Sustainability Strategic Approach

Smart Life 2030

Zorlu Holding responds to global change through its Smart Life 2030 strategy. By embracing the approach of a responsible investment holding company with a vision to inspire transformation, the Zorlu Group focuses on creating the highest environmental, social, and governance (ESG) value while investing for its companies, stakeholders, society, and future generations.Vestel, as part of Zorlu Holding, actively participates in and contributes to the Smart Life 2030 activities included in the sustainability vision of the Holding. Under the main strategies of preparing for the future with an innovative business model approach and developing peopleoriented ecosystems, the Company set sustainability targets in environmental, social and governance (ESG) areas. Vestel aligns its sustainability goals with the Smart Life 2030 vision, thereby contributing to Zorlu Holding's overall objectives.

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Vestel Group of Companies ESG Note.

Vestel Group of Companies ESG Note

Materiality Analysis

Vestel set its priorities in environmental, social and governance areas based on a double materiality approach, taking into account stakeholder views and expectations.

Sustainability Management

Vestel manages Sustainability issues, risks and opportunities at the highest level through the Sustainability Committee established at the Board of Directors level.

Sustainability Committee

Vestel Elektronik manages sustainability issues, risks, and opportunities at the highest level with the Sustainability Committee established at the Board of Directors (BoD) level. This committee, established in 2023, includes one independent BoD member and one BoD member of Vestel Elektronik. The committee's decisions are reported to the BoD and also contribute to other committees at the BoD level. In addition, the management of sustainability issues within the company is carried out by the Sustainability Directorate, which reports to the CEO. The committee meets at least four times a year, at least once every three months. The frequency of meetings is determined each year with the proposal of the Committee members and the approval of the Committee chair.

The Sustainability Committee ensures the effective management of issues, risks, and opportunities related to climate change. The CEO is responsible for climate change issues at the highest level. The BoD is responsible for reviewing and approving the decisions and strategies made. Other climate-related issues are routinely included in the agenda items of the Sustainability Committee. Committee decisions are disseminated to the relevant units through all Vestel general managers, and in this way, climate, environment, business continuity, reputation, and sustainability issues are effectively included in the company agenda in high-level decision-making processes in line with committee decisions.

Sustainability Directorate

The coordination of sustainability issues within the Vestel Group of Companies is provided by the Sustainability Directorate. The Sustainability Directorate began its operations in 2021 and continues its activities as a unit reporting directly to the CEO. The duties and responsibilities of the Sustainability Directorate are as follows:

Implementing sustainability as a core strategy in processes,
Implementing the Vestel Group of Companies' decarbonization strategy,
Determining the agendas for the Sustainability Committee meetings,
Implementing the decisions of the Sustainability Committee,
Preparing the integrated annual reports of the Vestel Group of Companies,
Managing the compliance process for new reporting regulations related to sustainability,
Acting as a point of contact between the Zorlu Holding Sustainability Directorate and the Vestel Group of Companies,
Improving data/information collection processes related to sustainability,
Developing proactive solutions, reporting, and sharing best practices regarding the company's risks and opportunities related to sustainability, climate change, and water management,
Preparing and/or coordinating action plans for sustainability goals, implementing action plans, monitoring progress towards goals, and reporting results through key performance indicators (KPIs).

Sustainability Data Management at Vestel

At Vestel, all sustainability indicators and targets tracked within the scope of environmental, social, and governance (ESG) have been tracked and reported internally via a digital data platform as of 2023.

With the collaboration with MAP360, a sustainability-focused data science platform that acts with the mission of helping organizations trigger value-oriented transformations throughout their operations using modern data science technologies, all Vestel sustainability goals can be easily reported and tracked.

Quarterly reports made to the Sustainability Committee, consisting of the CEO and General Managers, and sustainability data obtained annually from many different units of Vestel can be easily managed through MAP360. In this way, Vestel disseminates all its environmental, social, and governance goals within the company, makes them visible, and can track them at every level.

