites.
Material
Technologies

Processing
Technologies

Inspection andAnalysis Technologies• Heat exchanger design• Analysis technologies• Metal and resin materials• Ceramic coatings• Enameling• Welding and brazing• Pipe processing• Innovative processes• Innovation inspections• Image inspections• Inspection-free

Mold and casting
technologies

Automation
Technologies

Production System
Technologies• Mold technologies• Press technologies• Factory automation
development• Robot systemdevelopment• Production system design• Assembly process design

Production Design

Rinnai Innovation Circle

19

Digital Technologies• IoT (equipment,
people, things)• AI, data science

For details regarding Rinnai technologies, please visit the “Technologies” section of our corporate website.
https://www.rinnai.co.jp/en/technology/

Rinnai Report 2023

20

Introduction

Environment

SocialGovernance

Data

Medium-term Business Plans

New ERA 2025

New Expansion,
Revolution and Advancement

Expanded Lineup of Products That Contribute to Improved Quality of Life and Benefit
the Global Environment
Expanded lineup of ECO ONE products aimed at realizing carbon neutrality, launched sales of a new deluxe model in the popular
Kanta-kun product line.
Ultrafine bubble water heater(sales launched in October 2022)

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

Advancement in addressing
social challenges

Expansion of business scale

Revolution of corporate structure

ECO ONE X5 hybrid water heater with heating system for high-density housing(sales launch planned for September 2023)• Improve quality of life
• Help resolve global environmental
problems• Become more consumer-oriented• Make focused investments inintangible assets• Enhance profitability• Expand regional domains• Expand business domains

Deluxe model Kanta-kun gas
clothes dryer(sales launched in July 2023)

Group Net Sales and Operating Income After the Second Year of the Medium-term Business Plan

Net sales and operating income both reached all-time highs and are on track to achieve medium-term business plan targets.

(Billions of yen)

450.0

425.2
348.0

340.4

■■ Net sales■■ Operating income

8.9%

10.1%

344.3

366.1

11.8%
9.8%

9.7%

11.1%

● ● Operating margin

30.8

34.4

40.6

35.8

41.4

2018

2019

2020

2021

2022

50.0
…

2025 (Plan)Three Strategic Stories: Advancement in Addressing Social Issues

Maintain target of +50% increase in sales of products that contribute to improved quality of life and benefit the global environment.

2020

21

2021

2022

Maintain overseas sales ratio at 50% by capturing growing demand overseas and increasing sales in Japan.
Consolidated Domestic/Overseas Sales (Billions of yen)

Sales of products that benefit the global environment■Domestic+48% vs. fiscal 2021

Red text: Overseas sales ratio

2020

Compact bathroom heater/dryer(sales launched in October 2022)

Three Strategic Stories: Expansion of Business Scale—Regional Domains—

Target in the final year of the medium-term business plan: +50% increase (vs. fiscal 2021) in sales of
products that contribute to improved quality of life and benefit the global environment+59% vs. fiscal 2021

Built-in instant-heating gas water
heater with heating system heatsource device(sales launched in December 2022)

New ERA 2025

Previous Medium-term Business Plan

Sales of products that contribute to improved quality of life

Built-in dishwasher/dryer 405LP/GP series(sales launched in December 2022)

2021■Overseas

55.8%

48.9%

55.8%

168.4

204.1

175.8

162.0

187.8

2020

2021

2022

237.4

In the final year of the Medium-term Business Plan,
the consolidated net sales target of ¥450 billion
breaks down to domestic sales of ¥200 billion andoverseas sales of ¥250 billion.

2022

Rinnai Report 2023

22

Introduction

Three Strategic Stories: Expansion of Business Scale—Business Domains—

Environment

Promote initiatives aimed at hydrogen development as part of Rinnai’s RIM 2050 commitment to carbon neutrality.

■ 2. Hydrogen cooking appliances

Background

Objective

Rinnai will build a brand experience showroom and value creation laboratory to pursue
what consumers consider “intrinsically good,” experiment with value creation, andco-create with consumers and companies in other fields.

Plans

Various field testing(from Kitakyushu City website)

Hydrogen cooking equipment currently underjoint development• Developing water heater technology based on
100% hydrogen combustion (world’s first
technology for residential water heaters)• Supporting field tests using actual equipment in Australia,
where hydrogen is being proactively promoted• Jointly developing hydrogen combustion-fueledcooking equipment (in conjunction with the Toyota
Motor Corporation)• Through field tests at Woven City and other facilities, we arescientifically verifying the safety and efficiency of hydrogencooking and its effects on the taste and flavor of foodThree Strategic Stories: Revolution of Corporate Structure
Increase capital productivity through efficient investment of management capital in linewith improved business performance.
7.0% 7.0%

7.4%

8.0%

7.6%

Total Shareholder Return
Rinnai will expand shareholder returns while placing a priority on investments in future growth and strategic spending.

Shareholder return policy under the current Medium-term Management Plan:
Total return ratio of 40% (2021–2025 average)
84.7% (cumulative fiscal 2022–fiscal 2023)■■Total dividends (Billions of yen)■■Share buybacks (Billions of yen)

(Target)(Plan)

6.9%

Formulate details during fiscal 2024 based on the assumption of a pre-open test run infiscal 2025.

Rinnai hydrogenwater heater(concept model)• Commenced field-testing of Japan’s first 100%hydrogen-fueled water heater at Kitakyushu Hydrogen Town
(Iwatani Corporation, Kitakyushu City and elsewhere)• Commenced field tests in environments similar to actual use(fields with proven track records of hydrogen utilization
through pipelines since 2009)

8.4%

Data

To enhance sustainable corporate value, Rinnai believes it important to empathize withthe essential needs that lead to improved quality of life, and to expand and deepen
awareness of the Rinnai brand. To this end, we must establish lines of communication
with consumers in both the real world and in digital life, and facilitate life and brandexperiences that resonate with consumers.

■ 3. Field testing at Kitakyushu Hydrogen Town

Field testing conducted at the “Hydrogen House”
in Australia

Governance

Acquiring Land and Property in Tokyo’s Minami-Aoyama District to Become More Consumer Oriented

Hydrogen equipment-related business■ 1. Hydrogen water heaters (Australia)

Social

24.3

17.4

■ ROE
ROE has been included as a new performance indicator based on the importance of improving
capital policy transparency and capital efficiency

Fiscal 2026 ROE: Targeting 8.0% and further improvements during thenext medium-term plan period

10.0

6.4

10.0

4.8

5.0

4.8

5.0

6.4

6.9

7.8

8.5

2018

2019

2020

2021

2022

2023
(Plan)

Previous Medium-term Business Plan

■ ROIC

18.5

17.8

New ERA 2025

Current plan target: 19.0% ⇒ 13.3% (fiscal 2023)
Profit growth will continue, but ROIC is currently below the plan target due to appropriate
inventory level revisions and the execution of growth investments.

2018

2019

2020

2021

Previous medium-termbusiness plan

2022

2023

…

2025

…

Next medium-termbusiness plan

New ERA 2025

ROE Actual vs. Target

Focused Investments for the Future

Growthinvestments

Necessaryinvestments

Investing in increased production capacity in the United States, China, and other countries in line with expansion of overseas business.
Expanding investments to meet demand.

Dividends per Share and Payout Ratio
Continuing to consecutively increase dividends while steadily raising the dividend payout ratio to reach 30%.

As an additional policy under the current Medium-term Management Plan,
incrementally increase the payout ratio Fiscal 2026: 40% level■Dividends per share (Yen) ● Consolidated payout ratio (%)
Figures in parenthesis are on a pre-stock split basis.

United States: Griffin
Factory (commenced
operations in April 2022)

China: Fengxian Factory
Phase 2 (scheduled tocommence operations
in August 2023)

Japan: Kasugai Logistics
Center (commenced
operationsin October 2022)

(82)
27.3

(86)
28.6

(90)
30.0

Embodiment • Create consumer contact points to become more consumer-oriented
Futureinvestment
themes• Strengthen R&D, production technologies, and manufacturing capabilities (Innovation Center, etc.)• Make focused investments in intangible assets (information, brand, human resources, know-how)

18.8%

2015

20.0%

2016

21.9%

2017

(125)
41.6

(94)
31.3

(98)
32.6

23.6%

23.4%

23.3%

2018

2019

2020

(140)
46.6

(160)
53.3

(180)
60.0
40.0%

32.7%

• Consider methods (M&A, etc.) needed to promote expansion of business scale and business domains

29.8%

30.1%

2021

2022

2023
(Plan)

2024

2025

Note: On April 1, 2023, Rinnai conducted a 3-for-1 split of common stock.

23

Rinnai Report 2023

24

Introduction

Environment

SocialGovernance

Data

Message from the General Manager ofMarketing & Sales
Aiming to Further Stimulate Demand by ClearlyCommunicating to Customers the Value of Rinnai
Products that Meet Society’s Needs

Hideyuki Shiraki
Director, Senior Managing Executive Officer
Bathroom heaters/dryers equipped with Mold Guard Mist

Stoves equipped with automatic cooking functions linked to a smartphone app

Fiscal 2023 Supported by Growing Demand
In fiscal 2023, the Rinnai Group achieved record-high sales and profits, driven by growth in the sales of water heaters and other products,

Rinnai products have been supported by regular replacement demand, but as there are limits to continued growth in mature markets,

which I attribute to two factors. First, the entire Company has made efforts to strengthen our production system and clear the order

we are focused on providing products that add value and improve quality of life. Our launch of the industry’s first water heater thatbacklog that accumulated during fiscal 2022. As distributors currently have more inventory in their warehouses than ever before, we will

generates ultra-fine bubbles, bathroom heaters/dryers with Mold Guard Mist that prevent 99.9% of black mold growth, and stovesimplement various measures in fiscal 2024 to stimulate sales demand through proactive marketing. The second factor driving strong

equipped with automatic cooking functions linked to a smartphone app all play a role in reducing the burden of household chores andearnings was growing demand for environmentally friendly products. The Group medium-term business plan aims to help resolve global

supporting healthy lifestyles. At the same time, in addition to purchases to replace old equipment, Kanta-kun gas clothes dryers are being

environmental problems and improve quality of life as advances in addressing social challenges. I believe we have launched high value-

installed at newly constructed properties, with the number of condominiums installing them as standard equipment growing throughout

added products that meet the needs of society and consumers and are used in numerous households. However, in response to soaring

Japan. I think this reflects the rising awareness among consumers of the convenience and energy efficiency of gas clothes dryers, as wellraw material prices and rising logistics and energy costs, we had to revise prices for the second time between May and July 2023, after

as condominium developer efforts to design washing and dressing rooms as spaces for household chores. In recognition of Kanta-kun as

initially revising prices in April 2022.

a product that can and will grow even further, we will focus efforts on sales going forward.

Launch of Strategic Products under the Medium-term Business Plan

Domestic Sales Strategy and Human Resource Development

In terms of environmentally friendly products, Rinnai makes ECO ONE hybrid water heaters, which have attracted remarkable consumer

As energy conservation and environmental friendliness in housing are expected to accelerate in order to achieve carbon neutrality byinterest in recent years, and I think we should see sales expand in the next few years. ECO ONE combines the gas-powered Eco-Jozu with

2050, there will be an increasing number of opportunities to quantify how we can contribute to environmental measures and conduct

an air-source heat pump, and because it requires a certain amount of space for installation, it has so far been used mainly in detachedsales activities in cooperation with related businesses. Accordingly, it will become essential to transform the style and quality of sales

housing. In September 2023, we will launch the X5 model, which can be installed on apartment building balconies and in pipe shafts, inactivities, and Rinnai will use digital technologies to facilitate these changes. Paperwork associated with sales activities will be input into

an effort to expand the range of applications. As this product will be installed in limited residential spaces, we will work closely with home

this system to streamline and simplify the recording of results, while also being used to quickly analyze sales efforts, eliminate thebuilders, condominium developers, gas companies, and other related businesses to further promote the spread of ECO ONE.

personalization of information, and provide customers with better proposals. We will also encourage the digitalization of product orders toenhance convenience and enable customers to place orders from a smartphone. As information visualized through these efforts can also
be used in meetings between supervisors and subordinates and on-the-job training, Rinnai intends to use it as a tool for developing humanresources within sales activities.
Nowadays, products offer added value in addition to conventional functionality, increasing the complexity of knowledge and skills
required for sales representatives. Rinnai conducts regular training and study groups that facilitate the presentation of product value tobusiness operators, and going forward, we also plan to introduce a Meister system for each product to cultivate professionals adept inincreasingly complex products.
Although Rinnai develops B2B business, we also focus efforts on brand strategies to better convey the value of our products to
consumers. We will use land and buildings acquired in the Minami Aoyama district of Tokyo to create an interactive showroom that canalso be used by consumers. For example, this space will be used to exhibit products sold overseas and environmentally friendly products,
providing visitors with an opportunity to experience how comfortable life can be with products that make effective use of limited energy
supplies. Rather than having to put up with cold and heat while pursuing energy-saving and environmentally friendly lifestyles, we want

ECO ONE X5 can be installed on apartment building balconies and in pipe shafts

25

Kanta-kun gas clothes dryers help reduce time required for household chores

consumers to feel that Rinnai technological and product capabilities also enable them to enjoy comfort in daily life.

Rinnai Report 2023

26

Introduction

Environment

SocialGovernance

Data

Message from the President ofan Overseas Subsidiary
Aiming for “Total Home Comfort” with a Lineup of
Products that Contribute to Comfort and the
Global Environment

Lucas van Raay
CEO Rinnai Australia
Commercial-use air conditioner

Heat pump water heater

Fireplace2022 Management Review
Despite product supply issues, Rinnai Australia saw sales growth in its commercial-use business, especially the air conditioners business.

Further, I think gas equipment will remain a viable market going forward as these have been the preferred products for both installers

Commercial-use air conditioner products are manufactured by Rinnai Engineering Malaysia and sold under the “APAC” brand developed

and users for many years. While gas heaters will likely be replaced by heat pump equipment, there will still be demand for tankless waterby Specialized Engineering, acquired in 2017, whose high quality and brand power have contributed to sales and profits. At the same time,

heaters as they offer unique features that heat pumps do not, such as never having to worry about running out of hot water.

gas appliance sales are declining amid the ongoing trend toward electrification. Soaring raw material prices and increased distribution

In line with RIM 2050, the Rinnai Group’s Commitment to Carbon Neutrality, we will move forward with a focus on three directions:costs have also placed downward pressure on profits.

Heat pumps and other electric equipment, hydrogen combustion equipment, and conventional gas equipment.

Strategy Story and Priority Measures Going Forward

Corporate Structural Transformations: Brand Power Enhancement and Human Resource
Development

While gas tankless water heaters currently account for about 30% of the water heater market, we do not expect significant growth in the
future due to the ongoing trend toward electrification. In terms of an approach to the energy mix, the Australian government is promoting

Heat pump equipment is highly subsidized by the Australian government, and even companies that never had brands can enter thethe use of heat pump equipment for primary energy as well as household appliances. The main sources of profit for Rinnai Australia at

market and purchase heat pump equipment at low prices. To compete with such competition, I believe it is important to leverage Rinnai’spresent are gas water heaters and heating units, but I think heat pump-related products such as room air conditioners, duct-type airstrong brand power. We want to convey the message that Rinnai is not only a gas equipment company but also a company engaged in

conditioners, heat pump water heaters, and commercial-use air conditioners will become sources of profit in the future.

renewable energy, but I do not think we can send this message with our current product portfolio. In addition to enhancing our lineup of

At the same time, although hydrogen is slowly being adopted for commercial use in power generation and other areas, conditions
surrounding its residential use remain unclear. The transition from natural gas to hydrogen is quite complicated in terms of social

products that contribute to the global environment, we want to create a means of communications as a solid environmental company.
High-performing and strongly motivated employees are provided with a variety of developmental support, including special training

infrastructure and technology, while the transition from natural gas to electrification is very simple, hence this is the direction the Australiancourses for engineers and assistance with obtaining certifications. In my case, the Company supported me in acquiring an MBA degree.

government seems to be promoting. However, as we must also be prepared for movement toward hydrogen combustion equipment,

As employees are one of our assets, the Company encourages increased motivation and enhanced skill sets.

we are currently testing hydrogen combustion water heaters developed in Japan.

The Ideal Targeted by Rinnai Australia
The Australian home heating and cooling sector is moving toward electrification, a trend I assume will continue. “Control technologies”
will become a crucial aspect of this trend, as temperature controls for individual rooms will become as important as home automation
using monitors.
I want “Total Home Comfort” to become equally as important as the Rinnai Group brand promise “Creating a healthier way of living.”
We aim to achieve “Total Home Comfort” based on the idea that all Rinnai products, including home water heaters, heater units, and air
conditioners, which emphasize comfort throughout the home and are recognized as a premium brand, can be used to facilitate
a comfortable living environment.

Rinnai Australia head office27

Rinnai Australia warehouse

Rinnai Report 2023

28

Introduction

Environment

SocialGovernance

Data

Identifying Material Issues

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

Material Issue Targets and Results

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

Material Issues

Main Target Indicators

Energy consumption
CO2 emissions

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

Target area: Global
Target stakeholders: All

Material Issues

Main Target Indicators

Consumer safety
Improving quality

Number of defects that have
led to product recall
announcements

strategies, revolving primarily around our Corporate Planning Division.

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

Step 1

Step 2Outline existingengagement

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

Step 3
Analyze international
standards andguidelines

Step 4
Analyze ESG indicesand questionnaires● Analyze sustainability-related
international standards andreporting guidelines (ISO 26000,
GRI G4 Guidelines, etc.)

Step 5

Step 6

Study othercompanies

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

6.00

million tons

2025 target

7.00

CO2

million tons

2022 results: 5.82 million tons

0

cases

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

2022 results: 0 cases

Determining and Identifying Material Issues

Creating a System to Support Rinnai Quality

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.

Daily efforts to realize the goals of consumer safety and improving quality, identified as Rinnai material issues, are based on the Product Safety
Measures Chart.

○ Environmental issues

High<Importance to stakeholders>

Very highClassification of Issues□ Diversity□ Communicating with suppliers○ Biodiversity□ Child labor/forced labor◇ Pandemic□ Support for cultural activities andthe arts□ Support for school education/
vocational training□ Preventing corruption

High

29

● 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

2023 target◇ Customer issues□ Other issues

Collaboration with distributors in responding
to recalls◇ Health◇ Housework time reduction□ Stable procurement□ Work-life balance○ Waste○ Harmful chemicals○ Energy consumption○ CO2 emissions◇ Consumer safety◇ Improving quality○ Conserving resources/waste○ Drainage□ Industrial relations□ Occupational health and safety□ Protecting privacy◇ Repair and inspection services□ Wages and welfare□ IR communication activities□ Fair trade□ Work style reforms○ Transport and transfer◇ Enhancing Customer Center
services□ Training and education□ Dividend policy□ Surveying and evaluating suppliers<Importance to the Rinnai Group>

Product Safety Measures Chart

Gate

Planning◇ Marketing communication

Unified management of
repair information• Repair information push
notifications• Rulebooks• Knowledge collection

Gate

Development

Government agencies
and industrial
associations

Gate

Sales

Production

Designs realizing safety• Product safety through research that
includes products from other industries• Product safety exceeding industry
standards• Product safety preventing natural
disasters• Creation of safer products• Safety measures preventing misuse
and inadvertent accidents

Efforts to establish a culture of
product safety in collaboration
with government agencies andindustrial associations• Designation of criticalsafety parts andthorough managementin production processes• Elimination of silent
changes
Accelerated durability
testing for accurate
deterioration
countermeasures

Production personnel
training andtechnology transfers
Awareness of suppliermanagement systems
and systems forevaluations andcommendations

Customers

Alerting customers
using online
methods andprinted materials

Construction• Repair information• Claim information• Safe utilization explanations• Inspections and replacement
purchase proposals fordeteriorated products
Thorough and accurate
repair support using
technical service information

Information processing feedback

Repairs
Very high

Dissemination of safety measures through feedback

Rinnai Report 2023

30

Introduction

Environment

Environment

SocialGovernance

Data

Materiality Special Feature (1)Promoting Carbon Neutrality by Expanding Sales of
the ECO ONE Hybrid Water Heater and Heating System Offering the Highest
Level of Environmental Performance

VOICE
Conversation with Tokyo Gas, Focused on the Introduction of ECO ONE
The Tokyo Gas Group has a long-established culture of proposing
gas-powered hot-water floor heating as a comfortable heating
solution. Customer feedback indicates that while hot-water floor
heating systems are highly satisfactory with regard to comfort, the useof floor heating is less efficient than heat-pump air conditioners fromthe perspective of energy consumption, putting these systems at a
relative disadvantage in terms of environmental impact. Given these
conditions, hybrid water heater and heating equipment can reduceenergy consumption even when gas-powered hot-water floor heating
is used, achieving both carbon neutrality and comfort in daily life.
Additionally, as the benefits of selling electricity generated using
solar power are decreasing, we believe that hybrid water heater andheating systems, which can store energy in the form of hot water
without incurring storage battery costs, are one of the best ways to use
energy for household consumption. For this reason, we recommend

PLUG-IN MODE (L plug-in model) compatible with household outlets aimed at expanding the ECO ONE series

ECO ONE as a water heater and heating system compatible with solar
power generation systems.

The Rinnai carbon neutrality declaration RIM 2050 sets forth an ECO ONE hybrid water heater and heating system sales
target of 300,000 units per year in calendar 2030. ECO ONE is a hybrid water heater combining both electricity and gas
offering the highest thermal efficiency in the industry, making it an outstanding example of energy-saving equipment
among housing equipment.
Rinnai launched sales of the ECO ONE in fiscal 2010, and while its reputation has grown in line with repeatedfunctional and performance improvements that have caused sales to gradually increase, there has been no major
breakthrough to date, and sales have been limited to around 10,000 units per year.
Despite being one of the industry’s most energy-efficient products, installation workability is one factor preventing
sales expansion. Rinnai is making efforts to broaden its target by
expanding the ECO ONE product lineup, including the ECO ONE X5
launched in 2022 offering the same functions in a smaller unit, the X5
series used in high-density housing planned for launch during fiscal
2024, and plug-in models being prepared for use in existing buildings.
At the same time, with regard to the external environment, theenvironment surrounding climate change issues is changing, with the first
ECO ONE installed at Proud Season Inagi Minamiyama
Japanese government subsidy program for the hybrid water heater(Nomura Real Estate Development Co., Ltd.) in Inagi, Tokyo
category launched in 2023, and new systems related to the mandatory
installation of solar power generation equipment in Tokyo and other areas set to commence in April 2025. Further,businesses that have introduced energy-saving equipment offer fuel cell battery energy farms as products suitable forcarbon neutrality, while city gas companies have added ECO ONE to their product lineups, conveying a sense ofacceleration in all efforts aimed at realizing carbon neutrality. We asked Hironao Sato of Tokyo Gas Living Advance, which
conducts Tokyo Gas Group home equipment-related business, about the reasons behind the Tokyo Gas Group’s
proactive introduction of ECO ONE, mainly in newly constructed housing.

Managing Director, General Manager of Distribution Department
TOKYO GAS LIVING ADVANCE CO., LTD.

Hironao SatoIn this era of energy deregulation, the Tokyo Gas Group is no longer focused on“gas” or “electricity” with respect to energy sources and equipment sales. We are now
in a position to simply lead customers in the right direction and make proposals basedon themes such as comfort and contribution to the global environment. Further,regarding the achievement of carbon neutrality as a social issue, we are ata major turning point with respect to changes in customer values and the direction of
government policies on climate change issues. We believe companies that provide
energy equipment for household use view ECO ONE as a more optimal solution.
Even today, with disasters on the rise and difficulties in fully securing
infrastructure, we feel that hybrid systems able to use both gas and electricity provide
great peace of mind in everyday life and are truly superior in terms of resilience.
ECO ONE is highly compatible with solar power generation

The Tokyo Gas Group plans to expand its sales target for hybrid
water heater and heating systems in the newly built detached housing
market to 10,000 units by fiscal 2026. At present, although mostproducts are installed in newly built detached housing, as ECO ONE
continues to improve its space-saving and functional capabilities, we
expect to add this product to our lineup for the volume zone, comprisingexisting detached houses and newly built high-density housing, whilepursuing carbon neutrality and customer comfort as energy that is closer
to people, supports society, and leads to future developments.
ECO ONE provides energy savings and comfort

31

Rinnai Report 2023

32

Introduction

Environment

Environment

SocialGovernance

Data

Materiality Special Feature (2)We spoke with Noriaki Seki, Chairman of NPO SATOYAMA, who has been involved with Kitakyushu Hydrogen Town
since its inception in 2011, and also owns a house there equipped with a 100% hydrogen-burning water heater.

