What is sustainability reporting?
Sustainability reporting is the process of measuring, managing, and disclosing a business's environmental, social, and governance impacts, along with sustainability-related risks, opportunities, policies, targets, metrics, and performance, according to the relevant reporting standard.
Therefore, a sustainability report is not merely a corporate communication document. A well-designed reporting system brings together data management, risk management, strategic objectives, climate issues, supply chain visibility, and stakeholder communication within the same framework.
Why is sustainability reporting important?
Companies are evaluated not only by their past financial results but also by sustainability issues that may affect their future cash flows, access to finance, cost of capital, operations, or stakeholders.
Risk and opportunity visibility
It integrates issues such as climate, resource scarcity, regulations, supply chain, human rights, and reputation into decision-making processes.
Data quality
It systematises target owners, data sources, calculation methods, and performance tracking.
Financial communication
It helps in more comparable disclosure of financially material sustainability risks and opportunities.
Supply chain demands
Even companies outside the mandatory scope may face data requests from customers and their supply chain.
What are the main sustainability reporting standards?
“Sustainability report” does not refer to a single standard. Different standards may be used depending on legal obligations, target audience, and market conditions.
| Standard | Main focus | Materiality | Prominent use |
|---|---|---|---|
| TSRS 1 / TSRS 2 | Financial disclosures and climate related to sustainability | Financial materiality | Businesses within KGK scope in Turkey |
| IFRS S1 / IFRS S2 | Global investor-focused sustainability financial disclosures | Financial materiality | ISSB-based reporting |
| ESRS | Environmental, social, and governance disclosures within CSRD scope | Double materiality | Companies within CSRD scope |
| GRI Standards | Significant impacts on the economy, environment, and people | Impact materiality | Stakeholder and impact-focused reporting |
| SASB Standards | Industry-based investor-focused topics | Financial materiality | Sectoral metric selection |
For details, please refer to our GRI Sustainability Reporting and TSRS Sustainability Reporting pages.
Sustainability reporting in Turkey: 2026 TSRS scope
The Turkish Sustainability Reporting Standards (TSRS) is the framework for sustainability-related financial reporting in Turkey, based on ISSB's IFRS S1 and IFRS S2 standards.
2026 updated TSRS thresholds
With the KGK decision published in the Official Gazette dated 16 January 2026, no. 33139, the following thresholds have been redefined, to be applied for accounting periods beginning on or after 1 January 2025:
| Criterion | Threshold value |
|---|---|
| Total assets | 1 billion TRY |
| Annual net sales revenue | 2 billion TRY |
| Number of employees | 500 people |
For businesses subject to the thresholds, exceeding at least two of the three criteria for two consecutive reporting periods is one of the basic rules for scope assessment in the subsequent period.
Exiting TSRS scope
A business that entered the TSRS application scope due to exceeding the thresholds will exit the TSRS application scope from the subsequent accounting period if it falls below at least two of the three criteria for two consecutive accounting periods, or if it falls below the threshold value of at least two of the three criteria by 20% or more in one accounting period.
Group assessment: For businesses with subsidiaries and affiliates, the threshold assessment must be made according to the group calculation rules in the KGK decision. For detailed scope provisions, please check the KGK Sustainability – Legal Regulations page.
How did CSRD change in 2026?
With Directive (EU) 2026/470, the scope of CSRD has been significantly narrowed. For general company scope, a net turnover exceeding 450 million euros and an average annual number of employees exceeding 1,000 have become the main thresholds.
3 July 2026 revised ESRS
The European Commission adopted the revised ESRS package and a voluntary reporting standard for small companies on 3 July 2026 and submitted it to the European Parliament and Council for scrutiny. As of 27 July 2026, the measures will apply after the completion of a two-month scrutiny period; this scrutiny period may be extended by another two months. Therefore, the revised ESRS package should not be considered a fully effective and mandatory set of standards as of this date.
