Koç Group Sustainability Report 2014

IF NOT US, THEN

Koç Group Sustainability Report 2014 CONTENT Initiatives carried out by Koç Group www.koc.com.tr [email protected] For more detailed information Your feedbacks, suggestions and critics Projects and examples of best prac- regarding our operations as well as are the most valuable source we have tices conducted by the Group Compa- any updates and news beginning to improve our reporting studies. nies Arçelik, Aygaz, Ford Otosan, Koç 1 January 2015, you may visit Koç Information Technologies Group, Opet, Holding corporate website along with Otokar, Otokoç Otomotiv, Tat Gıda, the websites of the individual Group Tofaș, TürkTraktör, Tüpraș and Yapı Kredi companies and Vehbi Koç Foundation. Joint projects conducted by NGOs You may find the PDF version of Koç supported by the Group, The Vehbi Koç Group Sustainability Report on the Foundation and affiliated institutions corporate website.

Table of Contents: The Global Compact 1 About the Report United Nations Global Compact (UNGC) consists of 10 principles of human rights, labor conditions, 2 Message From the Chairman environment and anti-corruption. These principles are based on a guiding perspective for 3 Message From the CEO businesses and organizations in order allow them to achieve further objectives in terms of risk 4 Koç Group in 2014 management, efficiency growth, motivation and fidelity of employees, brand awareness as well as access to new markets. 6 Sustainability Vision Shaping the Future 12 Responsible Management The 10 Principles of the Global Compact 16 Inspiring Talents Human Rights P.16 -25 / P.4 4-4 5 Principle 1: Businesses should support and respect the protection of internationally 26 Innovating for the Environment proclaimed human rights; and 36 Innovation and Product Strategy Principle 2: Make sure that they are not complicit in human rights abuses 40 Empowering the Value Chain 46 Bridging the Past and the Future: Labor Standards P.16 -25 / P.4 4-4 5 Principle 3: Businesses should uphold the freedom of association and the effective recognition Nakkaștepe Campus of the right to collective bargaining; 48 Embracing the Community Principle 4: The elimination of all forms of forced and compulsory labor; 64 GRI Content Index Principle 5: The effective abolition of child labor; and Principle 6: The elimination of discrimination in respect of employment and occupation

Environment P.26-35 / P.36-39 Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: Undertake initiatives to promote greater environmental responsibility Principle 9: Encourage the development and diffusion of environmentally-friendly technologies

Anti-Corruption P.12-15 Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery About the Report

Koç Group has been a leading organization in the Turkish business world for 89 years, and a pioneer that has paved the way to many firsts. In addition to being the very first joint-stock company and holding company established in Turkey, Koç Holding and Koç Group companies have laid the cornerstones for the Turkish industrial development not only with the products and services they have provided but also through the principles and values they have set. Focused on guiding the future with the power it derived from its values settled in the business culture and its vision stemming from a well-established heritage, Koç Group has always been well-respected by its stakeholders been considered as exemplary. The success we have come to enjoy also entrusts us with a great responsibility towards our stakeholders. We define this responsibility as serving to enhance the quality of life for the future generations in terms of the social, economic and environmental properties of the ecosystem we have created, adopting a transparent and accountable approach towards our stakeholders regarding our operations and setting an exemplary stand not only by what we do but also the way we do business. In that respect we have further developed our sustainability report and the practices that form the basis for these publications, which we have been continuously developing since 2008, by implementing numerous new and progressive measures. The most significant change we have undertaken this year regarding our reporting activities has been in the standards we comply with. Our reporting activities, which previously complied with GRI G3 Standard B level guidelines, are now in accordance with the GRI G4 Reporting Guidelines “Core” option. In that respect we have revised our current systems so that we could adhere to the GRI G4 guidelines in identifying the scope and boundry of the report, determining the report content, calculating the performance indicators and establishing the statements regarding our practices. The report covers the operations of and projects conducted by Koç Holding in Turkey from 1 January 2014 until 31 December 2014. Due to the company structure, however, the most significant part of the social, environmental and economic impact generated by Koç Holding operations stem from the operations of the affiliates that actually exist outside the company organization. That is why the report covers the practice and performance data of certain group companies including Arçelik, Aygaz, Ford Otosan, Koç IT Group1, Opet, Otokar, Otokoç Otomotiv, Tat Gıda, Tofaș, Tüpraș, TürkTraktör and Yapı Kredi as well as projects undertaken with the support of Koç Holding, the Group Companies and Vehbi Koç Foundation (VKV). Unless otherwise stated and except for the sections explaining the Koç Holding profile besides the policy, system and practices implemented throughout the Group, the statements made regarding sustainability indicators cover those aforementioned companies or the consolidated information of the sector groups composed of those aforementioned companies. The scope we have established in that way reflects 87% of our Group employees and 94% of the combined turnover of the Group. Meanwhile endeavors of Vehbi Koç Foundation are also covered in the social investment areas mentioned in the report as well as the data related to external stakeholders of the Group companies such as dealers and suppliers regarding certain prioritized areas. In an effort to enable the readers to compare the performance data shared throughout the report, the data from previous periods are also quoted. However, certain performance indicators are being disclosed for the very first time this year and comparative figures for such indicators are not included in the report. We aim to implement the same annual plan and to use the same reporting standard in the reporting periods ahead.

1Koç Information Technologies Group does not represent a legal entity, but a common name for, Koç Group IT Companies, namely KoçSistem, Bilkom, Koç Infor- mation and Defense Technologies. Within this report, unless otherwise stated, all performance and application information disclosed regarding Koç Information Technologies Group consists of the shared data and practices of these 3 companies.

G4-17 G4-18 G4-20 G4-21 G4-23 G4-28 G4-29 G4-30 G4-32 Koç Group Sustainability Report 2014 1 MESSAGE FROM THE CHAIRMAN

issue. I consider it a significant progress that after the Mil- lennium Development Goals were identified, United Nations determined the new goals as Sustainable Development Goals; and that the private sector has become one of the active players in this process.

Today all of our operations defined within the scope of our sustainability agenda are shaped in the light of private sector’s this key role. In an effort to strengthen our capacity further and embrace the spirit of time, we launched Koç Group Sustainability Management Project with the participation of the Group Companies during the reporting period. Also taking global and local expectations into account, we will identify the areas that will determine the sustainability performance in the periods ahead and will develop our management strategies regarding these areas through this project. We are aiming to ensure that the sustainability management practices that have gained momentum during the reporting period will contribute to improving performance in an increasing fashion. Dear Stakeholders, In 2014 we launched a significant initiative in the field of Two aspects that we highlight as Koç Group at every oppor- social development, which we have always placed special tunity forms the foundation of our sustainability philosophy. emphasis on since the day we were established, and which The first aspect is our developmental perspective, defined we now regard as one of the most important components by our founder Vehbi Koç’s statement “I live and prosper of sustainability. In line with an agreement we signed with with my country”, while the second is our awareness to- the United Nations Entity for Gender Equality (UN Women), wards the responsibility of managing our broad sphere of we became supporter of the HeforShe a global solidarity influence meticulously and diligently. As a matter of fact, movement for gender equality. Having committed ourselves what we actually seek to achieve with our sustainability to being one of the 10x10x10 global impact leaders of this activities is to blend this philosophy with current priori- solidarity movement, we have also set gender equality as ties and values in an effort to mainstream this awareness the new theme focus of our “For My Country” Project. I look across all the people and organizations. forward to sharing our achievements with our companies, employees and dealer network in 2015. I believe that a so- In line with our firm belief in this philosophy, we signed UN ciety without women is a society without a future, and that Global Compact in 2006. Back then whether private sector upholding equality in social roles is a must for achieving should take on such an important role in issues apart from social and economic growth. the economic sphere was a controversial subject that was gradually making its way onto the global agenda. Certain I wish the gains we seek through these initiatives will have organizations that could be defined as pioneers owned up a broad reach and inspire many, and I would like to thank to their responsibilities in that sense while the remaining in advance all our stakeholders - especially our employees, majority had significant doubts about stepping into this investors, suppliers and business partners - for supporting area. However, the global opportunities and global threats us in this path. emerged in the following period showed how much business world needs to take part in social and environmental aspects of development, in fact even showed the importance of integrating this very philosophy into the way of conducting business.

Today, I see with great pleasure that both governments and Mustafa V. Koç the private sector are ready to share responsibility for this Chairman

2 Koç Group Sustainability Report 2014 G4-1 G4-2 MESSAGE FROM THE CEO

Dear Stakeholders, We as Koç Group seek to improve the quality of life in the society not only through the products and services we offer but also through the sustainability approach we adopt. We are working to activate the sustainability management model that shapes the future and is formed according to a holistic understanding across the entire Group. For that purpose during the reporting period we continued our sustainability management activities and completed the first stage of the Koç Group Sustainability Management Project, which is reviewed with a risk and opportunity-based approach. Within the scope of the project, first we revised our sustainability priorities in an effort to best address the stakeholder expectations today and in the future. Then we identified the aspects we need to improve by looking into the management principles our group companies follow. In the periods ahead, we plan to carry out activities that will increase our performance in the development issues we identified. Furthermore, we are aiming at spreading the 360° impact analysis perspective that extends from the environment to social development, and which we regard as the most important contribution of employees. These studies were conducted according to an app- our sustainability efforts, across our Group and our value chain. As a roach highlighting equal opportunities and diversity. Moreover, we result, while we will take our Group performance to the highest level, launched new initiatives focused on gender equality in 2014. we will also ensure that the big picture, which we must never forget that we are a part of, reflects on the sensitivities in our daily life. Sustainability management expanding throughout the entire value chain is a rising trend. While stakeholder expectations also focus Climate change is one of the issues that stands out in our project, on this area, Koç Group Companies launch practices introducing and is included in the Koç Group Companies agenda as a funda- their suppliers, dealers and business partners to sustainability mental priority. Approaching the issue from a multi-dimensional management; they organize trainings that help them enhance perspective, we form our projections for the future by taking their performances besides audits tracking their progress. As a risks and opportunities into account. Our activities in this area result of these practices, not only sustainability risks are managed make a positive contribution to our operational efficiency and efficiently throughout the value chain but value-added generation commercial success while facilitating our capability to comp- increases as well. ly with the potential legal regulations that might be introduced in the future. In 2014 our Group Companies succeeded to re- Achievements I mentioned here as a source of pride, also indicate duce their energy requirements by 2 million GJ and cut down the extent of responsibility I have taken over. My goal is to be able to hand this responsibility over, with the same level of success on their emissions by 149.9 thousand tons of CO2e in total thanks to the energy efficiency measures they have taken. The and pride, to the generations that will come after us. Taking this fact that Arçelik and Tofaș were listed among the best per- opportunity, I would like to thank all of our stakeholders, especially forming companies on an international scale within the scope our employees, shareholders, suppliers, dealers, and business of the Carbon Disclosure Project (CDP) was also an outstanding partners that have played a great part in Koç Group’s success so success we came to enjoy during the reporting period. far, and hope that we will go further together. Our companies continued their water consumption activities during the period too. Thanks to reusing and recycling applications, 26.7 million m3 of fresh water consumed in 2014 by our Group Companies actually met the need for 4 times this quantity, while the rate of recycled water use for consumption reached 75.7%. As a result of employee development practices undertaken during the year, we provided around 2 million person*hours of trai- Levent Çakıroğlu ning and planned 125,560 development actions for our 26,681 CEO

G4-1 G4-2 Koç Group Sustainability Report 2014 3 KOÇ GROUP IN 2014

KOÇ GROUP, THE LARGEST INDUSTRY AND SERVICES CONGLOMERATE OF TURKEY, CARRIED IT'S PROGRESS IN 2014. ACCORDING TO İSTANBUL CHAMBER OF INDUSTRY’S TURKEY’S TOP 500 INDUSTRIAL ENTERPRISES 2013 LISTING, FIVE OF THE TOP TEN COMPANIES ARE KOÇ GROUP COMPANIES.

Consumer Energy Automotive Durables Finance Other

Major Companies Major Companies Major Companies Major Companies Major Companies Tüpraş* Ford Otosan* Arçelik* Yapı Kredi Bankası* Tat Gıda* Aygaz* Tofaş* Arçelik-LG Klima Yapı Kredi Leasing* Düzey Opet TürkTraktör* Yapı Kredi Yatırım Ortaklığı* Koçtaş THY Opet Otokar* International Alliances Yapı Kredi Koray* Setur Opet Fuchs Otokoç Otomotiv LG Electronics Yapı Kredi Faktoring Setur Marinaları Entek Yapı Kredi Yatırım Mares* Aygaz Doğal Gaz International Alliances Yapı Kredi Portföy Yönetimi Divan Akpa Ford Motor Co. Koçfinans KoçSistem Demir Export Fiat Auto S.p.A Bilkom Case New Holland International Alliances RMK Marine International Alliances UniCredit İnventram AES Corporation Koç Bilgi ve Savunma Tek- nolojileri Setair * Listed companies Ram Dış Ticaret Tanı Zer Merkezi Hizmetler

63 Number of International Alliances Facilities Certified B&Q Kagome with OHSAS Sumitomo 18001 8,813 Number of Employees Volunteering for Social Projects

74 Number of 9% OF Facilities Certified with ISO 14001 228 TURKEY'S TOTAL EXPORT million TL Environmetal Protection Expenditures and Koç Group has generated a combined Investments financial revenue equivalent to

195 Number of Donations, Sponsorships and 8% Social Projects 30,545 Number of OF TURKEY'S NATIONAL INCOME Saplings Planted for Reforestation

4 Koç Group Sustainability Report 2014 G4-17 In 23 countries 85,517 employees 24,737 person x hours environmental trainings provided to employees

st World's 341 Largest Company Values (Million TL) 31 December 2013 31 December 2014 Change % According to Fortune Global 500 Consolidated Revenues 66,182 68,622 4 List Operating Profit 3,727 3,239 -13 Koç Holding remained as the only Turkish Profit Before Tax 3,055 3,778 4 company in Fortune Global 500 List during Net Income 4,000 4,214 5 2014. Equity Holders on the Parent 2,680 2,710 1 Koç Holding is the only Turkish company listed in Total Assets 58,790 63,941 9 Fortune Magazine's 2014 “World's Most Total Equity 26,191 29,301 12 Admired Companies’’ List. Shareholders' Equity 18,035 20,348 13 Koç Holding was entitled as "Turkey's Most Admired Company" in Fortune Turkey's List. KOÇ GROUP COMPANIES TOTAL NUMBER OF R&D STAFF Koç Holding was listed as top ranking Turkish TOTAL R&D EXPENDITURE (MILLION TL) IN KOÇ GROUP COMPANIES company according to the European Comission's R&D Investment Scoreboard” in 2014. Of the five other Turkish companies on the same list, two are 918 ANNUAL 4,169 INCREASE Koç Group companies. 2014 AVERAGE 2014 IN 706 INCREASE 3,693 NUMBER Koç Holding is one of only four Turkish companies 2013 IN R&D 2013 OF R&D on the 570 EXPENDITURES 3,258 Boston Consulting Group’s 2012 2012 STAFF BETWEEN BETWEEN (BCG) “2014 BCG 100: Rising 503 2,744 2011 2013-2014 2011 2013-2014 Stars” list. 30% 17%

Four of the top ten companies in the Turkish Exporters’ Assembly’s ranking of the “Top 1,000 Exporters of Turkey” in 2013 are Koç Group companies. CO2

Koç Holding’s “Vocational Education-A Crucial Matter for the Nation” 75.7% 2.00 149.9 project was honored with the Grand Prize MILLION GJ THOUSAND TONS of the Turkish Confederation of Employers’ Unions (TİSK) at their 2014 Corporate Social Responsibility Awards. Percentage of Recycled Total Energy Saved Total GHG Emissions Water in Total Water Usage Reduced

G4-9 Koç Group Sustainability Report 2014 5 “Another fundamental principle that we have pioneered and which is non-negotiable for us is fulfilling our responsibilities to both this and future generations.” Our Founder Vehbi Koç

SUSTAINABILITY VISION SHAPING THE FUTURE

With a history dating back to 1926, our human resources and customers, factors leading corporate sustainabi- Koç Holding has been a pioneering and to generate value for the society. lity to claim a larger part on the Turkish organization for the Turkish economy Now called sustainability management business world agenda. with the many firsts it has achieved. thanks to the management approach- In addition to being the founder of the es that have developed over time, In addition to our corporate citizen- first corporation, the first holding com- those principles have identified with ship practices, and the activities pany, the first direct foreign investment the values of Koç Holding and spread aligned with the 10 Principles of UN partnership, and the first Turkish cor- across its organizations and penetrat- Global Compact that we have spread porate foundation in Turkey, Koç Hol- ed into Koç Holding’s each and every across Koç Group sphere of influ- ding has also succeeded to be the first component eventually forming an inte- ence, we have also started developing Turkish company to make the Fortune gral aspect of Koç Holding. sustainability management features Global 500 list. Besides the pioneer- over the years. We developed many ing approaches implemented for cor- exemplary management instruments porate development, Koç Holding has and practices in this area. Aiming at KOÇ HOLDING SUSTAINABILITY also undertaken a number of visionary creating a model to broaden our hori- STRATEGY investments from producing Turkey’s zons further by already capturing the new requirements that the changing first electrical home appliances and Signed in 2006, the UN Global Com- world will impose in the future, we local car manufacture to making the pact lies as the fundamental reference launched the Koç Group Sustainability first LPG distribution service available, for the sustainability management ac- Management Project in 2014 with the and has introduced Turkey to modern tivities carried out by Koç Group in line encouragement of the Koç Holding se- production and product technologies with its vision and values besides the nior management and the support of in a country that was trying to build its Group’s corporate governance, busi- Group companies. Within the scope of industry and economy from the ground ness ethics and social responsibility the project, we identified our respon- up following the founding of the Tur- culture. Responding to the call made sibilities to establish a more qualified kish Republic. Utilizing the strength it by the UN Secretary-General on the standard of life for new generations. derives from the society to launch new corporations with the desire and the Moreover, while fulfilling these respon- initiatives, Koç Group has turned into determination to turn the world into a sibilities we also discussed what we Turkey’s largest industry and services better place and to ensure that the fu- needed to do to ensure the existence corporation, largest private sector em- ture generations are happier than the and development of Koç Group in that ployer and biggest taxpayer. people today, Koç Holding has once new socio-economic environment to again been a pioneer in demonstrating We have inherited from our founder come. In this regard, we determined 4 a responsible approach. Koç Holding’s Vehbi Koç an organization with a past approaches to implement: participation and the leading practic- of great achievements, and a huge es it has introduced in line with its legacy guiding us to be honest and responsible management culture and fair under all conditions, to lead inno- sustainable approach including espe- vation, to establish a corporate identity cially reporting activities have proved and ensure its continuity, to prioritize in turn to be among the significant

6 Koç Group Sustainability Report 2014 G4-16 Arçelik Romania Arctic Cooling Appliances Plant

KOÇ GROUP SUSTAINABILITY GRI G4 Guidelines are Now in Turkish MANAGEMENT Two of the most important barriers to adopting and implementing the inno- Koç Group sustainability management vations throughout the world are capacity and language problems. Although approach is composed of all the ac- it is no longer a problem for large-scale companies, they still pose a problem tivities carried out by Koç Holding and for small and medium scale enterprises. Group companies. The fundamental Having always supported the adoption of global governance approaches it policies and strategies regarding the has promoted to be spread across the Turkish business world, Koç Holding main sustainability issues are estab- takes related initiatives for that purpose today too. A case in point is the lished with the participation of the fact that Koç Holding has taken on the Turkish Project Leader position related Koç Holding bodies and Group within the scope of the project to issue the GRI G4 Reporting Guidelines companies while the policies, stra- in local languages. In line with the agreement reached between GRI and tegic trends and goals regarding the Koç Holding, Koç Holding has established an evaluation board composed of sectoral aspects of these areas are set experts on sustainability from a number of companies so that the entire GRI by the Group companies. Koç Holding G4 Guidelines could be reviewed and published in Turkish. The Guidelines and Group companies establish orga- published in Turkish are now available for the use of organizations willing nizations responsible for dealing with to adopt the GRI G4 Framework. these areas while the improvements achieved in relation to these goals are monitored through performance evaluation systems.

Since 2010 sustainability performance indicators have been monitored via the Koç Group Sustainability Performance Evaluation and Reporting System. Structured in line with the performance indicators set by the Global Reporting Initiative (GRI) G4 Sustainability Reporting practices besides the indicators designed specially to monitor the sustainability performance of the Koç Holding and Group companies, the system is improved annually according to the feedback received and the experience gained. In an effort to ensure the efficient use of the system in terms of content and

G4-19 Koç Group Sustainability Report 2014 7 Aygaz Gebze Facility

IT infrastructure, the required infor- and check the compliance of the ac- Koç Group Sustainability Priorities mation documents are delivered to tivities with the targeted performance the Group employees at the beginning results. In that respect besides all Prioritization is a fundamental prin- of every reporting period in addition other operational areas, the Board of ciple for the Koç Group sustainability to organizing workshops to review Directors is informed on the practices management approach. In line with with the employees about the gene- and performance about sustainability this principle, Koç Holding and Group ral properties of the system as well as through weekly reports, analyses and companies identify the most essential informing them on the new properties evaluations, annual Investor Relations performance areas that need to be introduced. During the data collection Management Board Reports and Sus- addressed, and focus their strategies processes focused on performance tainability Reports. Additionally, the on performing better regarding those evaluation, Group employees enjoy findings reached by the Committees areas, and establish the most efficient direct access to specialist support, and the Working Groups are submitted study program. to senior management through regular which improves the data reliability Within the scope of our Koç Group reports and presentations. Moreover, further. Sustainability Management Project, the the predictions, demands and infor- first aspect we addressed was review- In 2014 the indicators observed via mation stemming from the meetings ing the Koç Group sustainability priori- the Koç Group Sustainability Perfor- held with the people and organiza- ties. Therefore a comprehensive study mance Management Evaluation and tions located in the target stakeholder was conducted for the prioritization Reporting System were revised within groups are also conveyed to the senior stage of the project. Within the scope the scope of the sustainability strategy management so that the decision-ma- of this study, we formed a population of updated by the Koç Group Sustainabi- king processes are supported through 44 common, 94 sector-specific topics, lity Management Project. Furthermore, multi-dimensional information. Based once we went over the issues stem- the system was updated to comply on the performance results obtained ming from the engagements and legal with the GRI G4 guidelines, the most and the decision process supported obligations of Koç Holding and Group up-to-date reporting guidelines issued by the stakeholder views, Koç Holding companies, general and sector-specific by the GRI. Board of Directors identifies the stra- sustainability issues, issues related to tegic steps to be taken by the Group Due to the organizational structure peer companies and practices of the in the future, and to ensure that those of being a holding company, a large competitors in the sectors apart from steps are implemented by the senior portion of the operational activities are the issues related to the business goals management while also following the carried out by the individual compa- of the Koç Holding and Group compa- related process. nies in the Group, and the primary role nies and expectations of the stakehold- of the Koç Holding senior manage- ers. This population was analyzed to ment, and the Board of Directors in identify the prioritized issues in a study particular, regarding those sustainabil- conducted with the participation of a ity practices is to guide the activities group of 230 people including senior that will be carried out in line with the management of our Group companies strategic tendencies, and to monitor and managers of the specialty units.

8 Koç Group Sustainability Report 2014 G4-19 G4-20 Koç Group Sustainability Priorities

Empowering the Value Chain: In line with the corporate culture, Koç Group companies embrace a just and transparent governance understanding. They aim to be in the forefront in competition putting forward business strategies that foresee the world, society, consumers, sectors, markets and expectations arising out of these. Koç Group companies perceive their responsibility for the future not only within the scope of their operations but also in terms of Inspiring Talent: Koç Group com- the economic environment they create. They work with their panies regard human resources as stakeholders to ensure that responsible approaches Empowering the Value their most important capital and tal- and behaviours are adopted and the value chain is Chain ents that will shape the future; strengthened in a commercial sense through- • Product and Service they offer a safe working out the processes from the supply to the Responsibility environment prioritizing • Responsibility in Value Chain point where products and services meet equality, fairness and customers. human dignity while supporting individuals’ development. Inspiring Talent Embracing the • Occupational Health Community & Safety • Community • Workplace Culture Development Embracing the • Contribution Community: Koç Group to Local Economy companies identify their development with the develop- Innovation for Innovating for Future ment of the community present Future: Koç • Climate & Energy in their operation geography. That • Responsible Use of Resources Group companies is why they undertake studies to • Water Management mobilize innovative Innovation & Product Strategy strengthen local economies and help • ideas and technologies communities to develop in social, environ- as a prerequisite of their mental, cultural and economic sense while working future success. They develop in cooperation with NGOs for that purpose. environmentally friendly, efficient and creative business strategies; prioritize people, community and environment in their investments; manage their environmental impact and produce environmental products with added value to meet the expectations of the future generations.

