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CLIMATE ACTION PROGRAMME

30 January 2015

Arçelik Group’s pioneering green products

Arçelik Group designs and manufacture pioneering and environmentally friendly white goods with a focus on energy efficiency, water efficiency and smart technology.

Climate Action spoke to Levent Çakıroğlu President of Koç Holding Durable Goods Group and Arçelik A.Ş CEO about how the company is spearheading sustainability efforts in the industry.

Can you tell us a bit more about Arçelik A.Ş and some examples of the innovative, sustainable solutions that the company offers?

Arçelik Group, founded in 1955, engages in the production and marketing of durable goods, consumer electronics, their components and after-sale services.

We are one of the leading home appliances companies in the world – with 25 000 employees worldwide and 14 production facilities in Russia, China, South Africa, Romania and Turkey. We are active on six continents including Europe, the Americas, Africa, Asia and Australia with our 10 brands (Arçelik, Beko, Grundig, Defy, Arctic, Blomberg, Elektrabregenz, Leisure, Flavel and Altus) and our products are used by customers in more than 130 countries.

While maintaining our leadership in white goods, air conditioning and LCD TVs in Turkey, Arçelik Group continues its rapid growth in the global arena. Today, Arçelik Group is the third largest player in the white goods industry in the EMEA region (Europe, Middle East and Africa), which is close to half the global market. Along with its domestic leadership, Arçelik is also the leader in Romania and South Africa.

Our global household appliances brand Beko has doubled its market share, growing from fifth to second place in seven years and has recorded the fastest growth in its industry across Europe. Beko maintains its position as a second best-selling white goods brand in Europe and is also the market leader in the UK and Poland. Additionally, our Defy brand is number one in South Africa as is our Arctic brand in Romania.

Thanks to our strong R&D expertise and innovation capability, Arçelik Group is able to design and manufacture pioneering and environmentally friendly products which are the best in their class in terms of energy efficiency, water efficiency and noise level, featuring smart technology and stylish and functional designs.

Arçelik Cactus Dishwasher represented Turkey in the United Nations Sustainable Development Conference (Rio+20) by being included amongst the Best Country Applications in 2012

As a result of our efforts to reduce the environmental impacts of our products, we developed an A-45% energy class built-in oven, A+++-10% energy class dryer, A+++-50% energy class washing machine, A+++-10% energy class dishwasher, A+++ energy class upright freezer, A+++-20% energy class No-frost combi refrigerator and 41dBA low sound level built-in oven.

Additionally, as an outstanding example of our sustainable products, Arçelik Cactus Dishwasher which is one of the world’s least water-consuming dishwashers with 6 litres of water consumption, has represented Turkey in the United Nations Sustainable Development Conference (Rio+20) by being included amongst the Best Country Applications in 2012.

Moreover, we focus on enhancing the energy efficiency of our products beyond regulations. The purpose of ATLETE (Appliance Testing for Energy Label & Evaluation) is to increase European-wide implementation and control of energy labelling and eco design; Arçelik became one of the few producers using correct labelling, that is, all of our products listed were found in full compliance with the EU energy labelling regulation.

We combine our R&D capability with our understanding of different consumer needs and integrate into our products innovative and useful features that make a meaningful difference and add consumer convenience.

The new “Cool Hygiene 20°C” function in our washing machines allows for washing lightly soiled clothes while still removing bacteria and germs, providing a saving of 70% on energy and a noise level three times quieter than the average. A special technology called “Everfresh” in our refrigerators enables vegetables to last up to three times longer than in conventional fridge-freezers, and it works in any climate.

We focus on enhancing the energy efficiency of our products beyond regulations

We developed the first and only refrigerator in the world that has a built-in ice-cream maker, the world’s first and only tea maker that keeps tea fresh up to two times longer and the world’s first and only Turkish coffee machine, which has 18 patents.

