Sustainability has become an increasingly prominent issue in today’s business world. Companies have shifted from being solely profit-oriented to taking responsibility for environmental, social and corporate governance issues. Sustainability reporting standards and guidelines have been developed to fulfill these responsibilities and ensure transparency.

What is Sustainability?

Sustainability reporting is a set of reports prepared to assess and present a company’s social, environmental, and economic performance to stakeholders. These reports include the company’s sustainability strategies, goals, achievements, and areas for improvement. Sustainability reporting allows companies to measure not only their financial performance but also their environmental and social impact.

International Sustainability Standards

Many international organizations and institutions have developed specific standards and guidelines that companies should follow when preparing their sustainability reports. The most well-known of these are the standards of organizations such as the Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP), United Nations Global Compact (UNGC) and Sustainability Accounting Standards Board (SASB).

• Global Reporting Initiative (GRI): GRI is the most widely used standard for measuring, reporting and improving companies’ sustainability performance. GRI standards cover economic, environmental and social dimensions and enable stakeholders to understand a company’s sustainability performance.
• Carbon Disclosure Project (CDP): CDP is a platform that assesses how companies manage the risks and opportunities associated with climate change. By reporting their carbon footprint and other climate change-related data to CDP, companies can be better understood by investors and stakeholders.
• United Nations Global Compact (UNGC): The UNGC is an initiative that encourages companies to adopt sustainability principles. The UNGC’s ten principles cover issues such as human rights, labor standards, environmental protection and anti-corruption.
• Sustainability Accounting Standards Board (SASB): SASB develops sectoral standards to help companies integrate sustainability performance into their financial reporting processes. These standards address sector-specific environmental, social and governance issues.

In Turkey, there are certain standards and guidelines on sustainability reporting and governance. In particular, organizations such as the Business Council for Sustainable Development Turkey (BCSD Turkey) and the Sustainable Development Foundation of Turkey (TÜRKONFED) are taking various initiatives to raise awareness and promote transparency on sustainability in the Turkish business community.

These organizations are working to ensure that companies in Turkey comply with international standards and create a sustainability reporting framework that is appropriate for local conditions. The Turkish Sustainability Reporting Standards (TSRS) is a product of these efforts.

TSRS is a series of standards published by the Public Oversight, Accounting and Auditing Standards Authority, which sets out the general terms and principles that enterprises subject to the decision must comply with in their sustainability reporting. These standards aim to facilitate large enterprises’ access to green finance through sustainability reporting and to improve their ability to obtain investment.

The TSRS consists of two main parts: S1 – General Requirements for Disclosure of Sustainability-Related Financial Information and S2 – General Requirements for Disclosure of Sustainability-Related Financial Information. These sections provide specific guidance and requirements to ensure transparent reporting of sustainability-related financial information.

In addition, the companies that are obliged to apply TSRS have been determined. Companies with total assets of TL 500 million, annual net sales revenue of TL 1 billion and more than 250 employees are obliged to prepare a sustainability report within the scope of IFRS. In addition, some companies subject to Capital Markets Board regulation must also comply with the TSRS.

According to the Board Decision on the Scope of Implementation of Turkish Sustainability Reporting Standards (TSRS) published in the Official Gazette No. 32414 dated December 29, 2023, the companies that are obliged to apply TSRS have been determined. These enterprises are required to prepare a sustainability report under TSRS if they exceed the threshold values of at least two of the following criteria in two consecutive reporting periods:

Total assets of 500 million Turkish Liras,
Annual net sales revenue of 1 billion Turkish Liras,
Number of employees more than 250 people.

Organizations that meet these criteria are obliged to prepare a sustainability report following TSRS. In this way, the sustainability performance of large-scale enterprises in Turkey can be monitored more transparently. These reports are efficient tool for evaluating companies’ sustainability strategies and communicating with stakeholders.