Corporate responsibility in Turkey briefing

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An 8 page briefing on CSR and Sustainable Business development in Turkey which Ethical Corporation published around a year ago.

An 8 page briefing on CSR and Sustainable Business development in Turkey which Ethical Corporation published around a year ago.

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  • 1. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/4e Country briefing: Turkey 29 Modernisation and corporate challenges 33 Risks and opportunities 35 Change at the top Overview The philanthropy problem By Amy Brown If Turkey’s corporate responsibility movement is to drive real organisational change, companies need to see that sustainability is more than philanthropy urkey, one of the fastest-growing emerging The reasons for this lie in a centuries-old tradition. T economies, is in the midst of major transforma- tion. Since the 1980s, market deregulation has Since Ottoman times, institutionalised philanthropy, in the form of the “waqf ” (a form of charitable boosted foreign investment. The Turkish economy foundation from Islamic tradition) was the main experienced boom-and-bust cycles throughout the basis for the provision of public services such as 1990s, culminating in an economic crisis in 2001. education, social security and healthcare. Since then, structural reforms have brought political Waqfs generally belonged to wealthy families and economic stability. Now Turkey is the world’s who used these foundations to share their wealth in The idea that 16th largest economy and is expected to grow at a the form of public goods. Waqfs are still active in rate of about 5% until at least 2015. Turkey today and most family-owned conglomerates sustainability is With a population of 71 million, Turkey is a huge in Turkey have an associated waqf. In fact, Turkish a way to earn potential market. While its economy is much smaller society has come to expect companies to play an than the Bric countries (Brazil, Russia, India and active role in society, especially in education, health, competitive China), Turkey’s unique geopolitical position gives it culture, sports and the arts. advantage is still a particular importance on the world stage. Turkey’s sights are focused on achieving Traditional values novel in Turkey membership of the European Union. While the Sustainability and corporate responsibility have accession process is likely to create adjustment costs become mired in this tradition, where philanthropic and regulatory risks for business, it is expected to raise donations and community involvement are seen as environmental, ethical, and social standards in areas much the same thing. The idea that sustainability is such as participative democracy, anti-corruption, a way to earn competitive advantage through new human rights, and the importance of civil society. opportunities, new markets, and new business The EU is Turkey’s biggest trading partner, so models, or to minimise risks, is still novel in Turkey. there is a lot riding on getting it right. As it integrates “Most companies still consider CR as an add-on, its economy with developed countries, Turkish not core to the business,” says Melsa Ararat, a companies are competing on a much larger playing professor in strategic management, corporate field. The notion that a strong sustainability profile governance and business and ethics at Sabanci is a competitive advantage is only just taking root in University and the director of the Corporate Turkey, where corporate responsibility is often Governance Forum of Turkey. “Doing good should regarded as synonymous with philanthropy. start with avoiding harm and understanding your
  • 2. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/49 28 Country briefing: Turkey Ethical Corporation • September 2011 full impacts and Turkish companies are not there yet. likely to change,” says Serdar Dinler, president of the The importance CR is still about marketing and PR.” CSR Association of Turkey, an NGO. That view is shared by Atila Uras, manager of the Change must therefore come from within. And of sustainability UN Joint Programme to Enhance the Capacity of while there is still a long way to go, Dinler is globally is moving Turkey to Adapt to Climate Change. cautiously optimistic. CR up company “Planting some trees was enough for the private “A growing number of companies recognise the sector until the first part of this decade,” Uras says. competitive and reputational advantages of CR and agendas “Then the concept of CR became more familiar and some are implementing better practices,” Dinler says. they began to understand that CR requires But only a few are making it a strategic part of their partnership, not just providing funds or charity work.” business, and none are taking it to the next level by This briefing has been written by One Stone, with special contribution from He describes Turkish companies as generally integrating CR throughout their supply chain. “In Istanbul-based correspondent Jennifer following global trends – not leading them – saying that Turkey, most