Objective 1: Establishing the Necessary Infrastructure for a Transparent and Measurable Green Finance Ecosystem
The first objective of the Action Plan is to establish a reliable, transparent and measurable green-finance system in Türkiye. It envisages common rules for green-finance practices, a stronger data infrastructure, reporting standards and measures to prevent the misuse of green-finance practices. Five targets and several related actions have been defined under this objective.
The first target is to establish a regulatory framework that supports green finance. It envisages completing the Türkiye Green Taxonomy; developing rules on the green asset ratio; introducing sustainability requirements for insurance and payment institutions; preparing a climate-finance strategy; completing green-budgeting work; and assessing rules that would support the green transition in public procurement.
The second target concerns developing advisory, verification and assurance systems that support the green-finance ecosystem. It seeks to extend the Türkiye Sustainability Reporting Standards, strengthen the sustainability-assurance audit system, authorise audit firms, ensure that banks take account of emissions arising from their credit portfolios in risk management, establish an ESG rating system, develop sustainability indices and facilitate SMEs’ access to finance for green-transition investments.
The third target aims to improve the collection and sharing of data used in green finance. It provides for a data-sharing mechanism that will allow banks and financial institutions to access companies’ verified emissions data, and for the technical and legal infrastructure needed for relevant public institutions to use those data.
The fourth target envisages establishing common reporting standards. This is intended to ensure consistency among different institutions’ reporting practices and enable companies to use a common reporting system.
The Action Plan thus appears to prioritise establishing the required infrastructure before directly providing finance for green-finance development. Its measures seek to address gaps in areas such as taxonomy, reporting, data sharing, verification systems and common standards.
The actions also extend beyond banking to capital markets, insurance, payment institutions and SMEs. This demonstrates an intention for green finance to permeate the financial system as a whole. It shows that green finance is not regarded solely as a set of financial products, but that building a reliable and sustainable market structure is also a priority.
Objective 2: Strengthening Institutional Capacity and Human Resources in Green Finance
The second objective is to develop the institutional capacity needed for green finance and strengthen the human resources that will work in the field. It includes training, guidance and technical-infrastructure initiatives to support public institutions, financial institutions and the real sector in adapting to green-finance practices. It also includes actions to expand sustainability reporting and manage climate-related financial risks more effectively.
The first target is to increase the knowledge of public officials working in green finance and of employees in banking, capital markets and insurance. It envisages preparing training programmes, making training content accessible through digital platforms and developing specialised human resources in green finance. It also aims to inform the real sector about green-finance instruments and raise its awareness.
The second target focuses on improving sustainability reporting. Workshops are planned to help institutions prepare sustainability reports more accurately and in accordance with common standards, alongside the sharing of good practice and the preparation of guidance to prevent incorrect classification and reporting errors. The intention is to improve the reliability of sustainability reporting and build a common approach to reporting processes.
The third target is to manage the effects of climate change on the financial system more effectively. It envisages establishing stress-testing infrastructure for climate and environmental risks in the financial sector, conducting work to help sectors analyse these risks more effectively, and preparing a national risk-management guide covering climate and nature risks in insurance. The objective is to make the financial sector better prepared for climate-related risks.
Taken together, the actions under this objective show that the Plan does not focus only on providing finance, but also on raising the knowledge level of the institutions and employees that will implement the green-finance system. Training, improved sustainability reporting and climate-risk-management arrangements indicate the importance attached to strengthening the technical and institutional foundation needed to implement green finance soundly. The Plan therefore recognises green finance not only as a financing mechanism but also as a field requiring knowledge, expertise and institutional capacity.
Objective 3: Establishing Market Mechanisms for the Development of Green Finance
The third objective concerns creating the market mechanisms needed to develop Türkiye’s green-finance market and facilitate green investments’ access to finance. It aims to expand green-finance products and instruments, operationalise the Türkiye Emissions Trading System and strengthen incentives that support green finance.
The first target is to increase the share of green-finance products and instruments in financial markets. It envisages monitoring their market size; establishing a green-financing mechanism in line with the 2053 Net Zero Emissions Target; increasing sustainability-themed investment in state-contribution funds and Automatic Enrolment System funds; expanding sustainability-themed capital-market instruments; issuing sustainability-themed bonds through the Ministry of Treasury and Finance; diversifying social and sustainable capital-market instruments; making the Istanbul Financial Centre an international hub for sustainable finance; and conducting feasibility studies on catastrophe bonds.
The second target is to operationalise the Türkiye Emissions Trading System. It envisages completing secondary legislation on the system and putting it into operation, thereby completing the legal infrastructure for the carbon market and enabling effective operation.
The third target includes incentive mechanisms to support the development of green-finance products and instruments. These include assessing flexibility in the use of foreign-currency loans for green-transition investments, prioritising green projects in publicly supported lending, developing insurance-based guarantee mechanisms for emissions reductions, and encouraging green-patent applications and green-technology-focused R&D.
The Plan does not aim solely to create new financing instruments. It also seeks to establish a carbon market, direct investors towards sustainable finance instruments, shape public support to prioritise green investment and encourage innovative technologies. The goal is therefore to strengthen both financial markets and the investment environment for the development of green finance.
The three objectives and related targets in the Action Plan focus not only on developing new financing instruments in Türkiye, but also on strengthening the legal infrastructure, institutional capacity and human resources, and on creating a common framework for implementation in financial markets. By addressing the different components of the green-finance ecosystem together, the Plan sets out an integrated, implementation-oriented roadmap.
The Plan’s objectives, targets and actions provide a comprehensive framework for strengthening the legal, technical and institutional infrastructure needed for green finance. It includes numerous actions to improve the data infrastructure, diversify green-finance instruments, enhance the financial sector’s capacity and expand sustainable-finance practices.
Nonetheless, a significant share of the targets depend on preparing secondary regulations, ensuring coordination among institutions and managing implementation effectively. The success of the Action Plan will therefore be measured by whether its targets are implemented in accordance with the envisaged timetable and translated into tangible results in practice.
