Carbon Disclosure Requirements in Turkey 2026: Complete Legal Guide for Energy Companies and Foreign Investors

Learn about carbon disclosure requirements in Turkey in 2026. Discover TSRS reporting obligations, climate disclosures, greenhouse gas reporting, ESG compliance, carbon accounting requirements, and legal risks for businesses and investors.

Carbon disclosure has become one of the most important compliance obligations for businesses operating in carbon-intensive sectors. Investors, lenders, regulators, customers, and international business partners increasingly require transparent reporting regarding greenhouse gas emissions, climate risks, carbon reduction strategies, and sustainability performance.

In Turkey, carbon disclosure requirements are rapidly evolving as climate legislation, sustainability reporting standards, carbon markets, and environmental regulations continue to develop. The introduction of the Turkish Sustainability Reporting Standards (TSRS), the adoption of the Climate Law, and the planned implementation of a national Emissions Trading System (ETS) are transforming carbon reporting from a voluntary practice into a legal compliance obligation for many companies.

For energy companies, renewable energy developers, industrial manufacturers, infrastructure operators, financial institutions, and foreign investors, understanding carbon disclosure requirements is essential for regulatory compliance, investment readiness, financing access, and long-term risk management.

What Is Carbon Disclosure?

Carbon disclosure refers to the process of measuring, monitoring, and publicly reporting greenhouse gas emissions and climate-related information.

Carbon disclosure typically includes:

• Greenhouse gas emissions data
• Carbon accounting methodologies
• Climate-related risks
• Emissions reduction targets
• Sustainability strategies
• Carbon management policies
• Transition planning

The purpose is to provide stakeholders with transparent and comparable information regarding a company’s climate-related performance.

Why Carbon Disclosure Matters

Carbon disclosure has become increasingly important because climate-related risks now directly affect:

• Investment decisions
• Financing opportunities
• Regulatory compliance
• Corporate valuations
• Supply chain relationships
• International trade

Investors and lenders increasingly evaluate climate-related disclosures when assessing business performance and long-term resilience.

Companies that fail to provide reliable carbon information may face competitive disadvantages and increased regulatory scrutiny.

Turkey’s Climate Law and Carbon Disclosure

Turkey entered a new era of climate regulation following the adoption of Climate Law No. 7552 in July 2025.

The law establishes the legal foundation for:

• National climate governance
• Greenhouse gas monitoring
• Carbon market development
• Emissions Trading System implementation
• Climate-related compliance obligations

The Climate Law significantly strengthens the importance of carbon reporting and emissions-related transparency across multiple sectors.

For many businesses, climate-related reporting is no longer merely a corporate responsibility initiative but a legal compliance requirement.

Turkish Sustainability Reporting Standards (TSRS)

The most important reporting framework affecting carbon disclosure in Turkey is the Turkish Sustainability Reporting Standards (TSRS).

TSRS was developed by the Public Oversight, Accounting and Auditing Standards Authority (KGK) and is aligned with international sustainability reporting standards issued by the International Sustainability Standards Board (ISSB).

TSRS establishes a standardized framework for reporting sustainability and climate-related information.

TSRS 1

TSRS 1 establishes general requirements for sustainability-related disclosures.

Companies must disclose:

• Sustainability risks
• Sustainability opportunities
• Governance structures
• Risk management systems

TSRS 2

TSRS 2 specifically focuses on climate-related disclosures.

This standard requires reporting regarding:

• Climate risks
• Climate opportunities
• Greenhouse gas emissions
• Climate-related financial impacts

TSRS 2 has become one of the most important carbon disclosure requirements for businesses operating within its scope.

Which Companies Must Report?

Carbon disclosure obligations primarily affect companies that fall within the TSRS reporting framework.

The reporting scope generally focuses on larger entities, public interest entities, financial institutions, and listed companies meeting applicable thresholds. Turkey updated reporting thresholds in 2026, limiting mandatory reporting primarily to larger-scale entities.

Although smaller companies may not currently be subject to mandatory reporting requirements, many voluntarily adopt carbon disclosure practices due to investor and commercial expectations.

Greenhouse Gas Emissions Reporting

A central component of carbon disclosure is greenhouse gas emissions reporting.

Companies generally report emissions using internationally recognized methodologies.

Common categories include:

Scope 1 Emissions

Direct emissions generated from sources owned or controlled by the company.

Examples include:

• Fuel combustion
• Industrial processes
• Company-owned vehicles

Scope 2 Emissions

Indirect emissions resulting from purchased electricity, heating, cooling, or steam.

Scope 3 Emissions

Indirect emissions occurring throughout the value chain.

Examples include:

• Supplier emissions
• Transportation activities
• Business travel
• Product use emissions

Scope 3 reporting is becoming increasingly important because it often represents the largest portion of a company’s carbon footprint.

Carbon Accounting Requirements

Accurate carbon disclosure depends upon effective carbon accounting systems.

Businesses should establish procedures for:

• Emissions measurement
• Data collection
• Monitoring activities
• Verification processes
• Record retention

Reliable carbon accounting supports:

• TSRS reporting
• ESG disclosures
• Carbon market participation
• Investor communications

Poor data quality may create legal, regulatory, and reputational risks.

Climate Risk Disclosure

Modern carbon disclosure extends beyond emissions reporting.

Companies increasingly disclose climate-related risks, including:

Physical Risks

Examples include:

• Flooding
• Wildfires
• Drought
• Heatwaves

Transition Risks

Examples include:

• Carbon pricing
• Climate regulation
• Technology changes
• Market transformation

Climate risk disclosure helps investors evaluate long-term business resilience.

