CDP Climate Change Report 2015

Transcription

1 CDP Climate Change Report 2015 Turkey Edition Written on behalf 822 of investors with US$95 trillion in assets CDP Partner Scoring and Report Writing Partner

2 Investor signatories and members A 2 1. Investor signatories by location Europe = 46% North America = 26% Latin America & Caribbean - 75 = 9% Asia - 78 = 9% Australia and NZ - 67 = 8% Africa - 16 = 2% A 2. Investor signatories by type Asset Managers = 44% Asset Owners = 30% Banks = 19% Insurance - 37 = 5% Others - 19 = 2% CDP investor initiatives backed in 2015 by more than 822 institutional investors representing in excess of US$95 trillion in assets give investors access to a global source of year-on-year information that supports long-term objective analysis. This includes evidence and insight into companies greenhouse gas emissions, water usage and strategies for managing climate change, water and deforestation risks. Investor members have additional access to data tools and analysis. to become a member visit: Pages/what-is-membership.aspx To view the full list of investor signatories please visit: Pages/Sig-Investor-List.aspx 3. Investor signatories over time Number of signatories Assets under management US$trillion Investor members ABRAPP - Associação Brasileira das Entidades Fechadas de Previdência Complementar AEGON N.V. Allianz Global Investors ATP Group Aviva Investors AXA Group Bank of America Merrill Lynch Bendigo & Adelaide Bank Limited BlackRock Boston Common Asset Management, LLC BP Investment Management Limited California Public Employees' Retirement System California State Teachers' Retirement System Calvert Investment Management, Inc. Capricorn Investment Group, LLC Catholic Super CCLA Investment Management Ltd ClearBridge Investments DEXUS Property Group Environment Agency Pension fund Etica SGR Eurizon Capital SGR Fachesf FAPES Fundação Itaú Unibanco Generation Investment Management Goldman Sachs Asset Management Henderson Global Investors HSBC Holdings plc Infraprev KeyCorp KLP Legg Mason Global Asset Management London Pensions Fund Authority Maine Public Employees Retirement System Morgan Stanley National Australia Bank Limited NEI Investments Neuberger Berman New York State Common Retirement Fund Nordea Investment Management Norges Bank Investment Management Overlook Investments Limited PFA Pension Previ Real Grandeza Robeco RobecoSAM AG Rockefeller Asset Management, Sustainability & Impact Investing Group Royal Bank of Canada Sampension KP Livsforsikring A/S Schroders SEB AB Sompo Japan Nipponkoa Holdings, Inc Sustainable Insight Capital Management TD Asset Management Terra Alpha Investments LLC The Wellcome Trust UBS University of California

3 Contents Investor signatories and members 01 Foreword - Paul Dickinson, Executive Chairman, CDP 04 Main Sponsor Foreword - Suzan Sabancı Dinçer, Chairman, Akbank 05 Introduction - Melsa Ararat, Director, CDP Turkey, Sabancı University 05 CDP Turkey Respondents in Responding companies snapshot Turkey Global Overview ( ) 08 Turkey Overview ( ) 12 Company Responses Overview - Turkey Leadership Criteria Climate Leaders in Turkey 19 Commentary Gökhan Alpman, Partner, Deloitte Turkey 19 Company Responses Overview - Wheelchart - Turkey CDP Turkey 2015: Response Status Table 22 The Climate A List Commit to Action 28 3

4 Paul Dickinson Executive Chairman CDP CDP was set up, almost 15 years ago, to serve investors. A small group of 35 institutions, managing US$4 trillion in assets, wanted to see companies reporting reliable, comprehensive information about climate change risks and opportunities. Decarbonizing the global economy is an ambitious undertaking, even over many decades corporate leaders understand the size of the challenge, and the importance of meeting it. We are on the threshold of an economic revolution that will transform how we think about productive activity and growth. Since that time, our signatory base has grown enormously, to 822 investors with US$95 trillion in assets. And the corporate world has responded to their requests for this information. More than 5,500 companies now disclose to CDP, generating the world s largest database of corporate environmental information, covering climate, water and forest-risk commodities. Our investor signatories are not interested in this information out of mere curiosity. They believe, as we do, that this vital data offers insights into how reporting companies are confronting the central sustainability challenges of the 21st century. And the data, and this report, shows that companies have made considerable progress in recent years whether by adopting an internal carbon price, investing in low-carbon energy, or by setting long-term emissions reduction targets in line with climate science. For our signatory investors, insight leads to action. They use CDP data to help guide investment decisions to protect themselves against the risks associated with climate change and resource scarcity, and profit from those companies that are well positioned to succeed in a low-carbon economy. This year, in particular, momentum among investors has grown strongly. Shareholders have come together in overwhelming support for climate resolutions at leading energy companies BP, Shell and Statoil. There is ever increasing direct engagement by shareholders to stop the boards of companies from using shareholders funds to lobby against government action to tax and regulate greenhouse gasses. This activity is vital to protect the public. Many investors are critically assessing the climate risk in their portfolios, leading to select divestment from more carbon-intensive energy stocks or, in some cases, from the entire fossil fuel complex. Leading institutions have joined with us in the Portfolio Decarbonization Coalition, committing to cut the carbon intensity of their investments. This momentum comes at a crucial time, as we look forward to COP21, the pivotal UN climate talks, in Paris in December. A successful Paris agreement would set the world on course for a goal of net zero emissions by the end of this century, providing business and investors with a clear, longterm trajectory against which to plan strategy and investment. Without doubt, decarbonizing the global economy is an ambitious undertaking, even over many decades. But the actions that companies are already taking, and reporting to CDP, show that corporate leaders understand the size of the challenge, and the importance of meeting it. We are on the threshold of an economic revolution that will transform how we think about productive activity and growth. We are beginning to decouple energy use and greenhouse gas emissions from GDP, through a process of dematerialization where consumption migrates from physical goods to electronic products and services. This will create new assets, multi-billion dollar companies with a fraction of the physical footprint of their predecessors. Similarly, there is a growing realization that work is no longer a place, but increasingly an activity that can take place anywhere. And it no longer relies on the physical, carbon-intensive infrastructure we once built to support it. In the 19th century we built railway lines across the globe to transport people and goods. Now we need to create a new form of transportation, in the form of broadband. Investment in fixed and mobile broadband will create advanced networks upon which the communications-driven economy of the 21st century can be built an economy where opportunity is not limited by time or geography, and where there are no limits to growth. An economic revolution of this scale will create losers as well as winners. Schumpeter s creative destruction, applied to the climate challenge, is set to transform the global economy. It is only through the provision of timely, accurate information, such as that collected by CDP, that investors will be able to properly understand the processes underway. Our work has just begun. 4

5 Suzan Sabancı Dinçer, Chairman, Akbank Establishing regulations to replace the Kyoto protocol to restrict countries CO2 emissions and other greenhouse gases will be an encouraging step forward for the future of our planet. As Akbank, since our establishment, we have embraced our fundamental principle as to create sustainable value through our employees, clients, and projects. We have been proud to support the implementation of CDP, one of the major awareness and improvement projects worldwide, since 2010 in Turkey. In addition to our sponsorship, we annually report our policies concerning climate change to CDP. Global Studies on climate change are also increasing in number and content. We are excited about the UN 21st Conference of the Parties that will be held in Paris where a new global roadmap is expected. Establishing regulations to replace the Kyoto protocol to restrict countries CO2 emissions and other greenhouse gases will be an encouraging step forward for the future of our planet. Increasing participation of institutions from our country reporting to CDP, rise in the number of such institutions up to 46 from an initial eleven, the development in quality and content of these reports, are all greatly encouraging signs for us as a leading bank of the sector. Akbank will continue to be a leader of change in the sector and in our country in accordance with its global sustainability goals. Melsa Ararat, Director, CDP Turkey, Sabancı Universtiy The gap between the state and the corporate sector in Turkey in understanding the market risk of using coal based energy is a good reason to be hopeful that Turkey s current strategy may not survive the time. Turkey s corporate sector, dominated by family controlled business groups, has often been a driver of progressive change in the country. This is no surprise since controlling families have a longer-term investment perspective than most financial investors. When we launched CDP in Turkey in 2010, we relied on this sense of responsibility and owner stewardship in closing the gap in the awareness of climate change risks between Turkey and the developed economies. This report presents the changes that took place during the past five years globally and also in Turkey. Only 4 years after from a moderate start in 2010, in 2014, Turkey s two leading industrial firms, Tofaş and Arçelik, achieved A band performance together with 186 global leaders in This year, a financial firm, Garanti Bank, has followed suit and is included in the list of 113 A class performers. Moreover, number of CDP respondents in Turkey increased more than in any other country during this five years with 70% of the respondents achieving a disclosure score of above 80 out of 100. While the corporate sector demonstrated a high level adaptation, awareness and transparency, Turkey s government announced its Intended Nationally Determined Contribution (INDC) that includes an emission reduction target but with a projected 116% increase in emissions by 2030 from 2013 levels. This strategy is based on a heavy reliance on coal for energy production with plans for 80 new coal-fired power plants and continued state subsidies for coal mining. The gap between the state and the corporate sector in Turkey in understanding the market risk of using coal based energy is a good reason to be hopeful that Turkey s current strategy may not survive the time and the intention may change. 1 Known with Beko brand in Europe. 5

