All production facilities are located in industrial zones. The Izmit production complex is surrounded by other production facilities and there are no E&S risks and impacts to nearby communities. Performance Standards 5 through 8 are not applicable to this investment, since the Project is expected to be undertaken within the existing footprint of already established facilities and no new land will be required. As the Project is located in well-developed industrial zone, which is a highly modified habitat, the Project will not have an impact on biodiversity or living natural resources. In addition, there are no indigenous people or cultural assets identified at the Project sites or in vicinity thereof.

Key E&S issues and risks associated with the Project include: (i) Kordsa’s E&S management and monitoring systems, (ii) management of labor and working conditions, and occupational health and safety (OHS), (iii) monitoring and management of air emissions, waste, wastewater and hazardous materials; (iv) gender risks and (v) security management.

This Project involves addition of new manufacturing units and equipment for manufacturing of composite materials within the existing production complex in Izmit, Turkey and R&D activities in Turkey that currently operates in compliance with the local regulatory requirements as well as the IFC Performance Standards. The new units will also comply with the IFC Performance Standards and the relevant WBG EHS guidelines. As such, the Project is not expected to result in new or significant E&S impacts and is therefore a Category B project.

Environmental and Social Assessment and Management System:

The company has a well-established corporate E&S management system (ESMS), including a set of manuals, detailed work instructions and monitoring procedures addressing the environmental, health and safety (EHS) risks of operations. All plants are ISO 14001 (Environmental Management System) certified. The Izmit plant also holds ISO 45001 (Occupational Health and Safety Management System) and ISO 50001 (Energy Management System) Certificate.

Key EHS indicators are disclosed publicly through Kordsa’s Sustainability Report prepared in line with Global Reporting Initiative (GRI) standards: https://www.kordsa.com/en/images/pdf/KORDSA_2019_Sustainability_Report_EN.pdf) Kordsa has also established a sustainability road map, laying out the milestones to enable sustainable operations with an associated timeline.

As part of their ESMS, Kordsa hires external experts to conduct E&S assessments for new projects according to Turkish laws/regulations and its own technical standards. This includes reviewing and obtaining all required permits, developing action plans and procedures to manage environmental impacts of the respective project in accordance with good international industry practices. At this stage it is has not been confirmed if the new production units to be established within the scope of the Project will require an environmental impact assessment or other environmental permits per regulatory requirements. However, notwithstanding this requirement, Kordsa will in any event conduct an assessment of E&S impacts as per their existing procedures and practices.

Policy, Organizational Capacity and Competency, Monitoring and Review:

Kordsa’s Occupational Health & Safety, Environment & Sustainability, Energy Management and Water Policies reiterate its commitments for the sustainable development and responsible E&S management publicly available at: https://www.kordsa.com/en/investor-relations/kordsapdflist/policies/64/0/0. Other than aforementioned topics, its policies also cover labor and working conditions, gender and ethical standards. These policies focus the company’s sustainability targets comprising of corporate and plant level actions to reduce emissions, waste generation, water and energy consumption in its operations. EHS performance is tracked annually with respect to these reduction targets.

Kordsa has a strong EHS organization with experienced staff at the corporate headquarters and at the individual plants thereby ensuring that corporate policies and standards are followed in the establishment and operation of all facilities.

Emergency Preparedness and Response:

Kordsa has well established emergency response plans and in-house medical personnel specialized in handling emergencies. All the manufacturing buildings and warehouses are equipped with fire detectors and sprinkler systems. Signs are placed all over the plant for worker awareness and frequent drills are organized addressing all types of emergencies while each plant convenes two or three fire/emergency response drills per year. Kordsa’s production plants are located inside industrial zones that can provide firefighting/emergency response (ER) support if need be. At the Izmit plant, the company has in-house fire brigade and additional firefighting/ER support from the city is also available if required. At each shift of each Kordsa plants, there are designated employees responsible for firefighting who undertake relevant trainings. There have been no major accidents and emergency response incidents in the past few years of operations at any of the Kordsa plants.

Kordsa employs around 4,700 people worldwide (direct and contractors), of which about 34% (over 1,500) are females. At the Turkey operations, the company employs around 2,000 employees of which 165 are females. In Turkey, third party workers (12%) are employed in production activities as well as supporting activities including cleaning, canteens, private security. The company is planning to increase the global female workforce to 45 % in the next five years. As of end-2020, the R&D facilities had approximately 80 staff (comprising of mainly research scientists and engineers).

Human Resources Policies and Procedures, Working Conditions and Terms of Employment, Workers’ Organization:

Kordsa’s corporate HR policy and procedures provides HR frameworks/guidelines which cover, working conditions, health and safety, gender and equal opportunities, grievance handling, child labor, forced labor and freedom of association consistent with PS2. The company requires all its subsidiaries to set up HR procedures following local labor laws. Each employee receives a handbook clearly indicating the terms and conditions of the employment, rights and the benefits, requirements for following Kordsa’s EHS and ethical standards. All employees sign a code of conduct summarizing all workplace policies and requirements. HR policy and procedure trainings are incorporated in the new employee induction. Employees have access to the HR policy/procedures in their own languages. The corporate HR department conducts internal HR inspections on all Kordsa companies to confirm compliance with the corporate standards.

