Having set full alignment with the economy of the future as one of its key strategic objectives, Tofaş is taking steps to ease its gradual transition to a carbon-neutral automotives market. Within the same framework, the company recognizes both protecting natural resources and minimizing the environmental impact of its operations as two key responsibilities. Along with its own, direct environmental impact, Tofaş also focuses on managing and reducing the indirect environmental impact of its operations across its entire value chain.

2022 AT A GLANCE

• In 2022 Tofaş continued to be one of only 50 Turkish companies whose shares qualified for inclusion in the BIST Sustainability Index.
• Tofaş successfully passed all its mandatory and voluntary environmental audits in 2022 with no instances of non-compliance.
• In December 2022 Tofaş applied for admission to the Science-Based Targets Initiative and was accepted.
• In 2022 Tofaş booked a total of TL 2.5 million as environmental investment and management outlays.
• In 2022 Tofaş carried out 201 energy-efficiency projects. These projects conserved 115,055 GJ of energy and reduced the company’s CO₂ emissions by 9,622 tons
• In 2022 Tofaş reduced the average amount of energy needed to make one vehicle by 20% to 3.19 GJ, a figure well below the year’s target. The average greenhouse gas emissions generated in the production of one vehicle amounted to around 249 kg/CO₂ (eq).
• In 2022 Tofaş used about 2.74 m³ of water to make one vehicle. This was 6% less than in 2021.
• The Tofaş plant is equipped with an internal water recycling system that made it possible to reuse about 60 million m³ of water in 2022.
• In 2022 the production of one vehicle generated only 26.84 kgs of waste on average.
• Last year, 6,889 Tofaş employees received a total of 10,757 hours of environmental awareness-enhancement training.

CLIMATE CHANGE

Tofaş’s holistic approach to climate change mitigation simultaneously considers:

• Mandatory emission limits
• Physical and operational demands resulting from sudden changes in weather etc
• Financial implications such as carbon trading

As part of its corporate risk management framework, Tofaş takes quick action to address potential threats in all three dimensions while also developing ecofriendly techniques and sustainable solutions.

ENVIRONMENTAL & ENERGY-RESOURCE SUSTAINABILITY

Tofaş seeks to pass a clean and livable world on to future generations through a sustainable approach when dealing with environment and energy-related matters. In the conduct of all of its operations, Tofaş complies fully with all national and international requirements and it strives constantly to reduce the environmental impact of its manufacturing activities and of its products and services by making continuous improvements in its performance and through the use of appropriate technologies.

Environmental issues are handled by the Tofaş Sustainability Committee and by the Tofaş Sustainability Working Group in line with Tofaş’s Environmental and Energy Policy. Both committee and working group report directly to the Tofaş Board of Directors concerning the company’s environmental performance.

Tofaş takes a preventive and proactive approach to environmental risk management, which is costly but essential, in line with SPW (Stellantis Production Way) principles and the ISO 14001 standard. By continually improving its production system, the company goes beyond environmental regulations in its efforts to minimize risks and to eliminate or at least reduce pollution. Tofaş takes steps to keep potential risks under control so as to be sure that the financial impact of any losses in the event of their realization is minimal.

Tofaş deploys effective, integrated environmental management systems in order to:

• Prevent pollution at source and reduce environmental risks;
• Reduce the environmental impact of its products by taking a life-cycle approach;
• Use energy and natural resources responsibly and efficiently;
• Increase the environmental and energy-conservation awareness of employees, other stakeholders, and society at large.

Tofaş booked a total of TL 2.5 million as environmental investment and management outlays in 2022.

In order to keep all of its stakeholders informed about its targets on environment and sustainability issues, Tofaş transparently publishes the results of its efforts in these areas in sustainability reports and on its corporate website.

Environmental target	Performance indicator	2022	2023 (T)	2026 (T)
Energy consumption	GJ/vehicle	3.19	2.75	3.21
Greenhouse gas emissions	kg/CO2 (eq)/vehicle	249	262	100
VOC emissions	gr/m2	28.29	33.12	22.9
Fresh water consumption	m3/vehicle	2.74	3.08	1.79
Total waste generated	kg/vehicle	26.84	28.17	29.44
% waste disposed in landfill	%	0	0	0

SUSTAINABLE MANUFACTURING ATTITUDES

Having adopted sustainable-manufacturing principles in the conduct of its operations, Tofaş achieves natural resource use efficiency by implementing the “5R” (Refuse, Reduce, Reuse, Recycle, Recover) hierarchy in all of its production processes.

