Kuveyt Türk Participation Bank Sustainability Studies

Having realised the first sukuk transaction in Turkey and Continental Europe in 2010, Kuveyt Türk broke new ground in Turkey and in the world in 2021 and issued a "Global Sustainable Tier 2 Subordinated Sukuk" in line with the principles of participation finance. Kuveyt Türk's sustainable sukuk issuance, amounting to USD 350 million with a 10-year maturity and an early redemption option at the end of the 5th year, attracted over USD 4.3 billion in demand with a wide geographical distribution including Continental Europe, the United Kingdom, America, Asia and the Gulf. The funds obtained from sustainable sukuk are utilised in green and social project financing, particularly in renewable energy financing. On the other hand, the Sukuk issuance received the 'Transaction of the Year' award at the Bonds, Loans & Sukuk Middle East organised by GFC Media.

The 'Sustainability Participation Fund' offered under KT Portföy, a 100 percent subsidiary of Kuveyt Türk, stands out as the first participation-based sustainable investment fund as well as the first participation-based fund where investors can invest in USD-denominated foreign shares and foreign lease certificates. The Sustainability Participation Fund mainly consists of domestic and foreign company shares with high performance in environmental, social and ESG issues and lease certificates issued by companies that meet these criteria. Investors who invest in the fund aim to contribute to building a sustainable future by financing models that are beneficial to the environment and society as well as generating returns.

Kuveyt Türk's CDP Climate Change Note B

Carrying out its activities with a sense of responsibility towards society and nature, Kuveyt Türk considers minimising the environmental impact of its activities as one of the main components of its sustainable finance approach. Carrying out activities in many different areas ranging from sustainable products and services to waste management, from integrated corporate responsibility projects to in-house sustainability trainings, Kuveyt Türk measured its greenhouse gas emissions by fulfilling its environmental obligations and participated in the CDP Climate Change survey for the first time in 2023 and received a B score, one of the best grades in the finance sector. Over 23 thousand companies were scored within the scope of the 2023 Climate Change Programme of CDP, the world's largest environmental reporting platform. CDP aims to contribute to the functioning of the business world in order to reduce the impacts of climate change.

Sustainable Future Vision at Kuveyt Türk

Emphasising the 'sustainable finance' approach in its 2026 vision, Kuveyt Türk plans to take important initiatives in environmental, social and governance areas until 2026. In line with its 2026 strategy, Kuveyt Türk continues to take steps that add value to the society and the savings of its shareholders with its strong capital structure and dynamic corporate governance approach while offering innovative products and services to its customers. In addition to all these, Kuveyt Türk, which has established its sustainable banking strategy in line with the principle of responsible banking, plans to develop applications, products and services that are beneficial to the environment and society together with all its stakeholders by acting with the focus of being the leading participation bank in the development of sustainable banking and raising awareness in the society.

 Having published its Sustainability Policy in 2021 as part of its sustainability efforts, Kuveyt Türk established a Sustainability Committee and different working groups in the ESG fields affiliated to this committee in order to manage its sustainability efforts properly. Kuveyt Türk is also known as the first participation financial institution to receive 'Zero Waste Certificate' for its headquarters and banking base buildings by fulfilling all the criteria in the Zero Waste Regulation of the Ministry of Environment, Urbanisation and Climate Change. Offering incentive practices and trainings to its employees to reduce disposable products in order to prevent waste generation in the Head Office and Banking Base buildings, the Bank also provided sustainability trainings in 2023 to update the knowledge of employees on Zero Waste.

Kuveyt Türk attaches great importance to the financing of green transformation and renewable energy, and includes sustainable finance in its Credit Policies and Implementation Procedures policy. In line with the Environmental, Social and Governance Principles Implementation Principles in the Credit Policies and Implementation Procedures policy, Kuveyt Türk has identified the areas that will not be financed. Within the scope of supporting renewable energy, the Bank intermediated 95 MW of rooftop SPP financing in 2023 and disbursed TL 1.3 billion of rooftop SPP financing. Roof SPP accounted for 12.98% of the intermediated financial leasing transaction volume. The Bank's sustainability strategy prioritises the development of incentive projects to continue increasing renewable energy resources and minimising the environmental damage of financed projects.