G4-2 G4-19 G4-20 Koç Group Sustainability Report 2014 9 Ford Otosan Yeniköy Factory

As far as the prioritization study was Following the prioritization study, we Koç Holding and Group companies concerned, we applied a method in conducted gap analysis studies with identify their corporate stakehold- compliance with the principles set by the participation of the specialty units ers through an impact analysis. Due the GRI G4 Guidelines. In that respect, from the Group companies to look into to their structures, Koç Holding and we addressed the expectation levels of the components of the administrative Group companies have different target the stakeholders regarding the related approach we take for the manage- groups. Because of the operational matters once we had evaluated the ment of the sustainability issues, and structure of Koç Holding, the Group issues in general besides the impact identified the aspects that are open for companies do not have direct con- potential of those over the business development for the improvement ac- tact with the operational stakeholder success of the Group companies in a tivities we will carry out in the periods groups such as customers, dealers risk and opportunity-oriented fashion to come. and suppliers. However, Koç Holding while also taking the phases that might relates to a large stakeholder portfo- generate impact over the value chain As a result of the sustainability man- lio when it is considered along with its into account. We then consolidated the agement activities carried out by subsidiaries. In that respect prioritized results we obtained on a Group compa- Koç Holding and Group companies, stakeholder groups of Koç Holding ny-specific level throughout the entire Arçelik, Tofaș, Tüpraș and Yapı Kredi include shareholders, subsidiaries, Group by taking sector attributes into were entitled besides Koç Holding to be employees, dealers, agencies, custo- account. Consequently, we were able included in the BIST Sustainability In- mers, NGOs, and public organizations. to prioritize the sustainability issues dex formed for the first time in 2014 by on a Group company, operation sec- İstanbul Stock Exchange (BIST). Type and frequency of the stakehold- tor and Group scale. The sector and er communication activities carried Group-based results we obtained were out by Koç Holding depend on the expectations and needs of the target submitted to the evaluation of the re- OUR STAKEHOLDERS lation units at Koç Holding so that the audience. Stakeholder engagement necessary consolidation study could In line with its corporate values, gov- practices include not only one-on-one be completed, and then the processed ernance principles and sustainability interviews for one and two-way in- results were submitted to the approval approach, it is especially important formation provision and feedback re- of the Koç Holding senior management for Koç Holding to establish a dialogue ception, reports and presentations but for the completion of the prioritization with its stakeholders located on its also project-based partnerships. Koç study. operational geography so that it could Holding applies certain indicators to develop its strategies that will shape decide which corporate stakeholders the future in the best way possible by will be picked to cooperate with. In- recognizing the stakeholder expec- tegrity, respectability, ethical behavior, tations and needs properly. Creating and compliance with the laws and re- constant and constructive communi- gulatory norms are the basic principles cation with the stakeholders lies in the while potential of the collaboration to essence of this strategy. be started to create added-value and multiplier effect on social level besides

10 Koç Group Sustainability Report 2014 G4-19 G4-20 G4-24 G4-25 G4-26 G4-27 Tüpraş RUP

the innovative and creative aspects as webcasts as well as press releases, changes and press releases are post- well as sustainability of this collabo- material disclosures, meetings, and ed on the Intranet, which accessible ration form another set of important interviews. Except for the confidential by the Group employees. There is also criteria for making that decision. information regarded as trade secrets, an in-house monthly magazine called all the questions posed to the related “News from Us”, which is available for While all the operational units of Koç units are replied to by the most autho- public view and is published in order Holding are in contact with their stake- rized person about the matter either in to enhance communication with the holders through various channels, the writing or, if need be, through a meet- employees. main unit responsible for the stake- ing as soon as possible. holder communication activities of the Koç Group companies’ customers are company is the Corporate Communi- Thanks to the broad and comprehen- also able to share their views, sug- cation and External Relations Direc- sive activities of Koç Group regar- gestions, complaints and requests torate. Meanwhile, the fact that the ding corporate citizenship, we receive with Koç Holding through a number of Group companies that account for many requests from our stakeholders channels. Public Relations, Human Re- approximately 90% of the total asset for sponsorships, scholarships, dona- sources or Corporate Communication size of Koç Holding are actually listed tions, and support. Those requests are units provide feedback regarding all on stock exchange requires special evaluated and addressed according to the information requests, suggestions, importance to be attached to the ac- their areas and within the resources opinions, and complaints regarding tivities to communicate with the inves- available by Koç Holding Corporate products and services delivered to the tors, shareholders, and related finan- Communication and External Relations related units through calls, emails in cial stakeholders. Investor Relations Directorate as well as Vehbi Koç Foun- addition to the contact forms available Unit performs the related operations in dation in line with future plans. on the Koç Holding website. that respect. Apart from the practices carried out Koç Holding’s broad sphere of influ- by the Group companies for commu- ence leads to diverse expectations nication with the employees, there and demand from its stakeholders are also numerous activities carried regarding the Corporate Communica- out within Koç Holding. In that respect tion and External Relations Directorate corporate social responsibility projects and Investor Relations Unit. Related such as “For My Country” and “Voca- executives also address the primary tional Education: A Crucial Matter for demands of the stakeholders such the Nation” have been implemented in as transparent, equal, regular and a way to accept participation of and current information provision through contribution from all the Group em- annual reports, sustainability reports, ployees. Furthermore, our employees financial performance reports based are regularly informed through an- on annual and quarterly data, periodic nouncements and various events. Im- analyses, informative documents, and portant announcements, management

G4-24 G4-25 G4-26 G4-27 Koç Group Sustainability Report 2014 11 “Honesty, integrity and superior business ethics are the foundations of our behavior.” Our founder Vehbi Koç

RESPONSIBLE MANAGEMENT

Koç Grup has always sought to be quoted Koç Holding and Group companies have BOARD OF DIRECTORS AND as the best example in the business world acted as pioneering organizations that COMMITTEES thanks to our operations focused on inno- took voluntary initiatives to achieve a high The highest administrative organ at Koç vation, competitiveness and constant de- level of corporate governance standards. Holding is the Board of Directors. Formed velopment. Since our foundation 89 years In that context Koç Holding has been one according to a structure that complies ago to modern times, our responsible of the first Turkish companies to adopt with the Corporate Governance Princi- and sustainable management approach practices that turned into legal regulations ples set by the CMB, the Board of Direc- has played an important role in achiev- over time such as having independent tors has 15 members. Long before the ing that brilliant success. Our goal today members on the board and correlating CMB issued the related communiqué, is to shape the future too and enhance the remuneration of the senior manage- Koç Holding had adopted the principle the quality of life for the new generations ment with sustainable financial and oper- to assign professionals with internatio- while continuing to produce sustainable ational performances. The principles that nal success and prestige in their areas values for our stakeholders. In addition Koç Holding and Group Companies are to act as independent board members. to our strategic vision of seeking to learn required to adhere to at all times include Pursuant to the definition made in CMB from our stakeholders and to capture the showing a transparent, fair, responsible Corporate Governance Principles, none of expectations of the future now, the driving and accountable management approach the board members take on an executive force behind our trust in the future sus- besides ensuring full compliance with the role. Currently out of the 15 board mem- tainable development of Koç Group lies in regulatory norms as far as the organiza- bers, 5 are acknowledged as indepen- our corporate management approach that tional structure, policies and business pro- dent members in accordance with the we always strive to develop without com- cesses are concerned. principles stated by the CMB. In addition promising from our corporate principles or Issued by the Capital Market Board (CMB), to the board members accepted as inde- our ethical practices. Originally presented “Corporate Governance Principles” are im- pendent members by the CMB, 2 of our by our founder Vehbi Koç’s perspective plemented to a large extent by Koç Holding board members actually comply with all over the horizon and described today as and Group Companies. All our related orga- the independence criteria except for the sustainability management principles, our nizations carry out activities to improve their criterion about residing in Turkey and the Group values will remain as the strongest implementation of Corporate Governance criterion about the duration required by light showing us the way while we shape Principles levels continuously while the im- the Income Tax Law. Moreover, different our future. provements achieved are presented for our individuals act as the Koç Holding Chair- stakeholders to view annually through the man of the Board of Directors and Koç Annual Reports issued within the scope of Holding CEO. CORPORATE GOVERNANCE the Corporate Governance Compliance Re- A number of committees are formed so Principles of integrity, respectability, ethical port. Among our Group Companies traded that Koç Holding Board of Directors is behavior, and compliance with laws and on the stock exchange, Arçelik, Aygaz, able to perform its duties and responsi- regulations form the backbone of the cor- Otokar, Tofaș, TürkTraktör, Tüpraș bilities properly. porate governance structures established and Yapı Kredi Bank receive corporate within Koç Holding Group companies. Hav- governance ratings at regular intervals, Audit Committee ing understood the importance of forming and as a result of the high performance Composed of three independent mem- a corporate identity thanks to our founder levels achieved, they are listed on the bers, the Audit Committee oversees the Vehbi Koç’s visionary perspective long ago, Corporate Governance Index. functioning and effectiveness of process-

12 Koç Group Sustainability Report 2014 G4-34 Tat Gıda Ketchup Production Line

es and systems such as the accounting members and fulfill the duties regarding leads Koç Holding risk analysis and mana- system, public disclosure of financial the remuneration of the Board of Direc- gement activities. Through meetings and data, independent auditing, and inter- tors, and senior executives. periodical reports, all potential risks to be nal control of the partnership. The Audit encountered by Koç Holding are not only Risk Management Committee Committee supervises selection of an au- questioned under the main titles of fi- dit company as well as the preparation of Chaired by an independent board member nancial risks, operational risks, legal risks independent audit contracts, the launch and composed of 2 members, the Risk but also subjected to a comprehensive and of the independent audit process and the Management Committee carries out ac- detailed assessment. In that respect the activities of the independent audit organi- tivities for early diagnosis of the risks that social, environmental, economic risks and zation at every stage. may put the existence, development and opportunities involving current as well as continuity of the company at stake besides Corporate Governance Committee potential investments and operations are the implementation of counter measures overviewed so that preventive measures Composed of 2 members and chaired by and activities for risk management. could be taken against the identified risks. an independent Board of Directors mem- Executive Committee Information reports are filed regarding the ber, Corporate Governance Committee issues defined, and submitted to the the monitors the company’s compliance with Composed of the board members that Risk Management Committee in particu- the Corporate Governance Principles, do not have any executive roles, Execu- lar, and the Board of Directors periodically reviews the reasons quoted for the cor- tive Committee seeks to establish active through Koç Holding CFO. The Board of Di- porate governance principles yet to be coordination between the Board of Direc- rectors decides on the strategic actions to implemented, and makes suggestions to tors and the administrative structure as be taken regarding the issues and aspects the Board of Directors concerning mea- well as ensuring efficiency regarding the identified and the risk tolerance limits. The sures for further improvement. In line investment and business development functions responsible for the management with the CMB communiqué on Corporate issues that will be implemented in line of those risk issues are established within Governance Principles, the Corporate with the strategic goals. the Holding and Group companies. Governance Committee’s duties now Detailed information on the formation of An approach identical to the Koç Holding also include establishing a responsible the Board of Directors and the Commit- risk management model is present within and sustainable management approach tees, their working principles and mem- Group companies, and the Group compa- throughout the company and, on behalf ber composition is available on www.koc. nies have set up their own risk detection, of the Board of Directors, following up the com.tr. early warning and prevention mecha- principles and strategies adopted for that nisms, as well as their tolerance limits. The purpose. risk detections from the Group companies Nomination and Remuneration RISK MANAGEMENT feed the related processes at Koç Holding Committee Risk management and reporting are and help the preparation and implemen- Composed of 2 members in total, the among the responsibilities fulfilled by Koç tation of the action plans regarding the Nomination and Remuneration Commit- Holding Board of Directors with great care. output. tee is chaired by an independent board Risk Management Committee supervises Apart from the preventive measures taken member. The main duty of the committee the risk management function on behalf of against the risk elements identified, there as stated by the CMB Corporate Gover- the Board of Directors. In cooperation with are also other instruments utilized to pre- nance Principles is to nominate the board other presidencies, Presidency of Finance vent risks such as commitments made to

G4-14 G4-15 G4-34 Koç Group Sustainability Report 2014 13 Otokar Factory

the national and international voluntary Presidencies and Group companies. well as corporate citizenship approach and initiatives such as the Global Compact and Strategic planning process is carried out universal human rights so far. Equality at Work Declaration; in addition annually, and encompasses a minimum Launched by shaping a long-established to management standards including ISO period of 5 years. In addition to defining tradition formed over years through current 14001, ISO 14064, OHSAS 18001. the vision of the company and the strat- principles and practices of business ethics, egies and goals to be monitored in line Koç Group Code of Ethics and Business with that company vision, Group compa- COMPETITIVE STRATEGIC PLANNING Conduct has been documented, and is nies also evaluate the market conditions available for all the stakeholders to openly Koç Holding Board of Directors oversees in the next period, perform environmental view over the corporate website in Turkish the long-term interests of the company in and competition analyses, and monitor and English. All Koç Group employees are the first place by the strategic decisions developments regarding regulations, informed on the Koç Group Code of Ethics it takes and through its efforts to keep customer expectations, technological and Business Conduct, which is binding the balance between the risk, growth and innovations, product and service prop- for all Koç Group employees as well as benefits in the most suitable level while erties and trends regarding distribution business partners such as suppliers and managing and representing the compa- channels. Supported by feasibility stud- dealers. Moreover, new employees are also ny. Having defined the strategic goals ies, they are presented to the CEO and informed about those norms and principles for Koç Holding, the Board of Directors the related Presidents at the Strategy Re- during the orientation process. Compliance defines requirements for the human review Meetings. The financial projections with the Koç Group Code of Ethics and sources and financial resources, and also approved by the companies are consol- Business Conduct is ensured by the Ethical audits the management performance. idated on Group basis and a resource Conduct Boards set up separately within balance scenario for a period of 5 years At the quarterly meetings, Koç Holding Koç Holding and Group companies. Group is drawn up. Board of Directors monitors the finan- companies also issue company-specific cial performance of the Koç Group in a ethical conduct norms documents that comparative fashion with the budget, BUSINESS ETHICS AND ANTI- meet the sector-specific expectations and evaluates the developments regarding CORRUPTION comply with all the aforementioned policies. strategic issues, and makes suggestions. Due to the emphasis placed by the Koç During the year-end performance evalu- Our founder Vehbi Koç’s statement “It is our principle to be fair in all our relation- Group on ethical norms and transparency, ation process, besides the financial and the Group companies adhere strictly to all operational indicators, the realization le- ships, to act in good faith and understanding to ensure mutual benefit, and to comply the requirements and standards required vels for the goals of company strategies by the international trade norms. In that are also measured so that they could with the law and ethical rules” has been a guideline for Koç Group members. Having respect, all the Group companies accept be used as input for performance and fulfilling their legal obligations and provid- awarding. established itself as a role model that is now regarded as an exemplary figure by ing the highest gain for their stakeholders The most essential input for the activities many other organizations today, Koç Hold- as their responsibility. There is a constantly carried out on Board of Directors level is ing has assumed a pioneering role with the functional, standard and efficient check- composed of the strategic planning op- emphasis it has placed on ethical values, ing procedure activated throughout all the erations carried out by the Koç Holding transparent and fair way of doing business, Group companies to ensure that this re- Strategic Planning Organization, Sector compliance with laws and regulations, as sponsibility is fulfilled.

14 Koç Group Sustainability Report 2014 G4-14 G4-15 G4-56 RISK MANAGEMENT

FRAUD PROCESS AUDIT

REGULATIONS FINANCIAL AND STATEMENTS COMPLIANCE

Reporting directly to Koç Holding Chairman, • Regular audits and reviews conducted pendent board members. Koç Holding Audit Group Presidency con- by independent audit companies provide During the investigation of corruption sus- ducts the central audit process of Koç Group the Group companies with an outside picions, the following aspects are paid the companies. Meanwhile the Group compa- perspective over compliance with the greatest importance in the process: nies have their own internal audit functions international auditing and risk in place. Koç Holding and Group compa- management standards. • Clarifying the issue as soon as possible, nies’ internal audit departments perform • The Group companies with global part- • Maintaining confidentiality, five essential audit processes including Risk ners benefit from not only the Group’s • Following the necessary legal processes, Management Auditing, Process Auditing, principles, but also from the know-how • Informing public authorities or stake Financial Statements Auditing, Regulations of the foreign partners in terms of codes holders if necessary. and Compliance Auditing and finally Fraud of ethics while those ethical principles Auditing. Completed within the framework are implemented in the entire business Anti-fraud audits call for a process and of the International Auditing Standards, processes and relationships. content that requires special competen- those five essential audit processes assess cy. Koç Holding employs 2 auditors with In 2014 all the audits conducted by Koç the efficiency and adequacy of the internal a special certificate in fraud auditing Holding and Group companies’ internal auditing systems besides identifying the ar- (CFE-Certified Fraud Examiner) so that audit teams included audits for fraud. eas that need to be improved. efficiency in fraud audits could be en- Koç Holding Audit Team managers are hanced. Moreover, in order for the au- In addition to the general audit procedures contacted via their direct lines regarding ditors to possess globally acknowledged and preventive measures, the Group com- the conducts that are deemed suspicious know-how, they are encouraged and panies also carry out various activities in terms of fraud. The goal here is to en- supported to get a CIA (Certified Internal including special audit operations and sure that company employees can sub- Auditor) certificate. Koç Holding Audit activities in particular against any form of mit their allegations directly and free from Group Presidency employs 7 CIA-certi- bribery and corruption risks. Apart from the any influence. auditing processes, the following processes fied auditors at the moment. According to the Koç Group Procedures, are implemented throughout Koç Group to In line with the Koç Group Ethical Con- in case of any possibility of fraud in the prevent the risk of bribery and corruption; duct Norms, Koç Holding and Group Group companies, the manager of the re- companies do not adopt any political • Koç e-audit software carries out analyt- lated department informs the company’s ideologies or lend any support, ma- ical inspections and monitors the com- General Manager about the situation. The terial, in kind or in any other forms, to pany results. General Manager then immediately in- any political organizations or people in • Applications such as the Audit Portal forms the Business Unit Presidency and principle. Koç Group companies do not and Koç e-Audit software are used to the Audit Group Presidency he reports have communication with the public au- improve and update the knowledge to at Koç Holding. The fraud audit and thorities of the countries where they op- of our employees in the Finance and inspection results are also shared with erate except for the social responsibility Accounting departments of the Group senior management. Koç Holding Board projects and the commercial relations companies constantly on regulations, of Directors is also informed periodically established within the framework of the best practices and Koç Group principles. on the results obtained as a result of the related laws, fair competition norms and audit and inspection operations through transparency. the Audit Committee composed of inde-

G4-14 G4-15 Koç Group Sustainability Report 2014 15 “Our most valuable asset is our human resources.” Our Founder Vehbi Koç

INSPIRING TALENTS

We regard our talented, success-oriented Developed on the Group and company and to improve our related practices further. and responsible human resource as the basis, the human resources policies and Therefore, due to its sensitivity about these key to generate sustainable values, and we strategies are formed to enable the Group matters, Koç Group does not allow child believe that it is our most powerful strength companies to access the human resour- labor, and is not involved in any forced or to realize our goal of shaping the future ces they require in sufficient quality and in compulsory labor practices, expecting its too. Having formed our workplace culture sufficient numbers today and in the future suppliers to show the very same sensitivity in that respect, we strive to provide for our besides ensuring that the current emplo- for such matters. employees a working environment that is yees function as goal-oriented individuals The importance we attach to the universal fair, worthy of human dignity, open to deve- satisfied by their work life. The personnel human rights and practices is supported lopment, and safe. regulations issued by the Group companies by our principle to comply with the princi- define the instruments and processes to be ple stipulated in article 3.8.2. of Koç Group utilized in implementing those principles in WORKPLACE CULTURE Code of Conduct, “to act in accordance life. Another important structure we use to with the principles specified by the United The gains we have accomplished to date ensure the sustainability of the value we Nations Global Compact and to show an and the achievements we aim for the future have formed and our workplace culture is example of corporate citizenship to our em- can only be possible with our human re- the “Code of Ethics and Business Conduct”. ployees, dealers, suppliers and authorized sources. Aware of this fact as a Group, we We expect our employees to comply with service centers”. The aforementioned prin- have prioritized recruiting the most talented those ethical norms. Detailed information ciples are also in line with the agreements and qualified professionals. Through our on the Code of Ethics and Business Con- issued by the International Labour Orga- human resources processes, we provide duct is available on http://www.koc.com.tr/ nization (ILO). Commitments are obtained an equal, fair working environment that is tr-tr/hakkinda/hedef-ve-ilkeler . from our suppliers in writing at the onset of worthy of human dignity, and open to de- our business process as a requirement of velopment for our employees. We believe in the importance of providing opportunities Employee Rights for individuals to realize their full potential. Respect for human rights is an indispen- Ensuring that the jobs we create comply sable element of the workplace culture Minimum Notice Periods with human rights is a reflection of our within Koç Group. The importance attached One of our basic principles is to understanding of quality. Finding differenc- to human rights, which we regard as whole inform our employees reasonably es in individuals valuable, we prepare the together with employee rights, is reflected necessary environment for them to get cre- on the working life through all practices. In in advance in cases of new assign- ative. We avoid discrimination in an effort that respect all our operations comply with ments, downsizing or workplace to prevent losing the talents that we might all the human rights rules set forth by the shutdowns within the outlines otherwise gain. related laws and international agreements. prescribed by law in order to avoid negative impacts of such changes, Organized within Koç Holding and Group One of the areas we prioritize is expanding if any, as much as possible. The companies, the Human Resources units our holistic view on human rights over our minimum notice periods in that re- ensure the corporate identity, development value chain in a way to cover our stakehold- spect are not shorter than the peri- and continuity of the workplace culture el- ers too and to reflect our practices on the ements shaped as an essential part of the value chain. As a result of this approach, we ods stated by the related laws and Koç Group corporate culture over the years. strive to increase awareness of this aspect collective bargaining agreements.

16 Koç Group Sustainability Report 2014 G4-14 G4-15 Arçelik EskişehirArçelik RefrigeratorFabrikası Plant

Employee Demographics of the Group Companies Covered by the Report in the Year 2014:

Employee Breakdown by Gender Employee Breakdown by Contract Type Female Temporary Contract 16,040 3,586 Male Indefinite Term Contract 50,927 63,381

Employee Breakdown by Employment Type Senior Management Full Time Female 66,401 21 Part Time Male 566 190

Employee Breakdown by Category Mid-Level Management Blue Collar Female 35,683 1,003 White Collar Male 31,284 2,059

G4-9 G4-10 Koç Group Sustainability Report 2014 17 Aygaz

Declaration on Equality at Work Drawn up by the Equality at Work Platform - the most comprehensive initiative established in Turkey to reduce gender inequality- Dec- laration on Equality at Work was signed in early 2013 on behalf of the entire Koç Group by the Chairman of the Board of Directors, Mr. Mustafa V. Koç. Consequently, in line with the related principles, each Group company the areas for improvement, and presented implementation plans for the next three years in light of the commitments made within the scope of the Declaration on Equality at Work. Established with the participation of 12 senior executives in 2014, Equality at Work Project Group carried out activities in cooperation with the sub-committees consisting of some 40 employees from the company functions such as HR and Corporate Communication in an effort to organize the “Equality Norms and Implementation Principles”. Koç Group Equality Norms and Implementation Principles seek to provide a framework for the companies to develop their current policies and guide their practices. With a view to enabling Koç Group companies to monitor the HR indicators on a gender-based fashion, to analyze the conditions they are in, and to determine the areas requiring improvement fast, the data collection system e-Metric has been designed to comply with the GRI G4 Reporting Framework so that the assessments for the current conditions about 2014 could be made over this platform. In 2014 practices and projects sensitive to gender equality such as nursery benefits, expansion of the nursery services, nursing support for the women that give birth as well as programs focused on ensuring work-private life balance and career development were implemented. Thanks to the synergy provided by those activities, the female blue-collar worker employment rose by 30% when compared with the previous year in the automotive group, which had a low number of female workers historically. Detailed information on the Declaration Equality at Work is available http://www.isteesitlikplatformu.gov.tr.

those principles while our suppliers’ related them to develop their potential. Koç Group of Women (UN Women) to carry out joint practices are monitored afterwards too. adopts zero tolerance policy against gen- activities to empower women in social Equality, Multiculturalism and Diversity der-based mobbing and abuse policies, aspects. Within the scope of this colla- and uses complaint mechanisms based boration, Koç Holding will be one of the Koç Group does not allow at any stage of on confidentiality to prevent such ca- 10 organizations in the world acting as the working life any decisions or actions ses. Meanwhile the social areas and work spokespeople of the movement and will to be based on race, gender, political clothes in the Group companies’ facilities be the main sponsor in Turkey of the He- views, philosophical views, religion, de- are designed according to different needs ForShe Solidarity Movement calling 1 bil- nomination or any similar reasons while of female and male employees, and people lion men all over the world to be agents no actions that could be described as with disabilities. of change to ensure gender equality and discriminative are allowed, and diversi- strengthen women’s rights. ties are also respected. The same un- After signing Declaration on Equality at derstanding applies to all other business Work to empower women in business In 2013 and 2014 Ford Otosan, one of processes and business relations as well. life in 2013 and adopting the UN Wo- our Group companies, won the “Gender men’s Empowerment Principles (WEP), Equality Award” as part of the “Develop- The employee development practices im- in 2014, Koç Holding signed a collabo- ment of Gender Equality in Working Life” plemented throughout the Group comply ration agreement with the UN Entity for project organized by the Ministry of Labor with the principle of equality, and enable Gender Equality and the Empowerment and Social Security, for to its practices intro-

18 Koç Group Sustainability Report 2014 G4-15 G4-16 CLA Practices in 2014 Employee Trainings in 2014 (person*hour) 96% 35,009

1,220,069

761,754 36% 10,997 Employees Covered 68% by Collective Labour Agreement Employees Not Covered 32 % by Collective Labour Agreement White-Collar Blue-Collar Total Training Total Training Employees Employees Hours (Female) Hours (Male) duced in the automotive sector known for fessional associations (such as chamber ees working throughout the Group. Within low female employment levels. of medicine, bar association, chambers the scope of the process, 125,560 deve- Labour Union Rights of engineers and architects). In 2014, lopment plans were prepared. 1,170 Koç Group employees took office Talent Management Peace at work is not only important to in employee unions and 7 employees create a happy and efficient working took office in employer unions. Some of In light of the annual surveys and evalua- environment for our employees, but also our employees contribute to employment, tions held throughout Koç Group, employ- essential to the sustainability of our op- national economy and social life by ser- ee expectations and needs are analyzed erations. Establishing, maintaining and ving at Provincial Employment Commit- while strategic human resources plans developing a constant, sound and cons- tees, Chambers of Commerce and Indus- are prepared in line with the plans and tructive dialogue makes it possible to try, and various NGOs. strategies of the companies. The Human preserve that structure. For that purpose, Resources activities and projects go be- Koç Group attaches special importance yond complying with the employee expec- to the relations with labor unions. In line Professional Development tations, and qualities required to shape the with our goal to provide a working envi- An important part of our workplace culture is future are designed and implemented. ronment of constant peace at work, Koç creating a workplace environment that sup- Launched for that purpose in 2013, the Group Industrial Relations Coordination ports professional development, where the Indicator Monitoring and HR Process Im- Board holds regular meetings in an ef- employees are able to benefit from those provement System forms the infrastruc- fort to develop a sound and sustainable practices equally. Launched to identify the ture of the Koç Group Human Resources culture of industry relations, and spread development needs of Koç Group emplo- Strategy. With its coverage expanded in best practices across the Group. yees and to draw up individual development 2014, the system monitors the success Koç Group respects employees’ freedom plans for them, KoçAkademi Development indicators defined for human resources of unionization and collective bargaining. Planning and Learning Platform is as a me- area on an annual basis, and compares Throughout the Group companies es- dium open to all Group employees. Further them with the companies located in Tur- tablished in Turkey and abroad, 10,997 enriched everyday thanks to its training key and abroad. The key indicators with a white-collar and 35,009 blue-collar programs, electronic trainings, articles and direct impact over the business results are employees amounting to 46,006 em- similar information resources, KoçAkademi reported and analyzed regularly through ployees in total are covered by collective provides more support for the professional the e-Metric system. In addition to the agreements. During the reporting period, development of our employees. strong aspects of the Group, the areas the general unionization rate of the com- Development planning processes are com- that need to be focused on in a strategic panies covered by the report rose by 6% posed of stages including assessment, fashion are identified while in line with when compared with the previous year goals, defining development areas, and de- these findings, activities are carried out and reached 69% while this rate is 36% velopment plans followed by development to ensure efficiency and standardization among our white-collar employees, and activities characterized by either short-term regarding the human rights processes im- 96% among our blue-collar employees. trainings or long-term programs. After the plemented throughout the Group. Koç Group employees can be elected for assessment interviews at the end of the Koç Holding Human Resources Directorate the local and central managing bodies in year, the planning interviews for the next visits different Group companies selected employee and employer organizations as year are conducted. In 2014 development annually while the best practices and de- well as becoming members of their pro- plans were drawn up for 26,681 employ- velopment areas are identified on compa-