As a result of a comprehensive assessment carried out at Borsa İstanbul in 2022 by EIRIS, one of the responsible investment industry’s leading research providers, Tofaş remained one of 50 firms in Turkey whose shares qualify for inclusion in the BIST Sustainability Index. Tofaş also submitted its responses concerning climate-change and water-use issues to the Carbon Disclosure Project.

LOW-CARBON ECONOMY TRANSITION

Tofaş regards climate change as a matter that has legal implications (such as emission limits), physical and operational implications (such as radical changes in weather conditions), and financial implications (such as emissions trading). As part of its general corporate risk-management operations, the company identifies what risks these issues may entail, determines what its responses will be, and develops sustainable and effective solutions to deal with them.

Tofaş keeps a close watch on the progress of the European Green Deal in order to integrate EGD policies and practices into its own strategies for combating climate change. Tofaş is currently engaged in efforts to make itself a carbon-neutral company. The conduct of its projects to reduce emissions arising from production operations and the results that those projects achieve are independently verified and certified every year.

Supporting the transition to a low-carbon economy through its energy-efficiency efforts, Tofaş is also a corporate member of the Climate Platform. Tofaş has also committed itself to the “2 ˚C Challenge” program, an internationally-promoted corporate-mission statement that calls for global policies and actions to tackle climate change. In December 2022, Tofaş also joined the Science Based Targets initiative.

The hundreds of energy efficiency projects which the company has undertaken are steadily reducing the energy density of its operations. When new investments are to be undertaken or changes are to be made in machinery and equipment, environmental-impact and energy-efficiency procedures are standardized both by initiating a Kanban (lean/just-in-time manufacturing) process and by adhering to best-available-technology (BAT) practices.

Tofaş works with NGOs, professional associations, and statutory authorities in the formulation of policies to deal with environmental issues. As a member of the Turkish Automotive Manufacturers Association and of the Turkish Industry and Business Association, it takes part in both organizations’ working groups. Tofaş likewise seeks to contribute to the environmental value chain through partnerships with universities and with professional associations and chambers.

ZERO NON-COMPLIANCE

As the first automotive manufacturer in Turkey to be awarded ISO 14001 Environmental Management System certification, which it received in 1998, Tofaş has had a well-established and sustainable environmental management system ever since.

Tofaş commissioned its ISO 14064-1 Greenhouse Gases Management System in 2020 and has been having its annual GHG emissions reports verified ever since. The company’s ISO 50001 Energy Management System was also commissioned in 2013.

Tofaş has maintained a record of “zero non-compliance” ever since its very first environmental audit. Tofaş successfully passed all its mandatory and voluntary environmental audits in 2022 with no instances of non-compliance.

ZERO WASTE MANAGEMENT SYSTEM

Tofaş’s environmental approach is to make use of proactive and efficient management tools. In order to achieve its “Zero Waste/Zero Loss” goal, the company’s maxim is “If you don’t cause pollution in the first place, then there’s nothing that you have to clean up.”

One consequence of Tofaş’s Environment & Energy Policy is that it seeks both to reduce waste at source and to recover and recycle as much as possible of any waste that may be generated. Thus for example 100% of the industrial waste resulting from its manufacturing processes is either recovered or else used as raw material and energy inputs in the cement industry, thereby helping the company to achieve its “Zero Waste Disposal” goal.

Tofaş’s Zero Waste Management System was set up

• to prevent pollution at source,
• to use resources responsibly and efficiently and prevent their waste,
• to source-separate, collect, and recycle waste.

Tofaş’s Zero Waste Management System was awarded “Zero-Waste” certification by the Ministry of Environment and Urbanization.

In 2022, Tofaş continued to fulfil its pledge to eliminate single-use plastics by ending the individual use of disposable plastic products at its Bursa plant.

All (100%) of the industrial waste generated in the course of Tofaş’s production operations is recovered and used as raw-material inputs and fuel by cement-makers. This means that Tofaş has effectively achieved its no-disposable-waste (zero-landfill) goal.

Waste Recovery & Reuse at Tofaş

Insofar as is possible, packaging such as wood, cardboard, plastic sheeting etc associated with materials that Tofaş uses in its production operations is not discarded as waste but recovered and reused both to minimize the environmental impact of such operations and to save on costs. Cardboard for example is put to use in shipments of exported spare parts. Wooden palettes, boards, and slats are used in a variety of ways such as for building planters.

