What Is TSRS?
TSRS refers to the standards Turkey-based businesses must follow when publishing a sustainability report. TSRS and its scope were published in the Official Gazette on December 28, 2023, and TSRS-compliant reporting became mandatory for all in-scope companies as of January 1, 2024.
Published by the Public Oversight, Accounting and Auditing Standards Authority of Turkey (KGK), TSRS aims to ensure that companies' environmental, social, and governance performance is reported transparently and accountably. This allows investors and consumers to see a company's sustainability performance in full detail and make more informed decisions.
TSRS is made up of two main sections: TSRS S1 and TSRS S2.
- TSRS S1 requires companies to explain how they manage ESG-related risks and opportunities. It provides information on a company's long-term sustainability performance and its long-term financial implications.
- TSRS S2 focuses directly on topics such as climate change and greenhouse gas emissions.
These sections are based on IFRS S1 and IFRS S2, published by the International Sustainability Standards Board (ISSB). This aligns Turkey's sustainability reporting system with international standards.
Who Falls Under TSRS Scope?
Preparing and sharing a TSRS report is mandatory for companies that exceed certain financial and operational thresholds.
Companies that exceed at least two of the following criteria in two consecutive years fall under TSRS scope:
- Total assets above TRY 500 million
- Annual net sales above TRY 1 billion
- More than 250 employees
In addition:
- Companies listed on Borsa Istanbul,
- Banks under BDDK (Turkey's banking authority) regulation are also within TSRS scope. (Banks under TMSF are excluded.)
If a company falls below the defined thresholds by 20% or fails to meet these criteria for two consecutive years, the TSRS requirement no longer applies.
Why Does TSRS Matter for Companies?
So why is TSRS important for companies?
Transparency and Trust
Companies that comply with TSRS build a more transparent and sustainable financial structure, making them more attractive to investors and stakeholders.
Regulatory Compliance
Companies that comply with the standards are better prepared for regulations such as the EU's CSRD (Corporate Sustainability Reporting Directive) and CSDDD (Corporate Sustainability Due Diligence Directive).
Attracting Investors
Reporting under TSRS standards makes it easier to access green finance and sustainability incentives.
Reputation and Competitive Advantage
TSRS strengthens a company's carbon footprint management, making regulatory compliance easier while also improving environmental performance — providing a competitive edge in terms of reputation.
One of the critical effects of TSRS is that it levels the competitive playing field, especially for companies doing business with EU partners.
Companies not subject to TSRS can also choose to prepare reports under these standards. This allows them to stay aligned with international regulations while benefiting from the competitive advantages mentioned above.
Obligations Under TSRS for Your Company
Companies that fall under TSRS must publish a TSRS report for the previous year at the start of each year. (In 2025, companies will need to prepare their first TSRS reports, covering the 2024 period.) Reports can be prepared by internal teams or external consulting firms. Once prepared, reports must be verified by authorized audit organizations listed on the KGK website.
To ease the transition, some concessions have been granted to in-scope companies for the first two years of the implementation:
- For 2024 specifically, companies are not required to carry out comparative analysis and reporting against previous years.
- For the first two years from 2024 onward, companies are not required to include Scope 3 emissions in their reports.
- The first two reports starting from 2024 can be prepared as part of the company's annual financial reports.
How Is a TSRS Report Prepared?
Companies are expected to make disclosures across four core areas in their reports:
Governance
Companies must disclose the governance structures that monitor sustainability-related risks and opportunities. This gives stakeholders visibility into companies' governance processes, action plans, and sustainability procedures.
Strategy
Under this heading, companies are expected to explain how they evaluate sustainability-related risks and opportunities and how these considerations connect with their business model.
Risk Management
Companies must disclose how they assess sustainability-related risks, opportunities, and strategies and how these connect with overall enterprise risk management. This provides insight into the company's overall risk profile.
Metrics and Targets
In this area, companies are expected to explain sustainability-related risks and opportunities through quantitative data using the required metrics defined by TSRS. This heading also covers sustainability-related targets and the tracking of those targets.
The reporting methodology is the company's choice. Three internationally recognized frameworks are typically used when selecting a reporting format: GRI (Global Reporting Initiative), UNGC (UN Global Compact), and OECD (Organisation for Economic Co-operation and Development) standards.
The TSRS Reporting Process
1) Defining the Scope
Companies subject to TSRS must prepare a report that complies with both TSRS S1 and TSRS S2. For companies outside TSRS scope, defining the report's scope according to the institutions to which the report will be submitted is an important first step.
2) Data Collection
TSRS reports are based on non-financial sustainability data. Collecting the data specified in TSRS S1 and TSRS S2 accurately and reliably is a critical requirement before beginning the report.
3) Creating Content in the Required Format
Once the data required for the TSRS report has been collected, content is organized in the previously defined report format.
4) Independent Audit
Completed reports must be verified by organizations authorized by KGK. During verification, auditors review the integrity of reported data, the accuracy of emission calculations, and compliance with international standards.
5) Publication
Audited reports are shared with stakeholders alongside the company's annual financial reports.
CarbonSmart and the TSRS Reporting Process
With the CarbonSmart 'Carbon Footprint Management Platform,' you can manage all TSRS S2-scope metric data from a single place.
Using CarbonSmart, you can perform all of your emission calculations in one place, store and analyze the data you collect, and generate reports that meet international standards.
CarbonSmart stands by your side during the TSRS reporting process with more than 30,000 emission factors and full compliance with standards such as ISO 14064 and ISO 14067.
