The long-awaited Turkey Green Taxonomy Regulation was published in the Official Gazette dated 24 September 2026, No. 33380, and entered into force.
With this, Turkey has established the legal framework for a common classification system to determine which economic activities can be considered environmentally sustainable. The regulation aims to encourage the flow of financing toward sustainable investments, to assess the environmental sustainability of economic activities using common criteria, and to prevent greenwashing. It is based on Climate Law No. 7552, adopted in 2025.
So what is the Turkey Green Taxonomy, what does it change for companies, and why does it need attention starting today?
What is a taxonomy?
In its simplest form, a taxonomy is a classification system.
The Turkey Green Taxonomy aims to assess the contribution of economic activities to defined environmental objectives using common criteria. This creates a shared language for companies, financial institutions and investors on which economic activities meet environmental sustainability criteria.
This distinction matters particularly for green finance. It will no longer be enough for a company to simply label an investment or activity as “green.” The taxonomy requires that claim to be assessed against specific criteria.
What are the six environmental objectives?
The regulation sets out six environmental objectives:
- Reduction of greenhouse gas emissions
- Adaptation to climate change
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
This structure runs largely parallel to the six environmental objectives of the EU Taxonomy. Turkey’s preparatory work also envisaged analyzing the EU Taxonomy’s technical criteria and developing criteria specific to Turkey’s own conditions.
Being “taxonomy-eligible” is not the same as being “taxonomy-aligned”
This is one of the most important distinctions for understanding the regulation.
An economic activity being listed in Annex 1 of the regulation shows that it is an “eligible economic activity.” But this does not mean the activity is considered environmentally sustainable.
For an activity to be considered an “aligned economic activity,” it must meet three conditions together:
- making a substantial contribution to at least one of the environmental objectives,
- doing no significant harm to any of the other environmental objectives,
- complying with minimum social safeguards.
Assessments of substantial contribution and no significant harm will be made using technical screening criteria to be published by the Presidency of Climate Change.
The taxonomy therefore introduces an assessment system that is more comprehensive than a simple “green activity list.”
Why do social criteria matter?
The Turkey Green Taxonomy is not limited to carbon emissions, energy or environmental performance.
The minimum social safeguards in the regulation cover the principles set out in the International Labour Organization’s core conventions, the rights in the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and national labour and social security legislation.
As a result, if an economic activity with strong environmental performance fails to meet the social safeguard conditions, its taxonomy-alignment assessment can be affected as well.
This shows how the environmental and social dimensions of ESG are becoming increasingly interconnected in corporate practice.
Why will technical screening criteria be decisive?
The taxonomy’s real impact in practice will largely be determined by the technical screening criteria.
Under the regulation, the criteria must be as quantitative as possible, based on scientific evidence, and take into account the environmental impacts arising across the economic activity’s life cycle.
The Presidency of Climate Change will publish the criteria and may update them in line with scientific and technological developments. Updated criteria will apply from the following year.
Companies will therefore need to follow not only the regulation itself but also the sector- and activity-specific technical criteria to be published afterward.
Do companies have to report right away?
For non-financial companies, the regulation does not introduce a general mandatory taxonomy reporting obligation.
Institutions, organizations and businesses carrying out at least one eligible economic activity under Annex 1 will be able to report using templates to be published by the Presidency of Climate Change.
The picture is different for financial institutions.
Mandatory reporting is envisaged for banks, brokerage firms, investment trusts, portfolio management companies, and insurance, reinsurance and pension companies. Under the transitional provision, however, these institutions will not be required to report under the taxonomy until 1 January 2029.
Once reporting begins, taxonomy eligibility and alignment ratios will be tracked through indicators such as revenue, capital expenditure and operating expenses.
Why doesn’t the 2029 date mean companies can wait?
There is a notable provision in the regulation.
Financial institutions subject to the reporting obligation will be able to request that non-financial companies report under the Turkey Green Taxonomy framework with respect to transactions that may be part of the institutions’ own reporting.
