It is not enough for companies to produce, provide services and increase profits in our age. Organizations wishing to exist in the future should prioritize environmental impacts such as the climate crisis, social factors such as diversity and inclusion, and governance issues such as ethics and transparency. Consumers and investors are now looking to businesses to take responsibility for social and environmental matters. This makes sustainable development a regular way of doing business as part of the management strategy. Companies that look at sustainability in all its dimensions continue to take a step forward.

There is an assessment criterion to understand and measure how businesses operate sustainably. This criterion, expressed in ESG, stands for \"environmental, social governance.\" It represents environmental, social, and governance (ESG) investments. So what does ESG mean in more detail, its criteria, and why are they essential for businesses? Let's take a closer look.

“Organizations wishing to exist in the future should prioritize environmental impacts such as the climate crisis, social factors such as diversity and inclusion, and governance issues such as ethics and transparency. Consumers and investors are now looking to businesses to take responsibility for social and environmental matters.”

What is ESG?

ESG represents a company's financial interests focusing mainly on sustainable and ethical implications. Specifically, ESG is a policy framework for identifying, assessing, and addressing a company's objectives and operations, such as carbon footprint, sustainability, workplace culture, diversity, inclusion, corporate risks, and ethics of practice. Financial markets use ESG factors in assessing organizations and determining future financial performance.

What are the ESG Criteria?

Companies attach importance to ESG as a functional approach. Each of the ESG criteria plays a critical role in efforts to place greater emphasis on sustainable and ethical investments. Let's examine these criteria now.

Environmental: The extent to which an organization considers the conservation of natural resources. These include the environment, climate change, energy use and consumption, and their overall impact. In summary, it includes:
- Air and water quality
- Biodiversity
- Deforestation
- Energy performance
- Carbon footprint, including greenhouse gas emissions
- Depletion of natural resources
- Waste management and pollution

Social: Focuses on management, employee, and stakeholder relationships. It is a criterion that considers how a business treats its employees and stakeholders. Examples include employee engagement, impact on local communities, equity and inclusion, human rights, and employee health and safety.

Governance: Focuses on transparency, internal system controls, and practices and looks at an organization's internal audit and organizational management. Governance criteria ensure that a company uses accurate and transparent accounting methods, considers integrity and diversity in its management selection, and is accountable to its shareholders.

Why is ESG important for companies?

With increased awareness of the environment, consumer behavior is changing as well. As consumers focus on sustainability, they emphasize recycling, reducing their waste, and using resources efficiently. It is fair to say that this shift among consumers also affects financing and investment choices. This results in investors using their resources to fund companies that adhere to these practices. Ultimately, corporations accelerate their investments to improve their ESG performance.

When corporations integrate ESG into their business
- Business operations become sustainable.
- Financial performance improves.
- Potential for investor attraction increases.
- Their reputation rises
- Customer loyalty increases.

Petkim ranks 8th among 206 companies in the global ESG performance score!

As SOCAR Türkiye, we embrace the philosophy of creating value for a sustainable future by considering our business's economic, social, and environmental aspects.

Operating as the first and only integrated petrochemical company in Türkiye, Petkim was ranked eighth among 206 companies in the \"ESG Score,\" in which the world's leading institutions are evaluated by an independent auditor, thanks to its efforts in line with our sustainability goals. This success reflects our overall infrastructure and integration efforts to achieve sustainable production and our sustainability approach. Petkim contributes to the environment by minimizing the environmental impacts associated with its activities. The company always has a system that puts people at its center, sensitive to the safety and health of workers. With dedication and determination, it internalizes the concept of sustainability in all its aspects to demonstrate its maximum contribution to society with its social responsibility projects.