Turkey Sustainability Reporting Standards (TSRS)

Hello everyone, in this article, we will talk about the Turkey Sustainability Reporting Standards (TSRS), which concern your company and can be used as a guide.

Enjoy your reading.

This application aims to ensure that sustainability reporting, which seriously concerns the future of your company, becomes mandatory for the companies within the scope, allowing them to present their sustainability performances transparently. Thus, it is aimed to facilitate the access of businesses to green financing and to help companies partnering with EU companies to maintain and enhance their competitive advantages in the market.

Overview of the Entry into Force of TSRS and Scope

The Board Decision of the Public Oversight, Accounting and Auditing Standards Authority (KGK) has been published in the Official Gazette and has come into effect as of January 1, 2024. This decision covers companies that exceed certain thresholds during subsequent reporting periods.

First of all, you can find out whether your company and sector are on the list by clicking here.

Companies listed must comply with reporting obligations in accordance with TSRS if they exceed the thresholds listed below across two consecutive reporting periods:

1. Total assets of 500 Million Turkish Liras 

2. Annual net sales revenue of 1 Billion Turkish Liras 

3. Number of employees 250 persons

You can analyze your situation according to the template below.

Some conveniences have been provided for companies during the transition period.

• Presentation of comparative information is not mandatory in the first reporting period.

• It is also possible to publish the first reports together with these financial reports depending on whether there is a financial reporting obligation.

• In the first two years of reporting, the disclosure of Scope-3 greenhouse gas emissions is not mandatory.

SCHEDULE

January 1, 2024 - December 31, 2024 – Start of the first mandatory reporting period

2024 – Authorization of sustainability auditors

2025 – Publication of the first sustainability reports covering the performance of the previous year

2026 – Conducting limited assurance audits

GENERAL CONTENT OF REPORTING

 Metrics and Targets

Companies must disclose all risks and opportunities that may affect their financial statements using the metrics required by TSRS related to sustainability and climate metrics and targets. This way, the understanding of the company's sustainability and climate-related performance should be ensured.

Risk Management

When identifying the sustainability and climate-related risks and opportunities of the business, it should be reported whether these procedures are integrated into the company's overall risk management processes. In this context, it should be explained how the processes for identifying, assessing, prioritizing, and monitoring risks and opportunities are integrated into the company's overall procedures.

Strategy

To explain the strategies for addressing the company's sustainability and climate-related risks and opportunities to the users of financial reports, these strategies must be presented within general-purpose financial reports. These strategies should aim to determine potential impacts on business models and value chains, demonstrate resilience to those impacts, and develop appropriate strategies.

Governance

When making financial disclosures related to sustainability and climate, companies are expected to describe their governance processes, controls, and procedures. In this context, companies can assign committees and departments responsible for identifying sustainability risks and opportunities and can report on their functioning.

Core Perspective of TSRS and Comparison with Global Standards

It is noted that there are some differences between the GRI standards and the ESRS standards that the EU will use. The most notable difference is that the materiality assessment is based on financial materiality in ISSB standards. This means that the impact of climate and sustainability issues on financial statements is taken into account. Other standards are reported to have a more comprehensive perspective such as double materiality. As understood from the announcement made by the institution, TSRS was prepared using the standards developed by the International Sustainability Standards Board (ISSB) under the International Financial Reporting Standards Foundation (IFRS). 

In Conclusion: TSRS

TSRS are important as they mandate the disclosure of sustainability and climate-related risks and opportunities. With the competitive advantages gained from green transition, the importance of adapting quickly to this transition is increasing. Climate change and sustainability risks, along with the new markets and financial instruments offered by this transition, should not be overlooked. Sustainability reporting is a tool that provides an advantage in accessing opportunities while protecting businesses against risks.

In our country, TSRS has been implemented as reporting standards based on financial materiality inspired by ISSB standards. However, it is recommended that businesses with commercial relations with the EU also evaluate ESRS. Sustainability reporting should not be seen as a business unrelated to financial statements. Because it is an activity that has long been discussed and interacts with legal regulations. Conducting this reporting provides businesses with the opportunity to evaluate opportunities and is among the mandatory legal regulations that need to be done.

For details

TSRS 1

TSRS 2

CarbonSmart 

If you want to take a step towards sustainability and gain a competitive advantage, contact CarbonSmart for reporting consulting here!