Climate Risk Strategy
Being one of the supporters of the TCFD, we have an integrated approach which enables us to monitor, measure and manage the environmental, social, governance (ESG) risks and the impact on the financials.
The Board of Directors (BoD) is the highest governing body for the management of ESG related risks and opportunities. Koç Holding Consumer Durables President has been appointed by the BoD as the responsible board member to inform the BoD on ESG related risks and opportunities. Sustainability, as a business model, has fully integrated into the Group’s corporate strategy. The climate related and other ESG risks and opportunities are governed by the Sustainability Council that is chaired by the CFO and includes members from senior management. A number of working groups reports to the Council which meets quarterly.
In 2021, three reports were prepared to the attention of the BoD. The investments made or to be made concerning the decarbonization strategy, the risks concerning the potential application of the Carbon Border Adjustment Mechanism, the rise in carbon prices in both the voluntary and the regulated markets, the risks associated with the decarbonization strategy on the way to Net Zero are reported besides the investment need for other environmental/social issues and the restructuring in terms of human rights and diversity, inclusion issues.
Arçelik has a solid ESG risk management structure thanks to the mutual efforts of the Sustainability and Enterprise Risk Management teams. Additionally, Arçelik has received a third-party service to apply a physical and transition risk scenario analysis to identify the long-term potential impacts of the climate crisis. The outcome of the analysis is embedded in the Enterprise Risk Management system’s financial risks reporting structure.
Our ambition is to further develop our business towards achieving a low-carbon future and ensuring our business is resilient and adaptable for climate and other ESG-related risks and opportunities. By supporting TCFD, we strive to strengthen the link between climate change and its financial impacts on our business and operations.
Arçelik’s climate risk strategy consists of two pillars:
Approved Science Based Targets:
Our targets to reduce GHG emissions were approved by the Science Based Targets initiative, in line with the Paris Agreement’s goal of limiting global temperature increase to "well-below 2°C". As of 2030, we will reduce the Scope 1 and 2 emissions by 30% and the Scope 3 emissions from the use of sold products by 15% compared to 2018 baseline.
In addition to the approved SBTs, Arçelik has submitted the company’s updated SBTs which are in line with 1.5°C and aiming to reduce the Scope 1-2 and the Scope 3 emissions from the use of sold products by 50.4%. Arçelik has published the revised target regarding the SBTs which are under the approval phase by SBTi.
Net-Zero Target in the Value Chain:
We are committed to reach net zero emissions in the value chain by 2050.
We committed to making it compatible with the SBTi Net-Zero 2050 Standard. We are expected to receive approval for this within two years.
Arçelik's Climate Change Strategy
TCFD Reporting And Other
Esg-Related Risks & Opportunities
By supporting the Taskforce on Climate-related Financial Disclosures (TCFD), we aim to strengthen the link between climate change and the resulting financial impacts on our business.
For detailed explanation please refer to Arçelik 2021 Sustainability Report Annex 11 and 12.
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