From Continuity To Sustainability

FROM CONTINUITY
TO SUSTAINABILITY

A Journey of
Corporate
Sustainability

DR. IZEL LEVI COSKUN

From Continuity to Sustainability
A Journey of Corporate Sustainability
Dr. Izel Levi Coskun

©Publishing rights belong to Artisan Yayinlar.
The content in this book is available for re-use subject to proper acknowledgement of
the author and the source, without need for written permission.

Edited by: Gul Ulu
Cover and page layout design by: Selin Estroti
Translated into English by: Deniz Konuralp

First Published: May 2022, Istanbul
ISBN: 978-605-73485-0-0

Printed and bound in Turkey by: Cinar Mat. and Yay. San. Tic. Ltd. Sti.
Yuzyil Mahallesi, Matbaacilar Caddesi, Ata Han No: 34, Floor: 4-5,
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Artisan Yayinlar
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Publishing House Certificate No: 40129

CONTENTS

7 ACKNOWLEDGEMENTS
8 FOREWORD
11 EDITOR’S TRIBUTE
11 TRANSLATOR’S NOTE
13 INTRODUCTION

13 Chess and Stamps
17 Attempting to go Beyond Financial Data
18 Questions and Answers

22 CHAPTER I: Corporate Continuity or Corporate Sustainability?

24 Short-term Thinking – Long-term Thinking
32 Striking the Right Balance: Profit Maximization vs. Profit Optimisation
42 Economic Growth – Development
48 Financial and Non-Financial Measurement Tools
53 Rivalry with Competitors – Rivals as Stakeholders
60 The Interests of an Institution – The Interests of the Whole
65 Consumption – Savings and Prosumption
71 Global – Local
78 Destructive Language – The Language of Peace
85 Lateral Thinking – Integrated Thinking

89 CHAPTER II:
Getting to an Integrated Report: Corporate Sustainability Steps

89 Our Journey’s First Steps: How Did We Start?
91 Why a Sustainability Report?
93 Why is the Sustainability Report Important?
95 Creating and Communicating a Sustainability Vision
101 Decision Phase
103 Planning
105 Establishing the Sustainability Team
106 Stakeholder Surveys
108 Assessment of Initial Results and Prioritization Analysis
110 Employee Satisfaction Survey
112 Global Reporting Initiative (GRI) Standards Assigned to

Members of the Team
113 Designing the Sustainability Model
116 Model Name: Nautilus
117 Preparing the Report's Content
119 Checking and Cross-checking Information gathered - Final

Proof-reading
119 The Chairman of the Board's Message
122 Uploading the Report to the UN Global Compact Site
123 Preparing the Communications Infrastructure for the Report
124 Completing the Graphics
125 Final Check of the Report Before Printing
125 Communicating the Report
128 The Sustainability Reports that Followed
130 Key Performance Indicators (KPIs)
133 The Integrated Report

142 CHAPTER III:
Corporate Sustainability during Covid-19

142 Uncertainty
142 Taking Action
146 Learning Together and Ensuring Mutual Trust
152 Strengthening our Communication Network
153 Referencing Sustainable Development Goals
155 Awareness

158 CHAPTER IV: Transformation

158 Paper Cups
160 Prejudice
161 Sound
164 Turning a Negative into a Positive
165 Crossing Paths
169 Ripple Effect
170 Firdevs
173 Vicious Circle
179 Our Joint Responsibility
181 Why Sustainability?
183 Coat Rack
184 Marmara
188 Promise to the Future and to our Youth

192 ABOUT THE AUTHOR
193 ABBREVIATIONS
194 REFERENCES



ACKNOWLEDGEMENTS

For their patience and support while I was writing this book, I’d first of all
like to thank my beloved wife Sibel Horada and our daughters Serra and
Lara Levi Coskun as well as my parents Sarah and Leon Coskun. I am also
grateful to my colleagues Barlas Hunalp, Hayriye Ocak and Maral Evihan who
went through each version of the book in great detail, giving me their help-
ful comments; my grateful thanks go also to Selin Estroti Ipeker who de-
veloped the designs for the book, to Professor Dr. Guler Aras who was kind
enough to write the foreword, to my dear editor Gul Ulu as well to Ozge
Yılmaz for introducing me to Gul; thanks to my translator Deniz Konuralp
and business editor Peter John, thank you to Istem Akalp and Associate
Prof. Dr. Guner Coskunsu for guiding me with their constructive criticism;
to Victor Ananias whose memory has inspired in me the spirit of activism
and last, but not least, to all the team at Mazars Denge who helped me on
this journey both by shaping my experiences and allowing me to continue
my work without interruption.

7

FOREWORD

Are you able to live your life in accordance with the values that you hold?
It’s not easy to say “yes” to this question or to find others who can. It is
a truth well known to us all that, although people want to connect their
words with actions within the framework of idealised behaviour and de-
spite striving towards this in life, it is no easy thing to achieve. To begin
with, obstacles and difficulties can often lead to a retreat from expected
behaviour. Also, if our aims are not supported by science and knowledge,
difficulties that arise cannot be overcome at this basic initial level.

This book is a record of the struggles of an individual, in his decisions and
actions affecting all areas of his life, to do his best not to contradict the
values and principles he defends. As you read of how the powerful union of
mind, intellect and emotion ends in this most difficult journey, you cannot
but feel the need to empathise with him.

Given that it is not easy to narrate the absolute truth about one's life with
clarity, it's not hard to realise that it takes courage to write one’s own story
and experiences. Only those who are self-critical, open and honest with
themselves can do this successfully. Indeed, the truths that an individual
discovers as he tells his or her story means disclosing the inner world and
entails much soul-searching. Moreover, the ability to be self-critical whilst
communicating sincerely and convincingly also requires a distinct effort
and talent.

Izel Levi Coskun is one of those individuals who has set out to achieve this
through his book. He is a businessperson who practices what he preaches,
by applying the values he holds to every aspect of his life. He strives to
touch humanity, nature, living creatures and the world with kindness and
more importantly, with the instinct to protect. As a leader who has inter-
nalised sustainability, he seeks to exercise it as a lifestyle; engaging with it
in his business affairs and relationships through an ever-evolving effort to
push it a little further each day. At times, Coskun's efforts are criticised and
trivialised by those around him, and he struggles against a well established
and dominant orthodoxy that the sole purpose of companies is to profit;

8

against the prevailing notion that environmental awareness, serving soci-
ety and good management will need time to gain meaning and importance
for the business community.

What is the motivation behind this immense effort? You may find yourself
querying your own motivation as you turn the pages of this sincere, au-
thentically written book, in which you are sure to find detailed answers
to this question. Observing the author's struggle, you will come to know a
leader who is not simply focused on outcomes but is someone who cares
about process and who seeks to achieve his goals acting responsibly and
with accountability in his management style. As the story unfolds and
events are described, you will sometimes feel that the author is attempting
the impossible, and from time to time, you will judge that belief and effort
combined make success possible. You will become closely acquainted with
Izel Levi Coskun and bear witness to his efforts to achieve his aspirations.

This book is also intended as a guide to how sustainability can find its
place in our lives and in the business community. It includes genuinely val-
uable tips for what we can and should do for all who care about the planet
and future generations.

This book will be read with curiosity and pleasure by people from all walks
of life, especially young people and future leaders. They will discover much
that appeals, because it shares the author's experiences helpfully, as well
as setting out his motivation and accomplishments.

It's my hope that Izel Levi Coskun, who I met at a Turkish NGO training
program in the early 2000's and whose story I have had the pleasure of
watching unfold since, will find many more fellow travellers to walk at his
side as he journeys towards making sustainability the core of his life...

Prof. Dr. Güler Aras
Istanbul, May 2021

9

10

EDITOR'S TRIBUTE

This book is not simply a corporate sustainability roadmap but combines
the features of an autobiography with that of a textbook, in which you can
find the narrator's accumulated knowledge and insights in his sustaina-
bility quest to safeguard the future, welfare and general well-being of the
planet.

Izel Levi Coskun sets out the theory of corporate sustainability, as well a
first-hand account of the real effects of these concepts on individuals and
communities. Thus, the reader is able to observe the extent to which ar-
guments, sourced from rational and objective data can, when confronted
with person-to-person interaction, transform into different experiences in
a real-world setting.

Beginning with a story, the narrative alludes to what sustainability and
corporate sustainability are in their conceptual sense, whilst emphasizing
the importance of the struggle towards a common purpose, of believing
and working together, by means of presenting examples that show how
applying theoretical knowledge is not always a linear process; using char-
acters drawn from real life stories reminds us that, no matter what difficul-
ties are encountered, there is always a way forward.

