Türk Hava Yollari Anonim Ortakligi : 2021 Carbon Disclosure Project (CDP) Report

TÜRK HAVA YOLLARI A.O. - Climate Change 2021

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

Established in 1933, Turkish Airlines has been the flag carrier airline of the Republic of Turkey for 87 years. Turkish Airlines' main fields of activity are all types of domestic and international passenger and cargo air transportation.Turkish Airlines, which was originally established as a wholly state-ownedstate-owned enterprise, was included in the scope of privatization in 1990. Today, 50.88 percent of the Company's shares have been offered to the public, and T.C. The 49.12 percent share in the Privatization Administration of the Ministry of Treasury and Finance was transferred to the Turkey Wealth Fund in 2017. 1 Group C share is owned by T.C. It belongs to the Privatization Administration of the Ministry of Treasury and Finance.

The paid-in capital of the Incorporation is TL 1.38 billion. The Incorporation owns six subsidiaries and 12 joint ventures, adding up to 18 in total. Subsidiaries mainly consist of companies that provide services in the fields of maintenance, catering, ground handling and fuel supply As the airline flying to the most countries and international destinations in the world, Turkish Airlines flies to a total of 324 destinations as of the end of 2020, of which 52 are domestic and 272 are international. Turkish Airlines increased the number of aircraft in its fleet by 8.7% in the last 5 years to 363 by the end of 2020, of which 338 are passenger aircraft including 104 widebody and 234 narrow- body and 25 are freighters.

Turkish Airlines, which is listed on the Istanbul Stock Exchange (BIST) under the name "THYAO", is subject to the provisions of the Turkish Commercial Code (TTK) and the regulations of the Capital Markets Board (CMB). Adopting the principles of transparency, fairness, responsibility and accountability in all its operations, Turkish Airlines complies with all mandatory principles from the Corporate Governance Principles determined by the Capital Markets Board, and pays utmost attention to comply with non- mandatory principles. Turkish Airlines' Board of Directors consists of nine members, three of which are independent, elected by the General Assembly.

Turkish Airlines, together with its subsidiaries, employs more than 61 thousand people worldwide. Turkish Airlines has grown steadily at double-digit rates in the last 10 years, becoming one of the airlines with the largest global network in the world.

Our Incorporation has managed to maintain the strong growth trend that it has been carrying out for more than 11 years with the increasing service quality in cargo operations, without any interruption this year. Turkish Airlines has been a member of Star Alliance since 2008

Turkish Airlines, the airline that flies to the most countries in the world, connects many points in Turkey and the world with its flight network reaching 127 countries, 319 cities and 324 destinations. Carrying 74.3 million passengers in 2019, Turkish Airlines carried 28 million passengers with 363 aircraft in its fleet in 2020, making it the airline with the least decrease in passenger numbers among its competitors.

We are deeply committed to our goal of contributing to sustainable development by carrying out our activities with a sense of responsibility towards society, economy and the environment. Our sustainability program is built on four pillars: Governance, Development, People and the World, each of which contains many important topics within its own. Except for three of the key topics covered, the others are internal matters; Contribution to the growth of the economy, society and local development at our flight destinations are important external issues. We will continue to take our priority determination process further in the coming years by receiving feedback from our stakeholders on the issues we have mentioned under the material issues. Sustainable Development Goals priority topics;

• Increasing fuel efficiency and reducing emissions to combat climate change
• Waste management
• Resource efficiency
• Fleet modernization
• Sustainable Aviation Fuel
• Noise Management
• Carbon Pricing
• Sustainable Catering
• Single Use Plastics
• Customer satisfaction
• Access to products and services
• Training
• Flight Safety
• Flight Security
• Supporting biodiversity
• Human rights and employee development
• Employee health and safety and well-being
• Contribution to economic development

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• Diversity and gender equality
• Innovation and entrepreneurship
• Contribution to Local Development at Our Destinations
• Responsible Supply Chain Management
• Our Contributions to Economic and Social Development
• Financial Performance

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

	Start date	End date	Indicate if you are providing emissions data for past reporting	Select the number of past reporting years you will be providing emissions data
			years	for
Reporting	January 1	December 31	No
year	2020	2020

C0.3

(C0.3) Select the countries/areas for which you will be supplying data.

Turkey

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.

USD

C0.5

(C0.5) Select the option that describes the reporting boundary for which climate-related impacts on your business are being reported. Note that this option should align with your chosen approach for consolidating your GHG inventory.

