The Project is categorized as a B. Key E&S aspects assessed during appraisal included: (i) the company’s capacity and E&S management systems to manage their operations in line with IFC PSs; (ii) fair, safe and healthy working conditions for employees and contractors , including gender-based violence and harassment (GBVH), in line with PS2; (iii) supply chain management, particularly in relation to batteries (Ford, Tofas, Jeep, Volvo, PSA group brands, TOGG, Tesla, BYD, BMW, Mercedes, Volkswagen) and risks of forced/child labor and safety; (iv) occupational health and safety; (v) waste and effluent management; (vi) resource efficiency; (vii) emergency preparedness and response plan (EPRP), including life and fire safety (L&FS); and (viii) stakeholder engagement and external grievance management.  

 PS1: Assessment and Management of Environmental and Social Risks and Impacts 

Environmental and Social Policies. Otokoc has established a set of sustainability policies including Quality and Environmental, OHS, Energy, Human Rights, Ethics Code, Equality at Workplace, Security Management, Child/Forced Labor and Anti-bribery. These sustainability policies are published on the company website: https://www.otokocotomotiv.com.tr/etik-ilkeler-ve-uyum-politikalari

E&S Management System and Programs. Otokoc has established an integrated management system (IMS) i.e. certified as per ISO 9001 (quality management), ISO 14001 (environmental management), ISO 45001 (occupational health and safety management), and the ISO 10002:2018 for customer satisfaction (complaints system provides guidance on the handling of the process within an organization), which is generally in line with IFC’s PS requirements. The company management systems regularly undergo internal and external audits to confirm compliance of the company operations with local and international standards and key performance indicators (KPIs), e.g. 89 rental office locations were part of the environmental and OHS (re)certification in 2023. Otokoc is planning to achieve ISO 50001 Energy Management System certification by the end of 2024. Greenhouse gas (GHG) emissions are calculated and verified by an independent, accredited organization in accordance with the ISO 14064-1 GHG Emissions Reporting Standard. As part of the ISO 14001 system, Otokoc has developed an Environmental and Social Management Plan/Manual.

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 Sustainability Committee, which identifies and manages E&S risks and impacts associated with its operations as per (i) the National relevant requirements; and (ii) through specific risk screening and assessment procedures and internal audits. The EHS risk assessment for Otokoc Nigde PV, which was put in operations last year, included the environmental impact assessment.  For its retail branches, where the new and the second-hand vehicle sales and after-sales services are performed (repair, maintenance, bodywork, painting), Otokoc identifies, manages and monitors the environmental impacts of the activities.  For example, waste management is carried out in accordance with national regulations. Compliance with national legislation is monitored through internal audits and corrective actions are taken for identified nonconformities.

OHS risks are assessed in all Otokoc activities for all workplaces including subcontractors as per the OHS Risk Assessment Procedure. The risk assessment is renewed every time there is a material change to the company’s operational practices, workplace settings, change in technology and /or equipment, occurrence of environmental, work-related occupational incidents or diseases are observed. The risk associated with the contractors’ work is addressed by the application of Otokoc’s Contractor Technical Specification for Environment and Occupational Health and Safety Instructions. The current risk assessment framework in Otokoc is well developed and covers most industry related EHS aspect including (i) conducting climate risk assessment a part of the ESIA for its Nigde PV; and (ii) measuring thermal comfort of the workforce for each location and supplying PPE according to seasons.  Nonetheless, the company will, as per ESAP #1, integrate climate-related risks to its risk screening and assessment procedure and management plans for identifying and addressing any climate-related risks against its new development and ongoing operations including climate induced OHS risks to its workforce, risks from floods, water scarcity and droughts.

Organizational Capacity/Competency. Otokoc has well established E&S organizational structure placed within the HR department, which manages several units including the Sustainability, IMS and Administrational Affairs (SIAA) department, and reports to the Otokoc CEO. The SIAA unit is responsible for determining, monitoring, and reporting on the sustainability strategy and related actions in collaboration with business unit leaders. It oversees OHS compliance and recertifications process, defining and executing of the sustainability strategy, KPIs reporting, environmental management, GHG emissions reporting, quality systems and Lean 6 Sigma implementation, and other services such as security, transportation and cargo operations, food safety and housekeeping. Otokoc’s Sustainability Committee, headed by the Otokoc CFO and HR Head, supervise the work of various business units including the SIAA unit, sets targets and provide regular KPIs reporting to the Otokoc CEO. Otokoc contract external environmental consultancies for carrying out environmental management tasks at the Otokoc Authorized Dealers and Service Centers. The consultants are tasked with monitoring environmental performance as per the environmental permits and reporting to the authorities, development and implementation of waste management plan and annual waste declarations.

