Arçelik A.Ş. Sustainability Report 2011
Arçelik A.Ş. Sustainability Report 2011
Arçelik A.Ş. Sustainability Report 2011
- No tags were found...
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>Sustainability</strong> Performance <strong>2011</strong>SYSTEMSOCIAL DEVELOPMENTCorporateOrganizationSustainableGrowthGlobalOrganizationPEOPLEInnovationTarget Market;the GlobePRODUCTSUPPLYWe integrate our sustainability strategy focusedon five main dimensions; system, people, supply,product and social development into ourbusiness objectives. 4
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We Form Efficient and Sustainable Business Processes• Through 173 energy efficiency projects conducted; we have saved 109,516 GJ of energy.• Reduced 11,090 tons CO2 of GHG emissions.• We have reduced the chemical consumption of the wastewater treatment process of Washing MachinePlant by 34 tons as a result of improvement studies.• We have recovered 96% of the wastes emerged in production plants.We Take Strenght From Our Global Organization• We have increased our employee number to 19,213* with new job opportunities.• We have conducted 306,743 hours of employee training.• We have conducted 51,464 hours of occupational health and safety trainings.• We have improved our accident frequency rate by 32% and accident gravity rate by 8% in comparison with2010.We Develop Sustainable Supply Processes• We have worked with more than 1,400 suppliers for direct material purchases.• Region-wise, we have realized 46% of direct material purchases from Turkey.• We launched the Supplier Portal project.• We managed 2 billion Euros of purchasing volume.• We conducted the Beko Supplier Day in China with 300 participants from 7 countries and 20 companies.• We formed Supplier Development Unit in order to support the development of suppliers and to executejoint projects more effectively.We Offer Environment Friendly, Innovative Products Which Make Life Easierand Excellent Services to Our Consumers• We have spared 18,125,320 TRY to R&D investment and spending to develop environmental-friendly products.• We have developed the first A++ dishwashing machine which is the least water consuming machine of itsclass with 6 liters of water consumption.• We have designed and produced 4 new A+++ energy level refrigerators.• We have started the production of drying machines which consumes 50% less energy in 7 kg A class.• We have produced the least energy consuming oven of the world CSM 62520 DWL.• We have increased the A and B class product ratio in product portfolio to 45% in total production.We Support Social Development• We have provided scholarships to 590 students within the scope of Koç Group's Vocational Training: Acrucial matter for the nation project. We have initiated Electrical Household Appliances Technical TrainingProgram in 4 vocational high schools.• We have reached 200,000 students in 300 boarding schools at 60 cities with Standing United for EducationProgram.• Our employees have made 6,637 units of blood donation within the scope of National Blood DonationCampaign of For My Country project.• We continued our support for sports.*Total number of employees excluding Defy Appliances Ltd.5
<strong>Sustainability</strong> Journey• We adopted Capital Markets Board of Turkey CGP (Corporate Governance Principles) as abenchmark to evaluate our performance.• We started to publish CGP Compliance <strong>Report</strong> both in Annual <strong>Report</strong>s and our website.• Packaging waste compliance in Turkey before the regulations were published.• We signed the Code of Conduct issued by CECED. ( European Committee of DomesticEquipment Manufacturers)• We improved and expand university - industry cooperation studies.• We redefined HR policy and procedures according to UNGC; published Arçelik HR Policyand Code of Ethics and Business Conduct and shared it with all our employees.• Start of Lean 6 Sigma implementations.• Initiated “Work Life Evaluation and Improvement” survey practices in our internationalmanufacturing sites besides Turkey.• We published our first <strong>Sustainability</strong> <strong>Report</strong>.• Full RoHS compliance in Turkey before the regulations entered into force.• Arçelik Call Center was entitled as the Best Call Center in its category.• According to Nielsen Brand Survey, Arçelik became the first brand coming to mind and thebrand to which the consumer feels closest for the last decade.• We published “Arçelik Disclosure Policy”.• We received our first corporate governance rating as 8.21 out of 10.• We restructured our OHS organization.• We restructured our HR Department in order to increase efficiency in international operations.• We published 2008-2009 Arçelik <strong>Sustainability</strong> <strong>Report</strong> in GRI C level. <strong>Report</strong> according toGRI G3 Principles.• Our corporate governance rating has been raised to 8.55 out of 10.• After our plant in Russia has been certified to ISO 14001, our certified plant ratio reached to 100%.• We achieved to rank at the first place in the “Management” category of the "Turkey Program" of the“European Business Awards for the Environment” and we became one of the top three in the"European Program" of the same award programme. Thus, for the first time, a non-EU countrycompany has succeeded in being a finalist.• An agreement between our Company and Turkish Ministry of Energy, UNDP and TURKBESD forcooperation on “Market Transformation of Energy Efficient Appliances” campaign in Turkey.• Arçelik A.fi. <strong>Sustainability</strong> <strong>Report</strong> was published in compliance with Global <strong>Report</strong>ing Initiative principlesat B+ level.• Our corporate governance rating increased to 8.59 out of 10.• We celebrated the 20 th year of our Research and Development Department.• 7 different R&D centers of Arçelik A.fi. located in different locations was granted by Turkish RepublicMinistry of Industry and Commerce as “R&D Center Certificate”.• Arçelik A.fi was ranked as the 95 th company in WIPO's list of “the top 500 patent filling applicant”companies.• We have signed 2 o C Challenge Communique as a member and term spokesperson of The TurkishClimate Platform of the Corporate Leaders Group and represented Turkey in UN's 17 th Climate ChangeConference.• Arctic S.A. was granted by Japanese public institution JIPM the “Award for Excellence in Consistent TPMCommitment” becoming the first company in Romania to receive this award.• We earned the Verification Certificate given by the British Standards Institution (BSI), an internationalindependent accredited organization, by calculating the company's greenhouse gas emissions inaccordance with the requirements of the ISO 14064-1, which aims at measuring, quantifying and reducinggreenhouse gas emissions.6
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>7
About Arçelik A.fi.Founded in 1955, Arçelik A.fi. operates in consumerdurables and consumer electronics sectors with itsproduction, marketing and after-sales services. Arçelik A.fi.belongs to the largest conglomerate in Turkey, Koç Group,which operates in industries - energy, automotive, consumerdurable goods, finance. Koç Group is among the first 250companies of Fortune Global 500 List in <strong>2011</strong> and is theonly Turkish company in this list.Arçelik A.fi. has 14 production plants throughout the world;in Turkey, Romania, Russia and China. The Companyprovides products and services to its consumers in morethan 100 countries with sales and marketing offices in 20countries and 10 brands (Arçelik, Beko, Grundig, Defy,Altus, Blomberg, Elektrabregenz, Arctic, Leisure, Flavel).While maintaining its leadership in white goods, airconditioning and LCD TVs in Turkey, Arçelik A.fi. continuesits rapid growth in the global arena. Arçelik A.fi. is the thirdlargest company in its sector in Europe. The Company'sBeko brand is one of the top 3 brands in Europe in whitegoods sector. Aside from its domestic leadership,Arçelik A.fi. is also the leader in Romania with its Arcticbrand, and South Africa with its Defy brand.Arçelik A.fi. is one of the key players of its sector in Turkeyand abroad thanks to pioneering and environmentallyfriendlyproducts produced with its own R&D, cutting-edgetechnology, its global brands, strong work force, largenetwork of authorized dealers, services and suppliers.Arçelik A.fi. collects several awards from internationallyacclaimed institutions thanks to its innovative technology,high quality products and production plants. In <strong>2011</strong>, ArçelikA.fi. achieved a consolidated turnover of 8.4 billion Turkishlira and obtained an international sales volume of 4.4 billionTurkish lira.Being the clear leader in patent applications in Turkey,Arçelik A.fi. holds more than one third of the internationalpatent applications to WIPO (World Intellectual PropertyOrganization) that are originating from Turkey. Arçelik A.fi.is the only Turkish company, among the first 500 PCT(Patent Cooperation Treaty) filing companies listed by theWorld Intellectual Property Organization, ranking 95 th .Arçelik A.fi., in line with its corporate vision "Respects theGlobe, Respected Globally" focuses on the importance ofbecoming an ever-growing global brand, and developingenvironmentally-friendly technologies by using naturalresources effectively.Arçelik A. fi. continues to manufacture energy and waterefficient products with a competitive edge and pioneeringproducts including the "first"s and "most"s in the sector,thanks to the technological capacity reached as a result ofa 20 years of expertise in R&D.With more than half a century of experience in the industry,Arçelik A.fi. has consistently contributed to “SustainableDevelopment” by pioneering social and environmentalactivities in countries where it operates, in addition tocreating economic value through employment, growth andadded value.For further information please visit: www.arcelikas.comNet sales(TRY Million)Regional Distributionof Net SalesNet Sales by ProductGroup1000080008,437Million Euro <strong>2011</strong>Million Euro <strong>2011</strong>60006,692 6,8526,5926,9364000200002007 20082009 2010<strong>2011</strong>Europe1,437Turkey1,712CustomerElectronics625Other614Net sales - TurkeyNet sales - International(TRY Million)(TRY Million)50005000400030002000100003,428 3,420 3,170 3,4182007 2008 2009 20103,977<strong>2011</strong>400030002000100003,264 3,4322007 20083,422 3,5192009 20104,460<strong>2011</strong>Other484White Goods2,3948
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>(%)35302520100Gross Profit Margin27.5%2007HeadquartersTurkey/‹stanbulProduction Plants - TurkeyEskiflehir,Turkey‹stanbul, Tuzla,Turkey‹stanbul, Beylikdüzü,TurkeyBolu, TurkeyAnkara,TurkeyTekirda¤, Çerkezköy,TurkeyEskiflehir,TurkeyTekirda¤, Çerkezköy,Turkey28.4%200833%200929.8%201030.1%<strong>2011</strong>(%)14129630Refrigerator PlantWashing Machine PlantElectronics PlantCooking Appliances PlantDishwasher PlantElectric Motors PlantCompressor PlantTumble Dryer PlantEarnings before Interest, Taxesand Amortization9.9%8.8%14.1%12%2007 2008 2009 201010.2%<strong>2011</strong>Production Plants - InternationalRomania SC Arctic SARusia Beko LLCChinaChangzhou Beko Electrical Appliances Co. Ltd.South Africa Jacobs Cooking Appliances and Tumble Dryer PlantSouth Africa Ezakheni, Ladysmith Cooling Appliances PlantSouth Africa East London, Refrigerator PlantInternational Sales and MarketingGermanyBeko Deutschland GmbHAustriaElektra Bregenz AGCzech Republic Beko S.A. CeskoChina (Shangai) Beko Shanghai Trading Co.FranceBeko France S.A.UKBeko Plc.SpainBeko Electronics Espana S.L.ItalyBeko Italy S.r.lSlovakiaBeko Slovakia S.R.O.PolandBeko S.A.The Netherlands Grundig Multimedia B.V.*AustraliaBeko A and NZ Pty Ltd.TaiwanArdutch B.V.RomaniaSC Arctic SARussiaBeko LLCChinaChangzhou Beko Electrical Appliances Co. Ltd.South Africa Defy Appliances (PTY) Ltd. **EgyptBeko LLCUkraineBeko LLC* Established in Holland, Grunding Multi Media is a Holding company with 10 subsidiaries.** Defy Appliances (PTY) Ltd.'s headquarters is located in the city of Durban, Jacobs, USA.Operating Profit MarginNet Profit MarginReturn on EquityReturn on Assets(%)(%)(%) (%)1011.4%1025108647.8%6.4%9.2%7.7%8647.6%7.9%6.4%20151021.2%18.8%14.8%8647.6%8.4%6.4%202007 2008 2009 2010<strong>2011</strong>202.1%0.1%2007 2008 2009 2010<strong>2011</strong>506.4%0.3%2007 2008 2009 2010<strong>2011</strong>202.1%0.1%2007 2008 2009 2010<strong>2011</strong>9
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We Form Efficient andSustainable Business ProcessesAs Arçelik A.fi. we attribute our globally respected position to our profitable, long term andsustainable growth as we enlarge our economical sphere and create added value forstakeholders while leaving behind a positive track. The shortest way to this end is to formyour working principles, operation system and processes in the direction of accurate objectivesright from the beginning and not to compromise your goals.Our working culture, which is shaped by a sense of responsibility, is the most valuable legacythat leads us to success since our foundation. In order to foster this legacy constantly, wemake use of a governance model shaped around profound ethics and managementunderstandings; starting from the first phases of investment, we form efficient andsustainable business processes not only in terms of operations and profitability but alsoconsidering their social, economic and environmental impacts. The efficient use of resourcessuch as materials, energy and water, which are the focal points of improvements realizedin our business processes, is the major component of our strategy in combating the primalconcern of our times, climate change.11
SystemRobust Governance for Sustainable GrowthAs a member of Koç Group, one ofthe long-established organizations inTurkey, the most valuable legacy thatArçelik A.fi. carries on from its morethan half a century long history to thepresent, is the continuous developmentand institutionalization oriented workingculture with superior ethics andmanagement approach. Our goal isto enrich this legacy, which enabledus to reach our current status viamodern management principles andsystems and carry it into the future. Toreach goal, we operate with a robustcorporate governance a responsibleunderstanding of sustainability andsupreme standards and systems.Corporate GovernanceThe principles defining our corporategovernance understanding, whichaims to sustain and improve ourmanagerial success and respect fromour stakeholders, are; accountability,responsibility, equality, openness andtransparency. We continuouslydevelop the organization and practicesthat we form in the light of theseprinciples, and increase our corporategovernance performance. The mostsignificant indicator of the progresswe made in this field is theimprovements of our corporategovernance rating from 82.09% in 2009to 85.53% in 2010 and to 85.91% in<strong>2011</strong>, and the pursuant acceptanceto the ISE Corporate GovernanceIndex.Arçelik A.fi.'s management structureis a single stage system based on aBoard of Directors selected by theGeneral Assembly amongshareholders. The only executivemember in the Board of Directors isthe General Manager and there areno independent members. Allmembers of Arçelik A.fi. Board ofDirectors are responsible for theeconomic performance of thecompany. The executive responsibilityfor the social and environmentalperformance on the other hand,belongs to the General Manager. Theoffices of the General Manager who isat the top of executive body and of theChairman of the Board are held byseparate individuals.In order to conduct its duties andresponsibilities in a healthy manner,Arçelik A.fi. Board of Directors benefitsfrom various specialty committees.Forthis purpose, there is the AuditCommittee, comprised of two nonexecutiveBoard members.There is a Corporate GovernanceCommittee which presentssuggestions to the Board of Directorsregarding compliance with andimprovements upon CorporateGovernance Principles and iscomprised of 2 non-executive Boardmembers and an Assistant GeneralManager.Moreover, in order to determine theoperational, strategic, financial andother risks and manage them incompliance with company's corporaterisk taking profile, Risk ManagementCommittee was founded with theparticipation of 4 non-executive Boardmembers. With the participation of 4non-executive Board members andthe General Manager- the executivemember-, Investment and BusinessDevelopment Committee was foundedin order to plan the strategictendencies regarding companyoperations and support the Board ofDirectors in following the decidedpractices and investments. Generalprinciples for foundation, working,meeting and reporting of allcommittees were determined by, theBoard of Directors.For detailed information regardingArçelik A.fi.'s corporate governancestructure, members of the Board ofDirectors and top management, youcan visit the “About Arçelik A.fi.” and“Investor Relations” tabs atwww.arcelikas.com.12
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Risk ManagementIn Arçelik A. fi. risks are managed witha holistic approach. The strategic,operational, financial and other aspectsposing risk for our short and long termobjectives are evaluated, in every levelof the organization starting from theBoard of Directors. With regard to this,the Risk Management Committee wasfounded in order to determine andevaluate risks, to calculate theirimpacts and likelihood, to manage andreport them, to take them into accountin decision making, to form activeinternal control systems and to makesuggestions to the Board of Directors.In line with the evaluation of anddecisions taken by the Board ofDirectors regarding the strategic risks,Risk Management Committeedetermines the procedures regardingmajor risk groups, which will be appliedin integration with relevant businessprocesses. Process managers applythese procedures within their workflowroutine. “Risk ManagementDepartment ” which is organized withinthe company provides technicalsupports to process managers tomanage risks, follows the emergingrisks and ensures their analysis andreporting.At Arçelik A.fi. the internal controlpractices are managed by InternalAudit Department organized underAssistant General Manager, Financeand Accounting. The Audit Committeefollows the functioning and efficiencyof the control system.Risk Management Organization and ResponsibilitiesBoard of DirectorsRisk Assessment of Strategic MainBusiness ObjectivesRisk Management CommitteeIdentification of Procedures andTolerance Limits for Main Risk GroupsLegalRisk Management DepartmentRisk Follow-up Analysis and <strong>Report</strong>ingRiskDatabaseProceduresInternal Audit DepartmentBusiness Processes13
System<strong>Sustainability</strong> ManagementForming a sustainable, responsible and accountablebusiness model is a significant part Arçelik A.fi.’s businessstrategy. Henceforth, we monitor the social, economic,environmental and ethical aspects of our operations in linewith our business objectives, manage them with corporatepolicies, pursue improvement studies in accordance withstakeholder expectations and performance achievements,and share the outcomes we get with the public.In the management of corporate sustainability, we adopta risk-based and holistic approach. In the reporting period,the materiality study, which was held in the previous period(with the participation of Arçelik A.fi. <strong>Sustainability</strong> WorkGroup where every aspect of our activities andorganizational structure is represented), was reviewed withregards to the materiality issues and stakeholder studies.In this study, the social, economic, environmental andethical dimensions of our activities were examined, risksand opportunities we may encounter and stakeholderexpectations were evaluated.The infrastructure of our sustainability management isconstituted by focal point-based policy documents. Thanksto these documents, particularly Ethical Values, EnvironmentPolicy, Quality Policy, Work Health and Safety Policy, HumanResources Policy, Supplier Working Conditions and PublicDisclosure Policy which define working principles andprocedures, we conduct sustainability management andrealize performance improving studies.Our stakeholders can access Arçelik A.fi.'s corporate policydocuments at “Investor Relations,” “<strong>Sustainability</strong>,” “HumanResources” and “Purchasing” tabs of the corporate websitewww.arcelikas.com.<strong>Sustainability</strong> Management ApproachStrategicFocusesAs Arçelik A.fi. we evaluate and manage our sustainabilityperformance under 5 focal points: System, People, SupplyChain, Product and Social Development. The issues weprioritize within the scope of sustainability managementwere determined as contribution to local economies, totalquality management, corporate governance and businessethics, green approach in business processes, humanrights in the workplace, talent and performancemanagement, occupational health and safety, sustainabilityin procurement processes, innovative and environmentfriendly products, product information, development insales and after sales services, and contribution to socialdevelopment.<strong>Report</strong>ingandFeedbackPerformanceEvaluationSystem,Process,ProductsCorporatePoliciesSystem• Total Quality Management• Corporate governance and business ethics• Green approach in production processesPeople• Human rights in the workplace• Talent and performance management• Occupational health and safetyARÇEL‹K A.fi.Material<strong>Sustainability</strong>IssuesSupplyChainProduct• <strong>Sustainability</strong> in supply chain• Innovative and green products• Product information• Development in sales and after sales servicesSocialDevelopment• Contribution to local economies• Contribution to social development14