leading companies are at the Hattam. One Stone is a global team theirs is “not a strategic approach, but mostly reactive”. implementation level.” offering sustainability consultancy and communications expertise. One Stone’s But there are some signs that things are changing. partners and associates are based in The proximity to Europe, exposure to energy Consumer demand Stockholm, Edinburgh, Sydney, Portland, risks exacerbated by growth, Turkey’s reliance on Turkish society and its millions of consumers also Oregon and Washington DC. One Stone external finance, and the increasing importance of need to drive sustainability, says Engin Guvenc, has more than two decades’ experience working with multinational companies to sustainability globally are moving corporate executive director of the Business Council for guide sustainability leadership strategies responsibility up company agendas. Sustainable Development Turkey. and provide focused sustainability Among the developments since 2010: the launch of “It is not only companies who should be making communication. the Istanbul Stock Exchange’s Sustainability Index; the society aware of sustainability, consumers are also being April Streeter is a writer specialising in first Turkish signatories to the United Nations’ Principle affected. If there isn’t a demand for products produced sustainability since 1998. Formerly based of Responsible Investment programme and Carbon in a more socially and environmentally responsible in Sweden, where she covered Scandi- Disclosure Project (to date, 20 companies have joined); way, there will be less action from industry,” she says. navia for Windpower Monthly, she now lives in Portland, Oregon and is a blogger an increase in the number of Global Reporting Initiative It comes down to changing corporate culture, she for Tree Hugger and The Huffington Post. reports published; and a growing number of Turkish adds. “We have a culture handed down over the companies signing up to the UN Global Compact. generations, so it is difficult to change the mindset.” Amy Brown, based in Washington DC, has written the award-winning sustainability The pressure exerted from external institutions As Turkish markets become more competitive, and integrated annual reports for Novo and market forces will probably continue to be bigger civil rights are better respected, the legal and judicial Nordisk, Electrolux and Ericsson. She’s drivers for better sustainability practice in Turkey system improves, and the intensified political and also written extensively for the Interna- tional Herald Tribune on sustainability than either government policy or civil society. economic interaction with Europe affects social issues and was editorial consultant for “There is no pressure from Turkish society or values. Against this backdrop, Turkish business has the World Business Council for Sustain- government for the private sector to improve its no choice but to take on a long-term perspective – able Development’s 10th anniversary corporate responsibility practices, and that is not and that bodes well for sustainability in Turkey. n publication Walking the Talk. Turkey factsheet Corporate responsibility statistics: Ethical Corporation survey results Socio-economic statistics Focus of CSR/sustainability Guidelines and initiatives most used Population: ................78.8 million (2011 estimate) GDP: ..............................$960bn (PPP 2010 estimate) 1. Reporting Global Reporting Initiative GDP per capita: ..........$12,300 (PPP 2010 estimate) 2. Employee engagement Global Compact Human Development Index: ..0.679 (83rd / 169) 3. Resource efficiency Current leadership Turkey sustainability leaders most mentioned President: ............................................ Abdullah Gul Guideline and standards statistics Coca-Cola Icecek, Koç Holding Type: .......... Republican parliamentary democracy GRI reports in 2010 ..........................................................10 Import partners Foreign sustainability leaders most mentioned Global Compact participants ........................................13 Russia ..............................................................13.8% Novo Nordisk, Vodafone UNPRI signatories ..............................................................7 Germany ..........................................................10.0% China....................................................................9.0% References: • Socio-economic statistics obtained from recent publications from the CIA Factbook and the Human Export partners Development Index. Germany ............................................................9.6% • Corporate responsibility data obtained from an August 2011 Ethical Corporation survey. The small sample France ..................................................................6.1% of this survey means that the results should be regarded as an indication of trends in Turkey and not as UK ........................................................................5.8% scientific research. • Guideline and standards statistics obtained during August 2011 from official website of each initiative.