OHS procedures and instructions for Otokoç Otomotiv are developed at the central Koc Holding level. Its responsibilities include (i) compliance with national legal compliance standards, ISO 45001 guidelines, and Koç Holding Standards; (ii) implementation and maintenance of an effective OHS management system; (iii) conducting regular assessments to identify legal and other requirements relevant to occupational health and safety and ensuring that these are documented and communicated effectively within the organization; and (iv) manage medical rooms in all locations, provide necessary equipments and medicines. The Headquarters OHS team consists of an HSE Leader, occupational safety specialist, Occupational doctor and an occupational health nurse assigned at HQ. This team is responsible for ensuring centralized management in retail, parts warehouse, and rental functions, while adhering to legal regulations, Koç Holding standards, and ISO 45001 OHS Management System requirements. Otokoc Field OHS Team (Branches, Rental Offices, Warehouses) consists of 23 occupational safety specialists, 27 occupational doctors, and two occupational nurses assigned to the retail, warehouse, and rental functions. They are responsible for implementing the procedures and instructions determined by the HQ OHS Team at all Otokoç locations.

E&S Training. Otokoc has a comprehensive training program for all employees on environmental and OHS awareness and competency. Onboarding and regular training modules specific to the workplace risks and hazards are also provided to relevant staff by Occupational Safety Specialist and Workplace Physician or through the Türkiye Confederation of Business Association (TISK Academy) online training platform. Monthly OHS and environmental toolbox training are provided at each location including on use of the personal protective Equipment (PPE), chemicals management, safe driving, disaster awareness. Subcontractors’ E&S staff deliver similar training for the contracted workforce. Basic OHS & Refresher OHS Training, Initiation Training, Emergency Training, MYK (Vocational Qualification Training), Safe Driving Training, SRC-Psychotechnical Training, Adaptation Program Training, Cyber Security Training are defined as mandatory trainings for employees. In 2023, 4,171 office workers and 780 field workers; 3,391 employees, 310 contractors (subcontractors) have received OHS training. According to the 2023 KPIs, the number of employees received the environmental trainings by 2023 is 2,239 employees and, total environmental training hours is 3,762.

Otokoç offers mandatory online compliance trainings to all employees on its payroll. In addition, Koç Holding continues its studies on additional training plans including GBVH awareness / GBVH zero tolerance within the scope of the Ethics Code and Ethics Line policies. GBVH awareness /GBVH zero-tolerance trainings are be included in these mandatory trainings for both all direct and contractor employees. The company will revise the annually and mandatory training plans and will deliver refreshment trainings to increase the employee awareness on the GBVH awareness / GBVH zero-tolerance within the scope of the Ethics Code and the Ethics Line policies, as per ESAP #3.

Emergency Preparedness and Response. The company has a documented emergency preparedness and response plan (EPRP) covering the HQ and Logistics Center. In addition, site specific EPRPs are developed and implemented for each Otokoc authorized Dealer and Service Center. The emergency plans contain details such as the emergency teams, 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. Integral part of the emergency preparedness and response plan and procedures are life and fire safety (alarms, sprinklers, smoke detectors) and earthquake safety measures.

Otokoc has completed the installation of EV charging units (116 AC and 10 DC chargers) in all branches’ sales showroom and services centers and at HQ. Otokoc personnel can use these stations, but these are not available for the external community or customers. No charging station and or electric vehicles are stored and parked within closed areas. Both service areas and the charging stations are equipped with the necessary equipment, and health and safety training for Otkoc personnel is provided by the EV vehicles distributors (Ford Otosan, Tofas, Volvo TR, Fermas, etc.). Currently, Otokoc operations do not include special service centers for electric vehicle maintenance and repairs, though Otokoc will now need to implement health and safety provisions as related to servicing the EV in line with new legislation (TSE K 646 - Authorized Service Standards for Electric Vehicles).

As per ESAP# 2, Otokoc will complete a fire safety assessment for all its branches and warehouses by the February 2025, will incorporate provision for fire prevention/fighting and explosion risks into the design of EV charging stations and EV repair and service centers, and update its EPRP in line with GIIP, IFC PSs and World Bank Group (WBG) EHS Guidelines. The company will update the EPRP to include the community health and safety risks when / if accessing EV vehicles repair service premises and when using the EV charging stations, including risks associated with roof-top solar PV panels, and will be disclosed to the project affected stakeholders.