Gul Ulu
Istanbul, May 2021

TRANSLATOR’S NOTE

I have used the English alphabet throughout to avoid distracting the read-
er with unfamiliar letters.

Deniz Konuralp

11

12

INTRODUCTION

Chess and Stamps

The times I spent with my grandfather when I was a child have a special
place in my memory. He was the one who taught me how to play chess
and when I lost, not to react in haste, how to stay calm and control my
temper. “Think carefully about the consequences of each move you make.
It's the same in life. When you're talking to someone or if you're telling
them something, try to anticipate their reaction, just as you would try to
anticipate your opponent's next chess move, and act accordingly. So, you
won't do things you'll end up regretting,” he would say. My grandfather
also taught me that collecting stamps is a hobby that requires attention
and care. The day he bought my first stamp album and an accompanying
magnifying glass that used to light up when I pressed a button, feels as
fresh as if it was yesterday. “You need patience and attention to collect
stamps. When you immerse the paper in water, the stamp will come away
from the envelope, but if you try to remove the stamp without waiting long
enough, the stamp might be torn. And if you look carefully at the stamps
through a magnifying glass, you will discover lots of entertaining details
that can't be seen with the naked eye.”

My grandfather loved to listen to classical music. Every Saturday morning,
he would put on his most elegant clothes and visit Ataturk Kultur Merkezi
to attend their concerts. I, however, would spend that time listening to his
vinyl records at home on his record-player and sometimes pretend to be
driving a car using one of the larger records as a driving wheel, placing
others as if car tyres on the legs of the chair. He never tired of reading me
La Fontaine stories. Of these, the story of the Crow and the Fox was one he
read to me over and over again, admonishing me afterwards: “Don't take
yourself too seriously and don't pay attention to everything that is said
about you by others. The important thing is to know yourself and to know
yourself well.”

I was just six when I lost my grandfather and the loss of someone who
taught me so much and whom I loved so dearly was intensely traumatic.

13

I was still under the influence of this trauma when I first went to the Sisli
Terakki primary school, which seemed a rather frightening experience. I
convinced myself that my entire family would abandon me, and I would
be left to live my life completely alone, just as my grandfather had disap-
peared and forsaken me. The person who helped me overcome my fears
was my primary school teacher Mukadder Dogu, who showed me kindness
and compassion from my very first day at school. My attachment to Mrs.
Dogu was of such an intensity that I refused to leave her side, in case she
too left me, until pretty much the second grade. During breaks, I waited
in front of the teachers' common room until the bell rang. She, in turn,
not once rebuked me for this behaviour or told me to go away. Through
endless patience and devotion, she endeavoured to help me feel secure
in the school and to realise that no one would abandon me. She would
repeat constantly to us that at the heart of the things that make us human,
love, compassion, cooperation and solidarity are the main ingredients. She
sought to instil in us the need to become proper human beings above all
else, and also that we owed a duty towards society. It was Mrs. Dogu who
brought me closer to and inspired in me, a love of nature. We kept in touch
after our time at school ended. I'll never forget the time when she gave me
a garden pickaxe as a gift on a visit during the summer holidays. I remem-
ber her words clearly, "My dear Izel, I hope that you plant many trees and
flowers with this pickaxe, that you spend time with the earth and learn to
befriend it". Using it, I planted a small sapling that had I found while wan-
dering around Burgazada1 island. That tiny sapling has now become a very
large plum tree and it continues to bear fruit. In my mind, my teacher Mrs.
Dogu's gift has come to embody a symbol for change, for creating and for
coexistence with nature.

The years I spent in secondary school were the hardest of my life. Our
school had turned corporal punishment practically into a tradition. The
constant pressure of hierarchy was on us at all times. It was a ruthless
system in which the strong crushed the weak through excessive discipline,
beatings and oppression led by a deputy head who brutally beat, cursed

1 Burgazada is one of the Princes’ Islands, located in the Marmara Sea just off the coast of Istanbul.

14

and insulted the student body, aided by other teachers who simply imitat-
ed his actions. Following on from a beating I took in the first months of the
preparatory class, my father met to discuss this with the school principal,

only to be told, "If you're not happy, then you can send your child to an-

other school". At the family discussion that followed, I remember saying

that it was my belief that this had been an unfortunate, one-off incident
and that I was quite happy to stay on. In the years that followed I took
care not to share what I went through with my family again and sought to
endure in silence. The summer I finished high school, I started working as
an accountant at a company called Astel Kagitcilik. I was in charge of issu-
ing invoices, classifying documents, sorting cheques and promissory notes
according to their due dates and notifying clients of price increases by fax.
Thus, began my working life.

I could have spent my university years travelling and having fun. But I

kept asking myself why, in possession of a good education, with a head

for business and seeing that I was healthy, should I not take on more re-
sponsibility? I wanted to produce more than I consumed, to play a role
and not just be a bystander, and to be in constant pursuit of knowledge.

It was with these thoughts going round in my head during my undergrad-
uate programme and after a year spent gaining work experience at Astel,
that I began keeping accounts for Denge, the accounting tax and auditing
firm set up by my father Leon Coskun and his partner, managing two of
their clients. In my final year studying Business Administration at Istanbul
University, I applied to several MBA programmes in the United States to
see what I was capable of and in the hope of acquiring further knowledge.
However, the universities I was interested in did not count part-time work
as an undergrad to be sufficient experience. Nevertheless, I clung to the
hope that - since I had been an integral part of the family business for quite
a few years - perhaps one school might take this into consideration and

accept me. And I didn't want to leave anything to chance. With the money
I had saved in the three years I’d worked part-time, I decided to go to the
United States in order to meet with the two universities I wanted most:

Purdue and University of Illinois at Urbana Champaign (UIUC). In the au-

15

tumn semester after completing my first exams, I made an appointment
with both schools and flew to Chicago.

My first appointment was with Purdue. I had a very promising conversa-
tion with the Head of the Admissions Committee. So much so that I was
more than half an hour late for my second interview. The professor I was
due to interview next had taken another meeting. He asked me who I was
and when I explained that we had an appointment he told me he didn't
know who I was and that I should wait. After some time had passed, he
asked me to come over to his table. I informed him I had flown from Turkey
for an interview and that I had been instructed to meet him. After glancing
at his watch, the professor said, "I understand now", adding that he had
thrown my application away because he thought I was late and would not
show up. Pulling out the crumpled piece of paper from the rubbish bin, he
looked at me and then down at the crumpled note, asking: "You're 21, is
that right? At your age, an MBA will be useless to you. Besides, you have
very little work experience. Your TOEFL and GMAT scores are also not very
high. You won't be accepted here. Your trip has been a waste of time."

I was speechless. He advised me to return to my country, work a few more
years, to reapply only if I got better scores. He unceremoniously sent me
on my way to the third interview. After this treatment, I completely froze
at the next interview; I left the campus without really knowing how I had
answered the questions. I was very depressed. I had really liked the uni-
versity and was convinced I would receive a very good education there. I
returned to Chicago in this mood.

I had an appointment at UIUC the next day. With morale at a low I was be-
ginning to think that I would not get a result from there either. Departing
from Chicago on the Greyhound bus journey to the university I thought to
myself, ‘how much worse could I do in an interview?’. After coming all this
way, was this a waste of time and effort? I did not want to accept this. I had
two meetings at UIUC. Without taking my eyes off the person interviewing
me, I told them one after another, what was going through my mind. I was
lucky enough to meet a professor of accounting in the second part of the
interview. I got on really well with him too. I could feel that I was starting

16

to impress him with my knowledge and experience as I explained Turkish
bookkeeping and the intricacies of our tax procedure law. Nevertheless, I
was aware that the lack of work experience was critical. The situation was
touch and go and there was a decent chance that they would not accept me
on these criteria. Four months later and despite this, I received my accept-
ance letter from UIUC. That I was accepted showed clearly that my efforts
had not been in vain. It is impossible to describe in words the happiness
I felt.

I returned to Turkey during the summer to work at Denge. After complet-
ing my MBA, I spent the summer and autumn working and immediately
began my mandatory military service. After returning, I worked in the tax,
independent audit, VAT refund and internal audit departments one by one.
Whilst at the Independent Audit Department, I spent a year in Paris in 1999,
at the headquarters of the audit firm of Mazars, with which we have an in-
tegrated partnership. My ultimate aim in seeking out these experiences was
to become technically and administratively proficient so that I could earn a
senior position at the company which my father had established and built
with great effort. When I got back to Turkey, I applied to become a member
of the Turkish Young Businessmen's Association (TUGIAD) in order to be
more connected with the business community and upon joining, chose to
take a role in the entrepreneurship commission. The first major activity
our commission undertook was to initiate joint TUGIAD entrepreneurship
courses with Marmara University for the graduate class of their Produc-
tion Management and Marketing faculty. Soon afterwards I assumed the
role of coordinating these courses on behalf of the rest of the commission.
My time in charge of this project lasted a decade. The satisfaction ex-
pressed by students and the success we achieved with these courses was
instrumental in the faculty staff's encouraging me to embark on a PhD in
the same department at the end of our third year.

