Turkish Banking Green Asset Reporting Obligation

Turkish Banking Green Asset Reporting Obligation has officially commenced. A Communiqué on the Calculation of Green Assets of Banks is newly circuited in the Official Gazette dated April 11, 2025 and numbered 32867 (hereinafter as theCommuniqué). The Communiqué is intended to measure the contribution of banks to the financing of environmentally sustainable economic activities.

This article provides an overview of the newly introduced Turkish banking green asset reporting obligation. The Communiqué establishes a framework for measuring the extent to how banks contribute to the financing of environmentally sustainable economic activities. The Communiqué introduces the concept of the green asset ratio as a key performance indicator and imposes specific documentation, classification and reporting requirements on banks. BDDK is granted a new authority for implementation and oversight. The Communiqué is expected to play a significant role in aligning the Turkish banking system with global sustainability purposes and advancing the green transition of the financial sector.

Introduction

The Turkish banking and finance system offers one of the most robust and comprehensive frameworks, designed to ensure the stability and reliability of the financial market while protecting the interests of stakeholders.

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The new Communiqué on the Calculation of Green Assets of Banks is newly published in theOfficial Gazette dated April 11, 2025and numbered 32867 with the intention of supervising the contribution of banks to the financing of environmentally sustainable financial activities. This article will offer a brief review of the purpose of the Communiqué and main principles set forth in it. The Communiqué introduces a structured mechanism for the supervision and reporting of banks' environmentally sustainable activities.

What is the purpose of Turkish Banking Green Asset Reporting Obligation?

Under Article 1, the fundamental purpose of the Communiqué is to articulate the procedures and principles for reporting obligations of the Turkish Banking Sector for Green Assets. The Communiqué was formulated under Article 43 and 93 of theBanking Law numbered 5411. Primary performance benchmark will be the level of relevant bank's contribution to environmental sustainability on the basis of the green asset ratio. The green asset ratio (yeşil varlık oranı in Turkish) can be calculated through a certain way: dividing the eligible green assets included in the banks' non-consolidated balance sheets to the total assets within the scope of the green asset ratio.

How will Turkish Banking Green Asset Reporting Obligation work?

In accordance with Article 10, Banks are obliged

• to establish documentation, classification, monitoring and control processes,
• to form all additional policies for the assets constituting the numerator and denominator of the green asset ratio,
• to deal with necessary arrangements for the establishment of a reporting system.

What is the main authority for the implementation of the new Communiqué on the Turkish Banking Green Asset Reporting Obligation ?

Banking Regulation and Supervision Agency (Bankacılık Düzenleme ve Denetleme Kurumu in Turkish)will be responsible for the implementation of the new Communiqué. The Agency is authorized to take a decision on the application of all technical screening criteria for environmental objectives. Under Article 5 of the Communiqué, environmental objectives shall include the following:

• mitigation of climate change,
• adaptation of climate change,
• transition to a circular economy,
• sustainable use and protection of water and marine resources,
• prevention and control of pollution,
• protection and restoration of biodiversity and ecosystems

Conclusion

In conclusion, the Communiqué introduces new mandates to the Turkish Banking Sector. 2025 Reporting Obligation of Turkish Banking Sector for Green Assets is core parameters of the new revision. It is beyond doubt that the new Communiqué will have a crucial impact upon assuming responsibilities by the Turkish Banking Sector for environmentally sustainable economic activities in the long term.

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