G4-11 G4-16 Koç Group Sustainability Report 2014 19 Tüpraş Izmit Refinery

ny basis. Held in 2014, the Best Practices Recruitment Leader Development Programs Day enabled the human resources teams Koç Group companies seek to recruit pro- to learn about the exemplary activities fessionals with the highest qualities for the Featuring learning, experience shar- carried out by different companies. Group in line with our goals and principles. ing and cooperation development Rotations within the Group are empha- Therefore recruitment is the beginning of practices, Leader Development Pro- sized in order to allow the employees to that process. Compliance with the Group grams seek mainly to create a joint gain different perspectives, and to help competencies is the most important cri- leadership and management culture. them prepare for their future roles. Rota- terion for recruitment. Besides the com- The goal is to ensure that the bene- tions seek to maximize the synergy within petencies required, the main criteria in re- fits of the practices introduced within the Group. Essential improvements to the cruitment include candidate’s knowledge the scope of the program are lasting. internal announcement system of the Koç and experience required by the position. Since the beginning of the program, Group were introduced in 2014, which Just like every other process in place, 308 employees in total participated also led to strengthening the rotation cul- discrimination is on no account allowed in the trainings held in 2014. ture. during recruitment. In that context, the “You are the Leader” talent management candidates are evaluated by the Koç program seeks to identify the develop- Group Human Resources Units based on Within the scope of this context, all the ment needs of the employees with senior their competencies, and recruited accord- white-collar employees are subjected to executive potential, and supports their ingly while everyone is provided equal performance assessment on an annual preparation for possible future assign- opportunities throughout their working life basis. Accordingly, over 3,500 mid-level ments from today. Updated in 2014, the following their recruitment. and senior executives were included in program presents different personalized the manager performance assessment Detailed information regarding recruitment process throughout the Group in 2014. learning solutions. The process allows the processes is available on http://www.koc. employees to form development plans in com.tr/tr-tr/hakkinda/insan-kaynaklari/. Remuneration System line with their career goals. The program An internationally acknowledged system features different personalized develop- Performance Management is used as the salary level evaluation ment activities ranging from mentorship, Used as an instrument to expand the process at Koç Group. This aforemen- project studies, company and sector company goals over the employees effi- tioned evaluation plays a significant role presentations to coaching and part-time ciently, performance management sys- in defining the employees’ salaries. Be- rotation options. While contributing to the tem is composed of processes including sides this practice, the other parameters development of people, these instruments management by goals, active communi- used in salary management include the are also designed to increase both their cation with our employees, mutual feed- wage market and the sector in which familiarity with the Group companies and back, and understanding. In that respect the company operates, the current wage their knowledge regarding different sec- the performance of employees to realize structure of the Company, company’s tors. Launched in 2014, the “Learn from goals is evaluated, the factors that have wages policy, individual performance, the Master” program has so far enabled had a positive or negative impact on the and job grade. Moreover, regular market 40 employees to benefit from mentoring realization of the goals are identified while analyses are conducted for a competi- by Senior Executives of the Group. the achievements are awarded and the tive and fair wages policy. A bonus sys- individual development plans for the next tem encouraging high performance and period are drawn up.

20 Koç Group Sustainability Report 2014 Suggestion System Designed to attract young talent that just graduated from universities to work The feedback provided by the Group em- for Koç Group in the future, Koç Career recruitment platform was updated ployees is one of the important factors in 2014. The updated platform comes with 10 distant education programs supporting practice quality and efficien- providing young talent to prepare for professional life. Moreover, the website cy. As a natural result of this understand- also features presentations for the duties of the functions to inform them. ing, suggestions from the Group employees are evaluated within the scope of the related systems, and then imple- long-term success is also implemented. gal obligations. Other parameters taken mented. The successful projects that Additionally, Outstanding Success and into consideration during the remune- Distinctive Assignment Awards are given ration process include macroeconom- stand out are awarded to encourage the out to reward the employees’ perfor- ic market data, current wages policies, continuity of the system, and enhance mances for the related year. Koç Group the size and long-term objectives of the operational efficiency. In that respect adopts the equal pay for equal work po- company, and individual positions. When out of 62,436 suggestions made by the licy and therefore gender is not a factor all these evaluation results are consid- Group employees 39,169 of them were that creates a difference in determining ered, Koçocigations. Other parameters implemented in 2014. the salary levels and the wages for the taken into consideration during the re- Private Life – Work Life Balance employees. muneration process include macroeco- nomic market data, current wages poli- Professional and personal life balance In determining the salary levels of the cies, the size anFringe benefit packages is observed and supported by means of non-unionized employees, the difficulty provided for all our employees in line with human resources practices throughout level of the job, the level of know-how their job grades are reviewed annually the entire Koç Group companies while level required and the assumed respon- to meet the expectations of our emplo- practices that will have a positive influ- sibilities are taken into consideration, yees, and maintain our competitiveness. ence over the employees’ lives are im- while the salary and other financial ben- The fringe benefits are part of the total plemented accordingly. Many activities efits for the unionized employees are income package and seek to maximize focused on improving the social lives specified according to the Collective Bar- employees’ loyalty. or making non-professional aspects of gaining Agreements signed at the end of the collective bargaining conducted with the trade unions they are members Most Successful Koç Employees Award System of. Furthermore in most Group workplaces where collective agreements are in Since 2003 the Most Successful Koç Employees Rewarding System has been imple- place, the salary paid to new recruits mented with a view to acknowledging and appreciating the achievements of employees, is higher than the minimum wage as and determining and sharing the best practices in the Group. Thanks to the project, required by the collective agreements. successful projects are promoted throughout the Group while the employees’ successful Therefore due to the effect of bonuses practices are encouraged. In 2014, 10 projects were selected under the titles “Making a and benefit packages and the minimum Difference”, “Cooperation”, “Customer Satisfaction”, “Creative Innovations”, and “Adding entry wages determined by collective Value to Life” in two categories each, White Collar and Blue Collar Projects, and 94 Group agreements, the actual salaries paid by employees working in those projects were awarded as part of the program. the Group companies are considerably higher than the minimum wage. A bonus amounting to four months’ salary in total White Collar Blue Collar OPET TÜPRAŞ is paid on a monthly basis on top of the Developing Cooperation gross salary throughout the group, and a Traffic Detectives Project Planlı Duruş Sürecinin Yönetimi social benefit package is provided. When OTOKAR Energy Hunters these rights are taken into consideration, SETUR Adding Value to Life Disability-Free www.setur.com.tr TOFAŞ the standard starting level of the salaries Adding Value to Our Bursa Değer throughout the Group rises approximately Katmak 48% over the legal monthly gross mini- Creating Customer ARÇELİK OTOKAR mum wage. Arçelik Service Cloud Project Eliminating Refrigerator Pump Satisfaction Failure Salaries paid to the Koç Holding senior TÜPRAŞ TOFAŞ executives are set according to the prin- Creative Innovations Energy Regained through Edge Electrode Life Extension ciples of the “Remuneration Policy for the Membrane Deaerator Project Members of the Board of Directors and OTOKAR Making a Difference KOÇ UNIVERSITY Different View for Efficiency in Bus Senior Executives”. The assessments are Anatolian Scholarships Project Manufacturing made according to the standards and le-

Koç Group Sustainability Report 2014 21 In 2014 the total number of the participants in the organizations held by the Group Companies is as follows:

8,813 35,361 44,174 Voluntary Employees Voluntary Participants Total Number of Participated Supported Participants Supported

the employees’ lives easier are regular- the activities carried out for long years ly implemented, and the employees are Koç My Family Program to create awareness for the protection encouraged to participate in these prac- Koç My Family Program provides of the environment and nature in Bolu, tices. Moreover, all the Group companies lent their support to the “Soil and Leaf” Koç Group employees with the op- comply with the working hours and paid themed painting contest organized by portunity to benefit from goods and annual leave system as stipulated by the TEMA (Foundation to Combat Soil Ero- services offered by Group compa- law. sion in Turkey). Arçelik Classical Turkish nies and others, as well as extra For many employees, having a child may Music Choir resumed their activities in advantages through periodical cam- 2014 as well. pose difficulties in achieving a balance paigns. Moreover, the program aims between professional and personal life. at increasing employee satisfaction Aygaz and Opet employees started the While we try to increase the number of and engagement within the Group, “Aygaz-Opet Turkish Music Choir” back workingwomen and to ensure that wom- and developing a common Group in 2004 to enable those that love Turkish en stay in professional life, they may identity through the social activities Classical Music to perform, and to have suffer most from those negative aspects. and social responsibility projects the opportunity to be involved in music as Having a child is regarded as an impor- put into practice. KoçAilem Program a hobby. The choir continued its activities tant factor for women to quit professional in 2014, and gave an ‘Alaeddin Yavașça’ life. Koç Group companies develop their currently has about 95,000 members. concert. Some of the events and shows organizational and material means cons- organized by the Aygaz Social Activity tantly in order to provide the employees Club comprising employees that par- with such options. In that respect, 899 ticipate voluntarily included “Dialogue and talent for the good of the society women employees used maternity leaves in Darkness”, “Black Box” and “Saloon while also enhancing their adaptation to in 2014, and 717 of them returned to Game”. work later. the Group culture and corporate sense of belonging. The Group employees partic- Seeking to establish an assistance Employee Volunteerism ipate in practices implemented through- system with volunteering participants, As an essential component of its corpo- out the Group such as “No Barriers for Aygaz Search and Rescue Team rate culture, Koç Group human resources My Country” and “Koç Sports Festival” stepped up its activities in 2014. The is composed of individuals that are not with enthusiasm. Group companies con- team had search and rescue trainings only the most talented, trained and expe- tinued their activities supported by the and exercises at Sakarya AFAD Sapanca rienced professionals in their areas, but employees voluntarily in 2014 too. facilities and Koç Sports Club Bağlarbașı also people sensitive to social problems Woods training area for five days and two Arçelik, with the voluntary participa- with their highly developed social skills. days respectively. Furthermore, the team tion of its employees and 10 teachers Therefore the Group employees volunteer also received mountaineering training as selected among Darülaceze residents, to participate in the social development well as trainings on how to hold planning started the “Darülaceze School of Life” activities organized either by the com- and coordination meetings. so that the life experiences of the res- panies they work for or throughout the idents of Darülaceze, Turkey’s largest Ford Otosan Handicap-Free Theatre Group. As a result, the employees deve- charity organization, could be transferred Club aims to create awareness in society lop their personal lives and skills as well to the next generations. Arçelik Cook- and help the disabled, socially disadvan- as finding ways to use their knowledge ing Devices Plant employees, in line with taged employees to participate in social

22 Koç Group Sustainability Report 2014 Ford Otosan

Koç Holding Retirement Pension Foundation ing Festival, We have a Special Education Class Project in Aliağa, 23rd April Waste- Established on 01 November 1967, Koç Holding Retirement Pension Foundation water Wall Painting Event “The Young seeks to provide the employees working at Koç Group companies and already Drink and the Old is Responsible”, and covered by the Social Security Institution with supplementary social security and finally 23rd April Tüpraș Batman 7th Chil- support. The foundation offers its members full payment of balance, retirement dren’s Festival. pay, health insurance and financial assistance services and supports them for a comfortable and peaceful period of retirement. As of the end of 2013, Koç Holding TürkTraktör Sports Festival, which has Retirement Pension Foundation has 54,728 active and 335 retired members. been held for 12 years, was organized in 16 branches including basketball, football, volleyball, table tennis doubles, table tennis singles, backgammon, life through arts. Within the scope of a Otokar Photography Club participated in chess, darts, foosball doubles, foosball project launched by the club, the actors a photography event held with 12 mem- triples, foosball singles, checkers, bad- on the stage demonstrate the importance bers from the Sakarya New Life Sports minton doubles, badminton singles, of sign language and teach the audience Club for the Disabled. Thanks a campaign American three-ball pool, and American some of the key sign language words led by Otokar employees, aid packages pool branches. TürkTraktör employees through a number of shows they have were delivered to primary school pupils provided voluntary trainings for their own prepared. Composed of 26 Ford Otosan from Keser Village in Sorgun, Yozgat. colleagues on environment, occupational employees, the theatre group reached an Moreover, Otokar employees participa- safety, orientation, and World Class Pro- audience of almost 1,000 people with ted in the Coastal Cleanup Day held in duction, therefore assisting the develop- their plays titled “Mad Dumrul” and “I cooperation with Turmepa. As a result of ment of the employees. Close My Eyes and Do My Duty”. a project launched together with Otokar Yapı Kredi Volunteers continued their Koç IT Group social clubs, composed of Women’s Club and Otokar employees, activities in collaboration with NGOs voluntary employees, organized a num- families in need received free clothing. within the framework of 10 main projects ber of activities during the year while the Within the scope of the World Environ- in 2014. During the year they established Sailing and Chess clubs continued their ment Day, two Ekokar Environment Club libraries for many schools, provided tech- activities with the participation of the members gave Environmental and Ener- nological equipment such as printers and employees. gy Saving Trainings to 280 primary, secondary and high school students in computers while keeping the spirits of Opet Hobby Groups, which were estab- Arifiye region. the children up with the “Boots-Coats” lished back in 2010 to improve the moti- and “Wish Tree” campaigns held for vation and social life quality of the Opet Tüpraș employees participated in many them. The volunteers did not neglect the employees, continue their activities with activities in 2014 including TEGV’s "Pen- elderly and continued their visits to the the participation of 266 employees. The cils in Little Hands” campaign, “Our Team retirement homes, and also worked at courses organized by the groups include Runs for Charity and We Raise Funds the stands established for NGOs so that a wide range of hobby subjects ranging with Your Contributions” campaign held the organizations could generate charity from singing, basketball, volleyball, sail- for TOG, Izmit SEK General Directorate funds. Moreover, they carried on reading ing and photography to dancing, cooking Theatre Club, TEGV- Dreams Workshop books out for the vision-impaired, ran in a and swimming depending on different Project, Happy Wastes Packaging Waste marathon calling on their friends to raise th talents and interests of the employees. Sorting Movement in Aliağa, 5 Kite Fly- funds for TOFD, and finally participated in

Koç Group Sustainability Report 2014 23 Koç Group Sports Festival

the campaign to collect bottle lids so that matches and various sports competitions Otokar features facilities such as a bas- TOFD could buy more battery-operated with other companies. Employees are ketball court and a football field available wheelchairs for disabled people and help encouraged to participate in the sports for the use of all employees. Volleyball, them take a more active part in social life. competitions throughout the country. soccer, basketball, bowling and track competitions are organized within the Koç Employees and Sports HQ facility features a well-equipped Aygaz company, and employees training at the fitness center where the employees can Koç Group companies promote a healthy tennis, diving, skiing and sailing clubs are exercise with a trainer while other loca- life for their employees through sports encouraged in their sportive activities. and activities, and also help them estab- tions boast areas for the employees to be lish a balance between their personal and involved activities such as football, volley- Tat Gıda Football Team won the region- professional lives. Organized for the 25th ball and table tennis. Apart from the tour- al championship match for Bursa and time in 2014, Koç Group Sports Festival naments held in categories that interest the represented the region in the Super Cup provided the opportunity for the emplo- employees, Aygaz employees also partici- Finals in Istanbul. Moreover, Tat Gıda yees to participate in football and veteran pate in the Koç Sports Festival. Dragon Boat Team ranked third among the Group Companies. football matches, and bowling, sailing and Ford Otosan employees use the sports track competitions. 25th Koç Group Sports center where the team trainings for sports Tüpraș refineries boast fitness centers Festival not only contributed to improving activities also take place. and swimming pools while certain refi- the bodies and spirits of the employees neries also feature indoor sports facili- but also helped the Group companies Koç IT Group boasts a sports center and ties, basketball and tennis courts, football bond better and the Group culture get a sports room at Çamlıca Business Cen- pitches, racetracks and squash facilities. stronger. tre and Bilkom center, respectively for the Social Activities Clubs continue their ac- employees. Every year the employees par- tivities during the year, and sports events Koç Group Sports Festival, which started ticipate in the Koç Group Sports Festival in April and continued for 68 days, fea- such as Bowling and Streetball Tourna- individually or in teams. In 2014 KoçSistem ments among refineries are organized. tured close to 4,000 amateur sportspeo- employees ran the Istanbul Eurasia Mara- ple working for 30 Koç Group companies thon. Employees can also receive trainings TürkTraktör Sports Festival has been and 83 plants located in İstanbul, Ankara, at sailing and diving clubs. held for 12 years in 16 categories. 1,612 Bursa, İzmir, and Adana regions. people amounting to approximately 80% Opet boasts basketball, swimming, ten- of the company employees participated Arçelik HQ and production plants house nis, sailing, volleyball, football, bowling, in the festival, which was received with sports and fitness centers enabling the nature sports and extreme sports (skiing, great interest by the company employees. employees to exercise, as well as areas rafting) teams, in which employees par- Apart from the festival, recreation areas allowing them to be involved in sports ticipate actively. All the sports teams con- featuring indoor sports hall, open football activities including football, volleyball, tinued their studies during the reporting field, billiards and foosball are available basketball, tennis, table tennis, track and period and not only did they participate in for the employees to participate in sports billiards. Basketball, volleyball, football, Koç Group Sports Festival but also com- after work. veteran football, sailing, bowling, track, peted in tournaments with other compa- tennis and table tennis teams composed nies. Employees can also use the swim- Tofaș Sports Club features basketball of Arçelik employees not only partic- ming pool allocated to the swimming court, volleyball court and fitness room ipate in the tournaments held within team outside the practice hours. for the employees to use while the so- the company but they also compete in cial facilities boast 2 tennis courts and

24 Koç Group Sustainability Report 2014 1 basketball court. Sports Club organi- zes swimming, Basketball, and football Number of Number of Assigned Total Number summer schools for the children of the Active OHS Representative Employees of Active OHS employees, as well as motorbike, tennis, Committees on the OHS Committees Committee Members chess and diving trainings, and ski and Arçelik 13 32 200 diving trips for employees. Aygaz 13 38 108 Yapı Kredi has a club based in İstanbul Ford Otosan 3 5 61 and enables the employees to do sports Opet 6 17 90 in categories, and to be involved in social Otokar 1 6 17 activities in four categories. Accompanied Otokoç 22 53 275 by trainers, the employees can play sports within the scope of a certain program KoçSistem 4 11 31 thanks to the football court, indoor sports Tat 7 23 76 center, and swimming pool. As a team and Tofaş 9 9 95 as individuals, Yapı Kredi employees Tüpraş 5 21 35 have participated in sports competitions Türktraktör 3 6 62 and events featuring many corporations. Yapıkredi 17 17 85 TOTAL 103 238 1.135 OCCUPATIONAL HEALTH AND SAFETY Ensuring occupational safety and eliminating the elements that could have a nega- their results. In addition to this structure, bargaining agreements are implemented without exception. In addition to these tive impact on the employees’ health is an all the Group companies have their inde- practices, training activities and social essential priority for the Group companies. pendent Occupational Health and Safety projects for our employees and their fam- The Group companies have established Committees. ilies are organized. their policies and systems to manage the Regular occupational health and safety Occupational Health and Safety manage- trainings are offered at the Group work- Work accident statistics are regularly ment through systematic processes. places both for company employees conducted at the Group workplaces and and contractor employees. Workplace the obtained data are consolidated two Formed with the participation of the Group doctors, occupational health and safety times centrally, monitored and compared companies, the main functions of Koç professionals, and whenever required ad- with previous periods. The changes in Holding Occupational Health and Safety ditional medical personnel are employed the statistics are compared with the total Coordination Board include reviewing at our workplaces, and external services working hours, and the reasons for any practices throughout the Group regularly are procured when needed. During the increase and decline are assessed. to propose development and dissemi- reporting period risk assessment oper- nation proposals, ensuring the determi- ations were carried out to prevent acci- nation of high occupational safety stan- dents at work; technology and the ways During the reporting period 440,090 dards through the appropriation of good of doing work were reviewed while the person*hour of training was provided practices by other Group companies, employees were trained accordingly. with the participation of 74,375 Group monitoring work accident statistics regu- employees while 67,764 person*hour larly to make suggestions for improving During the reporting period 75,265 and developing zero accident frequency Group employees received 437,173,87 of occupational health and safety train- goal, and ensuring full compliance with person*hour of training, and 22,050 ing was provided with the participation the related regulations. The board meets contractor employees received 68,368 of 21,974 contractor employees. regularly to evaluate the operations and person*hour of occupational health and safety training. 2014 Occupational Health Safety Data2 During the recruitment process of our 1 Injury Rate 0.64 Out of the 83 facilities that belong to employees, their health information and Group companies covered by the re- health reports certifying that they are fit to Occupational Disease Rate 0.01 port, 63 of them are certified with the work are required. Apart from the routine Lost Working Days Rate 10.39 OHSAS 18001 “Occupational Health health screenings held throughout the and Safety Management System”. The Group, special medical examinations and OHSAS 18001 certification rate of our health screenings may be demanded for facilities, which was 70% a year ago, different tasks. The related health and oc- 1Yapı Kredi operation facilities are excluded. rose to 75% in 2014. cupational health aspects of the collective 2The calculations do not cover the data regarding contractor employees.

G4-9 G4-14 G4-15 Koç Group Sustainability Report 2014 25 “Being the best at all times is our indispensable goal.” Our Founder Vehbi Koç

INNOVATING FOR THE ENVIRONMENT

The world changes at a faster rate today ENVIRONMENTAL MANAGEMENT Details on Koç Holding environmental than it used to. Innovative thinking has management approach are available on Environmental management is imple- proven itself as one of the best assets the corporate social responsibility section mented across Koç Group with an in- in this changing environment, which of the website www.koc.com.tr. tegrated strategic and operational ap- also transforms social expectations. The proach through a structure that starts Koç Holding and Group companies are companies that define the world they with Koç Holding and extends to the focused on three main areas regarding exist in properly and produce innovative companies’ operational divisions without their environmental management practi- solutions for tomorrow’s expectations ignoring sector-specific differences. Gen- ces. All the Group companies; will continue to exist as an important ele- eral strategy and policies established by ment in the world of tomorrow. • Seek to keep the environmental impact the Koç Holding platform translate into under control including energy and wa- Great opportunities arise for the busi- sector-specific strategies, policies, and ter consumption in particular, emis- ness world due to the increase in the operations for the companies. The results sions, and waste generation, as well as needs created by the rising population of these activities are assessed by the aiming at increasing recycling, protect- while problems such as lack of re- senior management of the companies as ing biodiversity, and carrying out im- sources, environmental pollution and well as Koç Holding’s authorized senior provement activities in light of “current climate change caused by the rising management bodies to identify the new best practices” to achieve these goals; population also lead to risks that need strategic approaches required. to be monitored closely by the society • Monitor the environmental impact Compliance with the environmental reg- and the business world. That is why the caused by the products and services ulations of the countries they operate most important priority for the business throughout their lifecycle starting from in accounts for the first part of the Koç world must be the capability to meet the the design and planning stages to the Group environmental management phi- needs of the future through products end of their economic lives while devel- losophy. The entire set of principles to be and services with minimized environ- oping “environmentally friendly” prod- implemented regarding environmental mental risks regarding their production ucts and carrying out activities focused management is composed of the envi- processes and consumption qualities. on reducing that environmental impact; and ronmental policy documents designed Koç Group companies believe that the to adhere to requirements stated by • Carry out educational activities to cre- path to future success lies in mobilizing international standards and initiatives, ate awareness and to increase knowl- innovative ideas and technologies in an including the UN Global Compact in par- edge of the large groups in the soci- effort to create efficient and creative ticular. Those principles are also in line ety, including its employees, custom- business solutions, to prioritize the so- with Koç Group Business Principles. Koç ers, dealers, suppliers, contractors, and ciety and environment in their invest- Group Environmental Vision and Mission, other operational stakeholders. ments, to emphasize activities aimed at Koç Group Environmental Policy, and Koç Just like the Koç Holding strategic man- protecting the environment and biodi- Group Climate Change Strategy docu- agement approach, environmental man- versity, and to meeting next generations’ ments cover the fundamental common agement functions and practices depend expectations through environmentally principles shaping the environmental pro- on an organization that starts with Koç friendly and value added products. cesses for the Group companies. Holding and extends to the Group Com-

26 Koç Group Sustainability Report 2014 Otokar

panies. Established within Koç Holding reports along with the results from the Complying with sector-specific or widely with the participation of Group compa- audits conducted regularly by the Audit recognized sectoral, local and internation- nies' environmental, energy and sus- Group on policy and performance basis al product and process quality standards, tainability specialists, Koç Group Environ- are submitted to the company’s senior norms, product information and labeling mental Council, the highest-level decision management. In addition to the audits practices, all the Group companies also making body for environmental manage- conducted by the Audit Group, environ- adhere to the EU REACH Regulation, and ment issues in Koç Holding, is responsible mental policy and performance of the expect their suppliers to comply with the for identifying long-term environmental companies are also audited in-house and regulation too. management strategies as well as action through independent audit processes. In addition to the company senior man- plans for implementing these strategies, Improvement activities are held according agement and Holding senior manage- sharing examples for best practices, car- to the development issues revealed by ment, the Group companies inform their rying out activities to ensure changes in these audits. stakeholders on their environmental man- the environmental regulations, organiz- The Group companies ensure system re- agement policy and operations besides ing environmental training activities, and liability of their methodologies by adhering their related progress too. The majority of developing environmental management to the internationally recognized stan- the Group companies share that informa- systems throughout the Group. dards while the implementation reliability tion through sustainability reports. Composed of the energy executives from for these systems is established through Having developed a holistic approach the Group Companies, Energy Efficiency regular external audits. In this context, ISO towards their environmental risk mana- Working Group is a management body 14001 Environmental Management Sys- gement, Koç Group companies em- seeking to create synergy regarding ener- tem Standard is the basic methodology phasize the management of the im- gy efficiency throughout the entire Group the Group companies adopt. As of 2014, pact on the value chain. In this respect by drawing up improvement plans, main- out of the 83 facilities1 owned by the Group they seek to implement an approach streaming best practices, and underta- companies covered by the report, 74 oper- focused on reducing environmental king joint projects through its specialized ate within the scope of the ISO 14001 cer- impact on a scope including supply, subcommittees. tificate while certificate coverage rose and logistics, sales, product and services reached 89% in comparison to the pre- Strategic plans established on Group consumption processes, as well as vious year. In addition to aforementioned level transform into performance goals their own operations. In this sense the ISO 14001, Group companies widely on company basis, and are then main- environmental policies pursued by the use methodologies including ISO 50001 streamed over the entire organization supplier companies providing products Energy Management System Standard, starting with the company’s senior man- and services for the Group companies ISO 14064-1 for Quantifying and Auditing agement. Activities carried out by related are important too. Hence the Group Greenhouse Gas Emission System Stan- units depending on the operation areas companies expect their suppliers, dard, OHSAS 18001 Occupational Health are evaluated through quantitative per- which are an important part of their and Safety System Standard, ISO 9001 formance indicators. Prepared within the operations, to adopt an environmental Quality Management System Standard, framework of key performance indicators management approach identical to the EFQM, and 6 Sigma. identified by the Group Environmental Group companies, and they also include Council, annual performance evaluation the environmental management criteria 1 Yapı Kredi operation facilities are excluded.

