The Reality of Reporting to Two Regulators Simultaneously
An increasing number of Turkish companies find themselves at the intersection of two different sustainability reporting frameworks. On one side, TSRS published by KGK (Public Oversight, Accounting, and Auditing Standards Authority) — an investor-focused standard set developed on the basis of IFRS S1 and S2. On the other, ESRS applied under the EU's CSRD — a comprehensive reporting framework requiring double materiality and addressing a broad stakeholder base.
The simultaneous emergence of these two frameworks is not coincidental. Global sustainability reporting is consolidating around two main axes after years of fragmentation (GRI, CDP, TCFD, SASB, local standards): the ISSB global baseline and the ESRS EU-wide superstructure. Turkey's development of TSRS on the ISSB foundation aligns with this global trend (KGK, 2023). However, Turkish companies in EU supply chains must go beyond ISSB-based TSRS to meet CSRD/ESRS requirements as well.
In this article, we examine where the two frameworks overlap, where they diverge, and how Turkish companies can manage both efficiently.
TSRS and CSRD: Shared DNA, Different Purpose
Both frameworks have evolved from the TCFD (Task Force on Climate-related Financial Disclosures) legacy. The four-pillar structure — governance, strategy, risk management, metrics and targets — is foundational in both. This shared origin creates significant overlap in data points (IFRS Foundation, 2023).
Overlap Areas
At the practical level, common disclosures required by both frameworks:
- GHG emissions: Scope 1, 2, and 3 emissions are mandatory in both. TSRS (IFRS S2, paragraph 29) and ESRS (E1-6) require the same data set.
- Climate scenario analysis: IFRS S2 and ESRS E1 both expect companies to assess business model resilience under different climate scenarios.
- Transition plan: Both TSRS and ESRS require disclosure of climate change mitigation transition plans.
- Governance structure: How sustainability issues are addressed at the board level is mandatory in both frameworks.
- Targets and progress: Reporting emission reduction targets, energy efficiency targets, and progress toward them is a common requirement.
The interoperability work between ISSB and EFRAG has deliberately strengthened this overlap. The formal dialogue between the two bodies continues to ensure cross-framework consistency.
Data Point Overlap Rate
To provide a quantitative perspective: approximately 70-80 percent of data points in ESRS E1 (Climate Change) overlap with IFRS S2. In governance disclosures (ESRS 2 — GOV-1 through GOV-5), the overlap rate is around 60-70 percent. This means a climate-focused data collection process can substantially feed both frameworks.
Critical Differences: Where the Devil Is in the Detail
1. Materiality Approach
This is the most fundamental and most practical difference between the two frameworks:
| Dimension | TSRS (IFRS-Based) | CSRD/ESRS |
|---|---|---|
| Materiality definition | Financial materiality — a topic is material if it affects the company's financial position, performance, or cash flows | Double materiality — both financial materiality and impact materiality (the company's impact on people and the environment) |
| Primary audience | Investors and creditors | Broad stakeholder base (investors, employees, communities, civil society) |
| Practical consequence | Environmental topics are reported only when their financial impact is measurable | Environmental and social impacts can be reported regardless of financial impact |
A concrete example: consider a cement company's impact on a water source near its production facility. Under TSRS, this impact is reported only insofar as water scarcity could halt production or generate environmental liability costs — i.e., it creates financial risk. Under CSRD, the impact on the water source can be material in its own right (as impact materiality) — even if the financial risk has not yet materialized.
This difference directly affects the list of "material topics" identified in the double materiality assessment. Under CSRD, more topics may emerge as material, resulting in a broader reporting scope.
2. Scope Breadth
TSRS is based on IFRS S1 and S2 — primarily climate-focused:
| TSRS Scope | CSRD/ESRS Scope |
|---|---|
| Climate change (S2) | E1: Climate change |
| General sustainability requirements (S1) | E2: Pollution |
| E3: Water and marine resources | |
| E4: Biodiversity and ecosystems | |
| E5: Resource use and circular economy | |
| S1-S4: Social standards (workforce, value chain, communities, consumers) | |
| G1: Business conduct |
TSRS's scope may expand over time (ISSB's future agenda items include biodiversity and human capital), but as of today, CSRD offers a much broader scope.
3. Value Chain Information
Chapter 5 of ESRS 1 clearly states that value chain information is included in the reporting scope — both upstream (suppliers) and downstream (customers, product use). Under TSRS, value chain information is required within Scope 3 emissions, but a value chain disclosure as broad as what CSRD expects does not exist (Commission Delegated Regulation 2023/2772).
4. Assurance and Digital Reporting
| Dimension | TSRS | CSRD/ESRS |
|---|---|---|
| Assurance | Not yet mandatory | Limited assurance mandatory (transition to reasonable assurance planned) |
| Digital format | No requirement yet | XBRL tagging mandatory (under ESEF) |
| Transition plan detail | Paris Agreement-aligned, but format flexible | Detailed requirements under ESRS E1-1 (decarbonization levers, investment plans, interim targets) |
Who Does This Apply To? A Decision Matrix for Turkish Companies
Not every Turkish company needs to comply with both frameworks. Which requirements apply depends on the company's profile and its relationship with the EU:
Scenario 1: TSRS Only
Profile: Listed on Borsa Istanbul, included in KGK's TSRS scope, but with limited direct connection to EU supply chains.
