Appointment of the Sustainability Auditor and the Principles Regarding the Submission of Sustainability Reports Have Been Clarified
The Public Oversight, Accounting and Auditing Standards Authority's Board Decision on the Scope of Application of Sustainability Reporting Standards (“Decision”), which was prepared to determine the scope of application of the Turkish Sustainability Reporting Standards (“TSRS”), entered into force as of January 1, 2024. Pursuant to the Decision, certain institutions, organizations, and businesses have been made subject to the sustainability reporting obligations.
Furthermore, with the entry into force of the Sustainability Assurance Regulation on January 17, 2025, the procedures and principles regarding the audit processes of mandatory sustainability reports, as well as the duties and responsibilities of the entities authorized to conduct such assurance activities, have been regulated.
In order to eliminate uncertainties regarding whether the appointment of the sustainability auditor is subject to the approval of the general assembly and the principles governing the submission of the reports, the Public Oversight, Accounting and Auditing Standards Authority issued an announcement (“Announcement”) dated June 25, 2025.
1. Principles Regarding the Submission of Sustainability Reports
The announcement emphasized that the TSRS requires disclosure of sustainability-related risks and opportunities that may affect an entity's short-, medium- and long-term cash flows, access to financing or cost of capital, and therefore, sustainability reports should be presented as part of general-purpose financial reports.
In this context, sustainability reports shall be subject to assurance engagements conducted by authorized audit firms, and the submission of the assured reports to the general assembly shall be carried out together with, and in the same manner as, the financial statements.
2. Appointment of the Sustainability Auditor
With the Announcement, it has been clarified that the appointment of the sustainability auditor shall be submitted to the general assembly for approval, just as in the case of the audit of financial statements.
In addition, it has been stipulated that the responsibility for the preparation of sustainability reports lies with the board of directors, as is the case with financial reporting.
3. Transitional Process Regarding Sustainability Reports
Due to the fact that sustainability reporting is a newly introduced practice, a special transitional process has been established for the years 2024 and 2025. During this period, the auditors for the relevant reports shall be appointed by the board of directors and submitted for approval at the first ordinary general assembly meeting. In addition, the sustainability report for the year 2024 shall be presented at the ordinary general assembly meeting to be held in 2025.
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LBF Partners Law Firm
Furthermore, with the entry into force of the Sustainability Assurance Regulation on January 17, 2025, the procedures and principles regarding the audit processes of mandatory sustainability reports, as well as the duties and responsibilities of the entities authorized to conduct such assurance activities, have been regulated.
In order to eliminate uncertainties regarding whether the appointment of the sustainability auditor is subject to the approval of the general assembly and the principles governing the submission of the reports, the Public Oversight, Accounting and Auditing Standards Authority issued an announcement (“Announcement”) dated June 25, 2025.
1. Principles Regarding the Submission of Sustainability Reports
The announcement emphasized that the TSRS requires disclosure of sustainability-related risks and opportunities that may affect an entity's short-, medium- and long-term cash flows, access to financing or cost of capital, and therefore, sustainability reports should be presented as part of general-purpose financial reports.
In this context, sustainability reports shall be subject to assurance engagements conducted by authorized audit firms, and the submission of the assured reports to the general assembly shall be carried out together with, and in the same manner as, the financial statements.
2. Appointment of the Sustainability Auditor
With the Announcement, it has been clarified that the appointment of the sustainability auditor shall be submitted to the general assembly for approval, just as in the case of the audit of financial statements.
In addition, it has been stipulated that the responsibility for the preparation of sustainability reports lies with the board of directors, as is the case with financial reporting.
3. Transitional Process Regarding Sustainability Reports
Due to the fact that sustainability reporting is a newly introduced practice, a special transitional process has been established for the years 2024 and 2025. During this period, the auditors for the relevant reports shall be appointed by the board of directors and submitted for approval at the first ordinary general assembly meeting. In addition, the sustainability report for the year 2024 shall be presented at the ordinary general assembly meeting to be held in 2025.
For more information and support, you can contact us at info@lbfpartners.com
LBF Partners Law Firm
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