6 CDP Turkey Respondents in 2015 CDP Turkey Respondents in 2015 CDP Turkey Respondents in 2015 BIST-100 Respondents in % BIST-100 Respondents in 2015 Afyon Çimento Sanayi T.A.Ş. Afyon Akbank Çimento T.A.Ş. Sanayi T.A.Ş. Akbank Akçansa T.A.Ş. Çimento Sanayi Ve Ticaret A.Ş. Akçansa Akenerji Elektrik Çimento Üretim Sanayi A.Ş. Ve Ticaret A.Ş. Akenerji Alarko Holding Elektrik A.Ş. Üretim A.Ş. Alarko Anadolu Holding Cam Sanayi A.Ş. A.Ş. (SA) Anadolu Arçelik A.Ş. Cam Sanayi A.Ş. (SA) Arçelik Aselsan A.Ş. Elektronik Sanayi Ve Ticaret A.Ş. Aselsan Brisa Bridgestone Elektronik Sabanci Sanayi Ve Lastik Ticaret San.ve A.Ş. Tic.A.Ş. Brisa Çelebi Bridgestone Hava Servisi Sabanci A.Ş. Lastik San.ve Tic.A.Ş. Çelebi Çimsa Hava Çimento Servisi Sanayi A.Ş. Ve Ticaret A.Ş. Çimsa Coca-Cola Çimento İçecek Sanayi A.Ş. Ve Ticaret A.Ş. Coca-Cola Doğan Şirketler İçecek Grubu A.Ş. Holding A.Ş. Doğan İhlas Holding Şirketler A.Ş. Grubu Holding A.Ş. İhlas Kardemir Holding Karabük A.Ş. Demir Çelik Sanayi Ve Ticaret A.Ş. Kardemir Migros Ticaret Karabük A.Ş. Demir Çelik Sanayi Ve Ticaret A.Ş. Migros Netaş Telekomünikasyon Ticaret A.Ş. A.Ş. Netaş OMV Petrol Telekomünikasyon Ofisi A.Ş. (SA) A.Ş. Pegasus Hava Taşımacılığı A.Ş. Pegasus Sabancı Holding Hava Taşımacılığı A.Ş. A.Ş. Sabancı Şekerbank Holding T.A.Ş. A.Ş. Şekerbank Soda Sanayi T.A.Ş. (SA) Soda T.Garanti Sanayi Bankası A.Ş. (SA) A.Ş. T.Garanti T.Sınai Kalkınma Bankası Bankası A.Ş. A.Ş. T.Sınai T.Şişe Ve Kalkınma Cam Fabrikaları Bankası A.Ş. T.Şişe TAV Havalimanları Ve Cam Fabrikaları Holding A.Ş. TAV Tesco Havalimanları Kipa (SA) Holding A.Ş. Tesco Tofaş Türk Kipa Otomobil (SA) Fabrikası A.Ş. Tofaş Trakya Türk Cam Otomobil Sanayii A.Ş. Fabrikası (SA) A.Ş. Trakya Turkcell Cam İletişim Sanayii Hizmetleri A.Ş. (SA) A.Ş. Turkcell Türkiye Halk İletişim Bankası Hizmetleri A.Ş. A.Ş. Türkiye Halk Vakıflar Bankası Bankası A.Ş. T.A.O. Türkiye Vestel Beyaz Vakıflar Eşya Bankası Sanayi T.A.O. Ve Ticaret A.Ş. Vestel Beyaz Elektronik Eşya Sanayi Ve Ve Ticaret A.Ş. A.Ş. Vestel Zorlu Enerji Elektronik Elektrik Sanayi Üretim Ve A.Ş. Ticaret A.Ş. Zorlu Enerji Elektrik Üretim A.Ş. OMV Petrol Ofisi A.Ş. (SA) Non BIST-100 Respondents in % Non Boyner BIST-100 Büyük Mağazacılık Respondents A.Ş. in 2015 Boyner Duran Doğan Büyük Basım Mağazacılık Ve Ambalaj A.Ş. A.Ş. Duran Ekoten Doğan Tekstil Basım Sanayi Ve Ve Ambalaj Ticaret A.Ş. Ekoten Havalimanları Tekstil Yer Sanayi Hizmetleri Ve Ticaret A.Ş. A.Ş. (Havaş) Havalimanları İhlas Ev Aletleri Yer İmalat Hizmetleri Sanayi A.Ş. Ve Ticaret (Havaş) A.Ş. İhlas Mondi Ev Tire Aletleri Kutsan İmalat Kağıt Sanayi Ve Ambalaj Ve Ticaret Sanayi A.Ş. A.Ş. (SA) Pınar Süt Mamülleri Sanayii A.Ş. Pınar Sun Tekstil Süt Mamülleri Sanayi Ve Sanayii Ticaret A.Ş. A.Ş. (SA) Sun Yüksel Tekstil İnşaat Sanayi A.Ş. Ve Ticaret A.Ş. (SA) Yüksel Yünsa İnşaat Yünlü Sanayi A.Ş. Ve Ticaret A.Ş. Yünsa Zorlu Doğal Yünlü Elektrik Sanayi Üretim Ve Ticaret A.Ş. A.Ş. Zorlu Doğal Elektrik Üretim A.Ş. Mondi Tire Kutsan Kağıt Ve Ambalaj Sanayi A.Ş. (SA) 6

7 Responding companies snapshot -Turkey 2015 Responding companies: >70 disclosure score respondents: Performance A and B band respondents: Response and Scoring Summary Integrate climate change into business strategy: Provide incentives for management of climate change: Set an emissions reductions target: Climate Change Management & Performance 89% 89% 68% Top risks: Fuel/energy taxes and other regulations Reputation Change in precipitation extremes and droughts Change in mean temperature Changing consumer behaviour Top opportunities: Regulation Reputation Changing consumer behaviour Cap and trade schemes Change in temperature extremes Risks & Opportunities Reported Scope 1 and Scope 2 emissions: Reported increase in Scope 1 and 2 emissions from 2014: Emissions Reporting 89% 58% 39% Reported both absolute and intensity emissions targets: Reported absolute targets only: Reported intensity targets only: Emission Reduction Targets 16% 24% 29% 7

8 Global overview The case for corporate action on climate change has never been stronger and better understood. With the scientific evidence of manmade climate change becoming ever more incontrovertible, leading companies and their investors increasingly recognize the strategic opportunity presented by the transition to a low-carbon global economy. Global Analyzed responses 1,799 1,997 Market cap of analyzed companies US$m* 25,179,776 35,697,470 Scope 1 5,459 MtCO 2 e 5,382 MtCO 2 e Scope 2 1,027 MtCO 2 e 1,301 MtCO 2 e Scope 1 like for like: 1306 companies 4,135 MtCO 2 e 4,425 MtCO 2 e Scope 2 like for like: 1306 companies 794 MtCO 2 e 887 MtCO 2 e Business is already stepping up. The United Nations Environment Programme estimates that existing collaborative emissions reduction initiatives involving companies, cities and regions are on course to deliver the equivalent of 3 gigatons of carbon dioxide reductions by That s more than a third of the emissions gap between existing government targets for that year and greenhouse gas emissions levels consistent with avoiding dangerous climate change. * Market capitalization figures from Bloomberg at 1 January 2010 and 1 January And they are acting to seize this opportunity. The latest data from companies that this year took part in CDP s climate change program as requested by 822 institutional investors, representing US$95 trillion in assets provide evidence that reporting companies are taking action and making investments to position themselves for this transition. Growing momentum from the corporate world is coinciding with growing political momentum. Later this year, the world s governments will meet in Paris to forge a new international climate agreement. Whatever the contours of that agreement, business will be central to implementing the necessary transition to a low-carbon global economy. Those investors who understand the need to decarbonize the global economy are watching particularly closely for evidence that the companies in which they invest are positioned to transition away from fossil fuel dependency. By requesting that companies disclose through CDP, these investors have helped create the world s most comprehensive corporate environmental dataset. This data helps guide businesses, investors and governments to make better-informed decisions to address climate challenges. This report offers a global analysis of the current state of the corporate response to climate change. For 1. Improving climate actions Globally = 80% 9400= 94% 4700= 47% 7500= 75% 6000= 60% 8400= 84% 2100= 21% 5000= 50% 2700= 27% 4400= 44% 4700= 47% 8900= 89% 2900= 29% 6300= 63% 3800= 38% 6400= 64% = 34% 6400= 64% Board or senior management responsibility for climate change incentives for the management of climate change issues Engagement with policymakers on climate issues Intensity emissions reduction targets Absolute emission reduction targets Active emissions reduction initiatives Emissions data for 2 or more Scope 3 categories Scope 1 data independently verified Scope 2 data independently verified 8

