Dear Stakeholders,
Tens of thousands of people lost their lives in the Kahramanmaraş-centered earthquake that shook our country at the beginning of 2023. We wish God's mercy to our citizens who lost their lives once again due to the earthquake disaster that affected 11 provinces, and we wish patience and condolences to their relatives.
Following the earthquake disaster, when the natural gas supply in our province of operation, Gaziantep, was disrupted, Zorlu Energy was able to reactivate the 4,000-kilometer pipeline with a team of 300 people and 170 vehicles in order to provide rapid support and uninterrupted natural gas supply to living spaces after implementing the necessary security measures. At the same time, our electricity distribution teams continued to work day and night to ensure that the grid infrastructure of Adıyaman province is restored and provided service. Together, we will mitigate the effects of this disaster, rebuild, and continue to support one another. Don't forget that joining together in difficult times is the most vital step toward becoming strong.
We are going through a historic transition worldwide, particularly in the energy sector
The year 2023 has been a year in which we face many challenges all over the world. We have left behind a year in which we struggled with serious problems such as earthquakes, wars, and the climate crisis. Geopolitical tensions and divergent monetary policies at the global level have caused economic activities to differ at the country level. The Russia-Ukraine war caused increases in commodity prices, especially global energy and food prices, and created pressure on national economies. The return from peak levels of supply problems and the resulting increase in energy prices and the recovery of the Chinese economy in particular brought about more moderate economic activity, albeit limited compared to expectations. However, we also saw that the global economy was stagnant and unbalanced across countries due to the tight monetary policies implemented to combat persistent inflation on a global scale.
According to a report published by the Organization for Economic Co-operation and Development, global economic growth, which was 3.1 percent in 2023, is expected to decline to 2.9 percent this year and rise to 3 percent again in 2025, while growth in the Turkish economy is expected to be 2.9 percent this year and 3.1 percent in 2025.
Energy is one of the sectors most affected by these developments. Therefore, the impact of war and geopolitical tensions on the energy sector continued in 2023. As energy security comes to the forefront in the competition, the importance of renewable energy investments increases, bringing significant progress towards net zero worldwide. According to the International Energy Agency (IEA) 2023 World Energy Outlook Report, it is stated that investments in clean energy have increased by 40 percent since 2020 and that this increase is due not only to efforts to reduce emissions but also to economic reasons, and that clean energy investments have increased by more than 2 trillion dollars in the last three years, reaching 3 trillion dollars.
At this point, the need for clean energy and the determination of countries to rapidly implement these investments are remarkable. At the same time, the maturation of clean energy technologies, energy transformation, and digitalization are among the driving forces of the transition.
Energy transformation opens the door to significant changes in the sector and increases the emphasis on sustainable energy sources
We are witnessing a major transformation towards renewable energy sources and a transition to a low-carbon economy in the global energy market. Energy transformation opens the door to significant changes in the sector and increases the emphasis on sustainable energy sources. In this context, 2023 stands out as a year that is at the center of the future vision and sustainability efforts in the energy sector.
The same report by the IEA, prepared based on current energy policies, emphasizes that the energy world will change significantly by 2030 and that stronger measures will be needed to maintain the 1.5 °C target. The report predicts that clean energy technologies will grow rapidly by 2030, with electric cars and renewable energy sources in particular increasing significantly.
As Türkiye, we have the potential to be one of the pioneers of this transformation by rapidly implementing energy policies, increasing our renewable energy resource capacity, and reducing our energy costs. The approval of the Paris Climate Agreement by the Turkish Grand National Assembly (TBMM) in October 2021 is an important turning point for our country. In this context, the 2053 net zero emission targets establish our country's determined stance on emission reduction policies. I believe that this transformation will open up new prospects for our country's progress.
We have determined our sustainability goals with great determination
As Zorlu Holding, we are moving forward with a vision equipped with the principles of sustainability and responsibility. In line with our Smart Life 2030 strategy, we adopt a solution-oriented approach to global challenges and changes in our energy business line. By investing only in renewable resources and technologies, we focus on sustainability and aim to create the highest value in environmental, social, and governance (ESG) areas. In line with our sustainability vision, we continue our work rapidly to reinforce our leadership in the energy sector and play a more effective role in the fight against climate change. By being included in the BIST Sustainability Index for the 7th time in a row, we have once again proven our company's deep commitment to the principle of sustainability. In addition, with the last evaluation made by the international sustainability rating company Refinitiv in 2023, Zorlu Enerji increased its rating from 68 points to 74 points. I believe that Zorlu Enerji, which is preparing for the future with its ESG-based regenerative business model approach, will raise this score to much higher levels and will be more strongly prepared against economic vulnerabilities and climate risks.
Our progress in the social field is also among the prominent achievements of 2023. In the energy sector, where male employees are predominant, we have made significant progress by increasing our female employee ratio from 16.4% to 19%. In addition, we have completed our preparation process to participate in the Bloomberg Gender Equality Index in line with the targets we set for 2022, and we are awaiting the index results. We also prioritize social compliance in our supply chain. Within the framework of our cooperation with CRIF, we contribute to the continuous development of our suppliers and support them in areas that need improvement through ESG assessments we conduct through the Synesgy platform.
We are happy and proud to celebrate the 70th anniversary of our holding and the 30th anniversary of our energy business line on the 100th anniversary of our republic. In this special year, we are pleased to contribute to Türkiye's sustainable development vision, and we are excited to look forward to many more years of unity and solidarity.
As always, I would like to take this opportunity to thank the Zorlu Energy Family, our shareholders, our business partners, and all our stakeholders for bringing clean energy to our country in 2023, and I sincerely hope that 2024 will bring peace and well-being to our country and the entire world.
Best regards,
Ahmet Nazif Zorlu
Chairman of the Board
