Ending “Greenwashing” with the Era of “True Green” Investment
Official titleTürkiye Green Taxonomy Regulation
The first national Green Taxonomy Regulation, prepared to classify sustainable investments in Türkiye and prevent “greenwashing” activities, has been published.
Before
Türkiye did not have a national classification system (taxonomy) determining the environmental sustainability of economic activities or a mandatory official reporting requirement.
After
Six environmental objectives and technical screening criteria aligned with EU standards have been established; financial institutions and companies of a certain size are required to report under the taxonomy, and administrative fines are imposed on those that fail to comply.
Details of the Regulation
This Regulation establishes the technical criteria and reporting procedures for determining which activities in Türkiye’s economy are considered environmentally sustainable. The regulation is built around 6 core environmental objectives: greenhouse gas reduction, adaptation to climate change, protection of water resources, the circular economy, prevention of pollution, and protection of biodiversity. For an economic activity to be considered “green,” it must make a significant contribution to at least one of these objectives, avoid harming the others, and comply with minimum social safeguards.
A comprehensive reporting regime has been introduced for companies and financial institutions. Financial actors such as banks, insurance companies, and intermediary institutions are required to report the extent to which their portfolios are aligned with the taxonomy, based on revenue, capital expenditures (CapEx), and operating expenses (OpEx). An “Online Taxonomy Management System” will be established to manage these processes, and all reports will be made available to the public.
The Regulation also establishes an institutional structure and provides for the establishment of the “Türkiye Green Taxonomy Committee” and “Technical Expert Groups” under the Climate Change Presidency. Production activities using solid fossil fuels have been unequivocally excluded from the taxonomy. The reporting obligations for financial institutions have been deferred until 1 January 2029, allowing for a transitional process.
Questions You Might Have
- Which companies are required to report?
- Companies conducting economic activities within the scope of the Regulation and financial institutions such as banks, insurance companies, and portfolio management companies are subject to the mandatory requirements.
- Can coal investments be considered green?
- No. Under Article 11 of the Regulation, production activities using solid fossil fuels are definitively deemed not to be green economic activities.
- What is the penalty for failing to comply with the obligations?
- Administrative fines shall be imposed under the provisions of the Climate Act against those who fail to fulfil their reporting and disclosure obligations.
Key Terms
- Yeşile Boyama (Greenwashing)
- The portrayal of a product or service as being more environmentally friendly than it actually is, thereby deceiving the public.
- DNSH (Do No Significant Harm)
- The principle that while contributing to one environmental objective, an activity must not significantly harm the other objectives.
- Teknik Tarama Kriterleri
- The scientific and quantitative threshold values that determine whether an activity is sustainable.
Affected Sectors
- Finance and banking
- Energy
- Manufacturing industry
- Transport and logistics
- Construction and real estate
- Agriculture and forestry
- Tourism
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REGAS Commentary
This regulation represents a critical turning point for Türkiye’s alignment with the EU Green Agreement and access to international green financing resources. Companies will no longer be able to obtain green loans merely by asserting that they are “environmentally friendly”; they will be required to substantiate this through technical criteria. From the consumer perspective, making misleading green advertisements (greenwashing) subject to legal sanctions will increase market confidence.