IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Policies. Dogus Otomotiv has established a set of sustainability policies including Quality, Health, Safety and Environmental Policy, OHS Policy, Energy Policy, Human Rights, Ethics Code, Equality at Workplace, Security Management, Child/Forced Labor and Anti-bribery. Sustainability Policies are published on the company website (https://www.dogusotomotiv.com.tr/en/sustainability/strategy-and-management/sustainability-policies).
E&S Management System and Programs. Dogus Otomotiv has established an IMS certified per ISO 9001 (Quality management), ISO 14001 (Environmental management), ISO 45001 (Occupational Health and Safety management), ISO 50001 (Energy management) and ISO 27001 Information Security Management System. The IMS is generally in line with IFC’s Performance Standards (PSs) requirements. The company management systems regularly undergo internal audits, in addition to external audits conducted by independent certification institutions, to confirm compliance of the company operations with local and international standards and key performance indicators (KPIs).
Identification of E&S Risks and Impacts. E&S Risk Management is a part of the company's general risk management practices and is managed directly by the Board of Directors through the Early Detection of Risk Committee. The company identifies and manages E&S risks and impacts associated with its operations through specific risk screening and assessment procedures and internal audits. Per ESAP #1, Dogus Otomotiv will integrate climate-related risks to its risk screening and assessment procedure and management plans for identifying and addressing any climate-related risks against its operations including climate induced OHS risks and flood risk management.
Organizational Capacity/Competency. Dogus Otomotiv has established an E&S organizational structure within the IMS department. The IMS executive representative oversees the implementation at corporate level. There are separate OHS, Energy and Environmental Management Representatives, reporting to the IMS executive representative. Sustainability is overseen by the Corporate Governance and Sustainability Committee reporting to the Board of Directors. Sustainability initiatives and performance are discussed quarterly during Committee meetings. Working under the Committee, the Sustainability Team is responsible for coordination of sustainability related processes and preparation of corporate sustainability reports with the support of external consultants. For each Dogus facility, there is an OHS team composed of one full time OHS specialist, one full time nurse and one part-time workplace doctor. Dogus Otomotiv and Dogus Oto contract an external OHS consultancy company and require their sub-contractors to engage with the same company. An external environmental consultancy company (‘consultants’) is also engaged by the Company for carrying out environmental management tasks at the Dogus Oto Authorized Dealers and Service Centers. The consultants are responsible for monitoring environmental performance as per the environmental permits and reporting to the authorities, developing and implementing waste management plan and compiling annual waste declarations.
E&S Training. Dogus Otomotiv has a comprehensive training program for all employees on environmental and OHS awareness and competency. Training modules specific to the workplace risks and hazards are also provided to relevant personnel. In addition, online courses on ethics code, gender equality awareness, domestic violence and emergency preparedness are periodically offered to all employees. The training status of the employees is monitored by the HR department. Subcontractors’ E&S staff deliver similar training for the contracted workforce.
Emergency Preparedness and Response. The company has documented emergency preparedness and response plan (EPRP) covering the Head Quarters and Logistics Center. In addition, site specific EPRPs are developed and implemented for each Dogus Oto Authorized Dealer and Service Center. The emergency plans identify emergency teams, define communication methods, explain evacuation procedures, and provide a detailed guide including maintenance and use of emergency equipment. The roles and responsibilities of employees and emergency teams for evacuation, rescue, and firefighting, evacuation route maps, assembly point signs, and water hose reels are displayed at appropriate locations. Fire drills are conducted annually at each facility. Per ESAP#2, the company will develop an action plan to integrate fire and explosion risks associated with electrical vehicles in its EPRPs in line with World Bank Group (WBG) General EHS Guidelines and IFC Performance Standards.
Monitoring and Reporting. As per the company’s IMS, annual targets are set at corporate and dealers’ level by the Executive Committee. Internal and third-party audits are conducted on an annual basis to verify compliance with local and adopted international standards and performance against KPIs. The company KPIs comprise resource efficiency (electricity, fuel, and renewable energy consumption), carbon dioxide - CO2 emission per vehicle sold, water consumption per vehicle sold, waste generation, OHS statistics (accidents, lost time injury frequency rate (LTIFR), fatalities), gender equality (percentage of woman employees). OHS Committee Meetings are conducted periodically at the HQ and Authorized Dealers and regular OHS and environmental inspections are carried out through a comprehensive checklist at Authorized Service Centers.
Performance Standard 2: Labor and Working Conditions
Dogus Otomotiv employs around 740 direct workers, of whom 130 are blue-collar workers. In addition, there are almost 400 contractors’ workers. Female employees are 38% at HQ and logistics center including both direct and contractor workers. At Dogus Oto Authorized Dealers and Service Centers, there are around 1100 direct (almost 490 of whom are blue-collar) and 560 contractors’ workers. The contractors’ workers are only involved in activities such as security, cleaning, catering, transportation, etc.