9 We are targeting the full operational emissions for the organisation, including electricity, natural gas, diesel and refrigerant gases used in operational buildings and fleets. J Sainsbury Plc CDP has changed the way investors are able to understand the impact of climate change in their portfolio... promoting awareness of what risks or benefits are embedded into investments. Anna Kearney BNY Mellon the first time, CDP compares the existing landscape to when the world was last on the verge of a major climate agreement. By comparing data disclosed in 2015 with the information provided in 2010, this report tracks what companies were doing in 2009, ahead of the ill-fated Copenhagen climate talks at the end of that year. The findings show considerable progress: with corporate and investor engagement with the climate issue; in leading companies management of climate risk; and evidence that corporate action is proving effective. However, the data also shows that much more needs to be done if we are to avoid dangerous climate change. Growing corporate engagement on climate change For the purposes of this 2015 report and analysis, we focused on responses from 1,997 companies, primarily selected by market capitalization through regional stock indexes and listings, to compare with the equivalent 1,799 companies that submitted data in These companies, from 51 countries around the world, represent 55% of the market capitalization of listed companies globally. The data shows significant improvements in corporate management of climate change. What was leading behavior in 2010 is now standard practice. For example, governance is improving, with a higher percentage of companies allocating responsibility for climate issues to the board or to senior management (from 80% to 94% of respondents). And more companies are incentivizing employees through financial and non-financial means to manage climate issues (47% to 75%). Importantly, the percentage of companies setting targets to reduce emissions has also grown strongly. Forty four per cent now set goals to reduce their total greenhouse gas emissions, up from just 27% in Even more 50% - have goals to reduce emissions per unit of output, up from 20% in Companies are responding to the ever-more compelling evidence that manmade greenhouse gas emissions are warming the atmosphere. This helps build the business case for monitoring, measuring and disclosing around climate change issues. But greater corporate engagement with climate change is at least partly down to influence from increasingly concerned investors. Amid growing investor concern Since 2010, there has been a 54% rise in the number of institutional investors, from 534 to 822, requesting disclosure of climate change, energy and emissions data through CDP. Investors are also broadening the means by which they are encouraging corporate action on emissions. In recent years, they have launched several other initiatives. For example, a number of institutional investors have come together in the Aiming for A coalition to call on specific major emitters to demonstrate good strategic carbon management by attaining (and maintaining) inclusion in CDP s Climate A List. The A List recognizes companies that are leading in their actions to reduce emissions and mitigate climate change in the past CDP reporting year. In 2015, following a period of engagement with the companies, the coalition was successful in passing shareholder resolutions calling for improved climate disclosure at the annual meetings of BP, Shell and Statoil, with nearly 100% of the votes in each case. Investors are also applying principles of transparency and exposure to themselves. More than 60 institutional investors have signed the Montréal Carbon Pledge, under which they commit to measure and publicly disclose the carbon footprint of A A performance bands globally* performance bands globally 4. Disclosure scores over time Globally A - 72 D - 69 A B No Band A minus - 79 C B * in 2010 and 2015 not all companies were scored for performance C D E No band Lowest Average Highest 9

10 10 We have a public commitment to meet 100% of electricity requirements through renewables by fiscal 2018 and we will be investing in about 200 MW of solar PV plants. Infosys Google uses carbon prices as part of our risk assessment model. For example, the risk assessment at individual data centers also includes using a shadow price for carbon to estimate expected future energy costs. Google The numbers for companies using or planning to implement internal carbon pricing are based on the sample analyzed for Putting a price on risk:carbon pricing in the corporate world. Of the 1,997 companies analyzed in this report 315 have disclosed that they set an internal carbon price, with 263 planning to do so. For more detail, see carbon-pricing-in-the-corporate-world.pdf their investment portfolios on an annual basis. It aims to attract commitment from portfolios totaling US$3 trillion in time for the Paris climate talks. Investors are seeking to better understand the link between lower carbon emissions and financial performance, including through the use of innovative investor products such as CDP s sector research, launched this year, which directly links environmental impacts to the bottom line. Some investors are taking the next logical step, and are working to shrink their carbon footprints via the Portfolio Decarbonization Coalition (PDC). As of August, the PDC of which CDP is one the founding members was overseeing the decarbonization of US$50 billion of assets under management by its 14 members. Leading to effective corporate action Companies are responding to these signals. In total, companies disclosed 8,335 projects or initiatives to reduce emissions in 2015, up from 7,285 in 2011 (the year for which the data allows for the most accurate comparison). The three most frequently undertaken types of project are: improving energy efficiency in buildings and processes; installing or building low carbon energy generators; and changing behavior, such as introducing cycle to work schemes, recycling programs and shared transport. More than a third (36%) of reporting companies have switched to renewable energy to reduce their emissions. On average, the companies that purchased renewable energy in 2015 have doubled the number of activities they have in place to reduce their emissions, showing their growing understanding or capacity to realize the benefits of lower carbon business. Further, 71% (1,425) of respondents are employing energy efficiency measures to cut their emissions, compared with 62% (1,185) in 2011, demonstrating that companies are committed to reducing wasted energy wherever possible. Companies are also quietly preparing for a world with constraints and a price on carbon emissions. In the past year particularly, we have seen a significant jump in the number of companies attributing a cost to each ton of carbon dioxide they emit, to help guide their investment decisions. This year companies disclosed using an internal price on carbon, a near tripling of the 150 companies in Meanwhile, an additional 582 companies say they expect to be using an internal price on carbon in the next two years. However, these efforts have not proved sufficient to adequately constrain emissions growth. On a likefor-like basis, direct ( Scope 1 ) emissions from the companies analyzed for this report grew 7% between 2010 and Scope 2 emissions, associated with purchased electricity, grew 11%. There are many factors that might explain this, not least economic growth but this rise in emissions is also considerably lower than would have been the case without the investments made by responding companies in emissions reduction activities. Good progress but it needs to accelerate Companies disclosing through CDP s climate change program have made substantial progress in understanding, managing and beginning to reduce their climate change impacts. However, if dangerous climate change is to be avoided, emissions need to fall significantly. Governments have committed to hold global warming to less than 2 C above pre-industrial levels. The Intergovernmental Panel on Climate Change calculates that to do this, global emissions need to fall between 41% and 72% by Although more companies are setting emissions targets, few of them are in line with this goal. In most cases, targets are neither deep enough nor sufficiently long term. More than half (51%) of absolute emissions targets adopted by the reporting sample extend only to 2014 or Two fifths (42%) run to 2020 but only 6% extend beyond that date. The figures for intensity targets are almost identical. This caution in target setting is likely the result of the uncertain policy environment: many companies will be awaiting the outcome of the Paris climate talks before committing to longer-term targets. However, a number of big emitters such as utilities Iberdrola, Enel and NRG have established longterm, ambitious emissions targets that are in line with climate science. These companies recognize that there is a business case for taking on such targets and setting a clear strategic direction, including encouraging innovation, identifying new markets and building long-term resilience. Many other companies have pledged to do so through the We Mean Business Commit to Action initiative. CDP aims to work along a number of fronts to help other companies, especially in high-emitting sectors, join them. With its partners, CDP has developed a sector-based approach to help companies set climate science-based emissions reduction targets. The Science Based Targets initiative uses the 2 C scenario developed by the International Energy Agency. Looking forward, CDP will encourage more ambitious target setting through our performance scoring, by giving particular recognition to science-based targets. We are planning gradual changes to our scoring methodology that will reward companies that are transitioning towards renewable energy sources at pace and scale. In addition, CDP is working with high-emitting industries to develop sector-specific climate change questionnaires and scoring methodologies, to ensure that disclosure to CDP, and the actions required to show leading performance, are appropriate for each sector. In 2015, we piloted a sector-specific climate change questionnaire and scoring methodology privately with selected oil and gas companies, ahead of their intended implementation in 2016.