  • 3. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/4 Ethical Corporation • September 2011 Country briefing: Turkey 29 PH2212/ISTOCKPHOTO.COM Companies and sustainability Corporate hurdles By Amy Brown Turkey has big ambitions, but in its efforts to modernise, a range of sustainability challenges must be confronted opulation growth, urbanisation, rising incomes “Water scarcity is a big, big issue,” says Atila Uras, P and energy consumption are straining Turkey’s natural resources. Turkey is also highly vulnerable manager of the UN Joint Programme to Enhance the Capacity of Turkey to Adapt to Climate Change. Turkey faces pressure from to climate change, with a carbon-intense economy “Turkey is among the most highly vulnerable the EU to provide that has an increasing energy shortage and depend- countries in world, and the major impact of climate ence on imports. change will mostly be in terms of water. By 2070 it is concrete emissions In contrast with many emerging markets, Turkey predicted Turkey will experience 30% less rainfall, in reductions is a net commodity importer. About $35bn of oil and [what is] an important regional basin for agriculture natural gas each year has to be imported (equivalent and food security.” to almost 5% of GDP). The country has an unsus- Few companies embrace the environmental tainable carbon-based transport system. And with agenda of the country, turning instead to their long its large coal reserves, use of coal is expected to legacy of contributing to social needs such as educa- multiply over the next decade. tion. Unemployment at 14% is the most pressing On the bright side, Turkey is one of the pilot economic and social issue, mostly affecting Turkey’s countries in the Clean Technology Fund, which youthful population (44% are under the age of 24). finances low-emissions technologies for greenhouse “Many young people are graduating without gas reductions within countries’ investment plans. skills, which is a very dangerous thing, a time Through CTF, Turkey hopes to jump-start the private bomb,” says Serdar Dinler, president of the CSR market for energy efficiency and renewable energy. Association of Turkey, an NGO. “This is a very Turkey has substantial renewable energy important challenge for Turkish society.” resources, including hydroelectric, wind, geo- Atilla Yerlikaya, corporate affairs director at thermal and solar power. The long-awaited Coca-Cola Icecek, agrees. “Capacity building for the Renewable Energy Law, enacted January 2011, young, dynamic population of Turkey is extremely includes an incentive scheme to promote renewable important. Formal and vocational education is energy use and production. critical for the future of the country.” The EU accession process has improved Turkey’s Looming water scarcity infrastructure for protection of human rights but With a climate strategy criticised as vague, Turkey these institutions lack resources, independence and faces pressure from the EU to provide concrete impact, according to Prof Melsa Ararat of Sabanci emissions reductions. Lack of certainty over University. Turkey’s position with respect to international Trade union rights are another weakness. The agreements has led to a weak approach and low number of workers covered by collective agree- awareness of the issue by most corporations in ments in Turkey is as low as 3% of registered Turkey. workers. While Turkey has a labour unions law, it
  • 4. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/56 30 Country briefing: Turkey Ethical Corporation • September 2011 DEBORAH BENBROOK/DREAMSTIME.COM Koç Holding: social history By Amy Brown “I live and prosper with my country,” declared Vehbi Koç, founder of Koç Holding, the largest industrial conglomerate in Turkey. That philosophy has guided the actions of this powerful family-owned company for the past 40 years. A tradition of social responsibility began with the Vehbi Koç Foundation, supporting education and the arts. But in recent years that view has shifted to a more encompassing definition of corporate responsibility that is less about being a wealthy benefactor and more about recognising a business case for sustainability. Where Koç Holding leads, others follow. It comprises 117 companies, representing 10% of Turkey’s total exports, and generates a combined turnover equiva- lent to 7% of Turkey’s national income. It is the only Turkish company in the Fortune 500 list. With that kind of leverage comes a sense of responsibility, says Oya Ünlü Kizil, head of corporate communications and external affairs. “Our sustain- ability depends on the sustainability of the society at large,” she says. With Turkey’s large number of unemployed and unskilled young, Koç Holding started a vocational education programme with the ministry of education and local NGOs to encourage young people to enrol in Responsible textiles have a competitive advantage vocational education and to contribute to the training of a qualified workforce. This initiative goes beyond does not apply to certain sectors of the Procter & Gamble and Coca-Cola setting philanthropy, explains Kizil, in that it positively affects economy where informality is high. Health standards that domestic companies must business outcomes by increasing the pool of skilled and safety at work is therefore a serious follow to stay competitive. human resources. Consumer-product companies, such as On the environmental side, the company endorsed a appliance manufacturer Arcelik, which climate change strategy in 2010 with an eye to trans- Consumer product have growing numbers of local consumers forming potential risks into opportunities. “A low-carbon manufacturers are investing who view environmental performance as a economy,” Kizil says, “has significant potential to create differentiating factor, are taking the agenda important new business and job opportunities.” in environmental efficiency more seriously and investing in environ- An energy efficiency coordination group has shown mentally efficient products. results: a 100% group-wide improvement in energy concern, given the size of the informal And the banking sector is often regarded efficiency in two years, saving about 330,000 tonnes market and low level of unionisation. as a leader in corporate responsibility, of CO2 emissions in 2010. Companies within The Turkish textile industry has seized according to Ararat, not least because Koç stand out as leaders, such as Arcelik, which has on corporate responsibility as a competitive international loan institutions set environ- developed world-leading energy-efficient home advantage against the threat of Chinese mental, social and corporate governance appliances, and automakers Tofas and Otokar that textiles and engaged voluntarily in projects standards for loan recipients. produce hybrid and electric vehicles. with European civil society organisations Koç produces an annual CR report and was one of such as the Clean Clothes Campaign to A family affair the first signatories to the UN Global Compact. In 2010 improve social standards. Turkey’s corporate landscape is defined