Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Innovation
• Employee Well-being
• Community Investment
• Environmental Protection

Environmental Achievements

• Developed a green and sustainable formula for tire cord fabric dipping, replacing the resorcinol and formaldehyde-based formula.
• Listed in the BIST Sustainability Index.

Social Achievements

• School renovation projects.
• Internship and scholarship programs.
• Sponsorship of university engineering teams.
• Thailand and Laurel Hill facilities reached zero-accident targets for the fourth time.
• Awarded "Best Practices in Internship Program" in Brazil and "Indonesia Most Powerful Companies (IMPCA) 2017" award.
• Kordsa plant in Brazil listed as among the best employers for the second consecutive year.

Governance Achievements

• Official approval of R&D Center at Composite Technologies Center of Excellence.
• Participation in the 26th Quality Congress of the Turkish Quality Association.

Climate Goals & Targets

Environmental Challenges

• High cost of ballistic protection equipment.
• High weight of ballistic protection equipment hindering mobility.

Mitigation Strategies

• Increased usage of improved raw materials to decrease ballistic protection equipment weight.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• Eco-friendly adhesion system for tire cord fabrics.

Awards & Recognition

• Grand Award in the category of quality circles at the 20th Quality Circles Sharing Conference
• Best Practices in Internship Programs in Brazil
• Indonesia Most Powerful Companies (IMPCA) 2017 award
• Third prize in the Innovation Strategy category at the Inovalig Awards
• First prize in the textiles category at the 6th Private Sector R&D and Design Centers Summit

Environmental Metrics

ESG Focus Areas

• Business Ethics
• Employee Health and Safety
• Human Rights
• Training and Development
• Customer Privacy
• Sustainable Growth
• Supply Chain Management
• Materials Management
• Energy Management
• Emissions Management
• Waste Management
• Water Management

Environmental Achievements

• Savings of US$1.82 million through material reuse.
• Increased waste recycling rate by 12% compared to 2017.
• Decreased total water withdrawal by 2%. Water use per ton production decreased from 4.4 m3 to 4.2 m3/ton production.
• Achieved absolute change in CO2/ton in Scope 1 and Scope 2 emissions.
• Decreased absolute GHG emissions by 41% in Brazil, 12.5% in USA-Laurel Hill and 7.5% in Thailand facilities

Social Achievements

• Achieved a 31.25% decrease in recordable cases at all sites compared to 2016.
• Employee turnover rate dropped from 11.2% in 2017 to 10.1% in 2018.
• Employees received an average of 36 hours of training in 2018.
• Completed distribution of Anti-Corruption and Anti-Bribery Policy to all sites.
• Prepared a new Human Rights Policy and disseminated it at all locations.

Governance Achievements

• No cases of corruption or non-compliance occurred.
• Revised ethical rules and adapted them to current legislation.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions are not explicitly mentioned, but the report highlights the importance of managing supply chain risks.

Mitigation Strategies

• Supplier assessments were conducted, focusing on sustainability aspects.

Supply Chain Management

Supplier Audits: 13 major suppliers evaluated in 2018 (9 raw material, 4 machinery/equipment)

Responsible Procurement

• Statement on Code of Business Ethics included in supplier contracts.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact

Certifications: ISO 14001 (Turkey), AS 9100 (Composite Technologies Center of Excellence)

Third-party Assurance: QSI (Turkey plant emission verification)

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16
• SDG 17

Kordsa's material topics are directly related to 13 of the UN SDGs, with the remaining SDGs indirectly covered.

Sustainable Products & Innovation

• CoKoon technology
• Environmentally friendly resorcinol-and-formaldehyde-free adhesion technology
• Next-generation resin technology (CM14)

Awards & Recognition

• BIST Sustainability Index
• Export Champions Award
• Industry 4.0 Award
• Among Indonesia’s Top 100 Fastest Growing Companies
• Best Employer to Start Work Life Practices Award (Brazil)
• Best Internship Employers in Brazil

Environmental Metrics

ESG Focus Areas

• Industry, Innovation and Infrastructure
• Responsible Consumption and Production
• Decent Work and Economic Growth
• Gender Equality
• Quality Education

Environmental Achievements

• Reduced Scope 1 and Scope 2 total emissions by 14% from 2019.
• Increased the average reuse rate across all plants to 28% from 14% in 2019, saving $2.7 million through the reuse of 2.4 million pieces of materials.
• Axiom Materials Inc., Kordsa’s subsidiary, was certified as the world’s first carbon-neutral prepreg manufacturer.

