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Environmental Management

Strategies and policies established at Koç Holding level account for the conduct of environmental management at Group level. In addition to the environmental regulations of the countries Koç Group companies operate in, the necessary operating conditions of Group companies regarding the issues of environmental management are determined by the policies designed to be compatible with the international environmental management principles, standards and initiatives, starting with the United Nations Global Compact and Sustainable Development Goals.

All the companies affiliated with Koç Holding implement environmental management in a similar approach. The main principles pursued for that purpose are stated on the Koç Group Environmental Vision and Mission, Koç Group Environmental Policy and Koç Group Climate Change Strategy documents. Group companies also take the expectations and needs of their own sectors into account in order to develop environmental policies and strategies.

Koç Group Environmental Vision
With our Vision consisting of the principles of:
• Developing technologies which reduce the needs of treatment or disposal and ensure effective and efficient use of resources, thereby ensuring that wastes are minimized at source;
• Reducing the probable negative environmental effects of our business operations through science-based and cost-effective solutions;
• Assessing the environmental effects of each business operation planned to be built, thereby ensuring that environment is protected and healthy, safe and environment-friendly business operations are established;
• Closely following up all innovations, research and development works;
• Producing solutions for environmental problems by producing our own technologies;
• Organizing emergency and environmental risk management at the most developed level;
• Being a pioneer in realizing environmentally-sensitive investments;
• Being engaged in activities supporting the Sustainable Development principle;
• Establishing Environmental Information Systems ensuring access to all kinds and types of environmental information and data, we, as Koç Group, aim to be a Group showed off with pride not only today but also tomorrow and leaving sound traces for both our country and the world.

Koç Group Environmental Policy and Performance
Departing from "Sustainable Development and Environmental Protection" targets, and in all processes applied in Koç Group Companies, the Environmental Policy determined and formulated for Koç Holding commits and aims:
• To comply with the national environmental laws and regulations and international environmental treaties and conventions ratified by the Turkish Grand National Assembly, as well as other obligations and requirements;
• To prevent environmental pollution and continuously develop environmental performance by following up the scientific researches and technological developments;
• To protect and make most efficient use of natural resources;
• To keep the probable environmental effects under control and reduce the losses from the design stage to the end of life cycle;
• To reduce or recycle the wastes as far as possible at source;
• To contribute to continuous development by establishing and implementing environmental objectives and goals;
• To increase the environmental responsibility awareness of all our employees from top management to the lowest unit and level by giving training courses on environment to all employees of Koç Group Companies;
• To establish communication and if required, share information with all relevant parties;
• To support the environmental activities and participate in the environmental activities and organizations of public and private entities and institutions.

Environmental management activities of Koç Holding and Group Companies are focused on three main fields. Accordingly, all companies of Koç Group:
• Keep the environmental effects of their business operations under control, and enter into improvement activities for reduction of these effects;
• Follow up the environmental effects of their products and service for the whole life cycle from the design and planning stage to the end of economic life of them, and develop "environment-friendly products", and take actions for reduction of these effects;
• Organize training activities for increasing the environmental protection knowledge and awareness level of all segments of society and particularly their employees, customers, dealers, suppliers, subcontractors and other operational stakeholders, and organize field works for protection and development of biodiversity in their fields of business.

The environmental management activities undertaken by Koç Holding and Group companies cover three main areas. All Group companies,
• Aim to keep environmental impacts created by their activities such as energy consumption, water usage, emission and production of waste under control; increase recycling; protect biodiversity; and work on improvements to realize these goals in accordance with “the best existing practices”.
• Monitor environmental impacts created by manufactured goods and services for their whole life-cycle, from their design and planning stage until the end of their economic life; work on reducing these impacts by developing environmentally-friendly products.
• Carry out educational activities to increase knowledge and awareness on environmental protection among large segments of society, particularly employees, customers, dealers, suppliers, contractors and other operational stakeholders. Established within Koç Holding with the participation of Group companies' environmental, energy and sustainability specialists, the Koç Group Environmental Council is the highest-level coordinating body for environmental management issues at Koç Holding. The Council is responsible for identifying long-term environmental management strategies in addition to action plans for implementing these strategies, sharing examples of best practices among Group companies, carrying out efforts to ensure compliance in keeping with changes in environmental regulations, organizing environmental training activities, and developing environmental management systems across the Group. Various working groups are formed under the Koç Group Environmental Council to expand activities and improve performance in certain focus areas.

Staffed with participants chosen from among the Environmental Council membership, these working groups aim to determine and ensure Group-wide adoption of existing best practices; execute joint initiatives to increase synergy; and formulate plans geared toward improvement. Environmental Council formed working groups to focus on the key issues of Water, Soil, Integrated Environmental Permits, Waste Management, Coordination Board for Improving the Investment Climate, Greenhouse Gases, and Biodiversity. The working group structure is updated on an as needed basis.

