Scope 1 Emissions
2022 Communication on Progress
Arcelik A.S.
Published date
May 31, 2022
No. of questions
62
Supplemental files
Arçelik AA1000 Assurance ReportCEO Statement
Governance
Policies and Responsibilities
1. Does the Board / highest governance body or most senior executive of the company:
Optional commentArçelik issues its sustainability report including the statement of the CEO which covers its important highlights on its sustainability agenda. Also, Arçelik's CFO chairs to the Sustainability Council meetings and the Council convenes quarterly and is tasked with reporting the issues it deems critical to the Board. The Sustainability Council monitors and evaluates ESG risks, strategies and impact on business objectives quarterly. Risks and opportunities are prioritized by the Sustainability Council according to the scoring methodology of Arçelik. According to Arçelik’s risk and opportunity scoring methodology, risks and opportunities are scored based on financial, reputational, production, human and legal impacts, and the highest score is defined as the point of impact. The Sustainability Council works in close collaboration with the relevant committees.2. Does the company have a publicly stated commitment regarding the following sustainability topics?
Optional comment*Arçelik Global Human Rights Policy: https://www.arcelikglobal.com/media/6236/15_global-human-rights-policy-en-1.pdf *Arçelik Global Environmental Policy: https://www.arcelikglobal.com/media/5626/cevre_en.pdf also *Arçelik Responsible Purchasing Policy: https://www.arcelikglobal.com/media/5553/responsible-purchasing-policy_en.pdf *Arçelik Global Anti Bribery and Corruption Policy: https://www.arcelikglobal.com/media/5516/4_global-antibribery-and-corruption-policy_.pdf *Arçelik Global Code of Conduct: https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdf3. Does the company have in place a code of conduct regarding each of the following sustainability topics?
Optional comment*This Human Rights Policy (“the Policy”) is a guide that reflects Arçelik and its Group Companies’ approach and standards in relation to Human Rights and shows the importance Arçelik and its Group Companies' attribute to respect for Human Rights. All employees, directors and officers of Arçelik and its Group Companies shall comply with Arçelik Global Human Rights Policy. As a Koç Group company, Arçelik and its Group Companies also expect and take necessary steps to ensure that all its Business Partners - to the extent applicable - comply with and/or act in line with this Policy. Arçelik is responsible for ensuring the compliance with the Global Antibribery and Corruption Policy by all its employees.Third Parties must be in accordance with this Policy, at all times. must be conducted to mitigate corruption related risks. *The policy also covers labour rights such as Freedom of Organization and Collective Agreement, Health and Safety, Working Hours and Compensation and Personal Development. *On Arçelik Global Environmental Policy, please refer to page 1 and 2: "To carry out activities for the implementation of this Policy by our employees, dealers, distributers, subsidiaries, authorized services, suppliers (raw materials, components, logistics, etc.), contractors (waste companies, recyclers, construction companies, etc.), subcontractors, joint ventures, outsourcing partners and other operational stakeholders; encourage our business partners to reduce their environmental impact, increase and improve their environmental performance. *On Responsible Purchasing Policy please see page 2 as well :"This Policy is designed to ensure that suppliers’ business practices are aligned with Arçelik values, applicable laws and regulations and must be complied with by all suppliers" and "It is a contractual obligation for the suppliers to accept and comply with this Policy within the scope of the “Environment and Business Ethics ”article of the Arçelik A.Ş. Purchase Contract, which is signed between Arçelik A.Ş. and its suppliers. In case of violation of this Policy, Arçelik A.Ş. reserves the right to terminate the purchase contract": https://www.arcelikglobal.com/media/5553/responsible-purchasing-policy_en.pdf *As explained in Arçelik Global Anti Bribery and Corruption Policy, third Parties must be in accordance with Arçelik Global Anti Bribery and Corruption Policy. *Please also see Arçelik Global Code of Conduct: https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdf4. Has the company appointed an individual or group responsible for each of the following sustainability topics?
Optional comment*The Human Rights department is responsible for convening the Human Rights Committee (HRC). The HRC meets four times a year to systematically review and revise the risk mapping of potential human rights issues within our existing business and new business relations, as well as risks in the value chain. In terms of the value chain, our priority is assessing the risks of Tier-1 suppliers.The decisions made by the committee are reported to the Sustainability Council, which meets quarterly and is led by the CFO. *Arçelik Legal and Compliance Director reports Arçelik Global Compliance Program and the decisions of Global Ethics Committee to Koç Holding Consumer Durables’ President quarterly. Koç Holding Consumer Durables’ President who is a Board member in Arçelik as well is responsible for communicating the activities of Global Ethics Committee and compliance agenda of the Company to Board of Directors. *Under Sustainability Council which meets quarterly, there are working groups; Energy Working Group (WG), Green Chemistry WG, Environment WG, OHS WG, Sustainable Supply Chain WG to determine the issues to be discussed in the Sustainability Council meetings.The Sustainability Council, chaired by the CFO, governs the climate-related and other ESG risks and opportunities. Consisting of Arçelik Senior Management, the council members supervise and coordinate the sustainability activities in their areas of responsibility and chair the Sustainability Working Groups. Moreover, in order to ensure sustainability strategy is embedded in the Arçelik's strategies at the highest level, Koç Holding Consumer Durables’ President, one of the members of the BoD, and the Director of Quality, Sustainability and Corporate Affairs, report quarterly to the BoD on the activities implemented within the company in line with the ultimate sustainability strategy and the targets set. The overall responsibility of the Group's management of sustainability related topics rests with the BoD. The Sustainability Council works in close collaboration with the relevant committees.5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?
