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New Era in Sustainability Reporting: Turkey Sustainability Reporting Standards

Berk Cin

Ahsen Karadayı

The Board Decision (“Decision“) dated December 27, 2023 regarding the Turkish Sustainability Reporting Standards determined by the Public Oversight Accounting and Auditing Standards Authority (“Authority“) was published in the Repeated Official Gazette dated December 29, 2023.

The Turkish Sustainability Reporting Standards (TSRS), named TSRS 1 “General Requirements for Disclosure of Sustainability-related Financial Information” and TSRS 2 “Climate-related Disclosures,” were incorporated into our legislation based on the international sustainability reporting standards (i.e., IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information” and IFRS S2 “Climate-related Disclosure”) published by the International Sustainability Standards Board (ISSB) on December 26, 2023.

What TSRS Aim For?

TSRS 1 General Disclosure of Sustainability-related Financial Information requires companies to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect the company’s financial adequacy when preparing their general-purpose financial reports.

TSRS 2 Climate-related Disclosures requires companies to disclose information about climate-related physical and transition risks[1] and opportunities that could reasonably be expected to affect the company’s financial adequacy when preparing their general-purpose financial reports.

Companies will be able to apply TSRS regardless of which accounting standards they use when preparing their general-purpose financial reports. In other words, companies that prepare their financial statements in accordance with the Tax Procedure Law may also be subject to these standards.

Which Companies Will be Subject to Sustainability Reporting?

In the Announcement on the Determination of the Companies to be Subject to Sustainability Reporting published by the Board regarding the Decision, the companies that are required to report on sustainability are as follows:

  1. All banks except those under the Saving Deposit Insurance Fund (SDIF); and

  2. Companies exceeding the thresholds of at least two of the following criteria in two consecutive accounting periods, listed below:

    1. Total assets of TRY 500 million Turkish Liras

    2. Annual net sales revenue TRY 1 billion 

    3. Number of employees 250 people

The companies subject to the thresholds are as follows:

  1. Companies subject to the regulation and supervision of the Capital Markets Board (“CMB“);

  • Investment institutions,

  • Collective investment institutions,

  • Portfolio management companies,

  • Mortgage finance companies,

  • Central settlement organizations,

  • Central securities depositories,

  • Trade repositories,

  • Joint stock companies whose capital market instruments are traded on a stock exchange or other structured markets, or which have a prospectus or issuance certificate that has not expired,

  • Joint stock companies issuing non-share capital market instruments through private placement and not to be publicly traded (only until the end of the accounting period in which these capital market instruments are redeemed) or joint stock companies having an issuance certificate for this purpose which has not expired.

  • Companies subject to the regulation and supervision of the Banking Regulation and Supervision Agency (BRSA);

  • Rating agencies,

  • Financial holding companies,

  • Financial leasing companies,

  • Factoring companies,

  • Finance companies,

  • Asset management companies,

  • Companies holding qualified shares in financial holding companies and banks as defined in Law No. 5411,

  • Savings finance companies.

  • Precious metals intermediary institutions, and companies engaged in the production or trade of precious metals and other institutions that are permitted to operate in the Borsa Istanbul Markets.

  • Insurance, reinsurance, and pension companies.

When Will the First Sustainability Reports Be Published?

Pursuant to the Decision, companies subject to sustainability reporting will publish their sustainability reports for the first mandatory reporting period of January 1, 2024 – December 31, 2024 in 2025. In this respect, sustainability-related financial disclosures may be included in management’s assessment or in a similar report such as “annual activity and financial review report”, “integrated report”, “strategy report”, provided they are included as part of the company’s general-purpose financial reports.

Exclusion from the Scope of the Reporting

If companies obligated to report based on the thresholds fall below at least two of the specified criteria in two consecutive accounting periods or fall below these thresholds by 20% or more in an accounting period, the obligation to apply TSRS will end as at the following accounting period.

Transition Period Principles

To facilitate implementation, transitional provisions specific to the first reporting period have been established. In this context, companies 

  • will not be obligated to disclose Scope 3 greenhouse gas emissions[2] in their first 2 years of reporting.

  • will not be required to present comparative information for the first reporting period.

  • will not be obligated to present the reports to be published for the first time together with the financial reports. Accordingly:

  • Companies being required to submit interim financial reports on the same date as the 2nd quarter or six-month interim financial report,

  • Companies that do not submit interim financial reports within nine months after the end of the annual accounting period in which the TSRSs are first applied,

are allowed to present sustainability reports.

Audit of the Reports

After the disclosure of the initial sustainability reports, these reports will undergo assurance audits in 2026. In this respect, it is also envisaged that the Authority will carry out a study on the audit of sustainability reports in the future.

Status of Public Companies

Currently, within the scope of the Sustainability Principles Compliance Framework published by the CMB on October 2, 2020 publicly traded companies are obligated to disclose the basic principles to be followed in the execution of Environmental, Social and Corporate Governance activities with the principle of “comply or explain”. According to this obligation, companies whose shares are traded on the BIST Main, BIST Star and BIST Sub-Market are required to publish the disclosures required to be made within the scope of the Sustainability Principles Compliance Framework on the Public Disclosure Platform (PDP) in the Sustainability Report template format determined by the CMB.

Accordingly, public companies that are subject to sustainability reporting under the Decision will be obligated to make both reports.


Sustainability reporting, initially introduced to Turkish law by the CMB, has now become mandatory for companies in financial markets, and in particular banks, with a broader reporting scope. This requirement is based on the TSRS, which rely on the standards published by the ISSB approximately six months ago.

As the topic of sustainability is becoming increasingly important both locally and globally, we anticipate that it could expand to include more companies in its scope. In fact, as we mentioned in our announcement published on October 24th[3], there are plans to impose more obligations and audit requirements on banks on sustainability and fight against climate change, and TSRS are a part of the efforts made locally and globally on these matters.


[1] It refers to the probability of loss and damage related to the adaptation process to a low-carbon economy.

[2] Scope 3 emissions are emissions that may occur in areas outside the direct control of companies, such as supply chains or through their customers’ use of their products.


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