Sustainability Reporting Becomes Applicable to a Wider Range of Companies

 The Public Oversight, Accounting and Auditing Standards Authority (Authority) has determined the scope of application of the Turkish Sustainability Reporting Standards (TSRS) while preparation of sustainability reports by businesses, companies and institutions through the decision of its Board (Board) dated 27 December 2023. The Board has also published the TSRS 1 and TSRS 2 standards which shall be applied to reporting while preparation of sustainability reports by the following companies in line with the IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information” and IFRS S2 “Climate-related Disclosures” for the purposes of ensuring global validity and establishing uniformity.

According to the recent decision of the Board; investment institutions, collective investment institutions, portfolio management companies, mortgage financing institutions, central settlement institutions, central deposit institutions, joint stock companies capital markets instruments of which are listed at the stock exchange or which have issued prospectus or offering circular in that respect, joint stock companies which have issued capital markets instruments other than shares which are not listed at the stock exchange or which have issued an offering circular in that respect, banks within the control of Savings Deposit and Insurance Fund, rating agencies, financial holding companies, financial leasing companies, factoring companies, financing companies, asset management companies, companies holding qualified shares in financial holding companies as defined in Banking Law No. 5411, savings financing companies, insurance, reinsurance and pension companies and authorized entities, precious metal intermediary agencies, companies engaging in the manufacturing and trading of precious metals which are authorized to operate in Borsa Istanbul markets, alone or together with their affiliates or subsidiaries, which meet two of the three following criteria in two respective financial periods: 

• total assets with value of TL 500 million or more;
• annual net sales revenue of TL 1 billion or more;
• 250 employees or more.

shall apply TSRS while preparing sustainability reports. Banks on the other hand shall be subject to TSRS regardless of the thresholds. 

Reporting requirements will be applicable as of the fiscal period commencing on 01.01.2024 and the above entities shall provide comparative information in their reporting except for the first reporting period subject to TSRS. 

The entities are also allowed to publish the first reporting subject to the TSRS after the publication of their financial statements on the dates designated in the decision.

With the above decisions of the Board, a wider range of entities will become obliged to make sustainability reporting based on TSRS.