Operational control

C-TO0.7/C-TS0.7

(C-TO0.7/C-TS0.7) For which transport modes will you be providing data?

Aviation

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?

Yes

C1.1a

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(C1.1a) Identify the position(s) (do not include any names) of the individual(s) on the board with responsibility for climate-related issues.

Position of	Please explain
individual(s)
Board-level	In our Incorporation, the Sustainability Committee, whose members are composed of executives at the Turkish Airlines Senior Management level, has been established. The Sustainability Committee
committee	aims to create value by ensuring that the economic, social and environmental sustainability aspects carried out in different processes within our Incorporation are performed in a linked cycle. With
	this; responsibility for Turkish Airlines' impact on the economy, environment and society rests with the Board of Directors and the Executive Committee. In this regard, as in the company's
	performance in all matters, The Board of Directors and the Executive Committee are primarily responsible for monitoring and evaluating climate change management. The Sustainability Committee
	reports directly to the CEO. Turkish Airlines Sustainability Committee is chaired by Assistant General Manager (Financial). Members of the Sustainability Committee assume the vice chairmanship of
	the Assistant General Manager (Human Resources). Committee members consist of the titles of Assistant General Manager (Marketing and Sales) - Sustainability Committee Member, Quality
	Assurance President - Sustainability Committee Member, Corporate Sustainability Management Manager (Sustainability Committee Secretariat). Therefore, the Chairperson of the Sustainability
	Committee is on the Board of Directors, the highest decision-making body of the Incorporation. Sustainability Committee convenes at least once every quarter of the year, additionally it reconvenes in
	the cases where important issues arise regardless of time. In general, it convenes at least 4 times a year. Management Evaluation Meetings are held every 2 weeks as Senior Management
	meetings. At these meetings, decisions regarding sustainability are also taken. For instance; the decision to "evaluate cooperation for a biofuel flight in a line to be determined in a way that is certified
	and will not impose any obligation on our partnership" is one of the current decisions taken at the Senior Management Meeting on this subject.
Chief	Our efforts to combat the climate change is followed at the highest level by our CEO and our CEO is an executive member of Board of Directors. We consider climate change as a strategic issue that
Executive	requires full integration into business processes and decision-making mechanisms, and consider reducing our impact in this context as a fundamental component of our sustainability understanding.
Officer	For this purpose, a Sustainability Committee was established in our Incorporation, the members of which are Turkish Airlines Senior Management level executives. With this, the responsibility for the
(CEO)	impacts of Turkish Airlines on economy, environment and society lies with the Board of Directors and the Executive Committee. Sustainability Committee reports directly to the CEO. As examples of
	the decisions approved by our CEO are to "evaluate cooperation for a biofuel flight in a line to be determined in a way that is certified and will not impose any obligation on our partnership".
Chief	Our Incorporation considers climate change as a strategic issue that requires full integration into business processes and decision-making mechanisms, and considers reducing our impacts in this
Financial	content as a fundamental component of our sustainability approach. For this purpose, a Sustainability Committee was established in our Incorporation, the members of which are Turkish Airlines
Officer (CFO)	Senior Management level executives. Turkish Airlines Sustainability Committee is chaired by Assistant General Manager (Financial). Members of the Sustainability Committee assume the vice
	chairmanship of the Assistant General Manager (Human Resources). Committee members consist of the titles of Assistant General Manager (Marketing and Sales) - Sustainability Committee
	Member, Quality Assurance President - Sustainability Committee Member, Corporate Sustainability Management Manager (Sustainability Committee Secretariat). Therefore, the Chairperson of the
	Sustainability Committee is on the Board of Directors, the highest decision-making body of the Incorporation. Sustainability Committee reports directly to the CEO. Our CFO is not only the
	Chairperson of our Sustainability Committee, but also a board member of our company. Responsibilities of the Chairperson of our Sustainability Committee are summarized as follows: Reporting the
	important issues discussed in the Sustainability Committee to the Top Management and Senior Management and submitting the decisions taken to the approval of Top Management and Senior
	Management. Turkish Airlines Sustainability Committee Chairperson Assistant General Manager (Financial) ensures that the Company's risk management policies (within the scope of sustainability
	and all risks) are determined, necessary arrangements are made and systematically reviewed within the scope of the committee's purposes. By acting upon the policies of Incorporation, does the
	necessary work to achieve all its goals, and makes the decision on the acceptability of all risks that arise in the process s/he manages. As examples of the decisions involved and approved by our
	CFO are to "evaluate cooperation for a biofuel flight in a line to be determined in a way that is certified and will not impose any obligation on our partnership".