Highlights for GRI Standards in 2026
GRI focuses on reporting an organisation's significant impacts on the economy, environment, and people. GRI 3: Material Topics requires material topics to be determined through the organisation's most significant actual and potential impacts.
- GRI 101: Biodiversity 2024 came into effect for reporting from 1 January 2026.
- GRI 102: Climate Change 2025 and GRI 103: Energy 2025 will come into effect from 1 January 2027.
Therefore, the effective dates of the GRI topic and sector standards used in 2026 reports must be checked separately.
December 2025 amendments for IFRS S2
The ISSB published targeted amendments in December 2025 titled Amendments to Greenhouse Gas Emissions Disclosures (Amendments to IFRS S2). The amendments specifically include the following clarifications and facilitations:
- Clarification that the measurement and disclosure of Scope 3 Category 15 greenhouse gas emissions can be limited to financed emissions as defined in IFRS S2,
- The possibility of using alternative classification systems other than GICS for the disaggregation of financed emissions information,
- Jurisdictional relief regarding the use of GHG Protocol Corporate Standard in certain situations,
- Jurisdictional relief regarding the use of the most recent IPCC Assessment Report GWP values for converting emissions in certain situations.
The amendments will come into effect for annual reporting periods beginning on or after 1 January 2027 and early application is permitted. Therefore, they should not be presented as if they are already mandatorily in force in 2026.
The role of TCFD and SASB in 2026
TCFD
TCFD's corporate work concluded in October 2023. The IFRS Foundation states that TCFD recommendations have been fully incorporated into IFRS S1 and IFRS S2. Therefore, rather than presenting TCFD as an independent and current main standard in 2026, it is more accurate to explain its relationship with IFRS S1/S2.
SASB
SASB Standards continue to be used and help disclose sector-based sustainability risks and opportunities in a decision-useful way for investors.
For a sector-based approach, you can refer to our SASB Standards and Reporting guide.
Materiality analysis: impact, financial, and double materiality
Impact materiality
Assesses significant impacts on the economy, environment, and people caused or potentially caused by the company's activities and business relationships. This is GRI's core approach.
Financial materiality
Focuses on the impact of sustainability risks and opportunities on the company's expectations such as cash flows, access to finance, or cost of capital. TSRS and IFRS S1/S2 use this approach.
Double materiality
Considers both impact materiality and financial materiality together and is one of the key features of the ESRS/CSRD system.
One matrix does not fit all
The materiality methodology must be designed according to the standard the report is subject to.
What data is included in a sustainability report?
| Area | Example data | Checkpoints |
|---|---|---|
| Climate and energy | Scope 1, Scope 2, Scope 3 where applicable; energy consumption; climate risks | Organisational boundary, emission factors, base year |
| Water and waste | Water withdrawal/consumption, discharge, waste types, recovery | Facility scope, meter/data source, classifications |
| Human and working life | Number of employees, training, OHS, employee turnover | Consistency of definitions, personal data security |
| Governance and ethics | Board oversight, ethics, compliance, anti-corruption | Evidence of responsibility and control |
| Supply chain | Supplier assessments, human rights, environmental criteria | Value chain boundary and data quality |
For greenhouse gas data, you can examine our carbon footprint consultancy, for water data our water footprint consultancy, and for product lifecycle our LCA reporting content.
How to prepare a sustainability report? 8 steps
Determine obligation and target audience
Clarify the purpose: TSRS, CSRD/ESRS, GRI, investor demand, customer demand, or voluntary reporting.
Define the reporting boundary
Determine which legal entities, facilities, operations, and value chain elements will be covered.
Choose the appropriate materiality approach
Conduct impact, financial, or double materiality methodology according to the standard used.
Create a data inventory and assign owners
Define the source, owner, calculation method, control point, and evidence document for each metric.
Link risks, opportunities, policies, and targets
Establish a clear connection between the management approach, actions, and measurable results.
Perform data quality checks
Review consistency, period comparison, unit conversions, estimates, and methodology changes.