Social Achievements

• Provided 56 hours of training per employee on average.
• Three facilities ended the year with zero accidents.
• 73% of global suppliers participated in the 2020 supplier sustainability evaluation survey.
• Launched Kordsa Human Rights Policy.

Governance Achievements

• Updated Human Resources policy.
• Prepared Sustainable Employment Policy.
• No public cases on compliance occurred on environmental, social, or governance topics.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacts.
• Supply chain disruptions.
• Climate change risks.
• Water security risks.
• Data security and cyber-attack risks.
• Natural disaster risks.
• Infectious diseases.

Mitigation Strategies

• Maintained business continuity.
• Implemented Pandemic Infection Prevention and Control Procedure.
• Developed alternative sourcing strategies.
• Renewed loss of business and third-party indemnity insurances.
• Defined technology-related risks and prepared action plans.
• Created action plans and a Crisis Emergency Management standard.

Supply Chain Management

Supplier Audits: 73% of global suppliers participated in 2020 survey.

Responsible Procurement

• Code of Business Ethics
• Supplier Sustainability Evaluation Survey
• Integration of sustainability scores into assessment system.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact, IFC’s Performance Standards on Environmental and Social Sustainability, SASB

Certifications: ISO 14001, AS9100, IATF 16949

Third-party Assurance: PWC, QSI

UN Sustainable Development Goals

• SDG 9
• SDG 12
• SDG 8
• SDG 5
• SDG 4

Kordsa's activities contribute to these goals through R&D, sustainable production, decent work, gender equality, and quality education initiatives.

Sustainable Products & Innovation

• Capmax®, Twixtra®, KraTos®, CoKoon dipping technology

Awards & Recognition

• Apollo Golden Partner – Supply Chain Excellence Award
• Asia’s 2nd Best Materiality Reporting
• Ecovadis Gold Certificate
• CDP Climate Change and Water Program A- rating
• Ethics Turkey Award
• The Most Amazing Place to Work (Brazil)

Environmental Metrics

ESG Focus Areas

• Sustainable Growth
• Business Ethics
• Occupational Health and Safety
• Energy and Emissions
• Raw and Other Materials
• Waste Management
• Equal Opportunities and Diversity
• Water Management
• Training and Development
• Supplier Assessments
• Employment
• Human Rights
• Community Development

Environmental Achievements

• 5% reduction in Scope 1 and Scope 2 emissions compared to 2019 baseline
• Achieved Gold Ecovadis Medal
• Received Global Recycled Standard (GRS) certificate for products containing recycled materials
• Increased CDP Water Program score to A, becoming one of three Turkish companies on the Global A List
• Maintained A- score in CDP Climate Change Program
• Received A score in CDP Supplier Engagement Rating
• Saved $4.2 million through reuse of 2.48 million pieces of materials

Social Achievements

• Kordsa Indonesia plant included in Brazil’s “Best Place to Work” list
• Zero fatal occupational accidents and diseases
• Employee satisfaction rate of 62%
• 226 teachers trained in “Interactive Course Design in Online Education Training”
• Launched programs to develop a culture of diversity and inclusion

Governance Achievements

• Maintained place in Istanbul Stock Exchange Sustainability Index for the 6th time
• Updated Kordsa Code of Business Ethics
• Initiated Competition Law Compliance Program

Climate Goals & Targets

Environmental Challenges

• Chip shortage in the automotive industry
• Supply chain disruptions due to the COVID-19 pandemic
• Climate change risks (extreme weather events, regulatory changes, market shifts)
• Accessibility to raw materials
• Client dependency
• Delivery risks

Mitigation Strategies

• Exceptional capacity utilization rate and effective cost management
• High vaccination ratios of employees
• Continuing ‘wash hands, wear a mask, and keep social distance’ measures
• Regular disinfection of offices and common areas
• SBTi commitment and developing actions in line with this commitment
• Preparation of the roadmap to meet 2050 Net Zero target
• Reporting to national and international reporting mechanisms such as CDP, Ecovadis and Borsa Istanbul
• Planning preventive and protective long-term investments in facilities against natural disasters

Supply Chain Management

Supplier Audits: 72.5% of targeted suppliers underwent sustainability assessment; 87.5% of targeted raw material suppliers audited

Responsible Procurement

• Statement on Code of Business Ethics
• Supplier Sustainability Assessment Survey
• Annual Supplier Audit Program
• Ecovadis assessment

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Renewable energy investments

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact, IFC’s Performance Standards on Environmental and Social Sustainability, SASB standards

Certifications: ISO 14001 (54% of plants), AS9100, Global Recycled Standard (GRS)

Third-party Assurance: PWC (selected indicators); QSI (Scope 3 calculations)

UN Sustainable Development Goals

• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 6: Clean Water and Sanitation
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Production and Consumption
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

Kordsa's initiatives contribute to these goals through various programs and projects related to education, gender equality, water management, employment, innovation, responsible production, climate action, and partnerships.