G4-14 G4-15 Koç Group Sustainability Report 2014 27 74 228 Million TL Number of Facilities Expenditure and Investment with ISO 14001 Amount Ensuring Reduction Certification in Environmental Impact

in their audit practices, and carry out spending made throughout the Group international organizations and Gov- capacity development activities. During was used for R&D activities focused on ernments continue to take their acti- the reporting period the audit activities reducing environmental impact of the vities further; the responsibilities that including the environment criteria have products and production processes. fall on companies are revealed more covered 10% of the active suppliers clearly. Legal regulations introduced in In 2014, for the first time, World Envi- for the Group companies. Meanwhile many countries also imply that in the ronment Day was organized under the the environmental training provided for near future the activities carried out to auspices of Koç Holding CEO in order the supplier company employees has prevent climate change will begin to to develop environmental management reached 22,677 person*hours in total. be monitored much more closely on a consciousness and to raise awareness global scale, and will radically change Within the scope of their environmen- regarding environmental problems the ways companies do business, tal management activities, the Group throughout the Group. The theme of the eventually developing an economic companies conduct trainings to create first year was determined as “water”. At understanding based on low-carbon environmental awareness among their the events held with the participation of principle. employees, business partners, and in Ministry of Forestry and Water Affairs, society too. For that purpose in 2014, various NGOs and universities, the re- Guiding its activities in light of new the Group companies provided 46.693 sults of successful researches on the developments, Koç Holding monitors person*hours environmental training in condition of water and water footprint agendas of international organiza- total. in Turkey were summarized. The exem- tions and different local governments plary university-industry collaborations regarding climate change due to the In 2014 Group companies spent 58 regarding efficient use of water were diversity of its operations and vast op- million TL on environmental manage- also presented. erational geography. In that sense, Koç ment operations and training activities Holding and Group Companies manage while spending 170 million TL on per- CLIMATE & ENERGY climate change related aspects with an formance improvement investments, Now that the climate change-related approach based on risk and opportu- amounting to 228 million TL in total issues have begun to affect our daily nity assessments. Formed according environmental expenditure. Tüpraș lives in many ways, it takes a more to SWOT analyses completed with the made a large portion of that spending, prominent place on the world agenda participation of the Group companies, 143 million TL. In 2014 a large portion everyday. While scientific researchers, Koç Group Climate Change Strategy is of the total 918 million TL worth R&D the foundation for the climate change related activities within Koç Group. Group Contractor Company Trainings Provided Adopting this pivotal strategy, the Employee Employee Trainings for General Society Group companies carry out activities to Trainings meet the sector-specific requirements Number of 17,250 17,334 3,967 and stakeholder expectations regarding Participants climate change as well as developing their supply, production and product Training Hours 24,737 17,095 4,862 design, and development processes. (person*hours)

28 Koç Group Sustainability Report 2014 G4-14 G4-15 2.00 149,900 Million GJ Tons CO2e Total Energy Saved Greenhouse Gas Reduction

Climate change issue is managed of stakeholder groups need to work in Energy Efficiency and Emission within the scope of the environmental cooperation. In line with our vision of Reduction Practices management organization throughout shaping the future, Koç Holding and An important portion of the activities Koç Group. Strategic trends defined Group Companies carry out pioneer- carried out by Koç Group companies by the Koç Holding Board of Directors ing activities to increase community regarding environmental policies and translate into action plans, and are engagement and awareness, and to climate change strategies is com- implemented in line with the strate- develop collaboration with related par- posed of projects focused on energy gic decisions made by the Koç Group ties, including NGOs in particular, par- intensity and greenhouse gas emis- Environmental Council with the partic- ticipating in initiatives and platforms to sion reduction. While decreasing ipation of the companies. In addition to implement relevant practices. the impact on the environment and the strategic plan implementation le- Koç Group views climate change as an climate, these projects also help the vels, the results obtained are monitored important area for further study and in- Group companies achieve operational through quantitative and time-based vestment due to the risks and opportu- efficiency, which in turn creates a pos- performance indicators. As part of the nities it involves. Climate change bears itive effect over the costs. corporate and individual performance the potential of not only posing opera- evaluation systems, these evaluations In 2014 Group companies conducted tional, financial, regulation and market influence the remuneration policies many energy efficiency projects re- related risks due to its impact on na- regarding the executives responsible. sulting in the reduction of their energy ture, society and economic life but also Annual results are evaluated by the consumption by around 2 million GJ, provides diverse opportunities for com- Group Environmental Council to form and their greenhouse gas emissions by panies due to the needs arising for new future scenarios, which are reported to around 150,000 tons of CO2e. Thanks production organizations and products the Koç Holding senior management so to these activities the general energy as well as related financial instruments that the strategic trends could be iden- intensity of the Group companies co- to support them. It is safe to say that tified. vered by the report in 2014 turned out the companies that managed to trans- to be 591.06 GJ/million TL net income, Meanwhile compliance with related form the way they do business, and and greenhouse gas emission intensity policies, activities and their results are accepted to be a part of the solution turned out to be 38.09 Ton CO e/ mil- also covered by the audits conducted through their products and services will 2 lion TL net income. These values are by company internal audit function and benefit from these opportunities to con- 994.29 GJ/million TL, 62.61 Ton CO e/ Koç Holding Audit Group. tinue their existence in the future too. 2 million TL for the energy industry, the As for the energy and greenhouse gas In line with the Climate Change Stra- sector with the highest energy intensity management aspects for Group com- tegic Plan, Group companies carry out due to its structure, while the energy panies, independent external auditing emission reduction and calculation ac- intensity for the companies outside the and certification activities are also im- tivities. While all the Group companies energy industry declined to 120.27 GJ/ plemented within the scope of the ISO refer to the IPCC Guidelines in their cal- million TL, and their greenhouse gas 50001 and ISO 14064-1 standards. culations, the ISO 14064-1 certification emission intensity declined to 9.47 Ton practice introduced in the last reporting CO e/million TL. Since climate change has a broad 2 period continued in 2014 too. scope of impact, many different types

G4-14 G4-15 Koç Group Sustainability Report 2014 29 KoçSistem Data Center

Thanks to 66 energy efficiency projects in the fire reserve water pump build- ery, cooling, lighting automations that completed in 2014, Arçelik saved ing, another 8 Tons of CO2e emission maximize daylight utilization, localiza- 40,170 GJ on energy while also saving by getting the tanker filling platform to tion and automation systems in com- 1,179 Tons of CO2e emission directly, operate without interruption. pressed air leakage, correlation and and 2,868 Tons of CO2e emission in- optimization of energy consumption Ford Otosan Kocaeli plant saved directly. and use of insulation material. As a re- 4,6 million kWh energy and reduced sult of the projects, 124,812 GJ ener- emission by 2,127 Tons of CO e on an Energy Consumption and Green- 2 gy savings, and 9,720 CO e emission annual basis with the motor driver in- 2 house Gas Emission Reduction reduction were achieved. troduced in the cooling towers and air over Years conditioning plants. Moreover, the plant Tüpraș implemented 23 energy effi- Year Reduction Reduction in saved 850 thousand kWh and reduced ciency projects in its refineries in 2014, in Energy Greenhouse emission by 415 tons of CO2e by revis- saving 1.8 million GJ on energy, and Consumption Gas Emissions ing the lighting systems. As for İnönü reducing emission by over 126 thou- (million GJ) (thousand Ton plant, the valve jacket and ventilation sand tons of CO2e. CO2e) system optimization practices led to TürkTraktör reduced its electricity con- saving 2,754 GJ while implementing 2010 3.35 329.5 sumption by 528 GJ in 2014 by using waste heat recovery system during 2011 3.37 348.6 IE3 engine on engine and body pro- the year saved 12,045 GJ on energy duction units in 2014 while reducing 2012 5.44 369.8 and reduced emission by 1,673 Tons of electricity consumption further by 172 2013 3.06 208.2 CO e at the same time. 2 GJ through armature replacement and 2014 2.00 149.9 Opet undertook a renewable energy automation project for the engine pro- project at Mersin Terminal, installed a duction units. Finally, the PID applica- The projects implemented during the photovoltaic panel of 102,96 kWp/100 tion on the furnaces reduced electricity year include switching from the LPG kWe and began to generate electricity consumption by 17% per product. from solar power. forklifts to electric forklifts, introducing Logistics operations are vital to en- servo motor applications to plastic in- Otokar saved 2,110 GJ on energy in sure business continuity of the Group jection, and implementing a heat recov- 2014 through its practices, including companies. Carried out mainly by the ery project for the magnetic annealing variable speed compressor usage and companies providing logistics services, furnace. furnace automation. In the same pe- these practices lead to energy con- riod, the projects implemented by Tat sumption due to vehicle usage, and re- Aygaz saved 18 Tons of CO2e on an annual basis by preventing leaks from Gıda plants saved 4,315 GJ worth of lated indirect emission generation. The the steam boiler, while saving 23 Tons energy and 593 tons of CO2e emission Group companies reduce the impact in total. from the logistics operations through of CO2e by introducing solar power us- their route optimization, intermodal age in central heating systems. Addi- In 2014, Tofaș realized 111 new ener- logistics planning practices and fleet tionally, Aygaz saved 8 Tons of CO2e gy efficiency projects such as practices preferences. emission by replacing the water pump for thermal leakage, waste heat recov-

30 Koç Group Sustainability Report 2014 83 million m3 75.7% Amount of Water Reused Percentage of Recycled in Production Water in Total Water Usage

Arçelik started to work on the Scope more efficient loading practices. The WATER MANAGEMENT 3 Emission Calculations (Logistics) Pro- project enabled 70 fewer tours annu- The decline in the availability of the wa- ject back in 2013 to calculate its green- ally, therefore saving 4,900 liters on ter resources is the most prominent im- house gas emissions caused by prod- fuel and cutting down greenhouse gas pact made by the rise in population and uct transport operations within Turkey. emission by 13 Tons of CO e. 2 climate change on natural resources. In The company completed the project Ford Otosan shortened the Köln-Göl- addition to meeting human needs, clean in 2014, and had its emission values cük logistics operation road section by water resources remain among the most stemming from the domestic logistics 6.8 million km annually through the important resources required for indus- verified on “limited assurance” level. Mobile Trailer and Intermodal Logistics trial operations, which makes ensuring Thanks to the effective use of the “Dy- Project completed during the report- access to clean water resources in the namic Routing” introduced in product ing period, which reduced the annual future even more vital. Therefore using distribution operations and the loading greenhouse gas emission by 13,710 water resources efficiently is among the counts catalogue practices for exports, Tons of CO e. The Budapest Part Export shared sustainability goals for all the as well as internal transportation rout- 2 Center Project optimizing the operation Group companies. ing activities, the vehicles began to run also cut down greenhouse gas emis- closer to their full capacity. As such, Involved in water management opera- sion further by 4,800 Tons of CO e an- both the costs, and carbon emission 2 tions in line with environmental policy nually while a new axle stand design in- could be decreased. Moreover, using and management systems, the Group creased the number of parts delivered electric forklifts in the warehouse re- companies seek to increase efficiency on every round on the vehicle body and duced greenhouse gas emissions fur- in production, recycling and recovery lowered the shipment counts required. ther. so that clean water withdrawal could be In 2014 Otokar increased the milk run lowered and the stress induced on the Arçelik increased the orders provi- practice for the local suppliers’ material resources reduced thanks to diversifying ding high rates of loading thanks to the shipments to 40%. With the consolida- the resources, cutting down the amount practice of loading the product groups tion of the delivery vehicles used during of generated wastewater, and further of suitable sizes together, eventually the supply process as well as introduc- improving the quality of wastewater. All making fewer deliveries as part of its tion of new generation vehicles running these parameters are evaluated within transport operations. Additionally, as on Eurodiesel, exhaust gas emitted by the scope of the risk management sys- a more environmental method, mar- the Otokar logistics operations went tems, and related goals are set with per- itime transport use rose by 3% when down. The goal is to increase the ve- formance results evaluated on an annual compared with the previous year and hicles making deliveries with 71% of basis. reached 81%. the loading capacity used in 2014 to In 2014 the Group companies reduced Aygaz decreased vehicle weight by over 80% in 2015, which will reduce their total freshwater consumption by reducing the length and height of the the fuel and greenhouse gas emission 8.5% down to 26.7 million m³ when long-trailer vehicles in 2014 within the consumed per unit material. compared with 2013. Accordingly, for scope of the Long-Trailer Modification every 1 million TL net revenue gener- Project in 2014 while increasing the ated by the Group companies in 2014, number of cylinders carried thanks to water consumption turned out to be

Koç Group Sustainability Report 2014 31 TürkTraktör Factory

212.46 m3/million TL. In the energy period, recovered water usage rate in sumption fell by 7% when compared sector, water consumption for every production turned out to be 91,8% for with 2013. Moreover, the washing 1 million TL net revenue generated is the durable goods sector and 96,1% water from various filters in the water 273.81 m3 while this value is 116.6 m3 for the automotive sector. The drama- conditioning plant was delivered back for the durable goods sector, 79.69 m3 tic change observed in the recovered to the wastewater recovery plant for the for the automotive sector, and 24.41 m3 water amount and recovered water ion exchangers to be fed with the RO for the finance sector. amount used in production in the pre- production water instead of municipal vious reporting period essentially stems water. All these practices amounted Thanks to practices involving reusing from the fact that during the reporting to recovering 106,703 m3 of water in in process, and recycling in wastewa- period re-using in the process values 2014. Furthermore, the introduction of ter treatment plants in 2014, over 83 began to be covered by the calculations the Cascade system in the paint shop million m³ of water was used in pro- during the reporting period, therefore in the Refrigerator Plant recovered duction again, therefore the recovered yielding a real water recovery amount. 21,333 m3 of water while the improve- water usage rate in production turned ment practices implemented in the out to be 75,7%. During the reporting Arçelik, thanks to a project imple- Compressor Plant recovered 3,006 m3 mented in collaboration with İstanbul of water, and the maintenance and im- Technical University and with the sup- provement activities carried out at the port of TÜBİTAK TEYDEB in 2014, seeks Total Water Withdrawal by Tumble Dryer Plant recovered 3,500 m3 to recover wastewater and rainwater Source (m3) of water. through advanced treatment technology, and to reuse it in production without Tat Gıda saved 297,600 m3 of water compromising product quality. Planning by recovering the water overflown on to recover 110,00 m3 of water, the the separation lines at the front, and project recovered 1,484 m3 of water 172,800 m3 of water by cooling the in 2014. During the reporting year the water warmed in the cooling tunnel cooling water reused at the Dishwasher through a chiller and reusing it in the Plant saved 3.030 m3 of water, while cooling tunnel. Tat Gıda also saved the reused water from the heating boil- 189,000 m3 of water by recovering the ers saved 376 m3 of water. water from the overflowing section in the tomato lowering pool underground Due to the water consumption im- storage and using it in the tomato floa- provement activities carried out by the tation collector while saving 38,400 m3 Electronics Plant, 49,000 m3 of water of water by feeding the tomato product was saved. Meanwhile the Washing sterilized cooling water to the sprink- Machine Plant undertook a project with Surface Water 17,690,320 66% lers on the front for washing tomatoes the support lent by İstanbul Develop- Well Water 6,557,094 25% and finally saved 67,200 3m of water ment Agency to recover the biological Municipal Water 2,335,707 8,8% by channeling the condensed water treatment facility exit water and rain- Rain Water 10,340 0,1% warmed in the evaporator to the cool- water so that per product water con- Other 75,933 0,1%

32 Koç Group Sustainability Report 2014 Tofaş R&D Center

ing tower so that the evaporator could efficient use of resources like energy high potential of harming the ozone achieve vacuum once again. and water, as well as preserving and layer and greenhouse effect contri- improving the biodiversity capital, en- bution potential are prevented from While the Group companies reduce the suring efficient waste management being emitted to the atmosphere and freshwater amount they use through and waste recycling are collected in the facility and are dis- their recycling practices, the wastewa- posed of by the licensed facilities. The ter that cannot be recovered undergoes Arçelik Cooking Appliances Plant in- materials obtained from the facilities chemical and biological treatment pro- troduced a recovery practice enabling are recycled and contributed back to cesses in the units fit for their pollution it to save on the enamel raw material, the economy. load. The wastewater that has reached and reduced waste generation by 20 the quality norms stipulated by the dis- tons. The Washing Machine Plant car- Ford Otosan achieved a first in Turkey charging licenses is discharged either ried out production planning activities in 2014 by introducing the 3 WET Pro- into the receiving environments stated to bring products of different colors cess, which does not have many exam- by the same licenses, or municipal together, and invested in a new sieve, ples in the world. The project reduces sewage systems. In terms of the nat- therefore reducing the collection of the paint spraying booth and oven to ural receiving environment for the dis- paint over the sieve in the powder one, eliminating the need for an un- charged wastewater , the wastewater coating booth to 0.09 kg/ product. dercoat or abrasives, which resulted in does not exert any negative impact saving 5% on electricity consumption, Arçelik uses Mucell technology in the on the biodiversity properties, or on 26% on natural gas consumption, 14% injection process of plastic materials the species living in that environment on the industrial materials used, and to reduce weight, mold temperature, since the wastewater quality parame- 17% on the paint use. mold costs, part nominal thickness, ters are constantly monitored, and the cycle time and carbon footprint while Launched in 2010 to create recycling wastewater is only discharged once increasing high noise and temperature awareness among the Group employ- it has reached a quality level higher insulation, and mold life. Following the ees and to form a common standard than the stipulated norms. In 2014 the plastic injection trials conducted in for recycling paper, glass, plastic and wastewater amount generated due to 2014 using Mucell technology, weight metal wastes as well as increasing the the Group companies’ operations went reduction amounted to 12% and cycle amount of waste collected, the Recy- down by 11% and turned out to be time gain reached 10%. cling Project was completed in 2013. 16.6 million m³. The wastewater gene- In the period following the completion rated is filtered by the treatment units Arçelik established two processing of the project, Group companies con- and is discharged once it has reached plants for recycling electric and elec- tinued the related practices. In this the suitable standards. tronic goods in Bolu and Eskișehir. regard 3,542 tons of paper, 863 tons Granted recycling permissions by the of plastic, 699 tons of metal and 339 Ministry of Environment and Urban- tons of glass wastes were collected RESPONSIBLE USE OF RESOURCES ization in 2014, Bolu Facility recycles and recycled in 2014. large white goods and small house As part of their environmental man- appliances while the Eskișehir Facility In line with the Group Environmen- agement practices, Koç Group com- recycles waste refrigerators, freezers tal Policy, the Group companies are panies also focus on responsible and and air-conditioners. The gases with obliged to reduce waste at the source,

Koç Group Sustainability Report 2014 33 Opet Marmaraereğlisi Terminal

and ensure waste recovery as much Environmental Awards in 2014 as possible. 114,1 thousand Tons of Appreciated by their stakeholders thanks to their practices shaping the future, hazardous and 279,5 thousand Tons of Koç Group companies were also awarded by many organizations for their envi- non-hazardous waste was generated ronmental efforts. Within the scope of the Carbon Disclosure Project (CDP) they as a result of the Group Companies’ participated in 2014, Arçelik and Tofaș, both affiliated with Koç Group, became operations were recovered in 2014 the very first Turkish companies to win the right to be on the “A List: CDP Climate through authorized agencies by 78.6% Performance Leaders Index 2014” featuring the companies with the best perfor- while the remaining part was disposed mance from around the world by achieving the highest A performance score in of according to the norms set by the the CDP performance ranking. Meanwhile Arçelik Dishwasher Plant scored a first environmental regulations. time both in Turkey and Europe with “Nanotechnology Surface Processing Tech- Monitoring their environmental im- nology” in its paint shops and became the finalist from Turkey for the Sustainability pact with a multidimensional approach for Innovation – the EU Environmental Awards Turkey Program 2013-2015 peri- through risk assessment and precau- od Process Category. In the same contest Tüpraș was also selected among the tion practices, Koç Group companies finalists from Turkey thanks to its “Membrane Deaerator Cold Boiler Feed Water formulate plans for protection and Energy Recovery Project”. Moreover, Arçelik and Tüpraş also represented Turkey improvement. Implemented within the in the EU Business Awards for the Environment with these practices. Developed by scope of the environmental policy and Ford Otosan Kocaeli Plant for creating donations through the products manufac- management practices, they ensure tured from the waste materials, The project “Back Window” won the second prize that no negative impact is imposed on in the Environmental and Sustainability Management for Large Scale Enterprises the natural sites, forests or wetland are- Category of the 14th Environment and Energy Awards organized by the İstanbul as located on and near their operation Chamber of Industry. Otokar won the third prize in the Environmental and Sus- sites as well as on the living organisms tainability Management category in the same contest while Tofaş won the second inhabiting these sites. The negative prize in the Large Scale Enterprise Energy Efficiency Implementation Category. impact on the environment and bio- In 2014 Opet was awarded for its social responsibility projects in the “17th diversity stemming from the supplied Akdeniz University Environmental Service Awards” held by Akdeniz University chemical materials is managed in ac- Environmental Problems Research and Practice Centre in cooperation with the cordance with the REACH Regulation. Faculty of Engineering. Opet was also awarded for its Clean Toilet Campaign by None of the operational areas of Group the Nature Warriors Environmental Agency. Companies are located on protected natural, historical sites, special envi- Tofaş was awarded for its energy generation from waste heat project in the Min- ronmental preserves or RAMSAR sites istry of Science, Industry and Technology Sustainable Production Contest. Tofaş as specified by the law or international also won the first place in the Energy Management Awards Program held for the agreements. There are no lands or wa- first time by BUSİAD. ter resources that have suffered a significant impact in terms of biodiversity value or species population due to the Group companies’ operations. Mean- while the Group companies continued

34 Koç Group Sustainability Report 2014 Saplings Planted by Year Projects for Environmental thanks to 68 companies buying these Awareness paintings. The money raised was used 2010 42,747 for converting the Automotive Industry In line with the Group Environmental 2011 89,140 Exporters Association Technical and In- Policy, Koç Group companies carried dustrial Vocational High School building 2012 50,043 out 24 environmental projects, and into a green building and receive BREE- 2013 55,944 11 donation and sponsorship activities AM in Use certificate. The activities with a view to creating environmental 2014 30,545 helped the school building save 421 GJ awareness throughout the society. energy and 4,000 m3 of water. to protect and improve the biodiversity Arçelik Cooking Appliances Plant sup- During the reporting period Otokar properties of their operation regions ported the 6th Earth and Leaf Painting launched the Sapanca Lake Coastal during the reporting period too. Contest organized by the TEMA Foun- Clean Up Initiative with close to 100 dation in 2014. 156 students from 23 Arçelik Cooking Appliances Plant voluntary employees, their families schools competed in the contest, and spared an area of 4.2 km2 on it site and and Marine Environment Protection the students that were placed received began to grow here 8 bulbous plant tax- Association (TURMEPA) volunteers, awards. ons that are rare to come across while hence supporting the International 100 saplings were planted in an effort Started by Koç IT Group, Green IT Plat- Coast Clean Up project implemented to revitalize and increase production of form continued its activities in 2014 simultaneously in over 100 countries. Bolu Mountain Nuts facing extinction as too. In addition to supporting the Earth The event resulted in collecting 185 kg a species due to germination problems. Hour with all the member companies waste from Sapanca Lake. Otokar envi- Moreover, a green space was created and turning their lights off in their build- ronmental club EKOKAR provided train- and placed under protection on an area ings for 1 hour, the platform members ing for saving energy and environment of 104.5 km2 within the Plant bound- closed their websites for 1 hour too to for 280 students from 5 schools within aries. draw interest in green IT practices. In the scope of 5 June World Environment an effort to create awareness for sav- Day while the winners of the painting Ford Otosan protects 22,000 m2 of ing energy, Green IT Platform held the contest held with the theme “What do wetlands located on the plant site and “Take a step that does not leave a trace you do for the environment with your on the bird migratory route in its natural in nature” campaign seeking to reduce family?” among the students received state so that the biodiversity properties the use of elevators. their awards in a ceremony held at of the site is exempt from the operations. Otokar Plant. Meanwhile an area of approximately In a social media campaign launched 35,000 m2 formed due to a settling that with the hashtag “#sizeihtiyacvar”, Continued by Tüpraș since 2010, the occurred after an earthquake was reha- Green IT Platform sought to bring the Happy Wastes Project held a kite fes- bilitated in cooperation with the TEMA latest water shortage problems to the tival for the 5th time in 2014 and the Foundation and reforested to create a agenda and create awareness by shar- children participating in the festival re- park available for the employees to en- ing related information and visuals. ceived messages focused on creating joy. In 2014, 2,000 tree saplings were The campaign lasted for 15 days and environmental awareness. donated to the Middle East Technical reached 65,000 people organically. Batman Refinery voluntary employees University “A Forest from Us for a Tree Organized by the voluntary Green IT started a campaign that collected 150 from You” project organized by the Mid- Platform member company employee’ liters of waste vegetable oil from hous- dle East Technical University (METU). participation, “Hear My Voice Before es and sent to the recycling company. the Nature Reclaims It” project was Within the scope of the reforesting ac- The money raised from the project launched to coincide with the World tivities carried out by Opet in 2014 at was used to provide hearing aids and Environment Week while the song sung 23 stations, 24,234 plants were planted wheelchairs for disabled people. Mean- within the scope of the project reached while thanks to another project launched while the refinery employees also pro- over 20,000 people. in 2014, 594,172 plants were planted vided 4,590 person*hour training for in total at 680 stations and on the sites Ford Otosan implemented the “Back 2,295 students from 73 schools in Siirt, shown by municipalities. Window” project in collaboration with Bitlis, Batman villages and Tatvan with the Automotive Industry Exporters As- a view to drawing attention to the envi- The Group companies planted 30.545 sociation while as a result of the project ronmental damage created by wastes. saplings and plants as part of the re- 275 paintings were produced from the foresting activities carried out by the waste panels generated during produc- Group companies in 2014. tion and over 131,000 TL was raised