Emissions Trading System Reporting

Turkey’s planned Emissions Trading System will significantly increase carbon disclosure obligations.

Companies participating in the ETS are expected to:

• Monitor greenhouse gas emissions
• Submit verified emissions reports
• Maintain compliance records
• Support allowance calculations

The Climate Law provides the legal basis for establishing the national ETS and related reporting requirements.

Carbon Disclosure and ESG Reporting

Environmental, Social, and Governance reporting is closely connected to carbon disclosure.

Investors increasingly focus on:

• Carbon intensity
• Emissions reduction targets
• Climate governance
• Sustainability performance

Transparent carbon disclosures improve ESG ratings and enhance investor confidence.

Many international investors now treat carbon reporting as a key due diligence requirement.

Assurance and Verification Requirements

Carbon disclosures increasingly require independent verification.

Turkey has strengthened assurance requirements for sustainability reporting, increasing the importance of external review and audit processes.

Verification may cover:

• Emissions calculations
• Reporting methodologies
• Sustainability disclosures
• Carbon accounting systems

Independent assurance improves reporting credibility and reduces compliance risks.

Carbon Disclosure and Green Finance

Green finance initiatives increasingly rely on carbon disclosures.

Investors and lenders often require:

• Emissions data
• Climate strategies
• Sustainability metrics
• Carbon reduction plans

Carbon disclosure is becoming a critical prerequisite for:

• Green bonds
• Sustainability-linked loans
• Climate finance
• ESG-focused investment funds

Companies with strong disclosure practices may enjoy improved financing opportunities.

Carbon Disclosure and CBAM

The European Union’s Carbon Border Adjustment Mechanism is increasing pressure on companies to improve carbon reporting.

Export-oriented businesses may need detailed emissions information regarding products supplied to European markets.

Affected sectors include:

• Steel
• Cement
• Aluminum
• Fertilizers
• Electricity
• Hydrogen

Accurate carbon disclosure helps businesses prepare for international climate-related trade requirements.

Greenwashing Risks

Carbon disclosure creates legal risks if information is inaccurate or misleading.

Potential issues include:

• Overstated emissions reductions
• Unsupported net-zero claims
• Inaccurate carbon accounting
• Misleading sustainability statements

Regulators, investors, and stakeholders increasingly scrutinize climate-related disclosures.

Companies should ensure all reported information is evidence-based and verifiable.

Legal Risks of Non-Compliance

Failure to comply with carbon disclosure obligations may create several risks.

Regulatory Risks

Authorities may investigate inaccurate reporting.

Investor Claims

Investors may challenge misleading climate disclosures.

Financing Risks

Poor reporting may affect access to capital.

Reputational Risks

Public criticism may affect stakeholder confidence.

Strong governance systems help reduce these risks.

Best Practices for Carbon Disclosure

Energy companies and investors should consider:

• Implementing robust carbon accounting systems
• Establishing climate governance frameworks
• Conducting regular data verification
• Monitoring regulatory developments
• Reviewing public disclosures
• Training management teams
• Aligning reporting with international standards

Proactive compliance improves transparency and strengthens investor confidence.

Future Outlook

Carbon disclosure requirements in Turkey are expected to expand significantly.

Key developments may include:

• Expanded TSRS reporting scope
• Greater emissions reporting obligations
• ETS implementation
• Increased climate-related disclosures
• Enhanced verification requirements
• Stronger ESG reporting standards

Businesses that prepare early are likely to benefit from improved compliance and greater access to sustainable investment opportunities.

Frequently Asked Questions (FAQ)

What is carbon disclosure?

Carbon disclosure is the process of reporting greenhouse gas emissions, climate risks, carbon reduction initiatives, and related sustainability information.

Are carbon disclosures mandatory in Turkey?

Yes. Certain companies are subject to mandatory sustainability and climate-related reporting requirements under the TSRS framework and related regulations.

What is TSRS?

TSRS stands for Turkish Sustainability Reporting Standards, Turkey’s official sustainability reporting framework aligned with international standards.

What are Scope 1, Scope 2, and Scope 3 emissions?

Scope 1 covers direct emissions, Scope 2 covers purchased energy emissions, and Scope 3 covers indirect emissions throughout the value chain.

How does the Climate Law affect carbon disclosure?

Turkey’s Climate Law establishes a legal framework for climate governance, emissions monitoring, carbon markets, and climate-related compliance obligations.

Do energy companies have additional disclosure obligations?

Yes. Energy companies often face heightened scrutiny because of emissions intensity, climate risks, and potential ETS participation.

Why is carbon disclosure important for investors?

Carbon disclosure helps investors evaluate climate-related risks, sustainability performance, and long-term business resilience.

Will carbon reporting requirements increase in the future?

Yes. Climate legislation, carbon markets, ESG regulations, and international reporting standards are expected to expand carbon disclosure obligations.

Legal Support and Contact Information

Carbon disclosure requirements are becoming a critical component of climate compliance, ESG reporting, sustainable finance, and corporate governance. Professional legal guidance can help businesses establish effective reporting systems, reduce regulatory risks, and strengthen investor confidence.

Legal Support for Carbon Disclosure and Climate Compliance

Fırat Fesih Kaya Law

Phone: +90 312 434 22 22

Mobile: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yildirim Tower No:148, 06520 Balgat, Cankaya, Ankara, Turkey

Our legal team advises foreign investors, energy companies, renewable energy developers, infrastructure funds, industrial operators, financial institutions, and multinational corporations on carbon disclosure obligations, sustainability reporting, climate law compliance, ESG regulations, emissions trading systems, and sustainable investment strategies throughout Turkey.