DMA

Steps to Optimize Paper Consumption

Ziraat Bank adopts innovative practices in optimizing paper consumption and recycling waste paper. As of September 19, 2012, Ziraat Bank stopped using paper for the dispatch of internal communications throughout the Bank. Since then, all such communications have been in electronic format. In 2015, this practice prevented the use of some 3,012,168 sheets of A-4 paper. When hard-copy printouts must be taken, the multifunction printers installed at Ziraat Bank reduce paper consumption by printing on both sides of the sheet. Besides conserving paper resources, this practice is also estimated to have reduced the Bank's total CO2 emissions by 575 tons in 2015.

All of the Bank's head office, regional, and branch units now send, receive, and archive only electronic-format faxes and no hard-copy printouts of them are taken.

Tech-Savvy Environmental Sustainability Projects

The Virtual Loan-Account File Project aims to handle all documents related to loan assessment, proposal and disbursement procedures in electronic format both by scanning paperwork and creating electronic-format documents. Upon completion of the project, all documentation will be monitored via the system.

This initiative contributed to Ziraat Bank's efforts to slash paper consumption, saving about 4.5 million sheets of paper in 2015. During the year, the Bank continued to expend efforts to source paper documentation electronically, for those documents that the law requires to be obtained from other agencies and organizations when making credit allocation decisions. This initiative will help such outside concerns in their own efforts to reduce paper use; for the Bank, it will increase employee motivation and customer satisfaction by speeding up the loan application process.

In January 2013, the Bank began obtaining electronic-format documents and information required of firms obtaining loans to finance investments. This also saves paper, labor, time, and space. Documentation used in performing firms' financial analyses is also being circulated among units in an electronic format. The practice of sending out documents related to loan applications approved by Ziraat Bank by mail or fax has been terminated. In addition, as of 2015, the daybooks and general ledgers are kept in electronic rather than print format, which has helped Ziraat Bank save 1 million sheets of A-4 paper annually. The risks and costs associated with the physical archiving of files have also been minimized. Some 13,735,737 sheets of A-4 paper were saved in 2015 thanks to the centralized bulk statement dispatch project, whereby the Bank now sends statements of all transactions to customers by email. Additionally, Ziraat Bank sent 21,350 statements of all transactions performed by its Operations Center to customers by email in 2015.

Efforts initiated in 2013 to send out electronic-format rather than paper invoices documenting communications services continued in 2015. Considering that more than 175,089 telephone bills were handled last year alone, the huge savings in paper use that result from this initiative may be appreciated.

In order to cut paper consumption and protect the natural environment, the Bank continued efforts to send electronic rather than print statements to credit card customers. Incoming and outgoing written communications will be handled via the system dubbed KEP, calls to Ziraat Bank customers (about tenders and the like) will be made via KEP, thus resulting in significant savings in paper use.

Ziraat Bank works together with many different agencies and organizations in order to provide its customers with faster and better-quality service. For instance, the Bank and General Directorate of Deeds & Cadastral Surveys signed an agreement to permit mortgages on real estate properties to be released electronically. Under this agreement, mortgage loan borrowers' requests for deeds of release are sent in electronic format to the Ziraat Bank Operations Center, which then sends them electronically to the appropriate deeds registry.

As the first financial institution in Turkey to issue electronic format mortgage deeds of release, the Bank prevented some 91,280 sheets of A-4 paper from being used in 2015 with this effort.

Electronic Inspection and Internal Control Reporting

Under the Project for Issuing Electronic-Format Bank Inspection and Internal Control Reports at Ziraat Bank, new auditing and control models were introduced. All such reports for branches are now issued in this way. As a result of this effort, hard-copy reports are no longer issued for branches, with this practice generating substantial savings in paper. Additionally, the audit reports for headquarters and other units can be prepared and viewed online. This has already made it possible to reduce paperwork associated costs.

Digital archiving of audit reports has prevented the use of about 340,000 sheets of A-4 paper per year.

G4-DMA, G4-EN23

Waste Management at International Standards

Since 2003, documents whose retention by Ziraat Bank is no longer mandated by law together with the waste paper that the Bank's units and branches generate has been sold to licensed firms for use in recycling. In 2015, the Bank continued to reduce the amounts of new raw materials needed in paper manufacturing.

