Combating Climate Change
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Corporate Risk Management
Corporate Risk Management
The Three Lines of Defense model enhances the effectiveness of risk management.
At Akçansa, we manage risks identified under our corporate risk management methodology by applying global recognized standards and best practices. We adopt a holistic approach to risks spanning environmental, social, governance, operational, strategic, financial, and compliance domains- regularly assessing, monitoring and reporting those deemed of high significance.
In line with Article 378 of the Turkish Commercial Code No. 6102, our Early Risk Detection Committee evaluates risks that could impact company's existence, development, and continuity, ensuring timely actions aligned with our corporate risk appetite. We provide regular presentations and updates to this committee on identified risks and the measures taken.
The Corporate Risk Management Department which reports to the Early Risk Detection Committee composed of independent board members, is responsible for compiling risk management reports and offering strategic recommendations.
The committee reviews the prepared risk reports, provides recommendations on necessary measures, regularly evaluates the risk management processes, and ensures that the practices within the responsible units aligned with the committee's decisions.
To establish and enhance our risk management and internal control systems, we adopt the Three Lines of Defense approach. In this model, each line plays a distinct role, strengthening the overall effectiveness of risk management and control processes across the organization.
In this model, each line of defense assumes a distinct role, enhancing the effectiveness of risk management and control processes across the organization.
First Line
The first line comprises the internal and management controls of operational units that assume and manage risks. This line is executed by operational management, who are the direct owners of the risks. Operational management includes the responsible managers at our factories, ready-mixed concrete plants, ports, and terminals.
Second Line
The second line supports the first by assessing its effectiveness and monitoring risks. It also develops management strategies and procedures, while providing training and guidance. This line includes departments such as financial control, risk management, compliance, IT, system security, internal control, physical security, occupational safety, cybersecurity, information security, legal compliance, human resources, supply chain controls, and quality assurance.
Third Line
The third line independently evaluates the organization's entire risk management processes and controls. The internal audit function provides independent and objective assurance and advisory services by assessing the effectiveness of the first and second lines and offering improvement recommendations. It contributes to enhancing risk management processes throughout the organization by delivering assurance to senior management and the audit committee.
As part of our risk management framework, we identify and define risks, assess their impact and likelihood, calculate risk scores, determine appropriate mitigation measures, and continuously update our records by monitoring risks. We ensure the effectiveness of our risk management efforts using various analytical techniques and reporting tools.
We approach our corporate reporting through an integrated lens, encompassing both ESG and sustainability dimensions. We simultaneously assess the risk and opportunity potential of topics such as transitioning to a low-carbon economy, evaluation of production activities, environmentally responsible operations, efficient use of natural resources, impacts on water and marine resources, biodiversity and ecosystems, investor relations, gender equality, and a human-centered management culture. We manage all identified sustainability-related risks and opportunities by integrating them into Akçansa’s existing corporate risk management framework.
As a signatory to the Task Force on Climate-related Financial Disclosures (TCFD), we monitor climate risks and other ESG-related risks by integrating them into our corporate risk management, business continuity, and crisis management frameworks. In line with this approach, we enhance transparency and accountability by regularly disclosing our progress on carbon emissions and climate-related risks through CDP reporting. Our risk management processes leverage a wide array of data sources to identify, evaluate, prioritize, and track sustainability-related risks. These include internal data—such as operational metrics from production processes, and environmental indicators like carbon emissions, air pollutant levels, waste management, water usage, and energy consumption. Financial analysis further supports this framework by incorporating indicators such as energy costs, product revenues and expenditures, sustainability investments, and operational profitability.
We adopt a holistic approach to managing risks across environmental, social, governance, operational, strategic, financial, and compliance areas.
Additionally, we utilize external sources such as Turkish Statistical Institute (TÜİK) data, World Bank reports, international climate projections, and industry-specific studies to anticipate and assess sustainability risks.
We assess sustainability risks across all business lines and plants using both qualitative and quantitative methods to determine the nature, likelihood, and magnitude of potential impacts. We classify significant financial and strategic risks as critical, identifying them as potential threats to the company’s overall operations. Significant risks at the corporate level are defined as follows:
Quantitative: Risks exceeding 500,000 USD or 17,610,000 TRY9 annually are deemed significant. The 500,000 USD threshold has been set based on approximately 1% of the net profit in USD from the last year, taking into account our financial positionQualitative: Risks considered to pose a strategic threat to our core business model and continuity, identified through risk categories and calculated using our Risk Assessment Methodology. These are evaluated not only in terms of direct financial losses but also through potential operational disruptions, reputational damage, regulatory pressures, and long-term impacts on business continuity.