Koç Group Sustainability Report 2014 35 “Creation Of Wealth For Continuous Development Is Our Key Objective.” Our Founder Vehbi Koç

INNOVATION AND PRODUCT STRATEGY

Providing consumers with “firsts” and 4. Increasing partnership with external management competencies achieved by “bests” since it was established, Koç stakeholders, an important source of the Group companies are monitored and Group believes in the important of inno- innovation, and managing such col measured through the Innovation Index, vation regarding its strategy to shape the laborations in a more efficient manner, also devised by Koç Holding. future. Seeking to develop new business 5. Managing innovative operations with In addition to these operations coordi- models that will generate new values for in specific processes to ensure their nated by Koç Holding, Koç Group Tech- their stakeholders, create new markets sustainability. nology and Innovation Council estab- and help next generations benefit from lished under Koç Holding is responsible Launched by Koç Holding to implement environmental and value added products, for the coordination of the R&D practices Koç Group Innovation Strategy, Koç In- innovation activities are performed on an carried out within the Group. With its ba- novation Program seeks to establish operational level by the Group companies sic mission being to create the suitable and develop innovation management while the Koç Holding strategic trend and environment to set the long-term R&D infrastructures in the Group companies. systematic development practices con- and innovation strategies, goals and ac- For that purpose, standards are formed tribute to further development of innovation plans for the Group Companies, the about the related aspects especially tion activities throughout the Group. Council is composed of top managers including corporate entrepreneurship responsible for technology, innovation Innovation and Intellectual Property (“intrapreneurship”), business model and R&D operations of the Group Com- Rights Management innovation and open innovation while panies. In an effort to guide the innovation acti- goals are identified, trainings are pro- vities throughout Koç Group, Koç Group vided, processes are introduced and due Koç Group companies invest more and Innovation Strategy was launched in the diligence practices are implemented. more workforce, infrastructure and re- previous reporting period. In that sense, Pilot implementation of the Koç Innova- sources every year in innovation activi- the strategic goals for the activities car- tion Program that seeks to mainstream ties. In this regard the Group companies ried out through out the group include: innovation culture and help innovative developed their R&D capacity signifi- ways of doing business appear among cantly when compared with 2013 and 1. Building a culture of innovation and Koç Group companies began at Tat invested 918 million TL in R&D in total creating the right working environment Gıda. The Innovation Program imple- in 2014 while employing 4,169 R&D to enhance our innovation capacity, mented by Tat Gıda under the name employees. 2. Cultivating the corporate entrepre- “Good Idea” intends to mainstream cul- Practices for managing intellectual neurship (“Intrapreneurship”) across the ture of innovation in the company and property rights are important to protect Group, and supporting employee en- support in-house entrepreneurs. intellectual property, which is accepted trepreneurial dispositions and efforts, The innovation practices in the Group as an economic asset. In this regard Koç Group is the first Turkish company to 3. Extending innovative endeavours not companies are implemented within the introduce an intellectual property rights only across product and service framework of the Koç Holding Innovation strategy and share it with its related development activities but also to Model developed by Koç Holding and in- stakeholders. Koç Intellectual Property wards all business units and operations, troduced to the Group companies. The activities carried out within the frame- Rights Management Project seeks to work of this model, and the innovation implement this strategy.

36 Koç Group Sustainability Report 2014 R&D Investments by Koç Group Koç Group R&D Staff Over Years Patent Applications Over Years (million TL) 918 by Koç Group Over Years 563

706 570 4,169 503 3,693 400 381 3,258 310 2,744 253 273 2,385

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

The current Koç Group intellectual pro- being directly involved. The activities of an market, and ensured the compliance perty rights portfolio comprises over innovation and design teams of the com- of the vehicle models with the heat and 3.000 patent families, over 6.600 pat- panies play an important role in these desert conditions in the African and Gulf ents, over 700 industrial designs, over activities, which seek not only to meet the countries. Meanwhile the company also 7,100 brands, and over 4,200 Internet consumer expectations in the emerging carried out activities including projects domain names. Moreover, Koç Group markets but also local legal requirements. to modify its light commercial vehicles to companies applied for 563 patents in Arçelik, one of the Group companies, carry mail in Denmark, Sweden and the 2014. invested in Defy in South Africa in 2011 UK, and increased the added value and Group companies carry out joint activities and now intends to operate more actively competitive power of the Doblo model in with many agencies especially including in the Southeast Asian market, another the UK and Canada. universities for innovation. Meanwhile the emerging market, through its Thailand Eco-Innovative and Value Added innovation projects benefit from the inno- Plant Investment announced in 2014. Products vation incentive programs of many orga- Ford Otosan is focused on growing in nizations such as the EU and TÜBİTAK . A considerable portion of the R&D pro- emerging markets through its engineering jects carried out by Koç Group companies Detailed information regarding collabora- and technology exports as well as innova- include projects to reduce the environ- tions established for innovation and pro- tion capabilities, and the vehicles it manu- mental impact from the current and fu- jects is available in the Koç Holding 2014 factures. As the leader of the R&D exports ture product portfolios. Thanks to these Annual Report. from Turkey, Ford Otosan signed a deal activities, the Group companies not only Product Strategy in Emerging in 2013 with the Chinese JMC for the use provide products generating added value Markets of Ecotorq engines, whose intellectual and meeting the needs and expectations property rights lie 100% completely with of the customers fully but also ensure Accessing the emerging markets with the Ford Otosan, on JMC trucks. In 2014 minimized environmental impact during products that meet the expectorations the scope of the deal expanded to include the consumption of the products deve- play an important role in developing the license for the production of the chassis, loped. By preferring these products that competitive power of the Group compa- cabin and related parts of the current help them benefit from added value and nies. Koç Holding monitors the activities trucks, therefore allowing the production environmental consumption opportunities focused on diversifying these markets of complete trucks, whose intellectual at the same time, our consumers saved closely too. Koç Holding, by means of in- property rights belong to Ford Otosan, novation management systems, expertise over 1 million GJ worth of energy in 2014. in China, the world’s largest truck market. on intellectual property rights, opportuni- Meanwhile during the reporting period Arçelik spared close to 37 million TL for ties for collaboration under the Koç Tech- its activities to develop environmentally Ford Otosan signed a similar deal with nology and Innovation Council, and Per- Avtator company for the joint production friendly products. The share of LCD TVs formance Management System, supports of the trucks in Russia. in total TV production rose from 88% in the efforts of the Group companies re- 2013 to 100% in 2014 while the produc- garding technology, product and service Developing its business volume in emer- tion share of A++, A+ and A energy class development. While entering large-scale ging markets in line with its primary goals, products rose from 76% to 98%, there- new markets or investment projects, Koç Tofaș, carried out innovation activities to fore reducing the energy consumption Holding units contribute to the projects by modify the Linea FL model for the Indi-

Koç Group Sustainability Report 2014 37 Otokar

need stemming from its product portfolio Arçelik Electronics Plant BMS Line and from 544,000 GJ to 526,000 GJ. In 2014 Refrigerator Plant VIP Facility Investments stand-by power consumption was cut Monitoring panel supply dynamics changing in the global TV market closely, from 0.5 W to 0.3 W, preventing 9,000 Arçelik made in 2013 the first investment for the Backlight Module Set (BMS) GJ Kwh consumption in total. During the Production Line for the production of the TV panel that used to be bought until reporting year, the new stand design for 2013 while making the second investment in 2014. With the second line beco- the 40-48 ARTEMIS models saved 44 ming operational, the BMS Panel production gained impetus and the usage rate tons on plastic raw materials while the in total TV production rose over 90%. With the establishment of these two lines, design modifications introduced to the TV Arçelik set up clean rooms and gained a new production technology too. wall suspension apparatus saved 51 tons of plastic raw materials. Understanding of the LED illumination design and production technology, development of the optical engineering notion and elimination of the dependency on abroad Thanks to the activities carried out to a great extent regarding mechanical and industrial design with the production of during the year, the gas oven products BMS Panel helped Arçelik achieve significant development in terms of R&D, design reached A+ energy class properties ac- and production organization. While BMS Panel production created significant addi- cording to the EN 15181 standard while tional employment, the reduction of the pieces used also provided cost advantages. the built-in oven products reached A++ Vacuum Insulation Panels (VIP) provide 5 times higher insulation performance energy class properties according to EN than known heat insulation materials. So the level of insulation that could be 603350 standards and hood products achieved through 10 cm thick fiberglass or polyurethane could be achieved achieved A energy class properties ac- through 2 cm thick VIP, which reduces the edge thickness significantly. Using cording to EN 61591 standard. Thanks VIP technology provides important advantages such as improving temperature to all these changes, energy consump- insulation performance of refrigerator and increasing the volume offered. As VIP tion of the cooking products declined by usage increases in the white goods sector, Arçelik used its own engineering 6% saving over 32,400 GJ. power to start a VIP production center. As a result a first time was scored and Activities carried out in 2014 improved VIP panels that used to be imported until then began to be produced in Turkey. the energy consumption in washing Increase in the amount of energy saved thanks to expansion of the VIP prac- machines by 0.6% on average, saving tices will have much positive impact on economy and environment. Moreover, 10,800 GJ on energy. Highly efficient as refrigerators with VIP become more widespread, Arçelik will increase its products’ share in the product portfolio competitive power in the market and will achieve higher exports potential. significantly rose too. During the report- During the period, Arçelik also began to use the 3D printing technology actively ing period the production of washing in production enabling 3D digital models to be produced in layers without the machine models in silent products cat- need for molds or production fixtures featuring different materials. 3D printing egory went up by 21% in number. technologies improve the cooling performance of the molds too. In this regard, In terms of tumble dryers the ratio of using this technology Arçelik manufactured mold plates in the molds of ad- the A class energy class products with justable leg piece for refrigerator, washing machine boiler and coffee machine heat pump to total production rose from handles. While cycle duration was reduced to 20%-30% level, the temperature 19.5% in 2013 to 24.3%. Therefore per emitted to the environment was also reduced by 30%.

38 Koç Group Sustainability Report 2014 product energy consumption went down while minimizing its energy and water gy, Ford Otosan, implemented the “Fi- by 2.51%, saving 28,080 GJ. In early consumption. During the year, thanks lobil” project, which involves machine 2014, the noise level of the A+++ en- to the increase in the production num- to machine communication technology ergy class Grundig heat pump tumble bers of the products of A+ and higher via modules installed on Ford Cargo dryer was reduced from 65 dBA to 63 efficiency levels, energy consumption trucks, during the reporting period. The dBA. Meanwhile the amount of forest went down by approximately 3.38%, project enables identifying mechanical products used fell down by 75% to therefore saving 66,600 GJ of energy. problems, changes in the road condi- 116.1 tons. Thanks to the A++ energy tions and intervening immediately in Arçelik products and innovation activ- class Super eco machines that began case of accidents. In the Global Tele- ities were appreciated in the research- to be produced in 2014, 42% of CO coms Business Innovation Awards 2 es carried out by many consumer and equivalent refrigerant was saved while for the most innovative technological sector organizations in 2014 thanks that ratio was 12% for the A+ energy practices, Vodafone My Business Part- to their environmentally friendly qual- class 54 cm HP machines. ner and Ford Otosan’s “Ford Trucks ities and production technologies. Filobil” project received the “Innovation In 2014 as far as refrigerators are con- For instance, Elektrabregenz brand in Business Solutions” award. Filobil cerned, the basic A++ models rose to dishwashers won the Green Brand technology provides for up to 20% fuel 98 and basic A+++ models rose to 20 award for their performance in terms economy on Ford Cargo vehicles. in number. A new cooling system de- of climate and environmental pro- veloped in 2014 enabled designing of tection, and their reliability; while the Featuring 2.2 liter Duratorq TDCi diesel a No-Frost refrigerator achieving 30% Home+Living magazine published in engine engineered by Ford Otosan, more efficiency than the most efficient Singapore named Beko DSFN6839 as Transit Custom and Tourneo Custom energy class defined for the refrigerator the most energy efficient and lowest models offer 6.5 L/100km the most sector. As a result of the energy-orient- water-consuming dishwasher of 2014. successful consumption values in their ed Arçelik R&D activities, the world’s In the Turkish Innovation Week orga- class thanks to the Start/Stop system. most efficient compressor was devel- nized during the year, Arçelik won the 1.0 liter EcoBoost petrol engine won oped. Designed to keep green-leaved Innovation Strategy 2014 award in ad- the “International Engine of the Year” vegetables fresh for up to 30 days, dition to the R&D Leadership 2014 and award for the third time in a year from EverFresh Plus section is now being Technology Development Leadership the Engine of the Year organization. available in other products too. The 2014 awards. In the Energy Efficiency technology minimizes the condensation in the Industry Project Competition or- 1.0 liter three-cylinder EcoBoost petrol on the vegetables, therefore reducing ganized by the Ministry of Energy and engine provides the performance of a the appearance of mold, fungi and bac- Natural Resources in 2014, Arçelik not traditional 1.6 engine but saves 24% teria while delaying the rotting of food. only won the “Most Efficient Product” on fuel and 25% on greenhouse gas award for its tumble dryer with A+++ emission. Continuing to develop dishwashers with -10% energy level and the “Most Effi- lower energy and consumption values Opet offers over 1% fuel economy for cient Industrial Facility” award but also in 2014, Arçelik managed to reduce consumers thanks to the next genera- received the second prize in the Large the average energy consumption of all tion diesel additive that began to be Scale Enterprise R&D and Product Im- the dishwashers by 3.4%. The world’s used in the Ultraforce diesel product provement category in the “Energy Ef- first and only dishwasher eliminating in 2014. When the same additive be- ficiency Project Awards” for its ATLAS the stench in dishwashers without us- gins to be used in the Ecoforce diesel BLDC Washing Machine Motor. ing harmful chemicals, Arçelik 6388 product too in 2015, the additive usage I saves on water and energy since it With its improved formula, Aygaz Auto- amount in the product is planned to be does not have be full for being oper- gas provides excellent traction and ex- reduced by up to 40%, hence decreas- ated. Another innovative product de- tra performance besides the advantage ing the use of chemical substances. velopment project during the year was of achieving more mileage on less fuel. In 2014 activities were carried out to the Regional Washing System, which Thanks to the cleaning effect of Aygaz switch to the Tier IV emission levels on keeps the water consumption the same Autogas, the performance shown is the TT, TDD, JX series tractors manufac- but intensifies the washing in certain improved and the 90 km/h fixed speed tured at TürkTraktör. Thanks to this de- regions so that dirtier dishes could be fuel consumption test proved to an im- velopment, NOx, HC and PM emissions washed 5 times more efficiently. Imple- provement of 2.66%. are reduced by up to 85% when com- mented in 2014, Automatic Tablet De- Accepting reduction of the environ- pared with the Tier III engines. Within the tergent Detection System enables the mental impact from its products as an scope of the projects, activities are also dishwasher to perceive the detergent important aspect of its product strate- underway to reduce tractor noise levels. type and optimize its washing algorithm

Koç Group Sustainability Report 2014 39 “Customers are our benefactors.” Our Founder Vehbi Koç

EMPOWERING THE VALUE CHAIN

Boasting a sizable economic area of changing consumer expectations prop- tion to ensuring consumer satisfaction influence through its supply and dealer erly as well as from the activities carried thanks to compliance with consumer network besides its products and ser- out to increase consumers’ life quality expectations and needs. vices, Koç Group is the largest industry not only from today but also through In terms of products and services, Koç and service group in Turkey. In that con- the products and services that will be Group companies comply with the re- text, Koç Holding and Group companies provided in the future. Hence, in terms lated legal obligations, valid product perceive their responsibilities towards of product and service responsibilities, and service standards regarding the the future not only within the framework Group companies prioritize consumer design, production and supply pro- of their operations but also in the eco- safety and are focused on improving cesses in the first place. In the second nomic environment they boast. There- product and service quality in addition place, they establish quality norms that fore starting from the supply process to presenting true and transparent infor- go beyond those norms in an effort to to the point products and services meet mation about the products and services strengthen their international compet- consumers, they work in collaboration for consumers, keeping consumer infor- itiveness and customer satisfaction. with their stakeholders in an effort to en- mation confidential while always devel- Sector-specific properties play an im- sure adoption of responsible approach- oping consumer satisfaction further. portant role in defining these norms. es and behavior as well as commercial Product Quality and Safety strengthening of the value chain. In addition to the quality of the prod- The essential goal defined for all Koç ucts and services provided, Koç Group Carrying out activities to help dealers Group companies is to increase quality companies also accept developing and suppliers as strategic business of life for consumers by providing them healthy and safe usage conditions for partners in the value chain to adopt with healthy, safe products and ser- consumers in the consumption process the principles identical to those stated vices designed in line with high quality as an important product responsibi- by Koç Group in social, environmental, norms on an international level in addi- lity component. All Group companies economic and ethical sense throughout their operations, Koç Group supports their required capacity development Consumer Durables: Advanced Product Durability at Arçelik efforts for that purpose. Meanwhile the Group companies seek to improve the Arçelik seeks to ensure that its products provided for consumers remain dura- satisfaction experienced by the custom- ble for the longest time possible without compromising their usage quality over ers, regarded as its benefactors, further time. That is why all Arçelik products are designed to last for a decade, which is through products and services provided a much longer period than the one set by the related legal regulations. with a responsible approach for them. The new products and their components are subjected to tests simulating the PRODUCT AND SERVICE excessive usage conditions that will be experienced during a decade of use. The RESPONSIBILITY test results are required to be examined and approved by the senior management for the product to be granted a sales approval. As long as the product mod- In line with its responsible management el continues to be manufactured, the tests on the product life and its components understanding, a significant part of the continue so that the variables that could change during the production continuity Koç Group goals set to shape a sustain- are kept under control. able future stems from assessing the

40 Koç Group Sustainability Report 2014 Tofaş Assembly Line

Information Management at Koç Automotive Group: Vehicle Safety Information Technologies Group Vehicle safety, a fundamental priority for the automotive sector, is regulated by Koç IT Group companies prioritize in- legal norms. In this regard all Koç Automotive Group companies fully comply with formation management most among the regulations on vehicle safety in the markets they operate in. Meanwhile Koç the service quality processes. Every Automotive Group companies carry out product design and R&D activities in an Koç IT Group Company develops effort to equip the vehicles they manufacture with the most highly developed information management process- safety technologies. The vehicles manufactured to boast these technologies pro- es suitable for the nature of its own vide a safer driving experience for the users. Passive and active technologies service area. For instance, KoçSistem developed make sure that the vehicles manufactured reach the highest safety implements both sector-specific norms in their classes while tests conducted by international organizations such and worldwide-accepted processes as NCAP verify this is the case. and standards while managing the systems and their information on Today traffic safety has reached such a level that it is not limited to the vehicle customers’ behalf in addition to its properties alone but is also related to the smart driving systems enabling vehicles own operations. During the asset in- to communicate with each other and the infrastructure. Koç Automotive Group formation management processes, companies lent their support for the development of these technologies through KoçSistem uses systems such as file their R&D activities and participating in international projects bringing different servers based on QDMS, user autho- sector actors together in 2014. rization, Reporting Portal, Intranet Por- tal, Information Bank, ERP, CRM, PPM and Time Management Application. In terms of the service processes evaluate their products and services Responsible Advertising implemented by Koç Information and in terms of safe consumption con- and Marketing Defense Technologies, the company ditions in the design and production uses systems operating on safe net- Koç Group companies provide a consid- stages while complying with the valid works for the information manage- erably wide range of products and ser- legal regulations in the markets they ment needs involving aspects such as vices in the sectors they operate in for operate first. Afterwards they conduct archiving the reports presented to the consumers while achieving high mar- product development activities focused customers, managing bug and acti- ket shares both in domestic and foreign on maximizing those qualities. In that vity management, managing project markets. At this point it is important for context, all the products and services requirements and monitoring project the Group companies to use the adver- provided by Koç Group companies have development. In the same way, Bil- tising and marketing communication been reviewed in terms of their compli- kom too uses various systems to fulfill instruments in a right way. These op- ance with safe and healthy consump- information management require- erations are conducted accordingly and tion norms. During the reporting period ments as part of the quality conditions are based on Koç brand’s four integral no non-compliance cases in this sense involving dealer and customer service values including Leadership, Optimism, were experienced. processes. Solidarity and Value Generation.

Koç Group Sustainability Report 2014 41 Arçelik Çayırova R&D Center

During their engagement in marketing information through various methods for Yapı Kredi: Easy and Transparent communication, advertising and promo- consumers. Depending on the product Product Information tional operations, Koç Group companies and service type, information practices act in accordance with the International Legal norms define the contents and are implemented either via product labels Chamber of Commerce (ICC) Principles of usage conditions for financial prod- or information documents. While those Advertising Practice, and the Advertising ucts. Therefore unlike many other instruments are provided either on the Self-Regulatory Board guidelines. In that service types, financial products are product or along with the product for con- regard, we strive for the related messa- provided through legal contracts sumers, many informative instruments ges and instruments featured to be signed with consumers. In addition are also available for access over the to that, these services boast technical ethical, honest, accurate, responsible company websites. Product information contents due to their structure. In this towards the society as well as personal instruments feature product contents be- regard, in order to enable consumers rights and comply with the legal regula- to make conscious financial product sides information on safety and environ- tions while taking care to ensure that the and service decisions, it is important to mental impact too. definitions used, claims and visual depic- provide easy to understand, transpar- Customer Data Security tions made could be documented and ent information through sources also proved In addition to avoiding any actions easy to access as well as easily acces- In line with the Group principles viewing that might mislead the audience, detract, sible consumer support services. customers as our benefactors, all the imitate others or benefit from commercial Group employees adhere to the essen- Yapı Kredi shares all the information reputation unfairly. tial rule of gaining customers’ trust and about its products and campaigns on never weakening it. Within the framework Digital media use increases gradually in its website. Additionally, it provides in- of the close relation built up to increase marketing communication and advertise- struments such as sample loan repay- customer satisfaction constantly and also ment operations since it offers a univer- ment tables for consumers to benefit due to the nature of the services provided, sal dialogue environment in a way that from more detailed and easy to under- the Group companies get to know their could be measured. Seeking to use digital stand information especially regarding customers more closely and learn much media more throughout the Group, Koç loan products. The information on deposit products is designed in a way to about them. It is a part of our responsi- brand corporate identity guidelines now avoid contradictions and enable con- bility to use that information only within also cover digital media usage conditions sumers to compare products and in- the framework of the approval granted by and essential principles that have been terest rates. Losses or gains that might the customers and to prevent third parties set to maintain a certain quality standard. be caused by the product are shared from accessing when there is no approval Product Information with consumers in a transparent and with identity verification. The Group com- easily understood fashion. panies use state-of-the-art technologies Providing the most accurate, current and systems designed according to in- and reliable information for consumers ternationally acknowledged standards to about our products and services remains ensure customer information confidenti- among Koç Group companies’ funda- and care while preparing the product ality and limit the customer information mental principles. Group companies go information content. Taking into account to be used only for the purposes set and beyond the legal requirements in scope sector-specific requirements and differences, all the companies provide product allowed.