Through our ability to understand insights into various lifestyles and consumer habits, we have been also able to design and manufacture products that can accommodate the needs of specific customers in different cultures. In China for example, we presented our customers with a refrigerator that has a function to store cooked rice for longer by adjusting to local humidity and temperature; also in China, we market a dryer designed with a simple option to stop just before clothes are 100% dry – allowing them to be hung outside for the sun to finish the job. In Italy, we have developed a special pizza oven which allows families to cook pizzas at home exactly the same way as in restaurants.

 

Arçelik’s “Respects the Globe, Respected Globally” vision seeks to integrate sustainability into the company’s operations. What are the focus areas of this vision, and how is it being applied?

We feel a strong sense of responsibility to the Globe. Our vision, “Respects the Globe, Respected Globally” emphasises our sustainable development approach. While we increase our global presence and prevalence through our business strategy that would realise our vision, we operate with full awareness of environmental and social responsibilities and keep a sharp focus on resource efficiency.

Our sustainable, profitable growth strategy supports our vision and focuses on technology, innovation, design, quality and brand. In this direction, we will continue to strengthen our market position and expand our global area of activity by creating competitive superiority.

Through our sustainable development approach, we integrate principles of sustainability into all our processes and goals. Besides our products, we work to increase energy and material efficiency in all our processes from supply to distribution and to use resources in the most efficient way.

When we look at our products’ life cycle, 95% of the carbon emission occurs during the usage stage at home. For this reason, product development practices aiming to reduce environmental impacts are our first priority. Our objective is to realise innovative technologies to reduce our carbon footprint in product lifecycle and contribute to a sustainable future.

In the scope of sustainability of resource, we strive to minimise environmental impact of our production processes. We carry out projects to reduce our plants' wastes at their sources, to recycle the emerging waste and to reduce the GHG emissions arising out of our activities.

Through applying an ISO 50001 Energy Management System, we measure, monitor, analyse and reduce energy consumption in our production stages. Each year, we conduct more than 200 energy efficiency projects in factories and decrease energy consumption by 5 % which results in 11-12 K tonnes of eCO2 GHG emission decrease.

Our company controls its environmental impact by using ISO 14001 and ISO 14064-1 series standards. Moreover, our energy efficiency approach is verified and registered by credible institutions. Our production facilities were awarded “Platinum and Gold Certificates” as part of a green factory concept. This makes Arçelik the first home appliances company to have earned such certificates in the white goods sector worldwide. We continue to take part in the CDP (Carbon Disclosure Project), the most prestigious and well-known environmental global initiative where corporations share with international investors their carbon emissions and climate change strategies. After receiving the “Turkish Carbon Disclosure Project Leader” award in 2012, our company advanced its success further by being granted the “Carbon Disclosure Project Performance Leader” award in 2013.

Furthermore, Arçelik was a finalist in the “European Business Awards for Environment - European Programme in Management” category and thus represented Turkey as the first non-EU country to have achieved this award.

In our efforts to increase sustainability performance, we attach a significant importance to our human assets which are an indispensable factor of our success. To this end, we invest in continuous development of our human resources. We encourage our employees to focus on different development themes to increase their active participation in processes and improve their competencies.

After receiving the “Turkish Carbon Disclosure Project Leader” award in 2012, our company advanced its success further by being granted the “Carbon Disclosure Project Performance Leader” award in 2013

We also manage our supply processes with a sustainability approach. We know that to be able to offer high-quality, affordable and eco-friendly products to our customers, we need to have responsible supply chain applications apart from managing the environmental, social and economic impacts of our products and production processes. This is why we only incorporate suppliers who have high work ethics and operate with high environmental and quality standards to our supplier pool; we also implement various applications in order to improve their sustainability practices and boost their performances.

Arçelik Group has been sharing its sustainability efforts through Sustainability Reports since 2007. Like previous periods, prepared in line with international reporting standard Global Reporting Initiative (GRI) principles and external audit implementation, our report allows us to share our company’s performance on sustainability priorities and our relevant practices to our all stakeholders along the lines of our principles of transparency and accountability. Our report is based on the GRI's G3 Sustainability Reporting Guidelines at B+ level.