Sustainable Products & Innovation

• Capmax®, Twixtra®, CoKoon, Kratos, recycled nylon yarns, bio-based resins, water-based phenolic honeycombs, carbon fiber fabrics for electric vehicle batteries

Awards & Recognition

• Gold Ecovadis Medal
• GOLD Award in the 35th International Mercomm ARC Reporting Awards
• First prize in Intercompany Collaborations category at the Sustainable Business Awards
• 1st Place Award Among R&D Centers
• Cokoon Cooperation Award
• IDC Turkey DX Future of Connectedness Category Award
• TPM Zero Defects Award (Indonesia)
• Gold medal as The Best Textile Company in Brazil, and silver medal as The Best Company to Work for in Brazil (Brazil)

Environmental Metrics

ESG Focus Areas

• Water Security
• Sustainable Product and Process Technologies
• Reducing GHG Emissions

Environmental Achievements

• Reduced water withdrawal per tonnage of sales by 24.62% compared to 2019.
• Eliminated 1 ton of resorcinol and 1 ton of formaldehyde usage in production with CoKoon technology.
• Increased water use met through recycling/reuse in Indonesia plant (though not yet at target).

Social Achievements

• Maintained 100% access to safely managed drinking water and sanitation services for all employees.

Governance Achievements

• Established a publicly available water policy.
• Integrated water-related issues into long-term strategic business plan.
• Included water-related risks and responses in mainstream financial report.

Climate Goals & Targets

Environmental Challenges

• Water stress in operating areas (especially Turkey and Indonesia).
• Potential for acute physical risks (flooding) in Indonesia.
• Changes in consumer behavior and increasing demand for responsible water management.
• Supply chain disruptions due to water-related issues.

Mitigation Strategies

• Implemented water recycling/reuse projects (Indonesia, Turkey).
• Purchased flood insurance for Indonesia facility.
• Improved Indonesia facility's resilience to flooding (concrete fence, water gates, sump pits, monitoring systems).
• Dedicated capital budget to increase water efficiency in operations.
• Engaged with suppliers on water-related requirements.
• Shared information about products and water performance with customers.

Supply Chain Management

Supplier Audits: 57.1% of suppliers with a substantive impact monitored.

Responsible Procurement

• Supplier Code of Conduct (including water-related requirements).

Climate-Related Risks & Opportunities

Physical Risks

• Flooding (Indonesia)

Transition Risks

• Changes in consumer behavior and increasing demand for responsible water management.

Opportunities

• Increased sales of existing products/services due to improved water resilience.

Reporting Standards

Frameworks Used: GRI, ISO 14001

Third-party Assurance: PwC

UN Sustainable Development Goals

• SDG 6
• SDG 12

Kordsa's water policy aligns with UN SDG 6 (Clean Water and Sanitation) and SDG 12 (Responsible Consumption and Production).

Sustainable Products & Innovation

• CoKoon Dipping Technology

Environmental Metrics

ESG Focus Areas

• Sustainable Employment
• Sustainable Production
• Sustainable Products
• Sustainable Supply Chain
• Community Development
• Climate Change
• GHG Emissions Reduction
• Circular Economy
• Occupational Health and Safety
• Human Rights
• Employment and Labor Practices
• Equal Opportunities and Diversity
• Business Ethics and Compliance
• Corporate Governance
• Information-Data Security and Privacy
• Biodiversity Conservation

Environmental Achievements

• Reduced Scope 1 and Scope 2 emissions by 17.4% compared to the 2019 base year.
• Izmit Facility received ISCC Plus certification for recycled polyester production.
• Developed a fully sustainable, bio-based resin system for honeycomb production.
• Achieved an A- rating in the CDP Climate Change Program and an A rating in the CDP Supplier Engagement Rating.

Social Achievements

• Received the ‘Best Employer Certificate’ in Brazil, Indonesia, Thailand, and Türkiye by Great Place to Work®.
• Launched the Sabancı Hatay Incubation Center to support the local development of the earthquake zone.
• Achieved an 85% employee engagement score globally.
• Received the Equal Opportunity Model (FEM) certificate.