Monitoring and Reporting. As per the company’s IMS, annual targets are set at corporate and dealers’ level by the Sustainability Committee. Internal and third-party audits are conducted on an annual basis to verify compliance with local and international standards and performance against KPIs. The 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) and 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. Sustainability initiatives and performance are discussed at bimonthly meetings held at the Otokoc and the Koc Holding level. Otokoc published its 2023 Annual report, which includes information on its sustainability agenda (i.e. information on its environmental and social management systems, resource efficiency and climate change, OHS, promoting gender equality and social responsibility activities). Otokoc is planning to publish its first sustainability report by the end of 2024.

PS 2: Labor and Working Conditions

Otokoc Turkey Operation employs around 3486 direct workers, all of whom are white-collar employees. In addition, there are almost 798 contractors’ workers. Contractors’ workers are only involved in activities such as security, cleaning, catering, call center, etc. Female employees are 892 i.e. 26% of the total workforce in Otokoc; 43% female workers employed at HQ and 3% at the field operations.

Human Resources Policies and Procedures, Working Conditions and Terms of Employment.

Otokoc has HR policy and procedures, developed per the national law requirements and generally in line with IFC PS2. Otokoc 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.  In Otokoç's declared human rights policy document (https://www.otokocotomotiv.com.tr/assets/pdf/Koc-toplulugu-insan-haklari-politikasi.pdf), Zero Tolerance to discrimination and harassment is the key principle. Otokoc, 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. The company is a signatory of the UN Women's Empowerment Principles (WEP) and has developed "Diversity, Equity and Inclusion Policy". Otokoç Ethics Hotline is a reporting mechanism for a misconduct or an unethical behavior including all kinds of discrimination (harassment, mobbing, violation of the Code of Ethics). In addition, Otokoç Human Rights Policy goals for 2024 includes provision for achieving gender equality. Adopting a gender-balanced employment vision, the company is committed to employing women in its business activities; in 2024 there are 37 female field workers and Otokoç has committed increasing this number compared to the previous year as an annual KPI. The female manager ratio is 21.9% in 2024.

Grievance Mechanism. Workers can report their complaints, suggestions, or requests through email, in person or by calling the ‘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.

Ethics hotline is available in the headquarters and branch locations of Otokoç. Grievances that are received through the various channels are processed by Internal Audit, Legal & Compliance, Human Resources departments based on the complaint. In case of issues that are related to the Ethics Code, the Executive Disciplinary Committee conducts investigations and implements necessary actions. As per ESAP #4, Otokoc will strengthen its worker’s grievance mechanism to ensure that contracted workers have access to it and develop timely solutions to contractor grievances.

Otokoç contract employees or contractors can also access the Ethics Line and submit their complaints. In addition to the Ethics Line, compliance@koc.com.tr is another alternative complaint submission address. All submitted complaints are recorded and the solution process is managed/monitored by the Otokoç. While time to resolution can take some time depending on complexity of the complaint, Otokoc is committed to address complaints as soon as possible.  In this context, in addition to the Ethics Line operated as the relevant grievance mechanism, Otokoç will strengthen the Grievance Mechanism to ensure that all types of grievances are managed in accordance with IFC PS2, including GBVH and anonymous grievances, including the subcontractors' employees. This development activity will also fulfil the function of the request-complaint boxes used in Otokoç Branches before the Project and will ensure that the complaints coming to this channel are directly transferred to the improved GM call center channel and that all employee complaints on any subject are systematically managed in accordance with IFC PS2.

Occupational Health and Safety. Otokoc has a comprehensive OHS Procedure that includes risk assessments for its worker and contracted workforce including job hazard analysis, general OHS rules, Technical Working Instructions, Safety Instructions, training requirements, chemical handling, use of personal protective equipment (PPE), emergency response, first aid, accident and unsafe action reporting. All processes related to OHS are coordinated by an external OHS consultancy company and managed by Otokoc SIAA Unit, which is responsible for the implementation of the OHS policy. The OHS consultancy company carries out regular hazard assessments at the workplaces. Otokoc 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 PPE, trespassing of restricted areas, etc.) at the Logistics Center. There have been no fatal work accidents at Otokoç. The average LTIFR of the HQ and Logistics Center has progressively decreased between 2021 and 2024 and is currently well below good international industrial benchmarks for the sector. At Otokoc, the number of incidents has decreased by 60% in 2024 when compared to 2021 (from 34 to 11). 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, immediate actions, and corrective actions.