Optional commentMembers: Arçelik Chief Finance Officer (Chairperson), Arçelik Chief Executive Officer, Arçelik Chief People Officer, Arçelik Chief Commercial Officer, Arçelik Chief Marketing Officer, Arçelik Chief Strategy & Digital Officer,Arçelik Chief Technology Officer, Arçelik Quality,Sustainability&Corporate Affairs Director, Arçelik Global Communications Director, Arçelik R&D Director, Arçelik Legal & Compliance Director, Arçelik Human Rights Director, Arçelik Sustainability Manager, Arçelik Enterprise Risk & Insurance Management Manager Sustainability Council sets corporate sustainability and climate change policies and strategies, ensures those are integrated with internal business process, and track sustainability performance. Arçelik's CFO chairs to the Sustainability Council meetings and the Council convenes quarterly and is tasked with reporting the issues it deems critical to the Board. The Sustainability Council monitors and evaluates ESG risks, strategies and impact on business objectives quarterly. Risks and opportunities are prioritized by the Sustainability Council according to the scoring methodology of Arçelik. According to Arçelik’s risk and opportunity scoring methodology, risks and opportunities are scored based on financial, reputational, production, human and legal impacts, and the highest score is defined as the point of impact. The Sustainability Council works in close collaboration with the relevant committees.Prevention
6. Does the company have a process or processes to assess risk?
Optional comment*External (BSCI-SEDEX) audits and follow-up audits are carried out by third party auditing firms aside from internal audits, which allows us to identify the improvement opportunities for our own operations. Additionally, for risk assessment in the value chain, Arçelik prioritized assessment of Tier-1 suppliers. Arçelik suppliers are audited by third party audit firms in terms of human rights violations that might arise in the value chain. *100% of our operations are evaluated based on a corruption perception index. *For further information, please see Arçelik Human Rights Due Diligence Process: https://www.arcelikglobal.com/media/6508/human_rights_due_diligence.pdf *For environmental risks and climate related physical risks are considered in the evaluation criteria of new joint ventures/acquisitions added to Arçelik Global group of companies. *We developed an in-house supplier sustainability index project, the Supplier Sustainability Data Monitoring and Development Project. A dedicated in-house team in the Purchasing and Product Sourcing Departments works on this project in collaboration with the sustainability teams. The project covers Environmental, Social and Governance Data Collection and Performance Monitoring Process. We have also partnered with an independent, accredited audit firm to help us carry out this project. The results of these audits and our own assessment are combined to scale the performance of the suppliers as high, medium, or low risk. For further information, please refer to Arçelik's 2021 Sustainability Report: https://www.arcelikglobal.com/en/6.1. During the assessment of risk, which business relationships are reviewed?
Optional commentIn 2021, a total of 215 critical suppliers have been audited. 151 suppliers were sent questionnaires within Arçelik's assessment in collaboration made with a third party. 115 third party ethics audits were completed. 75% of the suppliers audited are from Turkey, 14% from Asia and 10% from Europe. The results of these audits and our own assessment are combined to scale the performance of the suppliers as high, medium, or low risk.7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?
Optional commentArcelik Human Rights Due Diligence Process outlines the systematic approach adopted by Arcelik for the identification of actual and potential adverse impacts of salient human rights issues considered relevant for Arçelik’s operation network in the entire value chain, including its own operations, the operations conducted in its business partners as well as measures taken during new acquisitions/mergers. The due diligence process also covers the prevention and mitigation efforts with respect to actual/potential salient human rights risks of the Group collectively. Additionally, 100% of our operations are evaluated based on a corruption perception index. Please see Arçelik Human Rights Due Diligence Process: https://www.arcelikglobal.com/media/6508/human_rights_due_diligence.pdf In the scope of ISO 14001 Environmental Management System (EMS), Arçelik's environmental aspects, impacts, and risk and opportunities are identified, and auidted internally and externally every year. In addition to this, Arçelik provides environmental audit by a third party audited organization to its prioritized suppliers to improve environmental management in all value chain. Please see Arçelik Sustainability Report for further information: https://www.arcelikglobal.com/en/7.1. During the due diligence process, which business relationships are reviewed?
Optional commentArcelik Human Rights Due Diligence Process outlines the systematic approach adopted by Arcelik for the identification of actual and potential adverse impacts of salient human rights issues considered relevant for Arçelik’s operation network in the entire value chain, including its own operations, the operations conducted in its business partners as well as measures taken during new acquisitions/mergers. The due diligence process also covers the prevention and mitigation efforts with respect to actual/potential salient human rights risks of the Group collectively. In 2021, all Arçelik factories including joint ventures (28/28) are subject to human rights assessments either internally or by third party audits. 28 factories have been internally audited and 14 factories have been third party audited. All Arçelik factories (28 factories including joint ventures) have mitigation plans in place for the risks identified. No major human rights issues were identified by internal and third party audits in Arçelik’s own operations and joint ventures. The results of internal and external audit findings are discussed in the Human Rights Committee and the mitigation actions are followed by corrective action plans. We developed an in-house supplier sustainability index project, the Supplier Sustainability Data Monitoring and Development Project. A dedicated in-house team in the Purchasing and Product Sourcing Departments works on this project in collaboration with the sustainability teams. We have also partnered with an independent, accredited audit firm to help us carry out this project. The first step consists of sending suppliers a survey with a list of both qualitative and quantitative questions about the environmental, social, governance issues. As a second step, we hire third-party auditors to conduct ethics audits to the suppliers to monitor their social and governance performance. In 2021, a total of 215 critical suppliers have been audited. 151 suppliers were sent questionnaires within Arçelik's assessment in collaboration made with a third party. 115 third party ethics audits were completed. 75% of the suppliers audited are from Turkey, 14% from Asia and 10% from Europe. The results of these audits and our own assessment are combined to scale the performance of the suppliers as high, medium, or low risk.Concerns and grievance mechanisms
8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?