In 2015, a total of 210 tons of waste paper generated by headquarters units was disposed of in this way. Another 1,100 tons generated by the Bank's branches was sold under contract to two licensed recycling firms. In 2015, the Bank purchased 1,850 tons of paper, of which 750 tons consisted of A-4 paper with 1,100 tons of untrimmed raw paper. These figures point to a consistent drop in paper consumption over the years.

Ziraat Bank sells discarded IT equipment (computers, printers, photocopiers, and the like), equipment consisting largely of sheet metal (air conditioner units, housings, and similar), storage batteries, and ATM units to licensed firms authorized by the Ministry of Environment to transport and process such scrap. This prevents the scrap materials from causing environmental harm while also ensuring that it is recycled for use as inputs by others.

When replacing the chemicals in fire extinguishers that have passed their expiration date, Ziraat Bank works with firms licensed to collect and dispose of such materials. In order to prevent waste batteries from harming the natural environment, the Bank will expand the waste battery collection boxes from the head office to the branch locations. Additionally, an authorized manufacturing firm collects empty print cartridges from Ziraat Bank branches.

Improvements at Service Points

In keeping with its environmental protection approach, Ziraat Bank continually seeks to improve the eco-friendliness of all aspects of its branch network and other service premises.

Ziraat Bank takes an R&D approach when identifying the plumbing, electrical components, fittings, furniture, furnishings and similar inputs that it uses in its own construction projects. Attention is given to the functionality and recyclability of such materials with preference given to concepts whose environmental impact is potentially the least.

As part of its efforts to minimize the environmental impact of its construction projects, Ziraat Bank has any waste generated during the conduct of construction work transferred under supervision to locations designated by local municipal authorities. In all such undertakings, efforts are made to contribute beneficially to the environment through effective supervision that ensures that waste is properly removed from building sites.

G4-EN6, G4-EN7

Eco-Friendly Branches

In keeping with its sustainability approach, the Bank modernized 404 branch locations in 2015. During the project design and application stages, preference was given to the use of innovative, composite materials. With regard to structures that are likely to be demolished eventually, attention is given as early as the project-costing stage to the recovery and reuse of materials.

In architectural design, attention is given to projects that make use of natural daylight with potentially eco-harmful materials avoided. Preference is given to applications that will quickly pay for themselves within two years or thereabouts.

During 2016, 10 of the Bank's service buildings will undergo controlled demolition and their materials will be recovered. The Bank has set a target of increasing the number of its sustainability-friendly branches to 270.

Energy Efficiency Efforts

Ziraat Bank Data Centers Project

Ziraat Bank is in the process of restructuring its data centers in light of its current needs. The Ziraat Bank Data Centers Project has a twofold IT focus that concentrates on the organizations to which services are provided (Ziraat Bank, Ziraat Katılım Bankası, Ziraat Sigorta, Ziraat Emeklilik, et al.), and the diversity of the services being provided (online banking, ATM, credit cards, et al.). This approach allows attention to be given to the interactions among design, construction, installation, and relocation of data centers. As part of the project, the Emergency Center infrastructure will be upgraded to deliver all services from the Center at 100% capacity and performance.

The gains to be achieved through the Ziraat Bank Data Centers Project are as follows:

• Transition to a newer and more secure technology, and improvement of risk management functions;
• A structure with higher continuity and performance levels;
• Less energy consumption and increased productivity;
• An expandable, flexible and modular structure.

The Ziraat Bank Data Centers are currently operating with infrastructure that has been in service for more than a decade and which consumes about 7,067,514 kWh of electricity a year on average. The renovation initiative aims to reduce their average annual energy consumption to around 4,226,700 kWh per annum.

A Groundbreaking Project: Green IT

One of Ziraat Bank's sustainability priorities is to execute groundbreaking energy conservation initiatives by making more efficient use of energy resources. The Green IT project that Ziraat Bank first initiated in 2005 to optimize the energy use of the computers employed in its branch, regional, and head office units has continued successfully since that time. If computers at the Bank remain powered on outside of normal office hours, their users are messaged notices at specified times advising them to shut down their machines. Units will automatically shut down unless the user takes action to prevent it. When computers at Ziraat Bank remain idle for 10 minutes, their monitors automatically go into sleep mode in order to help conserve energy. Microsoft's System Center 2012 Configuration Manager systems management software opens in vPro mode outside of office hours, on weekends, and in the event of an emergency so that security patches and updates may be installed more efficiently. Hardware failures can be detected and identified centrally even if the remote operating system is not functioning. This speeds up the intervention and repair process by ensuring that technicians show up with the spare parts, and the like that they need.