Workers Engaged by Third Parties. At each facility, contractor workers are required to operate with a permit which includes verification of OHS requirements and documentation (Otokoc Contractor and Visitor Procedure, Contactor Technical Specification, OHS and Environmental Instructions). Before a contractor enters the workplace, the contractor needs to submit to Otokoc business unit manager a “Request from Contractor Companies During Entry to Work” form. For hazardous work within Otokoc facilities a contractor must obtain a work permit Work Control Procedure for Hazardous work (hot work, high works, confined space work, energy insulation works, excavation and lifting works).

Supply Chain Management. Set of Otokoc’s Code of Ethics and Compliance Policies includes the Supply Chain Compliance Policy, which ensures business partners’ compliance, adherence to anti-bribery regulations and third-party due diligence. The policy includes a ESG Guide to manage its supply chain activities which includes also includes a review of environmental, social and governance aspects to determine whether the potential supplier would be subject to an onsite assessment and any capacity building activity.  If determined necessary, the client will develop and implement supply chain management system with focus on selection, onboarding and verification of solar panel suppliers’ E&S performance through dedicated supplier audits and monitoring to identify, if any, manage and remediate issues associated to child labor and forced labor in the supply chain. This includes due diligence and management procedures for the sourcing of solar in accordance with Good Industry International Practice.

The company’s current and main solar panels suppliers, Arcelik and Entek have their own Sustainable Supply Chain Management (both suppliers have been engaged in construction of the Otokoc Nigde PV), 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

While Otokoc does not have formal water, or energy or resource efficiency plans in place, it implemented a number of initiatives to reduce energy consumption in its branches and other measures such as installed solar PV (roof tops and land based) energy projects, energy-efficient compressor replacements, time clocks for environmental lighting, and light-emitting diode (LED) conversion projects, all of which have resulted in the reduction of approximately 9,400 tons of CO2 equivalent emissions in 2023.  Otokoc HQ and all branch offices / operations (30 locations in 12 Cities in Türkiye) are supplied by energy generated from renewable sources, as certified by 34 I-REC Certificates.

For all its branches, Otokoc monitors and reports electricity consumption monthly (renewable energy projects and electricity from the grid), water, natural gas and fuel oil consumption. Otokoc will be reporting aggregated data through its Sustainability Report for 2024 (https://www.otokocotomotiv.com.tr/surdurulebilirlik). The first sustainability report covers data for 2021-2022 and 2023, and medium and long-term targets continue to be implemented. The report will have a set of KPI defined to monitor and reduce resource consumption, GHG emissions and waste generation,  electricity, fuel, consumption of el. energy generated from renewable energy source, Scope1, Scope 2 and Scope 3 carbon dioxide - CO2 emission, total water consumption, waste generation, OHS statistics (accidents, lost time injury frequency rate (LTIFR), fatalities), gender equality (percentage of woman employees).

Air Emissions. There are no significant air emission sources at the service centers; these include air emissions from welding, painting, mounting, exhaust from boilers. The company and the service centers are exempt from air emission monitoring as per national 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 adhere to local regulations requirements and WBG General EHS Guideline guidance values.

Noise. There are no significant air emissions at the showrooms and service centers.  The company and authorized service centers are exempt from ambient noise monitoring as per national regulations. Occupational exposure to noise is monitored every three years by an accredited third-party laboratory. Test results provided to IFC confirm compliance with the limit values and requirements and WBG General EHS Guideline guidance values.

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 calculate its GHG emissions using IPCC guidelines and in accordance with ISO 14064-1 GHG Standard. Scope 1&2 GHG data between 2017-2021 are verified by an independent organization in accordance with ISO 14064-3 Standard as of 2021. Scope 1 (direct) have ranged between 3,500 (2018) to 4,000 (2021) ton CO2 equivalent per year (Mt CO2e/yr); in 2023, Scope 1 GHG emissions from Otokoc operations was 5,000 Mt CO2e/yr, significantly less than 25.000 Mt CO2e/yr. Scope 2 emissions have been reduced from 6,000 in 2017 to 860 Mt CO2e/yr in 2023. As of 2021, Otokoc started to create, calculate and verify Scope 3 inventory, i.e. in 2021 it was measured at 6,186,644 Mt CO2e/yr, and 8,172,417 in 2023 Mt CO2e/yr.

Water supply. Water is supplied from municipality networks at each facility. Otokoc monitors water consumption and has programs in place to reduce water consumption. Rainwater harvesting is carried out at Bursa Ford and Konya Ford facilities and used for washing vehicles. In the Otokoç Bursa Ford rainwater harvesting project, a total of 650 m3 of water was saved in 2023.

