Introduction
After the Paris Agreement was approved by the Turkish Grand National Assembly on October 6, 2021, Turkey became a party to a key step in the global fight against climate change, albeit somewhat late. It also announced its goal of becoming net-zero emissions by 2053. According to the most recent data announced by TURKSTAT, Turkey’s total greenhouse gas emissions increased by 3% in 2020 compared to the previous year and reached1 524 million tons (Mt) carbon dioxide equivalent (CO2e). It is quite clear that Turkey needs to reduce its emissions rapidly to achieve its 2053 net-zero target. Non-governmental organizations and think-tanks working on climate in Turkey state that it should achieve an absolute reduction of emissions of at least 35% to 340 MtCO2e by 2030 compared to 2020 to reach its net-zero target, emphasizing that this remains realistic.2 Shifting global trends in climate change policies and the mainstreaming of the low-carbon economy approach as a new growth model has also affected Turkey’s climate policies. A key development that has accelerated the agenda in Turkey is the “European Green Deal”, which the European Union made pub-lic in December 2019. Within the framework of the agreement, EU countries aim to reduce their carbon emissions by 55% by 2030 compared to 1990, aiming to be the first carbon neutral continent by 2050. One of the initiatives within the scope of this target is the Car-bon Border Adjustment Mechanism (CBAM). The mechanism focuses3 on carbon leakage and aims to reduce greenhouse gas emissions both in the EU and in the EU’s trading partners by pricing the carbon into the products imported by the EU, thus contributing to the fight against climate change.4
Within the scope of CBAM, five sectors with high carbon emissions, namely iron and ste-el, cement, aluminum, fertilizer, and electricity, are the priorities. The aim is to implement CBAM across these sectors by 2026 through carbon costing, following a 3-year transition period, which will start with data/information collection on trade and carbon content in 2023, during which time there will be no financial obligations. This has the potential to be a significant competition restriction for Turkey, as about half of its exports are to EU countries. In addition, members of the European Parliament have called for a wider and faster implementation of the CBAM by including the organic chemicals, plastics, hydrogen, and ammonia sectors, in order to achieve the global climate target quicker. For this reason, many companies are likely to come into the direct sphere of influence of the CBAM in the moderate-long term because of its expanding scope. At this point, a focus on BIST 30 companies is important. The BIST 30 Index includes the 30 companies with the highest trading volume and market value on Borsa Istanbul. These companies have high financing capabilities and can make a significant contribution to economic development by creating employment and added value. However, in terms of sustainability, it is important to examine the current situation of BIST 30 companies closely, as their situation may also affect their ability to generate finance. In this context, 25 non-banking companies in the BIST 30 have been evaluated based on their approaches to the following five vital climate and biodiversity-related themes:
- Level of interaction with fossil fuel assets/investments
- Target date for “Net Zero”
- Carbon footprint and target date for “Carbon Neutrality”
- Clean energy investments
- ESG (Environmental, Social, Governance) and similar ratings
This study evaluates the banks’ annual reports, sustainability reports, Carbon Disclosure Project (CDP) Climate Change 2021 scores and Sustainalytics ESG scores.