Kuveyt Türk's "We Grow with Our Values Approach

Kuveyt Türk protects the cultural heritage of the ancient tradition with its "we grow with our values" approach. Increasing its support for humanitarian aid campaigns, Kuveyt Türk undertakes the restoration of historical artefacts, supports traditional arts to ensure that they receive the value they deserve, realises many corporate social responsibility projects, and leaves source works in the fields of books, documentaries and music for future generations.

Global warming exhibition: Earth Don't Become a Desert!

Master artist Hikmet Barutçugil, who introduced the concept of gunpowder marbling to the world literature, exhibited his marbling exhibition 'World Should Not Be a Desert' at the Museum of Turkish and Islamic Arts with the contributions of Kuveyt Türk. Art lovers can visit the exhibition consisting of 41 artworks themed on global warming, climate change and environmental sustainability online via www.dunyacololmasin.art platform.

Software for the Future Computer Donation Project

With this project, schools in certain cities of Turkey that do not have access to technology are identified and computer labs are established in these schools. While the installation of computers in the opened classrooms is carried out by the employees of the institution, robotic coding training is given to students with robotic coding kits donated to schools.

Worth Talking Podcast Project

Kuveyt Türk, which continues to implement culture and art projects in order to preserve social values through art and pass them on to future generations, has published the podcast series "Worth Talking About" with Fuat Başar in calligraphy, Hikmet Barutçugil in marbling, Gülçin Anmaç in miniature, Hasan Aycın in drawing, Ayşe Özkan in tile, Prof. Dr. Ahmet Hakkı Turabi in religious music and Ömer Faruk Aksoy in documentary and photography. Worth Talking podcast series, in which 7 artists who have a say in their fields were the guests of writer and screenwriter Tarık Tufan, met with listeners as of 15 April 2023 World Art Day.

1010 Explorer Project

Aiming to protect and develop social values with the motto "We grow with our values", Kuveyt Türk continues to support education and science with the 1010 Explorers Project launched in 2018. Within the scope of the project implemented in cooperation with the Turkish Red Crescent and the Ministry of National Education (MoNE), Kuveyt Türk provides coding and robotics training to schools all around Turkey and prepares new generations for the professions of the future with the training and equipment support it provides.

Entrepreneur Explorer Project

Aiming to contribute to the discovery of children's talents with the innovative, production and development based Online Children's Entrepreneurship Education Platform Entrepreneur Kâşif, Kuveyt Türk enables children between the ages of 8 and 13 to access the training of puppets developed by education experts as well as participate in interactive activities thanks to the narrated educational content.

Turkish Red Crescent Mobile Catering Vehicle

Kuveyt Türk financed every detail of the 2 mobile catering vehicles prepared to be used for food distribution in disaster periods or wherever the Red Crescent is assigned in case of need. All processes from the construction to the preparation of the vehicle were financed by Kuveyt Türk.

It directly contributes to investments in Wind Power Plants, Solar Power Plants and Hydro Power Plants, especially within the scope of renewable energy financing that can directly contribute to sustainability. Aiming to grow in agricultural banking, Kuveyt Türk provides financing directly for the purchase of drones in order to encourage the use of drones in agricultural production. Construction projects and housing financing are differentiated by taking environmental and social impacts into consideration.

Corporate Strategy and Targets for Sustainability

Kuveyt Türk established the Sustainability Service under the umbrella of the Strategy Planning and Corporate Performance Management Department in order to deepen the sustainability perspective in its strategy. The Bank's Sustainability Strategy Plan was created and outlines what will be included in the Bank's sustainability activities until 2026 and how the activities will be shaped according to national and international policies and regulations. Planning to identify climate-related risks and opportunities in the coming period, the Bank organised the existing Sustainability Committee and Sustainability Working Groups to ensure sustainability governance. The Bank's Sustainability Policy, which is one of the outputs of the sustainability project initiated in previous years, is planned to be further deepened and revised within the framework of new regulations.