Optional commentAll employees, contractors, business partners and external stakeholders can report grievances via the website-based, independently operated ethics hotline and email (www.ethicsline.net, e-mail: arcelikas@ethicsline.net). Specific hotline numbers are also available in all the countries of operation. All cases are treated confidentially, following complainant’s preferences at each step as per the Global Whistleblowing Policy available at https://www.arcelikglobal.com/media/5515/3_global-whistleblowing-policy_.pdf . The harassment or victimization of anyone raising a concern is not tolerated and individuals making a disclosure will retain their anonymity unless they agree otherwise. Arçelik will not try to discover the identity of the anonymous whistleblowers.8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.
Optional commentIn 2020, we communicated the Global Code of Conduct and related Policies (including the Global Whistleblowing Policy) in 18 languages and completed the launch in all the countries that Arçelik operates. Everybody can access to the policies and the hotline phone numbers from the web page that is accessible by everyone.(https://www.arcelikglobal.com/en/company/about-us/global-code-of-conduct/). As explained in Global Whistleblowing Policy, Allegations or concerns can be reported through the Ethics Hotline, which is administered by an independent, third-party provider with confidentiality. Arçelik is fully committed to protect whistle-blowers and there will be zero tolerance towards to the acts aimed to put whistle-blowers in unfavourable positions by any act or omission regarding the whistleblowing. A whistle-blower is anyone who communicates an allegation or any other information indicating that acts which are incompliant to the Global Code of Conduct and related Code Policies. https://www.arcelikglobal.com/media/5515/3_global-whistleblowing-policy_.pdf.9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?
Optional commentArçelik ensures effective remedy actions to counteract human rights harms that have occurred. The defined remedy actions include both financial compensation or non-financial compensation, apologies, offering rehabilitation, punitive sanctions, administrative changes in terms of organizational structure. Arçelik also has communication channels to receive feedback and complaints from stakeholders. Arçelik imposes those punitive sanctions considering the mitigating and aggravating factors in order to maintain the non-repetition of the breaches. Also, during the reporting period, there were no fines of 10,000 USD or above due to noncompliance with environmental legislations.Lessons
10. How does the company capture lessons regarding each of the following sustainability topics?
Optional commentA new, dedicated Human Rights Department has been established by the Board of Directors. The department is responsible for organizing regular third-party and internal human rights assessments within the global organization, preparing a risk mapping of potential and actual violations, and taking necessary mitigation and remedial actions pursuant to the Global Human Rights Due Diligence Process. The Koç Holding Consumer Durables President, who is an Arçelik board member, has been assigned by the Board of Directors as the responsible board member to report on the human rights issues, potential risks and action plans. The Human Rights department is responsible for convening the Human Rights Committee (HRC). The HRC meets four times a year to systematically review and revise the risk mapping of potential human rights issues within our existing business and new business relations, as well as risks in the value chain. In terms of the value chain, our priority is assessing the risks of Tier-1 suppliers. The duty of the Human Rights Committee is to proactively ensure that the operations in the value chain do not have adverse impacts on individuals. The HRC is chaired by the Chief People Officer, and representatives from Occupational Health and Safety, Sustainability, Quality Systems, Purchasing, Global Compliance, Environment, and the Human Rights teams attend the committee. The decisions made by the committee are reported to the Sustainability Council, which meets quarterly and is led by the CFO. Arçelik takes actions detecting the root cause of the acts which are incompliant to the Global Code of Conduct and related Code Policies. Once an allegation is received it should immediately be reviewed and an initial analysis of the allegations conducted by the relevant Compliance Officer. Where appropriate Compliance Officer should consult the Global Compliance Manager to determine whether an investigation is required and, if so, who should be part of the investigation team. Arçelik Global Code of Conduct and related Policies are periodically reviewed by the assigned Legal and Compliance Department to ensure compliance with new or revised laws and regulations. Additionally, Arçelik’s Global Code of Conduct and Related Policies, as well as its compliance management systems, are third-party audited in line with ISO 37301 Compliance Management System standard. In the scope of ISO 14001 Environmental Management System (EMS), Arçelik's environmental aspects, impacts, and risk and opportunities are identified, and auidted internally and externally every year. In addition to this, Arçelik provides environmental audit by a third party audited organization to its prioritized suppliers to improve environmental management in all value chain. Please see Arçelik Sustainability Report for further information: https://www.arcelikglobal.com/en/Executive Pay
11. Is executive pay linked to performance on one or more of the following sustainability topics?
Optional commentIn the scorecard of Arçelik's Senior Management, the above mentioned topics are covered.Board Composition
12. Percentage of individuals within the company’s Board / highest governance body by:
Optional commentMembers: Mustafa Rahmi Koç (Chairperson), Mehmet Ömer Koç, Semahat Sevim Arsel, Yıldırım Ali Koç, Levent Çakıroğlu, Robert Sonman, Fatih Kemal Ebiçlioğlu, Hakan Hamdi Bulgurlu, Kamil Ömer Bozer, Müzeyyen Münire Gülay Barbarosoğlu, Ahmet Turul, Tuğrul Fadıllıoğlu. Currently, there are 2 female members in our Board of Directors, Ms. Semahat Sevim Arsel and Ms. Müzeyyen Münire Gülay Barbarosoğlu, and our female member rate is at the level of 17%. Hakan Hamdi Bulgurlu is both Chief Executive Officer (CEO) of the company and the youngest member of the Board. For further information, please see Arçelik Annual Report 2021: https://www.arcelikglobal.com/en/13. Do you produce sustainability reporting according to:
Data Assurance
14. Is the information disclosed in this questionnaire assured by a third-party?
Optional commentPlease see the uploaded Assurance Report 2021: "Our assurance engagement was planned and carried out in accordance with AA1000 Assurance Standard AA1000AS v3. The moderate level assurance provided is in accordance with AA1000AS v3 in our review, as defined by the scope and methodology described in this statement." Also, you could refer to Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/Human Rights
Materiality / Saliency
1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?