G4-DMA, G4-EN27, G4-DMA, G4-EN30, G4-EN31

Fuel Consumption Criteria in Vehicle Purchase or Rental

Another way in which Ziraat Bank seeks to minimize the adverse environmental impact of its operations is to focus on fuel-consumption criteria when purchasing or leasing vehicles for its fleet. While the fuel type that vehicles run on is treated as an element of total cost of ownership, fuel economy is included as one of the criteria of tendering specifications. In addition to lowering the vehicles' environmental impact, this practice also incidentally reduces total fossil fuel consumption at the national level.

Shift to LED Illumination

The Bank significantly reduces its illumination costs by installing more energy-efficient LED lighting systems in its branches, signage, and ATM housings. Ziraat Bank is also minimizing its use of fluorescent lighting due to the human and environmental health and safety issues that it poses.

Energy Efficiency in ATMs

Ziraat Bank operates one of the most extensive ATM networks in the country. A project to monitor these units centrally and to equip them with biometric access-control features is slated for completion in 2016.

Once this project is complete, it will also be possible to centrally monitor each ATM housings' ambient temperature and energy use. Collecting and analyzing such data can reduce energy use through fine-tuned adjustments.

Special Projects to Mitigate the Environmental Footprint

• In 2015, Ziraat Bank procured 1,275 split air conditioners equipped with high energy-efficiency inverter technology and non-ozone-depleting R410A refrigerant. Some 331 of these acquired units have the newly introduced Variable Refrigerant Flow (VRF) standard, which reduces heating costs, improves energy efficiency, and maximizes comfort.
• Ziraat Bank's procurement specifications of the cleaning materials used by its branches and units stipulate that they must be manufactured from chemicals that are not harmful to human or environmental health. Although the cleaning equipment (vacuum cleaners, mops, floor polishers, and the like) and cleaning supplies (detergents, soaps, polishes, disinfectants, and similar) used to clean service buildings are procured by outside cleaning service providers, their compliance with the stated specifications is periodically checked by the Bank.
• In line with its efforts to reduce the adverse environmental impact of its personnel transportation services, Ziraat Bank has begun using routing software that shortens travel distances and thus saves fuel for its staff transport fleet. The Ankara phase of this project, which seeks both to maximize service quality and to minimize cost, was completed in 2014. The Bank plans to undertake the same project in İstanbul and İzmir in 2015.

G4-DMA, G4-EN3, G4-EN4, G4-EN5, G4-DMA, G4-EN8, G4-DMA, G4-EN15, G4-EN16, G4-EN17, G4-EN18, G4-EN19

LEED Certification Goal for Ziraat Towers

The Bank plans to obtain Leadership in Energy & Environmental Design (LEED) certification for the Ziraat Towers development project. It is currently being built at the International Financial Center Complex in İstanbul's Ataşehir district in line with international environmental standards.

Ziraat Bank's Energy Consumption and Carbon Footprint in 2015

The aggregate carbon footprint of all Ziraat Bank head office units was calculated at 10,896.45 tons. Of this total, 3,784.13 tons consists of direct (Scope 1) and 7,112.32 tons consists of indirect (Scope 2) greenhouse gas emissions. In parallel with its steadily expanding business volume, the Bank manages its natural resources consumption efficiently and has the carbon footprint of its operations measured at international standards in order to minimize it.

Total energy consumed and emissions generated directly by Ziraat Bank Head Office Units (Scope 1)

Ziraat Bank monitors and measures the energy-use and emissions performance of its regional offices and branches located across Turkey. In 2015, the Bank's regional offices and branch locations consumed a total of 4,033,770 liters of gasoline and diesel fuel, the direct (Scope 1) emissions of which are calculated at 10,774 tons of equivalent CO2 (tCO2e). The same year, the Bank's regional offices, branches and head office units consumed 7,184 kg of air conditioning gas, whose direct emissions (Scope 1) was calculated at 15,000 tons.

Total energy consumed and emissions generated indirectly by Ziraat Bank headquarters units (Scope 2)

*A 61.55% increase in indirect emissions occurred over the prior year because of new subscriptions and the transfer of electricity consumption of ATMs from branch to head office accounts.

In 2015, the Bank's regional offices and branches consumed 66,521,483 kWh of electricity, the indirect (Scope 2) emissions of which are calculated at 31,398.14 tCO₂e.

Ziraat Bank 2015 Water Consumption and Footprint