A New Era for Sustainability Reporting in Turkey
Turkey is taking a landmark step in corporate sustainability reporting. The Public Oversight, Accounting and Auditing Standards Authority (KGK) has developed the Turkish Sustainability Reporting Standards (TSRS) based on IFRS S1 and IFRS S2, published by the International Sustainability Standards Board (ISSB) under the IFRS Foundation. These standards introduce mandatory reporting obligations for certain companies starting from fiscal year 2024 (KGK, 2023).
The Capital Markets Board (SPK) has also clarified expectations for listed companies through its Sustainability Principles Compliance Framework Communique (II-15.1). Sustainability reporting is moving from a voluntary corporate responsibility exercise to a legal requirement.
Who Needs to Report?
Phase One: Fiscal Year 2024
TSRS obligations are being rolled out on a phased timeline. Companies in the first wave include:
- Large-scale companies listed on Borsa Istanbul — those in the BIST-100 index exceeding certain thresholds for total assets, net revenue, or employee count
- Banks and financial institutions — entities supervised by the Banking Regulation and Supervision Agency (BDDK)
- Insurance companies — entities under the oversight of the Insurance and Private Pension Regulation and Supervision Agency (SEDDK)
Under SPK Communique II-15.1, listed companies are expected to submit sustainability reports alongside their annual activity reports or as standalone documents through the Public Disclosure Platform (KAP) (SPK, 2023).
Phase Two: 2025 and Beyond
The second phase will expand coverage to smaller listed companies and certain public interest entities. KGK's phased transition timeline is designed to give companies adequate preparation time.
What Does TSRS Require?
TSRS comprises two core standards, each adapted from the IFRS Sustainability Disclosure Standards for the Turkish regulatory context:
TSRS 1 — General Requirements for Sustainability-Related Financial Disclosures
Based on IFRS S1, this standard requires companies to report on how sustainability matters affect their financial position. The framework is built on four pillars:
- Governance: Corporate structures established to oversee sustainability risks and opportunities
- Strategy: How sustainability matters influence the business model and decision-making
- Risk Management: Processes for identifying, assessing, and managing sustainability-related risks
- Metrics and Targets: Quantitative indicators used to monitor sustainability performance and goals set
This architecture is rooted in the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and aims to deliver the information investors need for decision-making (IFRS Foundation, 2023).
TSRS 2 — Climate-Related Disclosures
Based on IFRS S2, this standard governs the specific reporting of climate-related risks and opportunities:
- Physical risks: Extreme weather events, sea-level rise, and chronic climate shifts
- Transition risks: Policy changes, technological transformation, market dynamics, and reputational impacts
- Greenhouse gas emissions: Reporting of Scope 1, Scope 2, and — where applicable — Scope 3 emissions
- Scenario analysis: Assessing the company's resilience under different climate scenarios
Alignment with Global Standards
TSRS alignment with IFRS S1 and S2 carries meaningful advantages for Turkish companies. These global standards, published by the IFRS Foundation in 2023, are being rapidly adopted worldwide. Singapore, Japan, Australia, and Brazil are undertaking similar adaptation processes (IFRS Foundation, 2023).
This alignment means:
- International investor expectations are met
- Group reporting for multinational companies becomes simpler
- Comparability increases for companies also subject to the EU's Corporate Sustainability Reporting Directive (CSRD)
Five Concrete Steps to Prepare
1. Conduct a Gap Assessment
Compare the sustainability data your company currently collects against TSRS requirements. Identifying data gaps is the first and most critical step in the preparation process.
2. Review Your Governance Structure
TSRS requires board-level oversight of sustainability. A dedicated committee or board member should be designated as responsible, and decision-making processes must be documented.
3. Build Your Greenhouse Gas Inventory
Reliable emissions data underpins climate-related disclosures. Start measuring Scope 1 and 2 emissions; develop a strategy for Scope 3 data collection.
4. Develop Financial Impact Analysis Capabilities
TSRS requires disclosure of the financial effects of sustainability matters. This demands close collaboration between sustainability teams and finance departments.
5. Plan for Internal Controls and Assurance
Internal control mechanisms for sustainability data reliability should be established. External assurance expectations are set to increase in subsequent years.
Key Dates
| Period | Development |
|---|---|
| 2023 | Publication of TSRS by KGK |
| Fiscal Year 2024 | Mandatory reporting begins for the first group of companies |
| During 2025 | Submission of first TSRS-aligned reports |
| Fiscal Year 2025 | Scope expansion — additional companies brought into reporting obligations |
Beyond Compliance: A Strategic Opportunity
TSRS mandatory reporting should not be treated solely as a compliance exercise. Systematically collecting and reporting sustainability data reveals operational efficiency opportunities, strengthens investor relations, and enables proactive management of supply chain risks.
Companies that prepare early will not only fulfil their legal obligations — they will also secure a credible position in the sustainable finance ecosystem.
Call to Action: Fiscal year 2024 has already begun. If you have not yet conducted a TSRS gap analysis, start today. The first step is always understanding your current data capacity.
References
- KGK (2023). Turkish Sustainability Reporting Standards (TSRS 1, TSRS 2). Public Oversight, Accounting and Auditing Standards Authority.
- SPK (2023). Communique on Sustainability Principles Compliance Framework (II-15.1). Capital Markets Board of Turkey.
- IFRS Foundation (2023). IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; IFRS S2 Climate-related Disclosures. International Sustainability Standards Board (ISSB).
- TCFD (2017). Recommendations of the Task Force on Climate-related Financial Disclosures. Financial Stability Board.
See how enterprise teams meet TSRS and SPK reporting requirements efficiently.