Kordsa does not impose restriction for the participation on employees’ organizations and has a collective bargaining agreement, whose conditions and benefits apply to all unionized workers. In Turkey, Indonesia and Brazil, the ratio of total number of employees under any type of collective agreement with respect to total number of blue-collar workers has reached 60% in 2021, totaling to approximately 2,800 employees. In Thailand, there is no union.

Forced or involuntary labor and child labor are strictly prohibited across all Kordsa operations.

Non-discrimination and Equal Opportunity:

Kordsa has extensive and exemplary work on non-discrimination and equal opportunity, as expressed in their policies. So as to enhance this and as defined in ESAP item #1, Kordsa will conduct an assessment of gender equality in the workplace environment including that related to hiring policies, mechanisms and channels and legal, economic, or sociocultural barriers that can be addressed to support recruitment and retention of women. This assessment will also focus on making jobs equally attractive to both men and women and increase the number of women employees in Kordsa in line with its future targets inclusive of all plants. As an outcome of the assessment Kordsa will then develop and implement a time-based gender action plan to address the findings and associated objectives of the study.

According to the provided information, gender-based violence trainings were conducted in the US plants in 2020. As per the ESAP item #2, in order to raise corporate awareness of gender-based violence (GBV) and sexual harassment at workplace, Kordsa will engage with external experts to develop and implement a training program for managers and a training of trainers program for the HR personnel to provide further trainings to all employees in all Kordsa plants.

Grievance Mechanism:

Kordsa has formal and well-established grievance mechanisms which also allow for anonymous submissions. All direct employees and contractors can report grievances through hotline, e-mail or online forms. Additionally, employees report their grievances to union representatives who follow an escalation procedure for addressing workplace issues. Issues raised through grievance mechanisms are followed up by relevant departments. The grievance mechanism is suitable to capture harassment related issues as well.

Occupational Health and Safety:

Kordsa has an OHS management system that comprises programs and procedures to develop and maintain high levels of health and safety performance. High standards of workplace health and safety are maintained through periodic safety trainings, good safety signage all over the facilities, external and internal audits, oversight from senior management, systematically tracking the accident/incident records and analysing the data and taking necessary actions, enforcing the use of personal protective equipment (PPE) and so on. All incident data are collected and complied through internal reporting systems for investigation, root cause analysis and to establish corrective and preventive measures. Other statistics, such as Occupational Illness Frequency Rate or Lost Days, are tracked (for own employees, contractor employees and the aggregate) and disclosed in the company's annual sustainability report. All Kordsa plants have had no lost-time accidents in past 3 years. Kordsa has competent health and safety experts assigned to plants and reporting to a senior health and safety manager appointed at corporate level. At the facility level, internal safety checks and site patrols are conducted by the EHS officer daily and by the EHS committee on monthly basis. All new employees receive safety training during induction, which is then followed by regular refresher training over the course of time and specific to the workplace risks and hazards. The Izmit plant was considered to have robust OHS management system implementation with good housekeeping, with safety signages and PPE use.

Workers Engaged by Third Parties:

All third-party workers (production, security, cleaning, canteens, etc.) in Kordsa follow the labour and OHS standards as those followed by the direct employees. Contractor workforce has access to the company’s grievance mechanism. Any accidents or incidents associated with third party employees are also recorded and monitored. There are clear procedures to assess and monitor OHS compliance of short-term contractors on site that are required to undertake certain maintenance or construction works within the premises.

Supply Chain:

Labor and human rights, health and safety, environmental protection, ethics, and management practices are included in Kordsa's Global Supplier Evaluation Procedure for all new suppliers. Kordsa monitors HR/OHS performances of key suppliers through periodic Supplier Sustainability Evaluation review procedures on topics of ethics policies and practices, occupational health and safety, human rights, labor, and environmental management and site visits if necessary. In 2021, Kordsa has started working with Ecovadis platform to perform more systematic supplier assessments by evaluating performance of its suppliers under four themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement.

Impact of COVID-19 Pandemic:

Kordsa’s business operations have not been seriously disrupted by the COVID-19 and most have been operating relatively normally. A Global Emergency Management Team manages COVID-19 related issues at the corporate level. Some of the actions taken to date include collecting information on employees' adherence to COVID-19 preventions practices using a checklist (e.g., regular measurement of body temperature, use of masks and gloves, or sanitizing environment) and contact tracking of infected employees, if any. Kordsa developed an Emergency Action plan particularly for COVID-19 and strictly follows this at all of its facilities and employees have been informed of and trained about the procedures.