Governance Achievements

• Implemented a Whistleblowing Procedure.
• Conducted ethics training for 2,611 employees.
• Launched Project Janus, a global ERP transformation project.

Climate Goals & Targets

Environmental Challenges

• Contracting market conditions in Europe and North America.
• Excess inventory of Chinese tire reinforcement manufacturers and consequent competitive prices.
• Decline in raw material prices compared to 2022.
• Negative effects on profitability of the discrepancy between exchange rates and inflation in EMEA.
• Supplier dependency for Scope 3 Category 1 emissions.
• Challenges in obtaining complete and reliable data for Life Cycle Assessments.
• Implementation of the emissions trading system (ETS) in Türkiye.
• Carbon border adjustment mechanism (CBAM) regulation in the EU.

Mitigation Strategies

• Close collaboration with customers to build future product portfolios.
• Opened two new technical centers in Indonesia and Germany.
• Developed a comprehensive plan to engage with suppliers on sustainability.
• Collaboration with suppliers on emission reduction opportunities.
• Implementation of various projects for emissions reduction.
• Investigation of alternative energy sources.
• Focus on R&D for improving product performance and environmental footprint.
• Validation of emissions reduction targets with SBTi.

Supply Chain Management

Supplier Audits: 100% of targeted raw material suppliers audited.

Responsible Procurement

• Code of Business Ethics
• Supplier sustainability requirements
• EcoVadis assessments
• Annual Supplier Sustainability Survey
• Annual Supplier Audit Program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding

Transition Risks

• Regulatory changes
• Market shifts
• ETS implementation in Türkiye
• CBAM regulation in the EU

Opportunities

• Development of energy-efficient products
• Development of lighter weight materials for vehicles.

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact

Certifications: ISO 14001, ISO 45001, ISCC Plus

Third-party Assurance: PWC (selected indicators), QSI (Scope 3 calculations)

UN Sustainable Development Goals

• SDG 4
• SDG 5
• SDG 6
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 17

Initiatives contribute to these goals directly and indirectly; details in Annexes.

Sustainable Products & Innovation

• Recycled nylon yarn and fabric
• Recycled polyester yarn and fabric
• Bio-based resin system for honeycomb
• CoKoon dipping technology
• REV Technologies
• Kratos Synthetic Fiber Reinforcements
• Kratos Structural Reinforcement products

Awards & Recognition

• EcoVadis Gold Medal
• Boğaziçi University Environment Awards
• Sustainable Business Awards
• SAP Digital Transformation Award
• Brandon Hall Group Human Capital Management Excellence Awards
• Great Place to Work® certificate
• Stevie® Awards for Great Employers
• White Flag Award
• TPM Excellence Award

Environmental Metrics

ESG Focus Areas

• Business Ethics
• Employment and Human Rights
• Environment
• Products
• Supply Chain
• Community Development

Environmental Achievements

• Reduced scope 1&2 GHG emissions by 46.2% compared to 2019 baseline (target 90% by 2050)
• Reduced scope 3 GHG emissions by 25% compared to 2021 baseline (target 90% by 2050)
• Reduced water withdrawal by 30% compared to 2019 baseline

Social Achievements

• Zero accident target for high-consequence injuries and recordable injuries by 2025
• Zero complaints on human rights violations target by 2025
• Employee satisfaction rate target of 65% and over by 2025
• Continuous employee development trainings
• Increasing women employment (Office staff) to 45% by 2025
• Number of students reached as part of the Sabancı Hatay Incubation Center project (in progress)

Governance Achievements

• Implementation of a Code of Ethics, Anti-bribery and anti-corruption policy, Gift Policy, Competition Law Compliance Program and Policy, Export Control Policy, Privacy Policies, and Personal Data Protection Compliance Program and Policy

Climate Goals & Targets

Supply Chain Management

Supplier Audits: 100% of targeted suppliers by 2030

Responsible Procurement

• Kordsa Supplier Business Ethics Declaration
• Sustainable Supply Chain Assessment Program

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative)

UN Sustainable Development Goals

• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 6: Clean Water and Sanitation
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 17: Partnership for the Goals

This policy aligns with and supports the achievement of the United Nations Sustainable Development Goals (SDGs)

Sustainable Products & Innovation

• tire cord fabric and single-end cord technologies
• composite technologies
• construction reinforcement technologies
• engineering thermoplastics