42 Koç Group Sustainability Report 2014 Providing its products and services for hun- Confidentiality through the Code of Ethics determine Arçelik authorized technical dreds of thousands customers all over the and Business Conduct rules while sta- service performance and service qual- world, Arçelik protects the information it ting that it is the duty of all employees to ity, which resulted in 93.08 Authorized has obtained on systems that are physically comply with these rules and report any Technical Service Shop Quality score on and electronically 7/24 secure with limited violation suspect to the related organs. average over one hundred. access permissions besides constant tests Furthermore, since this is a sector with According to a research covering 4,998 conducted against hacking. In an effort to its customer database used mostly in consumers in 31 provinces in 2014, the increase employee awareness about the diverse channels on a considerably large loyalty score for Aygaz LPG cylinder processes complying with the adopted ISO scale, the process for the customers turned out to be 77. Therefore Aygaz 27001 Standard for Information Security, all suspecting any violations to notify to the has continued its sector leadership since the company employees received trainings company has been simplified. While the 2003. Mogaz, a brand affiliated with the on various levels depending on the their Ethics Unit examines all the applications Group achieved 74 in loyalty score and duty qualifications in 2014. received in this regard, 113 applications came right after Aygaz with the high- of that nature were made while all the Implementing the Information Securi- est loyalty score in the sector. Moreover cases were dealt with formally and con- ty Policy and Protocols formed, Koç IT by scoring 80 in an autogas customer cluded in 2014. Group companies attach critically higher satisfaction research conducted in 29 importance to data security due to the Customer Satisfaction provinces with 3,256 people Aygaz has sectors they operate in. They also boast managed to maintain its leading posi- Creating customer satisfaction remains emergency procedures in case information since 2003. In the same segment a constant common aspect among Koç tion security is under risk. For instance Mogaz scored 80 and as a group Aygaz Group companies’ strategic goals. Ope- KoçSistem secures data security through reached the highest loyalty score in the rating in line with that approach, the systems accredited by the ISO 27001 research history. Group companies introduce pioneering System Standard while Koç Information practices to the sector they operate in and Through over 160 campaigns conducted and Defense Technologies implement they hence enjoy competitive advantage to enhance customer satisfaction in 2014, military grade data security protocols as by ensuring customer appreciation. An- Aygaz reached over 250.000 LPG cylin- required by the sector it operates in. As nually Koç Holding and Group companies der, water and autogas customers. Orga- for Bilkom providing end B2B and end hold customer satisfaction researches nized as one of those activities, Aygaz user services, its online shopping sys- to observe the related results from our Maintenance for Free Days sought to tems boast the highest-level data encryp- companies’ aforementioned approach. help autogas consumers to benefit from tion certificates available. Meanwhile Koç Group companies also higher performance and comfort while Operating in passenger and cargo trans- enjoy leading positions in their sectors driving their vehicles. Within the scope of portation branches of the automotive according to the studies conducted by the practice, 274 stations in 2014 pro- sector, and defense industry, Otokar independent organizations. vided free vehicle maintenance services for 654 days. prioritizes data confidentiality through In addition to the research activities its processes and systems designed in carried out by the Group companies, Aygaz won the first prize in the LPG Dis- accordance with the AQAP 2110 NATO Koç Holding has conducted the most tributors Cylinder Category of the Turkish Standard, ISO 9001, ISO 27001 and ISO comprehensive end consumer research Customer Satisfaction Index Survey held 10002 System Standards keeping the involving 20 different sectors regularly in 2014. data related to its defense industry and since 2003. Covering 21 brands from In the satisfaction surveys held in 2014, automotive customers safe. 12 Koç Group companies and their 120 Ford Otosan customers expressed their Serving hundreds of thousands custom- competitors, 44.090 face-to-face inter- satisfaction as 87.6% in the automobile ers in banking and other financial sector views are held in 51 provinces and the segment, 85.6% in the light-commercial branches, Yapı Kredi operations feature results are shared with Koç Holding and vehicle segment and 81.4% in the heavy business processes requiring its thou- Group companies’ senior and mid-level commercial vehicle segment. managers. The research results are taken sands of employees to access customer Thanks to its activities carried out to en- into consideration during the company information. As a result, the company is hance customer satisfaction within the operations and the goals set for improv- responsible for ensuring customer infor- scope of the “Travel to Excellence” pro- ing customer satisfaction are covered mation security not only elements outside gram, Opet was selected as the Compa- by the company managements’ perfor- the company but also within as far as ny with the Highest Customer Satisfaction mance goals. ethical conduct of its employees are con- for the 9th time in a row in the fuel sector cerned. In this regard Yapı Kredi defines In 2014 a research was conducted to category of the Turkish Customer Satis- Bank Secrecy and Customer Information carry out improvement activities and faction Index organized by the Quality

G4-27 Koç Group Sustainability Report 2014 43 Association in 2014. In addition to the to get all their related business partners generated grows along with it. In line with practices such as Fuel Assurance Sys- especially their suppliers, contractors, this understanding, Koç Group compa- tem, Online Transaction Centre and Opet dealers and distributors to adopt primar- nies conduct operations focused on help- Mobile Applications, customers appreci- ily their principles for conducting ethical ing their business partners in the value ated Opet Call Centre services too with business as well as their operational chain develop their success further. its 97.5% call-answering rate in 2014. norms stemming from the commitments Due to the important role the dealer made to various international initiatives Customer satisfaction surveys conduct- employees directly in contact with the including the Global Compact. Therefore, ed in 2014 showed that Yapı Kredi customers play in ensuring customer the deals signed with the business part- achieved 85% rise in private banking satisfaction, Aygaz provided Excellence ners also cover business ethics, quality, segment, and 69% rise in individual in Service and Safety Training on site environment, human rights, labor norms banking segment. Yapı Kredi also won through its training truck and buses for and principles within the scope of the the Innovative Owl Award from the Re- over 2,200 cylinder gas dealer employ- Global Compact principles. Supplier searchers Association of Turkey thanks ees and 918 autogas station pump at- trainings are among the activities carried to its creative practices in 2014. tendants in 2014. The aforementioned out for that purpose. In 2014 Koç Group training features subjects such as LPG Otokoç evaluates customer satisfaction companies provided 881 person*hour and the areas it is used, vehicle conver- levels regarding the services provided training in business ethics, 22,677 sion systems, autogas stations and prop- in monthly and quarterly periods reg- person*hour training in environment, erties, sales techniques and what should ularly through the activities carried out 5,105 person*hour training in social is- be done to achieve customer satisfaction. by Otokoç Call Centre and the research sues, and 1,557 person*hour training in Meanwhile Aygaz Conversion Club, systems of the companies it has deal- economic issues. which brings mechanics responsible for ership agreements with. In addition to the practices devised converting vehicles to run on LPG, trained to lend support for progress, activities 320 mechanics in 2014. for achieving control play an important RESPONSIBILITY IN VALUE CHAIN Activities made by dealers have an im- role in ensuring development. Thanks portant role in the Opet’s customer satis- Koç Group acts with the firm belief in to these activities, business partners’ faction leadership success for the dealers the fact that its corporate sustainability performance to comply with and devel- help the brand meet customers in the first approach could yield the expected re- op the related operational and achieve- place. Opet therefore conducts many ca- sults when mainstreamed throughout ment norms are evaluated while they pacity development, communication and its entire value chain. In this regard, the are provided with improvement plans audit activities in an effort to get its deal- Group companies seek to mainstream when needed. In this regard the sup- ers to develop their working norms and the responsible approach they show plier audits carried out by the Group business success further. Held in 2014 during their operations throughout the companies are emphasized. Covering with the participation of 3,943 employees value chain with a view to ensuring areas such as quality, environment, from 1.087 stations, Station Employees sustainable development in their overall business ethics, employee rights, hu- Training Program activities went on for economic influence sphere created. man rights, these audits also manage 232 days and featured a comprehen- the sustainability risks throughout the Responsible Value Chain sive content ranging from OHS to station entire value chain. Risk based selection Management management, from Opet products and criteria identify suppliers to be includ- services to quality management. A significant indicator for companies’ ed in the audit practices. In this regard success is the capacity of the value chain 1,200 suppliers were audited in 2014 Opet station audits, which play a sig- they have formed to generate the high- regarding social, environmental issues nificant role in identifying activities to est level of added value for the economy. and ethics while over 1,200 suppliers improve performance, are conduct- While defining this success, the way were audited for human rights issues. ed through diverse channels. Mystery the value is implemented stands out as Durable consumer goods sector turned shoppers, brand implementation teams, much as how much value is generated. out to be the sector with the highest quality control teams, site audit experts, That is why the Group companies do not audit coverage of up to 37%. site and regional directors, HQ employee limit their goal of shaping the future with visits, Traveller Project, envoys for flaw- Dealer and Supplier a view to creating a more sustainable life lessness and our customers are among Business Success only to their operations; they also strive the stakeholder groups auditing our sta- to expand their responsible management Achieving success in business life is a big tions. Brand Implementation Teams visit approach over the entire value chain. For team game. When success is reached stations regularly to see if the practices that purpose, the Group companies seek throughout the value chain, the value implemented are updated while also au-

44 Koç Group Sustainability Report 2014 G4-27 Opet

diting within the scope of the Clean Toilets tation activities for suppliers. Within the Companies meet their customers and Campaign. Organized by an independent scope of the activities organized under therefore monitors dealer satisfaction le- company, Mystery Shopper Program en- Tofaș Academy, 745 employees from vels regarding the Group Companies sures that the stations are visited 5 times 67 supplier companies received 1,002 dealers work with. Held for the 11th a year as part of the program. person*hour training in 2014. Thanks to time by the independent research com- the Synergy Supplier Orientation Program Opet Envoys for Flawlessness Project is panies in 2014, Dealer Satisfaction Sur- launched in 2014, 90 employees from 33 an auditing system composed of 7,389 vey covered 6,215 dealers in 81 pro- companies were trained on purchasing, voluntary Opet customers. Included in vinces. Just like the customer satisfaction project management, quality and logistics the project since 2000, the envoys audit goals, dealer satisfaction improvement processes. The program plans to reach the stations to see if they comply with goals are covered by the company man- 150 supplier employees in 2015. Addi- the Opet service standards. Envoys for agement performance goals too. tionally, activities are organized to develop Flawlessness deliver their reviews over the problem solving capabilities of the channels such as kiosk, web, OIM, iP- suppliers that have obtained the 7 Steps hone, Android, e-mail and a special line certificate. Formed for this purpose, by launched for them within the Call Centre. Ford Development Academy 2019, Diagnosys 7 Deployment Project is The reviews conveyed are collected in the slated for deployment in 35 companies. With its new facility that began provi- call center database and once the related ding service in 2014, Ford Develop- analyses have been completed, the direc- In addition to its suppliers, Tofaș also ment Academy has reached 32,400 tives delivered to the site managers en- carried out operations to develop its person*day training capacity and re- able immediate intervention in any neg- dealers’ business success, and prepared alized 13,000 person*day training in ative developments especially a decline 8 training modules focused on develop- the first six months of the year with in service standards. 422 Opet Envoys ing the dealers’ business performance a 60% increase with regards to the for Flawlessness shared their reviews re- through Tofaș Academy in 2014. During previous year. garding 1,272 audits in 2014. the reporting year, Dealer HR Project was Users can manage their personal implemented to help the dealers com- Tofaș supports its suppliers to improve training plans and training compe- plete their HR processes with a higher tence with the Fodders training ma- themselves in many aspects including performance, increasing employment nagement system, which provides product design, organizational & technical satisfaction and loyalty. Moreover, Man- interactive interaction and enables development, quality, cost improvement, agement Process through Objectives competence based development. physical and financial risks, production practice was implemented to certify the process improvement and joint purchase, The Dealer HR Project, slated for finance managers from the dealers. 87% as well as enhancing their competitive 2015, aims to determine the tech- of the dealers participated in the first year power. In this regard Tofaș focused on nical and behavioral competences of this practice seeking to increase dealer further risk management development in dealers with regards to defined operation performances. positions, to redefine recruitment especially regarding social, environmen- processes and to start “personality tal, operational and financial aspects as Koç Holding is aware of the significance inventory” and “ability test” practices well as expanding the WCM Methodology related to the company-dealer-customer in pilot dealers. in 2014 and therefore undertook orien- relations at the locations where the Group

Koç Group Sustainability Report 2014 45 BRIDGING THE PAST AND THE FUTURE: NAKKAŞTEPE CAMPUS

The success achieved by Koç Group rises HISTORY OF NAKKAŞTEPE CAMPUS to the successful restoration completed on a heritage of values dating back to a As one of the most precious Ottoman ar- true to the original. long time in the past. Koç Holding Nak- chitecture structures, Nakkaştepe Campus HISTORY, NATURE AND TECHNOLOGY kaștepe Campus is not only the HQ for was originally built as a manor house in IN THE HEART OF İSTANBUL Koç Holding but also symbolizes the mis- the late 19th century by Mehmet Şerif Pa- Located in the heart of İstanbul with a view sion to shape future through the Group’s sha, one of the members of the Ottoman overlooking the Bosphorus, Koç Holding cultural heritage. In terms of providing dynasty. Damaged on a large scale in a fire Nakkaştepe Campus is unique not only many opportunities for the employees, probably in the early years of the Turkish due to its historical but also natural qua- Koç Holding Nakkaștepe Campus is a Republic, the complex was acquired by lities. The facilities are built on an area modern working environment where the Koç Group in 1978 and renovated accord- of 23.219 m² while the open areas are values from the past are respectfully kept ing to the archive records kept by Prof. completely covered by trees. Also boasting while efficiency and environmental pro- Sedad Hakkı Eldem and his invaluable unique qualities in terms of biodiversity, tection practices are developed through contributions. The restoration work on the Nakkaştepe Campus is known to be one the most advanced implementation pos- Mehmet Şerif Pasha Manor comprising of the few locations hosting İstanbul’s local sibilities available. Harem, Selamlık, Ağa Dairesi, Hamam, parrot population in summer. Ahırlar and Arabacıbaşı annexes were Apart from its historical and natural value, completed finally in 1988. The manor won Nakkaştepe Campus has been acting as the Europa Nostra Award in 1991 thanks the HQ of Koç Holding, the largest private

46 Koç Group Sustainability Report 2014 sector organization of the Turkish econo- management. Therefore projects are pro- glamorous Abdülmecid Efendi Pavilion my, since 1988 and therefore hosts hun- duced continually to minimize resource built in 1880-1885 for Khedive of Egypt İs- dreds of employees. Nakkaştepe Campus consumption. mail Pasha. Available for all Koç Group emis a successfully integrated synthesis of The wastewater recycling and automated ployees and their guests to use, the woods heritage and modern technology because heating systems introduced in 2014 saved 12 boast a 1,600 meters-long track suitable while the historical and natural fabric is for walks and running in all seasons while thousand m3 of water and 25 thousand m3 of the natural tracks offered by the woods are maintained, state-of-the-art technologies natural gas. The goal is to continue projects to available in summer. were used to create an ergonomic, safe install rainwater harvesting, efficient illumina- and secure working environment for busi- tion and heating systems in 2015. The facilities located within Bağlarbaşı ness operations. Woods also host Koç Group Sports Club. WORKING ENVIRONMENT THAT EXEMPLARY EFFICIENCE The facilities feature a synthetic pitch for SUPPORTS HEALTHY AND ACTIVE soccer, a basketball court, tennis courts, Nakkaştepe Campus has a very limited LIFE a golf course, closed sports studios for resource consumption and environmental Nakkaștepe Campus provides diverse sports such as gymnastics, pilates and impact level since it is not a production social and sportive activity opportunities aikido as well as photography, ceramics facility. However, the campus sets an ex- for the employees. Next to the campus and painting workshops. Moreover a ca- ample as it is home to Koç Holding HQ is Bağlarbașı Woods, also owned by Koç feteria, a picnic area and a playground for and reflects the integrated view of the Holding, covering 120,000 square meters children are available for the visitors to company on efficiency and environmental of land with thousands of trees, and the spend time in during their visits.

Koç Group Sustainability Report 2014 47 “I live and prosper with my country.” Our Founder Vehbi Koç

EMBRACING THE COMMUNITY

History of Koç Holding identifies with the believes that private sector needs to play dation and Koç Group Companies seek to history of the Turkish society taking a a special role in helping the majority of the provide benefits that could be measured huge leap ahead for development with society have access to such services es- in all the projects they carry out through the dream of establishing a modern, de- pecially in developing countries. Therefore, tangible performance indicators, creating veloped welfare society. As one of the pio- in line with their corporate citizenship prin- long-term value by expanding the projects neering enterprises of an industrial sector ciple, Koç Holding and the Group Compa- to their employees and all the value chains. built from the scratch, Koç Group accept- nies consider lending their support in that For My Country ed the responsibility of growing constantly sense for the development of the commu- to ensure that the Turkish society benefits nities living on their operation geographies As one of the finest examples of the cor- from the modern products, services and as an essential aspect of their work. porate social responsibility activities car- capabilities provided by the developed ried out by Koç Group with all its employ- In 2014 Koç Group Companies carried world. Due to this responsibility taken on ees and dealers, “For My Country” project out 84 social responsibility projects and at the very start, we regard success not is an umbrella project launched in 2006 111 sponsorship activities in an effort to only as an economic indicator but also as Aimed at expanding our understanding of increase social welfare in their operational a debt we owe both to the community we social responsibility to individuals. geography. Koç Holding, Vehbi Koç Foun- operate in and to the future generations. Carried out in cooperation with the Al- With its operations having reached further ternative Life Association and the UNDP beyond Turkey’s borders and now quoted Distribution of Social Responsibility in 2012-2015, the “No Barriers for My as among the largest corporations in the Projects in the Reporting Period Country” project has sought to create world, Koç Group seeks not only to achieve by Area awareness about disabled people, im- commercial and operational success, and proving their quality of life both in their constant growth but also to lend its sup- professional as well as social lives. Within port to the social, economic and cultural the scope of the “Right Approach towards development of the communities living on Disability” trainings given, 372 voluntary the geographies we operate in through trainers were trained and 2,433 train- the level of competency and benefits we ings were held. Up until December 2014, have gained. Therefore as far as we are 125,982 people were reached in total as concerned, the measure of success is not a result of these trainings held in various only Koç Group’s development but also locations in our 36 provinces through our the support we provide for the develop- 34 Koç Group Companies and dealers vol- ment of the communities we operate in. unteering in the For my Country project. As set by the project goals, the change Education 56.32% of perception among the employees trig- SOCIAL INVESTMENTS Sports 27.16% gered the development of projects that would increase the quality of life for the Regarding access to products and ser- Arts & Culture 32.18% disabled people at the workplace. The vices in education, health and sports as Health 27.16% human resources procedures of our com- a fundamental human rights, Koç Holding Environment 31.18%

48 Koç Group Sustainability Report 2014 No Barriers for My Country Ford Otosan Practice

Number of Envoys and Companies Participating 135 1In 2009, companies did not participate to the project. 1 in the "For My Country Project" since 2006 121 125 125 116 For My Country Envoys Number of Companies Participating in the Project

81 81 81 81

49 43 46 30 34 34 34 22 0

2006 2007 2008 2009 2010 2011 2012 2013 2014 panies were revised in a way to watch Koç Companies and “No Barriers for A number of activities were held in 2014 out for the disabled individuals while Koç My Country” to turn Arçelik plants and authorized Group Companies added “Right Approach dealers into disability-friendly places. In collaboration with Koç Holding and Tohum towards Disability” trainings to their orien- A pool of ideas for a disability-friend- Autism Foundation, Koç Holding provided tation programs. Apart from that, an article ly products portfolio was formed while trainings for the trainers working at the İs- stipulating “Being Disability-Friendly” was projects continued for disabled-em- tanbul Provincial Directorate of National Ed- introduced to the procedures required for ployee recruitment and disabled peo- ucation Beylikdüzü Special Education Work opening new dealers, stores and branch- ple working from home. Additionally, Practice Centre apart from also providing In- es. Moreover, 1,361 different activities Arçelik implemented “Reading out clusive Education studies held in 20 schools were carried out as part of another goal of for You” project in cooperation with located in Beylikdüzü borough. the project to make physical environments Boğazici University Technology and Edu- “Disability-Friendly”. As a crucial part of Koç University Nursing College established cation Center for the Visually Impaired the project, Koç Group Companies have Support Centre for the Disabled Children (GETEM). The study supported the achieved major achievements in terms of and Their Families (EÇADEM) through the establishment of an “audio-book lib- accessibility features of their products and funds it received from İstanbul Develop- rary” for the visually impaired people. services for disabled consumers. ment Agency. The promotion video launched to get

Koç Group Sustainability Report 2014 49 Opet Traffic Detectives Project Practice

Arçelik authorized dealers to support Otokar provided “Right Approach to- Opet Traffic Detectives Project the project is also shared through Dealer wards Disability” training for the bus Launched with the support of Opet and drivers in cooperation with Sakarya Met- TV. in collaboration with the Ministry of Fami- Arçelik carried out “Photography Train- ropolitan Municipality while also provid- ly and Social Policies, Ministry of Domes- ing for the Physically Handicapped Indivi- ing photography training for the disabled tic Affairs, Ministry of National Education, duals” in collaboration with the Asso- people in cooperation with the Sakarya Directorate of Religious Affairs, Turkish ciation for Solidarity with the Physical- New Life Paralympic Sports Club. National Police and Police Spouses As- ly-Handicapped (BEDD) and Photog- Tüpraș hosted a special group of 100 dis- sociation for Inclusion and Cooperation raphymeter Association. Arçelik also abled children as part of the Tüpraș host- (PEKAY), “Traffic Detectives Project” seek continued to support “Sign Language ed a special group of 100 disabled chil- to raise the future driver candidates as Teacher Training Management” project dren as part of the Tüpraș Batman April individuals that are very well-familiar with focused on increasing the currently too 23rd Children’s Festival. Tüpraș also lent the traffic rules and are capable of taking limited number of sign language train- its support for the National Association for responsibility in that respect. As part of the project, trainings in 9 main areas are ers. Thanks to the training, an Arçelik People with Down’s Syndrome “I have a provided first for teachers and then for employee also won the right to be a Sign Special Education Classroom” project car- children and young people so that a last- Language Teacher. ried out in collaboration with the İzmir Pro- ing solution to prevent traffic accidents is vincial Ministry of National Education. The Aygaz made its ordering system voice-sup- created. Children and young people are ported with the support of its dealers in order project seeks to ensure that the disabled given “Traffic Detectives” title in an effort to make it easier for the disable individuals children continue their primary school ed- to help them developed a conscious be- to place orders for cylinders easily. ucation without disruption and help them havior model for traffic. integrate with the social life. As part of the Ford Otosan Yeniköy Plant started project, a classroom in the 80th Anniversa- So far over 1.2 million students have production in 2014 as 100% Disabili- ry Çamlık Primary School was converted been trained about traffic safety within ty-friendly from the very first day. During into a disability-friendly classroom. the scope of the project and earned the the same year the plant won the first prize title “Traffic Detective”. Seeking to create in the “Appreciation of Work Force Diver- TürkTraktör donated tractors for the AY- awareness about traffic safety among sity” category of the “Chairman’s Leader- DER’s “Alternative Camp” project in 2014 1,5 million children and teenagers aged ship Awards for Diversity” event held by while making educational lives of children 3-17 from 81 provinces all over Turkey, Ford annually to create awareness for at Sincan Özken Akbilek Primary School “Traffic Detectives” project also plans to tolerance towards diversity and differ- easier thanks to a special disability-friend- reach their parents indirectly. ences. 55% of the physical conditions of ly classroom established. the Ford Dealers have become disabili- Yapı Kredi launched “Type B Funds for lio that generates revenue for them while ty-friendly places while activities continue My Country”. Close to 70% of the reve- to make 100% of the current dealers dis- also supporting the project through Yapı nue generated by this investment fund is Kredi without having to pay an extra fee. ability-friendly. Moreover, Kocaeli Univer- transferred directly to the projects focused sity VKV Ford Otosan Gölcük İhsaniye Additionally, support was provided for on making the schools accessible for the converting an idle village school in Ovak- Automotive Vocational High School has disabled students. Hence the investors are been built as a disability-friendly facility. ent Ödemiș to a school for the mentally able to add a new product to their portfo- challenged. http://www.ulkemicin.com.tr/

50 Koç Group Sustainability Report 2014 Ford Otosan İhsaniye Automotive Vocational Haigh School Opening Ceremony

Kocaeli University VKV Ford Otosan Gölcük İhsaniye Automotive Vocational ding supports KidZania by means of an High School earthquake simulation center. Launched in cooperation with Boğaziçi University Started by Ford Otosan and Vehbi Koç Foundation within Kocaeli University, Gölcük İhsaniye Automotive Vocational High School opened in 2014. Established as part of Kandilli Observatory, the project first gives the studies that have been undertaken since 2006 within the scope of the “Vocational participants a theoretical lesson and then Education: A Crucial Matter for the Nation” project, Kocaeli University, Gölcük İhsaniye enables them to participate in an applied Automotive Vocational High School seeks to score a first time in higher education by program during and after the earthquake introducing applied vocational education concept so that qualified workforce could be experience provided. provided for the automotive sector while contributing to training high quality workforce Support for Vocational Education from and increasing recruitment of young people. Koç Companies Vocational Education: A Crucial Matter for SUPPORT FOR EDUCATION ings 2014, Koç University ranks among the Nation Project, carried out for seven the 350 global universities. Koç Univer- years by Koç Holding in cooperation with VKV Education Scholarships st sity also ranks 41 in the Times Higher Ministry of Education and Vehbi Koç Aimed at contributing to ensuring equal Education Top Universities Aged Under Foundation, finalized in 2013. However th opportunity in education, Vehbi Koç Foun- 50 list, 40 among the Asian Universities Corporation – School Cooperation mo- th dation supports talented young people list, and 20 on the BRICS & Emerging dels implemented fort the project by that are economically disadvantaged. The Economies list. Group Companies are still in practice. foundation has reached over 50 thousand The Koç School students through scholarship programs Electrical Home Appliances up until now and provided scholarships With its high school section started in Technical Training Program - Arçelik for 60,87 students in the 2013-2014 ed- 1988 and elementary school section Laboratories ucation term through the scholarship pro- started in 1998 by Vehbi Koç Foundation Firmly believing in the fact that educational grams managed by its HQ and its offices. (VKV), The Koç School 2014 graduates activities create the highest value-added not only turned out to be the class in the Koç University for social development, Arçelik devised history of the school with the highest num- “Electrical Home Appliances Technical Ser- Since the very first day it was estab- ber students to continue their education lished, Koç University has been among vice Program” Aimed at strengthening the abroad but also the class with the highest relationship between vocational education the most respected universities in Tur- number of scholarships won. key. The university contributes to the and employment as well as training work- development of science in Turkey and in KidZania – Earthquake Simulation force that is familiar with the developments the world with its 22 undergraduate, 31 Centre and new technologies regarding electrical graduate and 16 doctorate programs. Supporting projects that have a positive home appliances industry in Turkey. 22 faculty members of Koç University impact on children’s development and In the 2011-2014 period within the scope received the most distinguished awards create generations with higher aware- of the project, Arçelik Laboratories were for science and research in 2013-2014 ness levels by making teaching fun has established in 9 schools located in Is- academic year. According to the Times always been among the prioritized issues tanbul, Diyarbakır, Trabzon, İzmir, Ankara, Higher Education World University Rank- for Koç Group. In that respect Koç Hol Bursa and Tatvan. As part of the project,