A total of 756 such planters made from scrap wood were installed in various places around the factory where they were needed during 2022. Scrap wood was also used to build an office furniture set, two doghouses for the employee recreation center, and ten stray-animal feeders for installation in the vicinity of the Tofaş Museum of Cars and Anatolian Carriages in Bursa. This recycling prevented the harvesting of 150 trees and the emission of 3.5 tons of CO₂.

ENERGY CONSUMPTION

Taking into account both the life-cycle aspects of its products and services and the needs and expectations of its stakeholders, Tofaş recognizes that its own production operations and the use of the vehicles that it manufactures make up a significant part of the company’s impact on climate change. Seeking to make it possible for stakeholders to satisfy their mobility, transport, and distribution needs more sustainably, Tofaş seeks to improve the emissions performance of its vehicles while also developing vehicles that make use of non-conventional alternative fuels.

In support of the transition to a low-carbon economy, Tofaş takes part in projects to increased conventional-engine efficiency, expand the use of alternative fuel systems, and develop electric and hybrid vehicles that are undertaken in line with Stellantis’s product strategies.

In order to help keep its emissions below maximum limits set by government agencies, Tofaş sets itself short, medium, and long-term energy-efficiency and emissions-reduction targets and continuously monitors its performance progress. Tofaş’s CEO also receives regular briefings from the Energy Guidance Working Group and from the Tofaş Sustainability Committee on energy-efficiency and emissions-control issues.

21% of Tofaş’s R&D operations are related to emissions reduction. As a result of efforts to decrease fixed-energy consumption in line with its overall goal of reducing carbon emissions, 3.19 GJ/vehicle energy-consumption performance that Tofaş achieved in 2022 was better than the target that had been set for the year. Tofaş targets to put its renewable energy investments into use from 2022 and to reduce its GHG emissions resulting from manufacturing by 22.6% by 2026 solely with the support of these investments.

	2018	2019	2020	2021	2022
Total energy consumption (GJ)	1,165,961	1,042,245	993,438	906,678	841,801
Direct energy consumption - natural gas (GJ)	676,304	593,241	578,984	519,016	463,607
Indirect energy consumption (GJ)	489,657	449,004	414,454	387,662	378,194
Energy consumption/manufactured vehicle (GJ)	3.86	4.01	4.02	3.97	3.19

Intelligent Energy-Management

An intelligent energy-management system that makes use of internally-sourced algorithms has been installed in Tofaş’s paint-production plant. Whenever a planned or unplanned production halt occurs, this system automatically puts energy-consuming equipment into standby mode. Using operational data as its inputs, the system detects when production has ended and it automatically shuts down each production line as its production process finishes and reduces the energy supplied to it to the minimum required. Thanks to this system, Tofaş conserves 1,735,776 kWh of electricity and 147,600 m³ of natural gas a year thereby also preventing the release of 1,060 tCO₂e into the environment.

VOC Emissions 

Over the last five years Tofaş has achieved around a 15% reduction in its volatile organic compound (VOC) emissions through improvements in its operational controls.

Along with changes in manufacturing processes such as the use of solvent-free cleaning products, a switch to one-bell spray-painting technology, the introduction of electrostatically-applied water-borne paints, and the commissioning of the company’s nitrotherm spray project, Tofaş has been able to achieve VOC-emission performance ratings that are well below EU-prescribed limits.

GHG Density Emissions Trend

During 2022 Tofaş engaged in efforts to reduce its energy consumption and CO₂ emissions as specified by the Stellantis Production Way (SPW) methodology to which it adheres. 201 energy-efficiency projects have been initiated as part of these efforts, thanks to which 115,055 GJ of energy have been conserved and, in this way, 9,622 tons of CO₂ emissions have been prevented

	2018	2019	2020	2021	2022
Direct greenhouse gas emissions (Scope 1) (tCO2e)	50,062	46,266	45,653	42,790	38,313
Indirect greenhouse gas emissions (Scope 2) (tCO2e)	59,253	53,247	50,303	46,180	46,558

WATER USE

Tofaş strives to reduce the amounts of fresh water it needs by efficiently managing its water intake, recycling, and discharge systems and by developing solutions to improve water use. The company regularly analyzes its water use in order to ensure the continuity and sustainability of its water supply.