Attempting to go Beyond Financial Data

For a long time, I continued to pursue my career on the assumption that
price competition, ambitious growth, the pressure of perpetual profit and

17

maximising my own interest were an indispensable part of work life. The
success of an enterprise was measured by the very financial statements
which I was responsible for producing and auditing. However, as my ex-
perience in both life and work increased, I began to question whether fi-
nancial data alone was sufficient to assess the value or the success of an
enterprise.

I couldn't stop thinking about the questions for which I needed to find an-
swers: does a company exist simply to turn a profit and enrich sharehold-
ers; in what kind of relation does it stand to its community and the envi-
ronment? What should the connection it forms with its employees look
like? What purpose does this connection serve? Is the value created sim-
ply measured in monetary terms? What is its role in creating and solving
the interconnected problems on the global climate crisis, poverty, injustice
and inequality of opportunity? Consequently, what are the responsibilities
of that company’s senior management? What influence should manage-
ment exert on its employees and how best to assess the impact of this?

During those years when I was looking for the answers to these questions,
I could see that valuing a company based on financials alone was inade-
quate from the perspective of the end-users. Perhaps I could use other pa-
rameters? In search of answers to these questions and on the advice of my
professors who inspired me to pursue a doctorate - despite a constantly in-
creasing workload at my company - I joined the post-graduate programme
to study Product Management and Marketing at the Marmara University.

Questions and Answers

I was introduced to the concept of Corporate Sustainability while study-
ing for my doctorate. As I researched the concept, I realized that it helped
me to answer some of the questions that had been preoccupying me for
a while. Actually, my starting point was that -given the knowledge I had
gained in accounting and auditing until that point- financial analysis and
decisions based on financial analysis might, as a consequence of insuffi-
cient data, lead to wrong decision-making. Putting it quite simply, it would
be misleading to make a decision to invest in a company based solely on fi-

18

nancial data. While researching how to calculate the real value of an enter-
prise, I came across the concept of Economic Value Added (EVA). I noticed
that the opportunity cost of the investment amount was added to the EVA
formula, which made perfect sense to me. On the other hand, however, this
was a purely economic measurement model and did not include parame-
ters for social and environmental impacts. Thinking that I had made an im-
portant discovery, I immediately contacted my doctoral advisor. I told her
that the formula was deficient and that I would write my thesis on the plus
or minus social and environmental impact that must be included in it. My
doctoral advisor smiled and remarked, “Bravo Izel, I congratulate you. But
this is your doctoral thesis. It needs to be based on scientific data. You can't
set out on the premise that something is missing. You must first gather
evidence and create a scientific model. Instead of stating that the formula
is deficient, you should first pose the question of whether the social and
environmental aspects have a genuine scientific role in determining the
value," she explained, helping me to sort out the direction of my doctorate.

This red flag and her important suggestion allowed me to direct my at-
tention to what these aspects might be and to their relationship with a
business's brand value. In my opinion, how an enterprise influenced both
its micro and macro environment as well as how and to what extent it de-
veloped brand value as a result of interacting with these external factors,
could only be understood from the holistic perspective which was the basis
of sustainability. As a consequence, I decided to write my doctoral thesis
on “From the Turkish Consumer’s Perspective, the Relationship Between
Corporate Sustainability Components and Brand Equity Components”.

At the same time as I was writing my thesis and lecturing on entrepreneur-
ship at classes at the university, I was searching for ways of applying what
I was learning in the spirit of an ambassador trying to get the message out
against all odds in my role as CEO at my firm Mazars Denge. As I attained a
better understanding of the concept of corporate sustainability, I soon real-
ised that the change I sought needed to begin with me rather than my firm.

19

The ability to think from a sustainability perspective required a change
of approach and language. The lights I left on, the carbon emissions gen-
erated by the car I drove, the number of female employees who resigned
their jobs, ethics, drought, hunger, forced migration, disruptions in edu-
cation, the birds I could no longer see in the skies above me, shortened
seasons, rubbish thrown at the side of the road, micro-plastics floating in
the oceans, forests destroyed by natural or artificial disasters on the other
side of the globe, and human rights violations were, I realized, not unrelat-
ed as they seemed at first glance but actually interconnected. In addition to
being aware of all these problems as an individual, the fact that I was also
the manager of a company only served to reinforce the sense of utter re-
sponsibility I felt. This awareness led me to start with some small changes
in my personal life. I could choose local and organic products and reduce
my consumption of meat. I could use public transport more frequently and
reduce travel as much as possible. Though these were undoubtedly im-
portant steps, the solution to the problems I had begun to take note of,
required cooperation and solidarity in addition to individual effort. So, I
had to reach out to others. What is more, by working more closely with
non-governmental organisations, I could discover what people who felt
the same way as I did were thinking and acting on.

In my role as coordinator for the Marmara University entrepreneurship
courses my understanding of the connection between my belief in entre-
preneurship and sustainability deepened. Thanks to my conviction that
entrepreneurship had much to contribute to our transformation to a more
sustainable lifestyle and concentrating only on those start-up companies
which were able to strike the right balance between their social and envi-
ronmental impact and their economic benefits, I began to invest financially
in these companies. When making these investments I focused on how I
might be able to add value to these entrepreneurs using the knowledge,
experience, areas of expertise and networking opportunities at my dispos-
al, rather than on the return on investment over time or on how much my
net worth might increase.

20

Basing my decisions on the meaning of the sustainable development mod-
el, I kept asking myself: "How can we live our lives today in a way that
doesn't destroy the needs of future generations?". Limiting the role of CEO
to being responsible only for the technical development of our employ-
ees seemed inadequate. Moreover, a business model in which employees
spend the greater part of their day at work, answerable only for the tasks
that fell within their 'job description', in return for a pay cheque at the end
of the month did not seem to me to add enough value to people's lives. In
order for a company to add value to the lives of its employees who were, af-
ter all, its most important stakeholders, its business model needed to have
a meaning beyond that of commodified labour compensated by money.
The same could be said for our clients, suppliers and other stakeholders.
A give-and-take relationship based only on self-interest, in which money
was always centre stage, was not sufficient to describe the connection that
existed between us. If so, then could I establish a model that created more
value than simply that of financial gain, by combining existing stakeholder
relationships - especially those of our employees - with the fundamental
principles of corporate governance, such as fair management, transparen-
cy, accountability and responsibility?

What was needed was an instrument to establish, embed and adopt this
kind of model which set a sustainability approach as its guiding principle.
For my company Mazars Denge, the instrument became the sustainability
report. In the lead up to launching our first report in 2017, I wish I had
been able to explain the difference between corporate sustainability and
corporate continuity in clear terms to all our employees. If I had set out
this distinction, my guess is that this issue, which can seem quite abstract
to some people, would have been understood more quickly and put into
practice with greater ease. As it was not entirely clear to everyone what I
was trying to do, when work began on the report in 2016, rumours began
to circulate and grumblings such as "we would be more sustainable if our
CEO got us a few more clients instead of focusing on flowers and trees"
were heard.

21

CHAPTER I: Corporate Continuity or Corporate Sustainability?

Ever since we began our corporate sustainability drive at Mazars Denge,
I have had time to think more deeply about the meaning and underlying
doctrine of the concept of sustainability. In fact, I have been trying for a
long time to make this concept of the duty we bear to future generations
and of the changes we need to make in our daily lives, easier to grasp for
a wider audience. To this end, I will try to clarify and simplify the differ-
ence between corporate continuity and corporate sustainability under ten
headings in this next section.
It's been my experience that we have been one-dimensional in our edu-
cation and work lives for a long time and as a consequence, our thinking
has shifted to be almost exclusively 'continuity-oriented'. When I tried to
unpack the differences in meaning between the words 'continuity' and
'sustainability', two terms which are quite similar to each other in the con-
cepts they comprise, I came up with the table in Figure 1. On the left side of

(GENERALLY ACCEPTED) CORPORATE
CORPORATE CONTINUITY SUSTAINABILITY

Short-term thinking Long-term thinking
Profit maximisation Pressure to harmonise social,
environmental, economic impacts
Growth Progress / development
Financial measurement tools Financial plus other parameters
Competitors as stakeholders
Rivalry with competitors Interest of the whole
Institutional self-interest Prosumer economy
Local
Consumption The language of peace
Global Integrated thinking

Destructive language FIGURE 1
Lateral thinking

22

the table, I listed a businessperson’s predictable and customary business
style and on the right, I listed their responses from a corporate sustaina-
bility point of view.

