THE BOARD DECISIONS ON TURKISH SUSTAINABILITY REPORTING STANDARDS (“TSRS”) AND THE SCOPE OF IMPLEMENTATION PUBLISHED IN THE OFFICIAL GAZETTE

THE BOARD DECISIONS ON TURKISH SUSTAINABILITY REPORTING STANDARDS (“TSRS”) AND THE SCOPE OF IMPLEMENTATION PUBLISHED IN THE OFFICIAL GAZETTE

As it is known, on February 23, 2022, the European Commission published the Draft Corporate Sustainability Due Diligence and amending Directive (CSDD), which sets out the EU legal framework for the allocation of the duty of care regarding the environmental and social impacts of corporate activities in global supply chains.

Subsequently, the Corporate Sustainability Reporting Directive (CSRD), published by the Commission on January 5, 2023, aims to require companies of a certain size operating in the EU to integrate the duty of care into their corporate policies, to identify the social and environmental impacts of their activities, to prevent and mitigate potential negative impacts, to eliminate existing negative impacts and to report them. In this context, the European Sustainability Reporting Standards (ESRS) were adopted by the European Commission on July 31, 2023 to be used by all companies subject to the Corporate Sustainability Reporting Directive.

In the following period, the Regulation is expected to be published in the EU Official Journal, enter into force on the third __day following its publication and be directly implemented in EU Member States as of each fiscal year starting from January 2024. In parallel with the developments on sustainability in the European Union, in Turkey, with the sixth paragraph added to Article 88 of the Turkish Commercial Code No. 6102 (“TCC”) with the amendment made in the Official Gazette dated June 4, 2022 and numbered 31856, the authority to determine and publish the Turkish Sustainability Standards was given to the Public Oversight Authority.

In this context, the board decision of the Public Oversight, Accounting and Auditing Standards Authority (“POA”) was published in the Official Gazette numbered 32414 and dated 29.12.2023. It is regulated that these standards will be applied in accordance with the Decisions published by the Authority for the annual reporting periods starting on or after Ol .Ol .2024. Within this scope, the entities that will be subject to sustainability reporting within the scope of the Board Decision on the Scope of Application of Turkish Sustainability Reporting Standards (TSRS) have been determined. Accordingly

Listed in Article 3, paragraph l. of the relevant Board Decision. The companies that exceed the threshold values of at least two of the specified limits in two consecutive reporting periods are included within the scope of the mandatory practice.

The institutions, organizations and enterprises included in the relevant Decision are as follows:

• Pursuant to the Banking Law No. 5411, entities subject to the regulation and supervision of the Banking Regulation and Supervision Agency and specified in the scope of the resolution, (They are within the scope of mandatory reporting regardless of any threshold value)
• Insurance, reinsurance and pension companies operating under the Insurance Law No. 5684 and the Individual Pension Savings and Investment System Law,
• Companies subject to regulation and audit under the Capital Markets Law No. 6362,
• Companies authorized to operate in Borsa Istanbul Markets. During these evaluation criteria, companies will be evaluated together with their subsidiaries and affiliates.

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Please see for the relevant Board Decision.