Physical Risk Action Plan in Relation to Water Risks

In a potential scenario where the global warming cannot be reduced to “well-below 2°C” and eventually to “1.5°C”, companies will face financial and operational risks arising from physical risks in relation to excessive global warming, which is expected to vary between 2.6°C to 4°C based on the Intergovernmental Panel on Climate Change’s (IPCC) Representative Concentration Pathways (RCPs), greenhouse gas concentration trajectories, RCP 2.6, RCP 4.5 and RCP 8.5.

Based on Arçelik’s internal analysis as well as using S&P’s TruCost Methodology, water stress risks were determined as the most significant risks for Arçelik in terms of physical climate risks, and therefore, long-term action plans were created according to the results of water risk analysis.

In the scope of our risk adaptation plans, we have also set our 2030 target to increase the water recycling and reuse ratio* to 70% in all manufacturing plants (excluding JV’s) aiming to achieve a closed loop water system in production.

In 2019, as part of the International FinanceCorporation’s (IFC) Water Efficiency Project, we
compared 17 manufacturing plants located in Turkey, Romania, Russia, South Africa, Thailand, and Pakistan according to the industry’s best practices in Europe in the IFC database. With the IFC, we identified improvement areas at our manufacturing plants for water efficiency and prepared the Water Efficiency Report. We set our 2030 water target using the outcomes of the report. Within the scope of the target, we aim to reduce water withdrawal per product by 45% in all manufacturing plants* (excluding JVs) by 2030 compared to 2015. Water efficiency investments needed to reach such targets have been included in our green bond framework.

Internal Water Price

To encourage investments in water infrastructure and determine the real price of water, we use the Internal Water Price. In this calculation, we have identified the water stress in the basins where we operate and completed three different scenario analyses and water stress projections for 2020, 2030 and 2040.

* The target definition has been revised but the scope of the target remains the same. Water recycling and reuse ratio = (Total recycled + reused water)/Total water withdrawal

Arçelik Water Policy is availabile here.

Arçelik CDP Water Reports are available here.

AA1000 verification statement of Arçelik water withdrawal data of Turkey, Romania, Russia, South Africa, Thailand and Pakistan operations is shared in our 2021 Sustainability Report.