The Draft Regulation on Türkiye's Green Taxonomy has been announced and is now available for public consultation by the Directorate of Climate Change, an entity affiliated with the Ministry of Environment, Urbanization, and Climate Change of the Republic of Türkiye.
Draft Regulation, prepared to support economic activities aligned with sustainable development goals, promote the flow of financing to sustainable investments, and prevent greenwashing in the market, provides guidance on which investments are environmentally sustainable by offering a common language and clear definitions for this purpose. Another objective is to adapt the conditions supplied by the EU Taxonomy to Türkiye.
A. What is Taxonomy?
Turkiye's Green Taxonomy ('Taxonomy') refers to the classification system that sets principles and criteria for economic activities in order to contribute to the mobilisation of climate finance and to benefit the fight against climate change in line with the set environmental goals.
Clear climate finance taxonomies ensure everyone agrees on what qualifies as a genuine "green" investment. These rules are crucial for establishing a fair playing field that attracts investors, fosters the growth of climate finance, and accelerates progress toward a sustainable future.
B. Scope
Economic activities (activities under the framework of Türkiye's Green Taxonomy) of agencies and institutions that are obliged to generate sustainability reports according to Türkiye's Sustainability Reporting Standards are under the scope of The Draft Regulation. The Draft Regulation outlines the application standards of Türkiye's Green Taxonomy, technical scanning criteria, reporting and approval processes, administrative and technical procedures and principles, as well as other aspects related to the online taxonomy system ("system") used by agencies and institutions within the scope of Türkiye's Green Taxonomy.
C. New Definitions
Draft Regulation set outs definitions for several terms. The following terms are some of the ones that are defined in the Draft Regulation:
· Protection and restoration of biodiversity and ecosystems
- Protection and restoration of biodiversity and ecosystems
- Environmental target
- Circular economy transition
- Climate change adaptation
- Pollution control and prevention
- Facilitating activity
- Net-zero emissions
- Reducing sera gas emissions
- Greenwashing
- Türkiye's Green Taxonomy
D. Suitable Economic Activity
Appendix -1 of the Draft Regulation published economic activities under the scope of Türkiye's Green Taxonomy. These activities are as follows:
- Forestry activities
- Environmental protection and restoration activities
- Manufacturing activities
- Energy activities
- Water supply, sewerage, waste management, and remediation activities
- Transportation activities
- Construction and real estate activities
- Information and communication activities
- Agricultural activities
- Tourism activities
- Arts, entertainment, and recreation activities
- Financial and insurance activities
- Human health and social work activities
- Educational activities
- Service activities
- Accommodation activities
For a suitable economic activity to be classified as a compatible economic activity, it must significantly contribute to at least one environmental objective, do no significant harm to any other environmental objective, comply with minimum social safeguards, and meet the technical screening criteria simultaneously.
Defining the criteria for compatible economic activities will be an important tool in determining which economic activities are environmentally sustainable.
E. New Obligation: Reporting
According to the Draft Regulation, agencies and institutions that are required to generate a sustainability report under Türkiye's Sustainability Reporting Standards must register verified information regarding the compatible economic activities they conducted in the previous year into the Directorate's system, in addition to the sustainability report. Those who do not fulfill the reporting obligation are subject to an administrative fine in accordance with Environmental Law No. 2872.
F. Conclusion
The fact that climate change is one of the most pressing issues of our time makes the creation of a sustainable economy and the safeguarding of environmental integrity increasingly important. By publishing the Draft Regulation, the Directorate has taken a significant step on this issue.
Although the practical outcomes of the Draft Regulation remain uncertain, it can be anticipated that many related legal regulations will be enacted in the future. Given that the taxonomy is a classification system designed to promote sustainable finance and environmentally friendly investments, investors will be able to more easily evaluate which projects are sustainable. Furthermore, detemining of these criteria may prevent the public from being misled by inaccurate or deceptive information about economic activities carried out to create a climate-conscious and environmentally friendly image.
You can access the publication and related appendices from there1, and you can share your consultations.
Footnote
1 https://iklim.gov.tr/taslaklar-i-2124
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