As in the rest of the world, sustainability in Turkey has begun to be approached with concrete steps. In this regard, with the Board Decision No. 21632 published in the Official Gazette No. 32414(M) on December 29, 2023, the Turkey Sustainability Reporting Standards (TSRS) came into force to be applied in accounting periods starting on or after January 1, 2024, and regulations have accelerated. These standards aim to ensure that businesses in Turkey report their sustainability performance more transparently and consistently.

Purpose of TSRS

The main purpose of TSRS is designed to enable businesses to identify and disclose their risks and opportunities related to sustainability-related financial information. As a result, businesses will be required to consider the requirements set out in paragraphs 54-59 of TSRS 1 “General Provisions on Disclosure of Sustainability-Related Financial Information,” which aims to help businesses better understand and report the factors affecting their sustainability performance.

Climate-Related Disclosures and TSRS 2

TSRS 2, in addition to complying with the general disclosures of TSRS 1, is also being prepared to consider the requirements for climate-related disclosures. According to paragraph 12 of TSRS 2, this focuses on identifying the climate-related risks and opportunities reasonably expected to affect a business’s future financial viability, referring to and assessing the applicability of the sector-specific disclosure topics and metrics defined in the “Guide on Sector-Based Application of TSRS 2.”

Sector-Based Application

The sector-based application of TSRS will require businesses in each sector to comply with sustainability criteria and metrics specific to their field, allowing them to report their environmental, social, and governance (ESG) performance more accurately and in detail.

The sectors to be defined in the TSRS 2-Appendix Volumes are as follows:

  • TSRS 2-Appendix Volume-1: Apparel, Accessories, and Footwear
  • TSRS 2-Appendix Volume-2: Home Appliance Manufacturing
  • TSRS 2-Appendix Volume-3: Building Products and Furniture
  • TSRS 2-Appendix Volume-4: E-Commerce
  • TSRS 2-Appendix Volume-5: Home and Personal Care Products
  • TSRS 2-Appendix Volume-6: Multi-Line and Specialty Retailers and Distributors
  • TSRS 2-Appendix Volume-7: Coal Operations
  • TSRS 2-Appendix Volume-8: Construction Materials
  • TSRS 2-Appendix Volume-9: Iron and Steel Producers
  • TSRS 2-Appendix Volume-10: Metals and Mining
  • TSRS 2-Appendix Volume-11: Oil and Gas – Exploration and Production
  • TSRS 2-Appendix Volume-12: Oil and Gas – Midstream
  • TSRS 2-Appendix Volume-13: Oil and Gas – Refining and Marketing
  • TSRS 2-Appendix Volume-14: Oil and Gas Services
  • TSRS 2-Appendix Volume-15: Asset Management and Custody Activities
  • TSRS 2-Appendix Volume-16: Commercial Banks
  • TSRS 2-Appendix Volume-17: Insurance
  • TSRS 2-Appendix Volume-18: Investment Banking and Brokerage
  • TSRS 2-Appendix Volume-19: Mortgage Finance
  • TSRS 2-Appendix Volume-20: Agricultural Products
  • TSRS 2-Appendix Volume-21: Alcoholic Beverages
  • TSRS 2-Appendix Volume-22: Food Retailers and Distributors
  • TSRS 2-Appendix Volume-23: Meat, Poultry, and Dairy
  • TSRS 2-Appendix Volume-24: Non-Alcoholic Beverages
  • TSRS 2-Appendix Volume-25: Processed Foods
  • TSRS 2-Appendix Volume-26: Restaurants
  • TSRS 2-Appendix Volume-27: Pharmaceutical Retailers
  • TSRS 2-Appendix Volume-28: Health Care Delivery
  • TSRS 2-Appendix Volume-29: Health Care Distributors
  • TSRS 2-Appendix Volume-30: Managed Health Care
  • TSRS 2-Appendix Volume-31: Medical Equipment and Supplies
  • TSRS 2-Appendix Volume-32: Electric Utilities and Power Generators
  • TSRS 2-Appendix Volume-33: Engineering and Construction Services
  • TSRS 2-Appendix Volume-34: Gas Utilities and Distributors
  • TSRS 2-Appendix Volume-35: Homebuilders
  • TSRS 2-Appendix Volume-36: Real Estate
  • TSRS 2-Appendix Volume-37: Real Estate Services
  • TSRS 2-Appendix Volume-38: Waste Management
  • TSRS 2-Appendix Volume-39: Water Utilities and Services
  • TSRS 2-Appendix Volume-40: Biofuels
  • TSRS 2-Appendix Volume-41: Forestry Management
  • TSRS 2-Appendix Volume-42: Fuel Cells and Industrial Batteries
  • TSRS 2-Appendix Volume-43: Pulp and Paper Products
  • TSRS 2-Appendix Volume-44: Solar Technology and Project Developers
  • TSRS 2-Appendix Volume-45: Wind Technology and Project Developers
  • TSRS 2-Appendix Volume-46: Aerospace and Defense
  • TSRS 2-Appendix Volume-47: Chemicals
  • TSRS 2-Appendix Volume-48: Containers and Packaging
  • TSRS 2-Appendix Volume-49: Electrical and Electronic Equipment
  • TSRS 2-Appendix Volume-50: Industrial Machinery and Products
  • TSRS 2-Appendix Volume-52: Hotels and Lodging
  • TSRS 2-Appendix Volume-53: Leisure Facilities
  • TSRS 2-Appendix Volume-54: Electronic Manufacturing Services and Original Design Manufacturing
  • TSRS 2-Appendix Volume-55: Hardware
  • TSRS 2-Appendix Volume-56: Internet Media and Services
  • TSRS 2-Appendix Volume-57: Semiconductors
  • TSRS 2-Appendix Volume-58: Software and IT Services
  • TSRS 2-Appendix Volume-59: Telecommunications Services
  • TSRS 2-Appendix Volume-60: Air Freight and Logistics
  • TSRS 2-Appendix Volume-61: Airlines
  • TSRS 2-Appendix Volume-62: Auto Parts
  • TSRS 2-Appendix Volume-63: Automobiles
  • TSRS 2-Appendix Volume-64: Car Rental and Leasing
  • TSRS 2-Appendix Volume-65: Cruise Lines
  • TSRS 2-Appendix Volume-66: Marine Transportation
  • TSRS 2-Appendix Volume-67: Rail Transportation
  • TSRS 2-Appendix Volume-68: Road Transportation

Importance and Benefits of Application

The sector-based application of TSRS focuses on providing more accurate and effective reporting by addressing the specific sustainability requirements of each sector. This will enable investors and other stakeholders to better evaluate businesses’ sustainability performance and assist businesses in reducing their environmental and social impacts, complying with regulations, and creating long-term value.

Recommendations for Businesses

Compliance with these standards is important and necessary for the future. It will help businesses gain a competitive advantage both locally and internationally. Through sustainability reporting, investors and other stakeholders will better understand the long-term strategies and performance of businesses, increasing the trust in them. Therefore, it is crucial for businesses to adopt TSRS to effectively manage and report their sustainability performance.

To summarise;

The steps taken in Turkey regarding sustainability encourage businesses to make the necessary changes for a more sustainable future. The implementation of TSRS will help Turkey achieve its sustainable development goals and fulfill its obligations under the Kyoto and Paris Agreements. Therefore, it is essential for businesses to keep up with these developments and adapt quickly.

As 10k Consulting, we are aware of and follow this process. We are ready to support your company with our expert team in preparing your Sustainability Report and training your personnel. You can follow us on social media to stay updated with the latest developments!