The Türkiye Green Taxonomy Regulation: Reporting Obligations and Compliance Steps for Companies

The Türkiye Green Taxonomy Regulation (the "Regulation"), prepared by the Ministry of Environment, Urbanisation and Climate Change, was published in the Official Gazette dated September 24, 2026 and numbered 33380 and entered into force on its date of publication.

The Regulation was prepared on the basis of the Climate Law No. 7552 dated July 2, 2025 and Presidential Decree No. 4.

The purpose of the Regulation is to regulate the procedures and principles of the Türkiye Green Taxonomy in order to support economic activities aligned with sustainable development goals, to encourage the flow of financing to sustainable investments and to prevent greenwashing in the market.

What Is the Taxonomy and What Does It Mean for Companies?

The Regulation defines the Türkiye Green Taxonomy as a classification system that contributes to the mobilisation of climate finance by setting out principles and criteria for economic activities contributing to the fight against climate change in line with the designated environmental objectives.

Its function is to establish, through objective and verifiable criteria, whether an economic activity is environmentally sustainable. In this respect, the Regulation may be regarded as determining the criteria by which activities are to be classified and how this is to be reported, rather than imposing a direct environmental performance obligation on companies.

Its effect in practice may largely be expected to arise through access to financing. Indeed, the general principles of the Regulation expressly provide that the establishment of technical screening criteria determining the sustainability of eligible economic activities in order to support their access to financing is a guiding principle.

The Distinction Between Eligible and Aligned Activities

The Regulation distinguishes between two concepts. An eligible economic activity refers to the economic activities within the scope of the Türkiye Green Taxonomy published in Annex-1 to the Regulation. An aligned economic activity refers to those eligible economic activities that satisfy the criteria set out in Article 6 of the Regulation.

Accordingly, for an eligible economic activity to be an aligned economic activity, the following three conditions must be satisfied together:

• Making a substantial contribution to at least one of the environmental objectives.
• Doing no significant harm to any other environmental objective.
• Complying with the minimum social safeguards.

This distinction may prove significant in practice. The mere inclusion of an activity in the Annex-1 list does not in itself result in that activity being regarded as green, as the technical screening criteria are also required to be satisfied.

The Six Environmental Objectives

The Regulation sets out the environmental objectives as follows:

• Reduction of greenhouse gas emissions.
• Adaptation to climate change.
• Sustainable use and protection of water and marine resources.
• Transition to a circular economy.
• Prevention and control of pollution.
• Protection and restoration of biodiversity and ecosystems.

Both assessments are made by reference to the technical screening criteria. Under the Regulation, in order for an activity to be regarded as making a substantial contribution, it must satisfy the substantial contribution criteria established for the relevant environmental objective. In order to be regarded as doing no significant harm, it must satisfy the do-no-significant-harm criteria within the same set of criteria.

Minimum Social Safeguards: The HR and Employment Dimension

An aspect of the Regulation that may be overlooked in practice is that the classification has a social component as well as an environmental one.

Under the Regulation, the minimum social safeguards are the procedures applied in order to ensure compliance with social protection arrangements covering the principles referred to in the ten fundamental conventions defined in the International Labour Organization's Declaration on Fundamental Principles and Rights at Work and the rights set out in the Universal Declaration of Human Rights, as well as the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights and national labour and social security legislation.

It may therefore be concluded that, even where an activity satisfies the environmental criteria, it could be difficult to regard it as an aligned economic activity unless compliance with national labour and social security legislation is ensured. For this reason, it may be advisable not to leave practices relating to employee rights, occupational health and safety, working hours, wages and social security notifications outside the scope of the taxonomy exercise.

Technical Screening Criteria and the Timetable

The technical screening criteria are determined by the Directorate of Climate Change (the "Directorate") in line with the principles listed in the Regulation. The criteria are determined quantitatively where possible, and qualitative measures may be applied where quantitative determination is not possible.

Under the Regulation, production activities using solid fossil fuels will not be regarded as environmentally sustainable economic activities.

The criteria are published on the Directorate's official website, where an update is made the updated criteria are published by December 15 of each year, and they take effect as of the year following the year of the update. This timetable may enable companies to anticipate changes to the criteria in their annual planning.

Reporting: Voluntary for Whom, Mandatory for Whom?

Article 13 of the Regulation establishes a two-tier structure for reporting.

Accordingly, institutions, organizations and enterprises carrying out at least one of the eligible economic activities listed in Annex-1 may report in accordance with the reporting templates to be published on the Directorate's official website. Having regard to the wording of the provision, reporting may be regarded as voluntary for this group.

By contrast, among financial institutions, intermediary institutions, investment trusts and portfolio management companies, banks operating under Banking Law No. 5411, and insurance, reinsurance and pension companies operating under Insurance Law No. 5684 and the Individual Pension Savings and Investment System Law No. 4632 are required to report.

The reporting procedures and principles applicable to these institutions will be determined, as relevant, by the Capital Markets Board, the Banking Regulation and Supervision Agency and the Insurance and Private Pension Regulation and Supervision Agency.

Pursuant to Provisional Article 1, those financial institutions are not required to carry out taxonomy reporting until January 1, 2029.

How Voluntary Reporting Becomes an Indirect Requirement

One of the provisions of the Regulation likely to produce the greatest practical effect is the power granted to financial institutions subject to the reporting obligation to request reporting. Under this provision, financial institutions may request that institutions, organizations and enterprises falling within the voluntary reporting group carry out reporting in respect of the transactions that may form the subject of their own reporting.

In addition, financial institutions rely on the current data and key performance indicators of the reporting institutions, organizations and enterprises in order to calculate their own key performance indicators.

