KGK Introduces Critical Changes to GHG Reporting: Corporate ESG Compliance Set for Overhaul

The Capital Markets Board (KGK) has published a decisive overhaul of greenhouse gas (GHG) emission reporting methodology in the Official Gazette.

A New ESG Reporting Framework

■SASB (Sustainability Accounting Standards Board) Climate Protocol compliance becomes mandatory.

■Companies must use the existing standard unless a regulator or exchange explicitly requires an alternative measurement method for all or partial emissions.

■International Sustainability Standards Board (ISSB) guidelines are directly incorporated into Turkish legislation.

Translating Global Standards Locally

■ISSB's latest directives will make Turkish sustainability reports comparable on a global scale.

■KGK aligns the domestic regulatory framework with international norms by enacting these guidelines through the Official Gazette.

■The move is likely to boost foreign investors' confidence in the Turkish market.

Operational Impact on Market Participants

■Firms will need to revamp reporting processes, investing in additional data collection and software upgrades.

■ESG data providers may expand API integrations to support the new methodology.

■Auditors are expected to reprice compliance audits based on the new criteria.

Strategic Outlook

■In the short term, reporting costs could rise by 10‑15%.

■In the medium term, ESG‑focused capital inflows may increase by 20%.

■Over the long term, Turkey's ESG rating could improve its regional ranking.

Markets are likely to see a repricing of capital costs for high‑carbon sectors, while ESG‑driven fund flows accelerate. HFT algorithms will closely monitor volatility opportunities arising from the new reporting data, and swap markets will adjust interest‑rate expectations in line with a potential decline in sustainability risk premiums.