Turkish Sustainability Reporting Standards: Is Your Turkish Subsidiary in Scope?

Almost every English-language page on this subject still quotes the old figures.

What TSRS are

TSRS are Türkiye's adoption of the ISSB standards. TSRS 1 corresponds to IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and TSRS 2 to IFRS S2 Climate-related Disclosures. Both were published in the Resmî Gazete of 29 December 2023, no. 32414 (first repeating issue), by the KGK — the authority that also issues the Turkish Financial Reporting Standards (TFRS) — under Article 88 of the Turkish Commercial Code (Law No. 6102) and Decree-Law No. 660. They apply to annual reporting periods beginning on or after 1 January 2024.

Two consequences shape everything a group team needs to know.

First, the reporting basis is financial materiality. A TSRS report asks how sustainability-related risks and opportunities could reasonably be expected to affect the entity's cash flows, access to finance and cost of capital. It does not ask what the entity does to people and the environment for its own sake. That is the opposite end of the telescope from the ESRS, and it is why a TSRS report and an ESRS sustainability statement cannot be cut and pasted into one another.

Second, because TSRS follow the ISSB text, a group already reporting under IFRS S1 and S2 is working with the same architecture: the four core content areas of governance, strategy, risk management, and metrics and targets. TSRS add a small number of Turkish provisions, flagged as T-coded paragraphs; paragraph 61T of TSRS 1 is the one that matters in practice.

The scope test has two parts, and the first is not about size

This is the part most summaries get wrong. The KGK scope decision (no. 21634 of 27 December 2023, same Resmî Gazete) does not apply to Turkish companies generally. It applies to entities within four listed groups:

1. Capital-market undertakings supervised by the Capital Markets Board under Law No. 6362 — investment firms, collective investment undertakings, mortgage finance institutions, central clearing and central securities depository institutions, trade repositories; and joint stock companies whose capital market instruments are traded on an exchange or other organised market, or which hold a valid prospectus or issue document approved by the Board.
2. Banking-sector undertakings supervised by the Banking Regulation and Supervision Agency under Banking Law No. 5411 — banks, rating agencies, financial holding companies, leasing, factoring, financing, asset management and savings finance companies, and holders of a qualifying share in a bank or financial holding company.
3. Insurance, reinsurance and pension companies under Insurance Law No. 5684 and the Private Pension Law No. 4632.
4. Borsa İstanbul market participants — authorised institutions, precious metals intermediaries, and companies producing or trading in precious metals.

If a Turkish entity is not one of these, it is not required to report. The KGK's own decision tree opens with exactly that question, and a negative answer ends the enquiry: the entity is not obliged to report, and may report voluntarily.

For a European group this usually resolves the question in one sitting. An unlisted Turkish industrial, retail or services subsidiary is out of mandatory scope. One that is a bank, an insurer, a leasing or factoring company, or a listed company — including one listed only because of a bond issue — is in, subject to the size test.

The list has also been narrowed since 2023. Portfolio management companies were removed from mandatory scope by KGK board decision of 14 August 2025. Companies traded on the Watchlist Market and the Venture Capital Market of Borsa İstanbul, and companies issuing non-share instruments without a public offering, are carved out too.

The size test, as raised in January 2026

Apart from banks, an entity on the list is caught only if it exceeds at least two of three thresholds in two consecutive reporting periods — and the two need not be the same in both. It must also have held the qualifying status for at least two reporting periods. The obligation then bites in the following period.

On 13 January 2026 the KGK board raised all three figures. The decision (no. 75935942-050.01.04-[01/39092], Resmî Gazete of 16 January 2026, no. 33139) amends the criteria in Article 3(1) of the 2023 decision and applies to accounting periods beginning on or after 1 January 2025. It changes the numbers only: the rule, the entity list and the bank carve-out are untouched.

Because the new figures apply to periods beginning on or after 1 January 2025, a subsidiary preparing a first report for financial year 2025 may have dropped out. Worth checking before the group commissions the work.

Three mechanics matter when you run the test:

• The thresholds are assessed with subsidiaries and associates. Total assets and net sales revenue are added across the entity and its subsidiaries, with intra-group transactions eliminated; employee numbers are added, including overseas headcount; an associate counts in proportion to the holding. The test is run on the Turkish entity and what sits beneath it — not on the European parent's global figures — and an entity is not pulled into scope merely because its parent, subsidiary or associate is.
• There is an exit rule. An entity leaves mandatory scope from the following accounting period if it falls below at least two of the three thresholds in two consecutive periods, or 20 per cent or more below at least two of them in a single period.
• One open point. Scope for financial year 2025 is determined by testing the two preceding periods, and the KGK has not said whether those earlier years are re-tested against the higher thresholds. The natural reading is that they are, but it is not stated — get local confirmation rather than assuming.

Banks: no threshold at all

Banks supervised by the Banking Regulation and Supervision Agency — other than banks within the Savings Deposit Insurance Fund — apply TSRS without any threshold. If your group owns a Turkish bank, size is irrelevant to the obligation. No other category on the list is threshold-free; listed companies and insurers still have to pass the two-of-three test, which is the most common error in secondary material.

One relief applies. Under the KGK board decision of 16 December 2024, banks and non-bank financial institutions whose shares are not traded on Borsa İstanbul and which, at the end of the preceding year, had no more than one branch or no more than 250 employees are not subject to mandatory reporting for as long as they are exempt from disclosing Scope 3 emissions. They may still report voluntarily.