Write the report according to disclosure requirements
Align governance, strategy, risk management, metrics, targets, and other mandatory disclosures.
Complete management control, assurance, and publication
Complete approval and assurance processes according to relevant legislation; publish the report in an accessible format.
Why are data accuracy and independent assurance critical?
Reporting quality depends on the traceability and recalculability of data. The source, owner, calculation method, and supporting evidence for each material metric must be defined.
KGK has announced that TSRS-compliant reports will be subject to assurance audits by authorised audit firms in this field. Therefore, the mandatory TSRS process should be approached not merely as a text-writing exercise but as a project to establish an assurance-ready data and control system.
Benefits of sustainability reporting for companies
- Makes risks and opportunities visible at the management level.
- Identifies areas for improvement in energy, water, waste, and emissions data.
- Ensures more organised data submission for supply chain and customer demands.
- Supports decision-useful information sharing with investors and financial institutions.
- Facilitates regular monitoring of targets, policies, and performance results.
- Encourages supporting claims with data and evidence to reduce the risk of greenwashing.
- Creates comparability across years and builds corporate memory.
10 common mistakes in sustainability reporting
- Assuming TSRS, GRI, and ESRS use the same materiality approach.
- Only looking at turnover or employee count without performing a company scope analysis.
- Presenting TCFD as an independent current main standard in 2026.
- Not specifying a base year, scope, metrics, and target date for objectives.
- Not disclosing Scope 1, Scope 2, and Scope 3 boundaries.
- Not disclosing methodology changes and recalculations.
- Presenting policies disconnected from concrete actions and results.
- Ignoring significant negative impacts.
- Starting to write a report without creating data owners, evidence, and control trails.
- Not re-checking legislative and standard updates just before publication.
Sustainability report checklist before publication
- Is the reporting standard clear?
- Are the reporting period and organisational boundary clear?
- Is the materiality methodology compliant with the standard?
- Are material risks, opportunities, and impacts linked to the management approach?
- Are data sources and calculation methods available for critical KPIs?
- Are the base year and target years clear?
- Is comparability with past periods maintained?
- Are estimates, assumptions, and methodology changes disclosed?
- Is the internal management/approval process complete?
- Is the necessary assurance process planned?
- Has greenwashing risk been controlled?
- Have current regulations and standards been re-checked before publication?
Is sustainability reporting necessary for SMEs?
It is not correct to say that all SMEs automatically fall within the scope of TSRS or CSRD. However, sustainability data may be requested due to large customers, financial institutions, international supply chains, or assessments such as EcoVadis.
For SMEs, the goal is not to copy a large corporate report but to establish a verifiable data and reporting system that is appropriate for the company's scale and meets business needs.
Frequently asked questions about sustainability reporting
What is sustainability reporting?
Sustainability reporting is the process of disclosing a business's environmental, social, and governance impacts, along with sustainability-related risks, opportunities, policies, targets, metrics, and performance, according to the relevant reporting standard.
Is preparing a sustainability report mandatory in Turkey?
It is not mandatory for every business. In Turkey, the mandatory TSRS application is evaluated according to the business groups and scope criteria determined by KGK. For businesses subject to the thresholds, exceeding at least two of the three criteria for two consecutive reporting periods is one of the basic rules.
What are the 2026 TSRS thresholds?
With the KGK decision published in the Official Gazette dated 16 January 2026, total assets are set at 1 billion TRY, annual net sales revenue at 2 billion TRY, and the number of employees at 500 people. These thresholds apply to accounting periods beginning on or after 1 January 2025.
What is the difference between TSRS 1 and TSRS 2?
TSRS 1 regulates the general provisions for disclosing sustainability-related financial information. TSRS 2, on the other hand, focuses on disclosures related to climate-related risks and opportunities.
Who does CSRD cover in 2026?