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Arçelik A.fi. Management System isthe sum of workforce and workflowsorganized towards the corporatevision. We employ various standardsand methodologies to increase theefficiency of management system.While we form our working systematicin all our facilities, we adopt standardssuch as ISO 9001 Quality ManagementSystem, ISO 14001 EnvironmentalManagement System, OHSAS 18001Occupational Health and SafetyManagement System, ISO 17025Laboratory Management System andmethodologies such as ProductLifecycle Management (PLM), TotalProductive Maintenance (TPM), SixSigma. We manage these standardsand methodologies in an integratedmanner under the EFQM ExcellenceModel's umbrella. We use variety ofcentral systems and softwares suchas Document and ProcessManagement Software (QDMS) whichis unique to Arçelik A. fi. and workupon the company's intranet(ARPORT). We evaluate the realizationswe get as a consequence of the targetbasedstudies with a performancemeasuring system formed withobjective criteria; and present thefindings to our stakeholders in line withaccountability and transparencyprinciples and via tools and methodsdetermined by our public disclosurepolicy. We employ the feedbacks weobtain to develop our strategicdirections, systems, processes,products and practices.As a matter of its working principles,Arçelik A.fi. pursues its practices intotal compliance with all legalregulations regarding activityprocesses and product quality. Apartfrom the legal regulations, we alsocomply with voluntary codes, initiativesand regulations determining workingprinciples and product qualitiesregarding social, economic andenvironmental aspects at sectoral,national and regional levels.In 2006, Koç Holding became asignatory of UN Global Compact. Asa Koç Holding subsidiary, Arçelik A.fi.complies with the UN Global Compact.Apart from our corporate practices,we also follow the working principlesof Global Compact in the supplierevaluation processes.In Arçelik A.fi. domestic and overseasproduction plants have been auditedbased on the criteria of BSCI (BusinessSocial Compliance Initiative) andSedex (Suppliers Ethical DataExchange), which are used commonlyacross the European Union, by anindependent auditing firm and receivedcompliance reports.Arçelik A.fi. holds 37 national and 7general compliance certificates withregards to its product qualities. A majorpart of the content of these compliancecertificates is formed by products'environmental and social impact.Besides, as an active member ofEuropean Committee of DomesticEquipment Manufacturers (CECED)Arçelik A.fi. has been complying withEuropean Union's relevant directivesand participating in stakeholderdialogues for cohesion of the Turkishregulations.In this regard, we comply with theEnergy Using Products Directive (EuP),Waste Electrical and ElectronicEquipment Directive (WEEE),Restriction of Hazardous SubstancesDirective (RoHS) and EU's Registration,Evaluation, Authorization andRestriction of Chemicals (REACH)regulations.For detailed information regarding thedirectives Arçelik A.fi. complies with,you can visit the “<strong>Sustainability</strong>”segment at www.arcelikas.com.As Arçelik A. fi., it is our responsibilityto prevent the negative impacts of ouractivities on the physical integrity ofour operational field and neighboringenvironment, and the various speciesand humans living on it. In this regard,we take all the necessary precautionswith care and responsibility. We startto discharge this responsibility rightfrom the beginning, in the selection ofproduction locations. When weestablish a new production plant, orconduct a new physical investment,within the feasibility process, we makethe impact-risk analysis of the plannedinvestment in addition to the social andphysical advantages it will generate,and ensure the appropriate investmentconditions in accordance with theresearch results. As a result of thesestudies, we avoid the negative impactsof our activities on soil, water resourcesand species habitating in them, whilepreventing the negative social andphysical impacts on humans.Due to our field of activity, ouroperational plants reside in locationsdetermined to be appropriate forindustrial production. Hence none ofour facilities reside at natural protectedareas, special environmental areas orRAMSAR areas determined by lawsor international agreements. There areno locations of this kind within theimpact area of our plants. Our activitiesdo not cause any significant impactupon biodiversity or natural habitats,thanks to our location selections, tightprecautions we take and environmentalimpact reducing studies.We attempt to raise the biodiversityvalue of our impact areas via protectionand improvement works we pursue todevelop natural environment. In thisregard, in Istanbul Kemerburgaz weestablished an “Arçelik A.fi. MemorialForest” planting 6,500 saplings.Besides, we are conducting studiesto prevent light pollution for its negativeimpacts on the ecosystem. In thisregard, we realized a project to changethe wavelength of the exterior lightningof our plants. In addition to thesestudies, our practices on chemicalsubstance usage and emissionreduction have positive effects onbiodiversity.15
SystemDialogue with StakeholdersIn Arçelik A.fi. we adopt a transparent, accountable and participatory management understanding and by forming aconstructive and open communication platform, we evaluate the expectations and suggestions of our stakeholders asa valuable component to the development of our management decisions and practices. To realize this we constitutechannels to ensure the dialogue with our stakeholders. In determining the structure and practice frequency of thesechannels, we acknowledge the characteristics of our stakeholders and their position in our practices as our basis.16In order to learn the opinions and expactationsof local communities we make use of variousresearch and survey studies. While respondingto these expactations via our activities andproducts, we conduct studies such as socialenvironmental trainings, briefings and projects.We use web pages, TV, newspaper and radiobroadcast and annual and sustainability reportsto inform about our practices.We realize the informationand opinion demands bythe public institutionsregarding our activitiesand sector, while wesupport their social andsectoral developmentprojects and initiatives.We form with unions a positivedialog based on mutual good will.Collective bargaining agreementprocesses are the periods whenour relation is the densest. Weengage trade unions in ourdecision-making processes andhave their approval beforedeciding about topics related tothe employees.PublicInstitutionsTradeUnionsThe basis of our dialog with the NGOs is formed by activeparticipation as members, studies and projects run incooperation, and the general communication tools like face toface meeting and annual and sustainability reports. Along withprofessional associations like TÜRKBESD, CECED, TOBB, weconduct many joint studies with NGOs on sectoral and socialdevelopment and participate in many of them's management.To respond to the expactations of our customers is ourpriority. In this regard, we conduct survey, meetings,face to face meetings and focus group studies and formchannels such as website and support line. We respondto questions regarding product properties, technicalsupport and complaints via these channels. In order toinform our customers regarding our activities, productsand services we use annual and sustainability reportingalong with marketing communication tools.LocalCommunitiesSectorInstitutionsand NGOsCustomersSuppliersEmployeesShareholdersAuthorizedDealers andServices andRetailersOnline portal, visits and audits form thebasis of the dialog with our suppliers.Besides, we expect from our suppliers toaccept our “Work Ethics Principles forSuppliers”. Other informative tools weemploy are annual and sustainability reports.FOUNDATIONS PARTICIPATIONEuropean Committee of Domestic Equipment Manufacturers (CECED) Membership to General Assembly with other membershipsForeign Economic Relations Board (DE‹K) Membership to General Assembly in various business councils and Highlevel representation with various membershipsElectronic Equipments Manufacturers' Association (ECID)Vice Presidency and Membership to General AssemblyFoundation for Heating, Cooling, and Air Conditioning Membership to Membership to Board of TrusteesBoard of Trustees Research and Education (ISKAV)Turkish Electro Technology (TET) Chairman of the BoardIstanbul Foundation for Culture and Arts (IKSV) Membership to Board of TrusteesIstanbul Mine and Metals Exporters Unions (‹MM‹B)Coordinator ChairmanshipIstanbul Chamber of Industry (‹SO) Memberships to Professional Committees, Chairman of the Board,Membership to Environment Technical CommitteeTurkish Quality Association (KALDER) High level representation with various membershipsPersonnel Management Association (PERYÖN) Membership to General AssemblyTurkish Climate Platform of the Corporate Leaders Group on Climate Change Term SpokespersonChambers of Industry and Commerce Membership to General Assembly and Professional CommitteesTurkish Confederation of Employer Unions (T‹SK) Provincial RepresentativeTurkish Electronic Industrialists Association (TES‹D) Secretary General, Membership to Environment Technical CommitteeTurkish Industry & Business Association (TÜS‹AD) High level representation in 12 different working group and Membership toGeneral AssemblyTurkish White Good Manufacturers' Association (TÜRKBESD) High level membershipTurkish Informatics Foundation (TBV)High level representationTurkish Foreign Trade Association (TURKTRADE) Chairman of the BoardTurkish Exporters Assembly (T‹M) Membership to General AssemblyThe Union of Chambers and Commodity Exchanges of Turkey (TOBB) Chairman of Household Appliances Board and high level representationin sector boardTurkish Investor Relations Association (TÜY‹D) Founding MemberNote: The list was prepared in alphabetical order.In order to encourage our employeesto actively participate in decisionmaking and practice processes weuse suggestion systems and employeesurveys. Moreover, every year weconduct employee satisfaction surveysand plan the necessary ameliorations.To develop the relations of ouremployees with the company andamong themselves, we make use ofintranet. The tools we employ in orderto inform our employees regarding ouractivities are website, corporate TVchannel, bulletins, internal publications,trainings and annual and sustainabilityreports.Board of Directors meetings arethe main dialog channels with ourshareholders and investors. All ourshareholders use their right toexpress opinions and obtaininformation within the limits ofregulations. Other tools we employare annual and sustainabilityreports, material disclosure,roadshow and investorpresentations.We continuously inform authorizeddealers and services and retailersregarding our activities, products,services and future projections sincethey have a direct impact and roleon our activities. We conduct studiesfor them to develop knowledge andtalent for pursuing activities in ahealthy manner. In this regard, weuse tools as annual meetings, faceto-facemeetings, websites,corporate TV channel, trainings andseminars.As Arçelik A.fi. we are member ofvarious organizations such asassociations, foundations, researchinstitutions, unions and sectorchambers. Through variousplatforms, we meet withstakeholders in order to seeksolutions for social, environmentaland industry development issues.Via these platforms, work meetingsare held, project groups areorganized and reports are prepared.Information is disclosed to the publicand to the related authorities throughNGOs as the representative of allstakeholders.
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Green Approach in Resource ManagementDeveloping efficient and sustainable business processesand continuous improvement of our performance in this fieldhave a pivotal place in our business strategy. For realizingthis, we always keep one major question in our mind: “Howwe can produce more by allocating even fewer resources?”The efficient use of resources means consuming less energy,water and raw material in every process. The increasing ofthe efficiency in resource consumption is important for manydimensions of our activities. By using fewer resources, wecan increase profitability, develop our corporate sustainabilityperformance, and produce less emissions, wastewater andwaste. Most significantly, by using fewer resources we cantake the most fundamental step in combating the climatechange, the most important problem of our day.Combatting Climate ChangeThe reason for the increase of greenhouse gas (GHG) inatmosphere which causes the climate change is emissionsarising from energy consumption. The increase in energyconsumption due to population growth causes our planetto become unable to level its sensitive balance with its ownnatural possibilities. The climate change is not only anenvironmental threat but also a social and economical one.At Arçelik A.fi. we take climate change as a significant riskto the future of the world and the sustainability of ourcompany, and as a responsible corporate citizen we pursuefirm-level studies in combating this problem. We focus ourcombating climate change strategy, which is the biggestcomponent of our environment management, into 3 mainpoints: to continuously increase resource efficiency in alloperational processes from supply to distribution; to provideour customers with green products that has the highestwater and energy saving values; to conduct awarenessraising informing studies regarding climate change and tosupport solution initiatives.Arçelik A.fi. has become a member of Climate Platform inMay 2 <strong>2011</strong>, which is founded as an independent and nonprofitinitiative by Regional Environment Center Turkey (REC)and TÜS‹AD (Turkish Industry and Business Association)collaboration, to support the studies that combat the climatechange and the transition to low carbon economy. Thisplatform’s Turkish Climate Platform of the Corporate LeadersGroup term spokesman is Arçelik A.fi.’s CEO LeventÇak›ro¤lu.As a result of the fact that Kyoto Protocol’s first commitmentperiod was to end in 2012, which is the most importantformal document that regulates the international climateregime, how the new climate regime was going to be formedwas discussed in World Climate Summit in Durban, SouthAfrica. Levent Çak›ro¤lu, the CEO of Arçelik A.fi., representedTurkey as the term spokesman of Turkish Climate Platformof the Corporate Leaders in United Nations 17 th Conferenceof the Parties on Climate Change, which was conductedwith the participation of government representatives,international organizations and NGOs from 190 countries.Speaking in the panel named “Towards Rio +20, BusinessLeaders Build the Change,” Levent Çak›ro¤lu shared hisopinions regarding the role and leadership of private sectorin green development. He also participated in GlobalBusiness World Day which was conducted within the scopeof the summit by World Sustainable Business Council. Hespoke in the panel themed “Why the Business World ShouldBe the Driving Force for Environment?” and named “Carryingon with Action: Development for the Business World andEveryone”.Arçelik A.fi., which in line with its “Respects the Globe,Respected Globally” vision supports the national andinternational projects carried out by business world that aimreducing climate change impacts, has signed in 28 October<strong>2011</strong> the 2˚C Challenge Communique.Arçelik A.fi. takes climate change as a significant risk withenvironmental, social and economic dimensions thatendangers the sustainability of the world and continues tosupport local and international projects in this regard. Thus,Arçelik A.fi. signed 2˚C Challenge Communique which wasprepared by Corporate Leaders Network (CLN), which wassigned by over 200 company directors of different sectorsfrom 29 countries.scArçelik A.fi. combats climate change at all levels of thecompany. A team comprised of 12 Arçelik A.fi. employeesclimbed Africa’s highest mountain Kilimanjaro to drawattention to global warming. The climb to the mountain,which has lost 85% of its icecaps since 1912, was conductedin 17-25 September and the team was comprised of ArçelikA.fi. employees from Turkey, Russia, Germany, Romaniaand France.17
SystemEnvironmental ManagementAs a principle, “an environmental approach throughout the projectlife cycle” defines our general outlook on environmentalmanagement. Therefore, we aim to minimize the environmentalimpacts of all our processes from raw materials to productconsumption. Efficiency in resource consumption is our primefocus in these efforts.We run the management of environmental impacts resulting fromproduction processes by way of procedures defined by nationaland international systems and standards and an organizationalstructure that is in charge of environmental management. ArçelikA.fi. Environmental Policy defines the main framework of ourenvironmental management. ISO 14001 Environmental ManagementSystem Standard, which is integrated with ISO 9001 QualityManagement System Standard, forms the basis of strategies formedin line with this policy.For more detailed information on Arçelik A.fi. Environmental Policy, you can visithttp:// www.arcelikas.com/page/211/Urun_ve_Uretimde_Cevreci_YaklasimThe quality of Arçelik A.fi.’s environmental management has been certified by itssuccess. Arçelik is the winner of “European Union Environmental Awards 2010:Turkey Program: Management” category and a finalist for “European UnionEnvironmental Awards 2010: European Program: Management” category. Thesuccess of our environmental management policy was featured in United NationsDevelopment Program’s <strong>2011</strong> report “Development Stories from Europe and CentralAsia” and Arçelik was the only Turkish private company in this report.18
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Our Central Energy and Environment Department leadsour environmental management practices. Arçelik A.fi.Environmental Coordination Board operates with monthlymeetings under the leadership of the Directorate and isattended by staff in charge of environmental aspects allproduction and non-production processes. Within theframework of the Board’s practices, roadmaps are definedin line with developments regarding the environmental andtechnological innovations, and environmental managementpractices are supervised.By reflecting the goals identified in line with environmentalpolicies and business strategies onto personal performanceindicators, environmental management organization enablesthe active participation of all employees. The Central Energyand Environmental Department helps the realization oftargets, ensures compliance with all national andinternational legislations as well as other systems andstandards Arçelik A.fi. follows, forms new action plans withresults produced and executes all legal procedures.In addition to external auditing conducted by independentinstitutions, regularly conducted internal auditing guaranteesthe efficiency and continuity of environmental managementsystem. All our environmental activities and performanceresults are reported regularly to Arçelik A.fi. uppermanagement and to our stakeholders.Environmental TrainingsThe fundamental element in the improvement ofenvironmental performance is environmentalawareness of employees. We engage oursubcontractors and interns alongside our employeesin our environmental training practices. All ouremployees and interns go through a wide-rangeorientation program upon their recruitment. In thecourse of these programs, training is provided onenvironmental awareness and Arçelik A.fi.’senvironmental management policies.In <strong>2011</strong>, our employees received 15,904 person*hourtraining on environmental and energy managementsystems, carbon management, environmentallegislations, chemicals management, emergencyprotocol, waste management and hygiene issues.On these issues, our subcontractors and internsreceived 303.6 person*hour training in addition to255 person*hour training on social responsibility.19
SystemResource Use at Production PlantsEfficiency in Material UseWe use raw materials and materials provided by our suppliers and subcontractors in the production processes. Weregister and monitor this consumption in product basis through computer-supported systems. As a result, we are notonly able to keep our material flow costs under control but also implement projects focused on the usage of materialsthereby ensuring resource efficiency.Raw materials and other materials use in production plants in Turkeyfor the year <strong>2011</strong> (tons)Raw MaterialsPlastic 74,493Metal 295,863Other(1) 192Materials(2) 304,404Chemicals (3) 7,479Total 681,431(1) The figures stated are values pertaining to the isolation raw material use.(2) The values stated cover every kind of material and semi-finished productemployed as part of finished products.(3) The values stated include adhesives, lubricants, paint, enamel, operationaland all other kinds of chemicals.CFC use tableCFC12ended1995R134aStarted1995R600aStarted1997In <strong>2011</strong>, we reduced our resource consumption byimplementing projects aimed at enhancing ourefficiency regarding the use of materials. For instance,the plastic package improvement project resultedin reducing the sum of shrink package used at allof our facilities by 334 tons and ensured a 27%reduction in total.Another environmental aspect of material use is theimpact of the chemicals used in products andprocesses. In that respect, we are taking thenecessary measures to comply with the EURegulation on the Registration, Evaluation,Authorization and Restriction of Chemicals (REACH),which took effect in 2007. To this end, we cooperatewith industrialists, manufacturers, subcontractorsand other stakeholders. Moreover, Arçelik A.fi. wasthe first home appliances manufacturer to producethe first CFC free refrigerator in Turkey 11 yearsbefore the actual 2006 deadline set for Turkey withinthe framework of the Montreal Protocol designed tolimit the use of the substances depleting the ozonelayer.Water Use and RecoveryIn <strong>2011</strong>, one of the main inputs of our production processes is water. We met 28% of our water necessity, from wells, whilemeeting 72% of our water necessity from municipal water sources.Total Water Withdrawal by Source (m 3 )R600aContinuedto be used<strong>2011</strong>2009 2010 <strong>2011</strong>Wells 374,187 436,176 406,583Municipal Water 927,311 973,574 1,070,899Total 1,301,498 1,409,750 1,477,482In <strong>2011</strong>, our plants in Turkey enjoyed 15%production increase on average in productionquantity. In spite of this development, the totalwater consumption increase was limited to 4.8%and consequently withdrawn 1,477,482 m 3 ofwater in total thanks to the improvement andrecovery projects carried out.20As a result of the recovery projectscompleted in <strong>2011</strong>, we managed torecover 12,900 m 3 of water in total. Atour Washing Machine Plant, wesuccessfully recovered 12,000 m 3 ofwater by treating the product functiontesting water at the ion exchanger unitsand using that water for the dyeingfacility processes. At our ElectronicsPlant, we recovered 900 m 3 of waterby recovering the condensed waterfrom the air-conditioning centers.In addition to these, there are waterrecovery projects which we arecurrently working on or which are stillunderway. For instance, a project hasbeen launched to recover 50 m 3 /perday part of the discharged water fromthe wastewater treatment facility of ourCooking Appliances Plant. The waterrecovered will be used in the toilet tanksand the project will be completed in2012. We have also begun to work ona preliminary study for a project aimingto recover the water from our BiologicalTreatment Facility as well as recoveringrainwater at the Washing Machine Plantso that it could be used in a productionprocess. This project will begin in 2012.Thanks to the project, the treated380 m 3 /per day water discharged fromthe biological treatment facility willundergo advanced treatmentprocesses enabling it to be used in aproduction process. As part of thisproject, the rainwater to be collectedfrom the rooftops will also be recovered.Besides the water recovery projects,we implement projects with a view toreducing water usage as well. Forinstance, we saved 1,595 m 3 of waterthrough an improvement project toreduce the water used by the toilettanks of our Refrigerator Plant.