It would not be wrong to state that the items in the continuity column on
the left side of the table have become the generally accepted truths in the
way we do business currently. Nowadays, the system we live in where-
in everything is reduced to its monetary value has, by virtue of a struc-
ture that constantly fuels capital accumulation and consumption already
brought the whole world to the brink of a great crisis. I really don't know
if we will be able to overcome this crisis, but my hope is that if companies
can redirect their investments towards sustainability rather than continu-
ity rapidly, this could trigger a micro-scale transformation, and maybe the
Covid-19 epidemic will prove to be a turning point and the lessons learned
will have a transformative ripple effect.

The distinction between continuity and sustainability reminds me of the
right and left sides of the brain. The left column of the table in Figure 2
shows the control areas governed by the left cerebrum of the brain, and
the right column shows those governed by the right cerebrum.

LEFT CEREBRUM RIGHT CEREBRUM

Right hand control Left hand control
Language Visual
Analysis Symbols
Numbers 3D forms
Logic Intuition
Abstract thought
Realist thinking Art
Science

FIGURE 2
23

As someone who was born in 1973, I regret to say that my generation has
invested in left-sided thinking when it comes to matters of family, school
and in their approach to business. The same is true for the table which
shows continuity on the left and sustainability on the right side. While
investments are skewed towards the continuity side, the importance of
sustainability has, unfortunately, only begun to be noticed in recent years.

As a child, being left-handed was neither positive nor negative for me.
However, my sentiments on being left-handed underwent a dramatic
change with my first encounter of the game of basketball in second grade.
Everyone used their right hands to drive the ball down the right side of the
court to take a shot at the basketball hoop. This struck me as strange, even
wrong. I found it impossible to advance properly towards to the backboard
and hoop. Rather than dribbling the ball with my left hand and trying to
catch the corner of the hoop from the right side or risking collision with
those coming off after taking a shot from the right, I was forced to improve
my right-hand skills. When this situation became too hard to manage, I
gave up basketball and turned to folklore. As a child who enjoyed driving
the ball, running and jumping, having to give up basketball awoke feel-
ings of disappointment, hopelessness, loneliness and resentment in me.
I was to experience similar feelings years later when I began my work on
sustainability and found myself trying to convince my colleagues of the
importance of this issue. The only difference is that this time I am more
experienced than when I was a child.
Now, I will try to explain the differences in perspective between corporate
continuity and corporate sustainability that I mentioned in the Figure 1
above, detailing their associated features:

Short-term Thinking – Long-term Thinking

Sustainable Development,
Future Generations, Company Culture
and Vision, Entrepreneurship

24

During my time teaching entrepreneurship classes at Marmara University,
I came to realise that if I explained a theory with an illustrative story, the
subject became more embedded in my students' minds. Therefore, before

moving on to analyse the distinction between short-term versus long-term
thinking in an institutional context, I would like to share a brief memory.

It was 1999. I was working in the Independent Audit Department, auditing
a factory in Istanbul’s Topkapi district. I noticed a wretched dog, constantly
scratching itself in front of the guardhouse at the entrance of the factory. It

was a large, pale yellow animal, its bloody skin visible in bald patches un-

der its shaggy coat. I thought it might have scabies, but I wasn't sure. I went
past it, up to the office building and began working. I couldn't stop thinking
about the dog. Every now and then I would look out of the window to see

if he was still there. Finally, at noon, I could stand it no further, so I went

down to the guard and asked whose dog it was. "I actually don't know. He
hangs around here, but he is very old and sick.” “We called the municipality.
They will be putting him down,” he added. I was very sad to hear that. I im-
mediately called a veterinarian friend. I explained the situation briefly. Very
kindly she said, "I'll come and take a look". She added, “You tell them not to
let the municipality put him down until I've had a chance to look at him.”
After hearing this, I told the watchman that the vet would come the next day,
that no one should touch the dog and that I would explain the matter to the
company's CEO.

I went to see the CEO immediately. I told him that most likely the dog had
scabies, that the vet would come to give him his shots and please could they
call the municipality to explain the situation. I added that the vet would only
charge for the vaccine and that I would take care of this cost. The CEO was
stunned to hear me talk about the dog's condition when he'd been expecting
that I had come to raise some issue with regard to the audit. Fortunately,

he accepted my offer. But he felt he needed to add that if the dog did not

make a recovery, he was obliged to inform the municipality once more. My

vet friend visited the factory several times and took the trouble to treat the

dog. Meanwhile, our factory audit had been completed, and we had returned
to our firm. I was back at the factory three months later for our regular au-
dit, and I couldn't believe my eyes. There in front of the door was a large,

25

well-fed dog with yellowish hair, sitting in its kennel. As I walked in, I asked
the guard: "Is this the dog that had scabies?" "Yes," he replied. “After the vet
treated him, he became as fit as a fiddle. So, we built him a kennel. He lives
and sleeps there. We provide the food and water," he said. Even though many
years have passed since then, I can still recall and am inspired by the mem-
ory of how that dog, who was probably just waiting to die at the front gate
was able to survive and thrive with good treatment and regain his health to
the point where he became the factory’s guard dog.

The ability to think in the long-term and to have enough imagination to
predict a different future is critical not only for a living thing to be able
to hold on to life, but also for our collective existence in all its aspects to
continue and progress in harmony with the planet. In 1987, the Brundt-
land Report2 was published setting out the principles needed to contin-
ue to develop in harmony with the planet, giving the first warning in its
definition of sustainable development as follows: “Meeting the needs of
the present without compromising the capacity of future generations to
meet their own needs.” In summary, we do not have the right to destroy
the lives of future generations while living in the present. Based on this
principle, the United Nations’ Sustainable Development Goals (SDGs)
published in 2015 drew a long-term roadmap for the issues that the
entire business world should focus on. It is not possible to succeed in
leaving a habitable world to future generations if we apply short-term
thinking, by living hand to mouth, or by living a life that thinks only a few
years ahead.

Given my experience of the business community to date, I am confident
that I have not encountered any company that has a plan which goes
beyond the next five years. In general, strategies and decisions rely on
short-term financial projections. The long-term social and environmen-
tal consequences of decisions taken according to these financial pro-
jections are largely ignored. Fortunately, there are better precedents as
well. For example, on a micro scale, copier manufacturer Ricoh has taken

2 “Report of the World Commission on Environment and Development: Our Common Future”,
http://www.un-documents.net/our-common-future.pdf (February 2022)

26

all its 2017 decisions based on a net-zero emissions target by 2050.3 The
five focus points of this target also include increasing the quality of life
through sustainable development, a zero-carbon society and a circular
economy. In its decision-making processes, Ricoh does not act based
solely on the financial benefits of an issue, but also considers its long-
term social and environmental consequences.
Similarly, but on a macro scale, the World Business Council for Sustain-
able Development (WBCSD), which was established in 1992 to increase
the influence of the business community in the forum just before the Rio
Earth Summit, released its Vision 2050 report in 2010 setting out sug-
gestions designed to enable nine billion people to live together by shar-
ing global resources, without which co-habitation is unthinkable.4

1. Integrating externalities, starting with carbon, ecosystem ser-
vices5 and water into how the market functions,

2. Doubling agricultural output without increasing land and water use,
3. Stop deforestation by increasing returns on industrial forests,
4. Halve carbon emissions by 2050, (base year 2005) using

low-carbon energy systems,
5. Increase demand-side energy efficiency and achieve lower car-

bon mobility globally.

3 “Strategies -Ricoh Group Environmental Declaration and Environmental Goals”,
https://www.ricoh.com/sustainability/environment/strategy/target (February 2022)
4 Vision 2050, The New Agenda for Business” https://www.wbcsd.org/Overview/About-us/
Vision_2050/Resources/Vision-2050-The-new-agenda-for-business (February 2022)
5 Ecosystem or 'natures' services are defined as the benefits that people derive from the natural
environment and healthy ecosystems. Clean drinking water or the self-recycling of waste in nature
are examples. In 2005, the United Nations presented the Millennium Ecosystem Assessment
following interviews with 1,000 scientists. http://pdf.wri.org/ecosystems_human_wellbeing.pdf
(February 2022)

27

WBCSD and the Turkish Industry and Business Association (TUSIAD) pub-
lished a similar Vision 2050 report for Turkey in 2011.6 I want to showcase
Mazars Denge on how long-term planning can be developed in business
when it comes to Turkey. To begin with, if a company focuses only on the
financial side of things, it may not be possible to predict where that com-
pany will end up in 20 - 30 years.