11 The climate negotiations in Paris at the end of the year present a unique opportunity for countries around the world to commit to a prosperous, low carbon future. The more ambitious the effort, the higher the rewards will be. But Paris is a milestone on the road to a better climate, not the grand finale. Unilever And business needs a seat at the table in Paris The Paris climate agreement will, we hope, provide vital encouragement to what is a multi-decade effort to bring greenhouse gas emissions under control. It will hopefully give private sector emitters the confidence to set longer-term emissions targets aligned with climate change. Companies and their investors therefore will be, alongside national governments, arguably the most important participants in ensuring the success of the global effort to rein in emissions. Companies that have an opinion on a global climate deal are overwhelmingly in support: when asked if their board of directors would support a global climate change agreement to limit warming to below 2 C, 805 companies said yes, while 111 said no. However, a large number of respondents (1,075) stated they have no opinion, and 331 did not answer the question. This suggests either a lack of clarity around the official board position on the issue, or that many companies are not treating the imminent climate talks with the necessary strategic priority. Conclusion The direction of travel is clear: the world will need to rapidly reduce emissions to prevent the worst effects of climate change. And the political will is building to undertake those reductions. The majority of those reductions will need to be delivered by the corporate world creating both risk and opportunity. CDP and the investors we work with have played a formative role in building awareness of these risks and opportunities. Our data has helped build the business case for emissions reduction and inform investment decisions. The corporate world is responding with thousands of emissions reduction initiatives and projects. But the data also shows that efforts will need to be redoubled, by both companies and their investors, if we are to successfully confront the challenge of climate change in the years to come. A deeper dive into corporate environmental risk Working towards water stewardship Central to CDP s mission is communicating the progress companies have made in addressing climate change, and highlighting where risk may be unmanaged. To better do so, CDP has introduced sector-specific research for investors. This forward-looking research links environmental impacts directly to the bottom line and directs investors as to how they can engage with companies to improve environmental performance. The research flags topical environmental and regulatory issues within particular sectors, relevant to specific companies financial performance and valuation, and designed for incorporation into investment decisions. Sectors covered to date include automotive, electric utilities and chemicals. The research is intended to support engagement with companies, providing actionable company-level conclusions. To better equip investors in understanding carbon and climate risk, CDP is also developing further investor tools such as a carbon footprinting methodology, and is working continuously to improve the quality of our data. CDP has this year introduced the first evaluation and ranking of corporate water management, using scoring carried out by our lead water-scoring partner, South Pole Group. The questions in the water disclosure process guide companies to comprehensively assess the direct and indirect impacts that their business has on water resources, and their vulnerability to water availability and quality. Introducing credible scoring will catalyze further action. It will illuminate where companies can improve the quality of the information they report, and their water management performance. Participants will benefit from peer benchmarking and the sharing of best practice. Water scoring will follow a banded approach, with scores made public for those companies reaching the top leadership band. Scoring will raise the visibility of water as a strategic issue within companies and increase transparency on the efforts they are making to manage water more effectively. Furthermore, scoring will be used to inform business strategies, build supply chain resilience and secure competitive advantage. We hope that keeping score on companies and water will reduce the detrimental impacts that the commercial world has on water resources, ensuring a better future for all. 11

12 Turkey Overview ( ) Turkey Overview ( ) Turkey Analyzed responses (5) Market cap of analyzed companies US$m 51, ,409 Scope MtCO 2 e 20.7 MtCO 2 e Scope MtCO 2 e 2.3 MtCO 2 e Scope 1 like for like: 7 companies 2.8 MtCO 2 e 3.9 MtCO 2 e Scope 2 like for like: 7 companies 0.29 MtCO 2 e 0.20 MtCO 2 e the number in brackets refers to companies that responded after the deadline, or referred to a parent company. They are not included in analysis. Turkey has shown the largest percentage growth in the number of companies participating in CDP s climate program over the last five years, with 35 companies now disclosing two and a half times more than the 10 which disclosed in Meanwhile, the number of emission reduction activities they are undertaking has increased more than 300%. This is at least partly explained by the performance bands in Turkey performance bands in Turkey 3. Disclosure scores over time in Turkey* 100 In 2010 only 1 Turkish company in Global 500 was scored. They achieved a score of 81 B A - 1 D - 7 B - 7 C - 11 E - 1 No band Lowest Average Highest 4. Improving climate actions in Turkey % 40% 43% 40% 37% 30% 40% 47% 40% 47% 60% 70% 80% 93% 80% 87% 87% 83% Board or senior management responsibility for climate change Incentives for the management of climate change issues Engagement with policymakers on climate issues Intensity emissions reduction targets Absolute emission reduction targets Active emissions reduction initiatives Emissions data for 2 or more Scope 3 categories Scope 1 data independently verified Scope 2 data independently verified 12 (*) CDP Turkey results scored in 2011 for the first time. So there is no 2010 value.

13 250 % growth in the number of Turkish companies participating in CDP s climate program between 2010 and 2015 country s strong economic growth over recent years, and the increasing internationalization of its economy. Turkish companies perform largely in line with global averages in terms of carbon disclosure and performance, although they lag somewhat in terms of target setting and the verification of emissions data. They also report significant opportunities from climate change: Tire company Brisa Bridgestone, for example, cites a new concept tire that helps improve vehicle fuel efficiency and reduce emissions. Turkish companies appear particularly mindful of the physical risks posed by climate change. Nine in ten report physical climate exposures, compared with the global average of 79%. This is up from 70% in 2010, which itself was above the global average, then, of 59%. Given that only seven companies disclosed in both 2010 and 2015, emissions performance should be treated with caution. Scope 1 emissions have risen 39%, but Scope 2 emissions are down 30%. Garanti Bank has identified that one of the most significant areas that customers need support is development of innovative products for renewables. Consequently, Garanti Bank has included a longterm target in its strategy related to developing products and services that help catalyze the transition towards a more sustainable economy the technical and regulatory know-how accumulated in renewable energy continues to make Garanti Bank a preferred financing partner for investors in this field. T.Garanti Bankası 5.Proportion of 2015 companies and emissions by sector in Turkey % of responders Consumer Discretionary - 17% Financials - 23% IT - 3% Utilities - 7% Consumer Staples - 7% Healthcare - 0% Materials - 13% Energy - 0% Industrials - 27% Telecomms - 3% % of emissions Consumer Discretionary - 2% Financials - 1% IT - 0% Utilities - 6% Consumer Staples - 2% Healthcare - 0% Materials - 61% Energy - 0% Industrials - 27% Telecomms - 1% 13

14 Company Responses Overview - Turkey 2015 In 2015, CDP requested climate change information from BIST-100 companies, and also extended invitations to companies that responded to the questionnaire in previous years but are not included in BIST-100 index in CDP Turkey 2015 Climate Change Report presents the progress achieved by responding companies in reducing emissions, responding to climate related risks and opportunities, and mobilizing influence to manage climate change. Scoring in 2015 In 2015, company responses in Turkey were assessed by Deloitte Turkey both for disclosure and performance, according to the CDP scoring methodology. Highlights in 2015 Significant improvement in disclosure and transparency More progress is expected in external verification Better account of environmental risks to stabilize, maximize and grow shareholder return Increased targets identified by Turkish companies to reduce emission Raised awareness in terms of climate change related opportunities More than half of the initiatives disclosed is related to emission reduction and energy efficiency More should be done to decrease emissions in the high emitting sectors such as manufacturing and energy 14 Global success but it needs to accelerate There are 113 companies that achieved an A level performance globally. In order to achieve an A performance band, the company s response must be publicly available, there should be a certain amount of decrease in Scope 1 and 2 emissions of the respondent when compared to previous year s emission results and Scope 1 and Scope 2 emissions should be disclosed and independently verified by a third party. This year, T. Garanti Bankası is the only Turkish company that achieved an A performance. Considering that large emerging economies such as China, India and Brazil don t have any A performers, this is a notable achievement for Turkey. More should be done to decrease emissions in the other sectors such as manufacturing and energy. Therefore in the following years, we expect Turkish companies to increase the rate of third party verification on emissions. Also Turkish companies should initiate more aggressive projects and targets to reduce the emissions in the following years. All new cooler equipment purchases are to be 100 % HFC-free by end of 2015 (depending on the availability of the coolers). HFC gas; for eg. R 134-a was the most used gas in our system in The global warming potential (GWP) of this gas is We aim to reduce our emissions by using HFC-free gas of which GWP is with this program. Coca Cola İçecek Arçelik aims to reduce total eco2 emissions of its domestic production sites from 2010 (base year) to 2020 by 70% per sales revenue. Arçelik

15 Increased transparency and organizational trust The findings show considerable progress in respondents engagement with the climate issue, transparency in disclosing the climate risk and actions taken. There is a significant increase in the average disclosure points earned by respondents in 2015 when compared to information disclosed since This is a strong indication that more Turkish companies are taking action for more transparent climate change strategies and reporting. 1. Yearly Average Disclosure Points Furthermore, there is a significant increase in the rate of respondents that achieved disclosure points of 80 and above in The data shows significant improvements in commitment to the corporate management of climate change. What was a leading behaviour in 2011 is now a standard practice. Per the analysis in table 2, nearly 70% of the respondents achieved 80 points and above in 2015 where as in 2014, this rate was only 49%. 2. Rate of respondents that have 80 points and above 80% 70% 60% 50% 40% 30% 20% 10% 0%

