Our Bank operates adhering to the principles of participation finance, which align with sustainability, encompass all stakeholders, and promote fairness, ethics, participation, and sharing, integrating them into its strategy, philosophy, and practical implementations.
Dear Stakeholders,
Global transformation and climate crisis
The global transformation, which gained momentum due to the triggering of the COVID-19 pandemic, has led to disruptions in supply chains, an energy crisis, conflicts in the geographies neighboring Türkiye, and the global wave of inflation. The global business and finance system's extensive integration, advanced digitalization, and the rapid advancement in artificial intelligence and technologies impacting various industries indicate that this transformation is a cycle that will persist.
The climate crisis and its devastating impacts, which are witnessed on a global scale, emerge as another dynamic that will shape the global outlook of the upcoming period.
The Paris Agreement, considered a remedy for the climate crisis and of which our Country is also a stakeholder, aims to prevent the climate crisis by setting a goal to limit the increase in global average surface temperature to 2 degrees and, if feasible, below 1.5 degrees.
The limitation on temperature increase, which is determined as the focus of the fight against the climate crisis, requires a transition towards a low-carbon economy. Despite the recent establishment of green development policies and strategies in several countries, the private sector's declaration of carbon neutral targets and commitments, and the development of global cooperation efforts, the measurements conducted indicate that the achieved results are significantly below the targeted limitations.
The climate change is the major and long-term consequence of the ongoing challenges posed by the external environment. The formidable force of nature and the vulnerability of humanity in the presence of this force are significant indicators that we must take into consideration. This warning also highlights our responsibility to leave on a habitable planet for future generations. Climate risks, identified in this context, have become highly significant for financial service providers, particularly financial institutions. They establish the boundaries of the responsibilities of financial actors in the environmental aspect.
The role and responsibility of our industry
Considering the amount of electricity financial institutions use for office lighting and IT systems, as well as the fuel they consume for transportation, it is evident that their greenhouse gas emissions are relatively low. However, when accounting for customer emissions financed in relation to their commercial and investment activities, the picture undergoes a significant change. Upon analyzing the data from institutions and asset managers who shared their views on the matter, it becomes apparent that the emissions from their financed customers are considerably higher than their own operational emissions.
Climate-conscious financial institutions, rating agencies, and an expanding customer base now subject financed emissions to greater scrutiny, considering them a vital aspect in their decision-making process. Institutions that focus on this area have a competitive advantage in managing their costs, maintaining their market reputation, adapting to rapidly developing environmental-related regulatory risks, and playing a leading role in the changing competitive landscape. Besides, climate-conscious investors may have the opportunity to access more affordable resources by fulfilling certain requirements.
We are preparing to become an assertive stakeholder in the fight against the global climate crisis.
Ziraat Participation, the first publicly owned participation finance institution in our Country, has declared itself a stakeholder in the fight against the global climate crisis with the resolute and significant strides it has made during the 2022-2023 period for the internalization of the principles of sustainability and ESG.
The work we have conducted within the governance framework includes the establishment of the Sustainability Governance Structure, the prompt implementation of ESG-related processes and the disclosure of our sustainability policies.
Our Bank operates adhering to the principles of participation finance, which align with sustainability, encompass all stakeholders, and promote fairness, ethics, participation, and sharing, integrating them into its strategy, philosophy, and practical implementations. While this identity provides a very valuable opportunity for us, it also grants us valuable leverage by enabling us to use the concept of sustainable and responsible investment (SRI) as a guiding principle. SRI is one of the cornerstones of participation finance principles, along with ESG criteria.
Ziraat Participation is committed to enhancing its efforts in this context in the short, medium, and aims to gradually mitigate its direct and indirect emissions in line with Turkey's target of achieving carbon neutrality by 2053, ultimately striving for zero emissions.
Regarding the future
We are aware of the challenges associated with the sustainability mission we have undertaken and consider both the favorable and unfavorable developments that the upcoming period will bring.
We are currently in a period in which we need to work hard and continuously enhance our sustainability capabilities. The architects of this field will be our human resources, which have facilitated the remarkable growth that Ziraat Participation has demonstrated since the date it started its operations. We are committed to improving our capacity in sustainable finance and increasing our positive impact by updating our human resources, management structure, and processes in line with the global Sustainable Development Goals (SDG) and ESG agendas.
The energy we need to achieve our goals is based on the support of our stakeholders, and is bolstered by the strong connection between our customers and our products and services, and in the dedicated efforts of our employees.
I am delighted to introduce our first sustainability report, and I would like to state that it is a source of pride for us as we have started sustainability reporting in 2023, when we celebrated the 100th anniversary of our Republic with great enthusiasm.
On this occasion, on behalf of myself and our Board of Directors, I would like to express our gratitude to our customers, suppliers, and all stakeholders, particularly our employees, who greatly add value to Ziraat Participation in every way through their invaluable efforts.
Best Regards,
Alpaslan ÇAKAR
Chairman of the Board of Directors