That's why we are trying to make this happen at Mazars Denge by focusing
on our employees, who are our most important stakeholders since we are
a firm whose output is a service. Trying to imagine where a new assis-
tant auditor starting their career will end up in 20 years or even longer in
the company is the first step in thinking long-term. As CEO, I think this is
such an important consideration that I have begun conducting interviews
with all independent audit assistant candidates in person since 2019.
I'm attempting to gauge to what extent the candidates will adapt to our
firm's culture. It may well be that one of them will be the person managing
Mazars Denge in 20 years time.

Contrary to market practice, I choose not to ask questions on accounting,
auditing or finance during the interview. Instead, I'm careful to discuss is-
sues such as ethics, quality, trust and sustainable development with them,
posing some of the following questions.

“Let's say that we offered you a job on the spot because we really
liked your CV. And you accepted our offer, and we shook hands on
it. The next day you got a call from another company with an offer
of the same job with a higher starting salary. What would you do
and why?”.

“Say I gave you and the team a difficult task. The task was accom-
plished with success. Since I know you the best, I invited you to
my office and congratulated you on your individual success. What
would you do?".

6 TUSIAD, Vision 2050 Turkey, Publication No: TUSIAD-T/2011-09/518

28

“You are currently working somewhere else, and you have just
received a job offer from us. But we are in a hurry. Which is why
we need you to start as soon as possible. You are very keen to
start working with us, but you have work that needs to be fin-
ished at your current company. You can't start very quickly. And
we're pressuring you to start immediately. What would you do
and why?”.

“You’ve got first-hand knowledge of our firm’s outlook on sustain-
ability. You start work here. After a while, you notice that some
principles are not being adhered to. You inform your line manag-
ers. They tell you that they can’t help you. They say management
wants things done in this way. Would you have the courage to
stand up to me in this kind of scenario?”

Moreover, we ask questions such as, “Define the concept of being ethical?”,
“How would you define sustainable development?” the responses to which
we go on to assess during the interview. Regardless of the age or experi-
ence of the candidates, I attach great importance to the answers they give to
such questions as they are an indicator of a person’s ethical perspective. It's
for this reason that we don't proceed to the second round with candidates
whose answers we decide do not fit our firm’s culture, even in cases where
they display technical excellence or high scores in the English test which our
Human Resources department designs.

As a manager, I believe that my main responsibility is to ensure the devel-
opment of company employees and smooth a path for their careers. I would
rather focus on the personal goals of the colleagues I want to work with;
to drive the company model that I dream of together, and on how they can
grow and develop themselves and the firm's vision, than where the firm will
be financially in 20-30 years. In this respect, the design of the future stake-
holder network and the roles my colleagues will play in this network are of
critical importance. When engaging in long-term planning, I try to imagine
the development of our industry, its responsibilities and its proper position-
ing, not only in terms of technology, but also sustainability. For example, I

29

continually challenge myself on the question of where we should be as a
firm, in the landscape of 30-40 years from now, in the world of accounting
which I look upon as being the mathematics of an enterprise.

It is exactly for this reason that I make a point of working with people who
ask these questions, who have an entrepreneurial spirit, are willing to invest
in developing, producing projects, sharing, teaching and learning together.
For I believe that people who have entrepreneurship experience are more
inclined to make long-term plans; able to differentiate between opportuni-
ties and threats and know how to turn both into opportunities for all their
stakeholders. Therefore, as much as is possible, I try to align the dreams I
have for the future of our firm and our industry with the dreams of our em-
ployees.

In 2017 on our 40th anniversary, our director of marketing and communi-
cations Barlas Hunalp and I came up with an interesting idea. Based on the
belief that the values that brought us to where we are today will carry us
forward at least 40 more years, we asked our employees to each write a let-
ter to be read 40 years from the date of writing. All these letters were placed
together in a safe to be opened in 40 years time. I am not sure that we could
have come up with this idea if Barlas had not committed so wholeheartedly
to the long-term thinking principle that underlies corporate sustainability.

While I ponder how our colleagues can develop their potential in tandem
with our firm’s culture and vision, I never stop challenging myself as a man-
ager on how I can be more useful. Employing a long-term perspective, I
devote at least two hundred hours of my annual working time to social re-
sponsibility projects. After my nine-year stint at Marmara University coordi-
nating the TUGIAD entrepreneurship courses, since 2015 I have been work-
ing on TUSIAD's 'These Young People Have Potential' (BGIV) programme
for university students. I sincerely believe that if entrepreneurs receive an
effective education, their chances of success will increase, thus increasing
employment generally and creating a significant positive social and environ-
mental impact. While I strive to expand my own area of responsibility, I also
try to strengthen the bond between entrepreneurship and sustainability
through such projects.

30

My colleagues and close friends sometimes tell me that I give too much of my
time to entrepreneurs, cautioning that I won’t have enough time for every
student that needs something. They may be right. However, I believe that
the value added to society and the planet by entrepreneurs who can see the
relationship between entrepreneurship and creativity, measure the impact
of their work, be aware of what value they create for whom, who can pre-
pare a feasibility study by themselves, determine the ways in which their
team members can complement each other, who can draw up an operational
plan, identify distribution channels, who can think hard on the appropriate
type of company to set up, establish the relationship between Sustainable
Development Goals and the work they do, and master the main principles of
making presentations, is priceless. That's why I care so much about young
entrepreneurs and their needs. I think that it is an indisputable necessity for
entrepreneurs and aspiring entrepreneurs to acquire a basic understanding
of sustainability and ethics at the very outset, and to reinforce this knowl-
edge through practical application. Therefore, at BGIV we try to reach stu-
dents from all over Turkey and communicate these basics to them, doing I
hope my best to prepare them for a sustainable entrepreneurial life.

In every meeting with entrepreneurs, I always recommend that they have
the United Nations Sustainable Development Goals (SDGs) on their agenda
and advise them to choose from among these the goals they want to pur-
sue to connect with their particular business models. After establishing this,
they need to establish a system that measures the steps they have taken
to achieve their goal. For example, if they are focusing on Gender Equality
(SDG 5), I advise them to prepare a long-term roadmap including goals tar-
geted alongside assessment criteria at an early stage. I underline the need
to create awareness from the very beginning on factors like recruiting and
equality procedures, ensuring that the workplace environment complies
with the principles of equality, that the ratio of male and female managers
is equitable and that their salaries reflect this arrangement. Setting long-
term, measurable goals for these and going further by incorporating these
measures into a company's overall performance, is of critical importance for
future investor decisions.

31

Striking the Right Balance: Profit Maximization vs.
Profit Optimisation

Costs not included in Financial
Statements, Duties, Break-even
Points, Business Model Canvas,
Stakeholders

Profit, at its simplest, is the difference between total revenues and total
expenses. If this difference is positive, the business is in profit, and if it is
negative, it is loss-making. Provided the business is operating profitably,
the amount remaining after taxes will be distributed among natural or le-
gal entities who are the shareholders in respect of their share percentag-
es. The investment decision of investors in a business is always based on
this straightforward profit formula and on future profit projections. On the
other hand, the information provided in the business' financial statements
is imperfect. How, you may ask?

Let's start with the following thought experiment: "Is the sole raison d'être
of a business to turn a profit and make money for its shareholders?" The
answer we have been taught and are accustomed to hearing is “Yes, nat-
urally!”. It's obvious that a company cannot continue to operate without
generating income. However, if its sole purpose is characterised as the
generation of revenues and enriching shareholders, we encounter a se-
rious problem. For some of the costs incurred in order to generate this
income and which have already been imposed on society and the envi-
ronment as a whole, have not been included in the company's financial
statements. It follows therefore that there is an assumption that the share
of profits which shareholders are due at the end of the operating year is
deemed more important than the manner in which the company makes
that profit. Independent audits are conducted to express an opinion on
whether the financial statements on which the profit is based reflect the
truth in accordance with generally accepted standards. However, the en-
tire task depends on actual and measurable financial statement data. On
the other hand, enterprises actually have two other objectives: to be 'going

32

concerns' and to serve the community. It will not be possible for a business

to be a going concern in the long-term if it is engaged solely in turning a
profit, because from a purely continuity perspective it will eventually end
up consuming all global resources. Viewed from the perspective of both

the individual and collectively, it's impossible to assert that the institution

we work for has no effect on our health, family life, education and cultural

formation, given that - apart from weekends and holidays - we spend a
third of our lives at the company we work for. Consequently, it is inevitable
that these enterprises must take responsibility for these issues.