by the group developed a sustainability performance Turkey’s corporate sectors are rapidly the group of powerful families that own evaluation and reporting system. All of this has to internationalising. The automotive and half a dozen leading conglomerates, among matter to the bottom line if sustainability is to become textile industries that depend on trade with them Eczacibasi, Kocabiyik, Sabanci, Koç, truly entrenched as a way of doing business, Kizil says. Europe face requirements for capping their Yazicilar and Ozilhan. These conglomerates “The sustainability of CR activities largely depends carbon, or reporting their emissions to their stand out in opinion surveys about social on their returns for the companies. It’s a two-way customers. responsibility conducted by Capital street. The companies’ ability to analyse social and Multinational companies have a benefi- magazine and the market research firm environmental risks and mitigate them through CR cial effect on the growth of corporate GSK-Turkey. activities is the key for their sustainability as well as responsibility and sustainability in Turkey, Given their influence in Turkish society, leadership in the 21st century.” with companies such as Unilever, Carrefour, these companies seem to have embraced
  • 5. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/53 Ethical Corporation • September 2011 Country briefing: Turkey 31 Petkim: pure petrochemicals? By April Streeter Petkim Petrochemical Holdings is Turkey’s largest petrochemicals producer and its giant plant dominates the spit of coast it occupies on the gulf of Izmit, 125km from Istanbul. The company make nearly 2m tonnes of chemical products each year, ranging from PVC to ethylene. Petkim is well aware it is in one of the most energy-intensive indus- tries, and due in part to expansion plans, the company made the move in 2010 to measure and report its greenhouse gas emissions through the Carbon Disclosure Project. Project manager Gediz Kaja of the Gaia Carbon Team (Petkim worked with the UK’s Ecometrica as well) says Petkim’s awakening to corporate responsibility and carbon management are part of a trend among companies grappling with the reality of the need for a low-carbon economy. It is also considered necessary as Petkim pushes ahead with an ambitious five-year export expansion plan. Perhaps to some degree the move is also a result of previous pressure from NGO Greenpeace over Petkim’s waste and pollution. Not regulated domestically, Petkim is acting voluntarily. Petkim makes a big impact “Petkim’s status in international markets plays an important role in its decision to strengthen its CSR,” Kaya says. “Nevertheless, there is some internal motivation – it is already reducing its carbon intensity. starting with the CEO, there is strong faith in the company that it should play an impor- The company has identified 43 energy-efficiency projects it could undertake, and has tant role, to contribute to environmental and social sustainability in its region and 23 of these projects already in progress. Petkim has also received permits for a 25MW nationwide. It sees itself as a role model and strongly believes that as an institution it on-site wind power plant. These measures are estimated to save 90,000 tonnes of CO2 can do it.” equivalent a year. Though Petkim hasn’t publicly disclosed the results of its CO2 measurements (compa- In addition, Petkim is getting ready to release its first full sustainability report in 2011. rable competitors Chevron and ExxonMobil emitted 63m and 131m tonnes of CO2 “Petkim has become a superior example of sustainability and corporate social respon- respectively in 2009), and is not currently setting quantitative targets for GHG emissions, sibility practice,” Kaja says, “in an environment where such actions are not mandatory.” their leadership role in raising sustainability decade” award by World Finance Magazine number of youth and vocational on the corporate agenda. (an award partly based on a company’s programmes and, for example, has an The huge SME sector (SMEs make up sustainability track record), Turkcell is the employment creation programme focused 90% of all companies in Turkey) is playing only Turkish company to be listed on the on call centres. catch-up. SMEs receive a significantly lower New York Stock Exchange. “With 34 million customers, we rely on share of the credit supply in Turkey, so they Turkcell has become well known for its our call centres and at the same time this are more likely to opt for informality and tax activities to support education in Turkey. creates employment opportunities. We are evasion. As a result, it is not uncommon to Turkcell’s main educational project, creating community value by investing in find a SME extolling an educational or social “Modern Girls of Modern Turkey”, which the local community,” says Zeynep Ozbil, programme and claiming to have adopted started in 2000, grants scholarships to young head of corporate citizenship at Turkcell. corporate responsibility, while engaging in While he sees Turkcell’s initiatives within tax avoidance. education as commendable, Serdar Dinler “You cannot call what these SMEs are Turkey needs greater of the CSR Association says the company is doing CR as such,” Ararat says. “The activi- investment in vocation training still missing the big picture. “CSR is about ties aim to have a reputational benefit to the changing organisational culture, not just a company. But at the same time, these and human resources project,” he says. companies wouldn’t mind not paying Among the companies moving away taxes or being involved in the informal women in less developed parts of the from the philanthropy model to more economy. They do not see corporate respon- country. These “Kardelenler” (snowdrops) strategic sustainability is Coca-Cola Icecek sibility as a measure of overall good projects, conducted in partnership with a (see case study). Risk management and corporate citizenship.” local NGO, are now collectively one of the reputation are key drivers, along with Among the companies that stand out biggest social responsibility projects in the global expansion. consistently in Turkish opinion surveys and world. So far, 27,500 students have been “Research and development related to regional and international rankings on granted scholarships, 11,000 have gradu- eco-innovation could be better encouraged corporate responsibility is Turkcell, Turkey’s ated from high school, 3,500 passed by the government by announcing specific biggest communications and technology university entrance exams and 1,250 gradu- projects, giving more support to SMEs and company. Recognised as one of the top five ated from university. joint projects. Such programmes already companies in Europe for its financial disclo- Recognising that Turkey needs greater exist in Europe,” says Oya Ünlü Kizil, head sure procedures in 2011 by the IR Global investment in vocational training and of corporate communications and external Rankings, and recipient of “company of the human resources, Turkcell also supports a affairs at Koç Holding.
