Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Creating New Value, Customer Satisfaction, Human Resources
• Fundamental CSR (Corporate Social Responsibility)

Environmental Achievements

• Reduced greenhouse gas emissions by 63% in FY2020 due to energy efficiency projects, termination of radiator panel production, and COVID-19 effects.
• 90% of electricity needs for Hendek Production Facility met from renewable energy (solar power plant), preventing over 3,700 tons of greenhouse gas emissions annually.
• Switched from R410A to R-32 refrigerant in air conditioner production, reducing GWP by 3 times.

Social Achievements

• Increased female employees by 81% in the last three financial years; aiming for 50% blue-collar and 45% total female employees by 2025.
• Launched Sakura Women Entrepreneur Support Program, supporting 16 women entrepreneurs in 6 provinces.
• Established Daikin Turkey Academy, providing training to 40,000 individuals.

Governance Achievements

• Successfully passed two comprehensive J-SOX audits in 2020.
• Established a Sustainability Management System and Sustainability Governance Structure.
• Implemented a Contract Tracking System for improved operational processes.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and training.
• Supply chain disruptions.

Mitigation Strategies

• Implemented remote working and rotating office applications.
• Developed a COVID-19 Emergency Team and Business Continuity Plan.
• Localized production of 36 imported parts, reducing costs and carbon emissions.

Supply Chain Management

Supplier Audits: 70 supplier-related cases in FY2020

Responsible Procurement

• Fair purchasing practices.
• Use of sustainable materials.
• ISO 9001 certification required; ISO 14001 preferred.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Use of renewable energy sources

Reporting Standards

Frameworks Used: GRI Standards: Core, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 27001, ISO 18295, Zero Waste Certificate

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 13 (Climate Action)

Initiatives related to renewable energy, energy efficiency, and greenhouse gas emission reduction contribute to these goals.

Sustainable Products & Innovation

• R-32 refrigerant air conditioners
• High-efficiency heat pumps
• NDJ combi boiler
• Condense combi boiler

Awards & Recognition

• Super Brands of Turkey
• Green Heart Factory
• Academy Practices award
• R&D Center certificate
• TEGEP Learning and Development Awards
• ISIB Stars of Export awards
• Zero Waste Certificate
• Silver Effie award
• Quality Circle and Kaizen award

Environmental Metrics

ESG Focus Areas

• Occupational Health and Safety
• Anti-Bribery and Anti-Corruption
• Employment and Working Conditions
• Human Rights Assessments
• Business Ethics and Compliance
• Product Safety
• Digital Security and Privacy
• Equal Opportunity and Diversity
• Disaster Preparedness and Response
• Energy Management

Environmental Achievements

• Reduced natural gas consumption by 16%, gasoline consumption by 22%, and diesel consumption by 14% in 2021 (compared to 2019).
• Expanded the number of stores certified with the ISO 14001 Environmental Management System from 4 to 13 in 2021.
• Provided 3,843 hours of environmental training to employees in 2021.

Social Achievements

• Implemented Worksafe Mobile app for OHS management, reducing missed day accident rates by 60% in 2021.
• Launched "Ustabilir" (handyman) mobile app, increasing the number of experts by 315% and customers by 191% in 2021.
• Received the TSE Covid-19 Safe Production Certificate.

Governance Achievements

• Established a Sustainability Committee in 2021 to prepare regular Sustainability Reports.
• Implemented a Code of Conduct based on Kingfisher's standards.
• Conducted third-party due diligence studies as part of the Koç Holding Compliance Program.

Climate Goals & Targets

Environmental Challenges

• Pandemic impact on consumer behavior and consumption patterns.
• Increased online shopping.
• Need for innovation and digital transformation.
• Green transformation demands from younger generations.
• Supply chain disruptions.
• Cyber-attacks and data security threats.

Mitigation Strategies

• Reorganized business operations to manage the pandemic crisis.
• Revised store operational model and optimized employee numbers.
• Increased share turnover of Koçtaş branded products.
• Launched "Koçtaş Basic" private label products.
• Invested in digital transformation and customer experience.
• Collaborated with DHL Supply Chain for faster deliveries ("Koçtaş At My Door" app).
• Expanded warranty coverage with Gulf Sigorta.
• Implemented ISO 27001 Information Security Management System.