The Tofaş Sustainability Committee, led by the CEO, sets and monitors all water-related strategies. The Sustainability Working Group is responsible for strategic decision-making processes related to sustainability management. The group reports directly to the Sustainability Committee. The Environmental Health & Safety Manager, who is a member of the Sustainability Committee and the leader of the Sustainability Working Group, manages all water-related issues, including operational risks and opportunities. This officer also closely monitors issues such as water consumption and wastewater treatment and ensures that they are managed effectively.

Tofaş’s water management approach is informed by the principle of efficient water use. Owing to its potentially adverse impact on biodiversity, wastewater management is a critical part of Tofaş’s overall approach to water-systems management. Wastewater generated in the conduct of operations is recycled to the greatest possible extent with the aid of state-of-the-art treatment plants. Treated wastewater is discharged into receiving environments with loads that are below regulatorily-allowed limits. In 2022, 473,000 m³ of operational wastewater was treated and returned to the natural environment.

The average amount of water used per manufactured vehicle decreased from 2.91 m³ in 2021 to 2.74 m³ in 2022. Recycling projects are targeted to reduce average water consumption to 1.79 m³/vehicle by 2026.

The Tofaş plant’s internal recirculation system enabled the reuse of approximately 60 million m³ of water in 2022. Last year the company began harvesting rainwater and using it for general purposes at the plant.

Supply Chain Water-Management

Tofaş closely monitors its direct-materials suppliers from the standpoints of their fresh-water resources, water consumption, sewage volumes and discharge points, wastewater-management systems and action plans as well as of the locations of their operations.

The existence of physically and regulatorily appropriate water resources is critically important to suppliers’ business processes. In recognition of this, Tofaş regularly assesses its suppliers from the standpoints of water consumption, water sources, water treatment processes, and wastewater quality. This data is compiled and used to create risk profiles and matrices that assess risks arising from potential regulatory changes and/or process disruptions. The most recent assessment indicated that the company is not exposed to any significant supplier-based water risks. Environmental impact assessments are also conducted using EIA matrixes that employ the same water-related data as inputs. These matrixes are used to develop programs to help suppliers improve their water-use and other environmental-performance indicators and thus reduce their overall environmental impact.

Stakeholder-Based Water-Risk Assessment

	Relevance & involvement	Explanation
Customers	Not relevant, included	Tofaş acknowledges that its customers want the company to make its production processes more sustainable. It therefore includes water-use as a priority issue in its sustainability reports.
Employees	Relevant, always included	Tofaş is mindful of the needs of its employees when assessing risks. In addition to providing personnel with an adequate supply of potable water, the company also provides them with water-conservation training.
Investors	Relevant, always included	Borsa İstanbul operates a Sustainability Index that includes water-related issues in its company-evaluation criteria. Water-related issues are one of the priority topics reported to all stakeholders in Tofaş’s sustainability reports.
Local communities	Relevant, always included	Tofaş is committed to supporting the development of local communities as well as to minimizing any detrimental environmental impact on them. All company operations in water-stressed areas strive to minimize the amounts of water they take in and to improve the quality of the water they discharge. Tofaş collaborates with local authorities and suppliers on projects and initiatives that benefit local communities in wherever it has operations.
NGOs	Relevant, always included	Tofaş includes non-governmental organizations (NGOs) in its risk assessments both as an element of reputation management and for benchmarking purposes. The company collaborates with NGOs and solicits their opinions and suggestions according to their areas of expertise.
Other water users in the same catchment	Relevant, always included	The DOSAB Industrial Zone has underground water extraction wells and a wastewater treatment plant in the same catchment area.
Regulatory authorities	Relevant, always included	With pressures on water sources continuing to mount, authorities are increasingly obliging manufacturers to discharge no liquid effluents into the environment at all as a way of encouraging them to reuse water and reduce overall water consumption.
Nilüfer River Catchment authorities	Relevant, always included	Authorities are preparing a Nilüfer River Catchment Area Plan that will reduce the amounts of treated water that may be discharged into the environment, with the ultimate aim of reducing it to zero.
Local governmental & non-governmental interest groups	Relevant, always included	Tofaş is a member of OSD and TÜSİAD water-risk working groups and also heads the Koç Holding Water Management & Risk Assessment Working Group.
Suppliers	Relevant, always included	Water stress among suppliers will have a direct impact on Tofaş’s production. The company audits its suppliers to improve their water management.
Local water service-providers	Relevant, always included	The DOSAB Industrial Zone provides water services for tenants. Tofaş regards having recourse to these services as a possible alternative in the event of any changes in regulatory requirements.
Universities	Relevant, always included	Tofaş works with Uludağ University’s Department of Environmental Engineering on issues involving water management and wastewater quality.