  • 6. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/54 32 Country briefing: Turkey Ethical Corporation • September 2011 ERIC BRODER VAN DYKE/DREAMSTIME.COM Coca-Cola Icecek: bottled ethics By Amy Brown In a country and region expected to face serious water shortages in coming years, Coca-Cola Icecek (CCI), the Turkish-owned company that is the sixth largest bottler in the Coca-Cola empire, is proud of having the best water and energy usage rates in the global Coca-Cola system. “We are operating in an environment where natural resources are under tremendous pressure. Therefore efficient use of water, energy and packaging materials is critical for sustainability,” says Atilla Yerlikaya, director of corporate affairs at CCI. With a total of 20 plants, CCI employs about 9,000 people and has operations in 10 countries in the Middle East. Unlike many other Turkish companies just starting to get the big picture, CCI is well on the way to integrating sustainability. It’s a matter of common sense and long-term survival, Yerlikaya says. “Any CR approach or strategy that is not tied to the future of your business through a business case is destined to fail in the long term.” While aligned with the sustainability priorities of the Coca-Cola System, CCI has carved out its own priorities around water management, sustainable packaging, energy efficiency and climate change. CCI is hitting all the right notes in entrenching sustain- ability into the company’s fabric. Sustainability is embedded in CCI’s 2020 Vision and Strategic Framework. The board of directors’ corporate governance committee is responsible for the sustainability strategy and monitors performance. A sustainability committee led by the chief executive and comprising senior management identifies long-term sustainability targets and sets sustainability metrics. Finally, a sustainability working group includes all function heads and plays a critical role in linking sustainability management with field operations and upper-level management. The company has been a leader on the reporting front, too. CCI published its first CSR report in 2008, becoming the first company in Turkey to share non-financial perform- ance through a corporate social responsibility report according to the Global Reporting Initiative guidelines. It has continued to report according to GRI in 2010 and 2011 and is a signatory to the Global Compact. On the climate change front, CCI was among the first companies to sign the Copen- Cutting a mega brands impact is a towering task hagen Communiqué in 2009 and the Cancun Communiqué in 2010 and the CCI Turkey region president serves on the Climate Change Leaders Group, which supports the model that takes stakeholders’ expectations into account,” says Yerlikaya. “In the business community as Turkey transitions to a low-carbon economy. future, companies operating within this framework are going to be more successful “Earning a social licence to operate is only possible through building a business than others.” Taking a firmer line on climate change corporate affairs director of Coca-Cola change, companies are no longer able to would also be enhanced by stronger Icecek. hide their heads in the sand, Atila Uras says. government incentives, she adds. “Estab- The “360 degree view” of sustainability “Climate change is emerging in Turkey lishing a voluntary internal carbon market is being championed by NGOs such as as an issue for corporates, both to connected with international regulatory the Business Council for Sustainable Devel- address within the organisation and as a and voluntary markets may be another opment. marketing tool,” he says. Uras believes that means to encourage investments to BCSD’s executive director Engin Guvenc companies are beginning to see that the improve energy efficiency and carbon says that the organisation’s role is to make return on investments in energy efficiency reduction activities.” sure companies understand their risk areas or waste reduction is coming back very and help contribute to the company’s finan- quickly and that there is an enormous Confronting the challenges cial strength. “For example, without opportunity for greater visibility and Coca-Cola Icecek is among the Turkish knowing its carbon emissions impact, a communication around a more environ- companies confronting the issue of gender campaign to plant trees is clearly just for mental, low-carbon, responsible way of equality. Its female executive rate is 73%, marketing purposes. But if the company is operating their business. compared with only 16% globally. aware of their emissions impact and sees “As more evidence of the business “There is an increasing understanding of the risks associated, and this awareness case emerges, I expect to see growing the global CR agenda in Turkey, especially becomes part of the culture of the company investment by companies as they realise in the last two to three years. Right now, I to address these emissions – that is more there is an opportunity to do something believe Turkish companies are closing the corporate responsibility and sustainability.” good and receive economic benefit at the gap with MNCs,” says Atilla Yerlikaya, Particularly when it comes to climate same time.” n