Example: A domestic-only retail chain or a domestic-focused real estate developer.
Requirement: TSRS S1 and S2 compliant reporting. Integrated with SPK Sustainability Principles Communique (II-15.1) requirements.
Scenario 2: TSRS + CSRD (Most Complex)
Profile: Listed on Borsa Istanbul and in KGK's TSRS scope, while also exporting to EU customers or participating in EU supply chains. Also Turkish conglomerates with EU subsidiaries.
Example: A Turkish automotive parts supplier serving EU automakers. Or a Turkish cement group with production facilities in the EU.
Requirement: TSRS compliance (KGK) + value chain data requests from EU customers under CSRD. If an EU subsidiary exists, that subsidiary falls directly under CSRD.
Scenario 3: CSRD Only
Profile: EU subsidiaries of Turkish companies operating in the EU. These subsidiaries are directly subject to EU legislation.
Also note: CSRD's extraterritorial provisions under Article 40 may directly cover non-EU parent companies under certain conditions. Third-country parent companies with over EUR 150 million in EU revenue may fall under CSRD scope from FY 2028 (Directive 2022/2464, Article 40).
Integrated Reporting Strategy: Start with CSRD
For companies subject to both frameworks, the most efficient approach is to start with the broader CSRD/ESRS and fulfill TSRS requirements as a subset.
Why CSRD Should Be the Starting Point
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Scope breadth: CSRD's double materiality already covers TSRS's financial materiality. A company conducting a double materiality assessment can use the financial materiality results directly for TSRS.
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Data completeness: Environmental, social, and governance data collected under CSRD also covers TSRS's climate-focused data.
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Future-proofing: Since TSRS's scope will expand over time, collecting data at CSRD breadth now prepares for future requirements.
Practical Implementation Steps
Materiality assessment: Conduct the CSRD double materiality assessment. Use the financial materiality dimension results for TSRS, and the impact materiality dimension results for CSRD reporting scope.
Data collection: Design a single data collection infrastructure. Create a mapping table showing which data point satisfies which framework's requirements. GHG emissions, energy consumption, governance structure, and targets are common to both — collect this data once and feed it to both reports.
Reporting: Prepare the CSRD/ESRS report and use its climate section (E1) as the basis for the TSRS report. Add any TSRS-required information presented differently under ESRS (e.g., SASB sector metrics reference) as supplements.
Assurance: Manage the CSRD assurance process. Although assurance is not yet mandatory for TSRS, the evidence collected during CSRD assurance will be ready when TSRS assurance becomes required.
Data Point Mapping Table
| Data Point | TSRS Reference | ESRS Reference | Single Source? |
|---|---|---|---|
| Scope 1 emissions | IFRS S2, par. 29 | ESRS E1-6 | Yes |
| Scope 2 emissions | IFRS S2, par. 29 | ESRS E1-6 | Yes |
| Scope 3 emissions | IFRS S2, par. 29 | ESRS E1-6 | Yes (but ESRS more detailed) |
| Energy consumption | IFRS S2 (sector) | ESRS E1-5 | Yes |
| Transition plan | IFRS S2, par. 14 | ESRS E1-1 | Partially (ESRS more detailed) |
| Governance | IFRS S1, par. 6-9 | ESRS 2 GOV-1 to GOV-5 | Partially |
| Climate scenario | IFRS S2, par. 22 | ESRS E1 (IRO-1) | Yes |
| Targets | IFRS S2, par. 33 | ESRS E1-4 | Yes |
| Water consumption | — | ESRS E3 | CSRD only |
| Biodiversity | — | ESRS E4 | CSRD only |
| Workforce metrics | — | ESRS S1 | CSRD only |
| Anti-corruption | — | ESRS G1 | CSRD only |
This table forms the foundation of an integrated data collection process. Climate data feeds both frameworks, while social and governance data flows only to CSRD.
Pitfalls to Watch For
Underestimating TSRS. The fact that CSRD is more comprehensive does not mean TSRS is simple. TSRS's IFRS S2-derived GHG reporting requirements (particularly Scope 3 and scenario analysis) demand thorough preparation.
Managing as two separate projects. Treating the two frameworks as independent projects creates duplicate data collection effort, inconsistency risk, and increased costs. An integrated approach is superior for both efficiency and consistency.
Ignoring Article 40. Turkish groups with over EUR 150 million in EU revenue may fall directly under CSRD scope. Companies meeting this threshold should evaluate the consolidation conditions now.
Not planning for the assurance gap. CSRD assurance is mandatory; TSRS is not yet. However, KGK is likely to introduce assurance requirements in subsequent periods. The experience and infrastructure gained during the CSRD assurance process will ease this transition.
Action Item: Dual-framework compliance should not mean reporting twice — it should be a single integrated process. Start with the CSRD double materiality assessment — its financial materiality dimension will determine TSRS, while its impact materiality dimension will determine CSRD's own scope. A single assessment forms the foundation of both frameworks.
See how enterprise teams meet TSRS and SPK reporting requirements efficiently.