Emlak Participation Bank Sustainability Studies

Zero Waste Project (2020)

In the Head Office, additional service building and all branches of Emlak Katılım, all criteria in the Zero Waste Regulation of the Ministry of Environment, Urbanisation and Climate Change were fulfilled and the Zero Waste Project was implemented in September 2020. Emlak Katılım, the first participation financial institution to obtain a Zero Waste Certificate in the second year of its establishment and to start its activities in this field, continues to fulfil its responsibilities towards the environment in a sensitive manner. In this respect, Emlak Katılım recycled approximately 34 thousand kg of waste from branches and the Head Office building as of the end of 2022 and brought it into the economy.

Grey Water Treatment System

The water used in the headquarters building of Türkiye Emlak Katılım Bankası A.Ş. in Ataşehir comes to the Grey Water Treatment Centre and the treated grey water is transferred to the garden irrigation tank and used for irrigation of the green areas around the headquarters building.

Turkey's First Green Sukuk Issuance (2021)

Emlak Katılım Bankası's first studies within the scope of sustainable finance activities were initiated in 2021. In this respect, Emlak Katılım Bankası's Sustainable Finance, Green and Social Sukuk Framework Document was prepared based on generally accepted standards in international capital markets.

On 10 November 2021, Turkey's first green sukuk based on labour-capital partnership with a maturity of 371 days and an amount of approximately TL 52 million was issued through the Private Fund Pool (ÖFH) Participation Account. The funds obtained from the green sukuk issuance were used to finance projects that make a positive contribution to climate change and the environment in the Special Fund Participation Account. On periodic return payment dates, the return of the Special Fund Pool Participation Account was distributed to investors at a profit sharing ratio of 90/10.

 A second party opinion was also obtained from an independent valuation firm on the quantitative impacts of the green projects in the pool. According to this opinion, the financing of projects that are subject to green sukuk issuance and serve the sustainable development goals of the United Nations (UN) contributed approximately two thousand tonnes to the annual net carbon emission reduction. The said issuance was awarded the best sukuk issuance of the year in the world on a sector basis at the IFN Awards 2021, organised by Islamic Finance News, one of the leading publications in Islamic finance markets.

Brokerage for Turkey's First Green Sukuk Issuance Based on a Labour Contract

Emlak Participation Bank acted as an intermediary in the issuance of Turkey's first Green Lease Certificate based on a Work Contract with a maturity of two years and a total amount of TL 600 million on 24 December 2021 by TWF IFM A.Ş. (IFM), which is a 100% subsidiary of Turkey Wealth Fund and which carries out the Istanbul Finance Centre Project planned to contribute to Istanbul's goal of transformation into a global financial centre. The proceeds from the lease certificate issuance are used for the completion of the real estates in the Istanbul Finance Centre. On the other hand, the Istanbul Finance Centre Project is expected to make a significant contribution to the target of increasing the share of participation finance in Turkey to 15 percent by 2025.

In this context, the Green Lease Certificate Based on the Labour Contract, offered for the first time in Turkey, was one of the first steps towards this goal. This green sukuk issuance was deemed worthy of the most successful issuance of the year in local currency at the "Bonds, Loans & Sukuk Turkey 2022" award ceremony of GFC Media, one of the most prestigious awards in the finance sector.

Emlak Katılım supports farmers with EWR

With Electronic Warehouse Receipts (EWR), Emlak Katılım supports the agricultural sector by meeting the financing needs of producers of storable agricultural products (cereals, legumes, oilseeds, cotton, hazelnuts, olives, olive oil, figs, dried apricots, etc.) in accordance with interest-free banking principles. In EWR, an investment account is opened at Emlak Katılım on behalf of the customers and the account information is notified to the licensed warehouse operator. Customers can deliver their storable agricultural products to the licensed warehouse. The EWR issued by the licensed warehouse in return for the product received as a result of the control and analysis procedures carried out by the licensed warehouse is transferred to the customers' investment account. Emlak Participation Bank lends funds to producers by taking the Electronic Warehouse Receipts issued at the end of the day as collateral and supports farmers with EWR.