  • 7. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/55 Ethical Corporation • September 2011 Country briefing: Turkey 33 FATIH POLAT/DREAMSTIME.COM Civil society 80% of companies see philanthropy as synonymous with corporate responsibility, Growing pains, some gains leaving NGOs with an enormous, even overwhelming educational task. Bulay’s organisation, Sum Türkiye, has By April Streeter encountered these challenges. Bulay, a Turkey’s NGOs and business associations are in the challenging process former Ford product development engineer of convincing businesses of the risks and opportunities of sustainability passionate about mobility, was sponsored by the World Resource Institute’s Embarq quest by engineer Sibel Bulay to bring universities is getting students to look for network to start her organisation. A sustainable transport to Turkey is an apt analogy for the current challenges of renewable projects on campuses and advocate for policy change to their adminis- She dived into the country’s snarly transport issues – in Istanbul, for example, many of the country’s responsibility- trations. most working men and women commute focused NGOs and business associations. Tema has a high profile with the public for two hours or more in crawling traffic While opportunities abound, there are also and has made inroads inside companies. and smoggy air conditions. growing pains. The “81 Forests in 81 Cities” campaign Until recently, businesses’ charitable helped bring the plight of Turkey’s forests to Restrictive laws and philanthropic activities were moulded the attention of regular Turkish citizens. In Sum Türkiye started by working on an by the historical “waqf ” structure. Proper partnership with Tema, Is Bankasi decided emissions inventory of road-based traffic corporate responsibility requires a more internally to shift funds it would normally with BP Bulay soon realised, however, that . comprehensive view, however, and so use to send favoured customers New Year’s Sum Türkiye’s fundraising opportunities organisations have the challenge of both gifts and instead allocate them and other were limited, due to Turkey’s restricting growing stakeholder engagement in a NGO laws. Thus a significant portion of her society that has had limited activist Organisations have the working hours recently have been spent involvement, and increasing corporate setting up a foundation and changing the involvement in order to press forward with challenge of growing organisation name to Embarq Turkey. a sustainability agenda. stakeholder engagement in Now, Bulay’s new Embarq Turkey must Turkey’s fairly steady macroeconomic embrace a partnership model for success. growth beginning in 2002, and the subse- a society that has had limited There are two reasons for this. The influ- quent coming of age of a powerful group of activist involvement ence from European and US multinationals’ Turkish entrepreneurs spurred the first sustainability approach is only just now wave of sustainability-related NGOs and cash ($6.5m in total) to the planting of 2m spilling over to Turkish domestic corpora- business associations. Successful, civic- trees. Nearly a million are already in the tions, making them not primed for joint minded leaders such as Hayrettin Karaca ground, planted by Tema volunteers, projects just yet. and Nihat Gökyigit founded Tema (Turkish including elementary school children, at 81 In addition, as Guvenc Engin, executive Foundation for Combating Soil Erosion) urban locations. director of the Turkish BCSD notes, a and retired bank chief Ibrahim Bertil started However, meatier responsibility-centric critical, in-your-face approach, favoured by Tog (Community Volunteer Foundation). NGOs frequently run into the cultural resist- many existing Turkish NGOs (she mentions Tog, for example, has had success at ance of Turkish companies to see beyond Greenpeace) is not going to be fruitful for raising awareness among the Turkish public simple philanthropy to actual opportunities corporate responsibility and sustainability about renewable energy, especially in the and risks of embracing a broader sustain- issues. youth population (aged 17-25). For example, ability agenda. As Serdar Dinler, president of “Few NGOs have the understanding of the Solar Generation project now at seven the CSR Association of Turkey, has put it, sustainability to pressure companies – many
