Sustainability

Our Sustainability Services

A) Reporting

1. Determination of TSRS

With the decision of the Public Oversight Accounting and Auditing Standards Authority (KGK) dated December 29, 2023, published in the Official Gazette No. 32414 (1st Supplement), the International Financial Reporting Standards Foundation (IFRS Foundation) standards IFRS S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and IFRS S2 "Climate-related Disclosures" have been translated into Turkish and incorporated into national regulations under the name of Turkish Sustainability Reporting Standards (TSRS). These standards are:

• TSRS 1 General Requirements for the Disclosure of Sustainability-related Financial Information
• TSRS 2 Climate-related Disclosures

TSRS is essentially in the form of a financial reporting standard. Along with the Turkish Accounting Standards (TMS), TSRS constitutes the full set of financial reporting. The "Sector-Specific Application Guide for TSRS 2" that is part of TSRS 2 is not mandatory, but its applicability must be evaluated to determine risks and opportunities.

2. Scope of TSRS Application

The scope of TSRS implementation has been determined by the KGK with the decision published on December 29, 2023, in the Official Gazette No. 32414 (1st Supplement). According to Article 3 of the decision, businesses that are categorized and exceed specified thresholds must prepare a mandatory TSRS-compliant sustainability report. Merely being categorized or exceeding the thresholds is not sufficient. A business must meet both criteria to be within the mandatory application scope.

As mentioned in the decision, all banks, except those in the Savings Deposit Insurance Fund, are included in the mandatory TSRS scope, regardless of threshold values.

Additionally, with the decision published in the Official Gazette No. 32756 on December 18, 2024:

• The phrase "joint-stock companies whose securities are approved by the Capital Markets Board for trading on a stock exchange or other organized markets" has been replaced with "companies listed in the close monitoring market of Borsa İstanbul or companies listed in the venture capital market for qualified investors."
• Companies are issuing securities without a public offer but with an approval document from the Capital Markets Board are excluded from the mandatory scope.
• Banks and non-banking financial institutions, except those whose shares are traded on Borsa İstanbul, are required to report on Scope 3 greenhouse gas emissions only if their branch count exceeds 1 or their number of employees exceeds 250. Reporting on Scope 3 emissions is optional for these institutions during the exemption period.

3. TSRS Transition Provisions and Flexibilities

The transition provisions for the preparation of the first year of TSRS-compliant sustainability reports are outlined in Annex E of TSRS 1, Annex C of TSRS 2, and the second section of the KGK Decision on the TSRS Implementation Scope (Decision No. 21634). The purpose is to facilitate adaptation and prevent excessive preparation costs and application challenges for businesses in the first year. According to the provisions of the relevant standards and the Decision:

• Comparative information is not mandatory in the first reporting period of TSRS application. Normally, when the 2024 sustainability report is published, data from the 2023 fiscal year should also be disclosed for comparison. However, this requirement has been waived for the first application period. If a business implements TSRS for the first time in 2030, it is not required to present 2029 data for comparison.
• Normally, sustainability reports and financial reports must be published on the same day. However, for the first application year only, TSRS-compliant sustainability reports containing financial disclosures related to sustainability can be published on a different day from the financial reports. However, businesses that are required to prepare quarterly financial reports must publish the sustainability report for the relevant year on the same day as the second-quarter report for the year following the end of the activity year (For example, a bank that is required to publish quarterly reports must publish its 2024 sustainability report on the same day as the second-quarter report for the period from April to June 2025). On the other hand, businesses that are not required to publish quarterly reports can publish their sustainability reports on a day different from the financial reports, provided that they do so within nine months after the end of the activity year (For example, a business not required to publish quarterly reports may publish its 2024 financial report on April 5, 2025, and its TSRS-compliant sustainability report on September 10, 2025).
• For the first two years of TSRS implementation, there is no requirement to disclose Scope 3 category data related to greenhouse gas emissions in the sustainability reports.
• In the first TSRS implementation period, only the RS 2 application for the 2024 fiscal year is permitted. However, the TSRS 1 standard will continue to be applied to the extent it relates to climate-related risks and opportunities.
• Normally, for sustainability reports prepared according to TSRS, the measurement and reporting of greenhouse gas declarations should follow the Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard (2004) for Scope 1 and 2 emissions, and the Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Standard (2011) for Scope 3 emissions. However, if a different method was used in the year prior to the first year of TSRS application (e.g., ISO 14064-1), the use of this alternative method is allowed in the first year of TSRS reporting.

In this context, as RSM Turkey, we provide detailed and transparent reporting services to support businesses in their sustainability journey. With reports prepared in accordance with Turkish and International Sustainability Reporting Standards (TSRS and IFRS S1 and S2), the Global Reporting Initiative (GRI), the European Sustainability Reporting Standards (ESRS), and the Carbon Disclosure Project (CDP), we contribute to the objective evaluation of businesses' performance and provide opportunities for strategic improvement.

B) Assurance Auditing

The obligation for assurance audits of sustainability reports arises due to the importance of ensuring that the sustainability-related risks and opportunities presented in the reports are reliable, as they significantly impact the decisions of investors.

Therefore, sustainability assurance auditing can be defined as a qualified process where the auditor obtains sufficient and appropriate evidence to issue a conclusion designed to increase stakeholders' confidence in the sustainability report.

With the decision published in the Official Gazette No. 32653 on September 5, 2024, assurance audits for sustainability reports have become mandatory in Turkey.

Through assurance audits, businesses strengthen their sustainability information systems, internal control systems, and corporate governance processes.

As RSM Turkey, we offer assurance auditing services for sustainability reports with our experienced team to ensure their accuracy and reliability.

C) Consulting

Sustainability reports can be prepared internally by businesses to ensure visibility of their sustainability efforts and meet investor expectations.

In this regard, RSM Turkey provides strategic consulting and management guidance to integrate sustainable business practices into your company's DNA. Through these services, we support businesses in achieving their sustainability goals, aiming for long-term success and sustainable growth.

D) Training

The Turkish Sustainability Reporting Standards and IFRS Foundation Sustainability Disclosure Standards are newly established global sustainability reporting standards. Their novelty brings challenges in fully understanding the subject and applying the standards to reports.

As RSM Turkey, we aim to increase social awareness and corporate capacity by providing training on topics such as sustainability theory, sustainability reporting, adapting to framework regulations, emission control and management, and assurance auditing, to contribute to the establishment of minimum quality standards within companies and among auditors.

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