Supply Chain Management

Responsible Procurement

• Supplier Preliminary Information Form.
• Ethical values included in supplier contracts.
• Zero-tolerance policy for unethical suppliers.
• Prioritization of domestic suppliers (94.3% of total suppliers in 2021).

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Earthquakes

Reporting Standards

Frameworks Used: GRI Standards: Core option, IFC (International Finance Corporation) and EBRD (European Bank for Reconstruction and Development) standards

Certifications: ISO 14001 (13 stores), ISO 9001, ISO 27001, TSE Covid-19 Safe Production Certificate

Sustainable Products & Innovation

• Koçtaş Basic private label products.

Awards & Recognition

• Brand that Increased Its Value the Most (Brand Finance 2019)
• Most Popular Brand in Construction Market (Lovemarks 2018)
• First place in Coolest Brands Awards (Marketing Turkey)
• One of 134 superbrands in Turkey (2012)
• Best Workplace in Turkey (Kincentric 2020)
• First prize in TEGEP Learning and Development Awards (2020)
• First place in IDC CIO Summit (2020)
• First prize in IDC Digital Transformation Summit (2020)
• Best Technology Use in Retail Industry (Martech Awards 2020)
• Most Popular Brand in Furniture and Decoration (Retail Brands Research 2012)

Environmental Metrics

ESG Focus Areas

• Climate and Environment
• Circular Economy
• Equal, Diverse and Inclusive Workplace
• Health, Safety and Wellbeing
• Community and Social Vitality
• Innovation and Entrepreneurship
• Digital Transformation
• Ethics and Compliance
• Economic Performance

Environmental Achievements

• 38.5% decrease in total carbon emissions in production plants (Scope 1+2) compared to the previous year
• 36% reduction in carbon emission intensity compared to 2021
• 4% decrease in energy intensity compared to 2020
• 86.6% share of recycled waste
• Installation of a 4 MW solar power plant
• 93.4% of electricity use from renewable sources (including green electricity procurement)

Social Achievements

• Increased share of women among new recruits to 50%
• Increased share of women professionals to 38%
• Increased share of women in management to 40.3% in Turkey
• Accident frequency rate of 0.99
• Average of 25 training hours per employee
• Average of 29 training hours per talent

Governance Achievements

• Established working groups across all departments to cultivate sustainability-oriented initiatives
• Reviewed and updated sustainability goals and roadmap
• Implemented Zero-Based Budgeting (ZBB)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Energy shortages
• Difficulties in accessing raw materials
• Inflation
• Geopolitical developments (Russia-Ukraine war)
• Climate change impacts (water scarcity, raw material shortages)

Mitigation Strategies

• Strategic investments to boost production capacity and global reach
• Investments in renewable energy and energy efficiency
• Water conservation research and analyses
• Product design focusing on minimal environmental impact
• Strengthening supply chain resilience
• Agile business strategies to adapt to economic challenges

Supply Chain Management

Supplier Audits: Annual audits conducted by the supplier development department; assessments every six months for material suppliers

Responsible Procurement

• Ethical, economic, social, and environmental standards in purchasing decisions
• Prioritizing local suppliers
• Sustainable Purchasing practices
• Supplier days and training sessions

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Extreme weather events

Transition Risks

• Rising energy costs
• Raw material shortages
• Stringent environmental regulations

Opportunities

• Investments in renewable energy
• Energy efficiency improvements
• Development of sustainable products

Reporting Standards

Frameworks Used: GRI Standards, World Economic Forum’s Stakeholder Capitalism Sustainable Value Creation Reporting Criteria, International Integrated Reporting Framework

Certifications: ISO 14001, ISO 50001

Third-party Assurance: PricewaterhouseCoopers (PwC)

UN Sustainable Development Goals

• 7
• 12
• 8
• 13
• 9
• 17
• 3
• 4
• 5
• 6

Detailed explanation of alignment with SDGs provided in the report

Sustainable Products & Innovation

• Water-saving WC pans, waterless urinals, touch-free faucets, Rim-Ex rimless WC bowls, V-Care Smart Toilet

Awards & Recognition

• Six awards at the Turkish Customer Experience Awards (TCXA)
• International Customer Experience Award (ICXA)
• Gold award in the “Best Innovation in CX” category at the Turkey CX Awards 2022