VOICE
Thinking about New Urban Development through Hydrogen Energy
NPO SATOYAMA began engaging in activities based on an awareness of “satoyama as

Launching Field Test of Japan’s First 100% Hydrogen-burning
Water Heaters at Kitakyushu Hydrogen Town

a model for a sustainable society,” becoming an NPO in 2002, and remaining active up to now
based on the concept of coexistence and co-prosperity between nature and people. Living incities, even with opportunities to come in contact with nature, it is not a daily experience. Having
developed this idea further, we are now engaged in efforts aimed at “converting cities
into satoyama.”
Kitakyushu Hydrogen Town is located on the site of a former factory, one that is still there

In May 2022, Rinnai announced that it had succeeded in the technological development of 100% hydrogen-burning
residential water heaters. We then began preparing for overseas field tests in Australia and, in April 2023, announced thelaunch of 100% hydrogen-burning water heater field testing in conjunction with Iwatani Corporation at Kitakyushu
Hydrogen Town in Japan.

Chairman of NPO SATOYAMA

today. We believe that the utilization of energy generated from byproduct hydrogen produced by

Noriaki Seki

this factory will enable the achievement of a sustainable society and facilitate coexistence
between the town and people.

I feel that Rinnai hydrogen-burning water heaters are an important part of this project in terms of “making hot water,” which isessential in our daily lives, and I assume field tests will go well and that hydrogen energy will be used naturally in our daily lives.
The term “carbon neutral” has become commonplace, and I believe we have now reached a point where the world supports thisKitakyushu Hydrogen Town was constructed in 2011 as part of the Ministry of Economy, Trade and Industry’s“Demonstration Program for Establishing a Hydrogen Utilization Society System,” the world’s first (as of 2011) attempt to
supply byproduct hydrogen from factories to urban areas via pipelines to utilize hydrogen as energy for ordinary
residences as well as commercial and public facilities. Subsequently, infrastructure construction and environmental
improvements have commenced, and hydrogen utilization field tests have been conducted, with the hydrogen water
heaters installed becoming the first 100% hydrogen-burning residential water heaters in Japan.
The 100% hydrogen-burning water heaters will be installed in rental housing built within Kitakyushu Hydrogen Town,
with three of the seven buildings for sale equipped with hydrogen water heaters. These rental housing units are occupied
by members of the general public, and we will examine the conditions under which they use hot water in their daily lives,
while ensuring sufficient safety precautions. In addition to general residences, these water heaters will be installed ina privately owned café to conduct field tests of commercial use cases that differ from everyday life.

goal. Hydrogen is said to be the ultimate clean energy, and if we can create a system whereby this energy functions properly andcirculates efficiently from production to usage, we can expect to create new communities where nature, the city, and people are able tocoexist and prosper together.

Field Testing Hydrogen Equipment Overseas
100% hydrogen-burning water heater field testing has commenced
overseas in Australia. In conjunction with the Australian Gas
Infrastructure Group (AGIG), we have installed a 100% hydrogenburning water heater at the “Hydrogen House” located in the stateof Victoria, and are currently verifying the equipment. Hydrogenburning equipment for residential use will be installed in the“Hydrogen House” to test the operational status of the equipment in
actual daily usage with the aim of realizing the utilization ofhydrogen in everyday life. Two 100% hydrogen-burning water
heaters will be installed and tested in various hot water usage
scenarios involving the kitchen, sinks, and bathroom showers, withthe aim of commercialization by 2030.

Australia’s “Hydrogen House”

Having formulated the RIM 2050 carbon neutrality declaration, Rinnai is exploring potential advances andKitakyushu Hydrogen Town street view

33

Buried hydrogen pipeline

Installed 100% hydrogen-burning water heatersdeveloping technologies necessary to comply with various environmental and energy policies being advanced incountries throughout the world. Hydrogen technology development is one of these options, constituting a theme thatmust be developed in order to address climate change and achieve carbon neutrality. Recognizing the extreme
importance of Rinnai’s positioning amid advances in hydrogen development, we will maintain these efforts going forward.

Rinnai Report 2023

34

Introduction

Environment

SocialGovernance

Data

Environment

Responses to the Task Force on Climate-related
Financial Disclosures

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

Degree ofurgency

Convert to recyclable
materials¥(15.4)billion/
year

Low

Reduce procurement
costs throughindependent efforts¥(1.4)
billion/year

Low¥(0.7)
billion/5 yearsLow¥(15.0)billion/year

Medium

Impact on Rinnai

Raw material
procurement risks
associated withclimate change

Transition risks

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

Governance
ReportBoard ofDirectors

Report

ESG Committee

ReportSharing of
ESG Matters(What Rinnai will do to keep the increase intemperature below 1.5°C)(Impact on Rinnai if the temperature rises
by 4°C)

Risk of procurement cost increases
in line with raw material costs thatare passed on through carbon
pricing (carbon taxes andemissions trading) to suppliers ofmaterials that emit large amounts ofgreenhouse gases.
Risk that the sale of water heaters
potentially using large amounts ofwater resources will be restricted asa result of global water shortage
problems.

Gas water heater
regulations in line withfossil fuel regulations

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

ESG Working

Operation andEnvironment Management Management
Committee

4°C scenario*

Water heater
regulations as a resultof water resource
depletion

Risk Management
Committee

Physical risks fromnatural disasters

ISO 14001—
Physical risks

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

1.5°C scenario*

Risk of increased
operating costs—

Risk Management

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

35

Opportunities

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

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

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

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

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

——

Rinnai’s response or
impact on Rinnai.

Develop water heaters
able to restrict theamount of water used.

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

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

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

¥(0.4)
billion/year

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

Promote the introductionof residential power
generation throughsustainable energy andother measures.

¥(8.6)
billion/5 yearsLow¥6.0
billion/year

Medium

¥6.0
billion/year

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

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

* 1 .5°C and 4°C scenarios
Scenarios used in the Fifth Assessment Report (released in 2014) of the Intergovernmental Panel on Climate Change (IPCC), which estimates the impacts of approximate 1.5°C and
4°C temperature increases due to global warming.
Rinnai Report 2023

36

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Impact within Rinnai’s Value Chain

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

Rinnai’s Value Chain

Demands and Expectations
from Society(Overseas/Japan)

INPUT
Main resources consumed(Raw materials and energy)

Procurement

Development and Manufacturing

Sales, Logistics, and Services

Product Usage

Disposal

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

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

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

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

EnergyWater• Energy: 1,155,651 GJ• Ground water: 220,458 m3

EnergyWater

EnergyWater

EnergyWater• Public water: 742,154 m3

CO2 Emissions (Emissions Ratio)
Scope 3 (Category 1)*1

OUTPUT

1,072,825 t (6.74%)—

Solid waste(Includes valuable substances)

Wastewater

27,368 t 946,708 m³

Supply chain management

Pursuit of environmental
performance and streamliningof manufacturing processes

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

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

Rinnai’s estimates based on the “Basic Guidelines for Calculating Green House Emissions Through the Supply Chain”[Target scope] R innai Corporation and consolidated subsidiaries(*1. Rinnai Corporation *2. Rinnai Corporation and domestic consolidated subsidiaries)[Target period] Domestic: Fiscal 2023 (April 2022–End of March 2023) *2. Fiscal 2022 (April 2021–End of March 2022)
Overseas: January 2022-End of December 2022
[CO₂ emissions (units)]: t/CO₂e, (%) represents the emissions ratio within each process.

37

Scope 3 (Category 4)*1

9,703 t (0.06%)

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

Scope 3 (Category 11)*1

Scope 3 (Category 12)*2

7,125 t (0.04%)

14,597,287 t (91.75%)(Concerns emissions from Japanese water heaters)(Market based)

Rinnai’s environmental impact

Initiatives Rinnai conducts
through business

36,778 t (0.23%)
Scope 2 69,243 t (0.44%)
Scope 1—
Spread of environmentallyfriendly products
Sales: Strive to spread products that
contribute to energy efficiency inthe water heater and heating fields
Logistics: We are promoting logisticalstreamlining.
Services: Elevate the Rinnai brand withsecurity activities through a wealthof service maintenance andinspections——

Proposal of reasonably
achievable ecological lifestyles

Promotion of environmentallyconscious design

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

Rinnai Report 2023

38

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Management
Promotional Framework for Environmental Activities

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

Basic Philosophy on the Environment

Environmental Slogan

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

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

Headed by the President, the Environment Management Committee guides corporate efforts. This committee is chairedby the executive officer responsible for the environment and has the participation of representatives from all divisions. Its
mandate is to promote environment-oriented activities from a “big picture” perspective.
The Environment Management Committee discusses and decides important items, including basic environmental
policies, targets and medium- to long-term plans. The committee thoroughly informs individual divisions of decisions
made by the committee and promotes concrete activities in line with annual plans. We review our objectives as necessary
and diligently strive to meet our targets quarterly. To perform specific activities, each division has a liaison group and holds
routine meetings to make issues known to everyone in the respective division and continue improvement activities.

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

E-Products(Products)

Promote green procurement

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

Promote activities
3 with reduced
environmental
impact4

Sell environmentallyconscious products;
Encourage customers
to be moreenvironmentally aware

E-Factory(Factories)

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

E-Mind (Employees)

tivi

Link destination Data Book Environmental Data page 123 Status of Acquisition of Certifications

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

tlnt a a rt i e s B u s i n e s s a n d e n v i ro n m e r a t e coas whe e l s of s a m e c o r p

6

7

Emphasize
environmentallyconscious installation
and repair services
Promote activities with
reduced environmental
impact at our offices

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

Promoting environmental activities with the participation of all employees in allprocesses throughout the product lifecycle.
39

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

Develop and provide environmentallyconscious products
52

ISO 14001 Certification

External environmental audits

Rinnai Report 2023

40

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Training

Environmentally Conscious Design (Product Assessment)

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

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

Training for Internal Auditors

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

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

In recognition of these efforts, Rinnai received the Minister of the Environment Award (Large Enterprise Category),
the top award at the Environmental Persons Development Awards sponsored by the Japanese Ministry of theEnvironment and the Environmental Consortium for Leadership Development. This is the third straight year we havereceived recognition, after winning the “Excellence Award” in the previous two years. We will continue to provide regularenvironmental education, opportunities to experience nature, and workplace motivation through the President’s Awardfor employee-initiated ideas and daily improvements, among other efforts recognized as making significant contributions
to the environment and management.

Environmentally Conscious Design Policies• Conservation of resources• Reduce environmental impact at the manufacturing stage• Reduce environmental impact at the usage stage• Potential for recycling• Safety• Ease of collection and transport• Reduce environmental impacts in the final disposal stage (consider recycling in designs, etc.)

Supply Chain Management

Link destination Environmental Data page 55 Status of Environmental Communication

Compliance with Legal Regulations
While compliance with legal regulations is a given, Rinnai sets more stringent voluntary standards and engages in daily
supervision, conducts periodic measurements and implements thorough environmental audits. We are working on thecreation of a rapid response mechanism to prevent recurrence in the unlikely event that a violation or complaint wereto occur.
In fiscal 2023, there were no violations of environment-related laws and regulations, including those related topollution prevention.

41

Amid rapid changes in the social environment aimed at realizing a sustainable society, to continue doing business into
the future, Rinnai must contribute to the environment both as a Group and through the supply chain. In addition tocommunicating Rinnai’s green procurement policies to our suppliers, through daily exchanges we promote
improvements that contribute to environmental management and lead to reduced greenhouse gas emissions.
In recognition of these efforts, in fiscal 2023 Rinnai received a rating of “A-” in the Supplier Engagement Rating
conducted by CDP, an international non-profit organization that addresses climate change and other environmental issues.

Rinnai Report 2023

42

Introduction

Environment

SocialGovernance

Data

Environment

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

The Challenge of Zero CO₂ Emissions from Factories and Offices

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

Formulated and Announced Commitment to Carbon Neutrality by 2050
To realize carbon neutrality in household heat utilization, we must undertake measures based on national policies, atheme closely connected to operators of energy infrastructure-related businesses.
In November 2021, we formulated and announced our commitment to carbon neutrality called Rinnai Innovation
Manifesto 2050 (RIM 2050) as a corporate policy, setting 2050 as the target year.

Rinnai aims to achieve zero CO₂ emissions from factories that manufacture products and offices, including the Head
Office and sales offices. Among greenhouse gas emissions, we will target Scope 1 and Scope 2 emissions, and in
addition to reducing CO₂ emissions through daily manufacturing improvements, Rinnai aims to achieve zero CO₂emissions in 2050 through the proactive transition to green electricity among other efforts.
Future CO2 reduction scenario
Main indicators•D omestic bases will be converted to green electricity by 2030
•O verseas bases will be converted to green electricity by 2050

■Energy used

40%

The Challenge of Zero CO₂ Emissions from Product Usage
Amid global movements to curb rising temperatures, Rinnai views these efforts in terms of risks
and opportunities as it takes on the challenge of realizing zero CO₂ emissions from productusage by 2050. Looking at the lifecycle of our products from procurement to disposal, CO₂
emissions during use account for more than 95% of our total emissions. This makes it
necessary to not only evolve our existing energy-saving products, such as high-efficiency water
heaters with latent heat recovery and the ECO ONE hybrid water heater and heating system,
but also to ultimately create products and systems that emit no CO₂ at all. In anticipation of afull-scale decarbonized society in the future, we will continue to develop and research
combustion equipment that is compatible with hydrogen infrastructure and systems for net
zero CO₂ emissions.
Link: Materiality Special Feature (1) page 31

Materiality Special Feature (2) page33■Energy created

Examples of potential approaches for achieving these goals•P romote zero energy through karakuri* improvements•T horoughly eliminate waste by minimizing processes and lines
of flow•P romote renewable energy through the electrification ofequipment, etc.

■Energy saved

CO2 emissions volume

100%

2%
8%

Domestic
Scope 2-100%

Domestic
and overseas
-100%

30%
50%
8%
12%
FY2021

FY2031FY2051* A simple mechanism that uses gravity rather than a motor or other electrical power source that is useful when transporting parts.

Testing of Rinnai’s 100% hydrogen
combustion water heater at
Kitakyushu Hydrogen Town

Furthermore, toward the closest annual target of 2025, we will continue to work on a global scale to achieve the “CO₂
reduction contribution of 7 million tons,” as stated in the New ERA 2025 medium-term management plan.

Awards for Environmentally Conscious Products

Also Taking on the Challenge to Achieve Zero CO₂ Emissions Outside of Product Use under
Scope 3
In addition to CO₂ emissions from product use, we believe there is room to reduce CO₂ emissions from the procurementof materials and parts, logistics, human movement, and disposal, with the aim of mitigating the risks associated withclimate change. We will promote optimal energy-saving and CO₂ reduction activities in each process and take on thechallenge of achieving zero CO₂ emissions under Scope 3. Specific plans for 2030 and beyond will be developed anddiscussed within the RIM 2050 Council with a view toward achieving a decarbonized society in 2050.

ECO ONE X5 hybrid water heater with heating systems
December 2022

The Prize of Director-General of the Agency
for Natural Resources and Energy

2022 Energy Conservation Center Grand Prize(Organizer: The Energy Conservation Center, Japan)

Hybrid heating/cooling and water heater systems for cold regions
June 2022

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

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

March 2022

Excellence Award

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

January 2022

Energy Conservation Center
Chairman’s Award

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

Examples of potential approaches for achieving these goals
Procurement

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

Logistics

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

DisposalPromote comprehensive recovery schemes within construction and operations, etc.

Hybrid heating/cooling and water heater systems
October 2021

43

Energy Saving Division
Grand Prize

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

Rinnai Report 2023

44

Introduction

Environment

SocialGovernance

Data

Environment

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

Initiatives in ocean plastic problem

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

Case Study:

Parts Development Using Recycled Plastic

In light of the ocean plastic problem, the Rinnai Group strives to reduce the amount of plastic it uses by incorporating
recycled plastic material made by collecting and reprocessing discarded plastic waste in the molding of electricalcomponent cases and other parts.

Waste Generation Control and Zero Emissions
We are targeting a 6% reduction in the base unit of waste production by 2025 compared to the benchmark year. In fiscal
2023, we achieved a 3.4% reduction compared to our single-year target of 3%. In an effort to achieve zero emissions (zerolandfill waste)*, we maintain a recycling rate of 99.5% or higher. As we approach the final year of the medium-termbusiness plan in fiscal 2026, we maintain efforts to recycle as much of the unnecessary materials as possible based on
the assumption that raw materials used in the manufacturing process will be used efficiently.
1. Rinnai manufacturing site zero emissions definition: Recycling rate of 99.5% or higher (less than 0.5% landfill waste)

Crushing waste plastic materials

Re-pelletizing waste plastic materials

Reuse in electrical component cases(R.B. Controls, Co., Ltd.)Primary Initiatives

Manufacturing

45

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

Office• Promoting a shift to paperless work
processes through digitaltransformation (DX)• Curtailing the use of disposable andconsumable materials• Raising awareness by letting
employees see how many copies they
make and how much they cost

Both•Improving the accuracy of material
separation• Consigning industrial waste processing
to a reputable vendor, etc.

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

Industrial Waste Processing

Patrol at Rinnai’s factory eco house

When reaching agreements with waste processing subcontractors, Rinnai conducts strict inspections involving elements
such as their financial condition and on-site confirmations. In addition, we visit our processing subcontractors each year
to verify that they are conducting appropriate waste disposal. Once there, we confirm how manifests that contain
information regarding different varieties of waste, their disposal methods, and processing statuses are being
administered. We also conduct on-site confirmations regarding waste processing and exchange relevant information withthe subcontractor.

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

Rinnai Report 2023

46

Introduction

Environment

SocialGovernance

Data

Environment

Recycling Initiatives

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

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

Case Study:

Recycling Home Electrical Appliances
Japan’s Home Appliance Recycling Law went into effect in 2001 with the goals of reducing the amount of waste going tolandfills and incinerators and to promote more effective use of resources. Since then, old appliances thrown out by
consumers have been recycled into new products. Rinnai now has two products—a unit-style air conditioner and aclothes dryer—that fall under the category of recycled products.
Report on Recycling Specified Household Appliances (https://www.rinnai.co.jp/csr/result/index.html) (in Japanese only)• Improving awareness of water-saving (banning leaving
faucets running, etc.)• Utilizing rain water• Using water-saving functions at facilities that use water• Creating and using frameworks to increase the volume
of circulating water(Utilization of treated wastewater in office toilets, etc.)

Creating a Rainwater Reuse System

Water is a precious resource in Mexico, where groundwater is the main supply source. Through its water treatment
business, Industrias MASS SA de CV, a Rinnai Group company based in Mexico, has built a system that reuses
rainwater compliant with quality standards for showers and hand washing. This system supplies nearly 90% of thecompany’s annual water consumption, including during the dry season when rainwater is in short supply.
Annual impact: Water saved:-900 m3

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

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

47

Rinnai Report 2023

48

Introduction

Environment

SocialGovernance

Data

Environment

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

Improvements on Painting Lines

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

As part of our environmentally conscious manufacturing, we are striving to reduce environmental impacts throughimprovement activities on painting lines at Group manufacturing sites.

throughout the lifecycles of its products.
Manufacturing-related

Promoting Management of Products Containing Potentially Harmful Chemical Substances
Companies are being required to appropriately understand and manage the overall
supply chain for the chemicals used in their materials and products. The Rinnai Groupendeavors to appropriately manage information concerning products containing
potentially harmful chemicals along with its suppliers. The Company conducts thismanagement based on its Green Procurement Standards Guide (E-Procurement
Standards Guide) and its Chemical Substance Management Guidelines, which address
regulatory concerns regarding green procurement and chemical substances contained in
procured materials, respectively.

• Introduction of environmentally friendly painting equipment in line with construction of a new factory• Optimization of piping routes for color change valves and paint guns
• Review of processing oils, other

リンナイグリーン調達基準書（E-調達基準書）
第4版
2018 年 4 月 1 日発行
リンナイ株式会社

Preparing for Emergencies

Rinnai Green Procurement Standards
Guide (E-Procurement Standards Guide)

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

Initiatives to Reduce the Environmental Impact at Factories
To minimize the impact on the environment, Rinnai is
reducing and eliminating the use of hazardous chemical
substances through such initiatives as reviewing thechemical compounds used in the relevant manufacturing
processes and improving processing equipment. At eachmanufacturing site, we check and manage the amounts
handled, released, and transferred of the 462 Class 1
chemical substances designated under the PRTR1 Law,of which 500 kg or more is handled each year.

Atmosphere
Emergency response training (Rinnai Technica Co., Ltd. )Inspection of Critical Facilities
Products

Chemical
substances

Waste

Water areas

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

Soil

Flows of Release and Transfer of Chemical Substances (PRTR Substances)

49

Rinnai Report 2023

50

Introduction

Environment

SocialGovernance

Data

Environment

Protecting Biodiversity
Protecting the biodiversity that underpins social sustainability has become an urgent priority for humankind.

Involvement of Biodiversity in the Supply Chain

We will explore initiatives aimed at achieving a global nature positive and contribute to biodiversity by

Rinnai Principles on Biodiversity

1. R ecognition of theissues
2. Cultivation ofawareness

Rinnai regards protection of biodiversity as a priority for corporate survival andincorporates it into its environmental policy.
Rinnai is committed to deepening understanding and cultivating awareness of
biodiversity by creating opportunities for contact with nature, including throughpreservation and greening activities undertaken around Company premises.

3. P ursuit of businessactivities contributing
to biodiversity

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

4. D isclosure of
information

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

Rinnai Receives “Master Certification” under the Aichi Biodiversity Company
Certification Program
In recognition of its efforts to conserve biodiversity,
Rinnai received “Master Certification” under the Aichi
Biodiversity Company Certification Program sponsoredby Aichi Prefecture. We will continue to contribute tobiodiversity conservation, both through activities
covered by this certification, as well as a variety of otherefforts in the future.

Main Rinnai initiatives evaluated•C ontributions to local communities through efforts toexterminate specified invasive species•E nvironmental education through the cultivation ofheirloom vegetables and other crops.

51

The Certification Ceremony (Aichi Prefectural Office)Relationship between the Rinnai Group’s Business Activities and Biodiversity
Input

Business activities

OutputCO2

Use of mineral
resources

Greenhouse gases
Use of energy

Design, manufacturing

Chemicals(fuels, electricity)

NOx
Use of biologicalresources

Transportationand saleRaw materials
procurement

Soot and dust

Impact on Biodiversity

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

Release into the atmosphere

Approach to Protection of Biodiversity

Rinnai ascertains factors that have an impact or are dependent on nature through its business activities, while
categorizing and examining potential risks and countermeasures in each business process. Focused on the relationshipbetween Rinnai and nature, we promote activities related to CO₂, waste, air, and water that contribute to biodiversity
through initiatives aimed at reducing environmental impacts.

Dependence on Ecosystem Services

recognizing the relationship (influencing factors) between Rinnai business activities and biodiversity.

Waste
Use of water
resources

Collection, disposal,
and recycling

Use of products
by customers

Influencing
factors

Example ofrelationship with Rinnai

Main activity themes

Main initiatives

Global warming
prevention

Emissions ofgreenhouse gases
such as CO2

Global warming
prevention

Design of energy-saving
products
Energy conservation infactories, logistics, and offices

Overconsumption

Resource
consumption

Invasive species

Transfer due totransportation of partsand products

Use of land

Land modification
associated with mining
underground resources
and construction, etc.

Pollution

Release of chemical
substances due tolack of thoroughmanagement

Drainage
Noise and vibration

Use of land

Resource circulation
Resource saving
Local contribution

Pollution prevention

Reduction of input resources
Recycling
Circulating use
Invasive species extermination

Reduce the inclusion ofchemical substances in
products and the use of thesubstances in manufacturing
Pollution prevention

Extermination of Specified Invasive Species
At COP15 held in November 2022, the decision was made to target a 50% reduction in the introduction andentrenchment of invasive species by 2030. Since fiscal 2018, we have been working with local governments, volunteers,and neighboring businesses during Environment Month in June to eliminate at least one ton of specified invasive species(Coreopsis lanceolata) every year. In fiscal 2023, a total of 103 people exterminated 628 kg of invasive species while being
mindful of safety by limiting the work area and number of participants in consideration of the spread of COVID-19.
Specified invasive species are living organisms that the Japanese government has determined to pose a risk ofharm to ecosystems when they are introduced from other regions. Their cultivation, preservation, import, transport, andbreeding are prohibited. As Coreopsis lanceolata is a very fertile perennial plant, it is possible that seeds are carried into
the factory by logistics trucks or employee commuter vehicles as they enter and exit. If left unchecked, this invasive
species could spread to other areas and grow over a wide region, and as a
Company operating in this area, Rinnai believes we have a responsibility to preventa biodiversity crisis.
To maintain these efforts, we conduct fixed-point observations of growth
conditions before and after extermination through periodic monitoring surveys, andhave revised countermeasures to focus activities in a short period of time to avoid
extermination during seed-bearing seasons. We plan to continue these activities
until extermination is complete to preserve biodiversity in this area.
Extermination of the invasive species Coreopsis
lanceolata

Rinnai Report 2023

52

Introduction

Environment

SocialGovernance

Data

Environment

Protecting Biodiversity
Nijyu-maru Project* Registration
Efforts
The Rinnai Group endorses the Nijyu-maru
Project organized by the Japan Committee for
the International Union for Conservation of
Nature (IUCN-J) and promotes global
biodiversity conservation activities. “Nijyu-maru
Project Registration” pertains to initiatives in linewith the 20 goals outlined in the “Aichi Targets,”
which are global objectives adopted at the2010 Tenth Meeting of the Conference of theParties to the Convention on Biological
Diversity held in Nagoya, Aichi Prefecture. Thusfar, five projects have been registered.