When we expand our framework a little more, we encounter another im-
portant question that needs asking: shouldn't a business contribute to the
development of the environment and community in which it exists through
the conduct of its business, its ethical approach and the opportunities it of-
fers? When our answer to this question is yes, then matters of clean water
and sanitary conditions, climate action, life under water, gender equality,
responsible production and consumption, etc. which are included in the
17 UN SDGs must be considered a necessary component of the type of ac-
tivity, the strategies of and the policies of a business. It is at this juncture

that corporate sustainability, unlike corporate continuity, emphasizes the

necessity of enterprises, which continue to accrue economic returns, to

balance the accumulation of income against their social and environmen-
tal impacts in a corporate structure, instead of simply succumbing to profit
pressure.

There is a well-known con- Revenues (TL) Variable
cept in finance: the break- Costs
even point. As can be seen
in Figure 3, enterprises Profit
have variable costs which Fixed Costs
increase per unit of pro-
duction such as direct la- Loss
bour, raw materials, pack- Break-even
aging and maintenance point
and repair, and fixed costs
like rent, insurance and Production (Units) FIGURE 3

33

company car expenses which are independent of increases in unit produc-

tion. The section which is to the left of the break-even point rep-

resents loss, whereas represents profits. The break-even point is

usually calculated as follows:

Total Fixed Costs (TL)
Unit Sales Price (TL) – Variable Costs Per Unit (TL)

This formula allows companies to calculate how many units of production

are needed for revenues and costs to cancel each other out.

Those who have studied economics and finance will be very familiar with
this simple formula. However, unthinking application of the formula's prop-
osition that “profits are achieved beyond the break-even point” is doing
great harm at the very least to the accounting, tax and consultancy sector
in which we serve. Once they have succeeded in covering their fixed and
variable costs through their revenues, many companies in the industry have

chosen to provide services at very low prices with a ‘pile it high and sell it
cheap’ mentality. In fact, the break-even point is reached thanks to high lev-
els of revenue from foreign clients, and this has then been used to subsidise
greater market share and increased profits using a low price policy in the
rest of their business. This low-fee service seemed attractive to clients at
first, but after a while it led to a reduction in quality and created a tenden-
cy for clients to choose a provider solely on the basis of the lowest priced
service. As a consequence, in the last decade and a half, the sector's inter-
nal structure, from the level of client fees through to employees’ salaries,
together with the quality and professional ethics, has been destroyed. The
pressure on profits has increased every year due to rising costs and falling
fees. From the perspective of the client, services became cheaper and com-
modified, losing prestige along the way. Independent auditing, which was
one of the most popular professions in the ‘90s, is no longer favoured by
young people today, despite the enormous experience it offers. Having ana-
lysed the kind of consequences that a pressure to maximise profits can lead

34

to, when not based on the right fundamentals, let's now look at the roots of
profit optimisation.

I will try to explain this issue with an example that we often use for start-
ups. The ‘business canvas’ is a frequently used tool for modelling a start-
up, to ready the business idea for going to the market and to simplify the
relationship between different topics. You can find a sample of the business
canvas I prepared drawing inspiration from a work titled Business Model
Generation,7 in Figure 4, which also includes extensions for environmental
and social impacts.

Our value proposition is defined in the centre of the canvas in the box with
that name. You will note that, the word 'stakeholder' in this box is used to
underline my belief that value should be created from an inclusive perspec-

tive - not simply for the client but also for society and the environment.

In the client related boxes on the right side of the table, we input who we
are creating this value for and how we will deliver it to them. These sec-

tions detail why the client needs the product or service we intend to pro-
duce. One of the most important things to get right when filling out the
canvas is ensuring that there is compatibility between the client and the
value created. So, it is necessary to define who the target client group is
first and then to determine how and through which channels the clients
will be approached. It's best to create a meaningful structure for these three

parts, before moving on to the value proposition in the middle of the canvas.
In the upper left corner, you'll find the ‘Key Partners and Alliances’ box. In-
formation on which stakeholders you need to cooperate with in order to

be successful in your sector and reach your goals and why these stakehold-

ers will cooperate with you are written in this section on the left side of the
canvas. However, it is obvious that the success targeted in this box cannot
be achieved without acknowledging who your community and the envi-

ronment are and without cooperating with them as stakeholders. The ‘Key
Activities’ box comprises those activities that the start-up will engage in to
carry out its business and the ‘Key Resources’ box represents the basic re-

7 Alexander Osterwalder ve Yves Pigneur, Business Model Generation, John Wiley & Sons, 2010

35

Business Model Canvas KEY ACTIVITIES

KEY PARTNERS AND ALLIANCES • Which operational activities are needed
for the business model?
• In order for the business model to meet
targets, which partners do we need?
• Who are our key suppliers?
• Which key activities do our collaborating
stakeholders and suppliers perform which
affect the business model?
• Which key resources are made available
by these stakeholders and are being
acquired from them?

KEY RESOURCES

• What resources, for example sweat
equity; intellectual, human and financial
capital, or environmental and social capi-
tal, does our Value Proposition require?

COST STRUCTURE
• What are the financial and non-financial
costs required to implement the business
model?
• What costs and social and environmental
impacts are key resources based on, and
what expenses are raised by key activities?

36

FIGURE 4

VALUE PROPOSITION CLIENT RELATIONSHIPS CLIENT SEGMENTS

• What value are we • How costly is the • How do we define our
delivering to a pre-defined relationship we plan to target client group in
client or stakeholder establish and maintain with accordance with their
segment through which the target client segment? needs, behaviour patterns
product or service? • How are they integrated and other different
Which one of our client's with the rest of the business characteristics?
problems or needs are we model? • Depending on the
helping to solve or meet? definition of the target
audience, which client
segment(s) will be
addressed?

CHANNELS

• Through which channels
do clients want the
value proposition to be
delivered to them?
• How are we reaching
our clients at the
moment, noting that
value for money
and environmental/
social effects have to
be taken into account
simultaneously?
• How are our channels
integrated?

INCOME STREAMS

• What are the potential revenues that
we can get from different client segments
in return for value created?
• Which different income streams
contribute to the revenue model?
• What are the non-recurring and
recurring income items?

37

quirements to carry out activities such as financial resources, intellectual
capital and human resources. In the lower part of the canvas, you will find
the ‘Cost Structure’ box, which represents the costs to be incurred when
performing the work relating to key partnerships, core activities, and key

resources, and under the client relations, client segments, and distribution
channels boxes we find the ‘Income Streams’ box connecting to income
estimated to be generated from the client. Social and environmental costs

must be included in the calculations within the cost structure.

In order to examine the value proposition, we create for our clients and
Mazars Denge's other stakeholders from a sustainability perspective, our
senior executives were invited to do a trial run of filling out this canvas.
After completing the canvas's value proposition and the boxes concerning
clients, it was time to look at the Key Partners and Business Alliances box
in the left corner. In this box, we wrote down many stakeholders such as
Mazars' international offices, law firms, professional associations, regula-
tors, suppliers, universities, former employees, current clients, M&A bou-
tiques and NGOs. But we forgot to add two of the most important stake-
holders to the list: the environment and the society we live in. Actually,

this is the heart of the issue. When creating the canvas, it's very important

that we include the environment and society as our main business part-

ners right from the outset and then begin to shape the business model

accordingly. When we fail to do this, the costs imposed on society and the

environment are not taken into account in the cost structure section as-
sociated with this box. In fact, the word ‘business’ in Business Alliances
can be misleading and this important issue can escape our notice. Some-
times when we talk about a ‘business’ or a ‘engaging in business’, there’s
a hidden bias that society or nature is somehow external to this pursuit.
However, society and the environment are not separate or disconnected
from our work. On the contrary, both are directly affected by the way we do
business. Therefore, both must be included in the basic partnerships box
when creating the canvas. As soon as we start changing the way we think
about this, then the content of the cost structure box also begins to look
different. Because, from the moment that society and the environment be-
come incorporated, non-financial costs, in addition to financial ones, be-

38

come a consideration. This then alters the positioning of the Income box
because it is in direct interaction with the Cost box. For now, the scope
of the value created has expanded, and the ultimate goal of the business
begins to evolve beyond merely profit generated in return for client value
created and making money for shareholders, to developing awareness of

how to add value to all stakeholders, including the society it is a part of and

the environment. This awareness reorients the business from the gener-
ally accepted profit maximisation objective - based on constantly increas-
ing profits - to a profit optimisation objective. The profit optimisation ap-
proach is based on balancing the economic return obtained with the social

and environmental impact caused. In this fashion, some costs which are
not visible in the financial statements but directly affect society and the
environment, such as carbon emissions, cannot be ignored. The word 'im-

pact' is used here to represent the many areas that concern society and the

environment and that we, as a business, have access to. Therefore, these
areas of impact or influence differ according to the work done.