This means a company not directly subject to mandatory reporting today may still encounter taxonomy data down the line, through its bank or its financial relationships.
The taxonomy’s influence can therefore extend beyond the boundaries of a legal reporting obligation and into financing relationships.
What changes when it comes to greenwashing?
One of the regulation’s explicit aims is to prevent greenwashing.
Greenwashing is defined as creating a false or misleading impression about the contribution of products or services to environmental objectives.
The taxonomy creates a common reference point in this respect. What data and criteria a company relies on when using terms such as “green investment” or “sustainable activity” is likely to matter more.
This also means sustainability communication can no longer be confined to the marketing department. Its technical, legal and governance dimensions will need to be assessed together.
Why does this matter for industrial companies?
For industrial companies, the first question may be, “Do we have to report?”
But the more important question in the long run is how the company’s investments and economic activities will be assessed within the new classification system.
As technical criteria are published, transition investments such as energy efficiency, low-emission production, water management, circular economy initiatives and pollution reduction will move onto a more measurable footing.
This can affect companies’ investment decisions, financing negotiations and sustainability strategies.
Will supply chains be affected too?
Supply chains are one of the areas where the taxonomy’s indirect impact could be significant.
A company may need more detailed data on the products, processes or investments it uses in order to demonstrate its own activity’s taxonomy alignment.
This can raise new questions in the commercial relationship between a parent company and its suppliers:
Who will provide which data? Who will be responsible for the accuracy of that data? Who will bear the cost of complying with new technical standards? What contractual consequence follows if a supplier fails to meet the criteria? How will changes in technical criteria be reflected in existing commercial relationships?
These questions show that sustainability is also becoming a matter of contract design and negotiation.
Why does the taxonomy matter for dispute management as well?
Common criteria can reduce uncertainty. But new criteria also create new areas of responsibility.
Whether an economic activity is taxonomy-aligned, whether the data submitted is accurate, how an investment performs environmentally, whether financing conditions have been met, or whether a supplier has fulfilled its commitments, all of these can give rise to disagreements between parties down the line.
For this reason, it matters that companies do not treat taxonomy preparation solely as a technical compliance project.
Thinking in advance, within contracts and commercial relationships, about data sharing, verification, allocation of responsibility, cost sharing, adaptation to changing technical criteria, and the process to be followed in the event of a dispute, can help prevent disputes before they arise.
What can companies do today?
While the technical criteria and implementation details are still being completed, the preparation period for companies has already begun.
Determining whether economic activities fall under Annex 1, reviewing existing environmental and social data, identifying data gaps, assessing transition investments from a taxonomy perspective, and reviewing the data, liability and compliance provisions in supplier contracts can all be among the first steps.
The Turkey Green Taxonomy’s impact on companies will not be limited to which activities are considered “green.”
What information is shared, what standard is met, and how the cost of transition is allocated, in the relationships between a financing institution and a company, a main contractor and a supplier, or an investor and a business, will matter increasingly as well.
For this reason, the taxonomy should be read not merely as a new heading under environmental legislation, but as a new governance framework that will affect companies’ investment, financing, supply chain and commercial relationships in the period ahead.
ADRIstanbul’s Contribution on This Topic
The Turkey Green Taxonomy confronts companies not only with a reporting obligation but with a new web of relationships that extends from contract design to supply chain management. ADRIstanbul is engaged with the relational and procedural dimensions of this process, alongside its legal compliance dimension.
Negotiation and facilitated dialogue processes can support disagreements that arise between a main contractor and a supplier over data sharing and the allocation of responsibility; preliminary assessment and advisory services can help clarify expectations between a financing institution and a company regarding taxonomy alignment; and mediation can help address contractual adaptation needs that arise as technical criteria are updated, allowing companies to reach a resolution before a disagreement turns into a dispute.
Alongside the technical and legal dimensions of taxonomy compliance, ADRIstanbul continues to offer support on process design and dispute prevention, with an approach that also safeguards the sustainability of the commercial relationship between the parties.
Sustainable Development Goals