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Another improvement project was completed at the R&D part ofour Washing Machine Plant resulting in saving 944 m 3 of water.Moreover, within the scope of the transfer and stockpiling projectfor the single paint shop, the painting facility with the double lineswas provided with two identical production lines while the paintingfacility with the single line was abolished altogether. The projectsaved 20,000 m 3 of water annually.The projects focused on the reduction of water consumptioneventually resulted in reducing the water consumption per productby over 8.7% for the Tumble Dryer Plant; 7.7% for the DishwasherPlant; 5.6% for the Refrigerator Plant; 6% for the Compressor Plantand 5% for the Washing Machine Plant.Water DischargeBolu Cooking Appliances PlantWastewater Treatment FacilityIn an effort to protect the quality of the ground andsurface water resources, to prevent water pollutionand avoid imposing a negative impact on biodiversity,we discharge the water from our entire plants onlywhen it has been treated to comply with the waterdischarge standards at the chemical and biologicaltreatment facilities built in line with the characteristicsof the water.Water Discharged (m 3 ) 2009 2010 <strong>2011</strong>Public Tailrace ConnectionDischarge 328,421 230,083 303,454Receiving Systems 135,002 171,770 190,940Industrial ZoneTailrace Discharge 393,724 422,820 456,848Total 857,147 824,673 951,242In <strong>2011</strong>, the increase regarding the production quantity in our entire plants in Turkey turned out to be 15% while thetotal domestic and industrial waste water discharge increase rate was limited to the level of increase in the productionquantity.We check and monitor the compliance of the discharged water quality with the norms set by the legal regulationsthrough periodical analyses and we are also carrying out projects to achieve values even better than the legal limitsallowed for the discharged water. Thanks to our approach, the COD (Chemical Oxygen Demand) values pertainingto the water discharged by our plants are considerably lower than the highest legal limit values required in Turkey.COD values of discharged water (mg/lt)Plant* 2009 2010 <strong>2011</strong> COD Legal Limit Value (mg/lt)**Cooking Appliances 30 22 39 100Dish Washer 94.8 58.6 106.8 1,000Electronics 198 44 51 600Refrigerator and Compressor 17 22
SystemAs part of the improvement projects implemented at our Washing Machine Plant, the amount of chemicals used at thetreatment facility was reduced by 34 tons in <strong>2011</strong> when compared with 2010. Furthermore, the wastewater treatmentplant benefited from various maintenance and improvement projects too (such as the replacement of the ion exchangerunit resins and nozzles, replacement of the sand filter and hydro-antrasit, replacement of the consumable materials,procurement of a new measurement device etc).In 2012, as part of the energy efficiency projects to be implemented, the aeration tank blower of the biological wastewatertreatment facility is planned to be optimized with the help of an inverter.Energy and Emission ManagementArçelik A.fi. energy management is composed of practicessuch as measurement, monitoring, analyzing and reductionof energy consumption values. Energy Committeesestablished at the plants with the participation of manyemployees from different disciplines and categories workin collaboration with TPM office and EnvironmentalCoordination Council, hence forming the energymanagement organization together. Every month theefficiency practices conducted in line with the performanceobjectives set and their outcome are disclosed to therelated stakeholders via company-wide energy reports.We strive to establish a more systematic managementstructure and are therefore currently working on to complywith the EN 50001 Energy Management Systems Standardpublished in October <strong>2011</strong>.You can find detailed information on Arçelik A.fi. EnergyPolicy by visiting the corporate website:http://www.arcelikas.com/page/209/Arcelik_te_Enerji_VerimliligiArçelik A.fi. fulfills its national legal obligations regardingenergy consumption during its processes. In line with thelaw no.5627 on “Energy Efficiency” issued in 2007,engineers who have participated in an “Energy ManagerCertification Program”, organized either by the GeneralDirectorate on Renewable Energy or a similar authorizedinstitution, are employed at the company plants with energyconsumption values higher than the values defined by theaforementioned law.Our greenhouse gas emissions for <strong>2011</strong> are reported withinthe framework of the ISO 14064-1 standard and the IPCC2006 Guidelines are used as the methodology for therelated calculations. Our greenhouse gas emission valuefor <strong>2011</strong> has been audited and verified by an independentaccreditation body in accordance with ISO 14064-1 GHGEmission <strong>Report</strong>ing Standard, at a “reasonable assurance”level. For <strong>2011</strong>, the total greenhouse gas emission valueof our six campus areas including our entire productionplants, storage units, administrative buildings and facilitiesas well as Arçelik A.fi. HQ is 173,149 tons CO 2 .<strong>2011</strong> Greenhouse Gas Emmisions (ton CO 2 )90000880008600084000820008000078000Direct88,895tonCO 284,254tonCO 2IndirectArçelik A.fi. campus areas greenhouse gas emission direct/indirectemission distribution for <strong>2011</strong> (ton CO 2 )36.00033.00030.00027.00024.00021.00018.00015.00012.0009.0006.0003.0000‹stanbul EskiflehirHeadquarters RefrigeratorandCompressorPlantsCampusAnkaraDishwasherPlantCampusBoluCookingAppliancesPlantCampus‹stanbulÇay›rovaWashingMachinePlantCampusDirect‹stanbulBeylikdüzüElectronicsPlantCampusIndirectTekirda¤ÇerkezköyElectric Motorsand TumbleDryer MachinePlantsCampusThe emission management of Arçelik A.fi. not only includesclimate change and greenhouse gas emissions but also coverspractices for the management of other emissions in order toprotect air quality. In this context, all of our plants operate in linewith the emissions limit values defined by the legal regulationsand within the framework of the emission licenses granted by thepublic authorities. We disclose our compliance to the definedemissions levels via emissions reports containing the results ofmeasurements carried out by independent and accreditedlaboratories. We continuously implement improvement projectsfocused on improving air quality and hence increase ourperformance in that area. Since 2006, we have replaced traditionaldyeing processes with powder coating method, which leads toa reduction in volatile organic compound (VOC) emission, andwe have also ensured reduction in other emissions by conductingenergy efficiency projects as well as introducing the use ofdifferent energy resources.Arçelik A.fi. campus areas greenhouse gas emissiondirect/indirect emission distribution for <strong>2011</strong> (ton CO 2 )Direct Indirect Total‹stanbul HeadquartersRefrigerator and Compressor 30,628 28,302 58,930Dishwasher PlantCooking Appliances PlantWashing Machine PlantElectronics Plant1,090 1,401 2,4913,886 7,318 11,20414,806 12,534 27,34021,535 11,284 32,8206,613 15,942 22,555Çerkezköy Electric Motors and 5,695 12,115 17,810Tumble Dryer Machine PlantsToplam84,254 88,895 173,149** Datas Include HQ and Campuses of Production Plants in Turkey.22
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Energy Consumption and Emission Reduction ProjectsDespite the average 15% increase in product quantitiesin <strong>2011</strong>, the efficiency projects we carried out limited theenergy consumption increase to 8%. While the directenergy increase amounted to 8.8%, the indirect energyconsumption increase turned out to be 6.2%. In <strong>2011</strong>, thetotal amount of energy consumed was 1,929,235 GJ.Indirect energy types consumption (GJ/year)2009 2010 <strong>2011</strong>Electricity 524,158 566,914 602,194Direct energy consumption (GJ/year)2009 2010 <strong>2011</strong>Diesel 5,691 9,237 14,408Fuel Oil 59,969 53,669 56,775LNG 12,355 0 0LPG 34,336 55,539 43,272N. Gas 968,068 1,101,466 1,212,587Total 1,080,419 1,219,911 1,327,041Arçelik A.fi. Plants are “energy efficient” zones. As part ofthe energy efficiency projects conducted, measuringdevices in the consumption sectors are used to measurethe energy consumption and question the energy efficiencyin that work unit covered. Once the technical and financialaspects of a possible need for an energy efficiency practicehas been examined regarding that area, the project isprepared with the approval of the management and is thenimplemented. The outcome of the energy efficiency projectsis monitored by the energy committee.<strong>2011</strong> Energy EfficiencyProjects by SubjectProduction/Process51%Water 4%Illumination13%CompressedAir 4%Natural Gas3%In <strong>2011</strong> Arçelik A.fi. Turkey plants completed 173 energyefficiency projects saving 13,688,867 kWh on electricityand 1,748,444 m 3 on natural gas; thereby ensuring that109,516 GJ in total was saved on energy.Thanks to those projects, the total greenhouse gas emissionwas reduced by 3,761 tons of CO 2 directly and by 7,329tons of CO 2 indirectly, hence leading to 11,090 tons ofCO 2 reduction in total. Some of those projects aredescribed below:We switched to efficient illumination systems thanks to theproject completed at the Refrigerator Plant to increaseillumination efficiency. As part of the project, 1,200illumination units were replaced with efficient illuminationsystems, enabling us to save 1,402,694 kWh on electricityannually. The electricity saved prevented 751 tons of CO 2greenhouse gas from being emitted.At our Electronics Plant, we improved and reconditionedthe equipment at the facilities producing the steam weneed in our production process. Thanks to the project, wesaved 45,360 kWh on electricity and 220,000 m 3 on naturalgas. The electricity and natural gas saved helped usprevent 496 tons of CO 2 from being emitted.We materialized a project to increase the efficiency of thetransfer presses we use in production at our CookingAppliances Plant. The kaizen work we did and the projectsundertaken to enhance speed resulted in 8.3% increasein efficiency while also ensuring that 392,066 kWh wassaved on electricity annually. The electricity saved helpedus prevent 210 tons of CO 2 from being emitted.Within the scope of cooperation between universities andindustry, various studies were carried out in <strong>2011</strong> todetermine potential improvement opportunities of thecooling system as part of an MA thesis titled “PlasticInjection Cooling System Optimization” at Y›ld›z TechnicalUniversity Mechanical Engineering Department.Motors5%Venting/Heating/Cooling2%Electricity18%In 2010, we realized an energy pré-étude in our 8 facilities in Turkey where the energy management system was examined. After theevaluation by an independent body authorized by Republic of Turkey General Directorate of Renewable Energy, all our plants obtainedthe “Gold Certificate.” Arçelik A.fi. is the first and only firm in the world white goods sector to obtain this certificate. We broke our ownrecord and set the bar higher through the improvements we achieved in <strong>2011</strong> when 4 of our plants in Turkey this time obtained the“Platinum Certificate”, which makes Arçelik A.fi. the first and only firm in the world white goods sector to obtain “Platinum Certificate”.Arçelik A.fi. won three prizes in the Sustainable Environmentally Friendly Product and Practice Competition held within the scope ofthe ISO Environment Awards contest and organized by the Istanbul Chamber of Commerce (ISO) to raise environmental awarenessand contribute to the efforts to harmonize the environmental legislation with the EU norms. Operating in line with our vision “Respectsthe Globe, Respected Globally”, Arçelik A.fi. Dishwasher Plant received the Large Scale Corporation Sustainable Environment ProductTop Prize for its “Cactus” dishwasher and the Washing Machine Plant won the Large Scale Corporation Sustainable Environment ProductSecond Prize for its “Ekonomist” line washing machines while finally Arçelik A.fi. Standing United for Education Corporate SocialResponsibility Program received the second prize in the Large Scale Corporate Social Responsibility for the Environment Categoryfor the contest organized with the Theme “Environment”.23
SystemIntegrated Waste ManagementAn effective waste management appears to be one of themost efficient methods for the protection of natural resourcesat a time when those resources are constantly on decline.Thanks to the developments in recycling technology andpractices, waste management enables the use of materialsand raw materials with lower emission rates by reducingthe use of primary materials. Due to the reduction inenvironmental impacts and the efficiency increase inresource use, Arçelik A.fi. pays utmost significance to anintegrated waste management.Waste Arising from Factories in Turkey in <strong>2011</strong> (tons)The 3R principle (Reduce, Reuse, Recycle) constitutes themain character of Arçelik A.fi.’s integrated wastemanagement. The order of precedence in the practiceprocesses are evaluated as: avoiding the waste formation,reducing the amount of waste, recycling the waste orrecovering the waste as an energy resource while thewaste disposal is considered as the last option. The wastesarising from our activities are firstly classified, then gatheredat their source with regard to the type of waste andregulations, then transported with appropriate licensedvehicles, later to be recovered in licensed facilities andare finally disposed. The waste treatment is determinedwith regard to the waste type and legal regulations andonly those wastes, which cannot be recovered, are sentfor disposal.Recovered Disposal RecoveryRatio (%)Hazardous Waste 1,993 114 94.5Non-Hazardous Waste 56,019 2,257* 96Total 58,012 2,371 96*Mainly domestic waste that cannot be recycled,Choosing Business Partners for Waste DisposalIn the recycling and disposal of wastes arising from ouractivities we work with legally compliant and qualifiedbusiness partners. In the decision process, our technicalunits audit the qualifications and performance levels of ourpotential business partners with regard to the legalregulations, Arçelik A.fi. Environment Policy and environmentmanagement system. Only those firms, which can complywith our pre-determined norms, are accepted as businesspartners. After beginning their services, we audit ourbusiness partners, determine areas of improvement forthem and monitor their improvement plans and realizations.Waste Reduction ProjectsAs a result of various projects completed at our WashingMachine Plant, the amount of waste oil went down by 3.7tons in <strong>2011</strong> when compared with 2010 while the totalwaste amount was reduced by 429 tons.At our Cooking Appliances Plant, the undersize scrap overspray enamel was processed once again so that in <strong>2011</strong>49 tons of undersize scrap enamel in total was ready forreuse. Moreover, as a result of the efforts focused on thereduction of black powder coating consumption, which isused on around 60% of the pieces forming the built-inproducts, the total consumption was reduced by 13.2 tons.WasteRecovered;58,012 tonsDisposed;2,371 tonsthanks to the improvement projects realized, the totalamount of hazardous waste was reduced by 139.3 tons,which amounts to an improvement level of 23%.Although the production quantity of our Tumble Dryer Plantwent up by over 20%, the improvement efforts shown ledto the reduction of the total amount of hazardous waste by17.3 tons, amounting to an improvement level ofapproximately 33%.Our Compressor Plant managed to reduce the consumptionof oil by 10.5 tons as part of the projects to reduce oilconsumption, which naturally led to a decline in the amountof waste oil produced.Despite the almost 20% increase enjoyed by our ElectricMotors Plant as far as production quantity is concerned,24
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>As a result of the practices at our Electronics Plant for thereduction of the waste solder slag, the total amount ofsolder slag waste was reduced by around 35%. As a resultof the projects implemented to reduce the plastic wasteproduced during the plastic injection process, the totalamount of plastic waste caused by this process wasreduced from 4% to 0.05%.Affiliated with Koç Group, Arçelik participates in the KoçGroup Recycling Project launched in 2010. Koç Group, amember of the Global Recycling Network, aims to raiseawareness among its employees regarding recycling; toensure the collection and recycling of paper, glass, metaland plastic waste according to a common standard aswell as achieving an increase in the total amount of wastecollected. Within the scope of the project in <strong>2011</strong>, 5.1 tonsof domestic glass waste, 120.3 tons of paper, 1.5 tons ofmetal waste and 6.9 tons of plastic waste were collectedat the Arçelik A.fi. facilities. Thanks to the amount of thewaste collected, 3,728 trees were saved in total.Apart from the projects to reduce waste, “Every medicinesaved from thrash, is medicine for the world” campaignwas launched on 5 June, the World Environment Day, atour Electric Motors and Tumble Dryer Plants to raise theenvironmental awareness of our employees and contributeto the proper disposal of the medical waste from houses.Supported by Çerkezköy Offical Environmental Authorities,the campaign ensured that the expired medicines werereceived from the employees’ at the collection points setup at the plants, and were later disposed by the licensedcompanies properly. Work has also begun for theimplementation of this project at the other plants.Environment Protection Investments and ExpensesWith regard to the significance we pay to the eliminationof the impact of our activities on environment, every yearwe transfer significant amounts of resource to theenvironment management and investment processes.Within this scope, we realized 6,333,821 TL environmentalinvestments and expenses in <strong>2011</strong>.The expenses for waste management and operationalactivities accounted for the 23% of the total environmentalcosts while environmental protection and managementcosts amounted to 13% and the investments made inenvironment and energy management accounted for theremaining 64% of the costs in that area.Environmental Expenses and Investments for <strong>2011</strong> (TL)Investments in environmentand energy;4,069,340Waste management andoperational activities;1,461,384Environmentalprotection andmanagement costs;803,097Raising Public Awareness on Resource ConsumptionA majority of the environmental impact during the lifecycleof white goods and consumer electronics takes place intheir usage process. At the top our activities concerningthe reduction of this impact, which is based on resourceconsumption such as energy and water, is the developmentof green products. However, to achieve the intendedimpact, conscious consumers aware of the importance ofresource savings and saving methods are also needed.Hence a significant pillar to our climate change strategyis the awareness raising activities we organize for thepublic.Republic of TurkeyMinistry of Science,Industry and TechnologyIn drawing the attention of the consumers to energy andwater efficient products, the tool we most frequently useis the advertisements. While using this channel, we prioritizethe environment friendly qualities of our products.As Arçelik A.fi. in 2010, we launched the “MarketTransformation of Energy Efficient Products” project jointlywith United Nations Development Program (UNDP), GlobalEnvironment Fund (GEF), Turkish White GoodManufacturers' Association (TürkBESD), Turkish Ministryof Industry and Commerce and General Directorate ofElectrical Power Resources Survey and DevelopmentAdministration. In <strong>2011</strong>, we carried on with this project,which will last to the end of 2014. The goal of the projectis to reduce the domestic consumption of electric energy,and therefore reduce the related greenhouse gas emissions,by speeding up the transformation to electrical homeappliances consuming less energy.Market Transformation ofEnergy Efficient Appliancesin Turkey ProjectTurkish WhiteGoods Manufacturers25
SystemResource Utilization and Environment Protection ObjectivesEnvironment Protection Objective Realization Status ExplanationReducing water consumption by 5% in at least three plants in <strong>2011</strong> Completed. Despite the increase in our production quantities,6.6% water was saved on average in our 5 plants.Developing water recovery projects in at least two plants in <strong>2011</strong> Completed. Water recovery projects were implemented in 3of our plants. The details are on the “WaterUsage and Recovery” chapter of this report.Reducing total energy consumption by 5% in <strong>2011</strong>, thereby Completed. As a result of 173 energy efficiencyreducing greenhouse gas emissionprojects carried out, 7.4% energy was saved as wellas 11,090 tons of CO 2 GHG reduction wasachieved according to the budget. The detailsare covered on the “Energy Consumption andEmission Reduction Projects” chapter of this report.Running an enameling recovery project in 1 plant in <strong>2011</strong> Completed. In CAP, 49 tons of undersize scrap enamel wasrecovered for reusing in <strong>2011</strong>.Starting an Arçelik A.fi. Memorial Forest by planting 4,500 Completed. 6,500 saplings were planted in ‹stanbul Kemerburgazsaplings in <strong>2011</strong>by WMP and in Eskiflehir by RP and CP.Reducing light pollution by improving exterior lighting in 1 pilot Completed. Exterior lighting improvement projects were carried in<strong>2011</strong> plant out in three of our plants.Developing a social project for environment in 1 plant in <strong>2011</strong> Completed. EMP and TDP held ‘Every medicine saved fromthrash is medicine for the world’ campaign.Reducing waste amount by 5% as of 2012 Completed. Approximately 13% waste reduction ratio wasachieved.Realizing a plastic waste recovery project in 1 pilot plant by 2012 Completed. RP, WMP, EP and CAP reduce the plastic wasteamount by reusing the scrap plastic after breaking it.Setting a system to collect, recover and measure rain Project in progress. Feasibility study has been completed in WMP andwater in 1 pilot plant as of 2012work has begun to implement the project.Realizing public awareness raising studies with the Project in progress. The activities for <strong>2011</strong> regarding the project have“Market Transformation of Energy Efficient Products” till thebeen completed.end of 2014RP : Refrigerator PlantDP : Dishwasher PlantWMP : Washing Machine PlantEP : Electronics PlantEMPCPTDPCAP: Electric Motors Plant: Compressor Plant: Tumble Dryer Plant: Cooking Appliances PlantEnvironmental Protection Objectives for 2012• Implementing water saving and water recovery projectswhile making such efforts more widespread in 2012• Saving 5% on energy through energy efficiency projectsthereby reducing greenhouse gas emission in 2012• Meeting a portion of the electricity consumed fromrenewable energy resources in 2012• Establishing and getting certification for Arçelik ISO 50001Energy Management System• Continuity of the certificates covering Arçelik ISO 14001Environmental Management System and ISO 14064-1GHG Emissions <strong>Report</strong>ing Standard• Executing and developing integrated waste managementoperations• Implementation of the project to reduce packaging waste• Establishing a system in 1 pilot plant to collect, recoverand measure rainwater• Undertaking various efforts to raise further public awarenesswith the “Market Transformation of Energy Efficient Products"project until the end of 2014 carriying on with the socialresponsibility projects regarding environment.26
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>27
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We Take Strength from OurGlobal OrganizationArçelik A.fi. is a global organization that conducts marketing activities in 20 countries,provides its products to customers in over 100 countries, employs 19,213 employeesand has 14 production facilities throughout the world; in Turkey, Romania, Russia, Chinaand South Africa. We believe that the individual and cultural differences which means26 different languages and 17 different currencies, create richness and that the commonsynergy constituted by the totality of these talents form a multiplier effect in therealization of our operational and strategic objectives, hence strenghten us.As Arçelik A.fi., in order to ensure sustainability, we provide our employees an egalitarian,fair, safe and peaceful working environment that is compatible with human dignity andpresent opportunities through which they can develop their occupational skills and talents.Our fundamental expactation from our employees is leading innovation and making adifference by creating added value in line with our sustainable growth objectives andwithin a collaborative and solidarist culture.29