16 Companies take better account of environmental risks to stabilize, maximize and grow shareholder return. In common with other developing countries, climate change poses both risks and opportunities for Turkey. The major risks are regulatory, reputational and change in precipitation extremes and droughts. Regulatory risks identified are mainly related to fuel/energy prices and taxes. Most commonly reported risks are related to increasing operational costs due to fuel and electricity prices, carbon taxes, energy performance certificate requirements of the buildings and energy consumption reduction targets set by Ministry of Energy and Natural Resources. 3. Major Types of Risks Fuel/energy taxes and other regulations Reputation Change in precipitation extremes Change in mean (average) temperature Changing consumer behaviour Cap and trade schemes International agreements Carbon taxes Change in temperature extremes Emission reporting obligations Other physical climate drivers 539= 39% 230= 20% 219= 19% 114= 14% 111= 11% 88= 8% 88= 7% 88= 7% 88= 7% 536= 36% 230= 23% 210= 21% 112= 19% 117= 17% 115= 15% 114= 15% 114= 14% 111= 14% 114= 13% 111= 11% Types of risks reported Companies raise awareness in terms of climate change related opportunities There are 39 regulation related opportunities identified by the respondents this year. It is followed by reputational risks of 20 and changing customer behavior of 19 opportunities. Most commonly reported opportunities are presented below: 4. Major Types of Opportunities Regulation Reputation Changing consumer behaviour Cap and trade schemes Change in temperature extremes International agreements Induced change in natural resource Change in mean (average) temperature Change in precipitation extremes and Types of Opportunities reported As jet kerosene is our main operational cost item, any taxes on fossil fuels will have a considerable effect on our operational expenses. As climate change is seen to be one of the major problems humanity is facing, fossil fuels will most likely be more and more expensive as they are the main source for human induced climate change. To be able to fund mitigation and adaptation studies governments may incur extra taxes on fossil fuels, which will in turn increase our operational expenses. Pegasus Due to increased public concern both in Turkey and in rest of the world, climate change is very important in managing corporate reputation. Today, it is critical that companies safeguard their reputations through effective communications with all their stakeholders about their environmental performance on climate change issue. Şişecam 16

17 If a binding agreement for GHG emission reduction commitments is made at the upcoming COP meetings in Paris, Turkey can not avoid making national emission reduction commitments. And such a commitment will eventually be reflected as sectoral emission reduction target to be enforced with a cap system for each industrial installation. During this process, several Turkish industrial sectors may have to reduce their emissions through low carbon technology investments or through offsetting their GHG emissions, in order to keep their emissions under the allowed threshold levels. This may bring opportunities by accelerating the demand for renewable energy and energyefficiency projects, which the company can finance. Türkiye Vakıflar Bankası It is expected within the next 3-5 years that the energy efficient inverter type air conditioners will be obligatory in the market. It means that the rest of the air conditioners will be phased out. And Ihlas Home Appliances may have the chance to increase its sales. Inverter type A/Cs are already in the product portfolio of Ihlas. The A/Cs are imported from outside the country. İhlas Ev Aletleri Most of the initiatives taken by companies are related to energy efficiency processes Companies have taken a series of common-sense steps to curb carbon pollution and other greenhouse gases through initiatives that drive energy efficiency and promote clean energy. In 2015, respondents disclosed 163 initiatives taken to have emission reduction and energy efficiency. However, 32% of the respondents did not set any targets to reduce emissions. More should be done to take action and responsibility in climate change. 5. Number of initiatives taken in 2015 Energy efficiency: Processes %71 Energy efficiency: Building services %23 Low carbon energy installation %17 Transportation: fleet %12 Behavioral change %8 Transportation: use %6 Out of 163 initiatives, 71 are related to energy efficiency processes incorporated to company policies and procedures such as: Reduction of lamp consumptions and increase in LED illumination Increase in alternative fuel usage such as natural gas Modernization of air conditioning systems, use of inverter type air conditioners Machine and equipment changes to provide saving energy Replacement in electrical equipment with efficient types Consolidation of servers in data centers. Shifting to new and energy efficient ATM machines and servers. When compared to 2014, there is a significant increase in the number of initiatives taken in transportation fleets such as: Selling the old trucks and transportation vehicles and replacing them with the new trucks to reduce CO2 emissions Technical optimization Establishing new distribution centers in order to reduce the distance travelled by distribution trucks Also there are several behavioral changes initiated in These changes follow the global trends such as: Reduction of office supplies use Reducing the number of cars that are used by middle level managers, and integrating more service buses for commuting Reduction in printed papers Energy efficiency and sustainability training to employees 17

18 2015 Leadership Criteria Each year companies that participate in CDP s climate change program are scored against two parallel assessment schemes: performance and disclosure. The performance score assesses the level of action, as reported by the company, on climate change mitigation, adaptation and transparency. Its intent is to highlight positive climate action as demonstrated by a company s CDP response. A high performance score signals that a company is measuring, verifying and managing its carbon footprint, for example by setting and meeting carbon reduction targets and implementing programs to reduce emissions in both its direct operations and supply chain. The disclosure score assesses the completeness and quality of a company s response. Its purpose is to provide a summary of the extent to which companies have answered CDP s questions in a structured format. A high disclosure score signals that a company provided comprehensive information about the measurement and management of its carbon footprint, its climate change strategy and risk management processes and outcomes. The highest scoring companies for performance and/ or disclosure enter the A List (Performance band A) and / or the Climate Disclosure Leadership Index (CDLI). Public scores are available in CDP reports, through Bloomberg terminals, Google Finance and Deutsche Boerse s website. In 2015 the climate change scoring methodology was revised to put more emphasis on action and as a result achieving A is now better aligned with what the current climate change scenario requires. CDP operates a strict conflict of interest policy with regards to scoring and this can be viewed at pdf What are the A List and CDLI criteria? To enter the A List, a company must: Make its response public and submit via CDP s Online Response System Attain a performance score greater than 85 Score maximum performance points on question 12.1a (absolute emissions performance) for GHG reductions due to emission reduction actions over the past year 4% or above in 2015) Disclose gross global Scope 1 and Scope 2 figures Score maximum performance points for verification of Scope 1 and Scope 2 emissions (having 70% or more of their emissions verified) Furthermore, CDP reserves the right to exclude any company from the A List if there is anything in its response or other publicly available information that calls into question its suitability for inclusion. CDP is working with RepRisk in 2015 to strengthen this background research. Note: Companies that achieve a performance score high enough to warrant inclusion in the A List, but do not meet all of the other A List requirements are classed as Performance Band A- but are not included in the A List. To enter the CDLI, a company must: Make its response public and submit via CDP s Online Response System Achieve a disclosure score within the top 10% of the total regional sample population* *Note: while it is usually 10%, in some regions the CDLI cut-off may be based on another criteria, please see local reports for confirmation. Communicating progress Central to CDP s mission is communicating the progress companies have made in addressing climate change, and highlighting where risk may be unmanaged. To better do so, CDP is changing how our climate performance scoring is presented, and we have introduced sector-specific research for investors. Banding performance scores Starting with water and forests in 2015 and including climate change and supply chain in 2016, CDP is moving to present scores using an approach that illustrates companies progress towards environmental stewardship. Each reporting company will be placed in one of the following bands: Disclosure measures the completeness of the company s response; Awareness measures the extent to which the company has assessed environmental issues, risks and impacts in relation to its business; Management measures the extent to which the company has implemented actions, policies and strategies to address environmental issues; Leadership looks for particular steps a company has taken which represent best practice in the field of environmental management. We believe that this approach will be clearer and easier to understand for companies, investors and other stakeholders. Water and forest scores will use this new presentation of banded scores in 2015, while the updated scoring methodology for climate change will be available in February 2016 with results in late

19 2015 Climate Leaders in Turkey CDP 2015 CLIMATE PERFORMANCE LEADERSHIP INDEX (CPLI)* - A LIST COMPANY T.Garanti Bankası A.Ş. Financials A CDP TURKEY 2015 CLIMATE DISCLOSURE LEADERSHIP INDEX (CDLI) T.Sınai Kalkınma Bankası A.Ş. Financials 99 Brisa Bridgestone Sabancı Lastik San.ve Tic.A.Ş. Consumer Discretionary 98 T.Garanti Bankası A.Ş. Financials 98 Turkcell İletişim Hizmetleri A.Ş. Telecommunication Services 97 Arçelik A.Ş. Consumer Discretionary 96 Gökhan Alpman, Partner, Deloitte Turkey Deloitte Turkey is delighted to be the 2015 sponsor of CDP Turkey Climate Change report as the scoring and the report writing partner. This year 46 companies responded to CDP. We congratulate those companies in addressing one of the society s and next generations most important challenge which is climate change and global warming. Stakeholders, including consumers, employees, investors and regulators, are demanding that organizations improve their sustainability performance. Going forward, in order to effectively compete, more businesses should think about a new world shaped by corporate social responsibility, stakeholder expectations and develop innovative ways to address them. The topic sustainability is complicated with several uncertainties in Turkey, and while the business impact of sustainability is real, most companies do not know where to begin or how to address the risks. A sustainability strategy is most effective when aligned and integrated with existing short term and long term strategic planning of the companies, and coordinated with a reasonable approach to the related risks and rewards. As more Turkish companies are starting to report on their climate change and sustainability efforts; effective controls and independent verification around gathering, maintaining, and presenting relevant data becomes a vital part of a mature reporting process. The Deloitte network is committed to driving societal change and promoting environmental sustainability. Working in innovative ways with government, non-profit organizations, and civil society, we are designing and delivering solutions that contribute to a sustainable and prosperous future for all. (*) CPLI is a global index which includes all A band performers from all countries (In total 113 in 2015) regardless of their market capitalization however the CDLI is calculated on a regional (Turkey) basis. 19

