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Amendment to the Corporate Governance Communiqué: “Sustainability Principles Compliance Framework” for Public Companies in Turkey

The Turkish Capital Markets Board (CMB) introduced an amendment to the Corporate Governance Communiqué (Communiqué) on 2 October 2020. Accordingly, public companies that are subject to the Corporate Governance Principles will also be subject to the principles specified in the Sustainability Principles Compliance Framework. Although the application of principles under this framework is voluntary for public companies, CMB still requires an explanation for not complying from their addresses in their annual activity reports.

These principles cover three main areas:  Environmental Principles, Social Principles and Corporate Governance Principles (ESG). In this context, the board of directors is tasked with (i) determining the company’s strategy, policy and objectives regarding issues related to these three areas; (ii) appointing a committee, which will be responsible of implementation and monitoring of the company’s ESG policies; and (iii) publicly reporting the company’s ESG performance and activities on an annual basis. 

Public companies are required to address ESG issues (or provide explanations for failing to comply with the Sustainability Principles Compliance Framework) in their 2021 annual activity reports.