「愛知ターゲット」の「愛知ターゲット」の「愛知タ ーゲット」の目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と 消費」

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

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

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

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

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

目標 9「外来種」・目標 10「環境変化に弱い生態系の保護」・目標 11「保護地域」・目標 12「種の保全」*N ijyu-maru Project: A framework in which citizens’ organizations,companies, local authorities, and others state and register theirdeclaration to do what they can to contribute to the Aichi Biodiversity
Targets (Nijyu-maru Declaration)

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

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

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

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

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

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

「愛知ターゲット」の「愛知ターゲット」の目標 1「普及啓発」・目標 2「各種計画への組み込み」・目標 3「補助金･奨励措置」・目標 4「生産と 消費」

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

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

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

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

53

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

目標 13「遺伝的多様性」・目標 14「生態系サービス」・目標 15「復元と気候変動対策」・目標 16「ABS」
目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」

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

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

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

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

目標 17「効果的･参加型戦略」・目標 18「伝統的知識」・目標 19「知識･技術の向上と普及」・目標 20「人材･賃金」の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

の達成に多大なる貢献をしていることを表彰し、大きな ◎ をお贈り致します。

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

◎ の周りにたくさんの人たちが集まり、 ○ がもっと増えますように！

Rinnai Report 2023

54

Introduction

Environment

SocialGovernance

Data

Environment

Environmental Communication
We use regular communication and exchange events as a means of building awareness of the Rinnai Group’s
environmental activities in order to deepen our ties with and be a trusted member of our local communities.
Furthermore, Rinnai sets June as Environment Month and holds various environment-related events to further
enhance the environmental consciousness of its employees.

Presentation on Rinnai’s Carbon Neutral Efforts at the 2023 WLPGA Innovation Summit
Rinnai gave a presentation on Company efforts to achievecarbon neutrality at the 2023 World LPG Association
Innovation Summit (sponsored by the World LPG Association,
co-sponsored by the Japan LP Gas Association). We
introduced our 2050 Environmental Vision to nearly 100
participants from around the world, using case studies andfocusing on environmental initiatives during product use,
constituting the highest CO₂ emissions in the product lifecycle.

Rinnai Group Environmental Awards Programs
The Rinnai Group Environmental Awards are held annually to recognize outstanding
environmental activities and stimulate more action on the environment throughout theGroup. These awards recognize major contributions to environmental conservation andregional communication and are open to all bases in Japan and throughout the world. The
13th awards ceremony was held at the Rinnai Group New Year Convention, at which Rinnai’s
CEO presented the awards.
In fiscal 2023, there were a record 153 entries submitted, from which one Grand Prizeand 11 category-specific awards covering manufacturing, offices, logistics and social
contributions were selected.

部門のコエ
受賞

部門のコエ
受賞

経営層や他部門にアピールでき、取組に対する評価が上がった

長年、多岐に渡って調整を続けてきた改善担当者を褒めることができた

部門のコエ
受賞

環境をきっかけに
新たなビジネス機会に恵まれ、進められている

部門のコエ受賞

受賞をきっかけに、チーム内の環境コスト意識が変わってきた

部門のコエ受賞

CO2だけでなく、廃棄物や水、有害化学物質の削減にも効果のある改善を継続的に進められるようになってきた

カーボンニュートラルに向けて未来に続く環境変革 を推 進しよう
取 組 大 募 集！
募集期間
部門のコエ
受賞

小さな改善だが削減率100%が評価され、自信につながった表彰

2022年 3月〜6月7日（火）必着

環境大賞、優秀賞、奨励賞、努力賞（金一封あり）
応募資格

国内外グループ全従業員
応募前の個別相談も受付中！
お早めに！

詳しくは、環境部HPの応募要項をご覧下さい
公開場所

ポータルサイト ＞ 共通 ＞ 環境 ＞ 環境部からのお知らせ ＞ 環境大賞
問合せ先：リンナイ 環境部（内線：82-4340）

In-house award and submission
awareness poster

In-house Environmental Newsletter Eco no Coe

Rinnai presentationpic

3 リンナイグループの事業所・工場におけるカーボンニュートラル目標は？

カーボンニュートラルを紹介します。

2 0 5 0 年まで に「 C O 2 実 質ゼロ化 」

v o l .6 8 2 0 2 2

リム 二ーゼロゴーゼロ

リンナイのカーボンニュートラル宣言「 RIM2050 」より一部抜粋

国際基準の区分に従って削減目標を立てて、CO 2 排出量の削減をめざします。

世界各国において、脱炭素社会に向けた取組みが進められています。
企業にとって、CO 2 排出の「実質ゼロ化」は簡単ではありませんが、直接自社で燃やして排出するCO 2

Scope 2 電気によって発生する CO2 排出量2030 年までに国内拠点で実質ゼロへ
2050 年までに海外拠点で実質ゼロへ

スコープトゥー

Scope2とは…
社外から購入している電気など、それを作る過程で排出されるCO 2

1 省エネ法が改正されました
2022 年 5 月※ ※施行は2023年4月で、詳細は今後公布されます

今回の改正の主なポイントは？

省エネ法とは？
1 9 7 9 年に 制 定され た「 エネル ギー 使 用 の 合 理 化 等に 関 する法 律（ 以風 力 や 太 陽 光 など「 非 化 石 エ ネ ル ギ ー 」の

下 、省エネ法 ）」で、年 間 1,500kℓ以 上のエネルギーを使 用 する企 業に使 用 割 合の目標 設 定と、その利 用 実 績の報 告

課 す義 務や目標を定めています。リンナイ㈱ 、リンナイ精機㈱、アール・が義務化されます。

ビー・コントロールズ㈱が対象で、毎年、国へ省エネ実績を報告しています。

pic

Scope 1 とは…
ガス、ガソリン、油など、

2050 年までに、全拠点で実質ゼロへ

事業所で排出されるCO2のもとは、燃料や電気なので、ここの改正が進められているんだ！

2 カーボンニュートラルとは？ 低炭素と脱炭素は何が違うの？
もう一度おさらい！

低 炭素化

CO 2 排出量をより少なくすることtoto

情勢を見ながら、できることを一緒に考えていきましょう！
picスコープ ワン

Scope 1 ガス・燃料によって発生する CO2 排出量

C O 2 ゼロ企 業をめざ すには？！

事業所・工場における カーボンニュートラル

toRinnai regularly distributes the in-house environmental newsletter Eco no Coe toensure employees around the world stay up to date with Group environmental
activities and environmental trends elsewhere in Japan and other countries. This
newsletter has been published since 1999 as a means of enhancing environmental
knowledge and awareness, encouraging communication among employees.
In fiscal 2023, Rinnai introduced the trends of the Conference of the Parties
on Biological Diversity (COP15) and our initiatives toward carbon neutrality.

の多かった「事業所・工場」における

tovol.68 2022

今回は、読者アンケートでリクエスト

リ ン ナ イ の 色 ん な 活 動 と「 環 境 」を 結 ぶ

pic

4 Scope1とScope2を減らすには？
低炭素化のために：各拠点の省エネ改善を積み上げていく
脱炭素化のために：CO 2 排出量のより少ないエネルギーへ転換を行う

エネルギーの転換って具体的にどんなこと？
Scope 1 ガス・ガソリン
エアコンの電化や社有車の EV・HV 化
エアコン

ガソリン車

脱 炭素化

EV・HV へ企 業 活 動 を 行 え ば 必 然 的 に 何らか の 形 でることが求められます。これがカーボンニュー

C O 2 が 発 生してしまいます 。そこで 、太 陽 光

トラルです。
（脱炭素化）

発 電シ ステムなど 、事 業 所 で 電 気を「 作 る」

ただし、カーボンニュートラルの前に、相殺分の C O 2 排 出 量をなるべく少なくしたいので、継使って 相 殺し「 C O 2を排 出しない 」状 況にす

続的な省エネが求められます。
（低炭素化）

当 社は、脱 炭 素 社 会を見 据え、C O 2 のより少ないエネルギー利 用 へ 上 手くシフトしていけ・再エネ由来の電力メニューに切替え
カーボンニュートラルの実現には、低炭素と脱炭素の両方が必要！

炭素化が可能になります。

RIM2050 キックオフ（ 2022.5.17 ）Scope 2 電気再生可能エネルギーの導入

カーボンニュートラルは「実質的に」がポイント！

回収した CO 2と自然由来の水素から「メタン」「 合 成メタン」に置き換えることで 、ガスの 脱

GHP → EHP へ

ことや 、植 林 や C O 2を吸 収 するような技 術をカーボンニュートラル燃料への転化を合 成 するメタネーション 技 術が 注目され ています 。都 市 ガ ス の 原 料 で あ る 天 然 ガ スをCO 2 排出量を「実質ゼロ」にすること

・再エネ設備を自社の敷地に設置（自社保有 or 第三者保有の再エネ発電）

自社の敷地

るよう、それ ぞ れ目標を定 めて 、計 画 的に取組んでいきます。
RIM2050とは…

商 品 開 発 、製 造 、販 売における変 革（ Innovation ）により、将 来 の 事 業 領 域 の 枠（ R i m ）を越えて「 脱炭 素 社 会 実 現 へ の 貢 献 」をめざ すリンナイのカー
ボンニュートラル宣言。2021 年 11 月 5 日公開
詳 細 はこちら

Eco no Coe

Communication with Local Communities
Fostering a Deeper Understanding of Local Production for Local Consumption
Rinnai invites local students and other groups to tour its
factories and participate in internships to learn about its
environmental activities and various other business activities.
Explanations during tours and subsequent Q&A sessions arean opportunity for visitors to gain an understanding of Rinnai’s
environmental, quality, safety, and manufacturing activities.

As part of our environmental awareness program, since fiscal 2017 we have been growing heirloom* and other local
vegetables that have been popular since the Edo period. To date, local vegetable seeds have been distributed to morethan 1,000 employees and their families, providing them with opportunities to experience local food culture and natureand become familiar with greenery through growing, harvesting, and eating the vegetables themselves.
* Heirloom vegetables: Vegetables that have long been popular in a region, such as Kyoto and Kaga vegetables

Case Study:
Hosting local high school students

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

55

Providing Menus Using Local Ingredients in Company Cafeteria

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

Kaga vegetable tempura Kaga thick cucumber
and kakiage
stew with ginger

Fried Noto fukuragiwith vegetable sauce

Noto pork grilledwith ginger

Rinnai Report 2023

56

Introduction

Environment

SocialGovernance

Data

Environment

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

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

Medium-term Business Plan 2021–2025 New ERA 2025 Targets
Under the Rinnai medium-term business plan New ERA 2025, which runs from fiscal 2022 to fiscal 2026, we aim tocontribute to the resolution of social issues by reducing CO₂ emitted during product use by seven million tons andincreasing the sales ratio of products that contribute to improved quality of life and the global environment by 50% in 2025
(compared to 2020). Rinnai will make an effort to achieve the SDGs through products that contribute to improved qualityof life and the global environment.

Contributing to a reduction in CO2
emitted during product use(Unit: 1,000 t)

4,500

5,150

5,820

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

Sales of products contributing to improved
quality of life

7,000

(Unit: billions of yen)

50%UP

120.0

80.0

Percentage ofhousehold energy
consumption by usage
2020

2021

2022

2025

2020

2025

Cooling 2%
Cooking 10%

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

Theme

Contribution

Energy-efficiency

Higher energy-efficient water heaters contribute to the global environment

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

Micro Bubble Bath units

Health promotion

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

Gas clothes dryers

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

Reduced water usage

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

Reduces time requiredfor housework

Automated dishwashing contributes to reducing housework burdens

Stoves with automatic
cooking functions

Reduces time requiredfor housework

Automated cooking contributes to reducing housework burdens

Bathroom heaters/dryers

Prevents heat shock

Bathroom heating eliminates temperature differences when bathing, contributes to theprevention of heat shockHybrid water heaters

Dishwashers

Gas tankless water heaters Energy-efficiency
Gas boilers

57

Air pollution
countermeasures

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

Conventional water heaters

1,507(kg CO2/year)

High-efficiency water heaters

1,270(kg CO2/year)

Approx.

Heat pump-type water heaters

865(kg CO2/year)

Approx.

43% reduction

Hybrid water heaters

707(kg CO2/year)

Approx.

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

Heating
26%(ECO ONE 160 L type)

15% reduction

Source: Energy White Paper 2023, Agency for
Natural Resources and Energy

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

Products Provided by Rinnai and their Connection to the SDGs
Product

Water Heater CO2 Emissions Comparison

Heating water
29%

Power &
lighting, etc.
33%

Goal

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

Electricity(Heat pumps)

Gas(High-efficiency
water heaters)

Highly efficientand energy-saving

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

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

Hybrid water heaters

Switching fuel from coal to gas in water heaters with heating systems contributes to the controlof air pollution
Rinnai Report 2023

58

Introduction

Environment

SocialGovernance

Data

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

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

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

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

out and gently rise like a milky cloud. As time passes, they

device to spray hot water into the bathtub), microbubbles

float to the surface and become even finer bubbles as they

are generated and produce a variety of health benefits forcontract in water.

the bather.

Rinnai Conducts Surveys and Analyses on Various Social Issues, Disseminating Information
through the Netsu to Kurashi Tsushin (Heat & Life Newsletter).
In a questionnaire asking, “Who does the daily laundryin your house?” 93% of households responded “wife.”

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

80

80.0%
63.5%

70

Husband

Other

6.4%

0.3%

60
50
40
30

17.9%

20

Wife

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

Bad smell

93.3%

Microbubble bath unit

0

Difficult to dry

Spraying microbubbles

10.8%

10

7.2%

0.2%
Other

and the water heater with dedicated circulator fittings (aNone of the above

microns in diameter. They have low buoyancy and spreaddarkening

By affixing a microbubble bath unit between the bathtub

Causes yellowing or

Microbubble bath unit

Microbubbles are ultrafine bubbles measuring 1-100

Mold on clothing

What are microbubbles?

Awareness Survey on Laundry, Netsu to Kurashi Tsushin, May 2021; N = 1,000

Creating New Value with Fine Bubble Generation Technology
Rinnai developed the industry’s first residential-use water heater that provides hot watercontaining fine bubbles. We have named the technology for generating fine bubbles in water
heaters “Air Bubble Technology” and are working to further expand its applications. We use Air
Bubble Technology in our micro-bubble bath units and ultrafine bubble water heaters.

Rinnai’s ultrafine bubble water heaters create finebubbles less than 1 micron in diameter and can deliver
hot water containing ultrafine bubbles to various places
where hot water pipes are connected, such as
bathrooms, washrooms, kitchens, and dishwashers.
Simply using hot water containing ultrafine
bubbles prevents stains and limescale fromaccumulating in bathrooms, kitchens, washrooms, andother wet areas, thus reducing the burden of cleaning.

59

Powerful gas clothes dryers can dry an ample five kilograms oflaundry in approximately 52 minutes. Drying laundry in about
one-third the time required with electric dryers significantly
reduces time spent on housework.
Drying time comparison (laundry = 5 kg)

Gas clothes dryer

Fully automatic washer-dryer
with electric heat pump

Fully automatic washer-dryer
with electric heater

Approx.

Approx.

52 minutes

162 minutes
Approx.

281 minutes

Gas clothes dryer

Rinnai Report 2023

60

Introduction

Environment

SocialGovernance

Data

SocialContributing to Reduced Housework Burdens with Automated Dishwashers/
Contributing to the Conservation of Water Resources by Conserving Water
when Washing Dishes

Contributing to Reduced Housework Burden with Automated Cooking

Dishwashers reduce the time needed to clean up after meals. By shortening the time required to perform daily
housework, Rinnai aims to achieve gender equality both in terms of housework burdens and lifestyle freedoms.
Furthermore, using a Rinnai dishwasher to wash dishes uses approximately 80–90% less water compared withhandwashing, helping to conserve water resources.

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

Water Used When Handwashing vs. Dishwashers
(ℓ)

120
100
80
60
40

103.2 ℓ12 ℓ61.5 ℓ20
Recipe app

0
Dishwashers

Dishwasher

Handwashing
30 items

Stove with automated cooking function

Handwashing
56 items

Waterless Cooking Pots Also Compatible with Automated Cooking and Recipe App

Contributing to the Prevention of Heat Shock with Bathroom Heating That
Eliminates Temperature Differences when Bathing
The number of deaths from heat shock accidents while bathing is increasing year by year. Heat shock is a life-threatening
phenomenon in which sudden temperature changes, such as occur when bathing during winter, place a heavy load on
the heart and brain. The use of bathroom heaters/dryers eliminates these temperature differences when bathing,supporting a comfortable and safe lifestyle.
Waterless cooking pots

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

Approx. 19,000

20,0004 times
15,000or more10,000
5,000

4,373
0
Fatal traffic accidents

Bathroom heaters/dryers

61

Fatal heat shock accidents

In recent years, high-performance cooking pots compatible with anhydrous
cooking and automated cooking have been garnering attention amid
increasing demands for easier and faster cooking methods. In response, wedeveloped proprietary waterless cooking pots compatible with Rinnai stovesequipped with an automatic cooking function. These pots are made fromaluminum, making them lightweight and easy to use, with durability
comparable to conventional cast iron pots.
We design cooking utensils and engage in product development andmanufacturing, enabling anyone to easily prepare delicious food every day.

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

Rinnai Report 2023

62

Introduction

Environment

SocialGovernance

Data

Social Materiality Special Feature (3)Microbubble Baths Help Hydrate the Skin and Promote Better Sleep
Microbubbles Keep the Skin Moist for Longer
The results of a study have indicated that immersing oneself in the water of our microbubble bath units leads to anincrease in skin moisture content compared to bathing in regular water. Taking a bath in microbubbles not only makes it
easier to remove grime from the skin, but it has also been demonstrated to have a moisturizing effect essential for
maintaining skin health.

Some parents have expressed concern about not being able to take care of their own skin after taking a bath because
their attention soon turns to looking after their children. Ultimately, they worry and stress about having dry skin. Research
indicates that the skin’s moisture content 30 minutes after a microbubble bath is higher than the moisture content 15
minutes after a regular bath. This allows for a more relaxed skincare routine.
Also, microbubble baths are recommended for children because of their sensitive skin. Choosing the right soap for achild is actually quite challenging because some products do not agree with the child’s skin. Using as little soap as
possible when bathing is also advisable in some cases, so in this regard, a microbubble bath is reassuring because it onlyuses air and water.

Microbubble Baths also Support Better-Quality Sleep
The results of a study also indicated that when compared to a regular bath, a microbubble bath leads to a shorter duration
between the post-bath state of excitement and the state of calmness.

VOICE
Usually after taking a bath, one’s body is in a state of excitement or tension, and will not be readyfor sleep for another 70 minutes or so. After a microbubble bath, however, this period of tension
can be reduced to around 50 minutes. For busy people, the considerable advantage of saving
20 minutes before falling asleep can help ensure as much sleep time as possible.
To be able to fully recover from exhaustion and refresh the mind through sleep, entering a
We use Air Bubble Technology tocreate fine bubbles

Rinnai’s water heatersthat generate finebubbles*F ine bubbles are microscopic in size and classified as either ultrafine bubbles or microbubbles.
They are effective at removing bodily dirt and grime from water pipes and the like.

Considering the findings ofthis study, we surmise that
Faculty of Science and Technology,
Keio University

VOICE

Ph.D Yasue Mitsukura

Microbubble bathing can cleanse the body of dirt, but when dirt is removed, the natural oils inthe skin, called sebum, are also reduced. It is commonly thought that a decrease in sebum
tends to limit the skin’s ability to remain hydrated, but research has shown that despite areduction in sebum, microbubble baths are capable of maintaining the skin’s stratum corneum
moisture content.

microbubble baths might
further shorten the time ittakes for the body to entersuch a state of deep sleep.

Comparing time series variation in coefficient ofheart rate variability (CV)*
0.25
20 minutes
earlier

0.20

0.15

0.10

Point of transition toa state ready for sleep

0.05

0

10

20

30

40

50

60

70

80

90

100

110

120

Elapsed time after bath (minutes)

To begin with, the moisturizing effect of bathing itself is supported by multiple studies thatsuggest various mechanisms are at play. The mechanism thought to be the most significant is
the warming of the body and improved blood circulation that bathing promotes. With improved
circulation, more moisture content is transported to the skin via the bloodstream, which
Human Life Sciences, Tokyo City University

a deeper sleep more quickly.

Coefficient of heart rate variability (CV)Fine bubbles generated in the bathtubstate of deep sleep soon after the onset of sleep is ideal. Taking a bath can help one’s body fall intosuggests that moisture can be distributed to all areas of the skin.

Point of increase reaching a certain level

Regular bath

Microbubble bathExperimental conditions Experimental conditions: FY2020 Rinnai Corporation test data
A simulated dirt mixture of tallow and 10% carbon black was applied to the abdominal area and brightness was measured using a spectrophotometer
before and after bathing. The removal rate was calculated from the brightness values before and after bathing. Test subjects: six healthy adult males.
Bathing method: full-body immersion for 10 minutes at 38°C. *Statistically significant difference at a significance probability of less than 5%.
* The coefficient of heart rate variability (CV) is considered an indicator of parasympathetic nervous system functions and is used for the simplified assessment of autonomic nervous
system functions.

Professor Shinya Hayasaka

entire body, reaching even the tiniest of crevices. Thereis no need to vigorously scrub one’s body, making ita time-saving option. The easy, gentle cleansing of theskin provided by microbubble baths are believed tocontribute to beautiful skin over the long term.

Stratum corneum moisture content (µ s)Results of study on maintaining skin moisture content
Microbubble baths are capable of cleansing theRegular bath

160

120

Microbubble bath

116%

80

40
Immediately after bathing

Five minutes later

15 minutes later

30 minutes later

Experimental conditions Measurement: Stratum corneum moisture content of the forearm before and after a microbubble bath and a regular bath
Research paper by Shinya Hayasaka, Yuko Iwama, and Masao Nonoyama: “Effects of microbubble bathing on stratum corneum moisture content”;
Japanese Journal of Health and Research; 2022; Vol. 43, p.39–43 (test subjects: 15 adult females)

63

With good sleep, even a short duration can be enough to feel refreshed. Microbubble baths can help people benefit
from quality sleep whilst also saving time.
The everyday, casual use of hot water can deliver a myriad of functions that underpin our comfortable lifestyles andoverall health. At Rinnai, our proprietary technology related to microbubbles and ultrafine bubbles is called Air Bubble
Technology—an area in which we will continue to pursue technological developments.

For more information about our Air Bubble Technology, please visit the following websites: Microbubble bath units: https://rinnai.jp/lp/microbubble/
Ultrafine bubble water heaters: https://rinnai.jp/ultrafinebubble/

Rinnai Report 2023

64

Introduction

Environment

SocialGovernance

Data

SocialSafe and Secure Initiatives

Smooth Provision of Information through the Internet

After-Sales Services

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

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

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

smoothly provide information in consideration of customer internet utilization circumstances.

Microcomputer Meter Reset Process Introduction

Prompt After-Sales Services

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

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

Service Technician Assessment Questionnaire

Microcomputer meter reset process introduced on the Rinnai corporate website

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

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

65

Customer feedback questionnaires are provided
to customers requesting repair services. This
questionnaire assesses repair visit response
times and other factors determining the degree ofcustomer satisfaction with Rinnai repair services.
Customer assessment results are provided as
feedback and the results of questionnaires are
utilized effectively throughout the Company.
In fiscal 2023, 94,000 customers completed
questionnaires, which rated our after-sales
services an average of 97.9 points.

Degree of customer satisfaction with repair services

97.4

Comprehensive evaluation of service response
From repair request to completion of repair

97.1

Cleaning up after repair and maintenance

97.3

Description of repair details

97.8

Greetings and display of identification

97.5

Courtesy, attitude and language

98.1

Telephone response before visit

97.5
88

90

92

94

96

98

100 (Points)

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

Rinnai Report 2023

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Introduction

Environment

SocialGovernance

Data

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

The Customer Center handles inquiries from customers via toll-free telephone numbers and emails. In fiscal 2023,
approximately 790,000 toll-free calls and 20,000 email inquiries were received.