20 Company Responses Overview - Turkey GOVERNANCE AND STRATEGY Increasingly, companies in Turkey have stronger governance structures and strategies for climate change. This is reflected in increases in percentages associated with questions on senior level responsibility associated with climate change, integration of climate change into business strategy, and having a climate risk management procedure in place. %95 of the respondents stated that highest level of direct responsibility for climate change within their organization is senior level and above. 87% of the respondents have board oversight for climate change. CLIMATE CHANGE RISKS Responding Turkish companies appear particularly mindful of the physical risks posed by climate change. Nine in ten report physical climate exposures, compared with the global average of 79%. This is up from 70% in 2010, which itself was above the global average then of 59%. Among the companies that responded to this question in 2015, 95% identified climate change risks driven by changes in regulation, 61% identified risks of reputation, and 55% identified risks driven by changes in precipitation extremes and droughts. CLIMATE CHANGE OPPORTUNITIES Among the companies that responded to this question in 2015, 92% identified climate change opportunities driven by changes in regulation, 53% driven by changes in reputation, and 50% driven by changes in consumer behavior. Most commonly reported opportunities are presented on the right. EMISSIONS: SCOPE 1 AND SCOPE 2 In 2015, 89% of companies reported their Scope 1 and Scope 2 emissions. This represents a slight increase from 94% in However, a significant portion of respondents (58%) reported an increase in their emissions. On the positive side, 58% reported a decrease in Scope 1 and Scope 2 emissions. TARGETS Only 68% of companies have targets for reducing emissions from their core operations. However, this represents a slight increase from 53% in More should be done to decouple business growth from emissions growth as Turkey s economy is expected to grow in the near future. VERIFICATION 39% of the respondents indicated that Scope 1 and 2 emissions have been externally assured or assurance is underway. This represents a significant increase from 2014 (29%). Interest in verification is expected to grow given the new regulations on Measurement, Reporting and Verification (MRV) systems requiring companies in energy intensive sectors to get external verification in the near future. SCOPE 3 EMISSIONS In 2015, 71% of companies reported Scope 3 emissions representing a significant increase from 63% in 2014 and 42% in However, reporting on Scope 3 indirect emissions is still at a very early stage and hence companies are yet to build capacity to successfully assess and report on many of their impacts across their value chains. 71% of responding companies reported Scope 3 emissions 39% indicated that Scope 1 and Scope 2 emissions has been externally assured or assurance is underway 39% have an absolute emissions reduction target 68% have an emissions reduction target 39% VERIF 39% 58% reported an increase in Scope 1 and Scope 2 emissio 20

21 Company Responses Overview - Turkey GOVERNANCE AND STRATEGY Increasingly, companies in Turkey have stronger governance structures and strategies for climate change. This is reflected in increases in percentages associated with questions on senior level responsibility associated with climate change, integration of climate change into business strategy, and having a climate risk management procedure in place. %95 of the respondents stated that highest level of direct responsibility for climate change within their organization is senior level and above. 87% of the respondents have board oversight for climate change. CLIMATE CHANGE RISKS Responding Turkish companies appear particularly mindful of the physical risks posed by climate change. Nine in ten report physical climate exposures, compared with the global average of 79%. This is up from 70% in 2010, which itself was above the global average then of 59%. Among the companies that responded to this question in 2015, 95% identified climate change risks driven by changes in regulation, 61% identified risks of reputation, and 55% identified risks driven by changes in precipitation extremes and droughts. CLIMATE CHANGE OPPORTUNITIES Among the companies that responded to this question in 2015, 92% identified climate change opportunities driven by changes in regulation, 53% driven by changes in reputation, and 50% driven by changes in consumer behavior. Most commonly reported opportunities are presented on the right. EMISSIONS: SCOPE 1 AND SCOPE 2 In 2015, 89% of companies reported their Scope 1 and Scope 2 emissions. This represents a slight increase from 94% in However, a significant portion of respondents (58%) reported an increase in their emissions. On the positive side, 58% reported a decrease in Scope 1 and Scope 2 emissions. TARGETS Only 68% of companies have targets for reducing emissions from their core operations. However, this represents a slight increase from 53% in More should be done to decouple business growth from emissions growth as Turkey s economy is expected to grow in the near future. VERIFICATION 39% of the respondents indicated that Scope 1 and 2 emissions have been externally assured or assurance is underway. This represents a significant increase from 2014 (29%). Interest in verification is expected to grow given the new regulations on Measurement, Reporting and Verification (MRV) systems requiring companies in energy intensive sectors to get external verification in the near future. SCOPE 3 EMISSIONS In 2015, 71% of companies reported Scope 3 emissions representing a significant increase from 63% in 2014 and 42% in However, reporting on Scope 3 indirect emissions is still at a very early stage and hence companies are yet to build capacity to successfully assess and report on many of their impacts across their value chains. 71% of responding companies reported Scope 3 emissions 39% indicated that Scope 1 and Scope 2 emissions has been externally assured or assurance is underway 39% have an absolute emissions reduction target 68% have an emissions reduction target 39% VERIF 39% 58% reported an increase in Scope 1 and Scope 2 emissio 20

22 95% have board level or senior responsibility for climate change up from 91% in % integrate climate change into business strategy, up from 85% in % have climate risk management procedure in place, up from 82% in % 89% ICATION 71% SCOPE 3 Company Responses 2015 STRATEGY 87% RISKS 58% 47% 45% 42% 37% 50% 58% Reputation 47% Change in precipitation extremes and droughts 45% Change in mean temperature 42% Changing consumer behavior 37% International agreements 50% Fuel/energy taxes and regulations % of companies that reported risks from the most commonly reported categories TARGETS 68% 58% EMISSIONS 38% 89% 37% OPPORTUNITIES 21% 53% 18% 50% 50% Changing consumer behavior 53% Reputation 18% Change in temperature extremes 37% Cap and trade schemes % of companies that reported opportunities from the most commonly reported categories 21% International agreements ns 58% reported a decrease in Scope 1 and Scope 2 emissions 89% reported Scope 1 and Scope 2 emissions 21

23 CDP CDP Turkey Turkey 2015: 2015: Response Response Status Status Table Table Company Sector 2015 Score 2015 Response Status 2014 Response Status Permission status Disclosed Emissions Targets BIST 100 COMPANIES AFYON ÇİMENTO SANAYİ T.A.Ş. Materials 60 D AQ NR P int AKBANK T.A.Ş. Financials 79 C AQ AQ P abs int AKÇANSA ÇİMENTO SANAYİ VE TİCARET A.Ş. Materials 92 D AQ AQ P int AKENERJİ ELEKTRİK ÜRETİM A.Ş. Utilities 88 C AQ AQ P AKFEN HOLDİNG A.Ş. Industrials DP DP AKSA AKRİLİK KİMYA SANAYİİ A.Ş. Consumer Discretionary DP NR AKSA ENERJİ ÜRETİM A.Ş. Utilities NR X ALARKO HOLDİNG A.Ş. Industrials 17 AQ AQ NP ALBARAKA TÜRK KATILIM BANKASI A.Ş. Financials NR X ALKIM ALKALİ KİMYA A.Ş. Materials NR NR ANADOLU CAM SANAYİ A.Ş. (T.Şişe ve Cam Fabrikaları A.Ş.) Materials SA SA ANADOLU EFES BİRACILIK VE MALT SANAYİİ A.Ş. A.Ş. Consumer Staples DP DP ANADOLU HAYAT EMEKLİLİK A.Ş. Financials NR NR ANADOLU ISUZU OTOMOTİV SANAYİ VE TİCARET A.Ş. Industrials NR NR ARÇELİK A.Ş. Consumer Discretionary 96 B AQ AQ P abs int ASELSAN ELEKTRONİK SANAYİ VE TİCARET A.Ş. Industrials 95 B AQ AQ P abs AYGAZ A.Ş. Utilities NR NR BAGFAŞ BANDIRMA GÜBRE FABRİKALARI A.Ş. Materials DP AQ BEŞİKTAŞ FUTBOL YATIRIMLARI SANAYİ VE TİCARET A.Ş. Consumer Discretionary NR DP BİM BİRLEŞİK MAĞAZALAR A.Ş. Consumer Staples DP NR BİZİM TOPTAN SATIŞ MAĞAZALARI A.Ş. Consumer Staples NR NR BORN MANNESMANN BORU SANAYİ VE TİCARET A.Ş. Materials NR DP BRİSA BRIDGESTONE SABANCI LASTİK SAN.VE TİC.A.Ş Consumer Discretionary 98 B AQ AQ P abs int ÇELEBİ HAVA SERVİSİ A.Ş. Industrials 70 D AQ AQ NP ÇİMSA ÇİMENTO SANAYİ VE TİCARET A.Ş. Materials 93 C AQ AQ P int COCA-COLA İÇECEK A.Ş. Consumer Staples 94 B AQ AQ P abs int DOĞAN ŞİRKETLER GRUBU HOLDİNG A.Ş. Industrials 31 AQ NR NP DOĞUŞ OTOMOTİV SERVİS VE TİCARET A.Ş. Consumer Discretionary NR DP ECZACIBAŞI YATIRIM HOLDİNG ORTAKLIĞI A.Ş. Industrials NR NR EGE ENDÜSTRİ VE TİCARET A.Ş. Consumer Discretionary NR X EİS ECZACIBAŞI İLAÇ, SINAİ VE FİNANSAL YATIRIMLAR SANAYİ VE TİCARET A.Ş. Health Care NR NR 22