I have already elaborated on Mazars Denge's stakeholders in the discus-

sion on our main business partnerships. Mazars Denge provides account-
ing, tax, audit and consultancy services which our clients are able to gain
access to by paying for them. However, some of our other stakeholders,
such as NGOs or universities, may not have the same level of access. So,
we make a point of creating social and environmental value by sharing our
technical knowledge and experience with NGOs, universities, vocational
schools and other stakeholders and cover our costs with client generated
revenues. Our aim here is to share what we can so as to achieve a balance
between economic returns and social and environmental impacts, taking
into consideration the benefit of the environment and our community
who are our fundamental partners. This is done on the understanding that
creating mutual benefit should be emphasised, rather than an alignment
of mutual interests. In keeping with this fundamental principle, we have

spent many years providing pro bono accounting work for the Cultural

Awareness Development Foundation (KBGV) - which promotes the percep-

tion, adoption and sharing of our region's cultural diversity as our common

human heritage and the transmission of cultural diversity to future genera-

39

tions in an accurate and appropriate manner by raising social awareness.8
This is an important benefit which we can provide to KBGV. KBGV also
carries out its aim of developing cultural awareness, a purpose which it
espouses, by adding value to our firm through the sharing with us of an im-
portant value such as enabling our employees to take special cultural trips
and seminars free of charge. By means of this exchange, our employees,
who spend a significant part of their time at work, have the opportunity to
increase their personal development in diverse subjects such as culture,
art, history, anthropology and archaeology.

We carry out a different version of information sharing with Ashoka Turkey
office,9 which is both an NGO and the world's most widespread supporter
of social entrepreneurs and changemakers. Ashoka's social entrepreneurs
have an in-house e-mail address where they can ask us any question they
want about our profession and thereby obtain free consultancy: ashoka@
mazarsdenge.com.tr. Thanks to our in-house volunteer network, our turn-
around time for questions sent to this e-mail address is very short. Queries
posed are wide ranging from accounting to tax, from independent auditing
to the Personal Data Protection Law (KVKK) and cyber security.

We don't expect compensation from Ashoka for our support. Our goal is for
social entrepreneurs to be successful and increase their sphere of influence
thanks to the accurate and reliable information we provide. We believe that
their success in the sustainability cycle will not only benefit our firm but also
the society we live in and our environment.

We have a similar cooperation with the Marine Life Conservation Society
(DYK).10 DYK is an association that was established on the Princes' Islands,
in Istanbul which aims to protect future marine life through sustainable
and fair schemes using scientific studies and projects. Their projects in-
clude collecting and transforming ghost fishing nets - that can sometimes
be hundreds of meters long - which are caught in the rocks at the bottom of
the sea; they also strive to expand the protected areas around the Princes'

8 https://kulturbilinci.org/en-us/about-us (February 2022)
9 http://ashokaturkiye.org/ (February 2022)
10 https://www.denizyasaminikoruma.org/ (February 2022)

40

Islands, relocating a part of the coral colony of Sivriada to Neandros (Rab-
bit Island)11 which is under threat of extinction and of conducting and pub-
lishing research on the myriad of creatures that inhabit the Marmara Sea.

Mazars Denge provides consultancy, PR and human resources support to
DYK's projects, as well as giving financial support. “Why would a company
engaged in tax, accounting, auditing and consulting work support this type
of association?” you may ask. In keeping with SDG 13 relating to Climate
Action and with SDG 14 which concerns Life Below Water, we think it's
obvious that Mazars Denge, a company headquartered in the Marmara Re-
gion, must bear responsibility for protecting the region's seas, which are
the largest source of oxygen, and all the life that inhabits it. Thus, we be-
lieve that we are contributing to the environment and also to society which

forms part of the cycle of sustainability.

Years ago, a very connected colleague of mine called me to recommend a
company that needed tax consultancy because it was about to embark on
a large construction project in Mersin. During our call, he did not name the
company. He especially emphasised that Mazars Denge’s highest level and
most technically proficient tax partners needed to be at the initial meeting
given that the potential client’s important foreign representatives would
be attending. Since I trusted this colleague implicitly, I asked my team to
set up a meeting at the date and time requested. The meeting would take
place in a hotel.

Shortly before meeting, my colleague got in touch again to check that we
were ready. Everything was fine at our end, but during the conversation, I
couldn't overcome my curiosity. I knew of only one large construction pro-

ject in Mersin and that involved the nuclear power plant, so which other
project was he bringing to us? When my colleague responded that these
were indeed the people who were about to visit, I was at a loss for a mo-
ment. There was a long silence between us. I finally managed to overcome
my qualms and told him that we had to cancel the meeting. This time it was
his turn to be surprised. "Why?" he asked. He had not understood what the
problem was. I explained that given the multiple opportunities to make

11 Both Sivriada and Neandros are part of the Princes’ Islands off the coast of Istanbul.

41

energy savings in our country, and the numerous renewable energy sourc-
es that are available -particularly solar energy-, I opposed this investment
which was being carried out in an inappropriately situated earthquake
zone and therefore I did not want to take part in this project.

My colleague was stunned. He informed me that this business would bring
enormous revenues to our firm, that all of our competitors were after this
business, that he had already given our name to the client company and
cancelling a few days before the meeting would cause reputational dam-
age. Nevertheless, when I explained that the only other option was to par-
ticipate in the meeting but communicate to the client directly that we did
not want to be a part of this business, he understood how serious I was
about this and immediately ceased to insist further.
The next day I bought a box of chocolates and visited his office. I apolo-
gised for putting him in this difficult situation. I think this anecdote is a
good example of how important it is to weigh the social and environmental
impact against potential revenues when choosing to work with a client or
selecting a supplier; and I can't help but ask myself: I wonder if this com-
pany would have been able to enter the Turkish market so easily if it had
received the same reaction from all of our sector’s representatives?

Economic Growth – Development

Exponential Growth, Innovation, Environmental and
Social Impact, Exponential Sharing

Economic growth expresses itself as an increase in income brought on
as a result of production or providing services; numerically, the unit of
its measurement is money. For countries, growth is represented by the
increase in national income and its indicator is Gross Domestic Product
(GDP). In companies, economic growth is illustrated by the increase in
turnover. Economic growth is expressed as a percentage increase over
the numerical amount in the same period of the preceding year. Growth is
quantitative; development is a qualitative concept. Development includes

42

components as diverse as freedom of expression, justice, ethics, the rule of
law, female employment, raising society's living standards, increasing the
quality of education, expanding health services, widespread use of tech-
nology, reducing unemployment, ensuring social security, protecting the

environment, cultural, artistic and historical values and even improving

them, innovation and entrepreneurship. When viewed from a business
perspective, development covers freedom of expression, justice, ethics,
technology, as well as institution building, productivity, added value, and
quality. Therefore, development is not necessarily directly an outcome of
growth; development may produce growth, or it may not.

Bringing together the world's leading scientists, thought leaders, business-
people, economists and former politicians in an effort to find solutions
to global problems facing humanity, the Club of Rome's book ‘Limits to
Growth’12 published in 1972 and updated in 2004, shows the disastrous
consequences that a purely growth-oriented economic approach has
brought upon the world, using a mathematical model.

Until the mid-90's, the trend in business was towards linear growth. In

other words, however much a company was going to grow, the target for
growth was set at a level which was above the following year's inflation
rate. This is still true for companies with a traditional outlook. By the end
of the nineties, the start-ups that emerged after the expansion of the inter-
net were adored by the market. The new trend put forward by these start-
ups and their investors was exponential growth. Today, nearly all compa-
nies and particularly start-ups focus on exponential growth. The figures
that are the subject of exponential growth are expressed in hundreds or
even thousands. In Figure 5 below, you will notice the difference between
linear growth and exponential growth, where the X-axis represents “time”,
and the Y-axis shows “growth”.

