The concept of ESG, which has become an important topic today, refers to the principles of environmental, social and corporate governance1. Sustainability is currently one of the significant topics in corporate law, and especially as a result of regulations such as the Paris Agreement of the United Nations, it brings to the agenda the responsibilities of companies that are not limited to profitability but also include environmental and social factors. This concept covers environmental, social and governance practices that may be significant for investors and shareholders2. With the regulations made on international and national levels (such as the EU CSRD, SFDR, etc.) and the sanctions implemented, it has become imperative for companies to analyze their non-financial risks and opportunities and to develop strategies accordingly. This situation, which causes not only financial data but also sustainable practices, human rights, and transparent management mechanisms of companies to be managed meticulously, is also valid for Türkiye and continues to show its effects.
In Türkiye, there is not yet a specific and uniform legislation dedicated to ESG. However, this does not mean that the subject has no legal counterpart. On the contrary, many existing regulations currently in force under Turkish law — for example, provisions related to environment, labor law, protection of personal data, and corporate governance — can be interpreted in line with ESG principles, indicating that the legal infrastructure in Türkiye for environmental, social, and corporate governance is open to development and future regulations.
1. The Capital Markets Board's Guideline Regulation
With the "Sustainability Principles Compliance Framework" published by the Capital Markets Board in 2020, joint stock companies listed on Borsa Istanbul are encouraged to take environmental, social and corporate governance standards into account. Although this regulation expects companies to establish internal policies against environmental risks and to report their performance, the regulation is not binding but only has an encouraging nature. Even in this form, the regulation, which can be considered as a guideline, holds a prominent position for the steps that may be taken in the field of ESG in the future.
2. ESG Interpretations Within the Scope of the Turkish Commercial Code
It is possible to observe that various provisions regulated under the Turkish Commercial Code No. 6102 align with environmental, social and corporate governance, and some examples of these provisions are as follows:
- The "duty of care and loyalty" regulated under Article 369 can be interpreted to mean that directors have a responsibility to consider environmental and social impacts as well as economic benefit when making decisions.
- The financial reporting and auditing provisions under Articles 516 and 397 et seq. may serve as a basis for the principles of transparency and accountability, including ESG information.
- Articles 408, 371, and 375 may allow for the determination of ESG strategies, the establishment of internal policy documents, and the consideration of sustainability goals within the framework of general assembly and board of directors' powers.
3. Environmental Legislation and the "Environmental" Dimension of ESG
From an environmental law perspective, existing regulations such as Environmental Law No.2872, the Climate Law No.7552 and the Regulation on Monitoring of Greenhouse Gas Emissions may constitute a basis for ESG policies that companies should take into account when making decisions and that may be implemented in the future. The responsibilities that arise from these regulations, particularly for energy, industrial, and construction companies, include:
- tracking of carbon footprint,
- emission notifications,
- environmental impact assessment processes.
Although these are not obligations brought directly by ESG regulations, they serve as a foundation and push companies to take steps in this direction, thereby constituting a basis for actions that may be taken in the future.
4. Protection of Personal Data and Elements of Corporate Governance
The relationship between the Personal Data Protection Law No.6998 and the principles under the ESG framework has undeniable importance. As one of the key regulations that can be examined under the "governance" pillar, the PDPL plays a critical role in ESG compliance strategies in terms of data responsibility, transparency, and structuring of data security processes from an audit perspective.
5. Labor Law and the Area of Social Responsibility
The "social" part of environmental, social and corporate governance can be based on the Labor Law. These provisions are particularly regulated under the obligations of employers towards employees. These regulations, which should be taken into account during a company's decision-making and internal policy-making processes, can also be an important guide in determining ESG compliance strategies.
Conclusion and Evaluation
Although there is not yet a uniform regulation in the field of environmental, social and corporate governance in Türkiye, the provisions contained in the laws and regulations already enacted by the legislator constitute a foundation for future regulations and serve as a basis for the steps companies may take and the internal policies they may establish in this regard.
Footnotes
1. Translation by the author. Original in Turkish: Kayıklık, A. & Veziroğlu, C. (2023). Prof. Dr. Tuğrul Ansay Anısına: Anonim Şirketler Hukukunun Gelecek On Yılı. C. Veziroğlu & E. Toraman Çolgar & A. Kayıklık (Yay. haz.), Sürdürülebilirlik ve Şirketlerin Kamuyu Aydınlatma Yükümlülüğü(s. 136-137). On İki Levha Yayıncılık
2. Corporate Finance Institute (CFI), Kyle Peterdy, ESG (Environmental, Social, & Governance).
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