24 Company Sector 2015 Score 2015 Response Status 2014 Response Status Permission status Disclosed Emissions Targets BIST 100 COMPANIES ENKA İNŞAAT VE SANAYİ A.Ş. Industrials NR NR EREĞLİ DEMİR VE ÇELİK FABRİKALARI T.A.Ş. Materials DP NR FENERBAHÇE SPORTİF HİZMETLER SANAYİ VE TİCARET A.Ş. Consumer Discretionary NR NR FİNANSBANK A.Ş. Financials NR X FORD OTOMOTİV SANAYİ A.Ş. Consumer Discretionary NR DP GALATASARAY SPORTİF SINAİ VE YATIRIMLAR A.Ş. Consumer Discretionary NR NR GÖLTAŞ GÖLLER BÖLGESİ ÇİMENTO SAN. VE TİC.A.Ş. Materials NR NR GOODYEAR LASTİKLERİ T.A.Ş. Consumer Discretionary NR DP GÖZDE GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş. Financials NR NR GSD HOLDİNG A.Ş. Financials NR NR GÜBRE FABRİKALARI T.A.Ş. Materials NR NR HÜRRİYET GAZETECİLİK VE MATBAACILIK A.Ş. A.Ş. Consumer Discretionary DP NR İHLAS HOLDİNG A.Ş. Industrials 30 AQ NR P İPEK DOĞAL ENERJİ KAYNAKLARI ARAŞTIRMA VE ÜRETİM A.Ş. Energy NR NR İTTİFAK HOLDİNG A.Ş. Industrials NR NR İZMİR DEMİR ÇELİK SANAYİ A.Ş. Materials NR NR KARDEMİR KARABÜK DEMİR ÇELİK SANAYİ VE TİCARET A.Ş. Materials 72 E AQ AQ NP KARSAN OTOMOTİV SANAYİİ VE TİCARET A.Ş. Consumer Discretionary DP DP KARTONSAN KARTON SANAYİ VE TİCARET A.Ş. Materials DP DP KOÇ HOLDİNG A.Ş. Industrials NR NR KONYA ÇİMENTO SANAYİİ A.Ş. Materials NR NR KOZA ALTIN İŞLETMELERİ A.Ş. Materials NR NR KOZA ANADOLU METAL MADENCİLİK İŞLETMELERİ A.Ş. Materials NR NR LOGO YAZILIM SANAYİ VE TİCARET A.Ş. Information Technology DP X MENDERES TEKSTİL SANAYİ VE TİCARET A.Ş. Consumer Discretionary DP X METRO TİCARİ VE MALİ YATIRIMLAR A.Ş. Consumer Staples NR NR MİGROS TİCARET A.Ş. Consumer Staples 82D AQ DP NP NET TURİZM TİCARET VE SANAYİ A.Ş. Consumer Discretionary NR NR NETAŞ TELEKOMÜNİKASYON A.Ş. Information Technology 61D AQ AQ NP NUH ÇİMENTO SANAYİ A.Ş. Materials NR X OMV PETROL OFİSİ A.Ş. (OMV) Energy SA SA 23

25 Company Sector 2015 Score 2015 Response Status 2014 Response Status Permission status Disclosed Emissions Targets BIST 100 COMPANIES OTOKAR OTOMOTİV VE SAVUNMA SANAYİ A.Ş. Industrials NR NR PARK ELEKTRİK ÜRETİM MADENCİLİK SANAYİ VE TİCARET A.Ş. Materials NR NR PEGASUS HAVA TAŞIMACILIĞI A.Ş. Industrials 93B AQ NR P int PETKİM PETROKİMYA HOLDİNG A.Ş. Materials DP AQ SABANCI HOLDİNG A.Ş. Financials 94C AQ DP NP abs SASA POLYESTER SANAYİ A.Ş. Materials NR NR ŞEKERBANK T.A.Ş. Financials 89D AQ AQ P int SELÇUK ECZA DEPOSU TİCARET VE SANAYİ A.Ş. Health Care NR X SODA SANAYİ A.Ş. (T.Şişe ve Cam Fabrikaları A.Ş.) Materials SA X T. İŞ BANKASI A.Ş. Financials DP NR T.GARANTİ BANKASI A.Ş. Financials 98A AQ AQ P int T.SINAİ KALKINMA BANKASI A.Ş. A.Ş. Financials 99C AQ AQ P abs T.ŞİŞE VE CAM FABRİKALARI A.Ş. Industrials 91C AQ AQ P TAT GIDA SANAYİ A.Ş. Consumer Staples DP NR TAV HAVALİMANLARI HOLDİNG A.Ş. Industrials 89C AQ AQ P int TEKFEN HOLDİNG A.Ş. Industrials NR NR TEKNOSA İÇ VE DIŞ TİCARET A.Ş. Consumer Discretionary NR NR NP TEKSTİL BANKASI A.Ş. Financials NR NR TESCO KİPA (Tesco) Consumer Staples SA SA TOFAŞ TÜRK OTOMOBİL FABRİKASI A.Ş. Consumer Discretionary 93B AQ AQ P abs int TRAKYA CAM SANAYİİ A.Ş. (T.Şişe ve Cam Fabrikaları A.Ş.) Industrials SA SA TÜMOSAN MOTOR VE TRAKTÖR SANAYİ A.Ş. Industrials NR X TÜPRAŞ-TÜRKİYE PETROL RAFİNERİLERİ A.Ş. Energy NR NR TURCAS PETROL A.Ş. Energy NR NR TÜRK EKONOMİ BANKASI A.Ş. Financials NR AQ TÜRK HAVA YOLLARI A.O. Industrials NR DP TÜRK TELEKOMÜNİKASYON A.Ş. Telecommunication Services NR DP TÜRK TRAKTÖR VE ZİRAAT MAKİNELERİ A.Ş. Industrials NR DP TÜRK TUBORG BİRA VE MALT SANAYİİ A.Ş. Consumer Staples NR X TURKCELL İLETİŞİM HİZMETLERİ A.Ş. Telecommunication Services 97C AQ AQ P abs TÜRKİYE HALK BANKASI A.Ş. Financials 93C AQ AQ P 24

26 Company Sector 2015 Score 2015 Response Status 2014 Response Status Permission status Disclosed Emissions Targets TÜRKİYE VAKIFLAR BANKASI T.A.O. Financials 91C AQ DP P int ÜLKER BİSKÜVİ SANAYİ A.Ş. Consumer Staples NR NR VESTEL BEYAZ EŞYA SANAYİ VE TİCARET A.Ş. Consumer Discretionary 62D AQ AQ NP abs VESTEL ELEKTRONİK SANAYİ VE TİCARET A.Ş. Consumer Discretionary 95B AQ AQ P abs YAPI VE KREDİ BANKASI A.Ş. Financials NR DP YAZICILAR HOLDİNG A.Ş. Industrials NR NR ZORLU ENERJİ ELEKTRİK ÜRETİM A.Ş. Utilities 92C AQ AQ NON-BIST 100 COMPANIES (*) P BOYNER BÜYÜK MAĞAZACILIK A.Ş. Consumer Discretionary 68D AQ AQ NP int DURAN DOĞAN BASIM VE AMBALAJ A.Ş. Materials AQ*L AQ NP abs EKOTEN TEKSTİL SANAYİ VE TİCARET A.Ş. Consumer Discretionary 91B AQ AQ P abs int HAVAALANLARI YER HİZMETLERİ A.Ş. (HAVAŞ) Industrials 71C AQ X NP int İHLAS EV ALETLERİ İMALAT SANAYİ VE TİCARET A.Ş. Consumer Discretionary 57D AQ AQ P abs MONDİ TİRE KUTSAN KAĞIT VE AMBALAJ SANAYİ A.Ş. (Mondi PLC) Materials SA SA PINAR SÜT MAMULLERİ SANAYİİ A.Ş. Consumer Staples 95B AQ X NP SUN TEKSTİL SANAYİ VE TİCARET A.Ş. (Ekoten Tekstil) Consumer Discretionary SA SA int YÜKSEL İNŞAAT A.Ş. Industrials 95C AQ AQ P abs YÜNSA YÜNLÜ SANAYİ VE TİCARET A.Ş. Consumer Discretionary 92B AQ AQ P abs ZORLU DOĞAL ELEKTRİK ÜRETİM Utilities 90C AQ AQ P (*) Companies listed but BIST-100 drop-out and/or companies who voluntarily respond to CDP. KEY TO RESPONSE STATUS TABLE (AQ) Answered questionnaire (NR) No response (DP) Declined to Participate (X) Company was not included in any CDP samples in that year (SA) Company is either a subsidiary or has merged during the reporting process. See company in brackets for further information on company status. (NP) Non-public (P) Public Disclosed Scope 1 Emissions Disclosed Scope 2 Emissions Disclosed Scope 3 Emissions abs Absolute targets int Intensity targets CDLI Turkey Leader CPLI Leader 25