Basic Policies

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

Rinnai Customer Center

Customers’ Inquiries

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

Other 7.7%

Other
Air conditioners

Replacement purchases

9.5%

8.4%

Customer Center

Catalog requests

Industrial 0.01%
Commercial use

1.3%

0.5%
Inquiry
classification

Kitchens

35.3%

Consultation
desk

Analysis ofcustomerfeedback
Identification andanalysis ofimportantquality issues

Service system enhancements

Executives
Analysis and identification results

CustomerCenterDaily information

Consultationdesk• Repair requests• General product inquiries• Technical consultations• Customer consultations(Fiscal 2023)

Customers

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

9.9%

Relevant
departments

Feedback to
manufacturing
divisions
Information
sharing

Complaints

1.0%
Construction
methods

Inquiry
details

Products 38.5%(Fiscal 2023)

3.1%
Hot water supplies

Repairs

44.7%

39.6%

Frequently Asked Questions (FAQ)
In response to customer desires to solve problems on
their own, Rinnai created a “Frequently Asked
Questions” page on its corporate website, with manycustomers taking advantage of how-to videos that
78.2% of respondents said resolved their issue.

FAQ (Japanese language only)

67

Rinnai Report 2023

68

Introduction

Environment

SocialGovernance

Data

SocialInspection Efforts
Products Requiring Safety Inspections

Indoor bath heaters with gas burners

Gas fan heaters

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

Fanned flue heaters

Gas clothes dryer

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

Dishwashers

Built-in gas stoves

Built-in ovens

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

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

Outdoor gas water heaters

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

1

2

3

4

5

Owner
registration

Notification of
inspection

Application
for inspection

Processing of
application

Inspection

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

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

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

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

The Consumer Product Safety Act was revised in August 2021. Prior to this revision, owners of products designatedas specified maintenance products were required to undergo statutory, fee-based product inspections. The 2021
revisions exempt some products from this requirement. For details, please see “Regulatory Revisions Related to Legal
Compliance Inspections” on the Rinnai website (Japanese language only).
https://www.rinnai.co.jp/safety/system/law/

69

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

Rinnai Report 2023

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Introduction

Environment

SocialGovernance

Data

SocialAbout Inspections

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

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

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

1

Qualityinspection

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

2

Customerfocus

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

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

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

3

4

71

Appropriate and polite
provision of
information, etc.

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

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

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

5

Safetyguidance

Establish
trust

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

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

Rinnai Report 2023

72

Introduction

Environment

SocialGovernance

Data

SocialRinnai’s Human Capital Strategy
In our Medium-term Management Plan, New ERA 2025, we formulated a set of strategy narratives around how we intend
to contribute to “Advancement in addressing social challenges”, “Expansion of business scale”, and “Revolution of
corporate structure.” The aim of the plan is to achieve sustainable and sound long-term growth. In order to put thesestrategy narratives into practice as the first step towards growth for the next generation, it is absolutely essential that we
mobilize the strengths of our employees—the driving force of growth—and constantly embrace challenges. We intend toactively invest in human capital tied to our management strategy, and not only will we aim to achieve corporate growth byfurthering our strategy narratives, but we will facilitate employee growth and higher levels of engagement by driving thisprocess forward.

increase by 50%

Developing DX-savvy Employees
Indicator — No. of core employees driving DX

DX professionals: 0 10
DX technicians: 0 50

Brand Penetration

Expansion of business scale• Expand geographical regions• Expand business domains

74

Indicator — Brand training
participation rate

Domestic employees: 8.9% 100%
Overseas Group employees: 0.0% 100%

Improvements in global
business capabilities

Innovation/
greater productivity

Changes in
employee mindset

HR Investments
Revolution of corporate structure• Adopt a consumer-oriented approach• Invest heavily in intangible assets• Boost profitability

Main HR investment initiatives to support the strategy
Greater opportunities
for learning

Employee working styles/
workplace environments

Promotionof diversity

Indicators concerning the empowerment of women
Raising the percentage of women in management positions: 0.4%
Raising the percentage of employees taking paternity leave: 3.3%
Closing the gender pay gap: 58.8% 61.8%（* Numerics FY2021

Better performing
employees(invigoration of organizations
and employees)• Improve quality of life
• Tackle global environmental problems

Indicator — No. of employees with overseas
work experience:

Improvements in
employee engagement

Advancement in addressing social challenges

Human capital value (outcomes)

Nurturing Global Talent

Enhancing human capital value
by driving strategy narratives forward

Strategy narratives

Key measures/indicators

Employee engagement survey
Positive responses

1.5%
50.0%

FY2026: +15pt

In terms of employee education initiatives, we have long focused on improving the skills of employees under a framework comprising mainly
rank-based and departmental training, as well as self-improvement programs. However, an analysis of the results of the first-ever engagement
survey conducted in October 2021 revealed two Company-wide issues: (1) a significant difference in engagement scores between managerial
and non-managerial employees; and (2) a shortage of mechanisms that encourage employee growth.
To remedy these issues and improve the capabilities of individual employees, as well as organizational strength, we are currently
implementing various support measures. For example, initiatives that facilitate a change in mentality (such as an improvement in management
skills) among managerial staff who play a pivotal role in linking management and frontline operations, initiatives that improve the basic businessskills and expertise of employees, and the development of an environment that encourages proactive learning in view of future career planning.
Also, in addition to the above, the environment in which corporations currently operate is characterized by a wide range of issues, such ascarbon neutrality, digitalization, and Japan’s aging population. To ensure the sustained growth of the Company into the future, it is vital that we
identify and nurture leaders who can shoulder the responsibilities of management from a holistic perspective. In this regard, in FY2022 welaunched a core talent development project, for which we have already completed the selection process and training program for the firstcohort of participants. Up ahead, we will continue to work on nurturing outstanding leaders.

FY2022 result: Around 50%

FY2026）• Key Measures (HR development policy, workplace environment development policy)• Promotion of Diversity

Nurturing Global Talent
Considering that overseas sales account for more than 50% of our total revenue, growth in international markets is a major driver accelerating
the expansion of our business scale. To expand our presence overseas more aggressively than ever before, guaranteeing the quality andquantity of global talent will be a key element in our human resources strategy. In addition to the specialist fields of mainly product technology,
manufacturing technology, and financial skills required for our hitherto endeavors in the global market, we will seek to nurture internationallyminded employees backed by real-life experiences abroad.

As Japan’s working population continues to shrink, we are advancing initiatives around the utilization of female employees, senior personnel,
people with disabilities, and mid-career hires in order to secure enough labor and spark new ideas by harnessing a workforce possessing
different values and experiences.
Particularly regarding female employees, even though they make up roughly 30% of our workforce, most of them work in support roles(general positions) and we acknowledge that there is still more to be done when it comes to leveraging their capabilities. We are actively hiring
personnel for career-track positions and enabling employees to transition from a general position to a more specialized role. In addition, we areappointing female employees to key postings through the selection and planned development of candidates for managerial positions.
Alongside efforts to create a comfortable workplace environment in which female employees can keep working, mainly with the use ofa shortened working hours system and childcare leave, we are aiming to boost productivity by raising the understanding of childcare among
male employees and reassessing work styles. We are also taking steps to increase the percentage of male employees taking paternity leave.

Developing DX-savvy Employees
In a society characterized by changing buying behaviors and distribution structures, it is crucial that we fundamentally reassess ourconventional business and operating processes and transform our corporate structure, primarily by shifting to a consumer-oriented approach,in order to ensure future competitiveness in our mainstay business. To that end, we are currently driving a digital transformation (DX), and wehave already undertaken a number of initiatives, such as establishing a framework to promote DX, training human resources, developing tech
infrastructure, and building a data management platform. Particularly in terms of human resources, we have defined two types of core
employees that will lead the Company’s digital transformation—DX professionals and DX technicians—and we have launched somespecialized training programs to aid their development. Other than these core individuals, we are also promoting basic digital training for
employees that use IT devices with the goal of raising their level of IT literacy. The Company as a whole will work towards generating innovationand improving work productivity.
Brand Penetration
Since 2016 we have deployed a unified brand strategy both domestically and internationally. At the core of our branding activities is theinstillment of our brand message among employees. That is why since launching the new brand, we have run training sessions for mainly
employees in Japan, based on the thinking that having every employee understand, and embody in their day-to-day tasks, the brand promiseof “creating a healthier way of living,” is vital to the establishment of the Rinnai brand. Going forward, with the aim of realizing a brand that is evenmore differentiated and preferred than ever before, we will expand this training program to overseas Group company employees and set aboutchanging the mindset of employees.

73

Alongside our global, DX, and branding initiatives, we are also undertaking medium- to long-term investments in humanresources with the aim of enhancing employee performance, which is essential to the execution of our management
strategy.

• Greater Opportunities for Learning• Outline of Human Capital Strategy (metrics and targets)
Medium-term Management Plan:
New ERA 2025

HR investments to support the strategy (greater opportunities for learning, promotion of diversity,
employee working styles/workplace environments)• Employee Working Styles/Workplace Environments
With the arrival of Japan’s so-called “age of centenarians” and in the midst of considerable changes in societal values, including the way peopleview their own career, we are encouraging our employees to embrace new ways of working, including telecommuting, and we are taking steps
to develop workplace environments that are supportive of the physical and mental well-being of employees in order to ensure that they arehighly motivated and can continue to unleash their full potential. With the aim of raising employee awareness of health matters on a daily basis,
we are undertaking a raft of initiatives that support the day-to-day performance of employees. This includes more healthy food options in thecafeteria, the rollout of health programs linked to the employee benefits scheme, and the promotion of various harassment training and health& safety activities to ensure the psychological and physical safety of employees.

Rinnai Report 2023

74

Introduction

Environment

SocialGovernance

Data

SocialPersonnel Training
Rinnai’s company motto and foundation, “Harmony Spirit Sincerity,” embodies the meaning “to care for the people

Management Talent Development and Nominated/Selective Education

we work with, to work together, to have strong individual responsibility and sincerity, and to take on all challenges
with diligence and a scientific perspective.” To live up to this motto, we will provide and expand personnel training
opportunities to cultivate human resources aligned with these aspirations.

Overview of Human Resource Development
Rinnai’s training system consists of three main elements with a focus on raising the capabilities of all employees andencouraging their growth: “rank-specific training” to promote awareness of the roles of each rank and fundamental
business skills; “job-specific training” to hone practical skills in each department; and on-the-job training (OJT) to transfer
and develop know-how through practical experience. Among these, we consider rank-specific training for each job level
to be a vital program that can raise the skill level of all employees and pass on Rinnai’s corporate culture.

Company-wide education and training system

Other

Rank-specific education
Selected/nominated staff

2nd year

Manufacturing• Assessment of candidates’ competencies• Clarification of training issues• Strengthening of development issues (strengths and weaknesses)• Sharing of workplace practices

Young newjoiner layer

Compliance education

Basic management follow-up training
Mental health education

Information security training

Basic management training

Assessment
training

Reviewer training follow-up training
Self-development support
Training for pre-management layer

Training for leaders(Excerpted)• Online English conversation lessons• Distance learning• Support for acquisition of technical qualifications(Excerpted)

Follow-up training for new employees

75

Training for interns with offers of employment

Aptitude test for managers

Acquisition of management knowledge (input via e-learning)

Priority measures• DX human resource development

New employee training

A scene from new joiner training

360° feedback
survey• Various types of e-learning

Training for assistant managers• Global human resources development

New joiners

Practice in the workplace• Monozukuri training

Core Human Resource Development Project

Practice in the workplace

Technology

Understanding Rinnai’s management strategy

Establishedleader layer• Sales manager training

Competency
development interviews

Sales

Middlemanagement
layer• Confirmation of perception of growth• Establishment of new themes• Line manager training

Provision of skills necessary
for decision-making andleadership

External training

1st yearJob-specific training

Practice in the workplace

By qualification

Understanding oforganizational management
Application of practicalscenarios in the workplace

For all employees

The role of the management layer is particularly critical for Rinnai’s overall growth and for responding to a rapidlychanging society. In addition to further strengthening the existing training by rank aimed at enhancing managerial skills,
Rinnai is implementing targeted training for leader-level employees and retraining for manager-level employees.
Furthermore, we are working to improve our organizational capabilities through the Core Human Resources
Development Project, a selective training program that cultivates the people who will be responsible for leading Rinnai inthe future.
The project was launched in fiscal 2022, when the first cohort of learners began training. The two-year program wascompleted in fiscal 2023, and the second cohort will begin their training in fiscal 2024. The program is designed to help
participants grow as human resources well suited for leading Rinnai’s next generation by visualizing their strengths andweaknesses, providing them with specific skills tailored to each, and tracking their individual perceptions of growththrough problem solving on the front lines and structuring the program according to their individual characteristics.
By implementing this training over the medium to long term, we will discover human resources that can become thenext and future generations of executive management, thereby improving Rinnai’s overall organizational strength.

Job-specific Education• Brand penetration training

OJT

Rank-specific training is conducted for all employees,
including those at Group companies, at the time of entering
the Company and following promotions and other careermilestones. In addition to providing training at each rank on
Rinnai’s philosophy, management strategy, and compliancewith work duties that employees must understand andpractice, we also emphasize understanding the
expectations and roles of each rank and practicing them inwork situations to acquire the appropriate mindset and skills.

Each department offers training appropriate to the job and level of the participant. These include training for leader-level
personnel, training to support the acquisition of skills, and training for employees who work with global counterparts.
Additionally, “manufacturing succession centers” are established at each worksite to preserve and pass on
intangible assets, including accumulated process technologies and new technologies that perpetuate the “worksite
intuition” of experienced employees. These are used as places
to teach new employees manufacturing basics as well as aplace to share and pass on information and educate personnel
with respect to manufacturing “efficiency improvements andmanagement strengthening.”

Rinnai Report 2023

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Introduction

Environment

SocialGovernance

Data

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

VOICE
Aiming to Learn Local-Specific Negotiation Skills and Achieve Win-Win
Sales
I joined Rinnai in 2016, and for the past five and a half years, I have been involved in various
businesses in Europe, Australia, and Southeast Asia as part of the Overseas Business
Headquarters. I have been stationed in Rinnai Hong Kong since January 2022.

VOICE

While performing general corporate duties for Rinnai Hong Kong, I also conduct sales

Working as Head of Manufacturing in a Large Country Expecting
Population Growth

activities to gas companies in Hong Kong and Macau. Soon after my arrival, I experienced
Rinnai Hong Kong

firsthand the restrictions caused by the pandemic, but I was able to get closer to my customers

Masaki Sakaguchi

by making it a topic of conversation.
While stationed in Hong Kong, I am trying to get a personal sense how Hong Kong people

After joining Rinnai, I worked on equipment manufacturing and design for about 14 years at theProduction Engineering Division followed by a seven-year stint in manufacturing technology at

feel and think and to act like a Hong Kong local as best I can.
The unique work practices and negotiation techniques here and of its companies can be

the Seto Factory. After this, I was seconded to Rinnai Indonesia in December 2020. It was anchallenging, but I will continue to work on them so that I can conduct sales activities that areanxious time for me as not only was I living and working abroad for the first time, we were also in

win-win for both parties.

the throes of the COVID-19 pandemic.
Rinnai Indonesia

Moritoshi Ito

At Rinnai Indonesia, I am responsible for managing two factories employing about 2,000
employees as the head of manufacturing. When I arrived I saw that, although bright andcheerful, the mild and reserved nature of the Indonesian people hampered them from making
improvements in a self-directed manner. We have worked to build a collaborative atmosphereof sharing opinions and thinking together rather than managers giving instructions top-down.
I am gratified with the daily growth of our employees here, who have gradually become moreproactive.
Indonesia is a country with high population growth potential as it is home to over 270
million people with an average age in the 20s. We are striving for further growth in Indonesia, an
important base for the Rinnai brand in Southeast Asia.
Owing in part to my coming here alone, in my personal life, I am now able to cook,something I had not done before. I consider health management in a foreign country to be oneof the most important skills for those posted overseas. I have been cooking for myself every
day and bringing my own lunch to work and thankfully have not missed a day due to illness inthe past two and a half years.

77

Rinnai Report 2023

78

Introduction

Environment

SocialGovernance

Data

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

Health Management Initiatives

Rinnai believes healthy employees are important to enable the continued support of healthy customer lifestyles. Rinnai
has clearly stated policies on the maintenance and promotion of employee health set forth in the Group Code of Ethics
and the Personnel Affairs Division management plan. The Personnel Affairs Division established dedicated departments
as part of Rinnai’s three-pronged approach to supporting employee health, incorporating the health insurance union,
employee union and the Company.

We have provided more detailed care through occupational health physicians
and public health nurses to prevent the taking of medical leave, while at the sametime, supported a smooth return to the workplace for employees who had taken
leave. We are also striving to create an environment where employees can work withpeace of mind when they are ill, by providing training on mental health at theoccupational level and support in balancing work and undergoing medical treatment.
Individual employees also receive health support through health events and individual
coaching to help them develop sound lifestyle habits.
Health Management Promotion System
Person responsible for health management(President and CEO)

Promotion and evaluation
Sports communicationof health business
event
Cooperation

Employee union

Personnel affairs division
Health and safety committee(Each office)Data-based insurance
business
Cooperation

Health insurance
association

Rinnai Health Management
Initiatives• Mental Health Measures	We conduct mental healthseminars according to
occupational level and encourage
stress checks targeting a 95% or
better participation rate.
•	Lifestyle Disease Prevention
Measures	We provide guidance on theprevention of serious illnesses toinsured persons with diabetes andhypertension who are not intreatment. We also organize events
such as sport and walking festivals.
•	Metabolic Syndrome Prevention
Measures	We provide specific healthguidance aimed at reducing thenumber of employees withmetabolic syndrome by five
percentage points annually.

Employees

Augmenting the above initiatives, we provide an insurance business through our health insurance association as well as
engaging in activities through employee unions, insurance agency services through Groupsubsidiary Rinnai Enterprises, and support from full-time public health nurses at the HealthSupport Office of the Personnel Affairs Division. In recognition of these initiatives, Rinnai wasselected as an Outstanding Health Management Company 2023 (Large Enterprise
Category), sponsored by the Ministry of Economy, Trade and Industry, in recognition of ourefforts to promote health as a company practicing excellent health management.
79

Basic Policy on Safety and Hygiene

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

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

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

Rinnai Report 2023

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Introduction

Environment

SocialGovernance

Data

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

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

Program and MeasureChildcare leave

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

Sixth Period General Employers Action Plan

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

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

2. Details

Sick or injured childcare leave program

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

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

Extended family care leave

In principle, up to three periods of leave may be taken per eligible family member, for a total of
93 days.

<Measures>

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

for female employees.

Childcare shortened work hours

Family care shortened work hours

Objective:• Conduct roundtable discussions facilitating the exchange of information during training sessions• Improve the rate of male employees taking childcare leave by publishing interviews with male
employees who have taken childcare leave and spreading awareness of amendments topaternity leave conditions under the Child and Family Care Act.

81

Family care leave

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

Work from home program

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

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

Measure to reduce working hours(Flexible working hours)

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

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

• Create a system covering the duties of employees taking leave through employee training aimed
at instilling expertise across multiple work areas.

Rinnai Report 2023

82

Introduction

Environment

SocialGovernance

Data

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

Establishment of Good Labor Relations
Employees of the Company are members of the Rinnai Employees’ Association, which functions as the organization torepresent the entirety of the Company’s employees. Based on mutual understanding and trust, the Company and the
Association establish healthy and sound labor relations, openly exchange opinions on management issues, labor
conditions, workplace environments, and compensation and discuss improvement plans.
Moreover, the Company makes efforts to provide working environments where the employees of our business
partners, etc., in addition to our employees can work safely and with peace of mind. We also actively arrange and offer
welfare programs and various events and programs for our employees and their families.

Respect for Human Rights and Individuality
In accordance with the United Nations Guiding Principles on Business and Human Rights, Rinnai established andpublished the Rinnai Human Rights Policy (https://www.rinnai.co.jp/en/corp/human-rights/) in 2022. The Rinnai Human
Rights Policy states that Rinnai respects human rights as set forth in international human rights standards; will notdiscriminate on the basis of gender, age, language, nationality, physical characteristics; will not tolerate child labor andforced labor; and will not engage in human rights violations. The Rinnai Group will continuously conduct human rights
due diligence to identify and assess the negative human rights impacts of its business activities and prevent or mitigate
such risks.
Rinnai aims to create workplace environments and climates that allow its employees to feel glad to be working for theCompany. We collect opinions regarding the Company from each workplace and hold regular joint labor management
conferences along with employee unions. The goal of these conferences is to make improvements to the Rinnai Group.
We move forward with improvements by sharing issues unique to each business location and conducting systemrevisions. The Company has conducted activities aimed at promoting the use of paid leave, established a new regional
allowance system, and held nursing care seminars. Rinnai also provides financial support for health enhancement events
held by employee unions, such as sport or bowling competitions and walking festivals. Finally, we collaborate with
employee unions to provide workplace tours to employees’ families at our development locations and factories. Throughthese tours, we educate employees’ families about what we and their employee family members do.

Efforts to Prevent Child Labor and Forced Labor
The Rinnai Human Rights Policy and the “Rinnai Code of Conduct: 4.2 Prohibition of Child Labor and Forced Labor”
stipulates that “We will not use any inappropriate labor including child labor that subjects persons under the legal working
age to harmful labor or any form of unjust labor contrary to the intent of workers.” To prevent child labor, Rinnai thoroughly
verifies the age of employees when they join the Company.

Measures to Prevent Harassment
Major Programs in Rinnai Employees’ Association
Item

83

Overview

Nationwide eventsin Japan

Various events to promote the health of our employees and their family members and communication,
including bowling competitions, barbecue picnics, and sports festivals

Training seminars
by age group

Training seminars focusing on “education for the soul” that support employees in developing attractive
personalities as members of society

To maintain a working environment that our employees find comfortable, we take measures to prevent any infringementof human rights, including sexual harassment and power harassment as well as harassment related to pregnancy,
childbirth, childcare leave and nursing care leave (maternity/paternity harassment).
As a specific initiative, we produced a checklist of detailed examples of harassment that is posted on the
Companywide intranet for self-assessment.
In addition, in fiscal 2023, we conducted harassment training for managers at our factories and manufacturingsubsidiaries. As another measure, in rank-specific training for promoted employees, we also provide harassment
education to reinforce prevention. Additionally, we established employment regulations and in-house rules prohibiting
disadvantageous treatment and clarified disciplinary actions based on employment regulations in the event an employee
violates these rules.

Rinnai Report 2023

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Introduction

Environment

SocialGovernance

Data

SocialPromotion of Diversity
View toward Employment
We are committed to providing work environments where employees can demonstrate their various capabilities
regardless of age, gender, nationality, disability, or background. In addition, the Rinnai Group Code of Ethics stipulates thecode of conduct to be followed by all officers and employees, and states that we respect the individual, and we work toentrench this among our employees.
We hope to advance our businesses by respecting the individuality of each employee at each workplace byharnessing the new values and ideas that come from the interconnection of individual personalities.

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

To improve the employment environment so that women can play an active role, Rinnai
has formulated the following action plan.

Supporting the Promotion and Active Participation of Women

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

As many Rinnai products are used in everyday life, we believe it
necessary that not only men but also women occupy posts
facilitating both perspectives in planning and proposals. To increase
the ratio of female managers, which is one indicator of women’s
active participation, Rinnai must recruit and train women for careertrack positions. To this end, we are beginning to see the results ofefforts promoting the proactive hiring of female general employees,
the development of assistant manager-class female employees, andthe creation of comfortable working environments.
Although the current ratio of women in managerial positions is0.5%, Rinnai will conduct initiatives and confirm the results of efforts
focused on the recruitment and training of female generalemployees, raising this ratio to 1.5% by fiscal 2026 and 3.0% by
fiscal 2031.

Female employee ratio

2. Company issues

(%)

8
7
6
5
4
3
2
1
0

Female employees ingeneral positions

5.5％

Female assistantmanager-class employees

2.0％

,

17

6.3％ 6.4％ 6.7％
5.7％
5.0％ 5.3％

,

18

,

19

,

20

,

21

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

3. Goals, initiative details and implementation timeframes
,

22

,

23

,

24 (FY)(Planned)

Female manager target ratios
FY2023 actual

FY2026 target

FY2031 target

0.5%

1.5%

3.0%

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

4.0 years.
Initiative details: R educe the number of retirees due to childcare, family care or other factors.
• Support for employees working shortened hours.
• Expansion of telecommuting system.
Goal 2: I ncrease the percentage of women in general positions (non-managerial positions) from 6.3%

to 6.7%.
Initiative details: Reduce the number of retirees due to workplace culture, childcare and family care.
•S upport for returning to work after maternity leave (usage and revision of interview check sheet used before
and after returning).
•P romotion of female employee roundtable discussions at each business site (understanding requests for work
details and environment and network formation support).
• Appeal to female general employees using in-house newsletters and other means of communication.