We conduct plant-specific assessments based on location, taking into account each site’s unique environmental and social dynamics, and analyze operational impacts across diverse geographies. Compared to the previous reporting period, no changes have been made to this process; we continue to implement our risk management approach within the framework of existing policies and methodologies. Nevertheless, we remain committed to enhancing our data analytics capabilities and continually improving our processes for more effective sustainability risk monitoring.
We conduct plant-specific assessments based on location, taking into account each site’s unique environmental and social dynamics, and analyze operational impacts across diverse geographies. Compared to the previous reporting period, no changes have been made to this process; we continue to implement our risk management approach within the framework of existing policies and methodologies. Nevertheless, we remain committed to enhancing our data analytics capabilities and continually improving our processes for more effective sustainability risk monitoring.
9 The amount is calculated based on the exchange rate of 35.22 USD/TRY, as announced by the Central Bank of the Republic of Türkiye on 31/12/2024.
We are continuously enhance our processes to identify and assess the financial impacts of sustainability risks and opportunities, with a primary focus on climate-related risks and opportunities.
In assessing our sustainability risks and opportunities, we refer to the disclosure topics defined in the Construction Materials industry appendix of the Sustainability Accounting Standards Board (SASB). Accordingly, in alignment with TSRS, our report discloses the identified sustainability risks and opportunities across sections including Climate Change, Air Quality, Resource Use and Circularity, Water Management, and Biodiversity and Land Use.
Among these, climate change and water-related risks and opportunities currently have the highest potential to impact our organization. Accordingly, we provide in-depth analysis in these areas. Although risks arising from air quality and biodiversity are actively managed, our evaluations indicate that these do not pose material risks to Akçansa’s operations or financial performance. Further details on risks and opportunities regarding resource use and circularity are covered in the corresponding section of our report, with cross-references to related climate risks addressed under the Climate Change section. Based on our assessments, we conclude that sustainability risks and opportunities are not expected to result in significant modifications or adjustments to the carrying values of assets and liabilities reported in the financial statements for the upcoming reporting period.
We are continuously developing our capabilities to quantify the financial impacts of sustainability risks and opportunities, with a primary focus on climate-related risks and opportunities. For this reporting period, we identified and disclosed the financial impacts of climate and water-related risks in the Climate Change and Water Management sections of our report. The financial figures presented are not subject to a high degree of measurement uncertainty.
For risks where uncertainty is higher, financial impact assessments are ongoing. Due to data limitations—both external and internal—and measurement uncertainties, we are continuing to evaluate the financial impacts of sustainability issues including resource use, waste management, air quality, and biodiversity. As data quality improves through national and international developments, we aim to integrate these dimensions into future financial reporting.
For more detailed information regarding the risks and opportunities related to climate change, please refer to the Climate Change section of our report.
For more detailed information regarding the risks and opportunities related to water and marine resources, please refer to the Water Management section of our report.
For more detailed information regarding the risks and opportunities related to air quality, please refer to the Air Quality section of our report.
For more detailed information regarding the risks and opportunities related to resource use and waste management, please refer to the Resource Use and Circular Economy section of our report.
For more detailed information regarding the risks and opportunities related to biodiversity and land use, please refer to the Biodiversity and Land Use section of our report.
Business Continuity Management
In alignment with the ISO 22301 Business Continuity Management System Standard, we apply a comprehensive business continuity framework across the organization to ensure the operational sustainability at an acceptable level in the event of potential disruptions. We develop crisis management and business recovery plans, and conduct regular reviews to continuously improve their effectiveness.
We integrate disaster preparedness and operational resilience efforts into all of our processes, with a focus on minimizing the potential impact of risks.
To strengthen our risk management culture, we prioritize enhancing employee awareness of risks and continuously reinforce this awareness through regular training programs on Corporate Risk Management, Crisis Management, Business Continuity, and Insurance.
Legal Disclaimer
Akçansa 2024 Integrated Annual Report (‘Report’) has been prepared by Akçansa Çimento Sanayi ve Ticaret A.Ş. (‘Akçansa’). The scenario analyses aligned with TSRS, the financial materiality studies, and all assessments related to physical and transition risks stemming from climate change—prepared by Akçansa—are based on the company's data, calculations, expert opinions, and compliance with national and international standards. Akçansa Çimento Sanayi ve Ticaret A.Ş. shall not be held responsible for any losses or damages that may arise should third parties or entities rely on these assumptions.