Koç Group Sustainability Report 2014 51 TürkTraktör Employees

students are provided with the opportuni- TürkTraktör Agricultural Moreover, all Fiat laboratories gave “En- ty to do internship at Arçelik authorized Machinery Laboratories gine rejuvenation”, “Spare parts”, “Opar service shops and among those students Olio Lubricant” trainings and 6 schools In line with the collaboration devised that wish to work at Arçelik Authorized following the school-enterprise twinning visited Tofaş plant. Service Shops or the Company are cer- model introduced within the scope of the Tofaş Science High School tified and recruited once they have com- “Vocational Education: A Crucial Matter pleted certain stages successfully and are for the Nation” (MLMM) project, “Türk- Established by Tofaş in Bursa with the certified accordingly. Traktör Agricultural Machinery Labora- collaboration of Demirtaş Organized In- tories” were established in Ankara Gazi dustrial Zone (DOSAB), Tofaş Science Fiat Labs Technical and Industrial Vocational High High School was opened in the 2014- Established within the scope of the Voca- School, Amasya Gökhöyük Agricultural 2015 school year. Composed of 16 class- tional Education: A Crucial Matter for the Vocational High School, Şanlıurfa GAP rooms, 70 dormitory rooms with a total Nation project in collaboration with the Agricultural Vocational High School and capacity of 280 people and a sports hall, Ministry of National Education General Bursa Osmangazi Agricultural Techni- the high school has 384 students. Directorate for Vocational and Technical cal and Vocational High School. A first MEGEP Project for Strengthening Education, Fiat Laboratories seek to create time was scored with the opening of those laboratories while they will also be Vocational Education and Training the workforce with the capability to handle available for the benefit of the farmers System the technologies required by the automo- in cooperation with the Ministry of Food, tive sector. As of 2014 806 students and Agriculture and Animal Husbandry. The Signed with the Ministry of National Edu- teachers benefited from the Fiat Laborato- laboratories opened seek to enhance cation within the framework of the Tüpraş ries available in 11 vocational high schools the quality of vocational education re- Technical Education Program, the proto- in 9 provinces. 70 graduates, 9 of whom garding agricultural machineries, meet col covers collaboration for training staff were female, in 2014 found the opportuni- the need for qualified staff in the sector in Refinery and Process branches under ty to work at Fiat authorized service shops and create awareness among farmers Chemistry Technology Area. in 2014 while 330 students meeting the for the safe use agricultural machineries. Koç Group Companies Support for required conditions and used the laborato- TürkTraktör recruited 4 people in 2014 Education ries received scholarships provided by the as part of the project. Vehbi Koç Foundation. Within the scope of Koç University Anatolia Scholarship the practice, students and teachers receive Holders Program responsibility projects. The 8th In-Service technical and behavioral trainings over Training Program was offered in 2014, Many Koç companies lend their support Tofaș Academy portal while students’ per- and 700 vocational high school students for the scholarship program enabling sonal rights are recorded so that the grad- benefited from the programs to date. young and needy people throughout Tur- uates could be given priority to be hired at key. Six young people from Sivas, Bat- the authorized service shops or plants. As During the reporting period Tofaş dona- man, Bursa, İzmir, Osmaniye and Malatya part of the in-service training program pre- ted close to 250 electronics and mecha- continue their education at Koç University pared for the laboratory teachers, they not tronics parts to the Fiat Laboratories so thanks to the scholarships provided by only receive technical and behavioral train- that the students could be trained with Tüpraș, which has supported the project ings but are also trained regarding social the special equipment for Tofaş brands. for 4 years, within the scope of the pro-

52 Koç Group Sustainability Report 2014 Little Hands Holding Pencils by Tüpraş Project Practice

ject. Lending its support for the program, “I Read and I Play” Since 2008 16 thousand 500 children Tat Gıda supports the 5-year university with Yapı Kredi have been welcomed as part of the project rd education of 2 girl students. Moreover, Carried out by Yapı Kredi in collabora- to celebrate the April 23 National Sove- TürkTraktör provided the necessary tion with the in Educational Volunteers reignty and Children’s Day. financial support for the two bright and Foundation of Turkey (TEGV),“I Read Batman Children’s Festival won the “Most needy students at Koç University through- and I Play” project seeks to improve Successful Koç Employees” award for the out their educational program of 5 years children’s reading skills through 10 project team members, who in turn used in line with a protocol signed in 2012 educational parks, 40 learning units the award for children again and organized with Koç University. In 2014 Arçelik also and 684 volunteers. The project has a trip to Istanbul for the children. 29 students provided scholarships within the scope of reached 120,000 children since 2006. from the schools around Batman Refinery the program and supported the university In 2014 “Colorful Pencils” daily was is- participated in the trip along with 6 teachers. education of 2 students. sued as a communication activity of the “I read and I Play” project. The children Little Hands Holding Pencils During the year, Opet provided scholar- that received “I Read and I Play” training Campaign by Tüpraş ship to 264 students. 4 of these students at 10 TEGV educational parks began received scholarship within the scope of to experience issuing dailies under the Launched as an initiative carried out by Anatolia Scholarship Holders Program, coaching of experienced journalists. In Tüpraș employees within the scope of while 10 of them received under MLMM. 2014 the project began in Ankara, Ga- the “Leader and People Social Responsi- ziantep, Istanbul, İzmir, Samsun and Van bility Project”, “Little Hands Holding Pen- 93 Thousand 300 Children Had Fun while the goal is to complete it with the cils” campaign sought to support the ef- and Learned at the Same Time with other cities in 2015. forts to increase the quality of education Fireflies in 7 Years provided to our children, the future of Educational Volunteers Foundation of Tur- our country, and 30 thousand TL raised key (TEGV) Firefly Educational Program April 23rd 7th Tüpraş Batman Children’s thanks to the support of the Petrol İș seeks to enable children to develop their Festival Trade Union and 1,000 employees was emotions and skills such as self-confi- donated to the Educational Volunteers dence, feeling valuable, self-expression, Planned as one of the events organized Foundation of Turkey (TEGV). creativity and empathy while helping them within the scope of the One Hundred Smil- Audio Book by Yapı Kredi Publications feel themselves valuable as individuals. ing Faces – Umbrella Movement project Shaped by TEGV on those fundamental as- developed by Batman Refinery volunteers In 2014 Yapı Kredi continued a special rd pects, 5 Firefly Mobile Learning Unit ope- in 2008, April 23 Batman Children’s Fes- project launched for the visually impaired tival was held once again so that children rations have been sponsored by Tüpraş people. Thanks to a study started in col- could enjoy the April 23rd Children’s Day since 2008 while Aygaz has sponsored laboration with Technology and Education 2 mobile units. In 2014 the number of as a true festival in collaboration with the Center for the Visually Impaired (GETEM) children reached through the Firefly mo- Batman Governorship and Provincial Di- and SESTEK, all the new books published bile units turned out to be 13,635 while rectorate for National Education. 1,500 by Yapı Kredi Publishing House became the total number of children reached since students from Batman provincial schools available on the internet and via a special 2008 has amounted to 93,300. and Educational Volunteers Foundation phone line for the visually impaired people. th of Turkey 50 Anniversary Learning Unit. In late 2014, 93 books were transferred to

Koç Group Sustainability Report 2014 53 Koç University Hospital

digital environment as a result of the pro- Established with the ideal to form one of Support for Health by Koç Companies ject while the number of books covered the leading projects in the world in its area, Arçelik Darülaceze School of Life by the project increases day by day. The Koç University Hospital is the education, project gives the visually impaired people practice and research hospital of the Koç As the largest charity organization in the opportunity to freely enjoy books at the University School of Medicine. The hospital Turkey, Darülaceze started “Darülaceze same time with everyone. is composed of the campus buildings and School of Life” with ten former teachers research laboratories and general univer- selected from among the Darülaceze res- Turkey’s First Electric Bus Otokar Doruk sity units for the Koç University School idents so that they could transfer their life Electra is on University Campuses of Medicine and High School of Nursing experience to future generations. A group Designed and manufactured by as well as a large healthcare complex of of 25 people comprising Arçelik senior Otokar, Turkey’s first electric bus “Doruk 250 thousand square meters including managers and İstanbul dealers shared Electra” was provided for the students on children’s and oncology specialization the experiences of a different resident in a İstanbul University, Yıldız Technical Uni- hospitals, student dormitories and faculty different lesson for eight weeks within the versity and İstanbul Technical University member lodgings. The first phase of the scope of the project. campuses so that they could test it while Koç University Hospital was finished and Diabetic Children with Aygaz using it for transportation. Otokar also opened in September 2014. established stands on these campuses Organized by the Association of Diabetic to promote the technology used by Doruk Semahat Arsel Nursing, Education and Children and Adolescents and supported Electra so that the students are introduced Research Centre (SANERC) by Aygaz, The Diabetic Children’s Camp to modern technologies reached by the Established under Vehbi Koç Foundation was held for the 22nd time in 2014 with automotive sector. During the activities, American Hospital in 1992, Semahat the participation of 100 diabetic children. 3,480 people received information directly Arsel Nursing, Education and Research Sponsored by Aygaz since 2004, the while Doruk Electra carried 7,855 passen- Center (SANERC) was taken over by Koç camp is one of the first health camps de- gers in total and covered 476 km. University School of Nursing in 2004. voted to children in Turkey and helps them Since its launch, hundreds of healthcare learn how to live in a self-sufficient way staff have participated in the training and while making new friends. SUPPORT FOR HEALTH certificate programs constantly organized Aygaz Women’s Health Training by SANERC. The only center in the region Vehbi Koç Foundation Health Program Organizations with the ANCC international accreditation, SANERC also provides continuing training Aygaz has carried out activities for long Providing healthcare services in Turkey programs after graduation. years to create awareness among preg- and the nearby region under Northern nant women and mothers about their American standards with their appro- From Battles to Hospitals: A History of health and infant health in cooperation ximately 3000 healthcare professionals, Nursing in Turkey with the Turkish Family Health and Plan- know-how, corporate structure and state- Published by Vehbi Koç Foundation as the ning Foundation (TAPV) in an effort to of-the-art technologies, Vehbi Koç Foun- only book written on the subject, From enhance quality of life for mothers and in- dation Health Organizations include the Battles to Hospitals: A History of Nursing fants while also reducing the mortality rate American Hospital, Koç University Hospital was welcomed by readers in 2014. both for mothers and infants. and MedAmerican Medical Center.

54 Koç Group Sustainability Report 2014 Vehbi Koç Award Ceremony

13th Vehbi Koç Award donating blood. 738 units of blood were clean toilets, hygiene and saving water Given since 2002 by Vehbi Koç Foun- donated to the Turkish Red Crescent with- has been carried out with SASKİ, which dation to encourage individuals and in- in the scope of the campaign in 2014. is responsible for providing water and se- werage services in Sakarya Metropolitan stitutions contributing to the enhance- Thanks to the collaboration with Turkish ment of the quality of people’s lives in Municipality. In 2012 the project expanded Red Crescent, Arçelik donated 403 units the categories of culture, education and abroad upon an invitation from Saudi Ara- of blood, KoçSistem donated 111 units of healthcare respectively every year, Veh- bia and 4,800 students and teachers at the blood and Otokar donated 188 units of bi Koç Award went to Prof. Dr. Zeynep Turkish schools in 4 Saudi Arabian cities re- blood during the year. Çelik this year in the culture category. ceived training. In 2013, 750 students and As one of the leading architectural his- Otokar carried out an additional blood 60 teachers were trained upon an invitation torians in the world, Prof. Dr. Zeynep drive campaign as a sequel to the “I Do- received from Macedonia. In the same year Çelik studies Ottoman urban architec- nate My Blood for My Country” project the Opet standards were taken as basis ture and cultural history and is currently started in 2010 and donated 188 units of while the Turkish Standards Institute set the a member of the New Jersey Institute blood in 2014. obligatory standards for all the public toi- of Technology (Newark, New Jersey, the lets. Opet Training Team continued to train Opet Clean Toilet Campaign US) Faculty of Architecture and Design. people as part of the project and reached Aimed at establishing an awareness of 72 provinces covering over 5.5 million KM. hygiene in Turkey, Opet continues its ac- Over 8 million people received training on The scope of the “Safe Motherhood Proj- tivities and has continued “Clean Toilet the proper and clean use of toilets thanks ect” has been expanded further and sup- Campaign” for 14 years. Within the scope to 5,500 hours of training. In 2014 41,050 port is provided for the “Women’s Health of the project, the employees at Opet fuel people received training on cleaning and Training Program” (KSEP) formed to im- stations have been trained, and the toilets hygiene within the scope of the project. prove the awareness of health and quality have turned into hygienic environments Opet Clean Toilets Campaign, which of life for the families that have limited while toilets for the disabled people have introduced a new perspective on the un- income and education, and have moved been fitted. Moreover, the gas stations derstanding of hygiene, was awarded in or had had to move to the cities. In 2014 have been fitted with units for changing the Inspire category of the Gamechangers 85 groups were started within the scope diapers and cartoons, while videos have awards organized while also winning the of the trainings given in 19 provinces and been prepared to train children and adults. Efficiency Award given by the Turkish Con- 1,453 women received participation cer- In collaboration with the Ministry of Nation- federation of Employer Associations. tificates for the program. So far the project al Education and the Ministry of Culture, Support for Arts and Cultural Heritage has reached 5,953 women in total. students and teachers have also received Suna-İnan Kıraç Research Institute for Ford Otosan, KoçSistem and Otokar training at school. Moreover Opet has Mediterranean Civilizations (AKMED) Blood Donation Campaigns transferred its entire know-how and experience gained from the “Clean Toilet Cam- Established in Antalya Kaleiçi as part of Held regularly every year, Ford Otosan paign”, which has expanded day by day, to Vehbi Koç Foundation in 1996, Suna– blood donation awareness raising cam- the Turkish State Railways (TCDD) thanks to İnan Kıraç Research Institute for Mediter- paigns seek to increase social sensitivity the “Cleaning on the Rails Project”. Addi- ranean Civilizations (AKMED) restored an- and awareness of the employees about tionally a social responsibility project about other Kaleiçi house and made it available

Koç Group Sustainability Report 2014 55 Bilkom History Comes to Life in 3D

for visits in 2014. Moreover, the transfer In 2014 an educational package of three History Comes to Life in 3D with of the AKMED visual archives to an up- books was prepared within the scope of iVisit Anatolia Application to-date program has been completed so the “To the Museum!” project devised Bilkom continued its collaborations to that approximately 15,500 photographs, by Sadberk Hanım Museum for children. ensure the sustainability of its mobile slides, stereoscopes and postcards be- These activity books seek to help children technology-focused corporate social came available for the archive users. discover and learn about the history of ar- responsibility project “History Comes chaeology and the history of arts. Koç University Vehbi Koç Ankara to Life in 3D”, which was implemented in 2013 with the Pergamon stage. Studies Application and Research Contemporary Arts Museum Thanks to the project support, Perga- Centre (VEKAM) As one of the most important arts project mon made its way to the “UNESCO Operating in Ankara, VEKAM was taken by Vehbi Koç Foundation for the future, World Heritage List” in 2014. over by Vehbi Koç Foundation to enable the contemporary arts museum project it to carry out academic studies on An- is designed not only as a cultural center kara in 1994. In 2014 VEKAM became easily accessible in downtown but also 13th İstanbul Biennial was held under affiliated with Koç University, and earned as a place for learning, education and the title ‘Mom, am I a barbarian?’ and the status of a research center. Within the spending quality time. The museum will enjoyed a record number of visitors, scope of the 20th anniversary celebrations feature Vehbi Koç Foundation Contempo- 350,000, thanks to Koç Holding’s sup- held for VEKAM a symposium titled Uni- rary Arts Collection, and host temporary port making it free for all visitors to enter. versities and City Research Centers was contemporary art exhibitions throughout held. The exhibition titled 20 Years of the year. Construction of the museum Among the art activities organized in VEKAM featured the events, publications, will begin in 2015 and the museum is Turkey today, Istanbul Biennial has library and archive collections of VEKAM planned to be opened in 2017. become the most attractive and well since its first day and sought to document known abroad. The contributions made İstanbul Biennial the 20 years of the Center. to the Biennial are also made to the Koç Holding is the sponsor of the Inter- brand of Istanbul. Sadberk Hanım Museum national İstanbul Biennial, organized by International Nasreddin Hoca The collection of Sadberk Hanım Mu- İstanbul Foundation for Culture and Arts Caricature Competition and seum boasts the richest Turkish and (İKSV) as a contemporary art event fo- Symposium Islamic artworks collection except for cused directly on social issues, in the peri- the state museums. Titled “Shoes from od of 2007-2016 for 10 years. Aimed at supporting the social develop- Sadberk Hanım Museum Collection”, ment of various art branches and suc- The goal of the sponsorship is to cre- the thematic exhibition for 2014 fea- cessful representation of our country in ate awareness especially among young tured mainly shoes and slippers from the different areas abroad, Koç Holding has people about the recently discovered late-Ottoman period while also covered been the main sponsor of the Interna- contemporary arts in Turkey and encour- fewer number of shoe examples from tional Nasreddin Hoca Caricature Com- age people that are yet to get to know Central Asia, Iran, Northern Africa, India, petition organized by the Cartoonists contemporary arts so as to revitalize the Europe, and the early years of the Turk- Association since 2008. interest shown in contemporary arts. ish Republic.

56 Koç Group Sustainability Report 2014 18th Yapı Kredi Afife Theatre Awards

18th Yapı Kredi Afife Theatre Awards carried out in collaboration with the Minis- try of Culture and Tourism and Çanakkale Held annually since 1997, Afife Theatre Awards event was organized for the 18th th time in 2014. The awards go to winners in 14 categories and this year “The Rise 18 March University. In 2014 activities of Arturo Ui” won the Most Successful Production of the Year Award while Prof. Dr. continued on the layers corresponding to Zehra İpşiroğlu received the Yapı Kredi Special Award. the different periods in the different parts of the mound. Support for İKSV Theatre Festival Koç Companies’ Support for Culture Aygaz Library and Ottoman Period Aygaz, Opet and Tüpraş seek to bring & Arts Diplomatic History the universal vale of the arts to our coun- Sevgi Gönül Theatre Days by Aygaz In order to recapture the historical and cul- try through International Istanbul Theatre tural heritage of our geography and convey Festival, hence promoting Turkey in the Aygaz has supported Koç University them to future generations, Aygaz contin- international arena by means of arts too. Sevgi Gönül Theatre Days since 2006 ues the “Aygaz Library” project. Continued The theatre festival has been supported and continued its support in 2014 too. since 1996 by Aygaz, the project has so on main sponsor level since 2004. With- The festivals organized throughout the far introduced 14 works to the culture & arts in the scope of the festival close to 100 year featured performances staged by life. Aygaz is publishing the information shows were staged by 7 groups from university theatre companies as well and documents compiled from the Ottoman abroad and 35 groups from Turkey on 13 as by professional theatre companies archives through the Ottoman Period Diplo- different venues in 2014. and talks by actors and actresses, matic History project. Within the scope of the playwrights and directors apart from Ford Otosan Handicap-Free Theatre project, 32 books have been published so workshops held. Club far with the Sadberk Hanım Museum. Ancient Sagalassos City Handicap-Free Theatre Club seeks to Support for excavations in Van Castle Excavations and Restoration create awareness in society and help the Since 2010 Aygaz has supported the disabled, socially disadvantaged employ- Since 2005, Aygaz has supported the Van Castle mound excavations carried out ees to participate in social life by means excavation of the ancient Sagalassos in collaboration with the Ministry of Culture of arts. Within the scope of a project city located on the foothill of Toros and Tourism and Istanbul University. The launched by the club, the actors on the Mountains with a history of its first set- most comprehensive activities in the year stage demonstrate the importance of sign tlements dating back to 4200 BC. Once 2014 continued on the northern areas of language and teach the audience some the restoration studies have been com- the Van Citadel, also known as the Old of the key sign language words through pleted in 2016 as planned, the upper Van Town. The excavations have revealed a number of shows they have prepared. Agora will achieve urban integrity on an houses that are believed to have belonged Composed of 26 Ford Otosan employ- architectural level and will turn into one to Urartian tradesmen or aristocrats. ees, the theatre group reached close to of the most easily understood ancient an audience group of 1,000 people with city centres. Maydos Kilisetepe Excavations their plays titled “Mad Dumrul” and “I Since 2012 Aygaz has supported the Close My Eyes and Do My Duty”. Maydos Kilisetepe Mound Excavations

Koç Group Sustainability Report 2014 57 Turkey Koç Fest University Sports Games

Opet Respect for History Project Turkey Koç Fest University Sports Games Opet Respect for History Project has led In order to create a festival devoted to students and to make it traditional while taking to a great change within the borders of music and fun to university campuses, Koç Holding and Group Companies started Koç Fest the Gallipoli Peninsula Historical National in 2006. In 9 years Koç Fest organized 82 festivals in 32 cities. Park since 2006. As part of the project, With the belief that sports increase the quality of life in a society, Koç Holding became main arrangements were made in 2014 in the sponsor for the “University Sports Games” event organized by the Turkish University Sports region where the Battle of Dardanelles Federation in 2009. Increasing the interest shown in amateur branches and encouraging took place so that the Gallipoli Peninsula everyone to be involved in sports has been among the top Koç Fest priorities since 2009. could maintain its natural texture and Annually 22,000 sportspeople from 185 universities participate in over 45 branches within impart a modern look at the same time. the scope of the Turkey Koç Fest University Sports Games. With the support of Koç Holding, Alçıtepe, Seddülbahir, Bigalı, Kilitbahir, a portion of the sportspeople and teams that have become successful in the competitions Kocadere, Behramlı, Büyük Anafarta also represent Turkey regularly in the international organizations held. Koç Fest visited 10 villages and Eceabat borough came to universities in 2014 and organized its grand finale event at Kayseri Erciyes University with enjoy a new face as a result. Modern the participation of 5,000 students. sections for making sales were set up Koç Fest has reached 2,5 million university students on site all over Turkey while reaching within the scope of the project renovat- 20 million young people all thanks to social media integration in the last 9 years. ing the town squares and façades of the In 2014 Koç Fest won the Silver Prize in the Media Relations Category of the Mercury houses. Saplings were planted in the vil- Excellence Awards held by MerComm, the world’s only independent awards organization lages, the current museums were reno- established to develop the art of communication and science. http://www.kocfest.com.tr vated and the villages that lacked museums came to boast new museums and culture centers. Thanks to collaboration become self-sufficient and begin to Anatolia. Also located within the muse- established with the public education make the best of their historical, geo- um, Tofaș Arts Gallery has hosted Time centers, personal development trainings graphical and cultural potential but also Machines Exhibition since 2013. Boast- were organized while a park designed as to increase the level of education and ing thousands of clocks from different an open-air museum was established in enhance environmental awareness. periods from Architect Naim Arnas’ col- Eceabat. Titled “Respect for History”, Within the scope of the project, İncesu lection, 400 ephemeras and 400 watch- the part was decorated and equipped to Village in Isparta was converted into an maker instruments, the exhibition has so show all the details of the Dardanelles Eco-tourism Village in 2014. far been visited by 100,000 people. Battle. What is more, the renovation Tofaş Bursa Anatolian Cars Museum Tofaş sponsors Hierapolis activities of the martyrs’ cemeteries for and Tofaş Arts Gallery Excavations in Pamukkale the 57th Regiment and Akbaș have been completed. Tofaș restored a site of 17 thousand Tofaş has been one of the main spon- square meters including an old silk fac- sors of the Hierapolis Ancient City, Opet Exemplary Village tory in Bursa, historical Umurbey Turkish which is covered by the UNESCO World Aimed at increasing awareness in so- Bath and old Turkish house and estab- Heritage List, excavations since 2005. ciety, OPET “Exemplary Village Project” lished Anatolian Cars Museum in 2002 As a result of the studies held so far, Hi- not only seeks to ensure that villages to protect the automotive heritage in erapolis Ancient Theatre was restored

58 Koç Group Sustainability Report 2014 Turkish National Olympic Committee Sponsorship

and made available for cultural and ogy, history and culture & arts, as well lithic Age in Anatolia, since 1997, as the art events with a capacity of 12,000 as events such as exhibitions, sympo- main sponsor. Organized by Yapı Kredi people. Apart from the Ancient Theatre, siums and significant developments. Culture & Arts Publishing, Çatalhöyük Necropolis, Hot Springs, Grand Church, Exhibition was available for visitors Meanwhile the fourth book titled “A San Flippe Matrium, Frontinus Gate, during the 20th annual meeting held by Hellenistic Capital in Anatolia: Perga- Gymnasium, Apollo Shrine and Pluto the European Association of Archae- mon” was published in 2014 as part Gate was discovered thanks to the ex- ologists (EAA) on the İstanbul Technical of the in the “Anatolian Civilizations cavations. Last year Hierapolis Ancient University (İTÜ) Taşkışla Campus. Book Series” started in collaboration City welcomed 1,8 million visitors and between Tüpraş and Yapı Kredi Pub- has turned into one of the most visited lishing House. Support for Sports archaeological sites in Turkey. Young Musicians on World Stages Turkish National Olympic Küçükyalı Archeopark Excavations Committee Sponsorship Sponsorship Aimed at transferring their experience and know-how of 40 years to young- Making many economic and social in- Tofaş has continued to sponsor for 11 er musicians, “Young Musicians on vestments that will add value to Turkey, years Küçükyalı Archaeology Park ex- World Stages” project was started by Koç Holding has taken the support it cavations started in 2001 by Italian and world famous pianists Güher & Süher has lent for sports and sportspeople Turkish researchers under the auspices Pekinel sisters thanks to support lent one step ahead and has become the of the Ministry of Culture, Cultural As- by Tüpraş. As part of the project Tüpraş main sponsor of the Turkish National sets and Museums Directorate. Within provides scholarship for the highly gift- Olympic Committee (TNOC) for 3 years. the scope of the excavations carried out ed young musicians aged 15-23. in 2014 like every year, conservation, As the first national main sponsor of the restoration, photographing and data- Yapı Kredi Culture & Arts Publishing TNOC, Koç Holding seeks to contribute base processing research continued Culture & arts publishing house acti- to the development of the Olympic spirit besides the usage of the archaeology vities form the backbone of the social and the activities to be held in the inter- laboratory that was started by Koç Uni- responsibility understanding by Yapı national arena. versity. Promotion and guidance events, Kredi and they continue through the Also sponsoring the candidacy pro- educational studies for students went Yapı Kredi Culture & Arts Publishing cess for the 2020 Olympic Games and on too during the excavation season as started in 1992. Yapı Kredi Culture Paralympic Games, Koç Holding, con- part of the “social archaeology” aspect. Centre organized 9 exhibitions and 160 tinues its activities to turn sports into a art events in 2014 while 70,000 partic- lifestyle and to get everyone involved in Tüpraş Supports Archaeology ipated in them. sports. Organized in collaboration with Started in 2007, “Aktüel Arkeoloji” Çatalhöyük Excavations TNOC, “Olympic Action Days” seeks to magazine has been published thanks to encourage especially primary school sponsorship of . While informing Yapı Kredi has been supporting the Tüpraș pupils adopt sports culture and Olym- the Anatolian people on the riches of archaeological excavations at Çatal- pic values and later on to create that the land they stand on, the magazine höyük, the first and most important specific awareness in the entire society. covers the latest news about archaeol- archaeological discovery from the Neo-