The long-term strategic plans devised by the Koç Group Environmental Council are converted into actionable goals by the companies. Group companies ensure organization-wide adoption of these goals starting from their senior management teams. Efforts of related units are evaluated by way of numerical performance indicators. The Koç Group Environmental Council created a long-term strategic plan to be effective until 2020. Under this strategic plan, Koç Group companies are expected to certify their facility environmental management systems in accordance with international standards such as ISO 14001 and ISO 50001; implement best practices in energy and water efficiency; initiate efforts to achieve zero-waste operations; adopt green procurement processes and environmentally-friendly product practices; undertake anti-climate change related initiatives; and execute efforts to create environmental awareness among the entire society.

Annual performance evaluation reports are drafted in line with the key performance indicators determined by the Group Environmental Council; these reports are presented to Koç Holding’s senior management. Further, the Audit Group conducts policy- and performance-based periodic audits and reports the results to the related company senior management team. In addition to the audits conducted by the Audit Group with the contribution of the Environmental Council, the environmental policies and performance of Group companies are also subject to intra-company and independent auditing processes. Improvement efforts are carried out to address the target areas of improvement identified via these audits. Shortcomings identified after the Environmental Audit are tracked via quarterly interim reports; registered in the target cards of the companies for that year; and improvements are implemented. The environmental management systems of Koç Group companies are based on the ISO 14001 Environmental Management System Standard and other internationally-accepted standards. These systems are certified through periodic external audits in order to ensure the integrity of implementation.

Eighty-two of the 85 facilities owned by Group companies that fall within the scope sustainability reports are ISO 14001 certified. The share of certified facilities increased to 96,5% in 2016, from 89% in 2014. In addition to ISO 14001, other methods widely used by Group companies include the ISO 50001 Energy Management System Standard; ISO 14064-1 for Quantification and Auditing of the Greenhouse Gas Emissions System Standard; OHSAS 18001 Occupational Health and Safety System Standard; ISO 9001 Quality Management System Standard; ISO 10002 Customer Satisfaction Management System Standard; ISO 27001 Information Security Management System Standard; ISO 17025 Laboratory Management System Standard; EFQM; Six Sigma; and Total Productive Maintenance (TPM). Group companies also use Supply Chain Management System standards such as ISO 28001 and CIPS; ISO 20000 Information Technology Service Management System Standard; ISO 22301 Business Continuity Management System Standard; and social responsibility systems such as BSCI and SEDEX. Additionally, Group companies conform to sector-specific or generally-accepted local and international product and process quality standards, norms, product information and labeling practices. For example, REACH, RoHS, EuP, and WEEE are regulations governing the consumer durables sector that set the environmental attributes of products. Group companies comply with the European Union’s REACH Regulation while also expecting their suppliers to adhere to this regulatory framework.

Group companies bring their environmental management efforts and accomplishments to the attention of their respective senior management teams as well as to the executive management of Koç Holding. This information is also shared with the related stakeholders via sustainability reports and other various tools.

Koç Group companies approach environmental risks with a holistic approach, from procurement and logistics to sales and consumption of products and services. The aim is to mitigate the impacts across the value chain. To this end, Group companies expect their suppliers to adopt environmental policies and a governance approach that is identical to theirs; include environmental management criteria in supplier auditing methodologies; and execute capability enhancement initiatives. In 2016, 10.2% of active suppliers of Group companies were audited based on environmental management criteria. In addition, environmental training administered to the personnel of supplier firms totaled 2,976 person-hours. As part of their environmental management activities, Group companies also conduct environmental awareness training initiatives for their employees, business partners, and society at large. Within this scope, Group companies administered more than 91,500 person-hours of environmental training attended by nearly 69,000 persons during 2016. During 2016, Group companies channeled more than TL 77 million to environmental management and training activities, and approximately TL 309 million to environmental performance improvement initiatives, for a total of over TL 386 million for environment related efforts. More than TL 345 million of these outlays and investments were realized by Tüpraş. Largest share of the TL 1.3 billion R&D spending by Group companies in 2016 was for activities designed to reduce the environmental footprint of products and production processes.

Koç Holding strives to improve its sustainability efforts by actively engaging with different stakeholders. To determine material issues for NGOs, universities, public enterprises and opinion leaders on environmental, human rights and transparency issues and to fully understand their expectations from Koç Group, in 2016, “Sustainability Stakeholder Research” was conducted. According to the research results, preserving existing resources while increasing productivity, taking actions on climate change and increasing energy efficiency to reduce greenhouse gas emissions are focal points on stakeholder expectations from Koç Group companies. Accordingly, Koç Group updated its material issues on sustainability and prepared a guide on material issue management, stakeholder engagement, performance management and determining best practices.

In an effort to raise awareness on the environment and the problems it faces, a major element of the Group’s environmental strategy, we began to organize World Environment Day under the auspices of Koç Holding’s CEO in 2014. Focusing on a different environmental issue each year, the event’s 2016 theme was “Eco-Innovation”, an important aspect of Koç Group innovation strategy. The day’s activities included presentations, attended by many experts to mark the occasion. The presentations discussed major issues such as eco-innovation and its effect on the today’s business world, its importance regarding competitiveness and its links with Sustainable Development Goals.

* Data used in this page cover the companies representing 77% of our Group employees and 82.8% of combined turnover of the Group, as of 2016. Further information may be retrieved from Koç Group Sustainability Reports.