How Arçelik is Turning from ‘White Goods’ to ‘Green Goods’

Arçelik is a company that sits in a sector we often refer to as ‘white goods’. Fridges, washing machines, ovens, that sort of thing. But take time to talk with employees at global HQ in Istanbul, or to pore over the mass scale sustainability efforts permeating every corner of the business and it becomes clear that Arçelik’s goal is to become known as a leading producer of ‘green goods’. 

The company has been named a sector leader by the Dow Jones Sustainability Index for the second consecutive year and in 2019 and 2020 was officially carbon neutral according to the Scope 1 and Scope 2 standards. According to their 2020 Sustainability Report, the company has recycled 58 million PET plastic bottles since 2017, turning them into products and packaging. That progress has been several years in the making, explains CMO Zeynep Yalım Uzun.

“Five or six years ago we really started to think very deeply about what kinds of products we can bring into the market. We thought about what we could do in our operations, in our manufacturing and really started to focus on this holistically as an organisation,” she says. “The way we look at it, this is not a topic that is handled by marketers or sustainability team, it’s actually a business model. We’re really trying to convert our company into a company that does everything sustainably.”

The scope of Arçelik’s sustainability efforts cross everything from increasing energy efficiency in production, improving water management and waste management, tackling plastic pollution, moving from a linear economy model to a circular economy model (one that emphasises increasingly the product lifecycle and increasing recyclability rate), developing products that create environmental and social value and improving biodiversity.

Household appliances might not be the most obvious area for a sustainability revolution. But Arçelik has been quietly and comprehensively overhauling its business model and product lines, building a strong foundation and – perhaps just as importantly – creating products that help consumers reduce their own impact on the environment.

This commitment is built into the company’s business model – but even before it officially signed up for its 2030 targets (in line with the UN’s Sustainable Development Goals), recycling old appliances into new products was a way of life in its Turkish manufacturing plants. More recent innovations include ovens made from recycled fishing nets, creating washing machine drums using recycled PET plastic bottles and hybrid solar-powered fridges. There's an Autodose Dishwasher model that uses up to 28% detergent to reduce the level of chemical waste entering the water system. Currently at the prototype stage is a system that will filter plastic microfibres out of the wash cycle. 

There’s a playfulness to many of the innovations too. The BioCoffee Espresso Machine uses coffee residue instead of plastic to make the internal elements, while a new egg tray designed to come with certain fridge models has been developed using a material created from eggshells.

Key to Arçelik’s progress and innovation is a design thinking-led approach. That means that the marketing team, with their close connection to consumers’ and understanding of their needs and behaviours, works closely with product development teams.

Moreover, the marketing team has been finding that environmental credentials are becoming increasingly important to consumers. 

“We’ve recently done a study in Europe about consumer attitudes towards sustainability. People are really voting in favour of sustainability,” reveals Zeynep. A recent survey carried out by Beko found that 83% of consumers felt a personal sense of responsibility to take action to fight the climate crisis. “People want to do something, but sometimes they don’t know exactly what to do, which is kind of our role as marketers and companies to get them there. For example, offering solutions that are going to be more sustainable than others. People really do want to go for brands and products that are making a positive impact on the environment specifically. We also see that has been expedited after the Covid pandemic.”

In terms of communicating around green issues, the marketing approach has evolved. Before fully pushing into the sustainability world, for example, Beko’s purpose was all about health. The more the team came to understand the extent of the challenges they faced, they realised that health could not be isolated from planet. That’s led to a messaging approach that emphasises interconnectedness between humanity and nature.

“One thing started cropped up because we were so focused on environmental issues and sustainability, and we started to see this insight that you cannot be healthy unless you’re living on a healthy planet. And then this idea of connectivities started to emerge for us,” explains Zeynep. “We started really understanding that we cannot isolate ourselves and our own health from the health of the planet because we’re interconnected in some way. And then that kind of drove our creativity. For a long time, humans have been looking at nature as if there’s ‘us’ and ‘nature’. But we’re part of nature. Nature is very much part of us. Once we started thinking about this idea of connection, that’s the creative piece.”

Earlier in the year, Beko underlined this with a creative film that sees parts of the human body morph into scenes from nature. The morphs have been created using AI, representing technology’s role in repairing our link with nature. The film launched in spring, simultaneously in 103 countries and has clocked up 640m impressions and a 95% positive reaction.

