Sustainability

At Sabancı Holding, we pioneer and lead the sectors we operate in through our sustainability approach which we have spread to Group companies. With the best practices implemented in ESG, we contribute to sustainability to make it essential part of the business model in all sectors.

In our main business lines such as energy, industrials, and financial services, we focus on making our current investments more sustainable and defining our new generation growth platforms in sustainable and high‑tech business areas.

By focusing on areas such as electrification, digitalization and the circular economy, we aim to ensure the highest level of efficiency within our own organization and for our customers’ activities.

In line with our vision, we embarked on a large‑scale program to transform our increased ambition into a roadmap in 2020. The first step was to define ownership for the execution of ESG initiatives at the Holding level. We established our Group’s sustainability organizational structure with ownership and representation at Group presidency level, while enriching the structure with sustainability experts and professionals. We then consulted more than 1,000 different stakeholder representatives including our investor community and identified our material issues.

While determining the materiality of issues for stakeholders:

We received opinions on potential sustainability priorities from both Group company employees and external stakeholders.

In this context, we reached out to different groups ranging from universities to suppliers, nongovernmental organizations to investors. In the stakeholder analysis, based on the international stakeholder engagement standard (AA1000SES) and reaching 1,167 people, 44% of the stakeholders contacted participated in the study. We evaluated the key trends which impact the global agenda and analyzed material issues which affect business and sustainability by reviewing the literature with external trend analysis.

By identifying our material issues, we not only engaged with a range of stakeholders but also analyzed best and next practices. We also assessed the strategic impact of each issue on our business, and this is what formed the main driver behind raising our ambition.

Sustainability Roadmap: Focus Areas, Accelerators and Foundations

When it comes to material issues, we developed our action plan and long‑term ambitions for the whole Group, in agreement with Group Presidents at the Holding level and the CEOs of all Group companies. With these steps, together with our long‑term ambitions, we drew up our Sustainability Roadmap, which was published in the first quarter of 2021. Based on our current governance model, ESG initiatives and key performance indicators are being monitored at the Board level.

At Sabancı Group, we set a target to achieve Net-Zero Emissions and Zero Waste in all operations by 2050 at the latest. In collaboration with our stakeholders, we are transitioning to a circular business model to ensure more effective and efficient use of scarce resources.

We built our sustainability roadmap with a focus on three main pillars.

The first pillar is Acting on Climate Emergency. In this pillar, we perform the actions that will carry us to Net Zero Emissions and Zero Waste by 2050 at the latest. In line with these goals, we are investing in new technologies to increase renewable energy capacity and efficiency. In addition, we offer the transportation technologies of the future and support the transformation of the value chain with green electricity tariffs and green financing. Circular economy practices will also be a key area of priority in achieving these targets.

In line with this priority, we are transitioning to a circular business model in which waste is reused or recycled at the highest level to ensure the more effective and efficient use of scarce resources. Accordingly, we are developing products and services which reduce resource use and carbon emissions and enable the transition to and deployment of more sustainable technologies.

Achieving these targets will require a significant transformation which also should serve for the entire economy since we embrace the principle of ‘leaving no one behind’, especially those who are more vulnerable and struggling to keep up with the transition.

In our second pillar, we aim to maximize our positive impact on people and society. In line with our vision of being a pioneer and setting an example, we create long‑term and sustainable value for all our stakeholders with high‑impact social projects and partnerships. We believe that finding permanent solutions to social problems is only possible by reducing inequalities.

Accordingly, our key community investment programs are managed under a comprehensive approach which is closely connected to our main strategy and business activities. It also includes a strategic review of existing programs to ensure that our community investments create the maximum possible impact.

Our third pillar, Fostering Sustainable Business Models is about

further embedding the responsible investment approach in our business,

going beyond the ’do no harm’ principle, to develop innovative products, services and solutions which have a positive impact in line with our ambitious targets.

In addition to these three pillars, we believe that digitalization, technology and innovation will be accelerators to help us reach our goals more rapidly with Human Capital and Governance serving as the foundation of maintaining and further enhancing our performance.

In 2021, we created new ESG related KPIs such as the SDG linked revenues, and also initiated an external assurance process for all key performance indicators representing our Group performance to increase the granularity of our ESG performance.

Our Sustainability Roadmap will serve our intention of pioneering the sustainability and be among the best practices first in Turkey and in the midterm in the regions that we operate.

Being Net Zero emissions and Zero Waste at the latest by 2050 are the challenging but essential part of our targets. This includes our Scope 1 and 2 emissions, and our intention is to include Scope 3 to the extent that is feasible and practically possible. Therefore, it includes deep decarbonization to the extent possible while taking into consideration the global and local context on issues such as energy security, and then using credible offset methods to neutralize the residual emissions and to accelerate the transition.

With Net Zero emissions target, it will require significant reduction in our emissions by 2030s in parallel with the scientific studies. Accordingly, our Group companies started to define their own targets aligned with science. In 2022, our interim targets and to roadmap to 2050 will further be clarified thanks to a comprehensive assessment study run across all our businesses.

The zero‑waste goal is also challenging, but given our enduring efforts on the circular economy, we believe it is doable and we will go to every effort to reach this goal before 2050, at least in some of our sectors.

On the other hand, we will continuously increase the number of SDG‑linked products and services and the share in our total net sales revenues. Our aim is to increase the share of SDG‑linked products and also to reduce our waste and emissions. We also aim that 70% of our R&D and innovation expenses serve SDGs by 2025.

On the premise of leaving no one behind, we will continue to support all segments of our society inclusively. We will assess the impact of our major community investment programs and remain above the meaningful threshold which we identified for the social return on our investments.

Sustainability Governance

We believe that our ESG Governance also includes many firsts in Turkey in terms of robustness. As a part of our participative and total leader ownership approach, we established a Sustainability Leadership committee which includes all of our Group Presidents.

At a Group company level, sustainability organizations and ownership are also clearly defined. We ensure alignment and coordination across all our businesses through the Thematic Working Groups that include sustainability coordinators and representations from our Group companies.

One element of the governance structure which we deem to be critical is accountability and transparency. With our latest sustainability report, we were the first conglomerate in Turkey to disclose more than 30 KPIs by covering almost 100% of our Group companies while obtaining external assurance on the sustainability information at the Group Level.

As an indication of our ambition and accountability, we have integrated ESG metrics to the performance criteria of our CEOs and Group top management, at a rate of 10% for Group Presidents and 15% for CEOs.