Organising its activities with a high sense of responsibility towards its society and nature, Kuveyt Türk, Turkey's leading participation finance institution, participated in the Carbon Disclosure Project (CDP) Climate Change survey for the first time in 2023 to measure its environmental obligations and received a B score, one of the best grades in the banking sector. Within this framework, the Bank measured its greenhouse gas emission calculations and included the actions it needs to take to reduce its emissions in its strategy plan. The Bank plans to continue participating in CDP surveys and aims to regularly measure and report its carbon and water footprint. Reporting that it has taken steps to reduce resource consumption such as electricity, natural gas and fuel oil in its Head Office and branches, Kuveyt Türk's Banking Base building has BREEAM certificate. Prioritising energy efficient projects, the Bank is also one of the biggest supporters of the Zero Waste Project initiated by the Ministry of Environment, Urbanisation and Climate Change and continues awareness raising trainings for its employees at full speed. In 2023, sustainability trainings were offered to all employees and a total of 5,525 employees received various sustainability trainings, including zero waste training. Aiming to act in the field of sustainability not only with its employees but also with all its stakeholders, the Bank continues to publish blogs on sustainability-related agendas in order to raise the awareness of its customers on sustainability. In these publications, information is provided on various topics ranging from green marketing to eco-anxiety, water saving to alternative energy sources.

Kuveyt Türk, which plans to expand the scope of sustainability trainings and undertake awareness-raising projects in this field, attaches importance to sustainable supply chain management in parallel with its sustainability vision and endeavours to follow sustainable purchasing methods. While recyclable kraft materials are preferred in gifts prepared for employees, materials made of recycled plastic are preferred in all credit card plastic purchases. Customers continue to be encouraged to use e-statements. Aware of the impact of operation services on the environment, the Bank carried out 34% of account openings in 2023 through remote video calls via Kuveyt Türk Mobile application, without the need for customers to visit branches. Adopting the Paperless Banking approach, the Bank reduces paper consumption by implementing technological developments such as Digital Document Approval and Digital Document Attachment. For Kuveyt Türk, technologies such as digitalisation and data analytics are very important due to their impact on reducing the use of resources by making transactions more efficient. Digital banking reduces environmental impact compared to traditional banking. Kuveyt Türk is able to receive the majority of contract processes through mobile approval infrastructure. Thus, paper consumption is considerably reduced. In addition, the digitalisation of transactions greatly reduces the need for customers to visit physical branches, thereby reducing the carbon footprint caused by physical branches. With its digital-oriented approach, the Bank has included projects that will develop sustainable practices that will provide maximum benefit to its environment and society.

Within the scope of combating and adapting to the climate crisis, the Bank included sustainable finance in its Credit Policies and Implementation Procedures policy, and in line with the Environmental, Social and Governance Principles Implementation Principles, the Bank analysed the issues harmful to the environment and society and determined the areas that it will not finance. Attaching great importance to financing green transformation and renewable energy, Kuveyt Türk plans to support sustainable economic development with participation finance products that are beneficial to the environment and society. Focusing on changing customer needs and expectations, offering products and services to customers that address social or environmental problems, and continuously improving its products and services through technological developments will continue to be among the priorities in Kuveyt Türk's environmental sustainability perspective.