Ethical Principles

Vestel adopts an ethical business manner on the basis of Zorlu Holding Ethical Principles. Guided by the Ethical Principles to realize its vision, it conducts its activities in line with the principles of accountability

and transparency.

All employees and stakeholders can send an e-mail to the Ethical Principles Hotline (etik@vestel.com.tr, etik@zorlu.com) and call +90 212 456 23 23 or +90 850 226 23 23 phone numbers at any time of the day to report and consult about the irregularities they encounter on ethical issues.

Set up with the aim of establishing, developing and maintaining an ethical culture, the Ethics Committee is chaired by Zorlu Holding CEO and consists of Zorlu Holding Chief Human Resources Officer, Zorlu Holding Chief Legal Officer and Zorlu Holding Audit General Manager.

As a Zorlu Group company, Vestel offers Ethical Principles e-training through the Zorlu Academy online training platform. These training courses, which aim to increase awareness about ethical principles, explain how employees’ way of doing business, approaches, and perspectives should be arranged in accordance with these principles. Ethical Principles Training is held under the roof of Smart Life 2030. It is prepared andimplemented in coordination with the Audit Department and Human Resources Department as part of the Holding's Corporate Governance Working Group activities.

Zorlu Holding Ethical Principles are available here.

Climate Risks and Opportunities

In order to maintain its resilience in financial and ESG terms, Vestel is committed to managing global and local developments and related risks in a proactive manner, while focusing on seizing emerging opportunities.

The Sustainability Department actively participates in monitoring Sustainability risks and opportunities within Vestel and prioritizing them under the Company's risks and opportunities in a comprehensive manner together with the Enterprise Risk Management Department. This enables consolidated and comprehensive companywide monitoring and prioritization of risks, including sustainability risks and opportunities, and the integration of sustainability risks into the overall risk management processes.

At Vestel, climate risks and opportunities are identified by taking the TCFD (Task Force on Climate-related Financial Disclosures) recommendations as a reference. These risks and opportunities have a direct impact on the strategic decisions of senior management through the Sustainability Committee, working groups, the ISM Committee and corporate risk management processes.

Published with the aim of mandating companies to disclose climate-related risks and opportunities to all stakeholders, the International Financial Reporting Standards (IFRS) S2 Climate-Related Disclosures Standard requires companies to disclose their risks and opportunities in the context of transition and physical risks.

Vestel Elektronik
	Products Creating Environmental and Social Benefits	R&D and Innovation
Material Issue for External Stakeholders	Products and solutions of Vestel that reach a great number of people make up the Company's primary areas of impact. Vestel strives to create social benefit by reducing environmental impact through its products, to meet the needs of consumers in the best way possible, and to facilitate life with smart, high quality and safe products and services. Among Vestel's Scope 3 emissions, the largest share is made up by the use of products sold during their lifetime. In order to decrease this environmental impact, Vestel monitors the ratio of revenues from low-carbon products. Vestel defines its low-carbon products as follows: Based on GfK data for Türkiye and Europe, TV products that are below the average energy class (EEI) of total products sold, electric chargers and batteries that use electricity instead of fossil fuels, and LED lighting products that save electricity are defined as sustainable and low-carbon products. In addition, for all products, including products sold in non-European countries, products consuming less energy and water than the sector average are included in this category, based on the average consumption of products sold in the sector in Europe in 2023.	As a technology company, R&D and innovation are critical for Vestel in terms of both developing new products and transforming operations. The innovative products developed through R&D activities of Vestel have the potential to make a significant difference in the daily lives and environmental impact of people by touching a wide range of audiences and households. Such solutions not only support the mitigation of environmental impacts and improve the welfare of society, but also contribute to economic growth by elevating the Company's competitiveness. Through its 100% owned subsidiary Vestel Ventures Ar-Ge AŞ, which was established to support entrepreneurs engaged in R&D activities in order to introduce emerging technologies within Vestel, the Company continues to contribute to the activities performed on innovative devices, advanced materials, smart cities, smart homes and smart factories. In this context, it makes Vestel’s know-how and plants available to entrepreneurs at all stages of product development, such as product design, industrial design, multi-screen interface design, prototyping, testing, certification and production.
Output Metric	Vestel’s avoided emissions as a result of low-carbon products sold in 2023 (metric tons): 227,253	# of startups that received investment from Vestel Ventures: 35
Impact Valuation	Impact valuation is conducted based on social cost of carbon. According to EPA Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances, it is 204 dollars per metric ton of CO2 (Near term rate 2.0%). https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf	Impact valuation is conducted based on current market capitalization of funded startups.
Impact Metric	Social cost of carbon avoided: 227,253*204 = 46,359,612	Total market capitalization of funded startups in 2023: 332.977.330 USD