VOICE
Press Section, Oguchi Factory
Thoughts As Rinnai’s First Female Press Operator

Goal 3: I ncrease the percentage of women at the section chief level from 5.0% to 5.7%.
Initiative details: C hange awareness of women’s advancement by training and other methods.
• Conducting training for female employees (unions).
• Implementing a program fostering an understanding of diversity within managerial training.
• Implemented a program to motivate chiefs to seek promotion to section chiefs.

I am in charge of operation and maintenance as an operator of presses that form metal
sheets into molds. My work requires physical strength, such as handling materials weighing
more than 100 kg in total, but I have been able to overcome this challenge with thecooperation of my colleagues, such as having a dolly made for me to carry the materials andhaving the veteran workers help me when they saw how I was doing. In addition, I am always
aware of the importance of adhering to quality rules so that we do not produce defective
products, regardless of how rare that occurrence may be. In the future, I would like to obtain

85

qualifications so that I can increase the number of machines I can operate and gain

Press Department, Processing Group,
Oguchi Factoryknowledge and experience so that I can say with pride, “When it comes to this, I’m the best.”

Akiho Hamasaki

Rinnai Report 2023

86

Introduction

Environment

SocialGovernance

Data

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

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

Consolidated net sales per employee(Persons)(Millions of yen)

12,00038
37While achieving the legally mandated employment ratio for people with diverse abilities is a given, we are working tocreate a workplace where people with disabilities can work as productive members of the Company, making use of theirindividual characteristics and strengths. In hiring, we cooperate with various support organizations, including schools forhandicapped children, employment support organizations, and the Public Employment Security Office to promote
recruiting activities that emphasize matching applicants with the Company, such as hiring them after they have gained anunderstanding of our operations and workplace environments.
Furthermore with the aim of expanding employment opportunities for people with diverse abilities, in fiscal 2019 anorganization and office were established that are dedicated to hiring people with disabilities to perform various support
tasks within the Company. We are promoting work initiatives and the creation of workplaces where people with diverse
abilities can feel a sense of job satisfaction and personal growth. Toward this end, we are creating opportunities toproactively perform tasks required by each organization, such as cleaning in and around offices, supporting production at
manufacturing sites, supporting the promotion of digitization in each organization (e.g. PC entry and PDF file conversionwork), and the translation of foreign languages.

36
35

8,000

34

6,000

33
32

4,000

31

Net sales per employee

Promotion of Employment of People with Diverse Abilities

Number of employees

10,000

30

2,000

29

0

28

2011

2012

2013

2014

2015

2016

■ Employees

2017

2018

2019

2020

2021

2022

2023 (FY)● Net sales per employee

Increasing Employee Engagement
Rinnai began conducting an engagement survey in fiscal 2022 to visualize and continuously improve employee
engagement. The latest survey, targeting approximately 4,000 employees, had a response rate of 95%. From the survey
results, we identified large discrepancies in engagement between managers and non-managers, and a lack ofmechanisms encouraging employee growth, as Company-wide issues.
To resolve issues identified in this survey, we share issues with management and the heads of each organization,and have also launched the “Companywide Invigoration Project” across all departments within the Company to promotemeasures addressing Companywide and organization-specific issues.
Rinnai defines employee engagement as “feeling empathy for Company policies and strategies, taking pride andinitiative in one’s work.” To improve engagement, we recognizethat it is essential to both realize our short-, medium-, andPositive response rates in the employee
engagement survey
long-term strategy stories, as well as to foster employee growth
and a sense of unity within the organization through theTargeting a-point increase
execution process. Based on these prerequisites, we arebyfiscal2026
promoting various measures targeting a 15-point increase inengagement scores by fiscal 2026.

15

Business support work

87

Greening work

Rinnai Report 2023

88

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Shareholders and Investors

Aiming for Longer-Term Business Growth and Stable Shareholder
Returns

Announcement of Rinnai’s year-end financial results

We disclose information in an appropriate, timely, fair, and impartial manner, and engage in IR activities with
an emphasis on two-way communication in order to earn the trust of shareholders and investors. In an effort to provide
our shareholders and investors with direct updates on our business activities, and to ensure that information is disclosed
quickly and fairly, we provide information via channels such as results briefings for analysts and institutional investors(twice a year), biannual shareholder reports, press releases and presentation materials for results briefings on our website,and our IR calendar. Through various opportunities to meet with them, shareholders and investors are able to understandour business growth strategies from a longer-term perspective and to hold expectations for stable shareholder returns.
In August 2023, Rinnai invited investors and their families to Rinnai Hot.Lab Yokohama for a hands-on product experience
event held jointly with institutional investor Commons Asset Management, Inc. Rinnai Hot.Lab is a training facility forclients that provides hands-on experience with products that include DELICIA stoves with automatic cooking functions,and Kanta-kun, which dries clothes quickly using the power of gas. This event was attended by many investors in the
Commons Asset Management “Kodomo Trust” and their children, who were able to experience the fluffiness of dried
towels from Kanta-kun gas clothes dryers and try meals prepared by using DELICIA, which contributed to deepening
their understanding of our products and Company initiatives by seeing and actually touching them.
Kodomo (Children’s) Trust is an account for underage children provided by Commons Asset Management thatfacilitates asset growth in tandem with the growth of children. Kodomo Trust seminars provide children with opportunities
to experience initiatives promoted by the companies in which they are invested and learn that investing is a way tosupport the efforts of these companies. The Kodomo Trust seminar was a great opportunity for communication among
investors and children, as well as with companies.
As Rinnai handles products related to “clothing,food, and housing,” we provided children with anopportunity to experience how these products are
related to their daily lives. We provided a dietaryeducation program to provide children with
an opportunity to learn about “eating,” which is very
important to them, and to experience what happens
before and after the process of eating “food,” as wellas what kinds of “ingredients” become “cuisine” whenprocessed using “cooking utensils.”

Fiscal 2023 Activities
IR interviews conducted a total of 251 times
One-on-one interviews: (Tokyo: 45; Nagoya: 16)
Telephone interviews: 36 times
Online coverage: 154 times

Fiscal 2023 interim results briefing (livestream):
105 attendees
Fiscal 2023 year-end results briefing (livestream):
78 viewers

Institutional Investor Opinions at Fiscal 2023 Year-End
Institutional Investor Question Topics

In addition to customary questions regarding business performance,
Othersfuture outlook, and the status of product sales, at the fiscal 2023
24%
ESG
financial results announcement, institutional investors and analysts had
Shareholder
proposalsa wide range of questions and comments pertaining to domestic andForecasting
international demand fluctuations related to the pandemic, capitalMarkets
expenditures, capital policies, and other recent events andParts procurement
announcements.
Materials
Results
This was a period of wide-ranging discussions on capital policy
Price revisions
and growth strategy, with many exchanges regarding the use of funds,
including share buybacks, dividend increases, and proactive
Products
Capital policy
Supply chain
14%
Investments
investments. Rinnai will deepen communications with shareholders andinvestors as we move forward with the dynamic movement of funds.

Performance
45%

Medium-termbusiness plan
17%

89

Rinnai Report 2023

90

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Customers

Rinnai DX Initiatives
We have formulated three key strategies under the Medium-Term Management Plan New ERA 2025: Advancement inaddressing social challenges, Expansion of business scale, and Revolution of corporate structure. By utilizing digitaltransformation (DX), we will ensure the realization of our strategies, including the achievement of numerical targets.
We aim to contribute to solving social issues by strengthening our touchpoints with customers and business partners andproviding products and services that contribute to improving the quality of life in a timely manner. Furthermore, we willthoroughly review business processes in business and administrative divisions through the use of digital technology,
leading to the transformation of the corporate structure and expansion of business scale.

Rinnai’s DX collects various types of information obtained through business activities and repeatedly makes hypotheses
and verifies them based on findings from data analysis to improve business functionality. The Company aims to build
a virtuous cycle in which the provision of attractive services leads to an increase in the number of users, and in turnan increase in the amount of information that can be obtained further accelerates the upgrading of functionality.

Medium-Term Business Plan New ERA 2025 Three key strategies
Advancement in addressing
social challenges

Expansion of business scale

Revolution of corporate structure

Rinnai App• Improve quality of life
• Help resolve global environmental
problems• Expand regional domains• Expand business domains• Become more consumer-oriented• Make focused investments inintangible assets• Enhance profitability

DX: Digital transformation

91

Examples of Initiatives 1

Examples of Initiatives 2

The Rinnai App, which allows users to control bath-fillingsystems, bathroom heater/dryers, floor heating systems,
and panel heaters from their smartphones, can collectproduct usage and sensor information. By analyzing andutilizing this information, Rinnai will propose ways ofusing the ecosystems that match the lifestyles of ourcustomers and solve their problems, thereby contributing
to the improvement of their quality of life. We will also
expand our business domains by offering attractive
new services.

We have released “RinnaiBiZ,” a new information
communication platform connecting business partners
with Rinnai. The site provides the latest productinformation, replacement and inventory searches,
catalog browsing, building information, and otherbusiness support services, as well as a variety of content
to enhance sales. We will build an optimal cycle ofinformation dissemination, proposals, and businesssupport to enhance profitability by analyzing theinformation accumulated through daily sales activities
and the usage status of RinnaiBiZ.

Data

UP
RinnaiBiZ

Data analysis

Hypothesis Verification

Business function enhancement

To aggressively promote DX, we are working on the establishment of a framework, human resource development
and technology environment, and data management infrastructure. In the promotion structure, members to promote DX
are assigned to each of the business and administrative divisions. We have also established a cross-functional project tounite the entire Company.
For human resource development, we have defined “DX business personnel” to lead business transformation andDX technology personnel to create strategies through the use of digital technology as “DX promotion core personnel” andare working to cultivate them. At the same time, we are striving to improve skills Company-wide to ensure that we havethe competencies to respond to business models that utilize digital technology. In establishing the technologicalenvironment, we are promoting a swift environment build-out and optimizing operations through the use of cloudtechnology and have begun reviewing the entire system to ensure that it can flexibly respond to new business processes.
Our data management infrastructure is working to build an environmental infrastructure that can accumulate and analyze
a variety of information necessary for the creation of new value.

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Introduction

Environment

SocialGovernance

Data

SocialRinnai Group Purchasing Policy

Communication with Business Partners

Working with the Supply Chain to Build a Stable Procurement System

Business partners

Information

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

Flow of Initiatives

1

Rinnai’s Stance on Relationships with Its Business Partners
Ascertain risks

Specify targets

2• Suppliers• Parts and materials• Purchased parts and materials

3

Implement countermeasures

Diagram of Information Linkage

Rinnai

Purchasing Policy

Primary processors

Raw materials
Subsidiary materials

Natural disasters, fire, accidents, disputes,
epidemics, logistics disruptions, etc.

VOICE
Initiatives to Ensure Stable Supply
Rinnai’s overseas production bases have temporarily shut down their plants due to thepandemic and geopolitical factors, and on the logistics side, ports and airports have also been

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

Realization of Fair-and-Square Transactions

Provide appropriate
information

Rinnai

In 2022, the ongoing COVID-19 pandemic and the outbreak of theRussia-Ukraine conflict continued to make stable parts procurement
very challenging.
Going forward, geopolitical risks and natural disaster risks are
expected to remain ever-present and create an urgent need to build
a stable parts procurement system.
In this context, Rinnai works closely with its business partners to
exchange information, examine supply chain risks and grasp themarketability, availability and future viability of parts. To mitigate risks,
Rinnai is engaged in the diversification of materials, processes andlogistical networks. It also promotes inventory optimization to preparefor various risk scenarios.
To ensure a more stable supply of our products, which areessential to daily life, our supply chain will work together to build arobust product supply system that can respond to the risks it is
exposed to.

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

Monozukuri
supportResultso due prc t iv

ttra
te a
a
e
Cooperation
Cr

Improve quality,
reduce costs

ct s

Co-existence,
co-prosperity(Win-Win)

Products,
monozukuri proposals

Suppliers

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

Communication with Business Partners
We held a policy presentation for suppliers in the Main Hall of Winc Aichi (Nakamura-ku, Nagoya) to explain important
policies related to Company management and purchasing activities, which was attended by 228 representatives from132 supplier companies. This was the first presentation in four years, as the event has been cancelled after the 2019presentation due to the pandemic.
The presentation provided an overview of Rinnai policies on management, production, purchasing, and quality, withthe aim of facilitating business partner understanding as well as soliciting their cooperation in ensuring stable production
activities.

shut down on occasion.
Based on this experience, we first established multiple production bases and built a
production system by designing, developing, and building new automated machines in Japan
as well as at separate bases outside of Japan. Furthermore, the company is diversifying its
Tateyama Kagaku Sensor Technology Co., Ltd.
Representative Director & President

Iwao Hayashi

suppliers of parts and materials.
We will continue to promote BCP initiatives in close cooperation with our customers,
considering stable supply to be our top priority so that our customers can place orders withpeace of mind.
Management policy presentation

93

Inside venue
Rinnai Report 2023

94

Introduction

Environment

SocialGovernance

Data

SocialCSR Questionnaire
In accordance with the Rinnai Human Rights Policy, which is based on the United Nations Guiding Principles on Businessand Human Rights, we identify and assess the adverse human rights impacts of our business activities and conductongoing human rights due diligence to prevent or mitigate these risks. In fiscal 2023, we requested that suppliers
participate in a CSR questionnaire and collected responses from 246 suppliers (including 173 primary suppliers).
When issues are identified in CSR questionnaires, we encourage suppliers to correct them. We also conduct audits,
including on-site inspections and hearings, as necessary.

Global Social Contribution Activities
Brazil (Rinnai Brazil)
Rinnai Brazil, with the cooperation of its employees, was able to collecta large number of relief supplies during the 2022 Charity Campaign.
The relief supplies collected were delivered to 35 institutions andcommunities (1,800 Kg of food, 1,800 infant and adult diapers, 700
cleaning supplies, 600 Easter eggs, 115 blankets, and 100 toys).
In the city of Mogi das Cruzes, where the Rinnai Brazil plant islocated, a variety of other social contribution activities were conducted,
such as donating food and daily necessities to rehabilitation facilities
and community exchange centers, participating in community cleanup
activities, and providing gas appliances to those in need.

Responsible Procurement of Minerals
To fulfill our social responsibility within procurement activities, we will procure minerals responsibly throughout our supply
chain to ensure that minerals (tin, tantalum, tungsten, and gold) used in Rinnai products do not become a source offunding for armed groups involved in civil wars and conflicts that cause serious human rights abuses in regional conflicts
or high-risk areas.
Promoting the responsible procurement of minerals requires due diligence efforts throughout the supply chain. We
request that relevant suppliers provide information on smelters and refiners throughout the supply chain with the aim ofprocuring minerals from responsible smelters and refiners.
As responsible mineral surveys require the cooperation of all suppliers, from smelters and refiners on down, we use
survey tools that include industry-standard survey forms such as the Conflict Minerals Reporting Template (CMRT)
published by the Responsible Minerals Initiative (RMI).

Conflict Minerals Survey
Rinnai conducts conflict mineral surveys of all its suppliers. In fiscal 2023, we collected survey responses from 173
companies that were requested to participate. Based on the results of surveys collected, we conduct risk analyses andevaluations, and if risks are identified, we request that suppliers procure minerals from responsible smelters and refiners.

Donating food to local communities

United States (Rinnai America)
Rinnai America hosted an event for Bloom, a foster care organization in Georgia, raising
approximately $270,000. Rinnai America also provides regular support to Bloom, including
donations of clothing and household goods.
In conjunction with International Women’s Day on March 8, Rinnai America hosted avariety of events, including sports competitions, dinners, and speaking events aimed atdeepening exchanges. As part of these activities, Rinnai America donated soap, air
fresheners, and other daily necessities to women’s support facilities.
Rinnai America also continues to engage in volunteer activities, including assistancewith tornado relief efforts in Georgia and donations to walking events aimed at eradicating
Alzheimer’s disease.

Tornado Relief Efforts

South Korea (Rinnai Korea)
In September 2022, Rinnai Korea provided assistance to areas damaged bytyphoon Hinnamnor, which caused extensive destruction. In addition to
conducting free inspections and repairs of malfunctioning gas appliances at
shopping malls, residences, and cafeterias in Pohang, a city hit particularly
hard by the typhoon, Rinnai Korea donated and assisted with the installation ofgas stoves at no charge.
	  In March 2022, Rinnai Korea provided free gas appliance inspection
services in the Uljin and Samcheok areas of North Gyeongsang Province,
which were severely damaged by forest fires. They also replaced gas stovesand conducted safety inspections in Jeju Province, where vulnerabilities were
Supporting areas damaged by typhoon Hinnamnor
observed in the safety of gas appliance use, among other efforts to support
disaster preparedness and improve safety.
Further, as an industry-wide effort to counteract climate change, major boiler manufacturers have joined together todonate environmentally friendly boilers to social welfare and other facilities.

95

Rinnai Report 2023

96

Introduction

Environment

SocialGovernance

Data

SocialCommunication with Local Communities and Society

Contributing to Social Education through Community Exchanges

Contributing to Regional Artistic and Cultural Development

Teaching Students About SDGs Initiatives

Nakagawa Canal Restoration and Cultural/
Artistic Assistance Project (ARToC10)

In June 2023, 21 students from the Nagoya Junior High School Attached to Aichi University of Education visited Rinnai
Headquarters on an “SDGs company visit.”
Rinnai’s approach to the SDGs involves contributing to society by promoting the global use of as many environmentallyfriendly products that improve quality of life as possible. Students were introduced to Rinnai’s mainstay environmentally friendly
products that improve quality of life and learned how these products contribute to society and facilitate the achievement of
the SDGs.
Through this SDGs company visit, we were able to communicate to younger generations that Rinnai is a company thattakes the SDGs seriously and is working toward their achievement, while contributing to Goal 4: Quality Education. We willcontinue valuing connections with society to further improve the Rinnai brand image.

Introducing Rinnai initiatives to students

Demonstrating the Micro Bubble Bath Unit

Rinnai has donated ¥10 million every year, providing a total of ¥100 million in subsidies for the management of the
ARToC10 project launched in fiscal 2013.
The Moonlight Mobile Theater production “Silence” was selected as a subsidy recipient in fiscal 2023 and performed
outdoors between October 20–23 in the parking lot of a former Rinnai parts center. Rinnai will contribute to regional
revitalization through resident exchanges and creative activities using the Nakagawa Canal as a stage.

ARToC10 subsidy recipient Moonlight Mobile Theater performs “Silence”

VOICE
Explanations of Company SDGs Initiatives Provide Rewarding Educational
Opportunities
As part of our educational curriculum for junior high school students, we visit companies
engaged in SDGs initiatives to learn about their efforts and hear directly from the people who
are working toward their achievement, with the aim of creating an image of what a company
that contributes to the SDGs does (= SDGs education) and what it is like to work there (=potential careers).
During their visit to Rinnai, students learned about the Company’s origins and history, andAichi University of Education
Nagoya Junior High School
Social Studies Section

Kazumasa Kodama• Support for restoration project on the Nakagawa Canal• Nagoya Philharmonic Orchestra• Campus Venture Grand Prix, Chubu Area
• Nagoya Shonen Shojo Hatsumei Club (Invention andInnovation Youth Club)• Keidanren Committee on Nature Conservation• Chinese Spring Festival in Nagoya• Green Fund• Monozukuri Nihon Conference• Choju-no-Kai (Classical Japanese dance)• Sponsorship of RoboCupJunior Japan 2023
• Donations to Expo 2025 Osaka, Kansai, Japanin addition to its mainstay heating equipment business, they were told about the ways in which
Rinnai contributes to society through its SDGs initiatives. The students were also given

Social Contribution Amounts in Fiscal 2023

demonstrations of products on display, which they observed with keen interest. We feel the visit• Social contribution activities funding: ¥24,943,000• Political donations:¥1,210,000

was rewarding for the students, as they were able to convey what they learned in the debriefing
session that followed.

97

Rinnai Corporation, Actual Results in Fiscal 2023

Rinnai Report 2023

98

Introduction

Environment

SocialGovernance

Data

GovernanceManagement Structure
Director Compensation System

Corporate Governance Structure

A summary of the details of the Company’s policy for determining the content of compensation, etc. for individual directors is presented in 1.
through 4. below. The “Basic principles on determining compensation for directors” stipulate that the Company shall continuously verify theappropriateness of 2. the structure of compensation system and 3. the level of compensation, which will be reviewed in fiscal 2024.

General Shareholders’ Meeting
Election and dismissal

Audit & Supervisory Board
Cooperation

Accounting Auditor

Election and dismissal

Election and dismissal

Cooperation

Audit

Consultation andrecommendation

Nomination/Compensation
Advisory Committee

Board of Directors

Election, dismissal,
and administration

1. Basic principles on determining compensation for directors

Election, dismissal,
and administration

I. Promoting solid corporate value creation over the medium to long term
II. Securing objectivity and transparency to underline our accountability to a broad range of stakeholders, including shareholders

Direction

PresidentInternal Control Office

ReportReport

Audit

ReportManagement

Audit

Related Committees

Internal
Audit

Report2. Structure of compensation

Environment Management
Committee
ESG Committee and other

Executive Officers
ReportCorporate Ethics Committee
Risk Management Committee

Compensation for directors consists of a basic component (fixed compensation) and a performance-linked component in a ratio of
approximately 70:30 for the purpose of providing a sound motivation for increased corporate value and target achievement.
Performance-linked compensation consists of an annual bonus, designed to promote steady attainment of performance targets every
fiscal year, and a restricted stock compensation, designed to seek steady improvement of corporate value through sharing interests
with shareholders by holding the Company’s shares for the medium to long term.
Compensation for outside directors is limited to a basic component (fixed compensation) only, in order to promote proper
conduct of their duties to supervise and give advice to management from a position independent of executive management.
The composition of compensation and summary of each component are as follows:

Cooperation

Direction

Business Divisions

Audit System for Monitoring and Supervising Management
Rinnai recognizes the reinforcement and enhancement of its corporate governance to be important management priorities from theperspectives 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 toenhance the functionality of internal bodies, such as our Board of Directors and Audit & Supervisory Board.
The Audit & Supervisory Board is comprised of four members, two of whom are outside auditors. Audit & Supervisory Board members
attend Board of Directors’ meetings and other important meetings to monitor director and executive organization execution of duties, thedevelopment and operation of the internal control system, and the status of operations and property management at the head office and major
offices. In addition to these duties, external account auditors audit the Company’s accounts and verify from a third-party perspective thelegality of the internal control system as it relates to financial accounts.

Board of Directors
Rinnai’s Board of Directors is comprised of five members, two of whom are outside directors, and meets once a month in 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 otherbusiness meetings held on a quarterly basis. Moreover, the term of Directors is fixed at one year in order to clarify management responsibilities
and increase opportunities to enhance shareholder confidence in the Board.

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

Remuneration for Directors and Audit & Supervisory Board Members (Fiscal 2023)
Category

Directors(including outside directors)

Recipients(persons)
5(2)

Audit & Supervisory Board
members

44
(12)

44
(12)

—
(—)

—
(—)

5
(2)

Total

330
(28)

243
(28)

79
(—)

7
(—)

10
(4)

(including outside members)(including outside members)

99

Total Remuneration by Item (Millions of yen)
Total Remuneration(Millions of yen)
Basic component
Annual bonus
Restricted stock
286
199
79
7
(16)
(16)
(—)
(—)

Composition of Compensation
Basic component

70%

20%

10%

Annual bonus
Restricted stock

3. Level of compensation
The level of compensation for directors (excluding outside directors) is set so that directors are strongly motivated to realize increased
corporate value and attain goals through the concerted efforts of the entire Company. It is determined on the basis of position andduties and by using objective data on executive compensation gathered through a survey conducted by an outside expert agency(Willis Towers Watson’s Executive Compensation Data) and using those of selected comparable companies as a benchmark.

