Recent developments in corporate sustainability reporting in Turkey

Before the aforementioned plan, the Sustainability Principles Compliance Framework, published by the Capital Markets Board of Turkey in 2020, included the basic principles that publicly listed companies were expected to explain regarding their environmental, social and corporate governance (ESG) initiatives. Although the implementation of these principles is voluntary, it is obligatory to report whether they are implemented or not, with the principle of “comply or explain”.

At the end of 2021, the Sustainable Banking Strategic Plan was published by the Banking Regulation and Supervision Agency. The plan primarily focused on the establishment of a sustainable banking infrastructure, and included approaches regarding the procedures and principles that would be the basis for Turkish banks in matters related to sustainability within the framework of international standards and practices. The plan also presented general approaches to managing sustainability risks. For this purpose, the basic principles for quantifying, measuring, and analysing the “climate- related financial risks” of the Turkish banking sector, which are classified as physical, transition and reputational risks, have been determined. The policies outlined in the plan aim to develop sustainable banking activities while preserving the financial soundness of the sector.

Lastly, with the amendment made to the Turkish Commercial Code on 04 June 2022, the Public Oversight, Accounting and Auditing Standards Authority was authorised to set and issue the Sustainability Reporting Standards of Turkey. The setting of these standards aimed to ensure comparability by creating unity of practice in sustainability reporting, establishing the international validity of the reporting, and putting sustainability reporting and financial reporting in Turkey on the same legal basis.

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