Explanation of the Public Oversight Authority's Decision on the Scope of TSRS Application

Explanation of the Public Oversight Authority's decision on the scope of TSRS application

With decision No. 33130 of 25.06.2025 (Procedures and Principles), the Public Oversight, Accounting and Auditing Standards Authority (KGK) clarified the principles for applying its earlier decisions No. 21634 of 27.12.2023 and No. 28294 of 16.12.2024. Accordingly, whether companies are subject to sustainability reporting has been determined, with examples, on the basis of the characteristics and the financial and structural criteria set out in those decisions.

I. Companies within scope

The following companies are within the scope of sustainability reporting:

1. Within scope unconditionally:

   • All banks not under the Savings Deposit Insurance Fund (TMSF).

2. Companies meeting certain size criteria (at least two criteria in two consecutive years):

   • Criteria:

     • Total assets ≥ TRY 500 million,

     • Annual net sales revenue ≥ TRY 1 billion,

     • Number of employees ≥ 250.

   • The following types of company that meet two of these criteria: a) Financial institutions subject to BRSA legislation, b) Insurance, reinsurance and pension companies operating under the Insurance and Private Pension Regulation and Supervision Agency (SEDDK), c) Companies subject to Capital Markets Board (CMB) regulations (listed companies, investment firms, collective investment undertakings, portfolio management companies, mortgage finance institutions, clearing, custody and data storage institutions), d) Authorised institutions, precious metals intermediaries, and companies producing and trading precious metals.

II. Companies outside the reporting scope

Companies fall outside the scope of TSRS reporting in the following cases:

1. Banks under the TMSF,

2. Companies whose shares are not traded on the stock exchange but which have an approved valid issuance document,

3. Companies traded only on the Watchlist Market or the Venture Capital Market,

4. Banks and non-bank financial institutions whose shares are not traded on the stock exchange and which have no more than 1 branch or no more than 250 employees.

Note: The institutions in item 4 are not mandatorily subject to TSRS reporting in periods in which they are exempt from the obligation to disclose Scope 3 greenhouse gas emissions; they may report voluntarily.

III. Application principles

• To fall within scope, a company must both be one of the types listed above and exceed at least two of the 3 criteria in two consecutive years.

• The same two criteria need not be met each year; meeting any two is sufficient.

Assessment by period:

• For 2024: The financial statements for 2022 and 2023 will be used.

  • For 2022: Financial statements not adjusted for inflation,

  • For 2023: Inflation-adjusted financial statements will be taken into account.

• For 2025: The 2023 and 2024 financial statements will be used.

Listed companies:

• For the 2024 reporting obligation, the company must have started trading on the stock exchange in 2022 or earlier.

• Companies that started trading in 2023 or 2024 are not within scope for 2024.

The decision also includes examples of application.

IV. Conditions for leaving the scope

A company's reporting obligation ends in the following cases:

a) If it falls below at least two of the three thresholds for two consecutive years, it leaves the scope from the following period.

b) If, in a single year, it falls 20% or more below at least two of the thresholds, the reporting obligation ends from the following year.

Note: The two criteria fallen below need not be the same.

V. Reassessment for each period

Companies are required to reassess in each reporting period whether they are subject to the sustainability reporting obligation. The sole competent authority for resolving any uncertainties that may arise in this process is the Public Oversight Authority.