With Directive (EU) 2026/470, the general company scope has been significantly narrowed. The basic company threshold is based on a net turnover exceeding 450 million euros and an average annual number of employees exceeding 1,000. Although the Directive entered into force on 18 March 2026, the deadline for member states to transpose the changes in Articles 1–3 is 19 March 2027; therefore, the current national transposition and implementation status must also be checked on a company-by-company basis. Special provisions for group, issuer, and third-country companies must also be evaluated.
What is ESRS?
ESRS is an abbreviation for European Sustainability Reporting Standards. These are the European standards used in sustainability disclosures within the scope of CSRD. The European Commission adopted the revised ESRS package on 3 July 2026 and submitted it to the European Parliament and Council for scrutiny. As of 27 July 2026, the measures will apply after the completion of a two-month scrutiny period; this scrutiny period may be extended by another two months.
What is the difference between GRI and TSRS?
GRI focuses on an organisation's significant impacts on the economy, environment, and people. TSRS, on the other hand, uses a financial materiality approach that focuses on sustainability risks and opportunities that may affect the company's future cash flows, access to finance, or cost of capital.
What is the difference between GRI and ESRS?
GRI focuses on impact materiality, while ESRS uses a double materiality approach. ESRS evaluates both the company's impacts on people and the environment and the financial impacts of sustainability issues on the company.
What is double materiality?
Double materiality is the combined assessment of impact materiality and financial materiality. A topic can be material in one or both of these dimensions.
Can TCFD still be used?
TCFD's corporate work concluded in October 2023. However, its recommendations have been fully incorporated into IFRS S1 and especially IFRS S2 and can be used as a reference during the transition period.
Are SASB standards still valid?
Yes. SASB Standards continue to be used as a resource that helps disclose sector-based sustainability risks and opportunities in a way that is useful for investor decisions.
What data is included in a sustainability report?
Depending on the standard used and the materiality assessment, governance, strategy, risk management, greenhouse gas emissions, energy, water, waste, employees, occupational health and safety, human rights, supply chain, ethics, targets, and performance indicators may be reported.
How is a sustainability report prepared?
The typical process consists of determining the obligation and standard, defining the reporting boundary, materiality assessment, data inventory, data quality checks, risk and opportunity analysis, report drafting, management control, required assurance, and publication steps.
Is a sustainability report subject to independent assurance?
This depends on the applicable legislation. In Turkey, there are assurance audit regulations for reports within the mandatory TSRS scope. For voluntary GRI reports, however, a general legal assurance requirement of the same type does not directly stem from the GRI standards.
Should SMEs prepare a sustainability report?
Not all SMEs automatically fall within the scope of TSRS or CSRD. Nevertheless, sustainability data may be requested due to large customers, financial institutions, international supply chains, or assessments such as EcoVadis.
Where should one start with sustainability reporting?
First, clarify why the company will report (obligation or business need); then select the appropriate standard, define the reporting boundary, map data sources, and conduct a materiality analysis.
Official and primary sources
This guide has been updated by checking the following sources as of 27 July 2026. For company-specific application, the current version of legislation and standards must be re-verified.
- KGK – TSRS Board Decisions
- Official Gazette / TSRS threshold update – 16 January 2026
- EUR-Lex – Directive (EU) 2026/470: entry into force and transposition
- European Commission – 3 July 2026 revised ESRS and scrutiny process
- European Commission – CSRD implementing and delegated acts
- IFRS Foundation – IFRS S1
- IFRS Foundation – IFRS S2
- IFRS Foundation – Amendments to Greenhouse Gas Emissions Disclosures (Amendments to IFRS S2)
- IFRS Foundation – TCFD
- IFRS Foundation – SASB Standards
- GRI – GRI 3: Material Topics 2021
- GRI – Standards Resource Center
Related services and guides
Determine the right reporting framework for your company
You can contact EUROPECARBON for TSRS scope analysis, GRI reporting, materiality assessment, data gap analysis, and converting sustainability performance data into reports.