PeopleSustainable SuccessIn line with our belief that thesustainability of our business dependson the qualified and experiencedprofessionals who will carry Arçelik A.fi.into the future, it is one of our coreresponsibilities to provide for ouremployees a progress-oriented workingenvironment whereby they can feelhappy and productive. Our primaryapproach in carrying out theseresponsibilities is to be respectfultowards human rights and to focus oncontinuous improvement.Our Ethical Rules of Conduct, which isbased on the fundamental principlesaddressed by Vehbi Koç, the founderof Koç Group, carries utmostsignificance to ensure the perpetuityof our system.• Our customers are the focus ofeverything we do,• To be “the best” is our ultimate goal,• Our most important capital is ourhuman resources,• Our goal is to create wealth forcontinuous development,• We strive to strengthen Turkisheconomy from which we derive ourown strength,• Honesty, integrity, and superiorbusiness ethics are the foundationsof our business conduct.The effective and healthy applicationof ethical rules is ensured by the EthicalConduct Board formed within the bodyof Arçelik A.fi.This board is comprised of the GeneralManager, related Deputy GeneralManager, Human Resources Directorand Legal Advisor. In <strong>2011</strong>, the Boardof Ethics received no complaints.In order for equally effectivedissemination of our ethical values toall our employees and ensuring thatthey are passed on to the nextgeneration, related regulations of ourEthical Rules were revised anddeclared to our employees in <strong>2011</strong>.You can reach Ethical Rulesof Conduct viahttp://www.arcelikas.com/UserFiles/file/PDF/TR/EDI.pdfAs Arçelik A.fi., the significance weattribute to working conditions is notlimited to our own system. We have setforth our pioneer approach bybecoming one of the first signatoriesof the Code of Conduct on CorporateSocial Responsibility prepared byCECED (European Committee ofDomestic Equipment Manufacturers).Moreover, through its subsidiariesabroad Arçelik A.fi. is a member ofBSCI (Business Social ComplianceInitiative). By joining this initiative,Arçelik A.fi. accepted to be audited onpractices related to legal compliance,freedom of association and collectivebargaining, prevention of discrimination,wages, working hours, occupationalhealth and safety, environment andenvironmental security, managementsystems and other relevant socialresponsibility principles. In line with ourrespect for human rights approach, allemployees within Arçelik A.fi. arerecognized as equals regardless ofethnic background, race, language,religion, age, gender, nationality ordisability. Spearheaded by ourrecruitment policy, this approach isbased on principles such as rightperson for the right job, equal wage forequal job, merit based on success andequal opportunities for all.Arçelik A.fi. commits to comply with alllaws and regulations regarding equalrights and prevention of discrimination,ensures that the working environmentis devoid of discrimination and preventschild and forced labor in line with laborlegislation and policies developed inthis manner. In case of individual orcollective dismissals or reassignments,notice period provisions of respectivenational labor legislations and collectiveagreements are applied.30
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Freedom of Association and Collective BargainingAt Arçelik A.fi., we respect freedom of association and unionization rights, which are the most fundamental rights ofour employees. With this understanding, we pay attention to the preservation of regular conduct with the trade unionswhich our employees are registered with and carry out all our responsibilities as defined by legislation and collectiveagreements. In this regard, to provide better working conditions, occupational health and safety, social benefits suchas birth, marriage and education benefits are also included in the collective agreements in addition to the standardobligatory practices and these are followed by utmost care. The local and cultural elements of our operational geographyare also taken into consideration in defining these practices.Percentage of Employees Covered by Collective BargainingCollective BargainingAgreementTurkeyCompanies AbroadTotal Number ofEmployees14,6314,582Employee EngagementEmployees Covered by CollectiveBargaining Agreement12,4542,380EmployeesCovered %8552Arçelik A.fi. is a member of MESS (TurkishEmployers' Association of Metal Industries) andits blue-collar employees are members of Unionof Metal Workers of Turkey. In November 2010,Collective Bargaining Agreement, which covers01.09.2010-31.08.2012 period, was signedbetween MESS and Turkish Metal Trade Union.Regulations regarding Occupational Healthand Safety are included in theCollective Agreement.We believe that the sustainability ofour success is only possible with thecreation of platforms whereby ouremployees can express themselvesand with continuous improvement ofthe communication channels for themto provide feedback. In this regard,we apply various systems that ensuremore active involvement by theemployees in working life and effectivecommunication of their continuousfeedback and suggestions.As Arçelik A.fi. we care about themotivation of our employees. Withregard to the practices on employeecommitment, which is invariable to topmanagement's agenda, local businessplans were formed subsequent to the<strong>2011</strong> Employee Commitment Survey,and project groups and consultancycommittees comprised of topmanagers were constituted. Projectgroups are expected to form annualproject plans, conduct SWOT analysesthroughout the company, developbusiness plan suggestions and presentthem to the consultancy committees.In 2012, the operations that areprioritized throughout the companyare planned to be actualized. Theseoperations will include topics such aspersonal development seminars forblue-collar workers, strengthening ofinternal communication, expansion ofthe scope of suggestion system,broadening of internal bulletin boardssystem from white-collar employeesto blue collar employees, anddiversification of social activities formotivation. The communication ofthese operations to employees andassessment of their efficiency will beamong the action plans.Actively used by our employees, theSuggestion System seeks to raiseawareness among employees andencourage their participation. Theemployees directly and indirectlypresent their ideas on every topic,which are to improve the existentconditions. While the evaluationcommittees assess all the suggestions,practices which will be realizedimmediately are actualized and thedetails are studied for the projectswhich will be designed in later periods.The suggestion system is managedintegrated with recognition andappreciation process; our employeesearn points with every singlesuggestion they make and meetingsare held to award them.31
PeopleIn <strong>2011</strong>, our employees in Turkeyoperations made 5,990 suggestions and50% of these suggestions wereimmediately actualized.Communication and Exchange Meetings is another practicewhereby our employees participate in the companyprocesses. Within the scope of these meetings, which areheld in different levels, our employees present their ideasregarding the efficiency of company's main processes andactively support the meeting of core business objectives.Internal communication channels hold the utmost significancefor the constant informing of our employees and their activeengagement. For this matter, we continuously inform ouremployees through different communication channels suchas our intranet, our online magazine Aydabir, newsletters,internal announcements, information letters and e-mails. Inaddition to these practices, we have been realizing projectsregarding social media practices in order to increase theefficiency of our communication.on improving our human resources practices as we growand conduct practices with which our employees cancontinuously develop themselves.For further information regarding our human resources approachand the relevant processes, you can visit:http://www.arcelikas.com/page/13/INSAN_KAYNAKLARIWith our increasing business volume, Arçelik A.fi. family isalso expanding. We have become a more active andsuccessful actor in the global arena thanks to the new talentswe have acquired. In the last 10 year our total employeenumber has tripled. This fact indicates our success inachieving our “becoming a talent magnet” objective.Talent MagnetIt is only possible with our talented workforce to be the“pioneer” in every sphere that we conduct activity. This ishow, we, Arçelik A.fi., make “firsts” and “newests” happen.With this invariable approach of ours, we not only gather themost talented and experienced professionals but also providethem with the opportunities that would help them developand actualize their potentials, hence keep them within ourbody. We support and develop these opportunities withhuman resources processes, which we systematically formand manage in parallel with our company strategies.In order to enhance the strength we get from our employees,we employ integrated human resources systems and tools,encourage creative and innovative working environment andattribute importance to potential development and careerplanning in line with talent management strategy. As ArçelikA.fi., in parallel with our company strategies, we place valueNumber of Employees20000150001000050000Number of Employees by Contract TypeArçelik A.fi.Turkey6,9722426,73020092010<strong>2011</strong>11,0791,876 18763.43 9,203Permanent % Temporary % Total11,80412,91013,33796.29491.218,05343184,31813,7352000 2005 2010Turkey Companies Abroad Total*As of year end, excluding Defy Appliances4608251,2943.868.819,213*4,58214,631<strong>2011</strong>12,26413,73514,63132
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Number of Employees by StatusArçelik A.fi.Turkey 20092010<strong>2011</strong>Abroad20092010<strong>2011</strong>White Collar % Blue Collar % Total1,8592,0012,1771,0551,0511,15415.214.614.926.124.325.210,40511,73412,4542,9883,2673,42884.885.485.173.975.774.812,26413,73514,6314,0434,3184,582Employee Distribution by GenderArçelik A.fi. Turkey20092010<strong>2011</strong>Male % Female % Total9,56610,71311,41278 2,698 2278 3,022 2278 3,219 2212,26413,73514,631In Arçelik A.fi., various methods ofrecruitment are employed in order togather qualified professionals, toevaluate employee candidates in ahealthy fashion and to place them inthe necessary positions. With thesepractices, while the needed workforceis acquired, the number of potentialcandidates is increased. As anorganization that is conductinginternational activities, we regardflexibility, managing differences andcontinuous learning as critical skills.Employee Turnover by GenderArçelik A.fi. TurkeyMaleNumber ofLeavesIn this regard, the talents that will jointhe Arçelik A.fi. body are expected tohave these skills and to be amongindividuals who can identify with ourcompany culture and values. In therecruitment process, equalopportunities are provided to thosewho carry the qualities required by therelevant position.All employees that are recruited inArçelik A.fi. and its subsidiaries beganworking with a salary that is above thelocal minimum wage. There is nodifference between male and femaleemployees in terms of wage levels.The differences among the wages aredetermined with regards to the job thatis held and the responsibility taken.For further information about the opportunitiesprovided to our employees regarding wages,compensation and benefits, you can visithttp://www.arcelikas.com/page/83/Calisma_HayatiNumber ofTotal Number Total Number% FemaleLeaves%of Leaves of EmployeesTotal %2010<strong>2011</strong>10,71311,4121,1771,70011.014.93,0223,2191412234.76.91,3181,92313,73514,6319.613.1Employee Turnover by AgeArçelik A.fi. Turkey 50 % Total2010<strong>2011</strong>3711,3362869909547692838402.92.11,3181,92333
PeoplePerformance ManagementAs Arçelik A.fi., it is among our top objectives to support ourglobal success with our ever-developing global businessculture. In this regard, we pay attention to develop the talentsof our employees in each country we operate in, startingwith their recruitment. To that end, we closely monitor theperformance of our employees, and employ methods suchas goal dispersion, performance management, competenceand potential evaluation in order to manage our humanresource in the most effective fashion.Target and StrategyDisseminationBusiness Plan and AnnualStrategy MeetingsDetermination of Managementand Corporate TargetsDissemination to Sub-Unit Targetsfair training and development opportunities. The effectivenessof the relevant processes is evaluated continuously on regularbasis. The development and amendment areas of the nextbusiness period are determined with regard to theseevaluations and the acquired data.Total Training Hours in <strong>2011</strong>Blue CollarWhite CollarTotal220,40286,341306,743There has been an increase inthe total training hours with regardto the previous year. Eachwhite-collar employee received40 hours of training, while thisnumber was 18 hours for eachblue-collar employees.Hours perEmployee17.739.721.0Creation of PersonalScore CardWith goal dispersion, it is ensured that the company objectivesand strategies are disseminated from the top levels oforganization to departments and individuals. Hence, it isprovided that all employees adopt common objectives andstrive for them while the business results are measured andevaluated with accurate indicators.All of our white and blue-collar employees in domesticoperations are subject to performance evaluations. Whilethis system is used in some of our operations abroad, theexpansion studies are still being pursued.Development and Talent ManagementDevelopment and Talent Management in Arçelik A.fi. aimsto determine the talents that would realize the companyvision and to develop it. This aim is comprised of twosignificant steps. First, to determine the employees that willtake role in the future of the company, in line with company'sand Group's objectives and strategies towards continuousgrowth. Second, to plan and meet the present and futuredevelopment needs in parallel with company priorities,strategies and aims.While focusing on the global organization strategies,Development and Talent Management takes intoconsideration the necessities arising from the local differences.The activities are conducted with the principle to provideTraining and Development in Arçelik A.fi. aims to continuouslyincrease the performance of the company and the individual.In the determination of the development needs of anemployee, the present and future role of the individual istaken into account. Within this frame, the employees areincluded in development programs that are designed atvarious levels. These programs can be defined as talentdevelopment programs focusing on adaptation to the positionand the company, and to technical and behavioraldevelopment, developing leadership skills and preparingleader candidates for their future roles.Starting with their recruitment, our employees are includedin training programs designed at different levels and contentssuch as orientation, personal and occupational skilldevelopment, technical and operational knowledge, salesand marketing, leadership, management and foreignlanguages; with regard to their corporate and individualdevelopment needs. Some of our programs that developleadership skills and prepare employees for the future are:• Leadership and Business Trainings; is a program thatstrives to prepare and support employees with manegerialskills for future management positions.• Leaders and Strategy/People Trainings is pursued tosupport employees with managerial skills for future seniormanagement positions.• Management Continuous Development Programs is along term program that accelerates the adaptation processof newly appointed managers.34
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>• Functional Leadership Development Programs areprepared for different processes such as development,sales, marketing, purchasing and human resources.• International Manager Development Program is a programthat supports the development of employees who havethe potential for overseas assignments in areas such asholistic approach, managing differences, increasingefficiency through protecting corporate standards inpractices, collaborating with individuals, departmentsand institutions open to synergy and representing thecompany in these environments.• Arçelik Leadership Program supports the developmentof leadership competencies within the company.• Mentoring Program is a program that brings togetherthose employees who have the potential to fill seniormanagement positions in the future and current seniormanagers, thus allowing them to share their experiencesand help cultivate a coaching culture.In addition to these applied practices, training needsanalyses, which are aimed for the employees in the productionfield, are conducted annually within the scope of stationnecessities and job description responsibilities. Theseanalyses include technical and occupational training withregard to different assignments and versatility of skills thatour employees may need in coming periods. The trainingsare supported with training documents and one-point lessonswhile the internal trainer practice is employed for the spreadand continuity of the trainings.From Campus to CareerAs Arçelik A.fi, we are aware of the added value realizedwith the projects and practices we conduct in collaborationwith university students and universities. With these practices,we provide university students the opportunity to gainexperience in an environment whereby theory and practicemerge, giving them the opportunity to develop themselves.We support this approach with long and short-term internshippossibilities, university-industry collaborations andinternational practices in cooperation with CEMS.University-Industry CollaborationOur University-Industry Collaboration which we conduct withthe mutual protocols signed with the universities in includetechnical fields such as R&D, engineering, production,information technologies, as well as social fields such assales, marketing, human resources, and financial affairs.These studies are often held within the scope of theassignments of 3rd and 4th year undergraduate studentsor thesis studies of graduate students.CEMSCEMS is a program that aims to train the future managerswith profiles appropriate for the needs of internationalcorporations which is designed with cooperation ofuniversities and the business world. In cooperation with KoçUniversity Graduate School of Business, Arçelik A.fi. hasbecome the first company from Turkey to participate inCEMS which has a worldwide strategic web, and will takeon a significant task as it will contribute to the upbringing offuture global leaders.InternshipAs Arçelik A.fi. an average of 40%-50% of the recruitmentwe realize within a year is of new graduates. Our internshipprocess carries utmost significance, as it is a period wherewe can communicate with the students before graduationand evaluate potential employees for our company. Followingtheir internship, the students find the opportunity to workwith fixed term contracts or as part time employees.Our relationship with the academia is not limited to universities.Similar internship opportunities are provided to high schoolstudents as well.For detailed information regarding the internship opportunitiesprovided by Arçelik A.fi. you can visithttp://www.arcelikas.com/page/199/StajlarArçelik Electrical Household Appliances TechnicalTraining ProgramWith the program which has been jointly conducted in <strong>2011</strong>with the Ministry of National Education Directorate Generalof Technical Education for Boys within the scope of VocationalEducation: A Crucial Matter for the Nation project, we aimto raise a workforce informed with the developments inhousehold appliances and the new technologies, and tomake easier the employment of the students in the relevantvocational high schools. Arçelik labs strive to train thestudents to be eligible for employment as technicians in thewhite goods industry.Within the scope of the project taht will last for 4 years,Arçelik has established new laboratories furnished with thelatest instruments and equipment. The prepared trainingmaterials were distributed to schools and Arçelik A.fi trainedprogram traineers. Another objective of the project is to meetthe technical service personnel need of authorized servicesfrom these schools.35
PeopleConsidering the cities where the personnel need of authorizedservices are higher, 4 schools, 3 in Istanbul (Kartal - Beykoz- Zeytinburnu) and 1 in Diyarbak›r were identified. Theequipment which will be used in schools are determinedand purchased. In addition to these practices, the contentsof the trainings were aligned with technician developmentprogram employed in Arçelik A.fi. Within the scope of theproject 18 teachers in 4 schools received training for 4.5months and gained certificates. As a result of theseprocesses, 122 students started the trainings. In the lastphase of their internship the students who are willing to workin authorized services will be determined and they will betrained in Arçelik Academy on current products and will begiven certificates.‹fiKUR Occupational Training ProjectVocational Training Project is yet another project that hasbeen continuing as part of education and developmentprojects since 2009 with the collaboration of ‹fiKUR. Withinthe scope of the agreement, trainings are provided inbranches such as household appliances, air-conditioninginstallation, cooling systems and audio and video systems.60% of the participants who has successfully finished theseemployment trainings given by Arçelik A.fi. trainees for 4.5months have been recruited in our factories.Safety FirstOccupational Health and SafetyCreating a healthy and safe environment for our employeesis among the core priorities of Arçelik A.fi. The success wehave earned and aim for is dependent on the workingenvironment where our employees can work safely andefficiently. Based on “the value given to employees”, whichis one of the most important elements of its vision, ArçelikA.fi. promotes engagement of occupational health and safetyunder the planned and systematic activities by creatingcoherence between Occupational Health and Safety Policy,legislations and business processes.Arcelik A.fi. provides guidance to employees on health andsafety at all times, as well as provides continuouscommunication between coworkers and managers on healthand safety and related topics.At Arçelik A.fi. our objective regarding occupational healthand safety is “zero work accident and zero occupationaldisease.” In order to reach this goal, we continue our effortsregarding employee engagement and alignment of necessaryresources.You can reach Arçelik A.fi. Occupational Health and Safety Policyvia http://www.arcelikas.com/page/195/Is_Sagligi_ve_GuvenligiWithin Arçelik A.fi. there are 10 active Occupational Healthand Safety Committees which have 136 members and 28employee representatives. These committees help auditemployee health and work safety programs and providesuggestions regarding them.The topics regarding Occupational Health and Safety aremonitored within the scope of our performance system. Inaddition to the indicators controlled within this system,indicators such as Accident Frequency Rate, AccidentGravity Rate, training hours and lost working days are alsomonitored. As a result of these effort, we have achievedserious improvements in occupational health and safetyindicators.36
