Turkey enacts Green Taxonomy Regulation for sustainable finance

The Turkey Green Taxonomy Regulation has been officially published in the Official Gazette, establishing a standardized framework to classify sustainable economic activities. Prepared by the Climate Change Presidency under the Ministry of Environment, Urbanization and Climate Change, the regulation aims to align Turkey with European Union climate standards and facilitate access to international green financing.

To be classified as ‘taxonomy-aligned,’ an economic activity must simultaneously meet three criteria: it must significantly contribute to at least one of six environmental objectives, cause no significant harm to the other objectives, and comply with minimum social protection safeguards. The six environmental objectives are greenhouse gas emission reduction, climate change adaptation, sustainable use of water and marine resources, transition to a circular economy, pollution prevention, and the protection of biodiversity and ecosystems.

The regulation is designed to prevent ‘greenwashing’ by providing a common language for investors and companies. It covers 16 sectors and 137 economic activities. While companies may report their taxonomy-aligned revenue, investments, and expenditures voluntarily, mandatory reporting requirements for the financial sector—including banks, insurance companies, and pension funds—are expected to begin in 2029.