Optional commentCollective bargaining is also the topic in 'Salient Human Rights Issues' in Arçelik's Due Diligence Process. We can only choose 5 topics because of the limit. For Arçelik Human Rights Due Diligence Process, please refer to: https://www.arcelikglobal.com/media/6508/human_rights_due_diligence.pdfResponse
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
A new, dedicated Human Rights Department has been established by the Board of Directors. The department is responsible for organizing regular third-party and internal human rights assessments within the global organization, preparing a risk mapping of potential and actual violations, and taking necessary mitigation and remedial actions pursuant to the Global Human Rights Due Diligence Process. The Koç Holding Consumer Durables President, who is an Arçelik board member, has been assigned by the Board of Directors as the responsible board member to report on the human rights issues, potential risks and action plans. The Human Rights department is responsible for convening the Human Rights Committee (HRC). The HRC meets four times a year to systematically review and revise the risk mapping of potential human rights issues within our existing business and new business relations, as well as risks in the value chain. In terms of the value chain, our priority is assessing the risks of Tier-1 suppliers. The duty of the Human Rights Committee is to proactively ensure that the operations in the value chain do not have adverse impacts on individuals. The HRC is chaired by the Chief People Officer, and representatives from Occupational Health and Safety, Sustainability, Quality Systems, Purchasing, Global Compliance, Environment, and the Human Rights teams attend the committee. The decisions made by the committee are reported to the Sustainability Council, which meets quarterly and is led by the CFO.Labour
Commitment
1. Does the company have a policy commitment in relation to the following labour rights principles?
Optional commentFor Arçelik Global Human Rights Policy which covers all of the topics mentioned above, please refer to: https://www.arcelikglobal.com/media/6236/15_global-human-rights-policy-en-1.pdf For stand alone policies: Global Anti-Discrimination and Anti-Harassment Policy, please see: https://www.arcelikglobal.com/media/6317/16_global-anti-discrimination-and-anti-harassment.pdf Occupational Health and Safety Policy, please see: https://www.arcelikglobal.com/media/6287/occupational-health-and-safety-policy.pdf Global Salary Policy, please see: https://www.arcelikglobal.com/media/5555/globalsalarypolicy.pdf1.1. For each labour rights policy, is it:
Optional commentPlease see Arçelik Global Human Rights Policy: https://www.arcelikglobal.com/media/6236/15_global-human-rights-policy-en-1.pdf Please also see Arçelik Global Code of Conduct: "Compliance with these principles is an essential element in our business success. Day-to-day responsibility is delegated to all senior management of the operating companies." Link: https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdfPrevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?
Optional commentArçelik and its Group Companies respect employees' right and freedom of choice to join a trade union, and to collectively bargain without feeling any fear of retaliation. Arçelik and its Group Companies are committed to a constructive dialogue with the freely chosen representatives of its employees, represented by a legally recognized labor union.3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?
Optional commentAt the beginning of their employment, our employees read and accept the Global Code of Conduct and Related Policies and obtain relevant training in their orientation program. To ensure compliance with the Global Code of Conduct, we created a comprehensive training program including face-to-face and online training for all employees globally. By training 1,760 employees in 2021, we have now reached more than 11,000 employees regarding the Global Code of Conduct and related Policies since its first publication. The training covers the Global Code of Conduct and Related Policies, including the fight against bribery and corruption, as well as the prevention of human rights violations and the prevention of discrimination and harassment, responsible purchasing, and conflict of interest. We also provide training to our CEO and all our Assistant General Managers on the Global Code of Conduct and Related Policies. Turkey operations of Arçelik is a member of the MESS. The organized trade unions in other countries are labor unions. Only in Turkey we have membership in the employers’ union, and therefore, we pay due to MESS only for operations in Turkey. The MESS Board Chairman also serves as Koç Holding Human Resources Director. Within the scope of our MESS membership, we engage in activities that ensure compliance with occupational health and safety standards, and protection of employee and company rights. In addition, our membership allows us to benefit from MESS’s knowledge and support regarding the practices that regulate business life. In 2021, all Arçelik factories including joint ventures (28/28) are subject to human rights assessments either internally or by third party audits. 28 factories have been internally audited and 14 factories have been third party audited. All Arçelik factories (28 factories including joint ventures) have mitigation plans in place for the risks identified. No major human rights issues were identified by internal and third party audits in Arçelik’s own operations and joint ventures. The results of internal and external audit findings are discussed in the Human Rights Committee and the mitigation actions are followed by corrective action plans. “Welcome Diversity” is one of the leadership profile competencies expected from all our employees and managers. As a part of our recruitment and internal promotion process, we assess these competencies through competency-based interviews, case studies, online simulations, and role plays. These assessments are conducted by third-party companies, and we arrange one -on-one feedback sessions for all the participants. In 2021, we involved 181 managers in internal assessment processes. Hiring managers and recruiters are trained on competency-based interview techniques so they use the right methodologies and avoid discrimination. In 2021, unconscious bias training was delivered to managers in China, Pakistan, the Philippines, Thailand, and Italy, with 149 managers (61%) completing the training. We aim to complete the deployment of this training to all managers in 2022 as part of our global DEI strategy. To ensure bias-free talent evaluation, we also integrated objective evaluation criteria to our talent management system where all managers complete "potential assessment forms" to determine potential employees. In 2021, a total of 456,145 person*hours of OHS training on regulatory requirements and technical matters were organized for employees at all Arçelik facilities, equivalent to 11.3 hours of OHS training per person. Supplier OHS awareness training is delivered via an online platform, and we aim to reach 5,000 suppliers’ employees as part of our 2030 sustainability targets. In 2021, Arçelik started to provide consultancy services to its suppliers on sustainability