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>For our 8 production facilities in Turkey, the occupational health and safety indicator realizations are asindicated:Occupational Health and Safety Indicators20092010<strong>2011</strong>2010/<strong>2011</strong> Improvement %Accident Frequency Rate (F)*Accident Gravity Rate (G)**10.490.1138.410.0855.730.07832%8%* Accident Frequency Rate (F)= (Total number of work accidents / total working hours)*1,000,000** Accident Gravity Rate (G)= (Total number of workdays lost due to work accidents / total working hours)*1,000As a result of the work conducted, in <strong>2011</strong> theaccident frequency rate, which is an indicatorof total accidents, has decreased by 32% incomparison to 2010. Within the same period,accident gravity rate, which is an indicator ofnumber of days lost due to work-relatedaccidents, has decreased by 8%. Moreover,the improvement in the work-related accidentnumbers caused a decrease in working daysloss and an increase in efficiency. Nooccupational disease or fatal work accidenthas occurred within the reporting period.Our Occupational Health and Safety policies in the countrieswhere we operate and run production facilities (Romania,China, Russia) is audited with the system we employ inTurkey. As of <strong>2011</strong>, Accident Frequency Rate and AccidentGravity Rate indicators started to be monitored in theseregions.As Arçelik A.fi. we believe in the importance of raisingawareness for occupational health and safety and enrichthe continuous progress in this field with the trainings weprovide for our employees. In <strong>2011</strong>, 51,464 man*houroccupational health and safety training were providedthroughout Arçelik A.fi.Within the reporting period, we continued health and safetyprograms directed to our employees and their families as wedid in the previous years. Seminars regarding the effect ofnoise on health, ergonomics, flu and hygiene and women'shealth; child development support program for fathers; thedistribution of educational pamphlets for quitting smoking; flu,hepatitis B and tetanus vaccines for employees and theirfamilies, messages for waist and neck health, oral and dentalhealth, health and safety were among the issues covered.The ensuring of the physical security of working environmentis as significance as the other elements in the creation of asafe working environment. All the security personnel workingat Arçelik A.fi. receive training on relevant legal articles,company policies and procedures, customer satisfactionand stress management, effective communication and guestwelcoming and emergencies and these training data arebeing recorded. In addition to these, the security personnelreceive trainings every 5-year and are expected to renewtheir certificates.In <strong>2011</strong>, physical safety audits have been conducted inevery Arçelik A.fi. location. As a result of the audits held,amendatory activities were planned and the relevant projectshave been initiated for those fields determined as open forimprovement.37
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We Develop SustainableSupply ProcessesAt Arçelik A.fi. our aim is to make our products accessible to consumers worldwide throughour sustainable operational structure. Thus, we adopt Supply Chain Policies which guaranteemaximum consumer satisfaction while increasing due process productivity and ensuringsustainable growth. Through our integrated Supply Chain solutions at every stage, fromthe procurement of materials to the distribution of finished goods, we aim that theproducts demanded by the customers are delivered to them at the right time , with speed,flexibility and at the lowest possible cost. At this point, our suppliers hold a very significantrole.Our objectives of global accessibility, maximum level of consumer satisfaction and sustainablegrowth is only possible through top quality supplier portfolio. In this regard, we expect thematerials purchased from our suppliers to meet quality expectations and fulfill technicaland organizational requirements. In addition to these conditions compliance of all oursuppliers with quality management systems, environmental management systems andethical practices is a crucial aspect for the continuity of all processes.39
SupplyThe Improving Structure of SupplyInternational Supply OrganizationSupply chain policies adopted by Arçelik A.fi. are gearedtowards ensuring sustainable growth. With this mindset, ourgoal is to provide our customers affordable, accessible andenvironmentally-friendly products with high quality.Our procurement operations comprise the direct purchase,indirect purchase, service and investment goods for all ourproduction facilities of white goods and electronics in Turkeyand abroad. In addition, purchase of logistic service andproduct purchase are run separately. Arçelik A.fi. has anInternational Purchase Organization with headquarters inTurkey. In order to run the supply management processesmore efficiently in our operational areas and regions whereour suppliers are high in number, we have local purchasefunctions in our overseas business units. In line with Arçelik’ssustainable growth policies, Taiwan office was opened in<strong>2011</strong> with the aim to improve purchasing and technicalfunctions in the Far East. Also in <strong>2011</strong>, one of South Africanmarket’s most competitive players, Defy, joined our networkwith the purpose of increasing Arçelik A.fi.’s market presencein Sub-Saharan Africa. In parallel with our growth strategies,our foreign purchase functions will grow and develop in linewith requirements.In order to manage more effectively the activities aimed toimprove our suppliers and undertake joint projects, “SupplierDevelopment” unit was established within Arçelik A.fi. in<strong>2011</strong>. Purchasing functions for Information Technologies,Advertising and Marketing and other services have beenconsolidated under central supply operations since then.Europe -Russia,RomaniaHeadquarters–IstanbulPurchasing by NumbersSouth Africa–DefyDistribution of Purchasing of Raw Materials (%)Far East –Shanghai,Shenzen, ChangzhouPlantArçelik’s central purchasing directorate unit manages a 2billion Euro purchasing volume including mainly the directpurchases such as raw-materials used in production,processed metal and plastic materials and components aswell as indirect material/service purchases and investmentgoods purchasing.Arçelik A.fi. works with more than 1,400 suppliers in theprocurement of “Direct Materials” which includes rawmaterials and components used in the production of whitegoods and electronics.Raw materials made up 40% of Direct Materials procuredin <strong>2011</strong>. 44% of raw materials procured were metal sheetsand 43% were plastic raw materials.Metal SheetPlastic43%44%CopperAluminumOther9% 3%1%40
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>The rate of purchasing from “Low Cost Countries” in <strong>2011</strong>was 19%. In addition to this improvement, we target furthercompetitive advantage via cost reduction as a result ofprojects run with support from production facilities andour international supply network.In terms of regional distribution of purchasing activities,supplies from Turkey accounted for 46% of total purchasingvolume.Direct Material Procurement from Low CostCountries (%)Turkey36%45%One of our most significant purchasing strategies is toincrease local procurement in regions where ourproduction facilities are based. With our local procurementstrategy, we seek to contribute to the national economieswe operate in. We acknowledge that increasing localprocurement is a long-term goal which requires continuity.Beko LLC, which operates in Russia, increased its localprocurement volume ratio from 32% in 2010 to 35% in<strong>2011</strong>.LCC*OtherLCC*: Low cost countries19%Regional Distribution - Purchasing Capacity (%)U.S.0.10%Europe27.56%Turkey45.81%Far East25.67%Middle East0.85%41
SupplyS.C. Arctic S.A. – RomaniaBeko LLC - RussiaLocal14%International86%Local35%International65%The local and international procurement ratio of the production facilities for white products and electronics in Turkeyfor the year <strong>2011</strong>:Arçelik - White GoodsArçelik - ElectronicsLocal59%International41%Local9%International91%Supplier RelationsThe purpose of supplier relations is to establish long-termpartnerships in line with principles of unity, sincerity, mutualbenefit, sustainability and mutual growth strategies.Regular meetings and visits, information sharing throughthe portal, organizational structuring and suppliers’ events,which seek to enhance and increase cooperation with thesuppliers at every step of the process, are crucialcommunication tools for maintaining long-term partnerships.In order to strengthen communication with the suppliersand to enhance the traceability of the processes by electronicmapping out of the workflow, the “Supplier Portal”, launchedin <strong>2011</strong> and is used to manage supplier initial approvalprocesses.Prospective suppliers are scanned through a step-by-step“Supplier Initail Approval/Evaluation” process via SupplierPortal. In addition to the supplier’s capability formanufacturing materials, technical proficiency and financialinfrastructure, its compliance with quality, environmentaland work ethic standards are evaluated in this process.Information provided by the suppliers is regarded as tradesecrets and their confidentiality is highly respected. Supplierswho pass the pre-evaluation stage are examined with regardsto the quality of their product and criticality. While thesuppliers which pass the final qualification stage areapproved by Arçelik A.fi., those who score negatively arealso approved under probation and are asked to improvetheir inadequacies. In addition to these applications, Quality,Environmental and Work Ethic standards of Arçelik A.fi. isalso made available to existing and prospective suppliersvia Supplier Portal.42
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>In <strong>2011</strong>, the “Arçelik (Beko) Suppliers’ Day” was hosted in China in order to improve communication across suppliersin Asia. 300 delegates from 200 companies in 7 countries attended this organization. A more comprehensive organizationis planned within 2012, which will also include suppliers in Turkey and Europe.Expectations from SuppliersIn addition to compliance with the product specificationsand quality expectations, and satisfaction of technical andorganizational requirements, we expect all our suppliers tooperate in compliance with global conditions of qualitymanagement system, environmental management systemand work ethic standards. We also encourage our suppliersto develop projects to improve their products and processes.With this purpose, we have organized Innovation Days withparticipation of our suppliers which have facilitatedimprovement in our products with the help of projectsdeveloped through these events.QualitySince its foundation, Arçelik A.fi.’s principle has been toprovide its customers with high-quality products which willsimplify and improve their lives. Operating in a frameworkthat values customer satisfaction and environmentalawareness, Arçelik A.fi. attributes its success to “productquality, superior sales power and effective post-purchaseservices”.We operate with the awareness that ensuring the quality ofour products relies on ensuring the quality of the materialswe procure from our suppliers. Therefore, we expect andencourage our suppliers to operate in adherence to ourunderstanding of quality.We expect our suppliers to develop a Quality ManagementSystem, maintain its continuity and make efforts to improveit. To what extent our suppliers manage to meet ourexpectations is examined and controlled by Arçelik A.fi.In this respect, results of internal and external examinationsand targets regarding the crucial supervision indicators ofprocesses which impact quality control are routinely tracked.Arçelik A.fi. also examines customer quality awards, auditingrecords, customer feedback reports, product standardaccreditations and management standard certificates duringthese controls.We expect from our suppliers to have precisemeasuring/testing devices to test the process from thesupply of raw materials to their shipping, to makemeasurements in accordance with quality plans and torecord them, to pass on the quality documents that guaranteeproduct qualification alongside the products. These materialsand quality documents are examined in the productionfacilities and they go through measurements, function andsafety tests in our high-tech laboratories with modern devicesby the professional quality personnel.Our suppliers should develop measurable quality targetsthat meet with the expectations of Arçelik A.fi. and conductmanagement evaluations which should comprise theoperation results that aim to trace the general performancein the process. The quality performance results of our localsuppliers are presented in the Supplier Portal on a monthlybasis.43
SupplyWork EthicAs one of the first signatories of the European Committeeof Domestic Equipment Manufacturers (CECED) Code ofConduct, Arçelik A.fi. requires its suppliers to also complywith it. This Agreement ensures compliance with theregulations on compulsory labor, child labor, harassment,wages and compensation, work hours, equality betweenemployees (nondiscrimination), health and safety, freedomof association, freedom of collective bargaining,environmental legislations and standards within the frameworkof international agreements. These obligations are sharedwith the suppliers via Supplier Portal. They are examinedduring the initial approval of the suppliers and ensured viaagreements made with the suppliers. In <strong>2011</strong>, self-evaluationon Work Ethic studies was conducted with 187 suppliers.EnvironmentIn order to protect the ecological balance, we follow thenecessary regulations regarding the whole life cycle ofproducts from their production to disposal. Arçelik A.fi.’senvironmental policy guarantees compliance with EuropeanUnion directives which coordinate national legal precautionsadopted by member countries as well as the national legalregulations. The collaboration and engagement of allsuppliers in the Supply Chain is crucial to the realization ofArçelik’s environmental policy. In this framework, expectationsregarding environmental issues are specified for the materialsto be procured from the suppliers.• Studies on packaging materials have led to 344 tonsreduction in plastic packaging waste.• Studies on reconfiguration of user manuals offered withour products have led to a 127 tons reduction in the useof paper products.• Studies to increase the use of 100% recycled paperinstead of plastic and wooden materials for packagingmaterials still continue and we thus save a lot of energyand reduce dependency on natural resources.• Robotic applications enabling the re-use of wasted dyein the dyeing process have helped the reduction ofexpenditures as well as the use of chemicals and wasteproduced.• We have expanded the use of long-term re-usable plasticcases instead of non-recyclable cardboard boxes.As the central supply operations unit, we serve for thepurchasing needs of Arçelik in producing its national andinternational award winning innovative and environmentallyfriendlyproduct design, with our improving supplier portfolioand skilled supplier partners.We comply with the legal directives, regulations and rulesto ensure that the materials we procure are environmentfriendly and we expect our suppliers to operate in the sameway. In <strong>2011</strong>, Arçelik’s local suppliers were informed aboutcompliance for environmental regulations and conditionsincluding the REACH (Regulation on Registration, Evaluation,Authorization and Restriction of Chemicals) and theircompliance data were collected via e-mails and the SupplierPortal. In <strong>2011</strong>, self-evaluation on environment was conductedwith 152 suppliers.Innovation and PartnershipProducing environment friendly products which consumefewer natural resources is a priority for Arçelik A.fi.; thus wesearch for alternative materials. We support the suppliers’contributions to project design for the required materialsand components and encourage collaborations with ourR&D department. Results of such projects in the year <strong>2011</strong>are summarized as follows:44
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>45
46product
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We offer environment friendly,innovative products that make life easierand excellent services to our customersIt is an integral part of our sustainability to produce innovative and environment friendly productswhich conform to customers' living conditions and satisfy their expectations. In this respect, beinginnovative is the fundamental principle of Arçelik A.fi., the patent leader of Turkey.It is imperative that our products do not negatively affect natural resources during their use andcombating the climate change requires a reduction in global energy and water consumption. Thereforewe raise awareness among our customers and encourage their preference of more energy efficientproducts while accelerating our R&D studies on reducing the environmental impact of our products.In all markets we operate, our authorized dealers and after sales services network strives to providebetter services and to inform our consumers regarding our products.47
ProductArçelik, the Innovation ChampionAt Arçelik A.fi., it is our priority to offer a product portfoliothat has minimal impact on the environment and on thenatural resources in the recycling process. With this mindset,we expand our portfolio with more energy efficient products.Regulation of the environmental impact of our productsduring the entire product life-cycle forms the basis of ourR&D activities.We strengthen our position in Turkish and global marketswith the help of innovative and environment-friendly productswe develop. Product, design, development and improvementpractices in line with customers' demands and expectationsare crucial to achieving that success.Energy Consumption in the Product Life CycleConsumer use, 94-95%Production and raw material supply,
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Innovative ProductsWe aim to develop products that can meet the demandsof future generations in the framework of our managementapproach to protection of natural resources and ourunderstanding of quality. In this regard, we continuouslywork to improve our products and minimize their negativeimpacts on the environment and human health. 7 R&Dcenters with 800 qualified staff develop projects to createenvironment friendly products which offer highest efficiencywhile protecting the natural resources.Products manufactured by Arçelik A.fi. are tested in Arçeliklaboratories in compliance with energy labeling directivesand energy class defining performance test standards ofthe countries where these products will be sold.Through its vision championing the efficient use of naturalresources, consumer health and comfort and innovation,as a result of environment friendly product developmentperformance, Arçelik A.fi. has continued to deliver productscarrying the titles of “world's mosts and firsts” in <strong>2011</strong>.In line with REACH regulations, Arçelik A.fi.ensures the registration and control of thechemicals being used and the chemical safetyduring transportation from producer toconsuming industries; and enables necessaryinformation flow and its accessibility forconsumers. Accordingly, Arçelik A.fi. fulfillsREACH regulation liabilities by producing newimprovement projects.49
ProductDishwasherArçelik 92104 PFEI Cactus, which was commissioned in<strong>2011</strong>, is the world's most efficient water saving dishwasherat A++ class with 6 liter water consumption. The aluminumisolation material, which is only utilized by Arçelik in theworld, helps the product save 10% energy. By re-filteringthe cleanest water of the washing-cycle which is the rinsingwater and re-using it in the next washing-cycle, 14% wateris saved, thus making the product the world's most waterefficient dishwasher.According to the European Committee of DomesticEquipment Manufacturers (CECED) database, 70% of alldishwashers used in Turkey are A energy class with 15liter water consumption. If all these dishwashers arereplaced with Cactus models, 22 million tons of water,which is equivalent to 500,000 people's annual waterconsumption, and 900 GWh of energy could be savedand 420,000 tons of greenhouse gas emission can beprevented.Another record breaking product by Arçelik A.fi. is theworld's most energy efficient dishwasher 63109 HIT with194 kWh (0.68 kWh/cycle) energy consumption, saving10% more energy than A+++ class products.Also in <strong>2011</strong>, by expanding the use of innovativetechnologies such as BLDC motors, aluminum isolation,automated doors and closed fan systems in 60 and 45cm products and program optimizations, Arçelik managedan average 10% reduction in the energy consumptionlevels of its dishwashers.Washing MachineArçelik washing machines; A+++ -20% for 9 kg products,A+++ -30% for 8 kg, A+++ -10% for 7 kg, A+++ for 6 kgand A++ for 5 kg, have the highest energy efficiencylevels.DishwasherBy using aluminum isolation material instead of oil-basedisolation materials, Cactus dishwasher has been producedas an environment friendly product with high resourceefficiency. Aluminum isolation material conserves energydue to lack of necessity for heat treatment during operation,and the adhesives used for its operation are compliant toregulations such as RoHS and PAH. The product wasawarded with 1 st place in “Large Corporations Sustainable,Environment Friendly Product” category of IstanbulChamber of Industries “2010 Environment friendly Productsand Practices Awards” in <strong>2011</strong>.Washing MachineIn <strong>2011</strong>, use of technologies such as load detection andmethods that accordingly control water, time and heatingenergies required, have been expanded across middleand upper segment products. With systems that enablemore sensitive water consumption control at upper segmentproducts, 20% water is saved at standard laundry cycle.50
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>RefrigeratorIn <strong>2011</strong>, Arçelik A.fi. designed and produced 4 new A+++class refrigerators. A+++ class products save 60% moreenergy than A class products. Turkey's first A+++ CombiNo-Frost designed 2488 CNG A+++ and first A+++ shelflevel TSM 1541 A+++ models have been produced.R&D studies to reduce operational noise level ofrefrigerators have resulted in 30-100% improvements.Beko RBI 2301 model A++ built-in refrigerator andK54283B A++ refrigerator are results of these studies andhave the lowest sound levels in the world. Nearly 100%of all refrigerator range of Arçelik A.fi. uses environmentfriendly R600a as coolant gas.OvenCSM 62520 DWL, which was produced in <strong>2011</strong>, is theworld's most energy efficient oven and due to strengthenedisolation, it saves 40% more energy in comparison to Aclass in the eco-turbo cooking mode.There are approximately 11.7 million household ovensused in Turkey and on average they are A energy classproducts. In the event that these ovens are replaced withCSM 62520 DWL, annual return on energy would be 511GWh which is 1.7 times of the energy generating capacityof Tigris Dam. The energy that is saved can prevent245,339 tons of greenhouse gas emissions.OvenWhen Europe is considered, there are approximately 131million household ovens in 15 countries and they are onaverage A energy class products. If these ovens were allreplaced with CSM 62520 DWL, 6.033 GWh energy wouldbe saved annually, equaling the annual electricitygeneration capacity of Keban Dam. The energy savedcan prevent 2,891,451 tons of greenhouse gas emissions.Our ovens are already compliant to stand-by regulationswhich came into effect in 2012. In line with the regulations,when the energy consumed by household goods thatoperate with electronic timers on stand-by mode is reducedfrom 5W to 0.8W in 15 European countries, 231,000 tonsof greenhouse gas emission will be prevented. The numberstands at 21,000 tons for Turkey.RefrigeratorTumble DryerWith the help of new generation heat pump tumble dryersdeveloped in <strong>2011</strong>, Arçelik A.fi. began to produce 50%more energy efficient models at 7 kg A class. Thus annualenergy consumption has been reduced from 152.6 kWhto 115.8 kWh and 12% improvement was achieved in thedeclaration program timing. Also by using glass for tumbledr doors, product-recycling rates have been improved.F›r›nTumble Dryer51