ECO-FRIENDLY MATERIALS

Tofaş takes a life-cycle approach when considering the environmental impact of its products and services and it manages their negative and positive effects accordingly.

While striving to reduce the environmental impact of the production and use of the vehicles it makes, Tofaş is also constantly engaged in projects to make those vehicles more eco-friendly.

The company sets targets for increasing the use of eco-friendly/recyclable materials in its vehicles while also recovering reusable elements from end-of-life vehicles and ensuring that everything else is disposed of in accordance with national and international regulations.

The Tofaş R&D team develops and works with national and international organizations on projects whose aim is to increase the percentages of recyclable and ecofriendly materials used in vehicles.

A few of the company’s initiatives aimed at increasing the percentages of recyclable and ecofriendly materials used in vehicles are highlighted below.

• Ocean Fabric: Seat covers made from fabric manufactured using recycled plastic bottles collected from the sea.
• Recycling industrial PET bottles and using innovative techniques and processes to make automotive components.
• Multicycling: A method developed to recover plastic raw materials and restore them to their original properties, thereby allowing the materials to be reused over and over again.
• Using bio-based polymers in the production of automotive components.

IMPROVING ENVIRONMENTAL PERFORMANCE & RAISING ENVIRONMENTAL AWARENESS

Tofaş strives to improve energy efficiency in its distribution operations. The company seeks to raise environment and climate-change awareness and encourage responsible behavior across its supply chain through supplier & dealer development programs on the one hand and customer information services on the other.

In addition to its direct environmental impact, Tofaş is also committed to reducing the indirect environmental impact of its operations. It does this by systematically improving environmental performance throughout its value chain.

To ensure the sustainability of logistics operations, issues such as energy consumption, greenhouse gas emissions, and appropriate packaging are given high priority. When selecting logistical service providers, factors such as energy-efficiency and emissions-management systems and carbon-footprint verification certifications are taken into consideration. Attention is also given to the use of alternative shipping methods (sea, rail) and of more ecofriendly vehicles and to shipping and delivery-route optimization.

Tofaş designates departmental environment & energy guides who are responsible for environmental principle and procedure adoption and compliance within their unit. These guides take part in monthly Environment & Energy Committee meetings, during which departmental training and deployment activities are discussed and planned.

Tofaş believes that the most important and effective way to improve its environmental performance is by strengthening the systems and processes by which that performance is managed. By focusing on the economic costs associated with environmental risks, the company streamlines its risk-management decision-making processes. Tofaş allocates budget resources for environmental risk management and reduction. Tofaş believes it is important to incentivize not just its own employees but all stakeholders to be environmentally aware and concerned in order to ensure the future sustainability of its own environmental performance.

In order to promote and encourage environmental awareness among its own employees and those of its business partners, Tofaş incorporates annual environmental-management targets into its performance-evaluation system. However the company also attaches great importance to raising environmental awareness in general:

• As part of its efforts to increase environmental awareness, 6,889 employees were provided with a total of 10,757 hours of training in the form of Tofaş Academy training modules as well as through digital platforms during 2022.
• Every visitor and contractor employee entering any of Tofaş’s premises is required to undergo workplace-safety and environmental-risk and rule training. This training must be repeated at least once a year.
• Energy-conservation and environment-protection projects and competitions are used along with visual and other materials to increase environmental awareness within the factory.
• Tofaş employees and their families take part in company-organized observances of World Environment Day on June 5th every year.
• Under a project conducted together with the Bursa Federation of Disabled Persons’ Associations, receptacles for the disposal of plastic bottle and container caps were installed in twenty locations around the factory. These caps are collected by the federation, which uses the proceeds from their recycling for the benefit of people with disabilities.
• A “Join the Green Transformation” case-study competition that Tofaş organized was attended by more than 200 junior and senior-year university students. Finalists prepared and delivered presentations on how they would manage the automotives industry’s dynamics as it transitioned to a low-carbon economy. In addition to team awards, the members of the top three teams were given priority in admittance to Tofaş’s Prova Plus long-term internship program.