  • 8. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/50 34 Country briefing: Turkey Ethical Corporation • September 2011 AIR PORTRAIT/ISTOCKPHOTO.COM were established years ago and work proselytising corporate responsi- with a business-as-usual approach – bility. and to criticise companies is the “They organise meetings and main attraction. Greenpeace can do speakers – may publish papers – this, but other local NGOs can be but when it comes to supporting more successful by taking the more the government to improve legisla- constructive approach,” Engin says. tion that impacts the environment Bulay clearly knows this, and or other CSR issues, they do not favours a constructive approach for take any action,” Ararat says. In Embarq Turkey. fact, she suggests that they work to Yet as far as domestic corporations oppose more stringent environ- are concerned, education about mental or other CR-relevant corporate responsibility is still legislation that would impact lacking, Bulay says, and with Embarq companies’ competitiveness or the sole NGO specifically concen- profitability. trating on sustainable mobility, it is Observers seem unable to single beyond her organisation’s capacity. out any one NGO with clear success Embarq is unlikely to grab any in the responsibility/sustainability flashy headlines or prizes, as Is arena. The Turkish BCSD’s effort to Bankasi has with “81 Cities”. Instead, create a Sustainability Index for the Bulay says she must work to gain the Istanbul Stock Exchange seems a trust of stakeholders, now and in the current high note, however, espe- future. That way, she says, “when cially as 80 companies have companies are ready to invest their expressed interest. And the recent CSR dollars, we can align their objec- formation of a Turkish Business tives with CSR initiatives”. Cycling catching on Network Linked-in CSR group with Embarq Turkey has partnered 500 members is a positive develop- with the city of Sakarya’s Transport Direc- is one of the country’s most influential ment. torate, as well as the Dutch NGO Interface business organisations. Following Turkey’s Devin Bahceci, who has worked for the for Cycling Expertise (I-CE), to train a local application for EU membership in 1987, Turkish Green Party and in a variety of team to design safe bicycle corridors in this Tusiad has worked ceaselessly to align NGO roles, currently as secretary-general of mid-sized city. Over 90% of Sakarya’s Turkish business standards and practices the Earth Association, says the lack of a cyclists are male – unsafe conditions are with those of the EU. That would seem to guiding NGO is particularly dire in the field seen as a barrier to women riders – and at give corporate social responsibility at least a of climate change. least 10% of riders have been in collisions. place at the conference table. “For me the test of NGO success is the Bulay sees the greatest success in Tusiad president Ümit Boyner has made ability to affect people and government to Sakarya thus far as the Transport Direc- the right speeches about the low-carbon take necessary steps, both adaptation and torate’s realisation that cycling is actually a economy and Turkey’s needed to transition. mitigation, in order to prevent the destruc- mode of transport, worthy of initiatives. She tive threats of climate change,” he says. wants to see that kind of attitude shift Bahceci’s view is that there has not been an spread to other cities – Antalya will be next NGOs frequently run into the NGO in Turkey that has been able to do this. to develop a pilot cycling corridor – and to cultural resistance of Turkish Powerful environmental NGOs are “not domestic companies. political enough” to influence the govern- “It’s the idea that it’s not about cars per companies to see beyond ment, and they generally only provide se, it’s about climate change, mobility, simple philanthropy services such as “planting trees”. democracy,” she says. Bahceci says that from his observation, “Intensive work,” she has said, is under way private sector support of NGOs is still quite Who carries the torch? inside the organisation, for example, to low, and corporate responsibility initiatives Back to CSR’s educational deficit, and older, create a framework for Turkey’s response to inside more mainstream NGOs few and far established NGOs such as Tog and Tema are climate change. between. pursuing the slow process of raising aware- When it comes to action, however, others Yet Ararat says the pressure from Europe ness of environmental and social in the corporate responsibility community for Turkish companies to shift their vision sustainability issues among the Turkish are not so clear that Tusiad is committed. A from responsibility as an “add-on” to part of populace. Yet since smaller nimble players CR study group, established in 2007, started the core business strategy will continue. such as Embarq may not have the institu- out robustly but has seemed to peter out, And as the case study on Petkim’s process tional capacity, who will press the CR according to Serdar Dinler. also demonstrates (see p.31), while the agenda inside companies? That’s in line with what Melsa Ararat, education and impetus to start that process Probably not the business associations, it director of the Corporate Governance may not come from the NGO world at all, seems. In existence since 1971, the Turkish Forum of Turkey, calls the “lack of success” once the process has begun Turkish compa- Industry and Business Association (Tusiad) by Tusiad and other business associations at nies’ results can be swift and fruitful. n
