Climate Change Data

Environmental Metrics

ESG Focus Areas

• Good Governance
• Inclusive Workplace
• Smart Mobility
• Responsible Procurement
• Climate Change and the Environment

Environmental Achievements

• Reduced average vehicle greenhouse gas emission value by 11.5% in the last 2 years to 597.73 g CO2e/kWh
• Significant reductions in water consumption, wastewater management and waste amount
• Reduced energy consumption by 3,584 GJ in 2020 (6% of total energy consumption)
• Reduced VOC emissions by 826 kg per year by improving primer color application

Social Achievements

• Provided more than 12,000 hours of employee training in 2020
• Maintained a downward trend in occupational health and safety incident rates for three years
• Initiated the “Positive Equality” program to increase female employee rate by 2% annually until 2026
• Implemented the ILO Model for Promoting Gender Equality in Companies

Governance Achievements

• Developed multiple corporate policies (Information Policy, Stakeholders Policy, Remuneration Policy, Dividend Distribution Policy, Ethical Rules, Donation and Aid Policy, Employee Compensation Policy)
• Achieved compliance with the Sustainability Principles Compliance Framework announced by the CMB
• Established the Karsan Sustainability Committee and Sustainability Working Group to manage sustainability issues

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting production and employee health
• Decreased production leading to increased energy consumption per vehicle
• Maintaining desired level of energy consumption per vehicle despite total energy consumption reduction

Mitigation Strategies

• Formed a crisis management team and implemented comprehensive measures to address the COVID-19 pandemic
• Implemented energy efficiency efforts, including LED lighting and chiller unit improvements
• Initiated studies on solar energy and solarwall technologies to increase renewable energy use

Supply Chain Management

Supplier Audits: 12 audits/year

Responsible Procurement

• Supplier audits evaluating environmental, occupational health and safety, working conditions, quality, production, logistics norms, management, method and engineering capacity, competitiveness level, and financial structure

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Production of electric vehicles

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 9001, IATF 16949, OHSAS 18001, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• 17 UN Sustainable Development Goals

The report aligns with the UN Sustainable Development Goals, evaluating their social, economic, and environmental impacts.

Sustainable Products & Innovation

• JEST Electric, ATAK Electric, Autonomous ATAK Electric, e-ATA

Awards & Recognition

• Zero Waste certificate

Environmental Metrics

ESG Focus Areas

• Climate Change and Environment
• Smart Mobility
• Responsible Procurement
• Occupational Health and Safety
• Social Development
• Corporate Governance

Environmental Achievements

• Reduced carbon footprint by approximately 30%
• Achieved a 6% total energy improvement, saving 552 MWh/year of natural gas and 611 MWh/year of electricity
• Reduced energy consumption per production unit by 13% from 20 GJ/product in 2020 to 17.4 GJ/product unit
• Reduced water amount per production by 1.2% from 12.7 m3/piece in 2020 to 12.55 m3/piece
• Reduced the amount of wastewater sludge generated in wastewater treatment by 48.8% in 2021
• Saved 1.56 m3 of water per vehicle in the paint shop
• Recycled 100% of recyclable waste
• Reduced total amount of hazardous waste per vehicle by 1.9 kg/vehicle

Social Achievements

• Increased the number of female employees by 20% from 58 to 70
• Implemented ILO’s Model for the Promotion of Gender Equality in Companies
• Provided 2,853 hours of OHS training to 336 employees
• Launched the Adhesive Bonding Schools project, providing 72 hours of training to 18 employees
• Commissioned the Assembly Practical Training Area
• Implemented the Quality Tracking System (QTS)

Governance Achievements

• Implemented internationally recognized corporate governance principles
• Developed corporate policies (Information Policy, Stakeholders Policy, Remuneration Policy, Dividend Distribution Policy, Code of Ethics, Donation and Aid Policy, and Employee Compensation Policy)
• Established the Karsan Code of Ethics and Implementation Procedure
• Established an Early Detection of Risk Committee, an Audit Committee, and a Corporate Governance Committee
• Implemented a dynamic risk management program in accordance with the COSO Enterprise Risk Management systematic, ISO 31000 Standard and CMB Corporate Governance Principles
• Conducted the first WCM Audit and successfully completed it with 19 points

Climate Goals & Targets

Environmental Challenges

• Climate change and environmental impacts (extreme weather events, drought, reduction in water resources)
• Supply chain disruptions due to the Covid-19 pandemic
• Increased population pressure in cities
• Changing customer needs
• Raw material and semi-finished product shortages

Mitigation Strategies

• Developed innovative and effective strategies for a sustainable universe
• Produced sustainable transportation solutions
• Developed environmentally friendly mobility solutions
• Implemented World Class Manufacturing (WCM) system
• Increased local supplier ratio to 80%
• Implemented Green Procurement practices
• Developed a Carbon Neutral Roadmap

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier self-assessment form
• GDSDL Declaration
• Social Responsibility form

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Electric vehicle production
• R&D activities
• Renewable energy technologies

Reporting Standards

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

Certifications: ISO 9001, IATF 16949, ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 7: Affordable and Clean Energy
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 17: Partnerships for the Goals

Not disclosed

Sustainable Products & Innovation

• e-JEST
• e-ATA
• ATAK Electric
• Autonomous ATAK Electric

Awards & Recognition

• Common Tomorrows program award
• Federation of Automotive Maintenance Associations of Turkey award
• BUSIAD Doğaz Er söz award
• The Stevie Awards, Silver Stevie Winner

Environmental Metrics

ESG Focus Areas

• Occupational Health and Safety
• Smart and Green Mobility
• Climate Change and Environmental Management
• Supply Chain Management
• Social Development

Environmental Achievements

• Reduced greenhouse gas emissions per vehicle production to an average of 1.47 tons of CO2e/unit in 2022.
• Reduced water consumption per vehicle production to 8.47 m³/unit in 2022 (32% decrease compared to the previous year).
• Recycled 954 tons of waste in 2022.
• Achieved a 99% waste recovery and recycling rate.