ProductConsumer ElectronicsResearch shows that energy consumed by electronichousehold goods on stand-by mode account for 11% ofa household's total energy consumption. For that reason,further research and studies have been conducted on theenergy consumed by household goods on stand-by mode.Arçelik A.fi. has developed TVs that have stand-by energyconsumption levels
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Distribution and Authorized Dealer NetworkAn important aspect of the sector we are operating in isthe requirement to meet consumer demands and ordersin a timely manner. Therefore distribution optimization andsales network hold great significance. Our efforts to improveour flexible Order-Production-Distribution infrastructure tomeet the customer expectations and satisfaction continue.The flexibility of our distribution network positively influencesthe efficiency of our authorized dealer network. We continueto come up with innovative solutions to minimize theenvironmental impacts of distribution and to further improveour sales network's competence.Communication with the Authorized DealersOur authorized dealers at 3,600 locations across Turkeyare our contact-points with customers and they are extremelyimportant in sustaining the productivity and continuity ofthe operational system we have established. ThereforeArçelik A.fi. pays special attention to effectivecommunication with our authorized dealers. By utilizingthe established communication mechanisms and practices,we seek to continuously improve our dealers' knowledge,skills and competence. By way of our closed-circuit “ArçelikTV” and “BEKO TV” broadcast, training and seminars overthe internet, and broadcasting to exhibit LCD TV productsin retail stores, we maintain continuous communicationlines with our authorized dealers.In <strong>2011</strong>, we established our online training platform “E-Academy” where 2,400 sales representatives are registeredand have access to trainings and seminars on their owntime. Through tests conducted before and after trainings,the platform also helps us track our representatives'progress.2,541 sales representatives from Arçelik and Bekoauthorized dealers have participated in 108 different trainingprograms including product and sales techniques in <strong>2011</strong>.Of these programs, 66 seminars on “Fundamental Productand Sales Techniques” were attended by 1,407 while 42“Product” entitled seminars were attended by 1,134representatives. Also in the same period, “FundamentalProduct and Sales” training was conducted online incooperation with Bo¤aziçi University's Lifelong LearningCenter. 295 sales representatives attended the programand participated in the test held at the end. 179representatives performed successfully and were rewardedwith certificates.Arçelik Commercial Air-Conditioning provides B2B marketingand services infrastructure for professional decision-makers. ArçelikA.fi. Air-Conditioning Academy offers theoretical and practicaltraining to sales specialists, after-sales and implementation personneland to business partners composed of authorized dealers andservices. In addition to this, we include the “Energy Management”module for our authorized dealers and services.Feedback we gather from our authorized dealers by wayof communicative engagements is an important sourcethat is utilized for the improvement of operational processquality. We inform our authorized dealers regarding ArçelikA.fi.'s targets and goals at our Authorized Dealer Meetings.We ensure that our authorized dealers visit our productionfacilities via programs we call as “White Tours.” With thetwo white tours we conducted within <strong>2011</strong>, 65 authorizeddealers had the opportunity to observe our factories.In addition to all these practices, we encourage ourauthorized dealers to participate in voluntary projectsorganized by Arçelik A.fi. or Koç Group. In order to increasethe sales of our energy efficient products, we work togetherwith our authorized dealers in organizing various socioecologicalprojects, advertisement and promotion initiatives.Environmental Approaches for ProductDistributionThe environmentally-friendly supply chain applications thatwe realized in the reporting period and their results are asfollows: “Dynamic Routing” application which was realizedin 2010, was utilized more effectively and efficiently in <strong>2011</strong>.Dynamic Routing enabled lower transportation costs; highercustomer service through shorter lead times; lower carbonemission through shorter routes; and workforce optimizationthrough process efficiency.“Route and Load Optimization System” enables us to useoptimum number of vehicles thus reducing hazardous gasemissions due to transportation. In <strong>2011</strong>, the systemfacilitated an improvement of 10%.In 2010, we started “Dealer Shared Warehouse” practicesin Adana and Antalya. This practice will also be expandedto Ankara in <strong>2011</strong> and to Izmir, Kayseri and Istanbul AsianSide in 2012. By consolidating dealer warehouses, onestep in the process of product delivery to customer iseliminated hence reducing carbon emissions.In accordance to Arçelik A.fi.'s environment policy, projectsaimed at reducing warehouse energy consumptions haveincreased in <strong>2011</strong>. Arçelik has reduced CO 2 emissionsby 46% by switching from LPG to electrical vehicles usedin warehouses and also has switched to energy-conservinglighting systems, increased usage of daylight inwarehouses.53
ProductIt is very important for Arçelik A.fi. that exports from Turkeyare handled in environmentally friendly ways. After productsarrive at destination ports; railway and river shipping arepreferred for in-land distribution where possible. In <strong>2011</strong>,74% of exports were shipped by sea, 24% by road-transportand 2% by railways.In <strong>2011</strong>, 39% of exports to Poland were switched fromroad transport to maritime transport. Our target for thisratio in 2012 is 50%. It is aimed that in 2012, 35% ofthe exports to Germany and Sweden (which is done byroad transport rather than sea due to restrictions of transitdurations, to be handled via railways. Studies areconducted to enable direct railway connection withinTurkey between production facility warehousesand ports.In <strong>2011</strong>, 79% of imports were shipped by sea 20% by roadtransport and 1% by railways. Our use of maritime transporthas increased 30% in the last year.After SalesIt is important for Arçelik A.fi. to provide the same level ofafter sales service quality that accompanies our productquality to our customers and to expand this high servicestandard to all markets where we operate. Arçelik A.fi. offersafter sales services through its own service network in 15countries and in other countries through its distributors andcontracted services.In order to ensure the continuity of our service organization'sservice quality and improve its performance, we identifyperformance indicators, track their progress and engage inactivities to improve results.Our authorized dealer and service network is the largest inTurkish durable consumer goods sector. Operating underArçelik Customer Services Directorate, Customer Servicesserved with over 500 authorized dealers under 10 regionalmanagement units, over 5,000 car-parks and over 10,000employees (half of which are technical staff) in the field in<strong>2011</strong>. Our technical staff are trained and certificated by theTechnical Services and Training Management unit. In additionto this, via Service TV practices, our service personnelreceive training on product specifications. In <strong>2011</strong>, distancelearningprograms were developed and utilized as a pilotprogram.for the technician to finish the service in a short period oftime without the need for a second visit.Since 1998, Arçelik A.fi. has been offering a 3-year warrantyfor its products even though the Turkish laws require aminimum 2-year warranty for the related product range.Call CenterArçelik Call Center (444 0 888) has been operating since1991 and it is of vital importance for our communication withour customers. Our call center, which operates 24/7, seeksto maintain a healthy dialogue between us and our customers,to timely evaluate customers' feedback and demands andto maximize customer satisfaction. These practices helprespond to the majority of customers' demands with "FirstStep Support" services over the phone without the need toarrange a house-call for the customer.Arçelik Call Center service network has expanded greatlyby merging pre-sales and after sales services operationsof Austrian Elektrabregenz, Beko and Altus in 2008, GermanGrundig in 2009 and German Beko in 2010 under Turkeyoperations.Our Call Center Management has provided home-basedemployment opportunities for disabled people who mightnot be able to work in an office environment with its "HomeAgent" project in <strong>2011</strong>.We conduct customer satisfaction surveys in Turkey andabroad in order to access customer feedback, improve thequality of our services and produce more innovative products.By utilizing palm-computers in authorized dealers in <strong>2011</strong>,allocation of responsibilities to field staff was optimized, thusled to improvement of service quality and efficiency. Underservice performance management, customers were givenconvenient appointments, staff respected appointment times,arrangements were made so the technician and the productarrived at the same time and time allocation was optimized54
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Disposal, Reuse and Recycling of Our ProductsAs Arçelik A.fi., we operate with the same responsibleapproach in the disposal, reuse and recycling of ourproducts as we do in their production and transportationto the customers. Arçelik complies with all applicable legallaws and regulations throughout the product life cycle. ISO14001 Environmental Management Standards form thebasis of these practices for Arçelik A.fi. In addition to this,we also ensure by our collection and recycling mechanismsthat our products are compliant with 2002/96/EC codedWEEE directives abided by European Union membercountries.Depending on the type of the product, the recyclingratio of the products produced by Arçelik A.fi.varies between 83.9% and 98%. Our products andtheir recycling ratios are as follows: Washingmachines: 99%; Driers: 98%; Refrigerators: 99%;Dishwashers: 84%; Consumer electronics: 88-92%and Ovens:91%.Use of Packages and Packaging WasteManagementWe support the environmental performance we achievewith our products via effective packaging wastemanagement practices. Thus we conduct studies andprojects to use less and recyclable green packagingmaterials and to reduce resource consumption due topackaging.Packaging materials used for our products are as follows:Packaging Material : Cardboard Plastic WoodDish WasherRefrigiratorWashing MachineTumble Drier MachineCooking DevicesElectronic DevicesWe also voluntarily participate and encourage participationin practices seeking compliance with the WEEE directivesin non-European Union markets. We have developed aproject in <strong>2011</strong> to identify activities in Turkey under theWEEE framework and worked together with The Associationof Turkish White Good Industrialists to realize them. In thisproject, we have closely studied and inspected refrigeratorsproduced before 1995 with CFC-11 coolant gases andwith a survey study, collected old products from thecustomers and studied how they could be integrated intothe WEEE system.In all our facilities, "Re-Evaluation Centers" are establishedsince 1997 to encourage recycling to provide energyefficiency.Raw materials used in our products and their recyclingratios are as follows:Materials Recycling Ratio (%)Metals 100Plastic 100Glass 100Chemicals*Can not be recycledRubber 100Others 81Components 80The volume and weight of our products' packaging aredesigned to generate as little waste as possible. Wecooperate with recycling companies licensed in Turkeyand abroad for packaging waste management.60% of the cardboards used in our cardboard packagingare from recycled materials and all our product packagingis fully recyclable.For internal shipment, we also use equipment made ofrecycled material. For the internal shipment of the electricalmotors, cases made of recycled composite packagingwastes are used.The project we have started to improve plastic packaginghave enabled 334 tons of reduction in shrink wrappingmaterial used in all facilities in <strong>2011</strong> and a 27% reductionin total.* Chemicals do not include oil. 78% of oil can be recycled.55
56SocialDevelopment
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>We SupportSocial DevelopmentWe are aware that, as a globally operating company, our responsilibities match the extentof our physical presence. Therefore we engage in practices that support social developmenton a local and global scale. We assume an active role in issues and requirements relatingto social sustainability and continue to increase our efforts to ensure the continuity ofour solutions.Arçelik A.fi. not only creates value by increasing new employment opportunities andgrowth across the countries in which it operates, but also supports the development ofsocial, cultural, environmental and sports activities. Contributing to social projects inaccordance with its sustainable development principle will continue to be among the toppriorities of Arçelik A.fi.57
Social DevelopmentSocial Responsibility ApproachThe development and implementation of sustainable projectsaiming to raise social standards and solve social problemsin light of the company's corporate values and culturecomprises one of the primary responsibilities of Arçelik.Arçelik considers social volunteerism as one of its corevalues. Arçelik also considers contributions to be made byvolunteers who are members of its large corporate familyand the sustainability of the projects through local ownershipas an important success criterion.Social Projects and SupportActivitiesStanding United for Education withArçelik Program - TurkeyWith the Standing United for Education Program, whichwas launched in 2004 in cooperation with the Ministry ofNational Education, Arçelik aims to reach children of primaryeducation age based on the awareness that contributionsto individual educational development must begin duringthe earlier stages of an individual's life.The program was continued in <strong>2011</strong> with the aim ofimproving the educational and developmental standardsof the students, who are studying at Regional PrimaryBoarding Schools and come from financially disadvantagedfamilies, and raising them as role models. To date, Arçelikhas reached 200,000 students studying at 300 RegionalPrimary Boarding Schools spread across 60 provincesthrough this program.Within the framework of the program, students who havegraduated with distinction from Regional Primary BoardingSchools but do not have the necessary financial resourcesto pursue secondary education have been offeredscholarships for their secondary education. Arçelik hasprovided teachers and school heads working at theseRegional Primary Boarding Schools with a series of seminarsand workshops to contribute to their personal andprofessional development. The Volunteer Family Council,which is comprised of Arçelik employees, authorized dealersand services, has organized many important events, rangingfrom "career days" to book/toy campaigns, school andplant visits to "environmental awareness competitions" inorder to contribute to the students’ personal development.58
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>As part of the “Standing United for Education” socialresponsibility program, Arçelik has organized an essay,poetry and painting competition titled, “Let's Protect OurEnvironment and Natural Resources” in order to raiseawareness of depleting natural resources and theimportance of saving water and energy. Arçelik exhibitedthe work submitted to the competition on "World EnvironmentDay" in Istanbul.Within the scope of the campaign, by the end of <strong>2011</strong>,Arçelik employees donated a total of 6,637 units of blood.In addition, Arçelik and Beko authorized dealers andservices located in the provinces actively participated inthe campaign coordinated by Regional Sales Offices andambassador dealers.“For My Country” National Blood Donation Campaign – TurkeyKoç Holding carries out various social responsibility activitiesevery year within the scope of the "For My Country" Project,which it has been implementing since 2006, in order topromote a responsible citizenship culture across the holdingcompanies and to contribute to the fulfillment of society'sneeds and wants.Within the scope of the project, Arçelik has implementeda "National Blood Donation Campaign" in cooperation withthe Turkish Red Crescent in 2010 and <strong>2011</strong>. Arçelikemployees, authorized dealers and services activelyparticipated in this project, which has been launched inorder to raise awareness of the importance of donatingblood in Turkey and to increase the number of citizens whodonate blood voluntarily on a regular basis.59
Social DevelopmentArçelik A.fi. Electrical Household Appliances TechnicalTraining Program and Arçelik Laboratories - Turkey“Vocational Education: A Crucial Matter for the Nation” isa social responsibility Project initiated by Koç Holding andis supported by Arçelik's employees, authorized dealersand services. Arçelik has assumed responsibility for 26schools within the framework of the project. Volunteersengage in various tasks such as "Vocational High SchoolCoaches" and prepare students for the challenges of theirfuture professional lives by contributing to their personaldevelopment and serving as role models. A 24-stong teamconsisting of Arçelik employees, dealers and services offercoaching to students who study at these schools. A totalof 1,283 students, 590 of whom continued their education,have been selected to receive scholarships since thelaunch of the project.Arçelik continued its support for the Vocational Education:A Crucial Matter for the Nation project in <strong>2011</strong> and launchedArçelik Electrical Household Appliances Technical TrainingProgram - Arçelik Laboratories program in cooperationwith the Ministry of National Education and GeneralDirectorate of Technical Training for Boys.By the start of the <strong>2011</strong>-2012 academic year, Arçelik hasestablished four labs across Turkey: Three in Kartal, Beykozand Zeytinburnu and one in Diyarbak›r. At these schools,122 students have begun trainings attended by 21 teachersat the Electric-Electronic Technologies - Electrical HouseholdAppliances Technical Service as part of the Arçelik ElectricalHousehold Appliances Technical Training Program.With this program, Arçelik had created an industry-specificpractice that contributes to the establishment andcontinuation of training-employment relationship. Theprogram aims to train a workforce that can followdevelopments and new technologies in the Turkishhousehold appliances industry and create new employmentopportunities. Accordingly, Arçelik has established newlaboratories furnished with the latest measuring instrumentsand equipment. The curriculum to be pursued at theselabs has been redesigned in cooperation with the Ministryof National Education. Within the scope of the program, atotal of 25 teachers have been trained at the ArçelikAcademy.Arçelik labs strive to train the students to be eligible foremployment as technicians in the white goods andairconditioner product groups. The students will be providedwith internship opportunities at Arçelik-authorized services.Those students who want to work at Arçelik-authorizeddealers or at Arçelik itself and who have completed certainstages of training successfully will be offered certificatesand employment opportunities.60
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Arçelik Search & Rescue Teams Helping EarthquakeVictims – TurkeyIn the aftermath of the devastating Van earthquake, Arçelikcame to the rescue of earthquake victims through theCoordination Committee established by Koç Holding.Arçelik, which established contact with all of its dealersacross Turkey and urged all of its employees to extend ahelping hand to the region and participated in operationswith its search & rescue team of 15 people, conducted inboth Van and Ercifl.Arçelik also sent four trucks of emergency supplies to theearthquake zone. Arçelik and Beko trucks delivered readyto-operatewashing machines and dryers with detergent,water tanks, blankets, electric heaters, infrared heatersand drinking water.The first shipment of emergency aid supplies comprisingelectric generators and heaters was delivered to theearthquake zone. The emergency aid supplies sent byArçelik were distributed to earthquake victims under thesurveillance of local authorities. Furthermore, emergencyaid materials collected through aid campaigns launchedat Arçelik's head office and other production facilities weresent to the region in lots by lorries and trucks.Product Support from Beko - RussiaBeko LLC Russia made donations by participating in socialand charity events. In March <strong>2011</strong>, Beko LLC donatedBeko washing machines and small household appliancesto the Kitezh and Orion Orphanage located in Kaluga, acity 300 km from Moscow. Ninety orphans are living in thisorphanage as a family.Elektrabregenz’s Support for Children – AustriaElektrabregenz, a long-established Austrian brand, providessupport to an organization named Projuventüte, which looksafter homeless and needy children, in line with its socialresponsibility approach during the <strong>2011</strong>-2012 period. Aspart of the contributions made in <strong>2011</strong>, Elektrabregenz notonly donated various products to the orphanages renovatedby Projuventüte, but also made contributions to the programsimplemented by the organization in order to increase socialawareness and generate support.Arçelik A.fi. Employees and Environmental Awareness“Kilimanjaro Expedition”Arçelik A.fi. combats climate change at all levels of thecompany. A team comprised of 12 Arçelik A.fi. employeesclimbed Africa’s highest mountain Kilimanjaro to drawattention to global warming. The climb to the mountain,which has lost 85% of its icecaps since 1912, wasconducted in 17-25 September and the team was comprisedof Arçelik A.fi. employees from Turkey, Russia, Germany,Romania and France.61
Social DevelopmentDefy – South Africa• Ethelbert Children's HomeEthelbert Children's Home is a home and shelter for 65 children who have been removed from their families due tophysical and/or sexual abuse, neglect, or abandonment and those orphaned because of HIV/AIDS. Ethelbert is not anorphanage and a majority of the children who have been entrusted to this home have parents. The ultimate goal of thiscenter is to ensure that the children are united happily with their parents after they receive rehabilitation. EthelbertChildren’s Home consists of six cottages, each with two residing Child Care Workers and a maximum of twelve children.Boys and girls are placed in separate cottages, with children under five finding a home in the toddler cottage. Ethelbertcan care for a maximum of 65 children, though this number often differs due to the placement of children with rehabilitatedparents or foster/adoptive parents. Besides donating white goods and electronic appliances in parallel with the necessitiesof the Ethelbert Children’s Home, Defy also made cash donations in <strong>2011</strong>.• Eersterust Welfare Organization for the AgedEersterust Welfare Organization for the Aged (EWOA) has been dedicated to caring for the elderly in Eersterust, Pretoriasince 1961. EWOA has expanded the scope of its activities to include the elderly with disabilities regardless of race,gender, religion or creed and cares for 40 people, 90 percent of who are elderly. Three of these 90 individuals are over100 years of age. Its vision is to ensure that the elderly, disabled and homeless are supported, protected and liverespectable lives. EWOA has recently renovated its facilities for which Defy has donated new ovens.62Ecology from A to Z with Arctic - RomaniaAs part of its corporate social responsibility approach,Arctic has created a section titled "The ABC of Ecology"on a website available at: www.arcticpentrutine.ro. Visitorsare provided with practical information on matters relatedto ecology and the environment and are educated on thebenefits of an eco-friendly lifestyle. The aim of this onlineproject is to raise awareness among society onenvironmental protection and to change habits that goagainst protecting the environment.