Emlak Participation Bank Full Support to Renewable Energy

Emlak Katılım has signed a cooperation with Smart Energy to provide affordable and accessible financing support to companies wishing to benefit from solar energy. Thanks to our 100 per cent leasing financing and flexible payment plans in the field of renewable energy, Emlak Katılım Bank provided affordable and accessible financing support to companies wishing to benefit from solar energy, which stands out among renewable energy sources. On the other hand, Emlak Participation Bank also provided financing support for the installation of individual residential rooftop solar energy systems within the framework of its cooperation with Solar Çatı in the field of Rooftop Solar Power Plant (Rooftop SPP).

Green Vehicle Financing (2022)

Environmental Vehicle Finance offered by Emlak Katılım to its customers is an environmentally friendly vehicle finance that can be used to finance environmentally friendly electric or hybrid vehicles whose carbon emissions are much lower than traditional vehicles with internal combustion engines.

With the environmentally friendly financing model, customers received a 2-point profit share discount for the electric or hybrid vehicles of their choice, and a special sapling donation was made on their behalf through OGEM-VAK. This product was awarded at the 'Future in Our Hands Awards' at the Sustainable Future Summit organised by the Turkish Federation of Automotive Maintenance Associations (TOBFED).

Green Sukuk Working Report

Our Bank took part in the working group in the preparation of the Green Sukuk Working Report published by the Republic of Turkey Presidential Finance Office in May 2022 within the scope of the Green Consensus Action Plan.

Property Participation Sustainability Committee

The Property Participation Sustainability Committee was established to review and decide on recommendations made by Sustainability Working Groups and employees working on sustainability-related issues.

In this context, Sustainability Working Groups are divided into three groups.

- Financial Sustainability Working Group,

- Corporate Sustainability Working Group,

- Climate Risk and Reporting Working Group.

What are the Duties and Responsibilities of the Sustainability Committee and Working Groups?

The duties and responsibilities to be implemented by the Sustainability Committee and Working Groups operating under the leadership of Emlak Katılım Bankası are as follows:

- Evaluating the economic, environmental and social impacts of Emlak Katılım Bankası's activities, raising sustainability awareness among employees and making this awareness a corporate culture,

- To fulfil all the requirements of economic, environmental and social factors within the scope of corporate governance,

- To develop products and services in co-operation with the relevant units within the scope of sustainability,

- To create a sustainable environment in practices for employees,

- To measure and integrate Emlak Katılım's financial risks arising from climate change into Emlak Katılım's risk model,

- To closely follow domestic and global best practices and the latest trends and to ensure the coordination of Emlak Katılım's sustainability reporting,

- Strengthening sound relations and increasing cooperation with international financial institutions and development finance institutions,

- Responsible for calculating Emlak Katılım's carbon footprint and reporting to internal and external stakeholders and making decisions on necessary issues.

Establishment of Sustainability Service (2023)

The Sustainability Service was established under the Investment Banking and Investor Relations Directorate to carry out sustainability activities at the Bank.

Aid to the Earthquake Region

On 6 February 2023, the Board of Directors of our Bank decided to donate TL 1 billion in order to heal the wounds caused by the earthquake that occurred in the southeastern part of Turkey and adversely affected many provinces.

In addition, since the first moment of the earthquake, in-kind aid amounting to approximately TL 30 million was delivered to the affected regions under the coordination of AFAD.

Project Preferred Special Fund Pool

Project Preferred Special Fund Pool is an account based on the principle of profit and loss participation, which results in participation in the profit or loss arising from the use of the funds deposited in Turkish Lira in our Bank in the financing of a specific project by our Bank, in return for which no predetermined return is paid to the account holder and the repayment of the principal is not guaranteed.

