TURKEY SUSTAINABILITY REPORTING STANDARDS (TSRS)
Turkey Sustainability Reporting Standards ("TSRS") constitute a set of standards published by Public Oversight, Accounting and Auditing Standards Authority, determines general principles and rules to be pursued by businesses within their sustainability reports.
Public Oversight, Accounting and Auditing Standards Board decision numbered with 32414 regarding the scope of application of these standards has been published in the Official Gazette dated 29.12.2023.
The aim is to contribute to the protection and enhancement of global competitiveness, facilitation of access to domestic and foreign finance, increase in brand values, and meeting stakeholder expectations.
Sustainability Reports to be prepared within this framework, created within the International Sustainability Reporting Standards (“IFRS”) and published by the International Sustainability Standards Board (“ISSB”); IFRS S1 (“General Requirements for Disclosure of Sustainability-related Financial Information”) and IFRS S2 (“Climate-related Disclosures”) standards have been determined.
In accordance with the decision, the following are defined as: IFRS S1 (''General Requirements for Disclosure of Sustainability-related Financial Information''), TSRS 1 (''General Requirements for Disclosure of Sustainability-related Financial Information''); IFRS S2 (“Climate-related Disclosures”) and TSRS 2 “Climate-related Disclosures”.
TSRS 1 ("General Provisions Regarding the Disclosure of Financial Information Related to Sustainability") Standard provides information about all risks and opportunities related to sustainability that may reasonably be expected to affect a business's short, medium, or long-term cash flows, access to finance, or capital cost. These risks and opportunities may also be referred to as "sustainability-related risks and opportunities that may reasonably be expected to affect the expectations of the business."
Its purpose is to disclose information about the company's sustainability-related risks and opportunities that will be useful to the primary users of general-purpose financial reports when making decisions about providing resources to the business.
On the other hand, TSRS 2 ("Climate-related Disclosures") Standard, discloses information about climate-related risks and opportunities that may reasonably be expected to affect a business's short, medium, or long-term cash flows, access to finance, or capital cost. These risks and opportunities may also be referred to as "climate-related risks and opportunities that may reasonably be expected to affect the expectations of the business."
Its purpose is to inform the primary users of a business's general purpose financial reports about climate-related risks and opportunities that will be useful when making decisions about providing resources to the business.
The Board Decision asserts in detail which businesses must comply with the published standards. Accordingly, there are three conditions related to businesses. In this regard, businesses must exceed the threshold value of at least two of the following conditions in two consecutive accounting periods: (i) total assets of 500 million Turkish Liras, (ii) annual net sales revenue of 1 billion Turkish Liras, and (iii) 250 employees. If businesses subject to threshold values exceed the threshold value of at least two of the three criteria specified in this Decision in two consecutive accounting periods, they will be subject to the scope of TSRS application starting from the following accounting period.
Some exemptions have been granted within the scope of the application. It is not mandatory to present comparative information in the first reporting period in which TSRS is applied. Additionally, it is possible to report sustainability reports for the first annual reporting period after publishing the financial reports for the relevant period. In the first two annual reporting periods, the disclosure of Scope 3 greenhouse gas emissions is not mandatory.
Within this scope, we submit for your information that businesses should assess whether they meet the conditions determined by Board Decision and if the conditions are met, it is necessary to prepare the Sustainability Report in accordance with TSRS 1 and TSRS 2 Standards.