In Zeynep’s mind, it underlines the important role that marketing can play in changing behaviours.

“I personally have always believed that marketing has a role to play in creating change in our society, because we have the tools for it, we have these amazing brands that we manage. We know how to influence people – that’s our job! – and I know it can create some difference.”

What Arçelik is not doing is creating a couple of small, expensive niche green products and hoping to reap some ‘green points’ in the minds of consumers. The company has scale – and it’s prepared to use that scale to make as big a difference as possible.

“One of our tightest internal targets is to democratise these technologies,” says Zeynep. “If they’re only going to be in the top tier products, only a certain percentage of the population can possibly afford them, but we want to really democratise it. Sometimes these technologies do come at a cost. Products might be 5% more expensive but only because of the availability of the materials. But we are making a big effort to make sure that they’re part of the regular product range and not super premium.”

For reference, the company which launched in 1955 has grown to include 12 brands, including the likes of Beko and Grundig. There are sales and marketing offices in 43 countries, and it has 22 production facilities in eight countries. It’s become Europe’s second largest white good company, and it reached a turnover of EUR 20bn in 2020. It’s also a leader in research and development in Turkey, with 15 R&D centres in the country and 13 spread across ten other countries. 

That scale doesn’t mean that that Arçelik has all the answers. Indeed, collaboration is key to innovation and impact. Hackathons are a regular feature in the company calendar – they’ve hosted several in Turkey, one in Africa and another is due to take place in Europe imminently. Moreover, the company has found that working with external organisations, whether NGOs or companies or even football teams can help amplify their sustainability and social good efforts. For example, Beko has been a long-time sponsor of Barcelona Football Club, which has proven to be an impactful partner when it comes to the brands’ healthy eating initiatives.

“I believe this is a good model, putting together NGOs and companies with similar purposes or similar beliefs or visions,” says Zeynep. “We believe that these are such huge problems that they can only be solved collaboratively, so we’re open to collaboration across our sector, outside our sector, with NGOs. That is also one reason that we are doing this hackathon.”

2030 is a key date in the battle to save the planet. For example, the UN Sustainable Development Goals initiative has a 2030 agenda and the European Commission has a target to cut C02 emissions 55% by 2030.

And similarly, Arçelik has built its larger targets with this date in mind. For example, they have committed to reducing greenhouse gas emissions substantially by 2030. It will reduce absolute Scope 1 emissions (those made directly by the company) and absolute Scope 2 emissions (those made indirectly by the company – e.g. the electricity it buys to run its factories) by 30% and absolute Scope 3 emissions from the use of sold products by 15%. Their targets have been set by working with the Science Based Targets initiative.

Keeping  business the size of Arçelik on course requires sustainability to be built into its business KPIs. And it’s not just something that’s reported to shareholders. Being able to demonstrate tangible progress means that the company is eligible for externally assessed eco-labels, which can attract investment and also make them a more attractive prospect for potential clients looking for suppliers that will reduce the environmental impact across their own supply chain. 

“Sustainability goals have become very much part of our target setting – and not just for the sustainability team, but for all of us in the organisation,” says Zeynep. “So, within my team there are marketers, product managers, industrial designers. As a company as well, we are measured a lot on sustainability these days, so I mentioned the Dow Jones Sustainability Index. To be part of that, we have to prove that as a business our sustainability metrics are as strong as our business metrics.”

While Arçelik has several years of sustainability practice under its belt, other businesses are just beginning their sustainability journey. It can certainly seem daunting, but as the impact of global warming and environmental degradation become ever clearer around the world Zeynep believes that now is the time for action. Sure, there’s a business case to be made – future proofing against government regulation change, the ability to attract talent, positive consumer regard – but there’s also a human case.

“In all corners of the world, we’re starting to see the environmental impact in our day to day lives,” she says. “This whole summer we’ve been seeing forest fires here. In other parts of the world there are floods. There are problems in our oceans, like the waste issues, or wildlife becoming extinct. These issues have become so real to us and that’s a bad thing. But there is also a very positive aspect, it makes people very ready to engage with this topic. And I believe that it’s a great opportunity for us marketeers to show our creativity and to make sure that we pull people to action. I believe people are mentally ready, we just need to engage them through our creativity and start to make a change.”