In this context, customers with savings are given the opportunity to choose the sector in which they want their savings to be financed. Savers support the sustainable growth of sectors by investing in thematic areas such as wholesale and retail trade sector, energy sector, health sector, agriculture and livestock sector, etc.    

Intermediation in the Recycling Sector's First Green Sukuk Issuance

Emlak Participation Bank acted as an intermediary for the green sukuk issuance of EKOVAR Recycling company operating in the recycling sector with a nominal amount of TL 50,000,000 in September 2022. In this transaction, Emlak Participation Bank provided consultancy services to EKOVAR in the preparation of the Framework Document. Emlak Participation acted as an intermediary for the distribution of the proceeds from the sukuk issuance to the sukuk investors by purchasing, sorting and collecting the wastes to be recycled with the consideration obtained from the sukuk issuance, and distributing the income obtained by recycling these products and selling them in the market.

 This sukuk issuance is important in terms of being the first green sukuk issuance in Turkey within the scope of the "Green Debt Instrument, Sustainable Debt Instrument, Green Lease Certificate, Sustainable Lease Certificate Guidelines" implemented by the Capital Markets Board (CMB) on 24/02/2022 and being Turkey's first real sector green sukuk project. Thanks to the recycling of scrap wastes obtained with the funds obtained from the first green sukuk issuance of the recycling sector, which was undertaken by Emlak Katılım as the intermediary, approximately 31 thousand tonnes of contribution was made to carbon emission reduction and 6 targets from the UN Sustainable Development Goals.

Second Green Sukuk Issuance

Emlak Katılım successfully completed its second green sukuk issuance on 14 November 2022 with a maturity of 430 days and a total amount of TL 500 million within the scope of the TL 2 billion sustainable/green lease certificate issuance programme, which was received from the CMB in October 2022 within the scope of the Guidelines.

The funds raised from the issuance were utilised in an environmentally friendly green building project that plans to obtain LEED Gold certification. The environmentally friendly practices of the LEED certified green building to be constructed within the scope of the project are in line with the United Nations Sustainable Development Goals; Clean Water and Sanitation, Accessible and Clean Energy, Sustainable Cities and Communities and Climate Action.

Green Building Project Impact Report

- Emlak Katılım published the Fund Utilisation and Impact Report within the scope of the issuance of Green Lease Certificates based on Management Contracts with a total nominal amount of TL 500,000,000, which was issued in November 2023. According to the said report, 10,320 tonnes of carbon emissions and 9,754 tonnes of water consumption were prevented with the green buildings financed.

Sustainable Sukuk Issuances

Emlak Katılım issued sustainable sukuk with 1-year maturity amounting to TL 100 million and TL 200 million in May and June 2023, respectively, and sustainable sukuk with 1-year maturity amounting to TL 300 million in March 2024. The funds obtained from these sukuk issuances will be used to finance projects that contribute to combating climate change and social development.

Our First Sustainability Report Prepared in Accordance with GRI Standards

Emlak Katılım published its first sustainability report prepared in accordance with the Global Reporting Initiative (GRI) standards, in which it transparently presents its activities in this field as an important part of its commitment to sustainability.

Portfolio Custody Service

Based on the Capital Markets Board's approval dated 13 April 2023 and numbered 36060, Emlak Participation Bank obtained the operating permit for portfolio custody. Thus, Emlak Katılım started to provide collective portfolio custody services exclusively for participation-based investment funds. With the said operating licence, Emlak Katılım became the first bank in Turkey to start providing participation-based portfolio custody services.

Brokerage and Impact Report on Recycling Company's Sukuk Issuances

- Emlak Participation acted as an intermediary for EKOVAR Recycling's green lease certificates with a total amount of TL 100 million in March and April 2023.

- Emlak Katılım prepared a Fund Utilisation and Impact Report within the scope of the green sukuk issuance with a total nominal amount of TL 100,000,000, for which EKOVAR Recycling acted as the intermediary in April 2023 and March 2023. According to the said reports, it is informed that thanks to the recycling of scrap wastes, a total of approximately 48.3 thousand tonnes of carbon emission reduction and 3 targets from the UN Sustainable Development Goals were contributed.