C1.1b

(C1.1b) Provide further details on the board's oversight of climate-related issues.

Frequency	Governance	Scope of	Please explain
with	mechanisms	board-
which	into which	level
climate-	climate-	oversight
related	related issues
issues are	are integrated
a
scheduled
agenda
item
Scheduled	Reviewing and	<>	We integrate our sustainability approach into our business models in order to leave a more livable World to the future generations. On this purpose, we work to extend the
- some	guiding	Applicabl	policies in this field to all units of our Incorporation from the management level to the lowest level with our organizational structure. Putting a sustainable, transparent and
meetings	strategy	e>	accountable management into the focus of its operations, the Incorporation has established a Sustainability Committee, whose members are Turkish Airlines Senior
	Reviewing and		Management. With this, the responsibility for the impacts of Turkish Airlines on economic, environmental and social lies with the Board of Directors and the Executive
	guiding major		Committee. Sustainability Committee reports directly to the CEO. The Sustainability Committee aims to create value by ensuring that the economic, social and
	plans of action		environmental sustainability aspects carried out in different processes within our Incorporation are aligned and performed in linked among them. The Chairperson of the
	Reviewing and		Sustainability Committee is responsible for reporting the meeting minutes in the Sustainability Committee to the Top Management and Senior Management. Additionally,
	guiding risk		submitting the decisions taken in the Sustainability Committee to the approval of Top Management and Senior Management are of Chairperson's responsibility. Turkish
	management		Airlines Sustainability Committee is chaired by CFO-Assistant General Manager (Financial). Assistant General Manager (Human Resources) is the vice chairperson of the
	policies		Committee. Members of the Sustainability Committee are as follows: Assistant General Manager (Marketing and Sales) - Sustainability Committee Member, Quality
	Reviewing and		Assurance President - Sustainability Committee Member, Corporate Sustainability Management Manager (Sustainability Committee Secretariat). Therefore, the Chairperson
	guiding annual		of the Sustainability Committee is on the Board of Directors, the highest decision-making body of the Incorporation. Accordingly, the Chairperson is able to ensure that
	budgets		strategy such as reviewing and guiding strategy, major plans of action, annual budgets, business plans, overseeing major capital expenditures, setting objectives, targets
	Reviewing and		and monitoring the performance are in line with climate change mitigation and adaptation. The Sustainability Committee convenes at least once every quarter of the year,
	guiding		additionally, when important issues arise, it reconvenes regardless of time. It meets at least 4 times annually.
	business plans
	Setting
	performance
	objectives
	Monitoring
	implementation
	and
	performance of
	objectives
	Overseeing
	major capital
	expenditures,
	acquisitions
	and
	divestitures
	Monitoring and
	overseeing
	progress
	against goals
	and targets for
	addressing
	climate-related
	issues

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C1.2

(C1.2) Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s) and/or	Reporting line	Responsibility	Coverage of	Frequency of reporting to the board on climate-related
committee(s)			responsibility	issues
Chief Executive Officer (CEO)	<>	Both assessing and managing climate-related risks and		More frequently than quarterly
	Applicable>	opportunities
Sustainability committee	<>	Both assessing and managing climate-related risks and		More frequently than quarterly
	Applicable>	opportunities
Chief Financial Officer (CFO)	<>	Both assessing and managing climate-related risks and		More frequently than quarterly
	Applicable>	opportunities
Other, please specify (Senior Vice	<>	Both assessing and managing climate-related risks and		More frequently than quarterly
President)	Applicable>	opportunities

C1.2a

(C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associated responsibilities are, and how climate- related issues are monitored (do not include the names of individuals).

At Turkish Airlines, the sustainability issues are handled by the Sustainability Committee, consisting of the representatives of Senior Management, in a way that they include climate change . Turkish Airlines Sustainability Committee is chaired by Assistant General Manager (Financial). Members of the Sustainability Committee assume the vice chairmanship of the Assistant General Manager (Human Resources). Committee members consist of the titles of Assistant General Manager (Marketing and Sales) - Sustainability Committee Member, Quality Assurance President - Sustainability Committee Member, Corporate Sustainability Management Manager (Sustainability Committee Secretariat). The Sustainability Committee reports directly to the CEO.