issues through a third party independent institution, reaching 1,900 person*hours. In addition, we began a program that provides sustainability training to our suppliers through nongovernmental organizations and direct webinars. The program includes a wide range of topics such as supplier sustainability practices and strategies, energy efficiency and renewable energy applications, greenhouse gas inventory calculation method, conflict minerals, energy and environmental data collection, and risk Identification. To increase our reach and participation rate, we initiated the Digital Education Platform project in 2021 with the aim of digitizing our training programs. We are subject to regular audits due to our membership of the Business Social Compliance Initiative (BSCI) and the Suppliers Ethical Data Exchange (SEDEX). Through BSCI, our operations are regularly audited in topics such as social management systems, employee engagement, freedom of association and collective bargaining, prevention of discrimination, fair remuneration, OHS, prevention of precarious employment, prevention of forced and child labor, environmental protection, and ethical behavior. Customer-specific audits also may be performed per request. Our supply chain department also follows an audit plan to monitor the social compliance conditions of suppliers. We plan corrective actions for nonconformities that arise as a result of the audits and check the actions taken regarding these plans in the following audits. In 2021, a total of 215 critical suppliers have been audited. 151 suppliers were sent questionnaires within Arçelik's assessment in collaboration made with a third party. 115 third party ethics audits were completed. 75% of the suppliers audited are from Turkey, 14% from Asia and 10% from Europe. Based on the survey results and third-party audits, 24 suppliers have been rated as high risk supplier. A total of 1,249 areas open to improvement were identified. In addition, the findings of the previous period were taken into consideration. As a result of our audits findings, 19 follow-up audits were carried out by third party auditors and a total of 41% of the nonconformities were improved. No actual cases of child labor, forced labor,discrimination, bribery, or corruption were detected during these audits. There were no terminations of contacts in 2021. For further information, please refer to Arçelik's 2021 Sustainability Report: https://www.arcelikglobal.com/en/4. Who receives training for the following labour rights issues?
Optional commentAt the beginning of their employment, our employees read and accept the Global Code of Conduct and Related Policies and obtain relevant training in their orientation program. To ensure compliance with the Global Code of Conduct, we created a comprehensive training program including face-to-face and online training for all employees globally. By training 1,760 employees in 2021, we have now reached more than 11,000 employees regarding the Global Code of Conduct and related Policies since its first publication. The training covers the Global Code of Conduct and Related Policies, including the fight against bribery and corruption, as well as the prevention of human rights violations and the prevention of discrimination and harassment, responsible purchasing, and conflict of interest. We also provide training to our CEO and all our Assistant General Managers on the Global Code of Conduct and Related Policies. In 2021, a total of 456,145 person*hours of OHS training on regulatory requirements and technical matters were organized for employees at all Arçelik facilities, equivalent to 11.3 hours of OHS training per person. Supplier OHS awareness training is delivered via an online platform, and we aim to reach 5,000 suppliers’ employees as part of our 2030 sustainability target. In 2021, Arçelik started to provide consultancy services to its suppliers on sustainability issues through a thirdparty independent institution, reaching 1,900 person*hours. In addition, we began a program that provides sustainability training to our suppliers through nongovernmental organizations and direct webinars. The program includes a wide range of topics such as supplier sustainability practices and strategies, energy efficiency and renewable energy applications, greenhouse gas inventory calculation method, conflict minerals, energy and environmental data collection, and risk Identification. To increase our reach and participation rate, we initiated the Digital Education Platform project in 2021 with the aim of digitizing our training programs. “Welcome Diversity” is one of the leadership profile competencies expected from all our employees and managers. As a part of our recruitment and internal promotion process, we assess these competencies through competency-based interviews, case studies, online simulations, and role plays. These assessments are conducted by third-party companies, and we arrange one -on-one feedback sessions for all the participants. In 2021, we involved 181 managers in internal assessment processes. Hiring managers and recruiters are trained on competency-based interview techniques so they use the right methodologies and avoid discrimination. In 2021, unconscious bias training was delivered to managers in China, Pakistan, the Philippines, Thailand, and Italy, with 149 managers (61%) completing the training. We aim to complete the deployment of this training to all managers in 2022 as part of our global DEI strategy. To ensure bias-free talent evaluation, we also integrated objective evaluation criteria to our talent management system where all managers complete "potential assessment forms" to determine potential employees. For further information, please refer to Arçelik's 2021 Sustainability Report: https://www.arcelikglobal.com/en/5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?
Optional commentIn 2021, all Arçelik factories including joint ventures (28/28) are subject to human rights assessments either internally or by third party audits. 28 factories have been internally audited and 14 factories have been third party audited. All Arçelik factories (28 factories including joint ventures) have mitigation plans in place for the risks identified. No major human rights issues were identified by internal and third party audits in Arçelik’s own operations and joint ventures. The results of internal and external audit findings are discussed in the Human Rights Committee and the mitigation actions are followed by corrective action plans. As of 2021, 72.4% of our operations are covered by ISO 45001 OHS Management System certification. In addition to these audits, BSCI audits are carried out by third parties for Arçelik’s plants globally, as well as Arçelik internal online OHS audits and Koç Holding’s audits in Turkey. Weekly and monthly based OHS field audits are also carried out by first-line managers in all manufacturing plants and warehouses. For further details, please see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/Performance
6. What is the percentage of employees covered under collective bargaining agreements?
Optional commentIn 2021, 63,9% of the employees were covered by collective agreement in all countries where we have manufacturing plants.7. What is the percentage of employees in a trade union or other workers' organization?