Social Achievements

• Launched the “Leadership at the Speed of Trust” training program for managers, with 96.7% satisfaction rate.
• Increased female employee rate to 8% in 2022.
• Increased female manager rate to 19% in 2022.
• Implemented the Agile Working Program to improve business methodology and organizational culture.
• Conducted 17,501 person-hours of OHS training in 2022.

Governance Achievements

• Achieved a score of 29 in the 2022 WCM audit (a 10-point increase from 2021).
• Implemented the World Class Manufacturing (WCM) system to enhance production competitiveness.
• Implemented ISO 50001 Energy Management System in March 2021.
• Implemented ISO 14001 Environmental Management System in 2004.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to raw material shortages.
• Climate change risks (extreme weather events impacting vehicle reliability).
• Global economic challenges.

Mitigation Strategies

• Effective value chain management to ensure uninterrupted production.
• Innovative vehicle design solutions to enhance climate resilience and energy efficiency.
• Strategic decisions to enhance contributions to nature, society, and the economy.
• Implementation of the “Milkrun Project” to mitigate Scope 3 emissions.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier self-evaluation forms.
• Assessment of suppliers' adherence to environmental, OHS, and quality standards.
• Packaging improvement projects to reduce cardboard use.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• International regulations on emissions.
• Transition to electric and alternative fuel vehicles.

Opportunities

• Development of energy-efficient products.
• Leadership in electric vehicle production.

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact

Certifications: ISO 9001, IATF 16949, ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 11 (Sustainable Cities and Communities)
• SDG 12 (Responsible Production and Consumption)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)
• SDG 5 (Gender Equality)

Karsan's strategic priorities and initiatives align with these SDGs through various programs and policies.

Sustainable Products & Innovation

• e-JEST
• e-ATAK
• Autonomous e-ATAK
• e-ATA
• e-ATA HYDROGEN

Awards & Recognition

• Sustainable Bus of the Year 2023
• Europe’s Most Innovative Commercial Vehicle Brand (BRAND AWARDS WINNERS 2022)
• 2021 Stevie Awards Silver Winner (Female Leaders Development)
• ILO Social Dialogue Best Implementing Company Award
• Educorp Awards Corporate Training and Development Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Gender Equality
• Social Development
• Sustainable Mobility
• Supply Chain Management
• Human Rights
• Occupational Health and Safety

Environmental Achievements

• Over the past 4 years, Karsan’s electric minibus and bus sales constituted 90% of Türkiye’s overall e-bus exports.
• Karsan has established itself as the first and only brand in Europe to provide a comprehensive range of fully electric products for public transportation, ranging from 6 meters to 18 meters.
• In 2023, it became the first European producer to penetrate the Japanese market with the right-hand drive 6-meter e-JEST.

Social Achievements

• Karsan continued to undertake exemplary work to promote gender equality policies in the industry. By the end of 2023, 9.63 percent, or 259, of Karsan employees will be women. Furthermore, this percentage reaches up to 15.68 percent among workers in blue-collar positions.
• The Karsan Positive internal communication transformation movement, initiated in 2017, embraces a culture of positivity in all aspects of its operations.
• Hundreds of people’s lives have been touched through social responsibility projects.

Governance Achievements

• Karsan conducts its operations in a manner that is transparent, accountable, fair, and responsible.
• The responsibility for managing and reporting risks at Karsan Otomotiv has been transferred from the Legal and Internal Audit Coordination department to the Corporate Risk Management and Internal Audit department.
• Karsan is committed to complying with all rules and procedures outlined in the Karsan Code of Ethical Conduct and the Company policies that are associated with this statement.

Climate Goals & Targets

Environmental Challenges

• Recent production disruptions experienced in the automotive industry due to shortages of raw materials and semi-finished products.
• Climate change-induced extreme weather phenomena may also have an impact on the dependability and lifespan of vehicles.

Mitigation Strategies

• Karsan has effectively managed the value chain in its entirety, ensuring uninterrupted production activity even in challenging circumstances.
• Karsan develops and implements innovative vehicle design solutions with the aim of enhancing climate resilience and optimizing energy efficiency.

Supply Chain Management

Responsible Procurement

• thorough inspections on both suppliers and purchased products

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather phenomena

Transition Risks

• regulatory changes, market shifts

Opportunities

• development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 45001, ISO 14001, ISO 50001

Third-party Assurance: BDO

UN Sustainable Development Goals

• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for Goals)

Karsan’s sustainability goals and the progress it has made in achieving these goals are transparently shared with its stakeholders.

Sustainable Products & Innovation

• e-JEST
• e-ATAK
• Autonomous e-ATAK
• e-ATA series vehicles
• e-ATA HYDROGEN

Awards & Recognition

• Excellent Product Design” award from the German Design Council
• Busworld Digital Awards at the Busworld Fair
• two awards from Global Business & Finance Magazine
• Bronze Stevie Award for e-ATA Hydrogen