Koç Group Sustainability Report 2014 59 Koç Companies Support Sports while the pilot team MG Sports managed Yapı Kredi is the Official Bank Sponsor to run in the finals in the Young Men’s Tur- for the UEFA Champions League Beko Has Long Been a Supporter of key Championship. Turkey Sports Yapı Kredi had scored yet another first Continuing its sponsorship for the 2013 Tofaş Basketball Schools and time by being the Official Bank Sponsor – 2014 season of the Turkish Beko Bas- Basketball Volunteers Project– Fiatball of the UEFA Champions League in Tur- ketball League, Beko also became 2014 Basketball Festival key in 2012 and continued its sponsor- FIBA Men’s Basketball World Cup pre- Active under Tofaş Sports Club, Tofaş ship in 2014. senting sponsor and FIBA World Women’s Basketball Schools have continued to train Championship main sponsor. Beko also sportspeople for 15 years. Accredited CONTRIBUTION TO LOCAL ECONOMY continued its sponsorship name for the within the scope of the Turkish Basketball Having continued to generate value for its world’s leading basketball leagues in Ger- Federation Basketball Schools Accredi- stakeholders even during the most vola- many, Lithuania and Italy. tation Project, Tofaş Basketball Schools tile times of the economy for the last 89 train 3,500 children from 23 schools in In 2014 Beko continued its FA Cup spon- years, Koç Group is not only the leading 9 provinces annually. The project, which sorship, the most important football tourna- company in Turkey and the immediate re- has gained important sportspeople for ment in the UK. In 2014 Beko also signed gion but is also quoted among the largest the Turkish basketball, has so far reached a global sponsorship deal with the world’s companies in the world today. Koç Group 15,000 children from 50 schools in total. most important football team, FC Barcelo- is the largest group of companies in Tur- na, apart from jersey-back sponsorship of Carried out in collaboration between key in terms of the economic value it has the Beșiktaș Professional Football A Team. Tofaș Sports Club and Educational Vol- unteers Foundation of Turkey (TEGV), In Germany, Grundig brand continued its Basketball Volunteers Project focus on Yapı Kredi: Fair and football sponsorship as the Bundesliga children aged 7-14 and do not have the Transparent Pricing Football League Official Technology Part- opportunity to do sports due to structural nership while in Turkey the brand con- Pricing of financial products needs problems and lack of resources. Within tinued to sponsor Fenerbahçe Women’s to be made in line with critical mea- the scope of the project, 124 sports- and Men’s Volleyball Teams. Moreover, sures. While taking the financial women and 29 voluntary trainers from Grundig and Beko sponsored many signi- portfolio and profitability of the orga- 10 provinces in Turkey met in the Fiatball ficant national and international golf tour- nization into account, variables such Basketball Festival held by Tofaș Sports naments held in Turkey. as competitive power and ensuring Club and TEGV in 2014 on Koç Universi- maximum benefit for consumers Aygaz Supports Sports ty campus. The project continues on 13 should be considered. For that pur- TEGV educational parks in 10 provinces. Aygaz sponsors Beşiktaş Gymnastics pose, the policy and procedures Sports Club Handball Team in the 2013- Tüpraş Supports Sports in Batman of Yapı Kredi Bank for pricing 2015 period through its Mogaz brand. products and costs are structured Launched in 1995 through the initiative Aygaz has also lent its support for the to involve technical and analytical taken by Tüpraş Batman Refinery em- Koç University RAMS American Football processes. Deposit Products Pricing ployees, Tüpraşspor Football Club enables Team since 2007. Koç University Sports Committee and Consumer Banking the young people living around Batman Club American Football Team competed Pricing Committee are responsible Refinery to participate in sports. Featuring in the Turkish Protected Football Primary for operating the processes in that 70 sportspeople aged 10-17 as of 2014, League in the 2013-2014 season. way and for deciding on the most the club has won significant rankings not suitable price levels. Otokar Sponsors Turkish Table Tennis only in the regional but also in the national Championship for the Disabled competitions. Around 100 students bene- Another important aspect of pri- fit from the club and one of the footballers cing financial products is sharing Otokar became the sponsor of the first the prices set with the consumers. nation-wide Handicap-Free Sports Events has made it to the National Team while the footballers trained by the club have been For that purpose, the most up-to- held in Sakarya, Turkish Table Tennis date services costs are announced Championship for the Disabled. Also fea- transferred to professional and amateur football clubs in time. at the bank branches and on the turing Otokar employees, the tournament website in the ways most easi- included 64 disabled sportspeople from Established in 2006, Batman Sports Club ly accessible by the consumers. 12 provinces competing to win medals. Association for the Disabled People has Meanwhile the sales and services competed in the Turkish Disabled People contracts made with consumers Tofaş Sports Club nd Wheelchair Basketball 2 League since cover prices and costs in a way to Established in 1974 in Bursa Tofaş Plant, 2007-2008 season. Currently featuring be easily understood and are stat- Tofaş Sports Club is active in basketball, 51 sportspeople, 33 of whom are li- ed explicitly in the meetings held football, volleyball, table tennis, water polo censed, the club has made it possible for with consumers and the questions and bridge branches. Tofaş Sports Club hundreds of disabled people to participate posed by the consumers are ans- Basketball Team participated in the Eu- in sports and is famous for its success wered accordingly. ropean cups in the 2013-2014 season among the people in Batman.

60 Koç Group Sustainability Report 2014 Products and Services Eliminating Disabilities Ignoring disabled people that account for a significant portion of the society could no be regarded as a prudent approach in the eyes of a corporate citizen or a responsible tradesman. Therefore, improving the quality of life for the disabled consumers by providing products that are available for their use is not only about complying with the principle to uphold human rights and equality for Koç Group Companies but is also a commercial responsibility too. In that respect, Koç Group Companies conduct studies to eliminate the challenges that make it hard fro the disabled people to access their conven- tional products and services. Freedom of Movement with Fiat Autonomy Tofaş implements Fiat Autonomy, freedom of movement program of the Fiat brand for its disabled users, in Turkey. Within the scope of the program, the users order through the Fiat authorized dealer network a vehicle suitable for their use and the vehicle ordered is converted according to their disabilities. Currently Fiat Grande Punto, Punto Evo, Bravo, Doblo and Fiorino models are converted with two years of warranty for the use of those legally allowed to drive according to their orthopaedic disabilities through solution partners specializing in sensitive driving technologies. During the sale process the users benefit from tax discounts as well as special repayment options and after the sales they are provided 7/24 road assistance. Banking for the Disabled by Yapı Kredi Banking for the Disabled Program developed by Yapı Kredi provides many innovative practices focused on helping the disabled consumers to use the branches, ATMs, call centre and online transaction centres without facing challenges. Within the scope of the program, Yapı Kredi first updates its ATM infrastructure with devices that can be used by the orthopedically disabled and visually impaired people. In that respect as of 2014 Yapı Kredi had 1,260 ATMs for the visually impaired people and 20 ATMs for the orthopedically impaired people. As a result of a project developed in collaboration between Yapı Kredi and the Federation for the Hearing Impaired, a special online access centre for the hearing impaired users is established. This way the hearing impaired users are able to complete the transactions normally requiring access tot the call centre. The project then continued to enable the Disability-Friendly Online Access Centre to convert writing into sound so that the visually impaired users are able to monitor the changes in the financial markets simultaneously through the centre. NUVO Call Steering System application introduced to the current call centres enabled the call centres to function with voice commands so that the visually impaired users could use them. Within the scope of the program, the current internet website, mobile branch and the internet branch software codes are updated so that the visually impaired users could access those points over their mobiles using Voice Over application. Yapı Kredi also carries out activities to create awareness about its Banking for the Disabled Program over the website www. engelsizbankacilik.net, and works on improvements by means of user feedback.

Koç Group Sustainability Report 2014 61 Share of Sectors in the Economic Share of Sectors in the Economic Value Generated (%) Value Distributed (%)

Energy 57% Energy 61% Durable Goods 11% Durable Goods 10% Finance 7% Finance 5% Automotive 23% Automotive 23% Other 2% Other 1% formed, its share in exports, the taxes it economic environment also have a share on, the purchasing operation provides pays, employment it creates and its share in the value they generate. A company great nourishment for the local economy. on Borsa Istanbul (BIST). that achieves successful and sustainable In that respect, Koç Group Companies2 development is the one that increases purchased from 16,250 local suppliers The value of Koç Group for the local eco- the value it generates besides its profit- in 2014. Purchasing made through local nomy goes much beyond the economic ability while also increasing the value its suppliers account for over 64% of the to- value it creates and should also be an- presence provides for its stakeholders. tal supply operation. alyzed through aspects forming a mul- This equation means not only further ef- tiplier effect such as its services’ and Accessible and Affordable Products ficiency and revenue generation but also products’ quality, technology and R&D more procurement from suppliers, more The products and services provided create capacity, efficiency, jobs created, contribu- employment, more tax payment, more a positive influence over the local econo- tions made to occupational development dividend and more social investments. my. The consumers in their markets ap- as well as its giant supply and distribution preciate Koç Group Companies due to the network. The value Koç Group boasts to- While increasing the value they generate innovative and value-added products they day is not only an indicator of its success and the profitability they achieve since they provide. However, besides the properties but is also a reminder of the responsibility were established, Koç Group Companies of the products and services provided, it is that comes with it. Aware of this fact, Koç have also come to enjoy a significant place also important to meet the needs and ex- Holding and Group companies act accord- for the local economic growth by ensuring pectations of the target consumer groups, ingly and strive not only to enlarge their that their stakeholders also benefit more to comply with their purchasing power in economic impact areas but also do their from the value generated. In that context, general and to access the sales and ser- best deve-lop those areas further. close to 118 billion TL worth economic va- vices points throughout the market. lue was generated through the product Delivering Economic Value2 and service sales of Koç Group Com- Koç Group Companies accept meeting The main reason for the existence of companies in 2014. Still in 2014, Koç Group market expectations directly in their pro- panies as an economic organization is to Companies transferred over 112 billion TL duct and service development processes generate value for their stakeholders. The in economic value through their spending as their main goal. In line with many sur- economic value generated by Koç Group including items such as their operating veys including market trend surveys, con- Companies accounts for an important part costs, employee wages, donations and sumer expectation surveys, focus group of the Turkish economy. However, com- aids, dividends and franked payments.2 studies and consumer feedbacks, the panies continue their operations within properties of the product and services are Koç Group Companies’ product and a certain economic environment. So the shaped according to the target markets. services production processes are com- stakeholders they operate together in this pleted thanks to a giant supply network Another important aspect is to ensure that composed of thousands of suppliers. the product and services provided are set in 2 Since some of the companies within Koç Group Companies use many criteria while line with the purchasing power of the target Holding's consolidation scope are not included selecting the suppliers, which pose a consumer groups. Consumer purchasing into the scope of this report (for the scope of the report see p. 1) the financial data great importance to company operations. power analyses conducted in the markets disclosed in this section might differ from those One of those criteria is about the supplier operated in are an important part of the information disclosed to public via financial being a local. As a result of this criteri- product and services pricing processes. reports in Public Disclosure Platform.

62 Koç Group Sustainability Report 2014 G4-12 Arçelik South Africa Defy Cooking Appliances Plant

Increasing Need for Employment modern production capabilities and expe- Arçelik Makes New Investments riences employees in their sectors. There- One of the foremost indicators of a de- in Emerging Markets fore Koç Group production facilities are veloped society is the creation of jobs for the most appropriate places for vocational the young generations growing up in line The rising wealth in developing coun- education or college students to develop with the economic growth achieved. The tries provide significant opportunities for the producers that are close to their theoretical knowledge under produc- need for employment increases in Turkey consumers and are able to perceive tion conditions. For that reason annually day by day in line with the increase in the the market expectations in the dura- thousands of internship applications are young population. Meanwhile the indus- ble goods sector properly. As a result received and as many of those applications trial and services sector companies also of this understanding, one of the 5 are accepted as possible. In that respect need to recruit qualified employees. fundamental components of the main 2,256 high school students, 3,243 univer- business strategy of Arçelik is ensur- As the largest private sector employer in ing growth in emerging markets. In sity and college students did an internship Turkey, Koç Group launched “Vocational line with this strategy, Arçelik not only with Group Companies. Education: A Crucial Matter for the Na- continues its R&D activities to develop tion” Project (MLMM) in 2006 in cooper- Demand for Wealth Increase in products meeting the legal require- Emerging Markets ation with the Ministry of Education and ments, purchasing power of consum- Vehbi Koç Foundation within the scope of ers and functional expectations but While the Western markets went into a the “The Collaboration for Development also to make investments focused on period of stagnation during the latest of Vocational Training Protocol”. Thanks including new promising markets to its economic crisis years, the emerging to the project completed in 2013, 8 Koç production locations. Started in 2011 markets continued to grow. Expec- Group Companies established in 5 sec- with the acquisition of Defy in South tations for improving life standards tors 29 laboratories, 7 education centres, Africa, this process goes on with the go up in parallel with the rise in eco- production facility investment in Thai- 1 vocational high school and 1 vocational nomic growth and purchasing power land announced in late 2014. school besides supporting the vocational especially in the Asian countries. In the high schools in terms of their curriculum years ahead millions of new white-col- and technical capabilities. Prioritizing of the students, is handed over to Private lar employees are expected to join in women students, the project also pro- Sector Volunteers Association of Turkey the population. So the period to come vided scholarships for 8,000 students in in 2012. Hence, the spread of the study will be marked by the efforts to devel- total. One of the leading benefits derives throughout the whole private sector and op products and services suitable for from the project has been reinforcing the its continuity were ensured. the life styles of this new generation respectability of vocational education and After the completion of the project, the group of people while understanding making vocational education as a valid Group Companies have maintained their the complicated expectations of them and preferable career choice for promi- relations with the vocational education and focusing on improving quality of life sing young students. organizations and sustained their support. for them. Shaping their plans for the fu- High School Coaches Program, which is In that respect, 55,017 people participated ture accordingly, the Group Companies one of the most significant constituents in the vocational education studies held by adopt this vision in their target markets of the project and aims to support the the Group Companies in 2014. Meanwhile and their expansion to potential new individual and occupational development Koç Group Companies boast the most geographies.

Koç Group Sustainability Report 2014 63 GRI Content Index

Indicators Descriptions External Assurance Omissions General Standard Disclosures G4-1 Message From the Chairman (p.2); Message From the CEO (p.3) - - G4-2 Message From the Chairman (p.2); Message From the CEO (p.3); Koç - - Group Sustainability Priorities (p.9) G4-3 Contacts (Inside Back Cover) - - G4-4 "http://www.koc.com.tr/en-us/activity-fields/sectors - - http://www.koc.com.tr/en-us/activity-fields/list-of-brands" G4-5 Contacts (Inside Back Cover) - - G4-6 http://www.koc.com.tr/en-us/activity-fields/international-network-of-koc- - group G4-7 http://www.koc.com.tr/en-us/investor-relations/corporate-overview-and- - - governance/shareholder-structure G4-8 Koç Holding 2014 Annual Report (Inside Front Cover - Our Strategy) - - G4-9 Koç Group in 2014 (p.5); Employee Demographics (p.17); Occupational - - Health and Safety (p.25) G4-10 Employee Demographics (p.17); - - G4-11 Labour Union Rights (p.19) - - G4-12 Delivering Economic Value (p.62) - - G4-13 http://www.koc.com.tr/en-us/investor-relations/material-disclosures - - G4-14 Risk Management (p.13); Business Ethics and Anti-Corruption (p.14- - - 15); Employee Rights (p.16); Occupational Health and Safety (p.25); Environmental Management (p.27); Climate & Energy (p.28-29) G4-15 Risk Management (p.13); Business Ethics and Anti-Corruption (p.14- - - 15); Employee Rights (p.16); Declaration on Equality at Work (p.18); Occupational Health and Safety (p.25); Environmental Management (p.27); Climate & Energy (p.28-29) G4-16 Koç Holding Sustainability Strategy (p.6); Declaration on Equality at Work - - (p.18); Equality, Multiculturalism and Diversity (p.18-19) G4-17 About the Report (p.1); Koç Group in 2014 (p.4) G4-18 About the Report (p.1) - - G4-19 Koç Group Sustainability Management (p.7-8); Koç Group Sustainability - - Priorities (p.8-10) G4-20 About the Report (p.1); Koç Group Sustainability Priorities (p.8-10) - - G4-21 About the Report (p.1) - - G4-22 For this reporting period, water reused in the process was also included in - - calculations of total recycled water in line with G4-EN10, while for previous reporting periods, these calculations were based solely on waste water recycled in treatment facilities. G4-23 About the Report (p.1) - - G4-24 Our Stakeholders (p.10-11) - - G4-25 Our Stakeholders (p.10-11) - - G4-26 Our Stakeholders (p.10-11) - - G4-27 Our Stakeholders (p.10-11); Customer Satisfaction(p.43-44) - - G4-28 About the Report (p.1) - - G4-29 About the Report (p.1) - - G4-30 About the Report (p.1) - - G4-31 Contacts (Inside Back Cover) - - G4-32 About the Report (p.1); GRI Content Index (p.64-67); Legal Disclaimer - - (Inside Back Cover)

64 Koç Group Sustainability Report 2014 G4-32 Indicators Descriptions External Assurance Omissions General Standard Disclosures G4-33 Legal Disclaimer (Inside Back Cover) - - G4-34 Board of Directors and Committees (p.12-13) - - G4-56 "Business Ethics and Anti-Corruption (p.14); - - http://www.koc.com.tr/tr-tr/hakkinda/Documents/Koc%20Group%20 Code%20of%20Ethics%20and%20Business%20Conduct.pdf"

Indicators Descriptions External Assurance Omissions Specific Standard Disclosures Material Issue: Economic Performance G4-DMA Koç Group in 2014 (p.5); Delivering Economic Value (p.62) - - G4-EC1 Delivering Economic Value (p.62) - - G4-EC3 Koç Holding Retirement Pension Foundation (p.23) - - G4-EC4 Koç Holding 2014 Annual Report (p.183) - - Material Issue: Indirect Economic Impacts G4-DMA Innovation and Product Strategy (p.36-39); Dealer and Supplier Business - - Success (p.44-45); Social Investments (p.48); Support for Education (p.51- 54); Support for Health (p.54-55); Support for Art and Cultural Heritage (p.56-59); Support for Sports (p.59-60) G4-EC7 Social Investments (p.48); Support for Education (p.51-54); Support for - - Health (p.54-55); Support for Art and Cultural Heritage (p.56-59); Support for Sports (p.59-60) G4-EC8 Innovation and Product Strategy (p.36-39); Dealer and Supplier Business - - Success (p.44-45) Material Issue: Procurement Practices G4-DMA Delivering Economic Value (p.62) - - G4-EC9 Delivering Economic Value (p.62) - - Material Issue: Energy G4-DMA Environmental Management (p.26-28); Climate & Energy (p.28-29); Energy - - Effiiency and Emission Reduction Practices (p.29-31) G4-EN5 Energy Effiiency and Emission Reduction Practices (p.29-30) - - G4-EN6 Energy Effiiency and Emission Reduction Practices (p.30-31) - - G4-EN7 Eco-Innovative and Value Added Products (p.37-39) - - Material Issue: Water G4-DMA Environmental Management (p.26-28); Water Management (p.31-33) - - G4-EN8 Water Management (p.32) - - G4-EN10 Water Management (p.32) - - Material Issue: Biodiversity G4-DMA Environmental Management (p.26-28); Responsible Use of Resources - - (p.34) G4-EN11 Responsible Use of Resources (p.34) - - G4-EN13 Responsible Use of Resources (p.34-35) - - Material Issue: Emissions G4-DMA Environmental Management (p.26-28); Climate & Energy (p.28-29); Energy - - Effiiency and Emission Reduction Practices (p.29-31) G4-EN18 Energy Effiiency and Emission Reduction Practices (p.29-30) - - G4-EN19 Energy Effiiency and Emission Reduction Practices (p.30-31) - -

G4-32 Koç Group Sustainability Report 2014 65 Indicators Descriptions External Assurance Omissions Specific Standard Disclosures Material Issue: Effluents and Wastes G4-DMA Environmental Management (p.26-28); Water Management (p.33); - - Responsible Use of Resources (p.33-34) G4-EN22 Water Management (p.33) - - G4-EN23 Responsible Use of Resources (p.33-34) - - G4-EN26 Responsible Use of Resources (p.34) - - Material Issue: Products & Services G4-DMA Eco-Innovative and Value Added Products (p.37-39) - - G4-EN27 Eco-Innovative and Value Added Products (p.37-39) - - Material Issue: General G4-DMA Not Material - - G4-EN31 Environmental Management (p.28); - - Material Issue: Supplier Environmental Assessment G4-DMA Environmental Management (p.28); Responsible Value Chain Management - - (p.44) G4-EN32 Responsible Value Chain Management (p.44) - - Material Issue: Labour-Management Relations G4-DMA Not Material - - G4-LA5 Minimum Notice Periods (p.16) - - Material Issue: Occupational Health and Safety G4-DMA Occupational Health and Safety (p.25) - - G4-LA5 Occupational Health and Safety (p.25) - - G4-LA6 Occupational Health and Safety (p.25) - - Material Issue: Training G4-DMA Professional Development (p.19); Talent Management (p.20); Performance - - Management(p.20) G4-LA9 Professional Development (p.19); - - G4-LA10 Professional Development (p.19); Leader Development Programs (p.20) - - G4-LA11 Performance Management(p.20) - - Material Issue: Diversity and Equal Opportunity G4-DMA Employee Demographics (p.17) - - G4-LA12 Employee Demographics (p.17) - - Material Issue: Equal Remuneration for Women and Men G4-DMA Workplace Culture (p.16); Employee Rights (p.16); Declaration on Equality at - - Work (p.18), Remuneration System (p.21) G4-LA13 Remuneration System (p.21) - - Material Issue: Non-Discrimination G4-DMA Workplace Culture (p.16); Employee Rights (p.16); Equality, Multiculturalism - - and Diversity (p.18-19) G4-HR3 No discrimination case has been occured during the reporting period. - - Material Issue: Freedom of Association and Collective Bargaining G4-DMA Workplace Culture (p.16); Employee Rights (p.16); Equality, Labour Union - - Rights (p.19) G4-HR4 No case indicating that freedom of association and collective bargaining - - was under risk has been occured during the reporting period. Same principle applies to supplier audits and no risk aspect witnessed.

66 Koç Group Sustainability Report 2014 G4-32 Indicators Descriptions External Assurance Omissions Specific Standard Disclosures Material Issue: Child Labour G4-DMA Workplace Culture (p.16); Employee Rights (p.16) - - G4-HR5 No case indicating child labour risk has been occured during the reporting - - period. Same principle applies to supplier audits and no risk aspect witnessed. Material Issue: Forced or Compulsory Labour G4-DMA Workplace Culture (p.16); Employee Rights (p.16) - - G4-HR6 No case indicating forced or compulsory labour risk has been occured - - during the reporting period. Same principle applies to supplier audits and no risk aspect witnessed. Material Issue: Anti-Corruption G4-DMA Business Ethics and Anti-Corruption (p.14-15) - - G4-SO3 Business Ethics and Anti-Corruption (p.14-15) - - Material Issue: Public Policy G4-DMA Business Ethics and Anti-Corruption (p.14) - - G4-SO6 Business Ethics and Anti-Corruption (p.14) - - Material Issue: Customer Health and Safety G4-DMA Ürün ve Hizmet Sorumluluğu (p.40) - - G4-PR1 All products of Koç Group companies are assessed in line with consumer - - health and safety criteria. Material Issue: Product and Service Labeling G4-DMA Product Information (p.42); Yapı Kredi: Easy and Transparent Product - - Information (p.42) G4-PR3 Product Information (p.42); Yapı Kredi: Easy and Transparent Product - - Information (p.42) Material Issue: Innovation and Product Strategy DMA Innovation and Product Strategy (p.36-39) - -

G4-32 Koç Group Sustainability Report 2014 67

Legal Disclaimer This Report has been prepared by This Report is prepared for infor- good faith and based on sources Koç Holding A.Ș. (“Koç” or “Koç Hol- mation purposes only and it is not believed to be reliable. However, this ding” or “Koç Group”) in the context intended to form the basis of any does not constitute a representation, of United Nations Global Compact investment decision. It does not guarantee, warranty or undertaking Initiative which Koç adhered to on constitute or form part of an offer to of any nature on Koç Group. March 30, 2006. sell or issue, or a solicitation of an Accordingly, none of Koç Group or offer to purchase or subscribe for, their respective advisors, directors All information and opinions conta- any securities or other interests in or employees shall be liable for any ined in this Report which does not the Koç Group and no legal relations direct, indirect or consequential purport to be comprehensive, have shall be created by its issue. loss or damage suffered by any been provided to by Koç Group and person as a results of relying on any have not been independently verified All information contained in this statement in or omission from this for this purposes. Report and associated documents Report or in any other information or were believed to be accurate for the communications in connection with time period it covers, expressed in the Report.

Contact

Koç Holding Communications Oya Ünlü Kızıl Koç Holding Director of Corporate Communications and External Affairs

Koç Holding A.Ş. Nakkaştepe Azizbey Sok. No:1 Kuzguncuk 34674 İstanbul T: +90 (216) 531 02 87 F: +90 (216) 343 15 37 [email protected]

Consultant Kıymet-i Harbiye [email protected]

G4-3 G4-5 G4-31 G4-32 G4-33 www.koc.com.tr

This report has been produced with 100% recycled paper. No tree was harmed during its production.