Optional commentA total of 234 Arçelik employees served in labor unions, while two employers represented their group in employers’ unions. The total number of employees and employers who are member of labor and employers’ unions is 236. All hourly paid workers in Turkey work under a collective labor agreement. A total of 234 Arçelik employees served in labor unions, while two employers represented their group in employers’ unions. The total number of employees and employers who are member of labor and employers’ unions is 236. All hourly paid workers in Turkey work under a collective labor agreement.8. In the course of the reporting period, what was the percentage of women in:
Optional commentPlease see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?
Optional commentPlease see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?
Optional commentLost Injury Time Frequency Rate = (Number of injuries / Total official working hours) * 1,000,000 Please see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/11. In the course of the reporting period, what was the company’s incident rate?
Optional commentIncident Rate = (The number of recordable cases / Total official working hours) * 1,000,000Response and Reporting
12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?
Optional commentArçelik protects and remediates those who have been affected by a negative human rights impact. For this reason, we have set up a global whistleblowing mechanism that can be used to report possible improprieties to unethical acts such as breaches of the Global Code of Conduct and related Policies including the Global Human Rights Policy and Global Anti- Discrimination and Anti-Harassment Policy. A whistleblower can be anyone who communicates an allegation or any other information indicating acts that are noncompliant with the above-mentioned Policies. The harassment or victimization of anyone raising a concern is not tolerated and individuals making a disclosure will retain their anonymity unless they agree otherwise. Additionally, we ensure effective remediation actions to counteract human rights harms that have occurred. The defined remediation actions include financial or non-financial compensation, apologies, offering rehabilitation, punitive sanctions, and administrative changes in terms of organizational structure. Arçelik also has communication channels to receive feedback and complaints from stakeholders. For the harassment and mobbing issues, Arçelik took remediation actions including but not limited to psychological rehabilitation for an effective remedy, detecting the root cause of the mobbing, changing the organizational structure of the related department where the issue happened and changing the roles of some employees’ positions. For furher information, please refer to Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
A new, dedicated Human Rights Department has been established by the Board of Directors. The department is responsible for organizing regular third-party and internal human rights assessments within the global organization, preparing a risk mapping of potential and actual violations, and taking necessary mitigation and remedial actions pursuant to the Global Human Rights Due Diligence Process. The Koç Holding Consumer Durables President, who is an Arçelik board member, has been assigned by the Board of Directors as the responsible board member to report on the human rights issues, potential risks and action plans. The Human Rights department is responsible for convening the Human Rights Committee (HRC). The HRC meets four times a year to systematically review and revise the risk mapping of potential human rights issues within our existing business and new business relations, as well as risks in the value chain. In terms of the value chain, our priority is assessing the risks of Tier-1 suppliers. The duty of the Human Rights Committee is to proactively ensure that the operations in the value chain do not have adverse impacts on individuals. The HRC is chaired by the Chief People Officer, and representatives from Occupational Health and Safety, Sustainability, Quality Systems, Purchasing, Global Compliance, Environment, and the Human Rights teams attend the committee. The decisions made by the committee are reported to the Sustainability Council, which meets quarterly and is led by the CFO.Environment
Commitment
1. Does the company have a formal policy on the following environmental topics?
Optional commentArçelik Environmental Policy: https://www.arcelikglobal.com/media/5718/13_07environmental_policy.pdf Arçelik Climate Change Strategy: https://www.arcelikglobal.com/media/6503/climate_change_strategy.pdf Arçelik Water Policy: https://www.arcelikglobal.com/media/5793/28_07water_policy.pdf Arçelik Conflict Minerals Policy: https://www.arcelikglobal.com/media/5644/conflict-minerals-policy_0307.pdf Arçelik Energy Policy: https://www.arcelikglobal.com/media/5163/energy_policy.pdf1.1. For each environmental policy, is it:
Optional commentFor further details, please refer to the relevant Polices. Arçelik Code of Conduct: https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdf Arçelik Environmental Policy: https://www.arcelikglobal.com/media/5718/13_07environmental_policy.pdf Arçelik Climate Change Strategy: https://www.arcelikglobal.com/media/6503/climate_change_strategy.pdf Arçelik Water Policy: https://www.arcelikglobal.com/media/5793/28_07water_policy.pdf Arçelik Conflict Minerals Policy: https://www.arcelikglobal.com/media/5644/conflict-minerals-policy_0307.pdf Arçelik Energy Policy: https://www.arcelikglobal.com/media/5163/energy_policy.pdfPrevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?
Optional commentSince 2021, we are a member of WBCSD and we actively support workstreams in the Council. In 2022, we will be one of the members of CFO Network and SOS 1.5 Program organized by WBCSD and will collaborate the activities in the workstreams. The CFO Network Program aims to help shaping the dialogue and the landscape, working with investors and gaining access to the tools and resources. Workstreams at SOS 1.5 Program are organized to support companies while they are running for well below 1.5 degrees Celsius targets and their ultimate aim for being net-zero companies in 2050. With strong representative power in terms of the added value created by member organizations in our country’s economy, TÜSİAD is also a member of Business Europe, which is considered to represent the European private sector. As an umbrella NGO representing our country’s business world, TÜSİAD is an institution that actively participates in forming opinions as a public authority on a wide range of topics from sectoral developments to other related areas. In addition, TÜSİAD can closely monitor legislative works in the EU which concern our sector, and form opinions at the level of EU institutions by means of the Business Europe channel of which it is a member. Our company actively participates in and contributes to many TÜSAİD working groups and task forces. In particular, our company leads the Working Group for the Environment and Climate Change and the EU Green Deal Task Force to actively work on the formation of country policies in these areas. For further information, please see Arçelik's Sustainability Report 2021: https://www.arcelikglobal.com/en/3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?