Resource Efficiency:

Kordsa is committed on environmental protection with clearly defined KPIs, the company focuses on water management, energy management, waste management and greenhouse gas emissions. Targets are set for these indicators to meet by 2030 which include: 50% reduction in water withdrawal; 30% reduction in greenhouse gas (GHG) emissions; 50% reduction in hazardous wastes; and zero accident in comparison to 2018 baseline. With this focus, the company has developed and is implementing several projects. Examples of this include “eco-friendly dipping technology” which does not contain resorcinol and formaldehyde in bonding textile reinforcing materials to the rubber matrix and “water-based phenolic honeycombs technology”.

GHG Emissions:

The greenhouse emissions from the production plants are associated with electricity consumption and the use of natural gas and diesel used in company’s fleet. In 2019, total GHG emissions were reported as 423, 653 tons CO2e at corporate level. In 2020, the Izmit plant reportedly generated 111,436 tons CO2e. Since Kordsa is not planning a significant capacity increase at Turkey plant, total GHG emissions generated in Turkey operations are expected to remain more or less stable.

Water and Wastewater:

Kordsa is committed to sustainable water management as clearly outlined in its water policy that aims improving water management through continuous assessment and implementation of advance technologies, https://www.kordsa.com/en/images/pdf/Kordsa_Water_Policy_Signed_.pdf. The company also publishes Carbon Disclosure Project (CDP) Water Security Report, https://www.kordsa.com/en/images/pdf/Kordsa_CDP_Water_Security_2020_.pdf comprising of water related data about all its plants. The report includes Kordsa’s future water stress risk assessment for its operational countries by using the Aqueduct Water Risk Atlas of World Resources Institute (WRI) methodology to identify sites that will face the most significant risk of water demand and supply in the future. The results of this assessment were used in defining the long-term strategy of Kordsa at corporate and plant level action plans to mitigate risks.

In Kordsa’s production process the water is primarily used for cooling, demineralization (process) and in the dipping process. Raw water for the manufacturing process at Kordsa supplied through wells and municipal network with relevant permits, the company only uses renewable resources. Kordsa has installed wastewater treatment systems in its facilities as per the local environmental permit conditions. In the Izmit and Indonesia plants, the has advance treatment plants with reverse osmosis systems while some of the treated wastewater is reused in the manufacturing process. Wastewater indicators are continuously monitored for regulatory compliance before discharge to the municipal treatment facility and surface waters. In the Indonesia plant, the treated wastewater, the portion not reused in the process, is discharged to the surface water. The effluent indicators are in compliance with the WBG EHS Guidelines for the textile industry.

Air emissions:

Kordsa monitors and manages the air emissions from its facilities in accordance with the local environmental permit conditions. The main source of emissions is the natural gas fired boilers, or stand-by generators. Air pollution control measures are in place as needed i.e., use of scrubber systems. The measurement results in compliance with the local regulatory limits and the WBG EHS Guidelines. 

Solid Waste Management:

Kordsa has a waste management and monitoring plan for each facility which clearly identifies and classifies all waste streams generated at its plants, quantifies the amounts and describes storage and handling by accredited waste management companies. The majority of the waste (73%) produced at plants is recycled. This includes mainly plastics, batteries, packaging waste. Furthermore, by-products from yarn manufacturing are turned into raw materials. Carton separators, steel shells, wooden pallets and paper tubes are also reused.

Hazardous Materials and Waste Management:

Hazardous materials are handled through strict procedures where needed. At various processes, materials used are considered hazardous, particularly those associated with drying, spinning and dipping. Kordsa has adequate procedures for the proper handling of hazardous materials including Material Safety Data Sheets in local languages, labeling, personal protective equipment, spill containment, and fire prevention equipment.

All hazardous wastes generated at the plants are classified and temporarily stored at the plants until they are handled to accredited companies.

Kordsa’s operational facilities are in industrial areas, and hence generally away from the residential communities. Moreover, each Kordsa facility complies with applicable environmental and OHS related permit requirements which facilitates adequate community health, safety and security. Regular emergency response drills are conducted to test the preparedness of the company's emergency response teams, as required, such drills are conducted in collaboration with neighboring industrial units or the industrial zone authorities.

Security Personnel:

Security arrangements are variable across countries. Kordsa hires both private security companies and direct employees for facility site security that conducts routine ID checks at the gates and security monitoring. Kordsa has a security risk assessment and a security management plan for its plants. Except for the Izmit facility, in other plants, apart from the Security Managers, all security personnel are unarmed. In Izmit plant, Kordsa employs 18 security personnel in total, all armed, for 3 shifts and their main function is to regulate entrance and access to facilities. Security forces are well trained and have relevant certificates which are outsourced from a licensed security company (ISS Proser - https://www.tr.issworld.com/). Every year, all security personnel are trained on Kordsa’s code of ethics, human rights policy, how to engage with community and employees, appropriate behavior, and are subject to technical trainings and psychological tests.