Article 1: Establishment

These working principles (‘Working Principles’) determine the scope of duties and working principles of Çates Elektrik Üretim A.Ş. (‘Company’) Sustainability Committee (‘Committee’).

Article 2: Purpose and Scope

At Çates Elektrik Üretim A.Ş., it is aimed to create long-term value for all stakeholders by embedding sustainability issues into decision-making mechanisms and business processes. The Sustainability Committee, established for this purpose, is a Committee that officially reviews and approves the sustainability activities of the Company, chaired by Aydem Energy HSE and Sustainability Group Director.

The Sustainability Committee was established to monitor the sustainability strategy and performance of Çates Elektrik Üretim A.Ş. and to carry out activities to integrate sustainability into decision-making mechanisms and business models. The Committee aims to identify activities and opportunities to ensure the implementation of the Company's sustainability policy commitments, to create action plans and to ensure that they are implemented.

 The Committee meets quarterly to monitor progress and provide information for all sustainability activities. The Committee's task is to decide on the Company's strategic direction and action plans. The Committee reviews and decides on the recommendations brought by employees working on sustainability-related issues. Decisions taken by the Committee are shared with other units. The Committee also ensures the integration of all material aspects into ESG parameters, products, services and decision-making mechanisms. A full-time sustainability team has been established within the HSE and Sustainability Directorate with the aim of making the Company's sustainability organisation more effective. The Committee is responsible for the evaluation of sustainability targets and key performance indicators (‘KPI’).

The aim of the Committee is to develop a culture of sustainability, life, occupational health and safety that encompasses the Company's employees and all operating facilities, and to proactively adopt and develop a safe behaviour approach, including environmental regulations and activities. In addition, it is to inform the Board of Directors about preventive/improvement measures to ensure the implementation of sustainability principles, areas that may create opportunities and operational results. The Terms of Reference cover all social, environmental, occupational health and safety issues to be evaluated by the Committee.

Article 3: Abbreviations

KPI: Refers to key performance indicators.

HSE: Health, Safety and Environment

ESG: Environment, Social and Governance)

LTI: It refers to accidents with day loss.

Article 4: Structure of the Committee

The Committee consists of at least one member of the Board of Directors, the General Manager, Aydem Energy HSE and Sustainability Group Director, Power Plant Director, HSE and Sustainability Manager and HSE and Sustainability Manager. In case there are items on stakeholder participation and social impact in the meeting agenda of the Committee, the participation of Human Resources and/or Corporate Communications units is also requested. Aydem Energy HSE and Sustainability Group Director chairs the Committee.

Committee members are determined by the Board of Directors.

All kinds of resources and support required for the Committee to fulfil its duties are provided by the General Manager. The Committee may invite department employees and consultants it deems necessary to its meetings and receive their opinions. The Committee shall benefit from the opinions of experts and consultants when necessary.

Article 5: Meetings

It is essential that the Committee convenes quarterly; it may also convene upon the call of the Chairman of the Committee when required by the business. The Committee convenes with the absolute majority of the members and takes its decisions with the majority of those attending the meeting. In case of equality of votes, the decision is taken in line with the vote of the Committee Chairman.

The Company's HSE and Sustainability Manager or a member appointed by the committee assumes the responsibility of ‘Committee Secretariat’ reporting to the Committee Chairman. The Committee Secretariat submits the meeting agenda to the Committee members before the meeting. Ensures the attendance of the persons requested by the Chairman to attend the meeting. It writes the minutes and decisions of the meeting and ensures their distribution to the relevant parties. It is responsible for the administrative organisation of the meetings and the distribution of the minutes of the meetings to the committee members and the recording of the decisions in these minutes.

Committee activities and the results of the Committee meetings are submitted to the Board of Directors by the Chairman of the Committee, including relevant information. The Committee immediately notifies the Board of Directors in writing about the determinations and suggestions related to its duties and responsibilities. Minutes of the Committee meetings are approved by the Committee members and kept together with the Committee decisions.

The ‘Board of Directors Secretariat’ is responsible for distributing the minutes of the meetings to the members of the Board of Directors and keeping the resolutions in the resolution book.

Article 6: Duties of the Committee

The Committee monitors, reviews and revises sustainability, health, safety, environment, social and governance issues, including but not limited to the following issues, and reports the relevant issues and processes to the Board of Directors when necessary:

·        Managing sustainability priorities, ensuring integration with strategy and monitoring targets;

·        Reviewing and guiding progress on all sustainability-related policies, activities and processes;

·        Prioritising and managing risks and opportunities arising from climate change;

·        Planning activities to understand stakeholders' needs related to sustainability;

·        Evaluating feedback on environmental and social performance, energy consumption, waste management, environmental and social risks;

·        Evaluating the planning and taking decisions to realise the recommendations that will ensure continuous improvement and development in environmental activities,

·        Providing guidance for continuous improvement of HSE performance, including proactive risk prevention, regulatory preventive actions, near misses, unsafe conditions and behaviour, LTI;

·        Guidance on the relationships to be established with internal and external stakeholders;

·        Evaluation of KPI applications and related issues;

·        Monitoring activities related to critical success factors;

·        Providing support for ESG principles and evaluating risk and opportunity analyses;

·        Evaluation of planned management walks and audit results with efforts to popularise HSE culture;

·        Identifying, measuring, monitoring, recording, auditing and reporting the environmental and social risks and impact dimensions of the Company's operations;

·        Sustainability report and ESG scoring.

Article 7: Execution and Enforcement

The authority to make the necessary internal arrangements for the implementation of other principles and details that may be needed regarding this document is vested in the General Manager and Aydem Energy HSE and Sustainability Group Director and enters into force with the approval of the Board of Directors.