Human Resources Policies and Procedures, Working Conditions and Terms of Employment.
Dogus Otomotiv has HR policy and procedures, developed per the national law requirements and generally in line with IFC PS2. Dogus Otomotiv is not hiring migrant or seasonal workers; all workers are provided with indefinite employment contracts.
Workers’ Organization. Although there is no restriction on workers’ unionization within the company, according to senior management, none of the workers are represented by any unions.
Non-discrimination and Equal Opportunity. Dogus Otomotiv, as reflected in its Ethics Code, does not discriminate employees based on their language, race, color, gender, political opinion, belief, religion, age, or physical disability and offers them equal opportunities. Dogus Otomotiv and Dogus Oto published its “Workplace Principles against Domestic Violence Policy” in 2021.
Grievance Mechanism. Workers can report their complaints, suggestions, or requests through email, in person or by calling ‘Ethics Line’. Workers are informed about the Ethics Line through online trainings and encouraged to report gender-based violence/harassment cases through the same Ethics Line. Refreshment trainings are delivered, and reminders are published through the company intranet to increase the employee awareness. Grievances that are received through the various channels are processed by Internal Audit Department. In case of issues that are related to the Ethics Code, the Executive Disciplinary Committee conducts investigations and implements necessary actions.
Occupational Health and Safety. Dogus Otomotiv has a comprehensive OHS Procedure that includes risk assessments, job hazard analysis, general OHS Rules, Technical Working Instructions, Safety Instructions, training requirements, chemical handling, personal protective equipment (PPE), emergency response, first aid, accident and unsafe action reporting, and contractor workers. All processes related with OHS are coordinated out by an external OHS consultancy company and managed by Dogus Otomotiv Administrative and Technical Affairs Department, which is responsible for the implementation of the OHS policy. The OHS consultancy company carries out regular hazard assessments at the workplaces. The company has initiated an Artificial Intelligence Project through a closed-circuit television (CCTV) system that allows real-time identification of unsafe acts (such as misuse of personal protective equipment - PPE, trespassing of restricted areas) at the Logistics Center. The average LTIFR of the HQ and Logistics Center has progressively decreased between 2021 and 2023 and is currently well below the good international industrial benchmark for the sector (www.bls.gov). At Dogus Oto, the number of incidents has increased by 55% in 2023 when compared to 2022 (from 47 to 73). An incident reporting mechanism is in place to record all injuries, first aid cases, near misses and lost time accidents along with the cause of accident and corrective actions. The company will review the OHS statistics of the authorized dealers and service centers for the last three years, carry out root-cause analysis of increasing incident numbers and develop a corrective action plan to improve the incident performance (ESAP#3).
Workers Engaged by Third Parties. At each facility, contractor workers are required to operate with a permit to work system which includes verification of OHS requirements and documentation. Contractors’ agreements include employment conditions and to comply with Dogus Otomotiv’s E&S requirements.
Supply Chain Management. The purchasing processes of the company are managed in accordance with the Dogus Otomotiv Sustainable Purchasing Policy. According to the policy, suppliers are expected to comply with the company’s Ethics Code as well as the United Nations Global Principles Agreement and UN Universal Declaration on Human Rights that addresses child labor, forced labor and significant safety issues consistent with PS2. In addition, through the contractual clauses in the agreement, the company expects its suppliers to be compliant with national OHS regulations, and have policies, risk assessment mechanisms and employee training in place. Dogus Otomotiv’s purchasing department is responsible for implementation of this policy requirements and conducting suppliers’ audits. The company has developed a sustainable Supply Chain Model, for the assessment of its primary suppliers covering selection, operations, and inspection processes in terms of labor management, human right and equality, business ethics, child/forced labor, health and safety, environment, and management systems.
PS3: Resource Efficiency and Pollution Prevention
Dogus Otomotiv monitors electricity, water, natural gas and fuel oil consumption annually and reports such data through the Corporate Sustainability Report ( https://www.dogusotomotiv.com.tr/newdogusotomotiv_files/2024814165354320_Dogus%20-Otomotiv_ESR_2023-EN.pdf). Dogus Otomotiv’s purchased electricity consumption in 2023 has been decreased by 43% compared to the previous year. This reduction was achieved through using the renewable energy produced by the roof-top solar panels at the Logistics Center. With the Solar PV Investment, 60% of the electricity consumed at the HQ and Logistics Center was supplied from renewable energy in 2022, which increased to 67% in 2023. The company aims to meet 76% of its electricity demand through renewable energy by 2025. The total electricity consumption of Dogus Oto in 2023 has been reduced by 7.4% compared to the previous year. This reduction was achieved through an Energy Efficiency Incentive Program including Solar PV investments at the authorized Dealers and Service Centers and energy saving measures such as improvement of outdoor lightings, increased boilers and air conditioning efficiency, and implementation of electricity and natural gas consumption monitoring at each facility.