27 The Climate A List Company Country Company Country Consumer Discretionary Bank of America Best Buy Co., Inc. BNY Mellon BMW AG Germany CaixaBank Spain Coway Co Ltd South Korea Citigroup Inc. Fiat Chrysler Automobiles NV Italy Credit Suisse Switzerland Las Vegas Sands Corporation Dexus Property Group Australia LG Electronics South Korea Foncière des Régions France Melia Hotels International SA Spain Grupo Financiero Banorte SAB de CV Mexico NH Hotel Group Spain Host Hotels & Resorts, Inc. Nissan Motor Co., Ltd. Japan ING Group Netherlands Sky UK Limited United Kingdom Intesa Sanpaolo S.p.A Italy Sony Corporation Japan Investa Office Fund Australia Wyndham Worldwide Corporation Investec Limited South Africa YOOX SpA Italy Kiwi Property Group New Zealand Macerich Co. Consumer Staples MAPFRE Spain Asahi Group Holdings, Ltd. Japan Nedbank Limited South Africa Brown-Forman Corporation Principal Financial Group, Inc. Diageo Plc United Kingdom Raiffeisen Bank International AG Austria J Sainsbury Plc United Kingdom Shinhan Financial Group South Korea Kesko Corporation Finland Simon Property Group L'Oréal France Standard Chartered United Kingdom Nestlé Switzerland State Street Corporation Philip Morris International T.GARANTİ BANKASI A.Ş. Turkey SABMiller United Kingdom The Hartford Financial Services Group, Inc. Suntory Beverage & Food Unilever plc Japan United Kingdom Health Care Roche Holding AG Switzerland Energy Galp Energia SGPS SA Portugal Industrials PTT Exploration & Production Public Company Limited Thailand Abengoa Carillion Spain United Kingdom Financials CNH Industrial NV United Kingdom 26

28 2015 Company Country Company Country CSX Corporation Hewlett-Packard Dai Nippon Printing Co., Ltd. Japan Hitachi, Ltd. Japan Deutsche Bahn AG* Germany Juniper Networks, Inc. Deutsche Post AG Germany LG Innotek South Korea FERROVIAL Spain Microsoft Corporation Huber + Suhner AG Switzerland Samsung Electro-Mechanics Co., Ltd. South Korea Hyundai E&C South Korea Samsung Electronics South Korea Kingspan Group PLC Ireland Kone Oyj Finland Materials Obrascon Huarte Lain (OHL) Spain BillerudKorsnäs Sweden Pitney Bowes Inc. Givaudan SA Switzerland Raytheon Company Harmony Gold Mining Co Ltd* South Africa Royal BAM Group nv Netherlands International Flavors & Fragrances Inc. Royal Philips Netherlands Kumba Iron Ore South Africa Samsung C&T South Korea Sealed Air Corp. Samsung Engineering South Korea Symrise AG Germany Schneider Electric France The Mosaic Company Senior Plc Shimizu Corporation United Kingdom Japan Telecommunication Services Siemens AG Germany Belgacom Belgium Stanley Black & Decker, Inc. KT Corporation South Korea United Technologies Corporation LG Uplus South Korea Sprint Corporation Information Technology Swisscom Switzerland Accenture Ireland Telefonica Spain Adobe Systems, Inc. Telenor Group Norway Alcatel - Lucent Apple Inc. France Utilities Atos SE France ACCIONA S.A. Spain Autodesk, Inc. E.ON SE Germany Cisco Systems, Inc. EDP - Energias de Portugal S.A. Portugal EMC Corporation Entergy Corporation Google Inc. Iberdrola SA Spain *Deutsche Bahn responded through Mittelstand program and is not included in analysis *Harmony Gold Mining is not part of analysis sample 27

29 Commit to Action This year CDP and We Mean Business are inviting companies to look beyond their CDP disclosures and commit to leadership through ambitious climate action. In 2015, there is a unique opportunity for the business community to help safeguard its future profitability and sustainability, with the UN Climate Change Conference in Paris just weeks away. To maximize the chance of reaching a global agreement on climate, it is crucial that a message of business leadership reaches governments and policymakers. CDP is offering companies a platform to accomplish this. Alongside our We Mean Business Coalition partners, we invite companies to commit to a set of innovative and practical climate initiatives. Leveraging the power of businesses, we will also work with companies to develop business and technology solutions to the challenges that climate change presents. Over 265 companies have made over 520 commitments, representing over US$7 trillion market cap as of November Join the growing number of companies that have already taken steps to safeguard their future prosperity by visiting The Climate Commitments Commit to adopt a science-based emissions reduction target Commit to procure 100% of electricity from renewable sources Commit to removing commodity-driven deforestation from all supply chains Commit to reduce short-lived climate pollutant emissions Commit to responsible corporate engagement in climate policy Commit to put a price on carbon Commit to report climate change information in mainstream reports as a fiduciary duty Committed companies in Turkey AKÇANSA ÇİMENTO SANAYİ VE TİCARET A.Ş. ARÇELİK A.Ş. ÇİMSA ÇİMENTO SANAYİ VE TİCARET A.Ş. T.GARANTİ BANKASI A.Ş. T.SINAİ KALKINMA BANKASI A.Ş. TAV HAVALİMANLARI HOLDİNG A.Ş. 28

30 Notes 29

31 30 Notes

32 CDP Partner Main Sponsor Scoring and Report Writing Partner CDP Turkey 2015 Report has been made carbon neutral by MyClimate Turkey neutral Printed Matter No myclimate The Climate Protection Partnership Please note: The selection of analyzed companies in this report is based on market capitalization of regional stock indices whose constituents change over time. Therefore the analyzed companies are not the same in 2010 and 2015 and any trends shown are indicative of the progress of the largest companies out of or entered a stock index. Like for like analysis on emissions for sub-set of companies that reported in both 2010 and 2015 is included for clarity. Some dual listed companies are present in more than one regional stock index. Companies referring to a parent company response, those responding after the deadline and self-selected voluntary responding companies are not included in the analysis. For more information about the companies requested to respond to CDP s climate change program in 2015 please visit: Important Notice The contents of this report may be used by anyone providing acknowledgement is given to CDP Worldwide (CDP). This does not represent a license to repackage or resell any of the data reported to CDP or the contributing authors and presented in this report. If you intend to repackage or resell any of the contents of this report, you need to obtain express permission from CDP before doing so. Deloitte Turkey, Sabanci University and CDP have prepared the data and analysis in this report based on responses to the CDP 2015 Climate Change information request. No representation or warranty (express or implied) is given by Deloitte Turkey, Sabanci University or CDP as to the accuracy or completeness of the information and opinions contained in this report. You should not act upon the information contained in this publication without obtaining specific professional advice. To the extent permitted by law, Deloitte Turkey, Sabanci University and CDP do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it. All information and views expressed herein by CDP and/or Deloitte Turkey, and/or Sabanci University is based on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest commentaries where included in this report reflect the views of their respective authors; their inclusion is not an endorsement of them. Deloitte Turkey, Sabanci University and CDP and their affiliated member firms or companies, or their respective shareholders, members, partners, principals, directors, officers and/or employees, may have a position in the securities of the companies discussed herein. The securities of the companies mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates. CDP Worldwide and CDP refer to CDP Worldwide, a United Kingdom company limited by guarantee, registered as a United Kingdom charity number CDP Worldwide. All rights reserved. DOI: /SU_SOM_WP URL: 31

33 CDP Contacts Sue Howells Daniel Turner Head of Disclosure James Hulse Head of Investor Initiatives Antigone Theodorou Director, Global Operations CDP 3rd Floor, Quadrant House 4 Thomas More Square Thomas More Street London E1W 1YW United Kingdom Tel: +44 (0) [email protected] Partner Contacts Melsa Ararat Director Mirhan Köroğlu Göğüş Projects Manager Sabancı University Orhan Tuzla Istanbul Turkey Tel: +90 (0) cdpturkey.sabanciuniv.edu [email protected] Report Writer Contacts Mirhan Köroğlu Göğüş CDP Turkey Neslihan Beyhan Deloitte Turkey Melsa Ararat CDP Turkey Gökhan Alpman Deloitte Turkey Main Sponsor Scoring and Report Writing Partner 32