4. Process of determining compensation
Policies on determining compensation for directors are deliberated objectively at a meeting of the Compensation Advisory
Committee, composed of a majority outside directors, and ratified by resolution of the Board of Directors based on the Committee’s
recommendations. The amount of each director’s compensation, including an assessment of an individual performance-evaluation
component, is determined by deliberation of the Compensation Advisory Committee to which the Board of Directors has resolved todelegate authority, ensuring more objectivity and transparency in the process of determining compensation.
Deliberations of the Compensation Advisory Committee are conducted from an objective viewpoint and by referring toexpertise about compensation systems. Accordingly, information is obtained from an outside expert agency (Willis Towers Watson in
fiscal 2023) when necessary. The following are the members of the Compensation Advisory Committee who deliberated policies forfiscal 2023 and their activities during the fiscal year.
Members• Nobuyuki Matsui, Outside Director (Chairman of the Committee)• Tadashi Ogura, Outside Director• Takashi Kamio, Outside Director• Hiroyasu Naito, Inside Director
Activities
May 18, 2022: Decision of annual bonus for fiscal 2022, and deliberation on compensation policies for fiscal 2023
June 29, 2022: Deliberation on selection of Compensation Advisory Committee Chairman and individual amounts of compensationfor officers (directors) for fiscal 2023

Rinnai Report 2023 100

Introduction

Environment

SocialGovernance

Data

Governance

Leadership (As of June 29, 2023)
Board of Directors
Kenji Hayashi

Audit & Supervisory Board Members

Hiroyasu Naito

Kinji Mori

Representative Director, Chairman of the Board

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

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

Representative Director and President and Executive President

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

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

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

Hideyuki Shiraki

Kazuto Inoue

Director, Senior Managing Executive Officer

Takashi Kamio

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

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

Outside Director, Independent Officer

Career Summary and Current Position and Responsibility in the Corporation:
Apr. 1975 Joined Nippon Toki Co., Ltd. (currently, NORITAKE CO., LIMITED)
Jun. 2005 Director at NORITAKE CO., LIMITED
Apr. 2008 Director, & Managing Executive Officer at NORITAKE CO., LIMITED
Jun. 2010 Director, & Senior Managing Executive Officer at NORITAKE CO., LIMITED
Jun. 2011 Director & Vice President, Executive Officer at NORITAKE CO., LIMITED
Apr. 2012	Representative Director & Vice President, Executive Officer at NORITAKE CO.,LIMITED
Jun. 2013 Representative Director & President, Executive Officer at NORITAKE CO., LIMITED
Jun. 2018 Representative Director & Chairman at NORITAKE CO., LIMITED (current)
Jun. 2023 Outside Director, Rinnai Corporation (current)
Current Representation in Other Companies:
Representative Director & Chairman at NORITAKE CO., LIMITED

Masaaki Matsuoka Outside Independent Audit & Supervisory Board Member

Ippei Watanabe

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

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

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

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

Yoko Dochi

Outside Independent Audit & Supervisory Board Member

Executive Officers (excluding concurrent directors)
Managing Executive Officer

Chuji Nakashima

General Manager of Quality Assurance Headquarters

Managing Executive Officer

Hirohisa Ooi

General Manager of Production Headquarters

Managing Executive Officer

Takuya Ogawa

General Manager of Corporate Planning Headquarters

Managing Executive Officer

Yoshihiko Takasu

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

Senior Executive Officer

Kenichi Ebata

General Manager of President’s Office, andGeneral Manager of General Affairs Division

Senior Executive Officer

Hayao Nishizawa

General Manager of Overseas Business Headquarters

Executive Officer

Katsunori Tanioka

General Manager of Chubu Branch, Marketing & Sales Headquarters

Executive Officer

Hiroyuki Hoyano

General Manager of Kanto Branch, Marketing & Sales Headquarters

Executive Officer

Atsuo Kashima

General Manager of Accounting Division

Executive Officer

Daisuke Naito

Deputy General Manager of Overseas Business Headquarters

Executive Officer

Kenji Endo

President of RB Controls Co., Ltd. and President of Noto Tech Co., Ltd.

Outside Director, Independent Officer

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

Tadashi Ogura

Standing Audit & Supervisory Board Member

Career Summary and Current Position in the Corporation:
Apr. 1984 Joined Rinnai Corporation
Apr. 2016	Executive Officer, General Manager of Technology Development Division,
Research & Development Headquarters
Apr. 2021	Executive Officer, Deputy General Manager of Quality Assurance Headquarters,
concurrently General Manager of Quality Assurance Division
Apr. 2022 Senior Executive Officer, General Manager of Quality Assurance Headquarters
Jun. 2023 Standing Audit & Supervisory Board Member (current)

Director, Senior Managing Executive Officer

Career Summary and Current Position and Responsibility in the Corporation:
Apr. 1985 Joined Rinnai Corporation
Apr. 2008 Vice President of Rinnai Korea Corporation
Jun. 2012 President of Rinnai Precision Co., Ltd.
Apr. 2016	Executive Officer of the Corporation, General Manager of Production Control
Division, Production Headquarters
Apr. 2017 Executive Officer, Deputy General Manager of Production Headquarters
Apr. 2018 Executive Officer, General Manager of Production Engineering Headquarters
Managing Executive Officer, General Manager of Production Engineering Headquarters
Apr. 2021	
Apr. 2023	Senior Managing Executive Officer, General Manager of Production Engineering
Headquarters
Jun. 2023	Director, Senior Managing Executive Officer, General Manager of Production
Engineering Headquarters (current)

Nobuyuki Matsui Outside Director, Independent Officer

Current Representation in Other Companies: Outside director at Aichi Tokei Denki Co., Ltd.,
President at International Professional University of Technology in Nagoya

Masanori Shimizu

Current Representation in Other Companies: Outside Director at Nagoya Railroad Co., Ltd.

Tsunenori Narita Representative Director and Executive Vice President, President’s assistant

Career Summary and Current Position and Responsibility in the Corporation:
Apr. 1989 Joined Rinnai Corporation
Apr. 2017	Executive Officer, General Manager of Kanto Branch Office, Marketing & Sales
Headquarters
Apr. 2019	Executive Officer, Deputy General of Marketing & Sales Headquarters,
concurrently, General Manager of Kanto Branch OfficeJun. 2020 Managing Executive Officer, General Manager of Marketing & Sales Headquarters
Apr. 2023 Senior Managing Executive Officer, General Manager of Marketing
Jun. 2023	Director, Senior Managing Executive Officer, General Manager of Marketing(current)

Standing Audit & Supervisory Board Member

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

Outside Director, Independent Officer

Career Summary and Current Position and Responsibility in the Corporation:
Apr. 1975 Joined The Bank of Tokyo, Ltd. (currently, MUFG Bank, Ltd.)
Apr. 1993 Deputy General Manager of Finance Development Division at The Bank of Tokyo
Sept. 1996 Joined World Bank Group (WBG)
Sept. 1998 Investment Officer of International Finance Corporation under WBG
May 2001 Joined Toyota Motor Europe S.A./N.V.
Jan. 2013 General Manager of Investor Relations at Toyota Motor Europe S.A./N.V.
Jan. 2015	General Manager of Global Treasury and Investor Relations at Toyota Motor
Europe S.A./N.V.
Jun. 2018	In charge of Investors Relations and Accounting Division, and Stock Group at
Toyota Motor Corporation
Nov. 2018	Joined SoftBank Group Corp. In charge of Finance, General Manager of Investor
RelationsFeb. 2020 Joined SoftBank Group International Managing Partner, Head of Investor Relations
Jun. 2020 Outside Director of NIPPO LTD. (current)
Jun. 2023 Outside Director, Rinnai Corporation (current)
Current Representation in Other Companies:
Outside Director of NIPPO LTD. Trustee of Daiwa Anglo-Japanese Foundation

101

Rinnai Report 2023 102

Introduction

Environment

SocialGovernance

Data

Governance

Skills Matrix of Directors

Messages from Newly Appointed Outside Directors

Technology<Development/
Business Plans/
Production/
Marketing
Environment(E)>

I served as President and Chairman of NORITAKE CO., LIMITED, which was founded as
Finance/
Accounting/
Capital Policy

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

ESG/
Sustainability

IT/Digital
Transformation
(DX)

−

●

●

●

−

−

●

−

●

−

−

●

−

−

●

●

−

●

−

−

−

activities throughout the company for more than 10 years. Furthermore, as Chairman of the

−

−

−

●

−

●

−

−

●

Chubu Productivity Center until May 2023, I had been involved in activities that contribute to

Kazuto Inoue

−

●

●

−

−

−

−

−

●

Nobuyuki Matsui

−

−

●

−

−

●

●

−

●

Takashi Kamio

●

●

−

●

−

−

●

−

−

Tadashi Ogura

●

−

●

−

−

●

●

−

−

Yoko Dochi

−

●

−

−

●

−

−

●

−

Corporate
management

Globalmanagement

Kenji Hayashi

●

●

−

Hiroyasu Naito●●

Tsunenori Narita●

Hideyuki Shiraki

a maker of Western-style tableware, but now industrial products such as grinding andpolishing tools account for 95% of its sales. I first joined that company’s R&D Division
followed by stints in the Engineering Division and Human Resources Division and then by six
years as general manager at two plants. During my tenure as President, I invited Toyota
Production System (TPS) trainers from Toyota Motor Corporation and promoted monozukuri

the improvement of productivity necessary for the sustainable growth of companies.
Through these experiences, I became keenly aware that improving productivity depends on

Tadashi Ogura
Outside Director

people and how critical it is to support their growth, create workplaces where they can
express their abilities, and foster their engagement there.
Since its founding in the Chubu region, the heart of monozukuri in Japan, Rinnai hasdeveloped its heat energy appliance business by cultivating heat-related technologies
underpinned by the fundamental concept of “Quality is our destiny.” As it aims to continue
going out in the world and take on challenges, in my opinion Rinnai must create synergies* This table does not show all of the skills possessed by each Director.

through the formation of diverse human capital and partnerships with universities and otherexternal institutions to generate innovation on a sustained basis. I will do my utmost tocontribute my knowledge and experience to the advancement of the Company.

Reasons behind Selecting Eight-Point Skills Matrix

103

Corporate management

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

Global management

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

Technology<Development/Production/
Environment>

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

Business Plans/Marketing

Rinnai must have directors with demonstrated knowledge and experience in business planning and marketing to gather
information on the real needs of consumers and develop product planning and sales planning matched to these needs, and to
reinforce business activities related to direct sales.

Finance/Accounting/
Capital Policy

Rinnai must have directors with demonstrated knowledge and experience in financial, accounting and capital policy disciplines
for optimum allocation to strategic investments, return to shareholders and risk-responsive capital from the current added-value
and profit-emphasis management perspective as well as a medium-term perspective.

Human Resources Strategy (S)Rinnai must have directors with demonstrated knowledge and experience in human resources development, workplace creation,
health management and diversity-oriented hiring to realize personnel system reform that encourages employees to challengethemselves and strive for personal fulfillment, and to present new workstyles and improve brand power.

Governance (G)/Legal Matters

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

ESG/Sustainability

Directors with solid knowledge and experience in the field of ESG and sustainability are needed to solve social issues as wellas to incorporate them into business activities as earnings opportunities toward the realization of a sustainable society.

IT/Digital Transformation (DX)

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

For more than 20 years, I have been at the front lines of numerous dialogues with investors
and shareholders in Japan and overseas as the general manager and head of investor
relations for Toyota Motor Corporation and SoftBank Group Corp.
I aim to apply the skills and experience cultivated in building relationships of trust
through dialogue on business strategy, finance, technology, ESG (environmental, social, andgovernance), and other issues at various stages of growth and in various management
environments. In this way, I aim to be a Director with a high level of sensitivity so that I canalways understand investor and shareholder expectations, interests, and concerns regarding
Rinnai and reflect them in discussions at our board meetings.
Rinnai has been a monozukuri company for more than 100 years and has just started

Yoko Dochi
Outside Director

running toward its next century. Going forward, against the backdrop of the global demandfor carbon neutrality, it will become increasingly vital for its core business, which is led by gas
appliances, to respond to the diversification of energy sources and decarbonization.
As Rinnai seeks to achieve sustainable growth and enhance its corporate value toward thenext 100 years of its history, I would like to contribute to the decision-making process related
to future-oriented growth strategies and capital policies that are inextricably linked to thesestrategies, from the perspectives of different industries, a global view, and from the viewpointof its stakeholders.

Rinnai Report 2023 104

Introduction

Environment

SocialGovernance

Data

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

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

Code of Ethics summary awareness meeting(Rinnai (Thailand) )Compliance Education Activities
Rinnai conducts compliance education during employee training for new recruits and by rank, with 254 employees
attending in fiscal 2023. We also provided education for all employees with regard to compliance in their private lives,
including the use of social media services. Further, we posted information on legal revisions, explanations of laws related
to business operations, and examples of violations by other companies on the Company intranet to provide a variety of
information to Group company employees in Japan.

Confirmation and Modification of Compliance Activities
Every year, we conduct employee questionnaires to ascertain how deeply ingrained elements of our Corporate
Philosophy have become. In fiscal 2023, these showed that 99.8% of respondents were familiar with the Company Motto,
98.7% of respondents recognized Rinnai Brand Promise, and 96.8% understood our Corporate Mission.
We will continue to actively promote compliance activities to maintain these high levels.

Facilitation of Internal Reporting System
In the event it is confirmed that a domestic Group employee or a former employee in theirfirst year of retirement has violated laws, regulations, internal rules, or engaged in
misconduct, or is likely to engage in these actions, and it is difficult to report to or consult
with a supervisor or divisional head, employees can utilize the Corporate Ethics Helplineinternal reporting system. Established in November 2005, the Helpline accepts inquiries
from within and outside the Company. In this system, we stipulated that the person who
reported the incident will not receive any unfair treatment by the fact that he or she reported
the matter, and we also pay full attention to the protection of privacy of the person who
made the report.
In fiscal 2023, the helpline received 16 reports and requests for advice. Appropriate
measures have been taken, including investigation and confirmation of the facts in thesecases of alleged misconduct

Code of Ethics summary awareness meeting(Guangzhou Rinnai Gas and Electric Appliance)

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

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

윤리강령

Code

Code

Rinnai (New Zealand) written
paledges105of Ethics

ics

of Eth2019.4

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

Rinnai Report 2023 106

Introduction

Environment

SocialGovernance

Data

GovernanceDisciplinary Actions

Basic Principles of the Internal Control System

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

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

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

In fiscal 2023, there were no serious compliance violations.

Information Disclosure
Protecting Personal Information
Rinnai has established internal rules based on the Act on the Protection of Personal Information. We also established a
Privacy Policy as a guideline for handling personal information that is published on our website (https://www.rinnai.co.jp/
en/policy/privacy/). Through these efforts, we strive to properly manage, use and protect personal information.
Specifically, a Personal Information Protection Manager is appointed at the Head Office to maintain and teachinternal rules. Personal Information Protection Committee members are assigned in each workplace and domestic Group
company to provide guidance on methods and procedures to the person in charge of handling personal information.
In addition, a Personal Information Protection Committee member conducts internal audits once each year under
the direction of the Personal Information Protection Manager regarding the management status of personal information ineach workplace.
In fiscal 2023, there were no personal information leakage incidents.

In addition to the formulation of internal rules for the timely and appropriate disclosure of important information
concerning the Group, Rinnai created a disclosure policy that is published on our corporate website as a guideline for
information disclosure.
Disclosure policy (See: https://www.rinnai.co.jp/en/ir/disclosure/)

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

107

Rinnai Report 2023 108

Introduction

Environment

SocialGovernance

Data

GovernanceRisk Management

Information Security

Risk Management Policy

Information Security Policy

As society becomes increasingly complex, companies face a variety of risks. As a manufacturer of thermal energy
equipment that supports people’s daily lives, we believe it is our social responsibility to continue to provide products in astable manner. We are committed to risk management to live up to the trust of our customers and society and to conduct
stable business activities.

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

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

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

109

Risk ofnon-compliance ormanagement inviolation of applicablelaws

Geopoliticalrisks

Risk of fire,
explosionaccidents, andnatural disasters

Important Identified
Risks

Health risks such as
infectious diseases andmental health

Risk of suspension ordelays affecting raw
material procurement
activities

Risks related tothe environment

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

Chief Information
Security Officer
IT Security Office

Head Office Information
Security Manager

Rinnai’s Risk Management Committee is comprised mainly of Material Risks (Excerpted)• Compliance• Intellectual property
executive officers and divisional heads with the President• Product accident defects• Supply chain
Management Risk
serving as Chairman. The Risk Management Committee• Labor-related• Market environment,• Environment
etc.
identifies risks that may affect life, Rinnai’s reputation, business
Financial Risk
• Foreign exchange rates• Taxation, etc.
activities, and assets, and prepares a List of Material Risks,
Accident andwhich evaluates the importance of each item in terms of• Production shutdowns, etc.
Disaster Risk
magnitude of impact and potential frequency of occurrence.
IT Risk• Cyberattacks• Information leakage, etc.
The Committee also determines which business divisions
Health Risk
• Infectious diseases• Mental health, etc.
have a primary responsibility for each type of risk. These
Country Risk
• Geopolitical risk, etc.
divisions discuss and work on developing mechanisms toprevent risks from materializing, rapidly resolve crises,
minimize any damage that may occur as a result, and prevent recurrences.
The Committee works with all divisions and Group companies to mitigate risks and enhance risk response capabilities.

Head Office Information
Security Manager

Promotion Structure

Information Security System Diagram

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

IT risks such as
cyberattacks andinformation leaks

Rinnai Report 2023

110

Introduction

Environment

SocialGovernance

Data

Governance

Stakeholder Engagement
Information Security Education and Training Activities
The Rinnai Group conducts information security education every year toensure that all employees are fully aware of the importance of
information security measures and properly handle the information
assets used in business activities.
In fiscal 2023, we conducted education on the themes of“cyberattack mails.” Education is provided to all employees who use
personal computers via e-learning. We regularly release videos of ourtraining content to facilitate employee understanding and learning.
In addition, we regularly conduct cyberattack email training in aneffort to hone employee experience so that we can respond promptly
when problems related to information security occur.

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

Customers(Users) (Distributors)

Employees

Communication with
Our Stakeholders
Shareholders,
Investors
Fiscal 2024 new employee group training

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

Business
Partners

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

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

Feedback from the Nikkei Integrated Report Award 2022
Rinnai entered the Nikkei Integrated Report Award 2022 sponsored by Nikkei, Inc., receiving a wealth of evaluative feedback from judges that we will consider reflecting insubsequent issues of the Rinnai Report.

Main Points of Evaluation

Main Issues• The Message from the President effectively discusses management strategies
and human capital in a well-balanced manner.

• There are no overviews or explanations of business environments for eachsegment (region).

• The materiality discussion is detailed and complete.

• There is not enough discussion of financial policies, including financial strategies
and investment details, by the director in charge of finance.

• Rinnai provides extensive environmental disclosure, carefully explaining theSDGs concept and the financial impacts of the TCFD recommendations.

• The report does not cover the effectiveness of the Board of Directors,
descriptions of various committees, or topics discussed during Board meetings.

Results of Questionnaire Regarding Rinnai Report 2022 (Integrated report) n=227
We sent a questionnaire to readers of our Rinnai Report 2022 and asked them to vote on topics they found interesting.
We intend to incorporate the results of this questionnaire in our next edition.
Corporate Message
Corporate Mission and Vision Editorial Policy/Contents
100 Years of History
Rinnai Group Profile
Value Creation Process
Message from the President
Medium-term Business Plans
Message from the General Manager of the Overseas Business Headquarters
Message from the President of an Overseas Subsidiary
Identifying Material Issues
Rinnai Group’s Path to Becoming Carbon-Neutral
Responses to the Task Force on Climate-related Financial Disclosures
Global Deployment of Rinnai Group Water Heaters
Environmental Impact within Rinnai’s Value Chain
Links between Corporate Strategy and the Realization of a Sustainable Society (SDGs)

Response rate
0

111

10

20

30

40

50 (%)

Rinnai Report 2023

112

Introduction

Environment

FY2019FY2020SocialGovernance

Data

FY2022

FY2023

Data Collection
Eleven-Year Financial Summary
FY2013

FY2014FY2015*1

FY2017*1

FY2016*1

FY2018*1

FY2021

Net sales(Millions of yen)

251,832

286,981

295,022

319,935

330,256

347,071

348,022

340,460

344,364

366,185

425,229

Operating income(Millions of yen)

26,35134,01830,787

34,59334,05632,84930,87934,422

40,69035,864

41,418

(%)

10.5

11.9

10.4

10.8

10.3

9.5

8.9

10.1

11.8

9.8

9.7

Ordinary income(Millions of yen)

29,06436,91032,93835,80735,28034,28633,31835,67942,40039,06044,565

Net income attributable to owners of
the parent company(Millions of yen)

19,371

23,254

20,64722,71022,322

21,194

20,48021,561

27,581

23,74826,096

Total net assets(Millions of yen)

178,007

232,635

261,414271,709290,638

307,965

320,696

340,959

371,318

378,856

407,199

Total assets(Millions of yen)

262,590334,382355,140

368,084

402,107422,422430,885

450,486

497,291

512,867

547,114

Net assets per share(Yen)

3,516.11

4,245.48

4,742.42

4,924.24

5,245.62

5,589.17

5,819.80

6,140.52

6,660.40

6,889.76

7,462.80

Net income per share(Yen)

394.86454.74397.03436.71429.27410.41398.45419.49536.62

470.39530.76Equity ratio

(%)

65.7

66.0

69.4

69.6

67.8

68.0

69.4

70.1

68.8

66.9

66.6

Return on equity

(%)

12.0

11.8

8.8

9.0

8.4

7.6

7.0

7.0

8.4

6.9

7.4

Cash flows from operating activities(Millions of yen)

22,87236,45325,671

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

28,696

19,387

Cash flows from investing activities(Millions of yen)

(12,607)(32,908)(23,649)(17,770)(17,732)(12,190)(7,288)(7,124)(15,820)(25,486)(30,087)

Cash flows from financing activities(Millions of yen)

(5,002)

13,183(8,659)(6,554)(5,217)(11,725)(6,150)(6,436)(7,269)(27,109)(21,313)

Cash and cash equivalents at end ofyear(Millions of yen)

55,03074,27969,34079,60095,297

101,697

116,133

140,138

166,524

147,972

120,213

Capital expenditures(Millions of yen)

8,222

12,43913,774

16,93820,664

16,105

13,481

10,58013,301

22,682

26,521

Research and development expenses(Millions of yen)

8,060

8,380

8,895

9,113

9,340

9,918

9,503

9,308

11,802

12,762

13,458Operating income margin

Dividends

(Yen)

60

68

76

82

86

90

94

98

125

140

160*2

Payout ratio

(%)

15.2

15.0

19.1

18.8

20.0

21.9

23.6

23.4

23.3

29.8

30.1

Number of outstanding shares(Shares)

54,216,463

52,216,463

52,216,463

52,216,463

52,216,463

51,616,463

51,616,463

51,616,463

51,616,463

50,021,057

50,021,057*2

Closing price at the end of the period

(Yen)

6,770

9,070

8,910

9,940

9,230

10,100

7,830

7,650

12,3909,170

9,705*2(Millions of yen)

367,045473,603465,249

519,032

481,958

521,326

404,157

394,866

639,528

458,693

485,454

Market capitalization
Three stock splits*2
Dividends

(Yen)

20.0

22.6

25.3

27.3

28.6

30.0

31.3

32.6

41.6

46.6

53.3

Number of outstanding shares(Shares)

162,649,389

156,649,389

156,649,389

156,649,389

156,649,389

154,849,389

154,849,389

154,849,389

154,849,389

150,063,171

150,063,171

Closing price at the end of the period

(Yen)

2,257

3,023

2,970

3,313

3,077

3,367

2,610

2,550

4,130

3,057

3,235

Net assets per share(Yen)

1,172.04

1,415.16

1,580.81

1,641.41

1,748.54

1,863.06

1,939.93

2,046.84

2,220.13

2,296.59

2,487.60

Net income per share(Yen)

131.62151.58132.34145.57143.09136.80132.82139.83178.87156.80176.92*1 W
 e have applied the Partial Revisions to Accounting Standards for Tax Effect Accounting (Corporate Accounting Standards No. 28, February 16, 2018) since fiscal 2019.
As such, figures for fiscal 2015–fiscal 2018 have been adjusted to retroactively apply said accounting standards.
*2 On April 1, 2023, we conducted a three-for-one stock split of our common stock.