Intermediation and Framework Document for the Private Sector's First Social Sukuk Issuance

Turkey's first private sector social sukuk issuance in the amount of TL 50,000,000 with a maturity of 1 year was realised within the scope of the lease certificate ceiling based on the management contract amounting to TL 100 million obtained from the Capital Markets Board, where WorqCompany Dış Ticaret A.Ş. (WorqCompany), which developed the "Revenue Sharing E-Commerce Financing" model, a first in Turkey, was the fund user through Emlak Katılım.

The issuance was designed as a social sukuk in accordance with the internationally recognised International Capital Market Association's (ICMA) Social Bond Principles and the Islamic Development Bank's (IDB) "Sustainable Finance Framework", which is considered as an important milestone in sustainable funding principles. It is aimed to contribute to the project categories of Supporting Economic DevelopmentFinancial Inclusion and Socioeconomic Progress and Employment Creation specified in the "WorqCompany Social Sukuk Framework Document".

The United Nations Development Programme Istanbul Centre for Private Sector and Development (UNDP ICPSD), the Global Islamic Finance and Impact Investing Platform (GIFIIP), a joint initiative of the United Nations Development Programme and the Islamic Development Bank, and Türkiye Emlak Katılım Bankası A.Ş. (Emlak Katılım) provided technical support to WorqCompany.

What are the Planned Green Sukuk Issuances?

Türkiye Emlak Katılım Bankası A.Ş., Emlak Varlık Kiralama A.Ş, Konya Metropolitan Municipality and the United Nations Development Programme (UNDP Turkey, Istanbul Private Sector and Development Centre), Emlak Participation will be the fund user of the Konya Metropolitan Municipality, and Emlak Participation will issue Lease Certificates with a nominal value of TL 100,000.000 TL nominal value, denominated in Turkish Lira, with different maturities, under the Communiqué on Lease Certificates and the "Green Debt Instrument, Sustainable Debt Instrument, Green Lease Certificate, Sustainable Lease Certificate Guide" implemented by the Capital Markets Board, Emlak Katılım is planning to apply to the Capital Markets Board for the issuance of green lease certificates (sukuk) based on the work contract for the establishment of a solar energy electricity generation plant on the immovable property located in Saraçoğlu Neighbourhood, Karatay District, Konya Province, allocated to Konya Metropolitan Municipality by the Ministry of Treasury and Finance. In addition to the said issuance, Emlak Participation Bank;

- The Company obtained the approval of the CMB for the green sukuk issuance of a client that has a significant share in the production and export of qualified technical granite. It also provided consultancy services in the creation of the Framework Document for the said sukuk issuance.

Energy and Water Efficiency

Energy savings are achieved through smart air conditioning and lighting automation in the Head Office, Additional Service Building and Branches. A Solar Energy System with a power of 35KW was installed in Emlak Katılım Ümraniye Additional Service Building and an energy saving of 25% was achieved when averaged over summer and winter.

In order to increase water saving and ensure sustainability, all faucets in the offices were selected with sensors. In this way, savings were achieved by preventing unnecessary water use. The Grey Water Treatment system, which is important in terms of the correct use of resources, is used, and thanks to this system, waste water is purified and used in garden irrigation systems.

Breathe to Nature

Emlak Participation has donated saplings through OGEM-VAK on behalf of its colleagues as well as on behalf of its customers by making video calls with the "Breathe for Nature" campaigns it carries out from time to time.

"Clean Sea, Clean World" Sea and Coastal Clean-up Event

Emlak Participation Nature Club participated in a two-day sea and coastal cleaning activity in Muğla region on 6-7 June 2023 within the framework of the theme "Clean Sea, Clean World" together with the Turkish Environmental Protection Foundation (TÜÇEV) operating under the Ministry of Environment, Urbanisation and Climate Change. It supported the coastal cleaning by collecting approximately 600 kilograms of garbage.