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Spora DestekSupport for SportsBeko Basketball League - TurkeySupporting Turkish basketball through sponsorships, the Beko brand continues to invest in this area without losingsteam. Beko launched its sponsorship program in 2006 by lending its name to the Turkish Basketball League. Thissponsorship, which still continues today, is the first step in associating the Beko brand with basketball through whichthe company aims to reach its long-term brand goals. Beko not only lent its name to the Turkish Basketball League,which has been renamed the Beko Turkish Basketball League after the launch of the sponsorship program, but alsoto the All-Star games, which has been renamed the Beko All-Star games.Beko's investments in basketball, which have moved forward in parallel with the brand's "Global Brand" vision, haveexpanded beyond the borders of the country and have taken to the international stage. Beko became the main sponsorsof the 2009 FIBA Asian Basketball Championships (China) and the 2009 FIBA European Championships (Poland). Bekoalso became the "Presenting Sponsor" (the biggest sponsor, who presents the championships to the entire world) ofthe 2010 FIBA World Basketball Championships organized in Turkey and the FIBA <strong>2011</strong> European Championshipsorganized in Lithuania.Beko Basketball Bundesliga - GermanyThe German Basketball League, one of the leading basketball leagues in Europe, has been organized under the nameof "Beko Basketball Bundesliga" from the start of the 2009-2010 season. Beko also sponsored sports events such asthe Beko Basketball Bundesliga All Star Day, Beko BBL Top Four, Beko BBL Champions Cup and Beko Super Cup in<strong>2011</strong>.Beko Basketball League - RussiaThe Russia Basketball League has been organized under the name of Beko Professional League since 2010. Beko alsosponsors street basketball championships called "Challenge Cup," organized in various regions across Russia duringthe summer months as an alternative to the professional basketball league. By organizing these events, Beko aims topopularize street basketball as a main sports branch and coordinate events in which Russian youngsters living indifferent regions of the country engage during their spare time. These events were organized in Volgograd, Kazan andSt. Petersburg in <strong>2011</strong>.Beko Basketball - LithuaniaBeko also became the sponsor of the Lithuanian Basketball League in <strong>2011</strong>. The Lithuanian Basketball League will beorganized under the title of "Beko LKL League" during the <strong>2011</strong>-2012 season.Grundig “Bundesliga Official Technology Partner” - GermanyGrundig has become the "Official Technology Partner” of Bundesliga. The Grundig logo hasbeen displayed permanently during all Bundesliga and Bundesliga 2 broadcasts during the <strong>2011</strong>/2012 season. Thiswill also continue throughout the 2012/2013 season. The Grundig logo is displayed during all Bundesliga and Bundesliga2 games, including the opening, return and relegation games, which are broadcast live.Arts, Culture and Sports Sponsorships segment of our corporate website:. http://www.arcelikas.com/sayfa/181/Kultur__Sanat_ve_Spora_Destek63
Corporate Awards and AchievementsCorporate Awards and Achievements in <strong>2011</strong>• Arçelik A.fi. received three awards at the 11 th “Energy Efficiency in Industry Project Contest”, organized by theMinistry of Energy and Natural Resources: “Projects for the Improvement of Energy Efficiency in Industry” categoryaward for its Tumble Dryer Factory, “Energy Efficient Industrial Facility” category award for Eskiflehir RefrigeratorPlant and “Energy Efficient Product” category award for A class 30% energy saving dishwasher.• 7 different Arçelik A.fi. R&D facilities in different locations were awarded “R&D Facilities Certificate” in the frameworkof Ministry of Industry and Commerce’s no.5746 legislation.• Arctic S.A. was the first company in Romania to receive “TPM Exceptional Plant <strong>Sustainability</strong> Award” from JIPM,Japanese Institute of Planned Maintenance.• Beko dishwasher DSN 6634 FX was named the “Test Champion” in quality, environmental impact and ease of usecategories at a comparative product test on 11 dishwashers conducted by Germany’s prestigious, independentStiftung Warentest (StiWa) Test and Research Institute.• 3 Beko refrigerators’ energy labels were one of the few to be deemed compliant with declaration requirements bythe Appliance Testing for Energy Label Evaluation (ATLETE) project, run by European White Goods Producers’Association (CECED) and the European Commission.• Grundig’s Audiorama global speakers, which have remained in the same IF-Awarded design for the last 41 years,was awarded “Design Classic” by Germany and Europe’s largest interior design magazine Schöner Wohnen.• Beko’s 4-door refrigerator and OIM22500XP built-in pyrolitic oven were both awarded Product of the Year awardsin their respective categories from United Kingdom’s customer and sales channels magazine Get Connected. Bekoand Blomberg were also awarded “The Best Commercial Placing” special recognition.64
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>• Arçelik A.fi. was awarded by the Social Security Institution of Turkey in “10 Employers That Paid Highest Premiumsin 2010” and “Employers with the Highest Number of Disabled Employees in Terms of Premium-Payment Days”categories.• Arçelik Electronics was selected the “Most Liked and Most Preferred Brand in the Shopping Malls” in producerretailer category as a result of the “Best Brands in Shopping Malls” research conducted by Shopping MallsInvestors’ Association in partnership with GfK Turkey.• Arçelik A.fi.’s all+in+one TV won the Special Jury Award at TES‹D <strong>2011</strong> Innovation and Creativity Awards.• At the Istanbul Chamber of Industry’s 2010 “Sustainable Environment Friendly Products and Practices Awards”Arçelik’s Cactus Dishwasher won the 1 st Place and Economist Collection of Washing Machines won the 2ndPlace in Large Corporations: Sustainable Environment Friendly Product category. Arçelik’s “Standing United forEducation with Arçelik Program” also won the 2 nd Place in Large Corporations: Corporate Social Responsibilityin the area of Environment.• International independent accreditation institution British Standards Institution (BSI) awarded Arçelik A.fi. witha Confirmation Certificate for its ISO 14064-1-compliant greenhouse gas emissions calculation and reporting.• Beko Russia was awarded “Market Leader of Russia” at the “Contributions to Russia’s Economic DevelopmentAwards” organized by Russian Regional Businessmen’s Association and Russian Federation Parliament (Duma)for improvement and expansion of Beko Russia’s commercial activities and contributions of its impressiveperformance to the Russian economy.65
Performance Data (*) 2008 2009 2010 <strong>2011</strong>ECONOMICAL and MANAGEMENT PERFORMANCE DATANet Sales (Million EURO) 3,615 3,065 3,487 3,633By regionTurkey (Million EURO) - 1,474 1,718 1,712Europe (Million EURO) - 1,238 1,329 1,437Other (Million EURO) - 353 440 484By product groupWhite goods (Million EURO) - 2,044 2,208 2,394Consumer electonics (Million EURO) - 554 631 625Other (Million EURO) - 467 648 614Gross profit (Million EURO) 1,027 1,011 1,040 1,094Operating profit (Million EURO) 232 348 321 278Income before tax (Million EURO) 15 268 330 265Net income (Million EURO) 3 234 276 233Total assets (Million EURO) 3,204 2,975 3,573 3,764Total current liabilities (Million EURO) 1,397 1,472 1,143 1,445Total liabilities (Million EURO) 2,269 2,705 1,910 2,269Total equity (Million EURO) 935 1,270 1,663 1,494Dividends paid (Million EURO) 54 1 55 113Capital expenditures (Million EURO) 187 96 127 157Dividends per share (EURO) 0.013 0.069 0.186 0.191Year-end share price (EURO) 0.96 2.71 3.81 2.50Year-end market value (Million EURO) 385 1,830 2,572 1,692Corporate Governance Rating - 8.21 8.55 8.59Economic value generated ( Million TL) 7,639 7,170 7,347 8,927Revenues (Million TL) 7,639 7,170 7,347 8,927Economic value distributed (Million TL) 7,855 6,353 6,911 8,774Operating cost total (Million TL) 5,893 5,379 5,745 7,135Personnel expenses (Million TL) 625 577 706 824Payments to Providers of Funds (Million TL) 1,266 333 389 736Payments to Governments as Income Tax (Million TL) 65 63 62 71Community Investments (Million TL) 6 1 9 8Economic Value Retained (Million TL) (216) 817 436 153ENVIRONMENTAL PERFORMANCE DATARaw Materials and Other Material Use - Total (Ton) - - 656,999 681,431Raw Materials - Plastics (Ton) - - 59,263 73,493Raw Materials - Metals (Ton) - - 244,045 295,863Raw Materials - Others (Tons)((1) - - 186 192Materials (Tons)(2) - - 343,630 304,404Chemicals (Tons)(3) - - 9,875 7,47966
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>2008 2009 2010 <strong>2011</strong>Total Water Withdrawal by Source (m 3 ) 1,286,771 1,301,498 1,409,750 1,477,482Wells (m 3 ) 374,866 374,187 436,176 406,583Municipal Water (m 3 ) 911,905 927,311 973,574 1,070,899Total Water Discharge by Destination (m 3 ) 800,478 857,147 824,673 951,242Public Tailrace Connection Discharge (m 3 ) 233,155 328,421 230,083 303,454Receiving Systems (m 3 ) 205,920 135,002 171,770 190,940Industrial Zone Sewage Systems (m 3 ) 361,203 393,724 422,820 456,848COD Values of Discharged WaterCooking Appliances (mg/lt)(limit value: 100,00) 30 30 22 39Dishwashers (mg/lt)(limit value: 1,000.00) 81.3 94.8 58.6 106.8Electronics (mg/lt)(limit value: 600.00) 89 198 44 51Refrigerators and Compressors (mg/lt)(limit value: 100.00)
2008 2009 2010 <strong>2011</strong>SOCIAL PERFORMANCE DATATotal Number of Employees 12,678 12,264*** 13,735*** 14,631***Employee Breakdown by StatusBlue Collars 10,866 10,405 11,734 12,454White Collars 1,812 1,859 2,001 2,177Employee Breakdown by GenderFemale - 2,698 3,022 3,219Male - 9,566 10,713 11,412Employee Breakdown by Contract TypePermenant 11,652 11,804 12,910 13,337Temporary 1,026 460 825 1,294Average Age by Employee CategoryTop Management 47 46 46 47Mid-Management 42 42 42 44Experts & Staff 34 36 35 35Average Seniority by Employee CategoryTop Management 18 15 15 16Mid-Management 15 14 14 16Experts & Staff 8 9 8 9Employees Covered by Collective Bargaining Agreement (%) 86 85 85 85Employee Trainings (person*hour) 265,807 180,021*** 296,185*** 306,743***Blue Collars (person*hour) 176,046 137,278 247,849 220,402White Collars (person*hour) 89,761 42,743 48,336 86,341Accident Frequency Rate(F) (4) 16.45 10.49*** 8.41*** 5.73***Accident Gravity Rate (G) (5) 0.152 0.113*** 0.085*** 0.078***Safety Factor (6) 0.0025 0.0012*** 0.0007*** 0.0004***Employee Turnover (%) 7.4 9.5*** 9.6*** 13.1***Employee Turnover by GenderFemale (%) 3.3 6.6 4.7 6.9Male (%) 10.8 8.2 11 14.9Senior Management by GenderFemale (%) - - 12 10Male (%) - - 88 90(*) Data presented covers for operations in Turkey in accordance with reporting boundries,(**) Gender based turnover is calculated in line with the ratio of total employee number according to gender,(1) Presented data reflect isolation raw material consumption,(2) Presented data reflect all materials and semi-finished products employed as a part of finished products,(3) Adhesives, lubricants, paints, enamels, operational and all other chemicals are included to the presented data(4) Accident Frequency Rate (F)= (Total Number of Work Accidents/Total Working Hours)*1,000,000(5) Accident Gravity Rate (G)= (Total Number of Lost Workdays Due to Work Accidents / Total Working Hours)*1,000(6) Safety Factor= (F*G)/1,000***These numbers have received limited assurance from an independent assurance firm ("PwC").68
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>GRI Indicators TableGRI RESPONSEINDICATORS REFERENCES PAGES NOTES LEVELProfile Indicators1.1 Message From the CEO 2-3 Full1.2 Message From the CEO 2-3 Full<strong>Sustainability</strong> Performance <strong>2011</strong> 5Corporate Governance 12Risk Management 132.1 Contact Inside Back Cover Full2.2 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 20 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf FullCorporate Websitehttp://www.arcelikas.com/page/80/Brands2.3 Corporate Website http://www.arcelikas.com/page/74/Yonetim FullAbout Arçelik A.fi 8-9 http://www.arcelikas.com/page/59/Worldwidehttp://www.arcelikas.com/page/57/PlantsArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 21-22 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf2.4 Contact Inside Back Cover FullCorporate Websitehttp://www.arcelikas.com/page/264/Contact2.5 About Arçelik A.fi 8-9 FullAbout the <strong>Report</strong>Inside Front CoverArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 21-22 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf2.6 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 15 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf Full2.7 About Arçelik A.fi 8-9 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 20-21 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf2.8 Talent Magnet 32 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 14 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf2.9 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 15 Detailed information about significant changes in reporting periodcan be obtained from Investor Relations/ Latest Developmentssection located at our corporate website.http://www.arcelikas.com/UserFiles/file/FR<strong>2011</strong>(1).pdfFull2.10 Corporate Rewards and Achievements in <strong>2011</strong> 64-65 Full3.1 About the <strong>Report</strong> Inside Front Cover Full3.2 Corporate Website 69-73 http://www.arcelikas.com/UserFiles/file/surdurulebilirlik/KSS%20<strong>Sustainability</strong>%20<strong>Report</strong>%202010.pdfFull3.3 About the <strong>Report</strong> Inside Front Cover Full3.4 Contact Inside Back Cover Full3.5 <strong>Sustainability</strong> Management 14 FullAbout the <strong>Report</strong>Inside Front Cover3.6 About the <strong>Report</strong> Inside Front Cover Full3.7 About the <strong>Report</strong> Inside Front Cover Full3.8 About the <strong>Report</strong> Inside Front Cover Full3.9 About the <strong>Report</strong> Inside Front Cover Full3.10 About the <strong>Report</strong> Inside Front Cover Full3.11 About the <strong>Report</strong> Inside Front Cover Full3.12 GRI Indicators Table 69-73 Full3.13 Independent External Assurance <strong>Report</strong> 75 The data within the scope of the report, regarding employeenumber, employee turnover, training hours, accident frequencyrate, accident gravity rate and general accident rate which aredetailed in <strong>Report</strong>ing Guideline Annex-1 and which cover the yearsending with the dates 31.12.2009-31.12.2010 and 31.12.<strong>2011</strong>,were subjected to limited independent audit by PwC, aninternational independent auditing organization.Full4.1 Corporate Governance 12 FullRisk Management 13<strong>Sustainability</strong> Management 14Corporate Websitehttp://www.arcelikas.com/page/75/board_directors4.2 Corporate Governance 12 Full4.3 Corporate Governance 12 Full4.4 <strong>Sustainability</strong> Management 14 FullDialogue with Stakeholders 16Employee Engagement 31-32Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 59 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf4.5 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 68 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf Full4.6 Corporate Website http://www.arcelikas.com/UserFiles/file/PDF/TR/Etik%20De¤erler%20‹ngilizce.pdfArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 62-63 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdfFull69
GRI Indicators TableGRIRESPONSEINDICATORS REFERENCES PAGES NOTES LEVEL4.7 Corporate Governance 12 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 54-59 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf4.8 Corporate Governance 12 Full<strong>Sustainability</strong> Management 14Sustainable Success 30Environmental Management 18-19Occupational Health and Safety 36Corporate Websitehttp://www.arcelikas.com/UserFiles/file/PDF/TR/Etik%20De¤erler%20‹ngilizce.pdf4.9 Risk Management 13 Full<strong>Sustainability</strong> Management 144.10 Corporate Governance 12 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 67-68 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf4.11 Risk Management 13 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 65 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf4.12 <strong>Sustainability</strong> Management 15 FullCombatting Climate Change 17Environmental Management 18Efficiency in Material Use 20Energy and Emission Management 22Sustainable Success 30Supplier Relations 424.13 <strong>Sustainability</strong> Management 15 FullDialogue with Stakeholders 164.14 Dialogue with Stakeholders 16 Full4.15 <strong>Sustainability</strong> Management 14 FullDialogue with Stakeholders 164.16 Dialogue with Stakeholders 16 Full4.17 Call Center 54 FullAfter Sales 54Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 59 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdfManagement ApproachDMA EC Combatting Climate Change 17Message From the CEO 2-3Raising Public Awareness on Resource Consumption 25We Offer Environment Friendly, Innovative Products whichMake Life Easier and Excellent Services to Our Customers 47Energy and Emission Management 22Performance Data 66Talent Magnet 33 <strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Purchasing by Numbers 41-42 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullInnovation Champion Arçelik 48Innovative Products 49-52Energy Labelling 52Standing United for Education with Arçelik 58Arçelik A.fi. Search & Rescue Teams Helping Earthquake Victims 61Ethelbert Children's Home 62For My Country 59Vocational Education: A Crucial Matter for the Nation 60DMA EN Efficiency in Material Use 20Disposal, Reuse and Recycling of Products 55Message From the CEO 2-3<strong>Sustainability</strong> Performance <strong>2011</strong> 5Energy and Emission Management 23Energy Consumption and Emission Reduction Projects 23We Offer Environment Friendly, Innovative Products which<strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Make Life Easier and Excellent Services to Our Customers 47 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullInnovation Champion Arçelik 48Innovative Products 49-52Energy Labelling 5270