Optional commentFor further details, please see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/ Since the answers of "Forests/Biodiversity" and "Land use" are collected in one, these 2 questions are answered according to "Biodiversity" studies.4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?
Optional comment"Oceans" are not applicable for Arçelik. For further details on the environmental topics please see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/4.1. For each environmental topic in which the company sets timebound goals / targets, what kind of targets has the company set?
4.2. For each environmental topic in which the company sets timebound goals / targets, how is progress against target / goal tracked?
Optional commentPlease provide additional explanation: For further details on the environmental topics please see Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?
Optional commentArçeik did not face with the an adverse environmental impact which is needed for remediation.Climate Action
6. What were the company’s gross global greenhouse gas emissions for the reporting period?
Scope 2 Emissions
Scope 3 Emissions
Optional commentScope 3 emissions cover Purchased goods and services, Waste generated in operations, Business travel, Employee commuting, Downstream transportation and distribution, Use of sold products, End-of-life treatment of sold products, Other - upstream, Other - downstream.7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?
8. Has the organization acted to support climate change adaptation and resilience?
Optional commentArçelik is a TCFD signatory and reports its climaterelated risks and opportunities. Other ESG-related risks and opportunities are also transparently reported. For further information, please refer to Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/ The potential impacts of the transition to a low-carbon economy on Arçelik operations were analyzed in terms of the policy, market, reputation, and technology risks. For policy risk and the related price of carbon, the S&P Trucost ESG methodology has been outsourced. The S&P Trucost ESG Methodology includes a Corporate Carbon Pricing Tool that analyzes carbon price risk premiums on High, Medium, Low carbon price scenarios based on the responsiveness level of each scenario to limit global warming to 2 degrees Celsius. The scenarios have been based on 2030 and 2050 projections. Based on Trucost analysis, Arçelik's suppliers' main physical risks are also related to water stress. As a risk adaptation plan, we have also set our 2030 target to increase the water recycling and reuse ratio* to 70% in all manufacturing plants (excluding JVs) aiming to achieve a closed-loop water system in production. Additionally, we developed an in-house supplier sustainability index project, the Supplier Sustainability Data Monitoring and Development Project. A dedicated in-house team in the Purchasing and Product Sourcing Departments works on this project in collaboration with the sustainability teams. We have also partnered with an independent, accredited audit firm to help us carry out this project. The partner provides us the supplier data monitoring software platform and works in close collaboration with the purchasing team to reach out to the suppliers and act as an advisor for the questions raised by the suppliers. The aim is to understand our suppliers’ ESG-related risks and opportunities by collecting and analyzing their data. Our main intention is to enable Scope 3 reduction in the value chain. We have taken one further step in this process. We want to transform together with our supply chain and minimize the impact of the operations in the value chain in total. Therefore, it is important that we help and guide our suppliers set environmental targets, measure their progress, and reduce their impact. In November 2021, we circulated a letter (herein referred to as the “Commitment Letter”) to our suppliers explaining our sustainability strategy, our sustainability credentials and our Science Based Targets as well as the 2030 environmental targets. This letter was signed by Arçelik’s CEO, CFO, Purchasing Director, Product Sourcing Director and Quality, Sustainability and Corporate Affairs Director. We have asked our suppliers to sign the Commitment Letter, and to commit to setting their own targets for GHG emissions, water consumption, waste reduction and energy efficiency. We also have a requirement that suppliers will share these targets publicly on their websites and in their sustainability reports and report on progress in the same way we do. To date, 183 suppliers have signed the Commitment Letter. We have organized a webinar with committed suppliers to discuss what it means to set a target and share our experiences in setting our own emissions, waste, water, and energy efficiency targets. We aim to ensure that, by the end of 2023, the 183 signatories of the Commitment Letter have set longterm GHG emission, water, energy efficiency and waste reduction targets and publicly shared these targets on their websites and in sustainability reports. We have also organized a webinar series for our procurement team to increase their level of integration for Arçelik’s requirements from its suppliers and the targets set for suppliers.Energy / Resource Use
9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.
Optional commentAs Arçelik Global, our company's renewable energy consumption is 36,18% of total energy consumption in the reporting period 2021. For more information, please refer to Arçelik Sustainability Report 2021: https://www.arcelikglobal.com/en/Technology
10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?
Sector-specific Questions
11. Which sector(s) does the company operate in? If diversified, choose top 3 by revenue.
Sector-specific: Water
12. Please provide details regarding the company's water withdrawal and consumption (own operations) during the reporting period.
Water withdrawal (volume of water in megaliters):
Water consumption (volume of water in megaliters):
13. Please provide details about the company’s water intensity of products in regions with high or extremely high water stress.
Optional commentOur overall water intensity which includes all areas was 32 m3/mio TRY in 2021.Sector-specific: Forest, biodiversity, and land use
14. Please report the number and area (in hectares) of sites owned, leased, or managed by the company in or adjacent to protected areas and/or key biodiversity areas (KBA).
Optional commentA part of Arctic Ulmi factory is near Natura 2000 area named “Lacurile de pe Valea Ilfovului” for Birds Directive Special Protection Area (SPA), so, according to the National Air Quality Law 104/2011, Arçelik has to measure PM10, NO2 and SO2 quarterly. This is the only production site near to the protected areas and Key Biodiversity Areas (KBAs), where 431,369 m2 of border area is located between our production site and the protected area. https://www.arcelikglobal.com/media/6347/sustainability_report_2020.pdf15. What area (in hectares) of natural ecosystems was converted during the reporting period in areas owned, leased, or managed by the company?
Optional commentDuring the reporting period, none of natural ecosystem area was converted.16. Is the company supporting or implementing project(s) focused on ecosystem restoration and protection?