The responsibility for the impacts of Turkish Airlines on economy, environment and society lies with the Board of Directors and the Executive Committee. In this regard, as in the company's performance in all matters, The Board of Directors and the Executive Committee are primarily responsible for monitoring and evaluating climate change management . The Chairperson of the Sustainability Committee is the executive responsible for reporting the important issues discussed in the Sustainability Committee to the Top Management and Senior Management and submitting the decisions taken to the approval of Top Management and Senior Management and is in charge of the Sustainability Committee meetings. The Sustainability Committee convenes at least once every quarter of the year, additionally, when important issues arise, it reconvenes regardless of time. It generally meets at least 4 times a year.

Senior Vice President manages the process of carrying out the activities intended for satisfying the national and international civil aviation standards and the requirements of the Quality Management System and Environmental Management System as well as certifying this satisfaction and ensuring its continuation. The position is responsible of reporting to the CEO &

President onany safety, security, compliance, quality, and environment incident, activity, or case in the Company, which is out of the acceptable limits.

The Sustainability Committee carries out its activities in order to determine, review and continuously improve the sustainability management strategy, sustainability policy, short, medium and long-term sustainability targets, and to decide on improvement projects that will increase the sustainability performance of Turkish Airlines. Within the framework of the proposals made by the Committee, all our relevant units plan their necessary work and carry out their work in line with this plan. We aim to develop and maintain our sustainability efforts in line with the United Nations Sustainable Development Goals, by developing them day by day, in line with the vision, mission and general strategy of our Incorporation, taking into account the expectations of our stakeholders and related parties, our impact on the supply chain and the environment, and integrating them into every field in which our Incorporation operates. Besides, our Sustainability efforts are focused on the following material issues with the participation of all relevant units of our Incorporation;

In the environmental field; Fleet modernization, climate change, fuel efficiency and greenhouse gas emissions, sustainable biofuel, sustainable catering, waste management, s ingle-use plastics, resource efficiency, noise management, water management, carbon pricing, biodiversity

In the social field : Customer satisfaction, flight safety, flight security, innovation, employee health & safety and well-being, employee and management relations, human rights, diversity and gender equality, accessibility and disadvantaged passengers, corporate social responsibility, data and information security, training and capacity & career devel opment, local community involvement, product responsibility

In the field of economic ; Financial performance, local development at destinations, contribution to economic development, responsible supply chain management.

In the field of governance; It can be listed as corporate governance, business ethics and ethical behavior, compliance with legislation, and risk management.

Expenditure on our fuel, energy and greenhouse gas emissions; Our operational expenses have an important place among our costs. Since, the aviation is an industry which is affected by international regulations and highly regulated, the regulations and costs in these items have significant risks and opportunities for us. It is of great importance that the Incorporation has an effective risk management strategy in order to control potential risks in the highly competitive aviation industry and to ensure sustainable growth. The risk committee gathered 6 times in 2020.

C1.3

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(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?

	Provide incentives for the	Comment
	management of climate-
	related issues
Row	Yes	Yes. climate crisis affects both the world and our daily lives. For this reason, every climate-related issue affects us both individually and corporately. We show that we take
1		this issue and its importance into account by offering both monetary and non-monetary incentives to promote the management of climate-related issues and raise awareness
		about it.

C1.3a

(C1.3a) Provide further details on the incentives provided for the management of climate-related issues (do not include the names of individuals).