Wastewater. Domestic wastewater generated at most of facilities are discharged to the municipality sewerage systems. Rainwater is collected via collection system and released into the Municipal sewerage system.

Hazardous materials management. Chemicals are stored in dedicated fireproof storage areas fitted with special fire-fighting system, sprinkler. Secondary containments and venting are also installed. At the service centers, 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.

Hazardous and Non-Hazardous Wastes. All Otokoc facilities (retail branches, zero and second-hand vehicle sales and after-sales services (repair, maintenance, bodywork, painting) have waste management plans that are in line with the local legislation and approved by the relevant national authorities. There are only temporary waste storage areas for wastes in accordance with legal regulations. Oily water generated at the service centers is collected in dedicated storage tanks and treated (grate, oil trap and sedimentation tank), and then collection by the licensed waste management company. All hazardous wastes are separated at source and sent to environmentally licensed waste processing facilities e.g. waste batteries and hazardous waste (contaminated waste, paint waste, oil filters, etc.) are sent back to the EV suppliers for recycling, while waste motor oil is sent to refining facilities. The company handles waste accumulators and batteries in line with waste management plan and achieves 99% recycling target, as required by the national legislation. Every year, waste sent to waste treatment facilities is declared to the Ministry in accordance with the legislation.

PS 4: Community Health and Safety

Community Health and Safety. Number of Otokoc facilities, branches and service centers are located within the residential / commercial areas and as such must comply with relevant Turkish law that covers the health and safety aspects of the community that might be impacted by business activity. Otokoc ensures compliance with local regulations (TSE Standard) and international standards e.g. NFPA and FM Global (standards for safety and property loss prevention due to fire, weather conditions, and failure of electrical or mechanical equipment) by engaging fire consultancy services to ascertain that the design and operation of its properties are aligned with the standards. This includes that i.e. life and fire safety measures are integrated into the design of office spaces, 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. Fire and explosion risks were assessed in all branches and warehouses, and a document outlining measures for explosion protection was developed. Regular checks and maintenance are conducted on fire safety systems. Otokoc performs emergency drills once a year for each location in Türkiye.

Road Traffic. As part of the OHS Procedure, the company has a safe driving procedures and instruction that limits traffic risk to public by providing safe transportation of its employees and products. Transportation companies are contractually asked to follow Otokoc’s transportation safety procedures including vehicle safety checks, speed limits, and safe driving practices. 

Security Forces. The company employs 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. 

  As part of its Corporate Communication strategy, Otokoc has mapped its key stakeholders as individuals, institutions and organizations that could be directly affected or impacted by the company’s activities. The company grievance mechanism is primarily focused on its customers. External stakeholders can ask questions, make suggestions, or file a complaint through phone, email, live chat, social media, and letters according to the Customer Satisfaction Management System Policy (https://www.otokocotomotiv.com.tr/assets/Customer-Satisfaction-Management-System-Policy.pdf). Otokoc Customer Complaint Management Process enables fast processing of customers complaints and has Customer Experience KPI matrix to monitor performance e.g. days within which a complaint is resolved. In addition, feedback or grievance is obtained from the key stakeholders through surveys, materiality evaluations, Customer Experience phone line and email address, platforms on the Intranet e.g. Koc Holding Hotline https://secure.ethicspoint.eu/domain/media/en/gui/108227/ as well as information meetings and presentations.

Koç Holding Ethics Point system, which also allows external stakeholders to report grievances, is operated as a community grievance mechanism system. This platform is defined as a reporting tool that allows all Koç Group employees and stakeholders to confidentially report any activity that is considered or suspected to be illegal or abusive, that violates the current legislation and/or the Koç Group Ethical Principles and policies. In this context, the Ethics Line covers the following grievances, among others: (i) theft and fraud; (ii) discrimination, (iii) violation of ethical rules, laws, and legal regulations; and (iv) threats to community safety or health, etc. As per ESAP#5, Otokoç will revise and update its stakeholder mapping and strengthen external grievance mechanism procedure, to be open to receiving all kinds of complaints (including anonymous and GBVH) from all external stakeholders, to be easy to access, suitable for the use of vulnerable groups, and that has a clear and timely complaint assessment and feedback workflow.   

 Contact Person:  Gökhan Özbek

Company Name:  Otokoç Otomotiv Ticaret ve Sanayi A.S.

Address:   Aydinevler Mah. Saygi Cad. No:60 Maltepe / Istanbul

Email:    gokhano@otokocotomotiv.com.tr

Phone:    +90 216 587 98 00

Facsimile:   +90  216 388 98 79