Vestel Beyaz Eşya
	Products Creating Environmental and Social Benefits	Climate Crisis and Transition to a Zero Carbon Economy
Material Issue for External Stakeholders	Among Vestel Beyaz Eşya's most important areas of impact are its products and solutions that reach a great number of people. Vestel Beyaz Eşya strives to create social benefit by reducing environmental impact through its products, to meet the needs of consumers in the best way possible, and to facilitate life with smart, high quality and safe products and services. The largest share of Vestel Beyaz Eşya's Scope 3 emissions is the emissions from the use of products during their lifetime. In order to decrease this environmental impact, Vestel Beyaz Eşya monitors the ratio of revenues from low-carbon products. Vestel Beyaz Eşya defines its low-carbon products as follows: A large portion of the carbon footprint of all products manufactured at Vestel Beyaz Eşya is attributable to the energy and water consumption resulting from the use of these products. Therefore, producing more energy efficient and water saving products is one of the main R&D motivations. In identifying low-carbon products, those that consume less energy and water than the sector average are used as the benchmark. In this context, for all products, including non-European countries, products that consume less energy and water than the sector average are determined based on the average of the products sold in the household appliances sector in Europe in 2023.	Record-breaking high temperatures are making the impacts of the climate crisis more and more evident, and disasters and extreme weather events are becoming more frequent. Actions taken to combat climate change have a significant impact on the Company's Scope 3 emissions, especially considering Vestel Beyaz Eşya's wide range of products. It is therefore an important field for Vestel Beyaz Eşya to manage its impact on climate and contribute to the Paris Agreement's goal of limiting global warming to 1.5 C. Vestel Beyaz Eşya started to implement its “Decarbonization Strategy.” As part of this strategy and to reduce scope 3 emissions, a lower emission fuel agreement has been signed with Maersk, one of the largest logistics suppliers. By using lower emission fuel, 8,550 tons of carbon emissions were prevented until the end of 2023.
Output Metric	Vestel Beyaz Eşya’s avoided emissions as a result of low-carbon products sold in 2023 (metric tons): 24,838	Vestel Beyaz Eşya’s avoided emissions as a result of using lower emission fuel in 2023 (metric tons): 8,550
Impact Valuation	Impact valuation is conducted based on social cost of carbon. According to EPA Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances, it is 204 dollars per metric ton of CO2 (Near term rate 2.0%). https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf	Impact valuation is conducted based on social cost of carbon. According to EPA Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances, it is 204 dollars per metric ton of CO2 (Near term rate 2.0%). https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf
Impact Metric	Social cost of carbon avoided: 24,838*204 = 5,066,952	Social cost of carbon avoided: 8,550*204 = 1,744,200

For detailed explanation please refer to Vestel’s Annual Integrated Report 2023 (pages 58-62).

Supported Initiatives

Vestel believes in the significance of cooperating with different stakeholders and that participating in multi-stakeholder initiatives is the key to improving performance on its material issues and driving sectoral transformation.

Vestel stands by the United Nations Global Compact (UNGC) and Women's Empowerment Principles (WEPs) and is among the supporters of the Task Force on Climate-related Financial Disclosures (TCFD). In addition, as a signatory to the Business World Plastics Initiative (IPG), the Company made a commitment to reduce the plastic use and to recycle and reuse plastics.