What happened
A regulation prepared by the Ministry of Environment, Urbanisation and Climate Change is now in effect, creating a formal basis for classifying investments and company activities as green.
To qualify, an activity must pass three connected tests. It must make a measurable contribution to one of six environmental areas, which include emissions reduction, water protection and pollution prevention. It must not cause significant damage to another environmental objective. It must also meet fundamental worker-rights and social-protection requirements.
Electricity generation or manufacturing that uses solid fuels, including coal, cannot receive the green classification.
The framework also introduces disclosure duties for banks, insurance and pension companies, and major investment institutions. They are expected to report the proportion of investments that meets the criteria each year, submitting information through a public system within six months after their financial year ends. Non-submission can result in financial penalties.
Why it matters
The rules place environmental performance and social safeguards at the centre of a green label. Organisations seeking that label will need evidence that an activity meets every condition, rather than relying on its stated environmental purpose alone.
For investors and lenders, the reporting requirement should make the share of qualifying investments more visible. It also creates a practical review task: map relevant activities, assess their contribution against the environmental objectives, test for adverse effects elsewhere and confirm social compliance.
According to Enerji Günlüğü, an enterprise may be outside the reporting requirement where activities that could qualify account for less than 10% of its total business. The report also says reporting obligations for banks and insurers have been postponed until 2029.
What to do next
Financial institutions and other affected organisations should identify investments and activities potentially within scope, establish evidence for each of the three tests and prepare processes for annual public disclosure. They should also monitor the committee responsible for setting and updating the detailed rules. Reporting entities will need to work to the six-month deadline following each financial year-end, while banks and insurers should use the deferral period to prepare for their later obligation.