In 2023, natural gas consumption of Dogus Otomotiv has decreased by 1% while natural gas consumption of Dogus Oto has decreased by 8% compared to the previous year. Fuel oil consumption of Dogus Otomotiv and Dogus Oto has increased by 22% and 11% in 2023 due to the increased vehicle transport activities. The company aims to reduce fossil fuel consumption by investing in importation and sales of Electric Vehicles within the scope of the Project.
Greenhouse gas (GHG) emissions. Natural gas, diesel, LPG, and electricity use from the grid are the primary emission sources of the company operations. The company monitors its CO2 emissions from its operations and reports through Corporate Sustainability Report annually. Scope 1 (direct) GHG emissions from Dogus Otomotiv operations are reported to be significantly less than 25.000 metric ton CO2 equivalent per year (Mt CO2e/yr). The Project is anticipated to enable an estimated GHG emission (indirect) reduction of around 152,471 Mt CO2e/yr, by achieving annual sales of 135,000 electric vehicles (EVs) and thereby replacing internal combustion engine (ICE) vehicles.
Water supply. Water demand is supplied from municipality networks at each facility. Dogus Otomotiv monitors water consumption and has programs in place to reduce water consumption. In 2023, the company began measuring its water footprint in line with ISO 14046 Water Footprint Standard and published data for the first time. The company achieved an overall 11% reduction in water consumption in 2023.
Wastewater. Domestic wastewater generated at all facilities is discharged to the municipality sewerage systems. Oily water generated at the Service Centers is physically treated through oil retainer systems and waste oil is collected in dedicated storage tanks prior to collection by the licensed waste management company.
Air Emissions. There are no significant air emission sources at the Logistics Center. Air emissions at Service Centers include welding, painting, mounting, exhaust quality control process and boilers. The company and the Service Centers are exempt from air emission monitoring as per Environmental Permit Regulation. Occupational exposures such as dust exposure, indoor workplace air quality are monitored every three years by an accredited third-party laboratory. The company operations are in compliance with local regulations requirements and WBG General EHS Guideline guidance values.
Hazardous materials management. Chemicals are stored in dedicated storage areas fitted with special fire-fighting system, sprinkler and fire isolation. Secondary containments and venting are also installed. At the logistics center, the material safety data sheets (MSDS) are available near the storage area. At Authorized Dealers Service Centers, MSDSs are also available and accessible near the storage area. Eye wash kits and showers are easily accessible near the areas where hazardous materials are stored and used at all facilities.
Noise. The company and Authorized Service Centres are exempt from ambient noise monitoring as per local requirement. Occupational exposure to noise is monitored every three years by an accredited third-party laboratory. Provided test results show compliance with the limit values.
Hazardous and Non-Hazardous Wastes. All facilities have Industrial Waste Management Plans that are in line with the local legislation and approved by authorities. Hazardous waste is sent to sub-contracted waste management companies for recycling and disposal. The company handles waste accumulators and batteries in line with Waste Management Plan and achieves 90% recycling target as required by the national legislation. The company has a contract with a specialized waste management company for EV batteries recycling. 100% of waste motor oil, transmission oil and brake fluids generated at the authorized service centers is sent to the Regeneration Facilities for base oil recovery following temporary storage in designated tanks. At the repair shops, nozzles that are contaminated during painting are washed at a dedicated area where the wastewater is collected in small tanks. Contaminated water is then collected by a certified waste management company in compliance with the legislation.
Performance Standard 4: Community Health and Safety
Community Health and Safety.
Dogus Otomotiv ensures compliance with international standards and local regulations by receiving fire consultancy services for the design and operation of its properties. Life and fire safety measures are integrated into the design of service centers and logistics centers, including features such as physically isolated rooms for chemical storage, multiple emergency exits, fire extinguishing systems, sprinklers, fire-resistant blankets, thermal cameras, warning signs, and labeling. Regular checks and maintenance are conducted on fire safety systems. As previously mentioned, (ESAP#2), the company will develop an action plan to enhance its fire-fighting procedures and systems, including special systems for fire incidents on the roof-top solar PV panels and EV storage area and update its Emergency Preparedness and Response Plan to address electrical vehicle fire or explosion events, in line with international guidelines and standards.
Road Traffic. As part of the OHS Procedure, the company has a safe driving instruction for prevention of road accidents and to provide safe transportation of its employees and products. Transportation companies are contractually asked to follow Dogus Otomotiv’s transportation safety procedures including vehicle safety checks, speed limits, and safe driving practices.
Security Forces. The company employs almost 160 licensed and unarmed security personnel at all facilities, contracted from a private company. They are trained and certified as per local regulatory requirements. The facilities are equipped with CCTV cameras.
