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MESSAGES FROM US
Dear readers,
In this issue, we take a closer look at the alarming results of a new model that considers the cascading impacts of climate change, the Türkiye Sustainability Reporting Standards (TSRS) which hold a key place in the world of sustainability, and the rise of refillable products. We have also compiled the latest developments in the field of ESG and prominent news from around the world. Are you ready to think and act together on the path toward a sustainable future?
Stay sustainable…
ÖZGÜN ÇINAR, CEO
ESG NEWS
- With global average temperatures expected to continue to rise in the coming decades, scientists have projected that warming will significantly harm global agriculture as it weakens crop yields and disrupts food production. Now, new research finds that warming will disrupt many of Earth’s major crops and harm global crop diversity. DETAIL
- Reuters reports that the US has “withdrawn from the board of the UN’s hard-negotiated climate damage fund, dedicated to helping poor and vulnerable nations cope with climate change-fuelled disasters”. The newswire adds: “Nearly 200 countries had agreed to launch the ‘loss and damage’ fund at the COP28 UN climate summit in 2023, in a victory for developing nations that had demanded help for years over increased extreme weather events… DETAIL
- The LEGO Group revealed significant progress in its efforts to increase the use of sustainable materials in its products, announcing that its LEGO bricks in 2024 consisted of an estimated 33% material from renewable sources, nearly tripling year-over-year. DETAIL
- Lee Zeldin, the head of the US Environmental Protection Agency (EPA), has announced a series of actions to roll back environmental regulations, including rules on coal-fired power plant pollution, climate change and electric vehicles, reports the Associated Press. It notes that the changes are subject to “a lengthy process that includes public comment”. DETAIL
- Ancient humans might have lived in extremely icy conditions, which were previously thought to be uninhabitable, 25,000 years ago in Tibet. DETAIL
- Building and construction consumes 32 percent of the world’s energy while contributing 34 percent of its carbon emissions. The sector depends on materials like steel and cement that are major contributors to construction waste and are also responsible for 18 percent of emissions worldwide. While more countries are working toward decarbonizing their buildings, slow financing and progress is putting climate goals at risk, according to a new report published by the UN Environment Programme (UNEP) and the Global Alliance for Buildings and Construction (GlobalABC). DETAIL
- California now has more EV charging stations than gas pumps, a significant milestone on its road to stopping the sale of gas-powered cars by 2035. DETAIL
🍃 GREEN COLUMN🍃
AN OVERVIEW OF THE TSRS FRAMEWORK
Sustainability reporting is the process through which companies regularly disclose their environmental, social, and governance performance. The Türkiye Sustainability Reporting Standards (TSRS) provide a framework designed to ensure companies report their sustainability performance in a more transparent and standardized manner. According to these standards, only businesses that meet certain criteria are required to report.
To be subject to mandatory sustainability reporting, a company must meet two main conditions. First, it must qualify as an institution, organization, or enterprise as defined by the relevant regulations. Second, it must exceed the threshold values for at least two out of three key indicators in two consecutive reporting periods. These indicators are total assets, annual net sales revenue, and number of employees. If a company fulfills these conditions, it falls within the scope of sustainability reporting and is required to make disclosures in accordance with the prescribed standards.
Some entities are exempt from the sustainability reporting obligation. These include banks under the Savings Deposit Insurance Fund (SDIF), joint stock companies not listed on Borsa Istanbul but issuing certain capital market instruments, companies listed on the Close Monitoring Market or the Venture Capital Market, banks with no more than one branch or fewer than 250 employees (excluding those listed on Borsa Istanbul), and companies temporarily exempt from disclosing Scope 3 greenhouse gas emissions. Although not obligated, these companies may voluntarily engage in sustainability reporting, which presents a valuable opportunity for organizations seeking to enhance investor confidence and fulfill their environmental and social responsibilities.
Banks are subject to a special regulation. Regardless of the aforementioned criteria, all banks supervised by the Banking Regulation and Supervision Agency (BRSA) are required to engage in sustainability reporting. These institutions must regularly share their sustainability performance with the public to ensure financial transparency.
When a company becomes subject to mandatory sustainability reporting, its subsidiaries and affiliates are also affected. In such cases, the company must prepare consolidated sustainability reports that include the data of its subsidiaries and affiliates. However, if a subsidiary or affiliate exceeds the threshold values independently, it is also required to report separately. This does not eliminate the parent company’s obligation to include that data in its consolidated report.
To be exempt from sustainability reporting, a company must either fail to meet at least two of the threshold values in two consecutive reporting periods or fall 20% or more below the thresholds. In such cases, the company is released from its reporting obligations starting from the next reporting period. The obligation also ceases if the company no longer qualifies as an institution, organization, or enterprise under the regulation. However, each year, an evaluation is conducted to determine whether the company once again falls under the reporting requirements.
In determining whether a company is subject to sustainability reporting, both financial and operational data are considered. The company’s financial statements, prepared in accordance with Turkish Accounting Standards, are used to calculate total assets and annual net sales revenue. For employee count, the monthly average of the total number of employees reported in the company’s withholding tax return is taken into account; apprentices and interns in vocational training are excluded from this calculation. While the number of employees in subsidiaries is added to the parent company’s total employee count, the employee count in affiliates is calculated based on the parent company’s ownership share.
Sustainability reporting under the TSRS framework is not only about disclosing current performance, it is also a critical step in helping companies achieve long-term sustainability goals. This process supports better management of both environmental and social impacts and aims to create a more reliable and transparent business environment for investors and regulatory authorities alike.
DAMLA GÜNALP, SUSTAINABILITY ASSISTANT SPECIALIST