Guided by our “Respects the Globe, Respected Globally” vision, we will continue to work for our world and our common future, conscious of our responsibilities.

 

How crucial is R&D in ensuring that the company is on the cutting edge and that its goals of energy efficiency and carbon reduction are being achieved?

Our R&D and innovation capability is among the most important factors driving Arçelik Group’s success and a major competitive advantage for our brands.

Our R&D and innovation capability is among the most important factors driving Arçelik Group’s success

Thanks to the R&D expertise of 23 years, the technological competence that came along with it and innovation power, we have been able to design, manufacture and present products that meet and even go beyond the expectations and requirements of consumers in different markets. Moreover, we have developed value-added and world class products that are better suited to modern lifestyles, which have pioneered our sector and increased the comfort of our customers. We have also created numerous world-bests and world-firsts in several of our product categories in terms of energy and water efficiency.

Innovation is at the heart of our business strategy. Innovation in our company is triggered by the technological advancements or new ideas stemming from our research and development team along with the market analysis and consumer insights.

To give you a measure of our innovation — for the past five years Arçelik has been on the list of the top 200 companies globally filing patent applications with the World Intellectual Property Organisation.

 

How important is it for Arçelik to educate consumers in order to share the knowledge on how important energy efficient products are?

We are very dedicated to raising public awareness on energy efficiency. We inform our consumers about the efficient use of appliances through product guidelines, and we carry out several campaigns to educate consumers on the desirability of more energy-efficient products.

We also publish press releases and take active part in conferences about energy efficiency and climate change.

As an example of these efforts, to draw attention to use of energy-efficient products and speed up the transformation of home appliances consuming less energy, we launched the "Market Transformation of Energy Efficient Products” project jointly with the General Directorate of Renewable Energy of the Turkish Ministry of Energy and Natural Resources, the United Nations Development Programme (UNDP), the Turkish Ministry of Science, Industry and Technology, the Global Environment Fund (GEF) and Turkish White Good Manufacturers' Association (TurkBESD).

We are pleased to observe that the customer trend to buy energy-efficient products has been increasing.

 

Are there key public-private partnerships that you are participating in and how crucial is it for the private sector to be directly engaging with governments in the sustainability and environmental arena?

We believe in the importance and effectiveness of building strong private–public partnerships. In this regard, we collaborate with institutions and public enterprises in the developmental phase of legal regulations and standards related to the energy efficiency of appliances.

We also support projects and initiatives that combat climate change in Turkey and abroad. As a pioneering company, Arçelik is one of the first companies to try to raise public awareness on climate change.

We are a member of the Turkish Climate Platform, part of the Corporate Leaders Network for Climate Action, which was established to spearhead the implementation of national and international policies to transition to a low carbon economy. In addition, we have signed 2oC Challenge Communiqué, which outlines the steps to take in restricting climate change to 2 degrees. I am honoured to represent Turkey as the President of this platform in the UN's Climate Change Conference in Durban, South Africa in 2011 and in the Doha Climate Change Conference in 2012.

 

Can you tell us more about the Turkish Climate Platform and how the countries’ environmental targets are being reached?

“The Climate Platform”, was established by TUSIAD (Turkish Industry& Business Association) and REC (Regional Environmental Centre) Turkey in 2011 to support activities that combat climate change carried out by the business community, and to assist in the transition to a reduced carbon economy.

To reach the environmental targets the major priorities are reducing carbon emissions, improving resource efficiency and increasing the share of renewable energy

In an era where a new carbon-focused economy model is emerging, the platform has been developing tools to assist companies to adapt to this paradigm shift in a more rapid, efficient and cost-effective way. At the moment this Platform has 20 members.

To reach the environmental targets, as emphasised by relevant authorities, the major priorities to be considered are reducing carbon emissions, improving resource efficiency in products and production processes and increasing the share of renewable energy. Hence, the countries need to take the required actions, put into effect necessary regulations and encourage implementation of said regulations.

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