When these two provisions are assessed together, it may be considered that, although reporting is legally voluntary for real sector companies, it could become a commercially expected practice. It appears possible that a company with a credit, insurance or investment relationship may be called upon to provide taxonomy data at the request of the financial institution.

Key Performance Indicators

Under the Regulation, the key performance indicators cover the environmental objectives and, for the real sector, consist of the ratios of revenue, capital expenditure and operating expenditure derived from products or services that are taxonomy-eligible or taxonomy-aligned.

For banks, intermediary institutions, investment trusts, portfolio management companies and insurance, reinsurance and pension companies, the ratios showing the extent to which their activities take into account environmental sustainability and the environmental objectives are taken as the basis.

Calculating these indicators may require that revenue, capital expenditure and operating expenditure items be capable of being broken down by activity. Whether the accounting and reporting infrastructure permits such a breakdown may be regarded as one of the first control points of the compliance exercise.

The Reporting Timetable and the Minimum Threshold

Under the Regulation, reports are uploaded to the Online Taxonomy Management System at the end of the sixth month following the end of the financial statement period of the relevant year. For enterprises using a special accounting period, the end of that special accounting period is taken into account. Reports cover the reporting period of the year preceding the date on which the reporting is carried out.

The Regulation also provides for a minimum threshold. Accordingly, where the ratio of the revenue, capital expenditure or operating expenditure arising from the eligible economic activities listed in Annex-1 to the respective total is below 10%, the key performance indicator of the relevant economic activities may be excluded from the reporting.

The Taxonomy Transition Plan and Verification

The Regulation defines the taxonomy transition plan as the strategic plan established by institutions, organizations and enterprises in order to achieve compliance with the technical screening criteria or to manage the risks arising from the transition to a low-emission economy. The transition plan constitutes a complementary element of the report, and the related procedures and principles will be determined by the Directorate.

The procedures and principles for the verification of reports will likewise be determined by the Directorate. Accordingly, who is to carry out the verification and according to which standards may become clearer through secondary legislation.

The Online Taxonomy Management System and Public Disclosure

The processes relating to the taxonomy are carried out through the Online Taxonomy Management System. Under the Regulation, reports uploaded to the system are, as a rule, open to the public.

This provision may be taken to indicate that reporting is not merely an administrative notification but constitutes a declaration to be disclosed publicly. The accuracy of the report's content may therefore take on additional importance.

As regards information security, information and documents other than the taxonomy report uploaded to the system may be shared with third parties with the consent of the institutions, organizations and companies concerned. Compliance with Cyber Security Law No. 7545, Law No. 7552 and the legislation enacted on the basis of those laws is required in ensuring information security.

Greenwashing and Administrative Sanctions

The Regulation lists the prevention of greenwashing among its objectives and defines the concept. Under that definition, "greenwashing is the deceptive use of public relations, financing, advertising or marketing methods in order to create the perception that the products or services of an institution, organization or enterprise make a substantial contribution to one or more of the environmental objectives, do no significant harm to the other environmental objectives and satisfy the minimum social safeguards."

This definition may also produce consequences for sustainability communications and marketing activities. For example, a manufacturer may have presented its product as a "green product" on its packaging and in its sustainability report. Where that statement relies solely on the use of renewable energy in production, while the harm caused to water resources in the production process is significant or shortcomings exist in terms of compliance with labour and social security legislation, the activity cannot be regarded as an aligned economic activity within the meaning of the Regulation. In that case, the statement could be assessed as greenwashing, since it creates the perception that the product satisfies the taxonomy criteria in full.

Green claims made without satisfying the taxonomy criteria could henceforth be assessed by reference to a concept defined in the Regulation.

As regards administrative sanctions, under the Regulation an administrative fine provided for in Climate Law No. 7552 is imposed on those reporting entities that fail to fulfil the obligation to provide the notifications, information and documents required for reporting. Set at TRY 170,000 in the Law, this amount was determined as TRY 213,333 for 2026 following the application of the revaluation rate. The fine is increased in the event of repetition within three years of the date of notification, and given that the amounts are updated each year, monitoring notification and document submission processes may be regarded as important.

Checklist for Companies

Following the entry into force of the Regulation, the matters companies should review are as follows:

• Has it been determined which of the company's activities fall within the eligible economic activities listed in Annex-1 to the Regulation?
• Can revenue, capital expenditure and operating expenditure items be broken down by activity, and is the accounting infrastructure suitable for calculating the key performance indicators?
• Has the possibility of a taxonomy data request from financial institutions with which the company has a credit, insurance or investment relationship been assessed?
• In terms of the minimum social safeguards, have compliance with labour and social security legislation, occupational health and safety practices and human rights policies been reviewed?
• Are the green claims used in sustainability communications and marketing materials capable of being supported by the technical screening criteria?
• Has an annual monitoring mechanism been established, taking into account that the technical screening criteria may be updated by December 15 of each year?
• If reporting is to be carried out, has an internal timetable been established for uploading the report to the system by the end of the sixth month following the end of the financial statement period?

Conclusion

The Türkiye Green Taxonomy Regulation may be regarded as bringing a practice that has to date largely proceeded through voluntary declarations in the field of sustainability closer to defined criteria and a verifiable reporting regime.

The fact that reporting is voluntary for real sector companies should not be read as meaning that the Regulation is of no concern to them. Since financial institutions will report as from January 1, 2029 and will rely on their clients' data when calculating their own indicators, it may be advisable to complete the preparation of that data before that date.

It may therefore be useful for companies to ask themselves the following question: which of our activities fall within the scope of Annex-1, and are we able, as of today, to break down and report the revenue, capital expenditure and operating expenditure data relating to those activities?

If there is no clear answer to this question, reviewing the data infrastructure before the technical screening criteria and the secondary legislation are published may be worth considering.

You can access the relevant Regulation here. (In Turkish)