Entitled to	Type of	Activity	Comment
incentive	incentive	inventivized
Other, please	Non-	Other (please	We are sending "Thank you" letters to the Top 100 captains for each fleet in terms of fuel saving. Although not directly in line with the goal of reducing carbon emissions,
specify	monetary	specify) (Fuel	340 certificates of appreciation have been given so far for fuel savings. While, it is not considered as a routine practice, a certificate of appreciation is given to cockpit
(Captains)	reward	Saving)	employees who support the reduction of carbon emissions by using less than planned fuel. As Turkish Airlines, we operate the hazard identification and risk
			management processes in the Safety Management System, including the safety reporting system, and aim to eliminate or reduce all risks to safety, including human
			factors, by dynamically monitoring the flight operation. Therefore, in order not to endanger the flight safety, no monetary incentive is given in return for the practices of
			the captains to reduce fuel consumption.
All employees	Monetary	Emissions	Employees may receive monetary incentive by the achievement of energy and consequently emission reduction, efficiency, behavioral change for savings. Our 3
	reward	reduction	actions incentivesing all of our employees to participate and including the improvement of climate change performance are as follows: 1) A reporting system especially
		project	focusing on environmental issues, assessed by Quality Assurance Directorate. 2) Personal Proposal System: A campaign was held to raise environmental awareness
		Energy	through Feedy, the feedback application within our mobile application, which is one of our internal communication channels so that all employees can be involved.
		reduction	During the event, employees were encouraged to receive/give environmental labels from each other. Proposals for energy, emission efficiency and these proposals are
		project	evaluated by relevant departments. The selected welcomed proposals are deemed worthy to get a gold coin. It includes the notification of situations and events that
		Efficiency	partially or completely harm the environment or have the potential to harm the environment while the partnership activities are carried out, and these are evaluated
		project	according to the Environmental Management Manual. (Examples of feedback topics converted by non-compliance environment e-Reports via our internal
		Efficiency	communication tool are; mitigation of fuel, natural sources and paper use, waste sorting and collection etc.). 3) Aiming to process all internal and external sources and
		target	turn them into output, our Corporate Innovation System consists of many complementary activities. "Idea Management", one of the most important components of our
		Behavior	Corporate Innovation System, has been commissioned to activate the creative potential of our employees, the greatest asset of our Incorporation, and to increase their
		change	participation to innovation activities. Having a transparent sharing and rewarding structure, the idea management system enables all our employees to submit their
		related	valuable opinions and provides them with the opportunity to develop and realize projects and in return, to be rewarded for their efforts. Taking the interdepartmental
		indicator	coordination to the top level, this platform keeps serving for the purpose of utilizing all available opportunities and resolving all problems. Thanks to the idea
		Environmental	management system; we create awareness on innovation, promote the innovation culture and raise innovation ambassadors.
		criteria
		included in
		purchases
Board/Executive	Monetary	Emissions	According to macro and micro current financial conditions; Board of Directors may decide to deliver bonus and/or dividend to managerial positions of the company. As
board	reward	reduction	we are operating in avaition sector, our profitability is highly depending on our operating cost including energy (fuel & electricity) costs, which are our main source of
		target	emission (more than 99%) Therefore, the Board of Directors may receive monetary incentive by the achievement of energy and consequently emission reduction,
		Energy	efficiency, behavioral change for savings and more environmentally focus purchases. Responsibility for Turkish Airlines' impact on the economy, environment and
		reduction	society rests with the Board of Directors and the Executive Committee. The Chairperson of the Sustainability Committee is on the Board of Directors, the highest
		target	decision-making body of the Incorporation.
		Efficiency
		target
		Behavior
		change
		related
		indicator
		Environmental
		criteria
		included in
		purchases
Chief Executive	Monetary	Energy	According to macro and micro current financial conditions; Board of Directors may decide to deliver bonus and/or dividend to managerial positions of the company. As
Officer (CEO)	reward	reduction	we are operating in avaition sector, our profitability is highly depending on our operating cost including energy (fuel & electricity) costs, which are our main source of
		target	emission (more than 99%) Therefore, CEO may receive monetary incentive by the achievement of energy and consequently emission reduction, efficiency, behavioral
		Efficiency	change for savings and more environmentally focus purchases. Responsibility for Turkish Airlines' impact on the economy, environment and society rests with the
		target	Board of Directors and the Executive Committee.The Chairperson of the Sustainability Committee is on the Board of Directors, the highest decision-making body of the
		Behavior	Incorporation.
		change
		related
		indicator
		Company
		performance
		against a
		climate-
		related
		sustainability
		index
Chief Financial	Monetary	Emissions	The Sustainability Committee aims to create value by ensuring that the economic, social and environmental sustainability dimensions carried out in different processes
Officer (CFO)	reward	reduction	within our Incorporation are carried out in a linked cycle. Our CFO is not only the Chairperson of our Sustainability Committee, but also a board member of our company.
		target	Responsibilities of the Chairperson of our Sustainability Committee are summarized as follows: It is to report the important issues discussed in the Sustainability
		Energy	Committee to the Senior Management and the Top Management, and to submit the decisions taken for the approval of the Senior Management and the Top
		reduction	Management.
		target
		Efficiency
		target

C2. Risks and opportunities

C2.1

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