Amendments Applied to the Scope of Implementation of the Turkish Sustainability Reporting Standards (TSRS)

A.      INTRODUCTION 

The Board Decision on the Scope of Application of the Sustainability Reporting Standards (“Decision”), issued by the Public Oversight, Accounting and Auditing Standards Authority in order to determine the scope of application of the Turkish Sustainability Reporting Standards ("TSRS"), which will be taken as basis for the preparation of sustainability reports of institutions, organizations and enterprises in accordance with international sustainability reporting frameworks, was published in the Official Gazette on 28 December 2023 and entered into force as of 1 January 2024.

Some amendments have been applied to the Decision regarding the Scope of Application of the Sustainability Reporting Standards and the Board Decision regarding the said amendments (“Amendment Decision”) was published in the Official Gazette on 18 December 2024.

B.   AMENDMENTS TO THE CONTENT OF THE DECISION

The amendments made within the scope of the institutions, organizations and enterprises required to implement TSRS in the preparation of sustainability reports as specified in Article 3 of the Decision are as follows:

i) Joint stock companies whose capital market instruments are traded on a stock exchange or other organized markets, or which have a prospectus or issue document approved by the Capital Markets Board with a valid term for trading, have been removed from the list. With the Amendment Decision, companies whose shares are traded on stock exchange markets, except for those traded on the Watchlist Market of Borsa İstanbul A.Ş. (“BİST”) or sold to qualified investors in the Venture Capital Market, have been added to the list.

As a result, the scope of the obligation to apply the TSRS has been narrowed and it has been regulated that companies whose shares are traded on the stock exchange markets, except for companies whose shares are traded on the BIST Watchlist and on the Venture Capital Market to be sold to qualified investors, will be obliged to use the TSRS in the preparation of their sustainability reports.

ii) Joint stock companies, which are not traded on a stock exchange or other organised markets, but which issue capital market instruments other than shares without public offering, or which have a valid issue document approved by the Capital Markets Board for this purpose, are excluded from the scope of institutions that are obliged to apply TSRS in the preparation of sustainability reports.

In addition, within the scope of the Amendment Decision, banks and other financial institutions subject to the regulation and supervision of the Banking Regulation and Supervision Agency listed in subparagraph (b) of Article 3 of the Decision, except for those whose shares are traded on the BIST market,

• the number of branches as of the end of the previous year is 1 or,
• those whose number of employees does not exceed 250;

are exempted from the obligation to disclose Scope 3 greenhouse gas emissions under the Provisional Article 3 of the Decision during the periods in which they are not required to disclose these emissions (i.e., during their first two reporting periods of applying TSRS). Therefore, it has been decided that these institutions are not required to prepare sustainability reports, and this obligation is made optional for them.

C.        CONCLUSION

The Amendment Decision includes significant amendments to the scope of entities required to apply TSRS in the preparation of sustainability reports, and these amendments are to be effective for annual periods beginning on or after 1 January 2024.

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