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>GRI Indicators TableGRIRESPONSEINDICATORS REFERENCES PAGES NOTES LEVELPerformance Data 67<strong>Sustainability</strong> Management 15Water Use and Recovery 20Water Discharge 21 FullIntegrated Waste Management 24Environmental Approaches for Product Distribution 53-54Environment Protection Investments and Expenses 25Use of Packages and Packaging Waste Management 55DMA LA Talent Magnet 32-33Performance Data 68Freedom of Association and Collective Bargaining 31 <strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Sustainable Success 30 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullOccupational Health and Safety 36-37Performance Management 34Development and Talent Management 34-35DMA HR Supplier Relations 42Sustainable Success 30 <strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Occupational Health and Safety 37 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullDMA SO <strong>Sustainability</strong> Management 14-15 <strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Risk Management 13 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullDirect Answer SO6 73DMA PR <strong>Sustainability</strong> Management 14-15Efficiency in Material Use 20Expectations from the Suppliers 43-44Innovative Products 49, 52, 54 <strong>Sustainability</strong> Performance <strong>2011</strong> (p.5), Risk Management (p.13),Product Information 52 <strong>Sustainability</strong> Management (p.14-15), Dialogue with Stakeholders (p.16) FullAfter Sales 54Call Center 54Energy Labelling 52Performance IndicatorsEC1 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 14 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf FullPerformance Data 66EC2 Combatting Climate Change 17 PartialMessage From the CEO 2-3Energy and Emission Management 22We Offer Environment Friendly, Innovative Products whichMake Life Easier and Excellent Services to Our Customers 47Raising Public Awareness on Resource Consumption 25EC4 Arçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 136 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdf FullEC5 Talent Magnet 33 PartialEC6 Purchasing by Numbers 41-42 FullArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 41 http://www.arcelikas.com/UserFiles/file/ArcelikFRENG<strong>2011</strong>.pdfEC8 Standing United for Education with Arçelik 58 FullFor My Country 59Vocational Education: A Crucial Matter for the Nation 60Arçelik A.fi. Search & Rescue Teams Helping Earthquake Victims 61Ethelbert Children's Home 62EC9 Vocational Education: A Crucial Matter for the Nation 60 FullInnovation Champion Arçelik 48Innovative Products 49-52Energy Labelling 52EN1 Efficiency in Material Use 20 FullEN2 Disposal, Reuse and Recycling of Products 55 PartialEN3 Energy and Emission Management 23 FullPerformance Data 67EN4 Energy and Emission Management 23 PartialPerformance Data 67EN5 Energy Consumption and Emission Reduction Projects 23 Full71
GRI Indicators TableGRIRESPONSEINDICATORS REFERENCES PAGES NOTES LEVELEN6 Message From the CEO 2-3 Full<strong>Sustainability</strong> Performance <strong>2011</strong> 5We Offer Environment Friendly, Innovative Products whichMake Life Easier and Excellent Services to Our Customers 47Innovation Champion Arçelik 48Innovative Products 49Energy Labelling 52EN7 Energy Consumption and Emission Reduction Projects 23 FullEN8 Water Use and Recovery 20 FullEN9 <strong>Sustainability</strong> Management 15 Since the most significant share of the water used is withdrawnfrom the municipal systems and no water bodies with RAMSARor similar protection status are employed, Arçelik operationsFulldoes not result in any stress, as expressed by this indicator, onWater Use and Recovery 20 water bodies.EN11 <strong>Sustainability</strong> Management 15 FullEN13 <strong>Sustainability</strong> Management 15 FullEN14 <strong>Sustainability</strong> Management 15 FullEN16 Energy and Emission Management 22 FullPerformance Data 67EN18 Energy Consumption and Emission Reduction Projects 23 FullPerformance Data 67EN19 Efficiency in Material Use 20 FullEN21 Water Discharge 21 Water discharged from Arçelik's plants is not used by otherorganizations.FullPerformance Data 67EN22 Integrated Waste Management 24 FullPerformance Data 67EN25 GRI Indicators Table 72 The most significant share in waste water occured in Arçelik’splants is discharged to public or industrial zone sweage systems.Only a small portion is discharged to receiving environments.Since waste water is discharged only after the treatment processand reached to the quality level required by legal regulations,biodiversity value of no receiving environment is not harmed.FullEN26 Message From the CEO 2-3 Full<strong>Sustainability</strong> Performance <strong>2011</strong> 5We Offer Environment Friendly, Innovative Products whichMake Life Easier and Excellent Services to Our Customers 47Innovation Champion Arçelik 48Innovative Products 49-52Energy Labelling 52Environmental Approaches for Product Distribution 53-54Disposal, Reuse and Recycling of Products 55Use of Packages and Packaging Waste Management 55EN27 Use of Packages and Packaging Waste Management 55 PartialEN28 GRI Indicators Table 72 No fines occured for non-compliance with environmentallegislation during the reporting period.FullEN29 Environmental Approaches for Product Distribution 53-54 PartialEN30 Environment Protection Investments and Expenses 25 FullLA1 Talent Magnet 32-33 As the report covers Arçelik's activities and projectscarried out only in Turkey no regional breakdown is cited.FullPerformance Data 68LA2 Talent Magnet 33 As the report covers Arçelik's activities and projects carriedout only in Turkey no regional breakdown is cited.FullLA3 Talent Magnet 32-33 FullCorporate Websitehttp://www.arcelikas.com/page/197/Compensation%20and%20BenefitsLA4 Freedom of Association and Collective Bargaining 31 FullPerformance Data 68LA5 Sustainable Success 30 FullLA6 Occupational Health and Safety 36 Full72
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>GRI Indicators TableGRIRESPONSEINDICATORS REFERENCES PAGES NOTES LEVELLA7 Occupational Health and Safety 37 PartialPerformance Data 68LA 8 Performance Data 37 FullLA9 Freedom of Association and Collective Bargaining 31 FullLA10 Performance Management 34 FullPerformance Data 68LA11 Development and Talent Management 34-35 FullLA12 Performance Management 34 FullLA13 Performance Data 68 PartialLA14 Talent Magnet 33 Any personal property of employees can not be the reason ofdifferent application in remuneration process. According toemployees performance results and job responsibilities,Fullsalary can be changed .However, the salary can not bechange according to sex discrimination.HR2 Supplier Relations 42 PartialHR4 Sustainable Success 30 No such case occured and no complaints received during thereporting period.FullHR5 Sustainable Success 30 All Blue Collar workers collective bargaining, organization andunionization rights are secured. All employees are free tobecome a member of the labour union which they prefer andto benefit collective bargaining rights. During the reportingperiod, no breach or risk is identified within Arçelik Organization. FullHR6 Sustainable Success 30 No child labor is employed in Arçelik. During the reportingperiod, no breach or risk is identified within Arçelik Organization. FullHR7 Sustainable Success 30 No Arçelik operation employees forced or compulsory labor.During the reporting period, no breach or risk is identified withinArçelik Organization.FullHR8 Occupational Health and Safety 37 FullSO1 <strong>Sustainability</strong> Management 15 FullSO2 Risk Management 13 PartialArçelik A.fi. <strong>2011</strong> Annual <strong>Report</strong> 18SO6 GRI Indicators Table 73 No political ideology or agenda; accordingly no politicalopinion or position; no political party, movement or initiativeis supported directly or indirectly by Arçelik A.fi.FullPR1 Innovative Products 49, 52, 54 FullPR3 <strong>Sustainability</strong> Management 15 FullEfficiency in Material Use 20Expectations from the Suppliers 43-44Innovative Products 49Product Information 52PR5 After Sales 54 FullCall Center 54PR6 <strong>Sustainability</strong> Management 15 FullEfficiency in Material Use 20Energy Labelling 52Detailed notes on GRI indicators can be reached from www.globalreporting.org/<strong>Report</strong>ingFramework/G31Guidelines.73
Annex 1 : <strong>Report</strong>ing GuidanceArçelik A.fi. Number of Employees, Employee Turnover, Hours of Employee Training, Occupational Health and Safety Indicators<strong>Report</strong>ing GuidanceThis <strong>Report</strong>ing Guidance (“Guidance”) supports the preparation and reportingof number of employees, employee turnover, hours of employee training,occupational health and safety indicators of Arçelik A.fi. (the Company). It isthe responsibility of the Company management to ensure that appropriateprocedures are in place to prepare the indicators mentioned above in line with,in all material respects, the Guidance.All data up to and including from FY 09 (financial year starting 1 January 2009)to FY11 (financial year ending 31 December <strong>2011</strong>), only comprises the relevantoperations in Turkey, excluding all international operations. The data for therelated years, therefore, do not represent the entire Arçelik A.fi. operations.General <strong>Report</strong>ing PrinciplesIn preparing this guidance document, the following principles have beenconsidered:• Preparation of Information - the main principles have been defined as to berelevance and reliability in terms of the preparation of information and it is aimedto allow the ones who will use this information to emphasize on this issue.• <strong>Report</strong>ing of Information - the main principles have been defined as to becomparability/consistency of information with other data including prior year andunderstandability/ transparency providing clarity to users.Key DefinitionsThe definitions included in this report and the company's explanations for thesedefinitions are as follows:Blue-collar employees: It stands for employees working at an hourly rate.White-collar employees: It stands for employees working at a monthly wage.Number of Employees: Total number of white and blue collar employees in theCompany payroll whose premiums are paid to the Social Security Institution.Employee Turnover: The ratio of the total number of employees dismissed bythe Company and leaving the Company voluntarily and total number of employeesHours of Employee Training:It represents the sum of:• Total hours of training (technical, functional, on-the-job trainings, outdoor,orientation and class trainings) that has been provided by the Company or anythird party training institution to white and blue collar employees.• Total hours of completing e-learning and reading materials which are preparedfor white collar employees in Koç Academy Portal developed by Koç Holding.Hours of Employee Training Per Employee (Hour/Person): Total hours of employeetraining (White & Blue Collar Employee)/ Total Number of Employees (White &Blue Collar Employee)Employee Turnover: The ratio of the total number of employees leaving voluntarilyand dismissed from the company to the total number of employees.Occupational Health and Safety IndicatorsAccident: The incident which leads an employee within the Company to becomeincapable of working for one day or more.Total Working Hours: Total number of hours worked within the boundaries ofworkplace by white and blue collar employees.Loss of Working Days : Total number of working days in which the Company'semployees are incapable of working due to accidents.Accident Frequency Rate (F) : (Total Number of Work Accidents/Total WorkingHours)*1,000,000Accident Gravity Rate (G): (Total Number of Lost Workdays Due to Accidents /Total Working Hours) * 1,000Safety Factor: (F*G)/1,000Scope of the <strong>Report</strong>For FY09, FY10 and FY11, data of number of employees, employee turnover,hours of employee training, occupational health and safety indicators are shownfor the following locations and other management units operating in Turkey:• Ankara, Dishwasher Plant• ‹stanbul Çay›rova, Washing Machine Plant• Eskiflehir, Refrigerator Plant• Eskiflehir, Compressor Plant• Bolu, Cooking Appliances Plant• Tekirda¤ Çerkezköy, Electric Motors Plant• Tekirda¤ Çerkezköy, Tumble Dryer Plant• ‹stanbul Beylikdüzü, Electronics Plant• HeadquartersThe following information is omitted from the scope of reporting:• Data regarding contractor employees working for the Company• Company's operations outside TurkeyData PreparationNumber of EmployeesPersonal information of each employee who starts to work in the Company isregistered to the Bilin Humanist Software that is created for human resourcesapplications, by Human Resources Department. Bilin Humanist software generatesdata such as employee breakdown data by status (blue/white collar), genderand contract type (permanent/ temporary).Employee TurnoverCancellation of labor contract of an employee is performed via Bilin Humanistsoftware. Bilin Humanist software generates employee turnover data by genderand age for the calculation of employee turnover.Hours of Employee TrainingName of the training, details of participant and total hours of the training offeredto white and blue collar employees are registered to participatory forms. Theinformation on these forms are registered to the Bilin Humanist software by therelated human resources department. One-day training is considered to be 6hours.Hours of training that is registered with the status of “Completed” for eachemployee in Koç Academy Portal is included in the total hours of employeetraining. e-learnings and reading materials in Koç Academy Portal is consideredto be 2 hours.Occupational Health and Safety IndicatorsAccident Frequency Rate• The accidents with lost days of 1 day or more are included in the total numberof accidents.• Working hours of blue collar employees are calculated via BARDES PBSMSSQL software which keeps data of time of entrance and departure of employees.• Working hours of white collar employees are calculated via following formula:White collar employees working hours = Number of white collar employees *Total number of working days *9 hoursAccident Gravity Rate• Number of lost days is calculated by determining the period of incapable ofworking hours of an employee via BARDES PSB MSSQL software and comparingwith the incapacity report of the employee given by health institution. One workingday is considered to be 7,5 hours.74
<strong>Sustainability</strong> <strong>Report</strong> <strong>2011</strong>Independent Assurance <strong>Report</strong>75
76GRI Application Level Check Statement
DisclaimerThis <strong>Report</strong> contains information and analysis on corporate statements as well as forward-looking statements thatreflect the Company management's current views with respect to certain future events. Although it is believed thatthe information and analysis are correct and expectations reflected in these statements are reasonable, they maybe affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ,materially.Neither Arçelik, nor any of its managers or employees nor any other person shall have any liability whatsoever forany loss arising from the use of this <strong>Report</strong>.The content of this <strong>Report</strong> may not be copied, modified or distributed without the express written permissionof Arçelik A.fi. Arçelik A.fi. reserves all rights.We appreciate your feedback and inquiries regarding this <strong>Report</strong>and Arçelik's sustainability activities.Contact us, the Corporate Communications DepartmentE-mail: corporateinfo@arcelik.comFor Arçelik's latest Annual <strong>Report</strong> and <strong>Sustainability</strong> <strong>Report</strong> you mayvisit the following website:www.arcelikas.com<strong>2011</strong> Arçelik A.fi. Annual <strong>Report</strong> - Gold Award<strong>2011</strong> Arçelik A.fi. <strong>Sustainability</strong> <strong>Report</strong> - Gold Award2010 Arçelik A.fi. Annual <strong>Report</strong> - Honor Award2009 Arçelik A.fi. Annual <strong>Report</strong> - Silver Award2008 Arçelik A.fi. Annual <strong>Report</strong> - Platinium Awardby the LACP (League of American Communication Professionals)Arçelik A.fi. CommunicationMelis MutuflCorporate Communications Coordinatormelis.mutus@arcelik.comYasemin Baflçavuflo¤luCommunications Executiveyasemin.bascavusoglu@arcelik.comCorporateinfo@arcelik.comCompany advising on the contentsand the structure of the reportThe amount of GHG emitted as a result of theprinting and the distribution of the report inTurkey and abroad has been duly calculatedand offsetted by the credits of carbon emissionreduction projects.This report is printed on a paper that isderived from a well-managed forests.www.fsc.org
Karaa¤aç Caddesi No: 2-6, Sütlüce, Beyo¤lu 34445 Istanbul-TURKEYTelephone: +90 212 314 34 34 Fax: + 90 212 314 34 63www.arcelikas.com