What the subsidiary actually has to produce

A separate, specifically titled report. Paragraph 61T of TSRS 1 — a Turkish addition with no equivalent in IFRS S1 — requires the disclosures to be presented as a separate report titled TSRS Uyumlu Sürdürülebilirlik Raporu. It may sit inside another publication, such as an integrated annual report, provided it is included in its entirety, title included, is clearly identifiable and is not obscured. A group that wants the Turkish disclosures folded into its own annual report needs to design around this.

At the same time as the financial statements, for the same period and on the same entity boundary: the entity reporting on sustainability is the one reporting the related financial statements. A Turkish subsidiary preparing consolidated statements reports on that perimeter — including its own foreign subsidiaries and associates, even where those report under a different framework. A subsidiary that independently meets the test reports in its own right, which does not relieve its Turkish parent from consolidating it.

In the presentation currency of the related financial statements — TSRS 1 paragraph 24. It is not required to be Turkish lira.

With transition reliefs, now extended. The scope decision and Appendix E of TSRS 1 give first-time reporters: no comparative information in the first period; a climate-first option to disclose only TSRS 2 climate information in the first year, stated as such; no Scope 3 disclosure for the first two annual reporting periods, a year longer than IFRS S2 allows; and publication after the financial report in the first year, at the date of the half-year interim report or, where none is prepared, within nine months of period end. By decision of 25 December 2025 (Resmî Gazete of 30 December 2025, no. 33123) the publication-timing and climate-first reliefs were extended by one further year for entities that first reported for 2024.

Assurance is mandatory, and it starts at limited

This is where a group most often underestimates the work. A KGK board decision of 2 September 2024 (Resmî Gazete of 5 September 2024, no. 32653) requires sustainability reports prepared under TSRS for accounting periods beginning on or after 1 January 2024 to be assured from the first year in which they are prepared, on principles set by the authority. The KGK has stated that assurance begins at limited assurance, with reasonable assurance the eventual direction and no date set.

The engagement is performed by audit firms authorised by the KGK specifically for sustainability, under the Sustainability Audit Regulation published in the Resmî Gazete of 17 January 2025, no. 32785. The KGK maintains a public register of authorised firms; it currently lists several dozen for mandatory sustainability assurance and a handful more for voluntary engagements. That is a small market, and a reason to book early.

The Turkish adoption of the international sustainability assurance standard, SGDS 5000, was issued for public comment in October 2025 and had not been published as at the date of this review. Until it is, engagements run under the KGK's GDS 3000 (assurance engagements other than audits or reviews of historical financial information) and GDS 3410 (assurance engagements on greenhouse gas statements).

What changed in 2026, beyond the thresholds

TSRS 2 was amended. The KGK adopted the ISSB's Amendments to IFRS S2: Amendments to Greenhouse Gas Emissions Disclosures by board decision of 22 July 2026, published in the Resmî Gazete of 28 July 2026, no. 33323. They clarify that an authority or the entity's listing exchange may require a different measurement method, restructure and add to the requirements on Scope 3 Category 15 emissions, and rework the industry classification system used for financed emissions. They apply to reporting periods beginning on or after 1 January 2027, with early application permitted and disclosure required if taken early.

A reporting expertise licence exists. In February 2026 the KGK opened the registry and application process for its Corporate Sustainability Reporting Expertise (KSRU) licence — relevant when a group selects local support.

How TSRS sits next to the group's own reporting

The overlap is in the data, not the narrative. Greenhouse gas inventories, energy, workforce numbers and governance arrangements feed both; the materiality assessment, the impact-side disclosures and the framing do not. A group that runs one Turkish data collection exercise and maps it to both standards spends materially less than one running two projects — provided it accepts that the Turkish report answers a narrower question. The scope rules on the European side are in our CSRD and ESRS guide.

Separately, a Turkish subsidiary sits in the value chain of the group's own reporting and of the group's EU customers. Under the Omnibus I value chain cap a supplier that does not exceed an average of 1,000 employees is a protected undertaking, and the EU Voluntary Standard sets the ceiling of what may be required of it for sustainability reporting purposes. And if the subsidiary exports cement, iron and steel, aluminium, fertilisers, electricity or hydrogen into the EU, a third and unrelated data obligation falls on its customers under CBAM.

What to ask your Turkish subsidiary for

1. A written scope determination — which of the listed categories, if any, the entity falls into, and when it acquired that status.
2. The size test on the current figures — TRY 1 billion, TRY 2 billion, 500 employees — run on the last two reporting periods, including subsidiaries and associates.
3. Which transition reliefs it has used and in which year, so the group knows when Scope 3 and comparatives fall due.
4. The name of the KGK-authorised assurance firm and the level of assurance obtained.
5. The greenhouse gas inventory in the group's own format, so it reconciles with group Scope 1, 2 and 3 figures.
6. If the entity is out of scope, a note saying so and why, with the date of assessment. Out of scope is an answer, and should be documented like one.

We prepare these reports on the ground in Türkiye as a sustainability reporting engagement, and assess the same entities against lender requirements as part of environmental and social due diligence. The people who checked this page are on our team page.

This guide is general information about published Turkish legislation and standards, not legal advice on your company's position. Scope, thresholds and timing are set by KGK board decisions and can be amended; confirm the current position before acting.

Frequently asked questions