12 Donella H. Meadows, et al, The Limits to Growth: The 30-Year Update. White River Junction VT,
Chelsea Green Publishing Co., 2004

43

Growth Exponential
Linear

Time FIGURE 5

At a private meeting I attended last year, we were given a presentation on

Corporate Venture Capital (CVC). The presenter spoke of the importance

of the start-up's rapid growth following the investment made by the in-
stitution, how the return-on-investment period had shortened due to ex-
ponential growth and how the financial returns for investing institutions
were very significant. When it was my turn to speak, I asked, “Why are
we all searching for unlimited growth in a limited world? When we focus
so narrowly on growth, who pays the price of this rapid growth? Is it the
entrepreneur himself or his team or is it the environment or society? As
investors, don't we also have downside risk on the social and environmen-
tal impact they create when we force start-ups to grow to these sizes?” I
asked. Someone in the audience said, “Dear Izel, I totally understand and
respect what you are saying, but we are talking about entrepreneurship

here. You on the other hand, are talking about social entrepreneurship.
The two are very different concepts”. To this I responded: “It's my hope
that the entrepreneurs you are talking about will work day and night to
achieve the unlimited and exponential financial growth targets imposed
on them by their investors while being aware that they have as much re-

sponsibility for the environment and society as social entrepreneurs do,
for the sake of the planet we live in.”

This is what can happen to a company in the face of the growth ambition of

the other party. It was 2007. We had just completed a satisfactory contract
renewal period. It was the end of March. One of our tax partners came to

44

meet Leon Bey13 and said: “Leon Bey, we have a close relationship with the

Chairman of the Board at one of our closest rivals. During a recent chat he
mentioned his interest in purchasing our tax business. He wants to meet
with you." Leon Bey said, “This is a very strange offer. Our firm is not for
sale,” he added dismissively. But our tax partner was not satisfied with this
response, “Leon Bey, please don't turn me down. Let's at least take a meet-

ing. Let's hear their offer. We'll go to dinner. We'll have a discussion. What
harm is there in discussing it?” he persisted. Although Leon Bey said he
felt it was unnecessary once or twice, he finally accepted the suggestion.

I will never forget that it was the Chairman of the Board and the Business

Development Manager of the company that brought us the offer, and Leon
Bey, the tax partner and I who went out to dinner together. After exchang-

ing views on the economy and general problems of our sector, the Chair-
man cut to the chase. “We want to buy your Istanbul tax business. What
do you say to that?" he asked. Leon Bey replied immediately. “Tax isn't our

only business line. We also have other businesses. What will happen to
them?” The Chairman countered, “We will buy them too”. Leon Bey then
said, “But we don't just have an office in Istanbul. We also have offices in
Ankara, Izmir and Antalya.” The Chairman responded promptly “We'll take
them too, it doesn't matter.” Leon Bey then asked what price they were of-
fering. The Chairman replied: “Well, we paid $3.5 million for a company a
third of your size. So, you can guess how much we will give you.” Leon Bey
said, “Okay, but we have a partner: Mazars. We have a contract with them
with a $1 million penalty clause. What are we supposed to do about that?”
he added. To this the Chairman responded laughingly: “My dear Leon, ac-

cording to the legislation of our profession, this contract is not valid in

Turkey. We can take them to court. It will take years. We won't pay them

a penny, it's okay, don't worry." Leon Bey replied, "You're right, we never
thought of that." The Chairman pushed on with, “Look, this is a serious
offer. What do you think, shall we move forward on this?". Leon Bey said,
"I have partners. I need to consult them about this offer. I need some time,”.

At this, the Business Development Manager threw the lighter in his hand

13 The title ‘Bey’ is used as an honorific, is placed after the name of the individual as a courtesy.

45

towards the middle of the table and said, “You had better decide quickly.
We want to get going on this purchase as soon as possible. We would like
to celebrate this piece of good news at our year-end annual general meet-
ing. With this merger, we intend to be bigger than all of our competitors
in Turkey.” To which we replied, “Don't worry, we'll get back to you soon”
and got up to leave.

Leon Bey's car and driver were waiting at the entrance of the restaurant.
As we were walking towards the car, a huge car came sweeping up from
the opposite direction. The driver got out. The Chairman said, “Leon, what
is this? Is it a Toyota? Forget about this car. When you come over to us, we'll
get you the latest model Mercedes,” as he got into his car with a mocking
smile on his face. I got into the car with Leon Bey and set off towards home.
He asked, “What do you think, Izel?” I responded, “Father, you founded this
company. You've spent many years building it to what it is today. If you
want to sell it, I will respect your decision. However, I did not like the ap-
proach of these people at all. Their culture is completely different from
ours. It's as if all they care about is growth and their intention isn't to buy
us but to take us out of the market as soon as possible. Not only would I
not like to sell the company to these people, I wouldn't even want to do
business with them. Moreover, we have a foreign partner that we trust. I
personally could not do such a thing to them". His answer was very short
and to the point. "I agree with you. Let's share the details of this meeting
with our partners tomorrow and let them know our decision. Then let's
tell the other side that we are not interested" he said.

The next day our Istanbul Tax Department partners expressed their opin-
ion that we should accept the offer. In contrast, the partners of the other
functions were generally negative. Leon Bey called the Chairman to tell
him that we were not interested in the offer. But he added, "Let's buy you
dinner and we can chat there." That dinner never took place because the
day after we communicated that we were not interested in the offer, the
partner that had suggested the meeting together with another tax partner,
came to us each bearing a transfer agreement. They explained that they
would stay if we made them a counteroffer exceeding the other side's offer
by $150,000: otherwise, they were leaving to begin work at the other firm.

46

We answered that the amount in question was not a fair request and that
we would not stand in their way if they wanted to leave. The remaining
partner stepped in to take over the management of the tax business.

About two weeks later Leon Bey was on his way to the airport to fly abroad.
It was one o'clock and lunch was over. Despite this, the Tax Department was
deserted. This seemed odd, given that it had been a relatively busy morning.
I asked the tax department’s secretary where the rest of the staff were. She
said they had gone out to eat. I became suspicious. The restaurants in our
area were few and far between. I went out and quickly visited all of them.
There was no one from the Tax Department. I realized something was up. I
called Ozden Kanci, a trusted colleague who worked with Leon Bey's team.
“Where's everyone from Tax? Please be honest with me", I asked. “They are
all interviewing with that company that wants to buy us,” he said. I thanked
him and immediately called Leon Bey. He hurried back from the airport.
On his return, we spoke one by one with all of our employees who came
back from the interviews, staying until almost 11 o'clock that evening. The
result was that a substantial portfolio of clients left us, accompanied by

three partners, a senior manager, an assistant manager, three seniors, two

associates, four assistant auditors, and the secretary who had lied to us
about everybody being out to lunch. The next morning, we sent an email
to all our employees. In this e-mail, we briefly informed our employees
that we had received an offer for our firm to be purchased, but that we had
rejected this offer for three reasons:

1. The culture clash between the company that had submitted the offer
to buy us

2. Concern about the future of our employees in the event of a takeover
3. That there was no sound reason to terminate our relationship with

Mazars.

Those who left Mazars Denge took a lot of information about our firm to
the other party. So, we had two alternatives. The first was to file an unfair
competition lawsuit against the other party. The second was to draw a line
under it and focus on getting our firm back on track again. We chose the
second alternative. As each year goes by, we continue to raise the bar high-

47

er on our good name through our achievements. I would like to extend my
heartfelt thanks to my colleagues Ahmet Kartal, Ozden Kanci and Guray
Ogredik in our tax department who chose to stay with us through those
difficult days.

This unpleasant incident taught me a great deal. But of all that I learned,
the eagerness for rapid economic growth and its cost to external stake-
holders are the two that stand out. I am very sure that if this merger had
taken place, at least half of our employees would have been laid off shortly
afterwards. This might have reduced the costs of the acquiring company,
but the main cost would have been borne by our former employees.

Every year companies prepare their following year’s budgets with the
question "how much are we going to grow this year?". This question is con-
stantly posed to us from abroad. I'm expected to comment on it and set
goals. Hitherto, I've been careful not to set a goal that we should grow by
this or that amount. Instead, I prefer the use of key performance indicators
for investment areas that we need to make progress on and to implement a
development plan accordingly. The promise of growth really worries me. In
May 2020, I expressed my hope at a meeting of the Turkish Family Businesses
Association (TAIDER): “I wonder if exponential growth will one day be re-
placed by exponential sharing?”

Financial and Non-Financial Measurement Tools

Company Valuation, Measurement Units other
than Money, Social and Environmental Impacts,
Economic Externalities

As I explained before, the economic growth indicator for countries is GDP
and for companies, it's turnover. For both, the unit of measurement is
money. When it comes to GDP, we are talking about the value of the total
goods and services produced by a country in one year expressed in terms
of its currency. The Turkish Statistical Institute (TUIK) reveals how much
growth has been achieved it terms of GDP for every quarter compared to

48