Especially fintech, insurtech and agtech companies, which are the main stakeholders of the startup ecosystem, contribute directly and indirectly to sustainability through the services they offer at the forefront of digitalisation. In addition, startups have a critical importance for the economic growth and development of our country. For this reason, Kuveyt Türk continues to offer solutions to all stakeholders of the entrepreneurship ecosystem and support the ecosystem with its services. Kuveyt Türk's subsidiary Lonca Entrepreneurship, which is an entrepreneurship centre, offers trainings and mentoring programmes in many areas such as strategy determination, value creation, digital marketing and brand development to new initiatives together with the stakeholder teams it is affiliated with. Different investment areas are created for startups through the subsidiaries we are associated with. At Lonca Entrepreneurship Centre, 3 million TL cash grant support has been provided to entrepreneurs since the first day.

Establishing its sustainability strategy by complying with national and international sustainability policies and regulations with its digital and sustainable-oriented approach, Kuveyt Türk will continue to engage in activities to support sustainable development.

Kuveyt Turk Sustainable Payment Systems

On the payment systems side, Kuveyt Türk has been providing all credit cards made of recycled plastic since 2021. In order to reduce the use of card plastic, it can direct its customers to digital payments such as QR payment. On the other hand, most of the customers prefer applications such as e-statements. At Kuveyt Türk ATMs, various instructions are also given to avoid receiving information slips. The digital slip application, which will be implemented with the recent BRSA regulation, will both save time for customers and reduce the carbon footprint.

Efforts to raise customer awareness on sustainability continue unabated. In this direction, one of the biggest goals is to establish a structure where digitalisation is at the centre of the banking products and services offered to customers and to prevent unnecessary consumption in the processes. At the same time, Kuveyt Türk endeavours to create user-friendly structures that can advance all processes digitally, regardless of the sector, and where the customer can manage and monitor the entire end-to-end process. In this direction, it aims to save resources by offering products and services to customers through digital channels and to increase the awareness of these customers.

Thanks to its Online Finance service, Kuveyt Türk offers all financing processes to its customers in a structure that they manage completely by themselves, without the need to go to Kuveyt Türk branches and deal with any paperwork process. In line with the digital limit project they have implemented, customers were enabled to create their limit by applying for a corporate card through mobile branches and to advance their transactions by creating a virtual card without having to wait for a physical card.

As a result of the digital slip development that will be implemented in the coming days, paper slips received after shopping will now be easily tracked in digital environments. With the E-Statement development, a structure where customers can follow all their statements via digital e-statements instead of physical statements has been put into service. The NFC payment development, which will also be implemented in the coming days, will provide a structure where customers can easily make payments without the need for physical cards.

In addition to all these, as a result of the Letter of Guarantee developments, a structure where customers can manage their letter of guarantee application processes from digital environments was put into service. In this context, digitalisation was brought to the forefront at many stages by moving the necessary document signatures of customers in banking processes to mobile approval. One of the biggest goals is to contribute to sustainability at this point by opening the remote account opening service offered to tradesmen and farmer customers to all legal customers.

Direct Financial Support for Sustainability

Meetings are held with Vehicle Charging Station Manufacturers and Operators. Regular meetings with representatives of the Turkish Hybrid Vehicles Association (TEHAD) on the needs and future of the sector continue to be held with the aim of demonstrating that sustainability in the transport sector is feasible with zero carbon emissions. Meetings with various associations and unions aiming to bring smart irrigation systems to the forefront in the agricultural sector also continue unabated. Direct financial support is provided to sustainability through project-based partnerships established with companies that directly contribute to sustainability through partnership projects.

Kuveyt Türk Power in Sustainability

Kuveyt Türk celebrated the fact that Sağlam Card, which was put into the service of its customers in 2017, exceeded 1 million units by planting 17 thousand saplings on behalf of its employees and their families. The first saplings were planted in Gebze district of Kocaeli with the participation of employees and their families. When the project, which was carried out in cooperation with the Association for Solidarity with Environmental Organisations (ÇEKUD), was completed, 10 thousand pine saplings were planted in Gebze and 7 thousand pistachio saplings were planted in Kilis. Kuveyt Türk will also continue to produce Sağlam Card using recycled plastic as part of its sustainability efforts.