Optional commentConsidering the proximity of the manufacturing plant to the Natura 2000 site, Arçelik has committed to create Net Positive Impact (NPI) in partnership with a thirdparty company, EPC Consulanta de Mediu, which specializes in biodiversity protection.Overall Environment
21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.
In line with its sustainability approach and commitment to tackle climate change, Arçelik works to minimize the environmental impacts of its products throughout their lifecycle thanks to new generation practices, and to reduce its environmental footprint by effectively managing all stages of value chain. To have a robust environmental management, Arçelik manages environmental issues in accoedance with the legal laws in the geographies where it has activities, and implements environmental standards such as ISO 14001, ISO 50001, and ISO 14064. Being aware of our responsibilities, Arçelik sets environmental targets in line with the principles of sustainable development and circular economy, and makes the commitments to global organizations such as the Science-Based Goals Initiative (SBTi) to combat climate change. Arçelik’s 2030 GHG emissions reduction targets were approved in November 2020 by the Science Based Targets initiative (SBTi), for working toward a “wellbelow 2°C” scenario in line with the Paris Agreement. Arçelik commits to reduce its absolute Scope 1 and 2 GHG emissions by 30%; and reduce its absolute Scope 3 GHG emissions from the use of sold products by 15% by 2030 from a 2018 base year.Anti-corruption
Commitment
1. Does the company have an anti-corruption compliance programme?
Optional commentPlease see Arcelik Global Anti Bribery and Corruption Policy: https://www.arcelikglobal.com/media/5516/4_global-antibribery-and-corruption-policy_.pdf2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?
Optional comment*Please see page 4 on Arçelik Global Code of Conduct, under 'Conflict of Interests': "We expect all employees and business partners to stay away from actual and potential conflicts of interest and not to engage in any business relationship that or potentially conflicts with the interests of our company, such as personal and financial interests or off-company activities." The link: https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdf *Arçelik Global Gift and Hospitality Policy: https://www.arcelikglobal.com/media/5518/5_global-gift-and-hospitality-policy_.pdf. Accordingly as written on the first page: "if offers of gifts, hospitality or travel are frequent or of substantial value, they may create potential conflicts of interest between parties, or result in non-compliance to local or global laws and regulations. Consequently, giving or receiving gifts and hospitality activities to/from third parties can only be granted when no counter benefit is expected." Please also see the headline about "Governmental Organizations, Governement Officials and Politically Exposed Persons." *Please also see page X on the Arcelik Global Anti Bribery and Corruption Policy, under 'Hiring or Engaging Government Officials and Politically Exposed Persons (PEP)': https://www.arcelikglobal.com/media/5516/4_global-antibribery-and-corruption-policy_.pdf *Please also see Global Donations and Sponsorship Policy: https://www.arcelikglobal.com/media/6246/7_global-donation-and-sponsorship-policy.pdf.Prevention
3. Who receives training on anti-corruption and integrity?
Optional commentPlease see Arçelik Global Anti Bribery and Corruption Policy. https://www.arcelikglobal.com/media/5516/4_global-antibribery-and-corruption-policy_.pdf "GENERAL PRINCIPLES" headline: It is required for all employees in Arçelik to complete anti-bribery-related trainings on an annual basis. Please also see the explanations on the web page: https://www.arcelikglobal.com/en/company/about-us/global-code-of-conduct/ To ensure complete compliance with the Global Code of Conduct framework Arçelik designed an extensive training program consist of face-to-face and online trainings covering all employees globally. The trainings’ content includes Global Code of Conduct and Related Code Policies, including combating bribery and corruption and also preventing discrimination and human rights violations. Additionally we also trained the upper management with one to one sessions.3.1. How often is such training provided?
Optional commentPlease see Arçelik Global Anti Bribery and Corruption Policy. https://www.arcelikglobal.com/media/5516/4_global-antibribery-and-corruption-policy_.pdf "GENERAL PRINCIPLES" headline: It is required for all employees in Arçelik to complete anti-bribery-related trainings on an annual basis.4. Does the company monitor its anti-corruption compliance programme?
Optional commentPlease see Arcelik Global Anti Bribery and Corruption Policy, as written in the policy Compliance Officers are employees of the Company appointed by the Chief Legal and Compliance Officer of Arçelik as being responsible for monitoring the Company’s operations pertaining to this Policy. This Policy will be periodically reviewed by the Arçelik Legal and Compliance Department to ensure compliance with new or revised laws and regulations.Response and Reporting
5. Please report the company's total number and nature of incidents of corruption during the reporting year.
6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?
Optional commentAs stated in the previous question, the total number of grievances reported and resolved on anti-corruption and bribery topics was zero during 2020 and 2021.7. Does your company engage in Collective Action against corruption?
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.
The total number of grievances reported and resolved on anti-corruption and bribery topics was zero during 2020 and 2021. Therefore there was no remediation actions. In terms of the prevention action; Arçellik has Global Anti Bribery and Anti Corruption Policy. It is required for all employees in Arçelik to complete anti-bribery-related trainings on an annual basis. Compliance Officers are appointed by the Chief Legal and Compliance Officer of Arçelik as being responsible for monitoring the Company’s operations pertaining to this Policy. Global Anti Bribery and Anti Corruption Policy is periodically reviewed by the Arçelik Legal and Compliance Department to ensure compliance with new or revised laws and regulations. There are ethics hotline phone numbers for the whistleblowers to report if they are aware of any action inconsistency with Global Anti Bribery and Anti Corruption Policy, the applicable law or Arçelik Global Code of Conduct. The whistleblower can be anyone who communicates an allegation or any other information indicating that acts which are incompliant to the Arçelik Global Code of Conduct and related Code Policies.