113

Rinnai Report 2023

114

Introduction

Environment

SocialGovernance

Data

Data Collection
Financial Data
Consolidated

Rinnai Corporation

Results of profit
and loss

Domestic
consolidated andaffiliated companies
Overseas
consolidated
companies

Total

Consolidated

Rinnai Corporation

Sales by product

Domestic
consolidated andaffiliated companies

Overseas
consolidated
companies

Total

Rinnai America

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

Rinnai Indonesia *(Millions of yen)

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

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

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

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

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

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

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

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

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

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

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

425,229
41,41844,56526,096242,442
19,871
24,796
18,530113,350
3,405
3,860
2,720
241,425
20,313
22,34818,082597,218
43,59051,00439,333
258,658
91,78021,941
10,66942,179143,405
56,9459,625
2,470
29,99542,046
13,735878
1,515
55,174
160,61237,484
15,921
8,886
18,520346,064
108,166
26,425
12,872
103,690
55,750306
210
160
27,771
1,167
1,208
854
64,2499,591
11,377
9,980
30,840672
818
503
16,997
2,400
2,632
2,104

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

115

Rinnai Report 2023

116

Introduction

Environment

SocialExecutive Position
Supervisory position
Of which are generalmanagers or higher
Director
Of which are executive
directors

FemaleGovernance

Data

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

Male
FemaleMale
FemaleMale
FemaleTotal

Fiscal 2021

Fiscal 2022

Fiscal 2023

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

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

2,542
1,045
1,268
689
3,736
1,870
11,150Managerial Position Appointment Status (People)*E nd-FY2023 Compiled from the Rinnai Corporation

Paid leave* Rinnai parent, Based on the status of leave taken by permanent employeesJapan

Asia, excluding Japan

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

Fiscal 2021

Fiscal 2022

Fiscal 2023

Composition

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

3,806
1,760
5,566
2,501
1,242
3,743
408
173
581
644
243
887
10,777

3,810
1,734
5,544
2,520
1,280
3,800
540
350
890
676
240
916
11,150——49.72%——
34.08%
—
—
7.98%
—
—
8.22%
100%

Fiscal 2021

Fiscal 2022

Fiscal 2023

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

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

445
232
677
715
433
1,148
573
248
821
759
123
882
50
9
59
4

Employment of persons with disabilities
Fiscal 2023
Female ratio

Number of OJT accidents* I ncludes domestic consolidated subsidiaries

31.3%

33.7%

39.3%

26.2%

Proportion of employees who took maternity leave (%)

32.3%

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

Rinnai Corporation
Employee Ages
Under 30

30–39

40–49

50–59

60 or older
Number of non-Japanese employees

Number of employees who used shortened work hours

Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Subtotal

Number of employees who used family care leave

Number of employees who used nursing leave

Number of employees who took nursing leave of absence
Number of employees who used our reemployment (Come Back)systemNumber of employees who used the work from home program

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

Average age (Years old)

117

Working Hours

Fiscal 2021

Fiscal 2022

Fiscal 2023

Male
FemaleSubtotal
Male
FemaleSubtotal

66
35
101
0
1
1

71
13
84
7
1
8

89
14
103
5
6
11

Subtotal

1910Subtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

194
17.9
14.2
16.8
40.1
35.3
38.7

178
18.7
15.3
17.7
41.0
36.3
39.6

181
19.1
16.2
18.3
41.4
37.3
40.2

Ratio of Women (%)
0.56

43

0

0

23

0

0

0

14

0

0

Fiscal 2021
1.8
20
12.2
63
79
2.22
28
0.56
20
100
72.3
21.8
100
95.4
62
4
95
99
3.3
103.3
100
98
99
0
161
161
1
27
28
2
3
5
0
5
5
0
0
0
835
247
1,082

Fiscal 2022
1.2
20
14.0
70
82
2.33
26
0.00
31
100
88.6
19.9
100
94.4
63
7
123
130
6.5
85.7
100
97
99
4
199
203
2
38
40
3
2
5
0
1
1
0
0
0
512
210
722

Fiscal 2023
2.8
20
11.6
61
79
2.19
25
0.74
21
100
91.7
19.4
100
95.8
64
18
91
109
21.7
106.4
100
98
99
2
215
217
4
59
63
4
9
13
1
0
1
0
1
1
806
233
1,039

Fiscal 2021
1,952
176.7
14.7
6,440,168
319,550
269,450
296,680———

Fiscal 2022
2,054
211.3
17.6
6,532,997
303,150
265,450
284,965———

Fiscal 2023
2,065
246.7
19.9
6,671,135
311,150
264,050
287,612
60.4%
60.4%
65.5%

Fiscal 2021
2
0
13
0.7

Fiscal 2022
10
0
27
0.7

Fiscal 2023
16
0
24
1.2

*1 Employees who have two or more of the “Recommended Value for Medical Examination” items and have at least one untreated item.
*2 Measures to prevent aggravation of health insurance

Number of Employees (Non-consolidated)
Newly recruitedemployees

MaleFemaleSubtotal
Male
FemaleMale
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

Number of employees who took childcare leave of absence

Non-Japanese00Maximum number of days added with paid leave
Average number of days taken with paid leave
Utilization ratio (%)
Number of persons with disabilities
Employment rate (%)
Number of accidents
Number of disasters(%)(LTIFR)

Number of employees on mental health leave
Periodic health checkup participation ratio
Secondary health checkup participation ratio
Smoking ratio
Participation ratio in measures*1 for high-risk individuals*2 (%)
Stress check test taker ratio (%)
Number of employees who used childcare leave

Male
709

0

Voluntary termination rate (%)

Number of Full-time Employees by Region (Consolidated, Year-end)
MaleFemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal
Male
FemaleSubtotal

4

Newly recruitedemployee retention

Male
FemaleSubtotal

Newly recruitedemployees in April 2020

Employees retainedin April 2022

66
35
101

58
29
87

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

Gender Wage Gap

Highest wage at 30
Lowest wage at 30
Average wage at 30
All workers
Full-time workers
Part-time and fixed-term workers

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

Rinnai Report 2023

118

Introduction

Environment

SocialGovernance

Data

Data Collection
Environmental Data

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

Basic Environmental Activities and Targets for Fiscal 2022–2026
Field
Environment
marketing (Sales)
Environmental
services(Construction andrepair)Environmental
products (Productdevelopment)

Basic Environmental Activities

Expanding Sales of Environmentally Friendly Products(Japan & Overseas)
CO₂ reduction contribution by fiscal 2026: 7 million tons

Continuously develop high-efficiency equipment for
Zero-Energy Homes (ZEH) and products that use lesspower during both standby and use
We will continue to develop and research combustion
equipment that is compatible with hydrogen
infrastructure and systems for net zero CO₂ emissions.
Promotion of resource conservation and resource
recycling
Continuously evaluate each product’s environmental
impact from its design stage through its lifecycle anddevelop smaller and lighter products

Environmental
procurement

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

Fiscal 2023 Results

Field• 5.82 million tons of CO₂ reduction contribution*1 whenusing products

Environmental minds(Regional
communities andemployees)• The ECO ONE X5 hybrid water heater with heating
system received the Agency for Natural Resources
and Energy Commissioner’s Award at the Fiscal 2023
Agency for Natural Resources and Energy Awards• Developed highly efficient gas water heaters andkitchen equipment• Developed technology for 100% hydrogen
combustion in residential water heaters• Launched joint developments related to hydrogencooking• Implemented designs to reduce weight of water
heaters and gas stoves• Conducting the management of Rinnai Green
Procurement Standards Guide (Material procurement
and use, including new parts)• Increasing cooperation with business partners andimproving the management level of chemical
substance• Received an A- rating on the CDP Supplier
Engagement Rating (SER) evaluation

Environmental
factories
Environmental offices

Basic Environmental Activities

Fiscal 2023 Results

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

• Rated AAA in the Nikkei’s GX500 decarbonization
management ranking• Participating in various external evaluations

Contributing to Local Communities
Rinnai continuously engages in activities that ensure
the preservation of biodiversity, as well as efforts that
contribute to local governments and schools.
Extermination of specified invasive species incorresponding areas 1 ton/year• Recognized as a Master Certified Aichi Biodiversity
Company under the Aichi Biodiversity Company
Certification Program• C oreopsis lanceolata eradication 628 kg/year *3

Conducting Environmental Training and Awareness
Activities
Continuing with initiatives that foster environmental
awareness and the enhanced ability to take action in
employees through training• Multiple environmental awareness events andinformation dissemination implemented for
employees• Held event to learn about local production for local
consumption through heirloom vegetables and otherlocal food products

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

Decreased by 2.8% compared to fiscal 2020

Shift to energy use with lower CO₂ emissions

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

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

Reduced by 3.4% compared to fiscal 2020

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

Realized recycling rate of 99.8%

Promoting paperless offices
Annual improvements Over 10 examples

Paperless improvements 15 examples

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

Increased by 0.9% compared to fiscal 2020

Target scope: Rinnai Corporation
Reporting Period: April 1, 2022 to March 31, 2023
Notes: 1. CO₂ reduction contribution = Reduction in CO₂ emissions compared to products sold in 2005 resulting from improved performance of Rinnai water heaters (estimated)
Concerns emissions produced through markets in Japan and overseas.
2. Basic unit: Burden per unit standard determined by Rinnai.
3. To prevent the spread of COVID-19, the area and number of participants were limited, and processes were conducted with strict attention to safety.

119

Rinnai Report 2023 120

Introduction

Environment

SocialGovernance

Data

Data Collection
Impact on the Environment of the Rinnai Group

Global Warming Prevention
Total energy used

Non-renewable energy usage

(TJ)
1,200

1,107

1,101

Renewable energy usage

1,134

Total amount ratio of the entire value chain(CO2 emissions) * 1

Eco-friendly products(contribute to reduction of CO2 emissions)

Scope 3 Category 1
Purchased goods / services

1,156(1,000 tCO2e)
8,000

1,070,000 t

7,000(6.74%)

1,000

Rinnai is working to achieve full comprehension of all environmental impacts related to its business activities. As amanufacturer of thermal energy equipment, we have identified energy consumption and CO₂ emissions (Scope 1, 2 and
3) to be important issues. Accordingly, we are implementing third-party inspections and working to ensure the accuracy
and reliability of information disclosure, which is used to reduce environmental impacts.

5,150
4,510

Total of Scope 1, 2, 3

15,910,000 t

600

4,000

400
2,000
200
0

0

Scope 3 Category 11
Use of sold products

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Fiscal 2021 Fiscal 2022 Fiscal 2023

14,600,000 t (91.75%)

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

5,820

6,000
800

Non-renewable Energy Consumption
• Shanghai Rinnai Thermo Energy Engineering Co., Ltd.
• Central Heating New Zealand Ltd.
• Rinnai America Corporation• Rinnai Australia Pty., Ltd.
• Shanghai Rinnai Co., Ltd.
• Rinnai Korea Corporation• P.T. Rinnai Indonesia• Rinnai New Zealand Ltd.
• Rinnai Taiwan Corporation• Rinnai (Thailand) Co., Ltd.
• Rinnai Brasil Heating Technology Ltd.
• Rinnai Viet Nam Co., Ltd.
• Rinnai Manufacturing Malaysia Sdn. Bhd.
• Industrias Mass, S.A. de C.V.
• RB Korea Ltd.
• Gas Appliance Services Corporation

Scope

Fiscal2026(Target)(Unit: GJ)

Unit

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

MWh445,038.0

423,511.4

441,221.0

459,595.5

469,845.8✓□

For the use of equipmentin each facility

kNm3

504,914.0

467,713.4

470,861.2

481,526.9

475,582.7✓□

For vehicle use

kNm3

64.3

52.7

22.3

4.6

0.0

✓
□

km3

1,388.2

1,535.8

1,831.3

1,651.2

1,211.0✓□

For the use of equipmentin each facilityt144,427.5

128,929.6

118,803.1

119,548.8

121,035.1✓□

For vehicle use

t

55.7

70.3

97.6

66.1

46.4

✓
□

Butane

t

814.3

682.3

750.5

483.3

285.6

✓
□

Acetylene

t

386.8

386.6

375.4

488.2

364.4

✓
□

Ethylene

t

1.60

3.60

1.90

2.10

2.10

✓
□

Heavy oil

kl

7.00

7.00

7.00

7.00

7.00

✓
□

Heating oil

kl

782.1

680.4

574.2

737.4

563.0

✓
□

For the use of equipmentin each facilitykl

5,130.5

4,041.0

3,321.6

3,414.0

3,416.6✓□

For vehicle use

kl

16,262.1

15,818.9

13,545.3

12,069.8

12,616.6✓□

For the use of equipmentin each facility

kl

192.2

175.9

162.9

185.9

208.0

✓
□

For vehicle use

kl

72,614.1

62,947.8

49,137.9

53,710.8

64,460.5✓□

GJ

1,192,078

1,106,557

1,100,713

1,133,492

1,149,645✓□

Electricity

Town gas

Methane

LPG

Reporting Period
Light oil

Domestic: From April 1, 2022 to March 31, 2023
Overseas: From January 1, 2022 to December 31, 2022
Gasoline
LRQA Independent Assurance Statement

Relating to Rinnai Corporation’s Environmental Data for the fiscal year
2021

Assurance

This Assurance Statement has been prepared for Rinnai Corporation in accordance with our contract.

Third-Party Assurance

Terms of Engagement

LRQA Limited (“LRQA”) was commissioned by Rinnai Corporation (“the Company”) to provide independent
assurance on its environmental data (“the report”) for the fiscal year 2021 1 against the assurance criteria below to alimited level of assurance and at the materiality of the professional judgement of the verifier using ISAE 3000 (Revised)
and ISO 14064-3:2019 for greenhouse gas (“GHG”) emissions.
Our assurance engagement covered the Company and its consolidated subsidiaries’ operations and activities inJapan and overseas and specifically the following requirements:• Verifying conformance with the Company’s reporting methodologies for the selected indicators:• Evaluating the accuracy and reliability of data for only the selected indicators listed below:••••✓ This icon indicates that a measure has third-party assurance from Lloyd’s Register Quality

Assurance (LRQA).

Total

Scope 1 GHG emissions (tonnes CO2e) 2 3
Scope 2 GHG emissions [Market-based] (tonnes CO2e)
Scope 3 GHG emissions (Category 11) (tonnes CO2e) 4
Energy consumption (GJ) 5

Our assurance engagement excluded the data and information of the Company’s suppliers, contractors and any
third-parties mentioned in the report.
LRQA’s responsibility is only to the Company. LRQA disclaims any liability or responsibility to others as explained in
the end footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all the dataand information within the report and for maintaining effective internal controls over the systems from which thereport is derived. Ultimately, the report has been approved by, and remains the responsibility of the Company.

Renewable Energy Consumption

(Unit: GJ)

LRQA’s Opinion

Based on LRQA’s approach nothing has come to our attention that would cause us to believe that the Company has
not, in all material respects:• Met the requirements of the Company’s reporting methodologies• Disclosed accurate and reliable environmental data as summarized in Table 1 and Table 2 below
The opinion expressed is formed on the basis of a limited level of assurance6 and at the materiality of the professional
judgement of the verifier.

1

2
3
4
5
6

The reporting period is based on the fiscal year of domestic and overseas subsidiary companies: (1) domestic subsidiary companies:
FY2021(01/04/2021 – 31/03/2022), and (2) overseas subsidiary companies: CY2021 (01/01/2021– 31/12/2021)
GHG quantification is subject to inherent uncertainty.
The scope 1 GHG emissions cover only energy-oriented CO2.
Scope 3 emissions data cover activities associated with the usage of water heaters domestically sold by Rinnai Corporation.
The scope includes the breakdown of energy consumption.
The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited assurance
engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance obtained in alimited assurance engagement is lower than the assurance that would have been obtained had a reasonable assurance engagement been
performed.

Scope

Unit

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

Total of renewable energy

MWh

257.3

292.8

349.8

530.2

6,005.8

Assurance✓□

Page 1 of 3

LRQA Independent AssuranceStatement(https://www.rinnai.co.jp/en/
corp/csr/pdf/ias.pdf)

121

Rinnai Report 2023 122

Introduction

Environment

SocialGovernance

Data

Data Collection
CO₂ Emissions
Scope

Scope 1*1

Scope 2*2

Scope 3

(Unit: tCO₂e)Year of Reporting Results

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

CO₂40,25436,72335,16135,941

CH₄

—

—

—

—

73

N₂O

—

—

—

—

18

HFC

—

—

—

—

251

Market-based

73,181

66,23968,606

67,987

69,2430.44%✓□

Location-based(76,522)(69,641)(70,604)(68,563)(68,163)

—

✓
□

*3

Fiscal 2023

Percentage✓□

36,4370.23%

866,847

821,979

848,727

883,457

1,072,825

6.74%

✓
□

2

Capital goods

25,92821,07823,661

39,58985,666

0.54%

✓
□

3

Fuel- and energy-related
activities

3,263

4,379

4,386

4,475

17,973

0.11%

✓
□

4

Upstream transportationand distribution

8,838

8,377

9,384

8,953

9,703

0.06%

✓
□

5

Waste generated inoperations

565

5,668

1,036

1,028

5,247

0.03%

✓
□

6

Business travel

530

535

531

515

1,655

0.01%

✓
□

7

Employee commuting

1,592

1,598

1,586

1,544

5,527

0.03%

✓
□

8

Upstream leased assets

Included in
Scope 1, 2

Included in
Scope 1, 2

Included in
Scope 1, 2

Included in
Scope 1, 2

Included in
Scope 1, 2

—

✓
□

9

Downstream transportation anddistribution

—

—

—

—

—

—

—

10

Processing of soldproducts

Not
applicableNot
applicableNot
applicableNot
applicableNot
applicable

—

—

11

Use of sold products

10,825,493

10,511,507

10,497,104

8,846,480

14,597,287

91.75%✓□

12End-of-life treatment ofsold products

0.04%

✓
□

13

5,414

5,942

5,937

6,109

7,125

Downstream leased
assetsNotapplicableNot
applicableNot
applicableNot
applicableNot
applicable

—

—

14

FranchisesNotapplicableNot
applicableNot
applicableNot
applicableNot
applicable

—

—

15

Investments

NotapplicableNot
applicableNot
applicableNot
applicableNot
applicable——

11,851,905

11,484,025

11,496,120

9,896,078

15,909,028

100%

✓
□

*1 Scope 1: The volume of greenhouse gases that are leaked directly into the Earth’s atmosphere from sources related to Rinnai’s business activities (no PFC, SF6, or NF3 emissions)*2 Scope 2: Emissions from the use of electricity purchased by the Rinnai Group*3 Scope 3: The volume of emissions that occur during business activities conducted throughout Rinnai’s supply chain (excluding those in Scope 1 and 2)
Categories 2, 3, 5, 6, 7, 8, and 11 of Scope 3 were calculated by expanding the scope from fiscal 2023.

Shipping Volume and CO₂ Emissions

123

Unit

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Emission factors: MOE/METI, GHG Emission Calculation and Reporting Manual (Ver. 4.9)

Rinnai Group

Scope 2Market-base emission factor
Domestic emission factors: “Emission Factors by Electricity Utility (for FY2023 Reporting)” in MOE/
METI, GHG Emission Calculation and Reporting Manual (Ver. 4.9)
Overseas emission factors: Latest figures published for electricity utilities, etc., in the countries
concerned
Location-base emission factor
Domestic emission factors: “Alternative Emission Factors by Electricity Utility (for FY2023 Reporting)”
Overseas emission factors: IGES List of Grid Emission Factors Ver11.1_20230318, etc.

Rinnai Group

✓
□
✓
□

Fiscal 2023

Shipping volume

Millions tons/
km

5,815

5,837

6,524

6,152

6,682

CO₂ emissions

tCO₂e

8,838

8,377

9,384

8,953

9,703

Scope ofcalculations

Scope 1✓□

Purchased goods andservices

Scope

CO₂ conversion factors

Assurance

1

Total of Scope 1, 2, and 3

Conditions for Calculations

Scope 3

SharedCalculated in accordance with MOE/METI, Basic Guidelines on Calculation of Greenhouse Gas
Emissions Throughout the Supply Chain (Ver. 2.5)
Emission factors: MOE, Emission Factor Database (Ver. 3.3), Sustainable Management Promotion
Organization’s LCI database IDEAv2 (for calculating GHG emissions in the supply chain)

Category 1

Calculated by multiplying the purchase price of each type of parts, goods, and services by theemissions factor

Rinnai
Corporation

Category 2

Calculated by multiplying the purchase price of tangible fixed assets by Rinnai’s business code
emissions factor

Rinnai Group

Category 3

Calculated by multiplying the amount of energy used according to energy type by the energy
generation stage emissions factor

Rinnai Group

Category 4

Calculated using the revised ton-kilometer calculation method for the scope of calculation for
Rinnai
specified shipper notifications under the Energy Conservation Act and the Act on Promotion of Global
Corporation
Warming Countermeasures

Category 5

Calculated by multiplying emissions by waste type and treatment method, by the emissions factor,
including during transportation

Rinnai Group

Category 6

Calculated by multiplying the number of employees by the emissions factor per employee

Rinnai Group

Category 7

Calculated by multiplying the number of employees in each work category and city by the number ofworking days, then multiplying by the emissions factor per employee

Rinnai Group

Category 8

All energy associated with the operation of upstream leased assets is included in Scope 1 and 2

Rinnai Group

Category 11

Products covered: Water heaters, kitchen appliances and home heaters sold by Rinnai
Period: 10 years
Conditions: Conditions defined by Rinnai
Emission factors:• Electricity: 0.570 kgCO₂e/kWh• Federation of Electric Power Companies of Japan, Environmental Action Plans in the Electricity
Industry, September 2015 (reference materials: collected data on performance in fiscal 2014)• City gas: 2.21 kgCO₂e/m3• Tokyo Gas Co., Ltd., City Gas CO₂ Emission Factors (13A, 45 MJ/m3, ordinary households and othercustomers receiving low-pressure supply)

Rinnai
Corporation

Applicable to the Home Appliance Recycling Law
Calculated by multiplying the number of units sold by product type, by the emissions factor by type
Other than above
Calculated by multiplying the mass of each component per product by the number of units sold, thenCategory 12
multiplying by the emissions factor by type and disposal method (including during transportation)
Product containers and packaging
Calculated by multiplying the amount of container and packaging materials used according to type, by
the emissions factor for each type and disposal method (including during transportation)

Environmentally
Conscious Products(CO₂ reduction
contribution)—

Rinnai
Corporation andits domestic
consolidated
subsidiaries

In accordance with the Guidelines for Quantifying GHG Emission Reductions (March 2018, Ministry of
Economy, Trade and Industry)
During product usage
Calculation target
Calculation method Flow-based (Years of usage = 10 years, Diffusion = Units sold in evaluation year) Rinnai Group
Baseline (comparison) FY2006 popular products
Evaluation Products with improved heat conversion efficiency as substitutes for comparative
products, etc.

Rinnai Report 2023 124

Introduction

Environment

SocialGovernance

Data

Data Collection
Resource Recycling, Pollution Prevention, and Protecting Biodiversity

Environmental Accounting
Breakdown of Costs forEnvironmental Protection

Water used

Solid waste(1,000 m3)
1,000
31

30

800
27

808

758

786

50

36

Environmental
Mainly efforts to save energy
protection

15

31

11

28

28

Resource
recycling

Recycling as well as treatment anddisposal of industrial waste

102

117

103

95

106

Upstream/downstream

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

11

12

13

11

12

Management activities

Mainly monitoring and surveillance ofenvironmental impact

150

109

119

100

97

Research and development

Research and development onenvironmentally conscious products

1,149

733

1,243

1,239

1,457

Community efforts

Environmental communication withlocal regions and beautification/
greening at places of business andsurrounding areas

2

2

3

2

3

Environmental Impact Reduction
Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2023

600
20

400

360

400
230
10

200

200

101

0

0

0

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Unit

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

Waste generated (Including valuables)

Thousand
tons

31

31

30

27

27

Recycled waste

Thousand
tons

31

29

28

25

26

Waste into landfill

Thousand
tons

1.2

1.8

1.2

1.7

1.4

Water usage

Thousand m3

859

808

758

786

962

Thousand m3

846

778

742

754

948

t

237

217

224

238

246

kg

180

360

230

101

628

Persons

63

89

42

31

103

Discharge of water
Hazardous chemicals use*1

Weight of exterminated specified invasive species*2

Number of people who participated in theextermination of specified invasive species*2* 	Class I designated chemical substance stipulated by the Pollutant Release and Transfer Register (PRTR) Law
Scope: Rinnai Corporation and its domestic consolidated subsidiaries*2 In fiscal 2021 and fiscal 2023, the area and number of participants were limited due to the COVID-19 pandemic and were handled while paying due attention to safety.
1

Fiscal 2023

37

628

600

27

Costs (Millions of yen)
Fiscal 2020 Fiscal 2021 Fiscal 2022
27

In the scope ofoperations

(kg)
800

962

Mainly efforts to prevent air and waterpollution

Fiscal 201944

(Weight of exterminated specified invasive species)(1,000 t)
40

30

Pollution
prevention

Biodiversity protection(Includes valuable substances)

Key Activities

Key Activities
Environmental Protection
EffectUnit

Fiscal 2019

CO₂ emissions
reductions

Thousand tCO₂e

2.0

6.0

3.5

10.8

5.2

Waste curtailment

Thousand tons

0.4

0.3

0.5

0.1

0.1

Water saving

Thousand m3

6.7

17.0

31.8

21.9

5.2

•E
 nvironmental protection effects are not increases or decreases in overall costs but rather an effective amount regarded for its economic benefit through the associated activities ofeach site.