  • 9. EC /SapM ambar_LPyouM /3//47t69t4633//33 47//: Pga/58 Ethical Corporation • September 2011 Country briefing: Turkey 35 Government Missing the big picture By Jennifer Hattam There are plenty of well-meaning sustainability initiatives under way in Turkey, but a cultural movement for change has yet to take hold aced with soaring energy costs amid F rapid urbanisation and industrialisation, the Turkish government late last year finally President Guls progressive laws could be better enforced enacted a long-awaited law setting feed-in tariffs for renewable energy generation. far as I can tell, no company in Turkey is comes to sustainability. For environmentalists, though, the law truly migrating towards sustainability in a “Turkey’s environmental agenda is 100% contained a major catch. It allowed way that meaningfully challenges the related to the EU accession process. Every protected nature areas to be used for business model,” says John Buffington of year we’re incorporating new EU regula- production facilities for renewable energy – Karbon Ekonomi, a firm that offers sustain- tions and directives and there’s a huge including the massive hydroelectric dams ability consulting to Turkish firms. amount of compliance work being done at they have been fighting for years. Many say the government, since 2007 the company level,” Okumus says, adding The inconsistency reflects what the under Abdullah Gul, gives companies little that international climate change negotia- deputy director of the Regional Environ- or no incentive to do so, despite various tions also play a significant role. mental Centre’s Turkey office calls a lack of “[EU accession] has been one of the overall vision on environmental issues. “There is no motivation, drivers in the Turkish clean-tech industry,” “There are a lot of laws but they are not says a business leader in the renewable- enforced and do not serve a target,” says no incentive, no regulatory energy sector. “The EU has been pressuring REC’s Kerem Okumus. “There is no sustain- pressure” Turkey since its economy has been growing able long-term regulatory framework.” at high rates in the last decade, but without The situation parallels that of most Kerem Okumus, Regional much care for the environment.” Turkish companies, which largely adopt Environmental Centre The increasing globalisation of the individual initiatives that might fall under Turkish economy has had a similar influ- the heading of “corporate social responsi- commendable laws, including ones ence, with multinationals operating in the bility” without making deeper changes to mandating building energy performance country often at the leading edge of corpo- their practices and processes. and other efficiency measures. rate responsibility efforts. “The real drivers “Many companies do not get what right now that I’ve found are a foreign sustainability is about,” says Aykan Gulten, Lacking pressure parent company that has a global a former Nike corporate responsibility “Environmental regulation in Turkey is programme and foreign investors asking for manager who now heads works in corpo- pretty sophisticated but there is not enough it,” Buffington says. rate affairs for Coca-Cola Icecek. “They do monitoring, enforcement, and criminal When looking for a corporate partner for not assess their impact on the environment sanctions,” says Gulten. “There are no regu- her social entrepreneurship project, and society but try to be recognised as lations holding companies back from Copmadam founder Tara Hopkins likewise responsible through donations and PR improving environmental performance but found success with Unilever, a large multi- work.” there are not enough encouraging it either.” national. “We did go to several big Turkish Garanti Bank, the country’s second According to REC’s Okumus, one of the companies, asking them to sponsor a largest private bank, has, for example, been most important moves the government Turkish development programme, and they much praised for its longstanding sponsor- could make would be to establish an emis- were less than interested,” she says. ship of the environmental group WWF sions-reduction target that companies Others remain hopeful, however, that Turkey. The same bank has, however, been a would have to figure out how to meet. awareness and action are on the rise, partic- target of fierce criticism domestically and in Turkey’s per-capita carbon emissions are ularly in the private sector. Europe for its support for the Ilisu Dam near the world average of 4.5 tonnes a year, “Turkey is going through the same project, a massive hydroelectric power but at the current rate of growth, he says, period the western world completed a few plant in south-eastern Turkey that would this figure could hit 9 tonnes by 2020, years ago,” Gulten says. “At the end of this inundate a 2,000-year-old city and displace leaving the country trailing. period, companies with real commitment its current residents. European funders “Right now there is no motivation, no will be able to differentiate their position have already pulled out of the project. incentive, no regulatory pressure,” Okumus from greenwashers.” n “There are a growing number of firms says, adding that consumer demand and adopting incremental CSR measures, but as market pressure are also lacking when it Jennifer Hattam is a freelance journalist based in Istanbul.