CMB Chairman Gönül: We Aim to Complete Our Sustainability Initiatives by 2024

The first Collaboration and Awareness meeting within the framework of the Corporate Sustainability Leaders Summit organized in partnership with the Public Oversight, Accounting and Auditing Standards Authority (KGK) and the Capital Markets Board (SPK) took place at the General Directorate of Halkbank Conference Hall.

The meeting was attended by Deputy Ministers of Treasury and Finance Osman Çelik and Abdullah Erdem Cantimur, SPK Chairman İbrahim Ömer Gönül, KGK Chairman Hasan Özçelik, and other guests.

Speaking at the summit, Deputy Minister of Treasury and Finance Osman Çelik stated that the ESG market is expected to reach a volume of approximately 31 trillion dollars by 2025, constituting one-third of global assets.

Çelik pointed out that the reporting of sustainability information will gain greater importance every day, emphasizing that "it is crucial to treat this issue as a national matter and to own it, given that countries will swiftly take action and that it will become mandatory."

He stressed the significant importance of businesses developing new strategies and business models that are more sensitive to the environment, nature, and society in this new era, as well as improving processes and managing this transformation effectively.

Çelik noted that significant steps have been taken in the field of sustainability globally and in Turkey over the past three years, stating: "During this period, we witnessed a rapidly developing legislative change and transformation process aimed at achieving global sustainability goals. With the coordinated efforts of our relevant ministries and institutions, we have made significant progress in this field. Various projects, such as the Responsible Program developed by our Ministry of Commerce, support programs for digital and green transformation from our Ministry of Industry and Technology, and taxonomy studies from our Ministry of Environment, Urbanization and Climate Change, have recorded important advances in sustainability."

He mentioned that the Ministry of Treasury and Finance has taken significant steps to develop financial models with new strategies and policies in sustainable finance, stating that a new department has been established in this direction.

Discussing the work conducted within the Ministry, Çelik said: "On the other hand, we have prepared an action plan at the national level, which is a high-level policy document for green finance that will track projects that need to be implemented in this area. We will share this with you soon. We continue to produce instruments specifically for this area, starting with our ESG bond issuances. In the coming period, we plan to play an effective role in ESG bond markets in both conventional areas and sukuk and similar alternative financing models."

Çelik also referred to the Capacity Development Program introduced at the summit. He stated that sustainability cannot be achieved solely through a legislative infrastructure, emphasizing that "the top executives of our businesses and institutions adopting and taking necessary steps on this issue is vital for achieving success in this process. Therefore, it is of great importance for all of us to provide the necessary support to the process. The first phase of the program—the provision of awareness and cooperation—plays a critical role in the success of other phases."

"Reporting sustainability information is an important need," said Deputy Minister of Finance Cantimur, explaining that the concept of sustainability, especially with the Paris Climate Agreement, has reshaped the rules of doing business by placing newly developed policies and regulations at the center of economic and financial systems.

Cantimur expressed that the climate crises experienced in recent years, which have been increasingly intensifying, have fundamentally changed the dynamics of commercial life, stating: "This situation has prompted countries to create new policies and regulations in this area. These policies and regulations have shifted the focus beyond numbers, affecting all actors in the value chain in various ways, and have brought numerous opportunities for businesses to be more sensitive to nature, society, and their human resources."

Cantimur shared that investors and business stakeholders are demanding high-quality, reliable, and comparable reports regarding climate, working conditions, human rights, and corporate governance from companies. He noted that strategic steps towards sustainability have become a fundamental condition for long-term success, competitiveness, and corporate reputation, stating, "At this point, the reliable, impartial, comparable, and comprehensive reporting of sustainability information has become an important need. In this respect, in line with our country policies aimed at sustainable development and parallel to developments worldwide, KGK has been authorized to determine and publish the Turkey Sustainability Reporting Standards, compatible with international standards, through the amendment made to the Turkish Commercial Code in 2022."

Cantimur recalled that under this authority, KGK has established the Turkey Sustainability Reporting Standards (TSRS) in accordance with international standards to ensure that sustainability reports are transparent, comparable, and globally valid. He shared the benefits of TSRS, stating: "Reporting in line with TSRS will transparently highlight the risks and opportunities related to the sustainability of businesses while establishing strategies for compliance with risks and opportunities, thereby creating a roadmap for their sustainability journeys. Therefore, the biggest factor in the success of reporting is the ownership of this process by the top management of the business and the integration of the concept of sustainability into the overall strategy and key decision-making processes of the business."

SPK Chairman Gönül highlighted that when looking at milestones in sustainable development, social issues such as poverty, access to food, access to clean water, and education, as well as environmental issues like clean energy, climate action, life below water, and life on land, were addressed in 2015.

He pointed out that the publication of the United Nations Sustainable Development Goals (SDGs) marked a significant milestone, including 17 high-level goals, 169 sub-targets, and 232 indicators under the SDGs. Gönül continued by discussing the benefits of implementing the SDGs: "The SDGs have imposed obligations on the business world to reduce the negative impacts of their economic activities on society and the environment and to engage in initiatives that will create a positive impact. Particularly, while financial reporting initially relied on companies' financial indicators, sustainability-focused changes in economic activities have led to the broadening of reporting to include sustainability goals as well. Environmental reporting that began to emerge in the 1990s subsequently encompassed social responsibility reports, and since the 2010s, Sustainability Reporting has gained importance."

Gönül noted that the broad adoption of international agreements in the fight against climate change is a significant development in sustainability. He stated that during the Kyoto Protocol and later within the framework of the Paris Climate Agreement, national commitments to combat climate change were established, adding, "Our country ratified the Paris Climate Agreement in 2021. With this agreement, the work related to sustainability and green transformation in our country has gained momentum. In particular, the Green Deal Action Plan published in 2021 has provided a roadmap for public institutions to carry out sustainability activities in a coordinated manner."

Gönül referred to SPK's work related to sustainability reporting, stating that the first initiative was the publication of the Sustainability Principles Compliance Framework. He recalled that under the Green Deal Action Plan, in February 2022, “Green Debt Instruments, Sustainable Borrowing Instruments, Green Lease Certificates, and Sustainable Lease Certificate Guidelines” were published. He noted that in June 2022, a reporting template for the sustainability principles compliance framework was also established by the Board. He said, "We aim to complete our sustainability efforts by 2024. Finally, I believe that these efforts will increase our investors' awareness of sustainability and direct them towards companies working in Environmental, Social, and Governance areas in the long term."

KGK Chairman Özçelik emphasized that the institutions participating in the meeting are pioneers in digital and green transformation, asserting that this transformation process is a more extensive structure extending to all areas of life. Özçelik expressed that institutions have a responsibility to guide and support the firms in their supply chains during these transformation processes, continuing: "You are not alone in these duties. We are preparing our country for the twin transformation revolution with public institutions, ministries, NGOs, universities, and national-international partnerships. Every risk also presents opportunities. We are ready to work together to seize these opportunities, mitigate risks, and lead in the global twin transformation revolution."

Özçelik recalled that KGK published Sustainability Reporting Standards in December 2023 simultaneously with the world. He explained that they have prepared a capacity development program during this process, stating, "We are organizing training and awareness programs for companies and employees across Turkey. We are carrying out these activities with our relevant ministries in different provinces. We have held meetings in nearly 10 provinces with our Ministries of Commerce and Industry and Technology, and we plan to be more present in the field in the future."