Economic EffectAccompanying
Environmental
Protection Measures

Key Activities
Reduced expenses through energy
conservation, waste curtailment, andwater saving

Fiscal 2019
270

Economic Effect (Millions of yen)
Fiscal 2020 Fiscal 2021 Fiscal 2022
295

538

Fiscal 2023

359

179

• The calculations above exclude depreciation and amortization expenses.
• The economic effects achieved through energy savings and waste reduction are not increases or decreases in overall costs but rather an effective amount regarded for its
economic benefit through the associated activities of each site.
• Assumed effects, such as avoiding risks and enhanced product sales, fall outside the scope of economic effects because the standards for evaluation are too vague.

125

Rinnai Report 2023 126

Introduction

Environment

SocialGovernance

Data

Data Collection
Chronology of Environmental Activities at Rinnai
1993
1994
1996
1997

1998

1999

2000

Won special prize at 2nd Eco-Design Awards for tabletop cooking stove
Market debut: Absorption-type gas air conditioner (non-CFC)
Acquired ISO 14001 certification at Oguchi Factory
Won prize at 8th Energy Conservation Vanguard 21 for tabletop oven RSBN-096

2007
2008

2009

January Presented a talk on Rinnai’s environmental activities at the 20th Dialogue and Exchange Event hosted by EPOC
Won the Energy Center Director’s Award at the Energy Conservation Awards for third-generation ECO ONE hybrid water and space heating system
March Conducted inspections regarding conversion to ISO 14001:2015 standards
June Environment Month events:
Organized action to eradicate a specified invasive species (Coreopsis lanceolata)
Organized an exchange event (visit) with a corporate environmental pioneer
3,922 Rinnai employees participated in the My Action Declaration’s five actions to protect
biodiversity backed by the Japan Committee for the United Nations Decade on Biodiversity (UNDB-J)
November Rinnai Kansai branch office received Eco-Drive Excellent activity certificate in the general division of the 2017 Eco-drive Activity Concours,
sponsored by the Foundation for Promoting Personal Mobility and Eco-Drive Ecological Transportation

2018

January Held the eighth Rinnai Group Environmental Awards during our New Year’s celebration
February Won first prize in the Aichi Environmental Awards, which is an extremely energy-efficient water heater and heating system that cleverly and optimallyuses diverse energy (development of ECO ONE)
April Published fourth edition of our Green Procurement Standards Guide
June Environment Month events:
Removed Coreopsis lanceolata coreopsis plants, an invasive species, and held an Environmentally Progressive Company Inspection Council(exchange meeting)Exterminated the specified invasive species Coreopsis lanceolata
September Held internal study groups on ESG and the SDGs (invited outside lecturers)
December Participated in the EcoPro 2018 exhibition

2019

January 9th Rinnai Group Environmental Award Ceremony held during the New Year's ceremony
February Received the “Minister of the Environment Award,” the top award at the COOL CHOICE LEADERS AWARD 2018 sponsored by the Ministry of theEnvironment (development of ECO ONE)
Received the “Excellence Award” at the 22nd Environmental Communication Awards sponsored by the Ministry of the Environment (CSR Report
2018)
May Received the “Excellence Award” from the Ministry of the Environment(Medium-term management plan G-shift 2020 “Development of human resources to promote environmental management and contribution”)
Ranked 26th overall at the 22nd Environmental Management Ranking hosted by The Nikkei, which evaluates the environmental management levelof Japanese companies
June Monthly environmental events• Held environmentally advanced company exchange meetings (inspection meetings)• Exterminated the specified invasive species Coreopsis lanceolata
September Received “Honorable Mention” at the 2nd EcoPro Awards sponsored by the Industrial Environment Management Association of Japan (for thedevelopment of “optimal hot water supply and heating systems” according to energy and environmental conditions in each country and region)
November Received an Award at the Biodiversity Action Awards 2019 (Let’s grow heirloom vegetables together) organized by the Japan Committee for theUnited Nations Decade on Biodiversity (UNDB-J)
December Participated in the EcoPro 2019 exhibition

April Won top prize for gas clothes dryer and special awards for small hot-water heater and for absorption-type gas air conditioner at 3rd Eco-DesignAwards
October Market debut: Yukko V Series, featuring no styrene packing, low stand by power consumption and low NOx emissions
June
July
September
October
FebruaryMay
June
AugustEnvironment Month event: Talk given at Rinnai by a corporate environmental pioneer
Established Environment DivisionMarket debut: Ecomax burner and Eco burner-equipped gas cooking stove
Market debut: Condensing water heater boasting 95% heat efficiency and NOx emissions under 30 ppm
Won Minister of Economy, Trade and Industry Award for condensing water heater at Ministry's 10th Energy Conservation Awards
Drafted Rinnai Environmental Action Principles
Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Published inaugural issue of Environmental Report

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

2006

127

March
June
October
DecemberJune Environment Month event: Talk given at Rinnai by a corporate environmental pioneer

2005

2017

July Market debut: Low-NOx burner built-in water heater (NOx at less than 60 ppm)
March Won top prize at 1st Eco-Design Awards, sponsored by Tokyo Gas, Osaka Gas and Toho Gas for water heater, fan heater and small hot-water heater

2001

2004

May Acquired a certificate of a low-carbon building as Japan’s first residential complex in which all units have ECO ONE and floor heating
June Environment Month events: Issued new environmental cards to all Rinnai employees Organized an exchange event (visit) with a corporate
environmental pioneer
July Participated in COOL CHOICE campaign, a new national movement to global climatic changes and reducing greenhouse effect gas
August Won Good Packaging Prize at Japan Packaging Contest 2014 for a bottom tray with parts box for important attachments
September Held the seventh Rinnai Group Environmental Awards ceremony
December Won Nagoya Municipal Industrial Research Institute Director’s Award at 21st Resource Recycling Monozukuri Symposium IMS

March Drafted Environmental Preservation Action Plan; established Environment Committee
December Won prize at 4th Energy Conservation Vanguard 21 for gas-blast type high-heat griller RGM-4, 6, 8

2002
2003

2016

June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2003 for built-in 75 cm-wide
glass-top gas cooking stove
June Environment Month event: Talk given at Rinnai by a corporate environmental pioneer
Won Logistics Prize at Japan Packaging Contest 2004 for bathroom heater/dryer
December Created the Green Procurement Standards Guide (first edition)
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Participated in Team Minus 6%, a national movement to prevent global warming
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2006
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Gas tankless water heater sold in the United States captured 2008 Super Nova Star Award (Stars of Energy Efficiency) in the United States from theAlliance to Save Energy
October Won Electric Equipment Packaging Category Award in the Good Packaging division at Japan Packaging Contest 2008 for gas fan heater
February Market debut: Eco-Jozu hot-water/heating unit RVD-E Series
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer

2010

January Market debut: Eco-Jozu water heater with bath-filling systems RUF-E Series Participated in Challenge 25 campaign, a national movement to prevent
global warming
February Won Silver Award at Aichi Environmental Award 2010 sponsored by Aichi Prefecture for global promotion of high-efficiency combustion appliancesand systems, including latent heat recovery water heaters (development of latent heat recovery type water heaters)
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the first Rinnai Group Environmental Awards ceremony

2011

April Market debut: Eco One hybrid water heater with heating systems for colder regions
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the second Rinnai Group Environmental Awards ceremony
December Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 16th Resource Recycling Manufacturing Symposium

2012

June
September
October
December

2013

June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the fourth Rinnai Group Environmental Awards ceremony
December Won the Chairman Award of Nagoya Industries Promotion Corporation at the IMS 18th Resource Recycling Manufacturing Symposium

2014

January Won top energy conservation award at METI Award in the fiscal 2013 Energy Conservation Awards for Eco One hybrid water heater with heating
systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
August Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2014 for returnable package
September Held the fifth Rinnai Group Environmental Awards ceremony
December Won 2014 Energy Saving and New Energy Grand Prize in Kitaguni (northern area in Japan) for Eco One hybrid water heater with heating systems for
the Hokkaido region
Won the Chunichi Shimbun Award at the IMS 19th Resource Recycling Manufacturing Symposium for our development of an eco-friendly water
heater with bath-filling systems

2015

April Market debut: Eco One third-generation hybrid water heater with heating systems
June Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
September Held the sixth Rinnai Group Environmental Awards ceremony

Environment Month event: Organized an exchange event (visit) with a corporate environmental pioneer
Held the third Rinnai Group Environmental Awards ceremony
Won Large and Heavy Good Packaging Prize at Japan Packaging Contest 2012 for Eco One hybrid water heater with heating systems
Won the Resource Recycling Manufacturing Research Group Chairman’s Award at the IMS 17th Resource Recycling Manufacturing Symposium

2020

January
May
June
July
October

10th Rinnai Group Environmental Award Ceremony held during the New-Year Convention
Received the “Excellence Award” in the Ministry of the Environment’s 2019 Environmental Persons Development Awards
Environment Month events: Exterminated the specified invasive species Coreopsis lanceolata
Selected as “Good Practice” at the Aichi-Nagoya Biodiversity Best PracticeReceived the Japan Packaging Contest “Packaging Category Award (Industrial Packaging Category Award)” for exported water heater packaging
improvements

2021

January Held the 11th Rinnai Group Environmental Awards during the Company’s New Year’s celebration
Received the “Silver Prize” at the Sustainability Website Awards 2021 organized by the CSR Communications Association
March Received the “Minister of the Environment Award (Large Enterprise Category)” at the 2020 Environmental Human Resources Development
Corporate Awards organized by the Ministry of the Environment
June Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata
July Conducted a lecture on Rinnai’s environmental efforts at the “Environment and Manufacturing Conference” organized by the Nagoya Industries
Promotion Corporation
October Received the Energy Saving Division Grand Prize in the 2021 Hokkaido Government Energy Saving / New Energy Promotion Grand Prize
November Announced commitment to carbon neutrality (RIM 2050)

2022

January Held the 12th Rinnai Group Environmental Awards during the Company’s New Year’s celebration
Received the Energy Conservation Center Chairman’s Award in the 2021 Energy Conservation Center Grand Prize(Hybrid heating/cooling and water heater systems for cold regions)
March Received the Excellence Award in the 2021 Energy Saving and New Energy Grand Prize in Kitaguni organized by METI Hokkaido Bureau of
Economy, Trade and Industry
April Established ESG Committee
May Succeeded in developing the world’s first 100% hydrogen combustion technology for home-use water heaters
June Received the Heat Pump & Thermal Storage Technology Center of Japan (HPTCJ) Promotion Award in the Demand-Side Management Award for2022 organized by HPTCJ
Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata
October Launched joint developments related to hydrogen cooking with Toyota Motor Corporation
November Recognized as a Master Certified Aichi Biodiversity Company under the Aichi Biodiversity Company Certification Program
December Received the Agency for Natural Resources and Energy Commissioner’s Award at the Fiscal 2023 Agency for Natural Resources and EnergyAwards (ECO ONE X5 hybrid water heater with heating system)

2023

January Held the 13th Rinnai Group Environmental Award Ceremony during the New-Year Convention
April Launched testing of Japan’s first 100% hydrogen combustion water heater at Kitakyushu Hydrogen Town
June Environment Month event: Engaged in efforts to eradicate the specified invasive species Coreopsis lanceolata

Rinnai Report 2023 128

Introduction

Environment

SocialGovernance

Data

Data Collection
Certification Acquisition Status

Data by Site (Fiscal 2022 Results)✓ CO₂ emissions

Environmental Management System International Standard [ISO 14001:2015]
Location
Rinnai

Domestic Group companies

Month/Year Certified

Scope 2
(tCO₂e)Energy use(GJ)*1Oguchi Factory

Oguchi-cho, Niwa-gun, Aichi

1,949

1,969

56,125

4,735

4,726

9

Production Engineering Headquarters

October 1997

Seto Factory

Seto-shi, Aichi

1,729

4,530

73,769

2,378

2,378

0

Oguchi Factory

October 1997

Akatsuki Factory

Seto-shi, Aichi

867

1,399

29,644

1,336

1,336

0

Seto Factory

December 2000

Technology Development Center

Oguchi-cho, Niwa-gun, Aichi

1,908

2,419

58,784

119

119

0

Environment DivisionDecember 2000

Quality Assurance Headquarters

November 2003

Head Office and Sales Offices*3

—

3,483

2,317

77,130

669

614

23

Head Office

December 2008

Yanagisawa Manufacturing Co., Ltd. Kadoma-shi, Osaka

760

708

20,169

417

417

0

Chubu Branch Office

December 2008

Rinnai Technica Co., Ltd.

Kakegawa-shi, Shizuoka

1,412

1,296

35,608

1,019

1,014

6

Kansai Branch Office

May 2010

Gastar Co., Ltd.

Yamato-shi, Kanagawa

1,321

1,447

38,577

582

581

1

Logistic Control Office

May 2010

RB Controls Co., Ltd.

Kanazawa-shi, Ishikawa

944

2,641

37,493

428

408

19

Kanto Branch Office

May 2011

Rinnai Precision Co., Ltd.

Komaki-shi, Aichi

4,929

7,031

159,080

2,393

2,382

4

Chugoku Branch

May 2011

Kyushu Branch

April 2012

RT Engineering Co., Ltd.

Toyoda-shi, Aichi

264

1,140

15,813

226

223

3

Hokkaido Branch

April 2012

Noto Tech Co., Ltd.

Nakanoto-cho,Kajima-gun, Ishikawa

1,267

1,064

29,979

1,452

1,332

119

Niigata Sales Office

April 2012

Techno Parts Co., Ltd.

Aichi

Tohoku Branch Office

May 2013

233

220

6,640

64

62

2

Shikoku Branch

May 2013

Rinnai Holdings (Pacific) Pte Ltd.

Singapore

45

24

880

—

—

—

Higashi-Kanto Branch

April 2014

Rinnai Hong Kong Ltd.

Hong Kong

0

2

12

—

—

—

Kita-Kanto Branch

April 2016

China

40

101

1,050

—

—

—

Customer Service Division

May 2017

Guangzhou Rinnai Gas andElectric Appliance Co., Ltd.

Akatsuki Factory

March 2018

Rinnai Italia S.r.l.

Italy

58

13

1,100

1

1

0

Oguchi Higashi Factry

June 2018

New Zealand

112

16

1,927

96

87

9

Minami-Kanto Branch

June 2019

Central Heating New ZealandLtd.

Gastar Co., Ltd.

October 2001

Rinnai America Corporation*4

United States of America

1,880

2,851

56,454

451

451

0

December 2003

Rinnai Australia Pty., Ltd.

Australia

1,736

6,939

56,474

739

302

436

Yanagisawa Manufacturing Co., Ltd.

June 2004

Shanghai Rinnai Co., Ltd.

China

2,255

11,203

95,526

1,004

1,004

0

Rinnai Precision Co., Ltd.

December 2005

Rinnai Korea Corporation

South Korea

2,227

5,343

84,285

1,265

1,252

12

RT Engineering Co., Ltd.

March 2006

P.T. Rinnai Indonesia

Indonesia

4,411

10,547

133,762

5,914

5,408

506

RB Controls Co., Ltd.

March 2006

Noto Tech Co., Ltd.

January 2007

Rinnai New Zealand Ltd.

New Zealand

246

95

6,175

209

182

27

Rinnai Korea Corporation

July 1999

Rinnai Taiwan Corporation

Taiwan650

1,097

19,425

312

192

120

RB Korea Ltd.

October 2006

Rinnai (Thailand) Co., Ltd.

Thailand

1,129

1,607

33,497

635

605

30

Shanghai Rinnai Co., Ltd.

December 2008

Rinnai Brasil Heating Technology Ltd. Brazil

116

39

5,563

344

313

31

Rinnai Brasil Heating Technology Ltd.

June 2011

Rinnai Viet Nam Co., Ltd.

Viet Nam

650

579

13,804

408

408

0

Rinnai New Zealand Ltd.

July 2013

Industrias Mass, S.A. de C.V.

Mexico

85

52

1,738

129

129

0

Rinnai Viet Nam Co., Ltd.

June 2019

RB Korea Ltd.

South Korea

70

554

5,170

44

32

0

Location

129

Scope 1
(tCO₂e)October 1997

Environmental Management System “Eco Action21”
Domestic Group companies

Location

Amount of waste
Amount of waste
Amount ofgenerated
into landfill
recycled waste(Including valuables)(Thousands of Tons) (Thousands of Tons)(Thousands of Tons)*2

Research & Development Headquarters

Rinnai Technica Co., Ltd.

Overseas Group companies

Site name✓Techno Parts Co., Ltd.

Certified Year/Month*5*6

1. Total energy use is the sum of non-renewable energy and renewable energy.
2. In some cases, there is a mismatch between the breakdowns and totals for the amount of waste generated, the amount of waste into landfill and the amount of recycled waste (Unit:
Thousands of Tons).
3. Includes the Head Office, nationwide sales offices, logistics centers and the Rinnai Parts Center.
4. Includes Rinnai Canada Holdings Ltd.
5. Includes Gas Appliance Services Corporation.
6. Includes Shanghai Rinnai Thermo Energy Engineering Co., Ltd.

August 2011

Rinnai Report 2023 130

Introduction

Environment

SocialGovernance

Data

Data Collection
Water Discharge (Fiscal 2023 Results)
Site
Oguchi Factory

Seto Factory

Akatsuki Factory

Yanagisawa
Manufacturing Co., Ltd.

Rinnai Technica Co., Ltd.

Gastar Co., Ltd., Yamato
Head Office andFactories
Gastar Co., Ltd.,
Research Building

Rinnai Precision Co., Ltd.,
Head Office and Komaki
Factory

Water discharge
standard(Water discharged)
Sewer

River
(Yatoko River)River(Kazunari River)

Sewer

River
(Ota River)

Sewer

River
(Sakai River)Sewer

Rinnai Precision Co., Ltd.,
Kani Factory
The Second Building

River(Kani River)

Rinnai Precision Co., Ltd.,
Kani Factory
The Third Building

River(Kani River)

RT Engineering Co., Ltd.

Noto Tech Co., Ltd.

Sewer

River
(Nagaso River)

Substance*1

PRTR (Fiscal 2023 Results)
Regulation value

VoluntaryAmount of emission/discharge

Actual value(Maximum)

pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.6
25 (20)25 (20)30 (20)5.8~8.620
20
20

5.8~8.7240—240
6.0~8.420
20
20
5.9~8.519
19
19

6.6~7.5
67—
67
7.0~7.8
3.7
5.9
2.0
6.7~7.5
10
10
1

pH

5.0~9.0

5.9~8.5

6.9~7.9

BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS
pH
BOD
COD
SS

600
—
600
5.8~8.6
25 (20)160 (120)
50 (40)5.0~9.0600——
5.8~8.615
2540
5.8~8.6600—
300
5.8~8.6
15
—
30

100
—
100
6.3~8.1
18
18
30 (20)5.2~8.8480——
6.0~8.41220
32
6.0~8.4300—
300
5.8~8.6
15
—
30

3.8
—
34
7.1~7.6
16
16
7.5
7.1~8.0
less than 5——
7.5~7.8
less than 5less than 5less than 5
7.2~7.6290—
10
7.0~7.6
14—
9pH

5.8~8.6

5.8~8.6

6.0~6.6

BOD

15

15

3.6

COD

—

—

—

SS

30

30

2

pH
BOD
COD
SS
pH
BOD
COD
SS

5.7~8.7300—
300
5.8~8.2
40 (30)160 (120)
40 (30)5.7~8.2150—150
6.0~8.2
36 (27)140 (100)
36 (27)

6.9~7.245—
4
7.0~7.3
17
25
8

Site

Oguchi Factory

Seto Factory

Akatsuki Factory

NumberClass I designated chemical
substance name*2

PublicwatersAir

Soil

Landfill

Amount of transfer
OutsidetheSewersrelevant
office53

Ethylbenzene

940

0

0

0

0

410

80

Xylene

1,200

0

0

0

0

520

300

Toluene

2,300

0

0

0

0

980

309

Nickel compounds

0

0

0

0

0

130

405

Boron compounds

0

0

0

0

0

380

53

Ethylbenzene

1,100

0

0

0

0

310

80

Xylene

1,600

0

0

0

0

310

87

Chromium and chromium (III)compounds

0

0

0

0

0

0

308

Nickel

0

0

0

0

0

0

53

Ethylbenzene

2,300

0

0

0

0

250

80

Xylene

5,300

0

0

0

0

260

296

1,2,4-trimethylbenzene

1,100

0

0

0

0

200

300

Toluene

570

0

0

0

0

600

Gaster Co., Ltd.
Yamato Head Office Factory

53

Ethylbenzene

380

0

0

0

0

980

RB Controls Co., Ltd.;
Kanaiwa Factory

31

Antimony and its
compounds

0

0

0

0

0

250

265

Tetrahydromethylphthalicanhydride

0

0

0

0

0

0

448

Methylenebis (4,1-phenylene)
diisocyanate

0

0

0

0

0

0

460

Tritolyl phosphate

0

0

0

0

0

300

448

Methylenebis (4,1-phenylene)
diisocyanate

0

0

0

0

0

0

460

Tritolyl phosphate

0

0

0

0

0

6,000

300

Toluene

3,500

0

0

0

0

0

31

Antimony and its
compounds

0

0

0

0

0

340

405

Boron compounds

0

58

0

0

0

1,600

RB Controls Co., Ltd.;
Tsurugi Factory
Rinnai Precision Co., Ltd.
Kani Factory
Noto Tech Co., Ltd.

*2 Class I designated chemical substances stipulated by the Pollutant Release and Transfer Register (PRTR) Law (Unit: kg), rounded off to two significant digits

Emissions into the Air (Fiscal 2023 Results)
Regulation value

Voluntary

Actual value(Maximum)Combustion furnace Soot and dust

0.25

0.16

0.001

NOx emissions

180

150

73

0.08

0.002

Site
Oguchi Factory

Facility

BoilerSubstance*3

Soot and dust

0.1

NOx emissions

150

96

62

Soot and dust

0.1

0.05

0.001

Seto Factory

BoilerNOx emissions

150

79

15

Akatsuki Factory

Combustion furnace Soot and dust

0.2

0.16

0.003

NOx emissions

230

180

3

Soot and dust

0.1

0.05

0.002

Yanagisawa Manufacturing Co., Ltd. Boiler*1 pH: Concentration of hydrogen ions, BOD: Biochemical oxygen demand (mg/l), COD: Chemical oxygen demand (mg/l), SS: Concentration of aqueous suspended solids (mg/l),( ) Daily average

Gaster Co., Ltd.

NOx emissions

150

100

20

Combustion furnace Soot and dust

0.2

0.05

0.002

BoilerSoot and dust

0.1

0.08

0.0012NOx emissions

150

120

26

*3 Soot and dust: g/m3N, NOx: ppm, SOx: m3N/h

131

Rinnai Report 2023 132

Introduction

Environment

SocialGovernance

Data

Data Collection
External Acclaim and Recognition

International Recognition for ESG Efforts

Evaluation of Climate Change

Rinnai was selected for inclusion in the FTSE4Good Index Series and theFTSE Blossom Japan Index, the leading environmental, social andgovernance (ESG) investment indices.

The Carbon Disclosure Project (CDP), an international non-profit
organization, globally evaluates corporate efforts regarding climate change.
• CDP Climate Change
CDP Climate Change evaluates the corporate response to climate change.
Rinnai has received a B rating.

Rinnai was selected for inclusion in the FTSE Blossom Japan Sector
Relative Index formulated by FTSE Russell, a leading environmental, socialand governance (ESG) rating organization. In addition to the ESG
assessment, Rinnai was evaluated for its environmental impact andmanagement approaches to climate change risks and opportunities.

• CDP Supplier Engagement Rating (SER)
The CDP SER evaluates performance in governance, targets, Scope 3
emissions, and value chain engagement within the CDP Climate Change
Questionnaire. Rinnai has received an A- rating.

Participation in International Initiatives
Rinnai was selected for inclusion in the Sompo Sustainability Index
launched by SOMPO Asset Management Co., Ltd.

Rinnai was selected as a constituent of the iSTOXX MUTB Japan Platinum
Career 150 Index.
Jointly developed by Mitsubishi UFJ Trust and Banking Corporationand STOXX, an index provider affiliated with the Deutsche Börse Group, thisindex incorporates evaluation items used for Platinum Career companies inToyo Keizai Inc. CSR survey data to recognize 150 Japanese companies
that actively contribute to employee career development evaluated fromthree perspectives: long-term view, active learning, and social contribution.

133

The United Nations Global Compact (UNGC) is a voluntary initiative in which
member companies and organizations participate in the creation of a global
framework to achieve sustainable growth by acting as good members ofsociety through responsible and creative leadership.
Having announced its participation in the UNGC in 2023, Rinnai will
support the UNGC 10 principles related to the protection of human rights,
the elimination of unfair labor practices, environmental responsibility, andthe prevention of corruption, thereby contributing to the creation ofa sustainable society.

Rinnai Report 2023 134