Climate change is no longer solely an environmental issue. It has become a global challenge that directly affects economic growth, financial stability, production processes and investment decisions. Rising temperatures, drought, extreme weather events and the mounting pressure on natural resources have led countries to develop climate policies, while bringing the financing dimension of those policies to the fore. Achieving the Sustainable Development Goals therefore requires a robust financing structure that can support environmental transformation.
The success of the green transition cannot depend solely on public resources. Particularly in developing countries, the scale of investment required makes active private-sector participation and a financial system configured to support sustainable investment essential. Green finance consequently stands out as an important instrument for meeting environmental objectives, increasing sustainable investments and making more effective use of international sources of finance.
International efforts to address climate change accelerated after the Paris Agreement, with climate finance and sustainable investment becoming central elements of the process. In this context, many countries have started to introduce sustainability-based reforms not only in environmental policy but also in their financial systems.
In Türkiye, policies and regulations for the green transition have accelerated in recent years in line with the 2053 Net Zero Emissions Target. The Green Deal Action Plan, the Twelfth Development Plan, the Medium-Term Programme, the Climate Law and various regulations introduced in sustainable finance constitute the principal building blocks of this transition.
Accordingly, the Ministry of Treasury and Finance published the National Green Finance Strategy and Action Plan (2026–2029) on 4 July 2026. Its vision is to become a model country that supports sustainable development by creating a fair, inclusive and innovative green-finance ecosystem. Its mission is to establish a financial ecosystem that facilitates Türkiye’s access to international green-finance resources and directs domestic and foreign financial resources towards sustainable economic activities, in line with the 2053 Net Zero Emissions Target. The Action Plan sets out a roadmap consisting of three strategic objectives, eleven targets and forty-five actions.
Basis of the Action Plan
The National Green Finance Strategy and Action Plan was prepared on the basis of key policy documents developed in recent years in line with Türkiye’s climate-change, sustainable-development and green-transition objectives. These include the Green Deal Action Plan, the Climate Council Final Declaration, the Twelfth Development Plan (2024–2028), the Ministry of Treasury and Finance Strategic Plan (2024–2028), the Medium-Term Programmes and the Climate Law. The Action Plan therefore brings together earlier policy goals under one umbrella and provides guidance for their implementation.
The first step in this process was the Green Deal Action Plan, published in 2021. It aimed to align Türkiye with the European Green Deal and identified the financing of the green transition as a priority field of work. Eleven actions were included under green finance, and it was also stated that work to update the Plan in response to changing needs was continuing. This continuing work shows that green-finance regulation will continue to evolve in response to changing requirements.
At the Climate Council held in 2022, preparing a National Green Finance Strategy and Action Plan was included among the priority decisions adopted in line with the 2053 Net Zero Emissions and Green Development targets.
The subsequently published Twelfth Development Plan gave broader coverage to sustainable finance. It envisaged supporting sustainability initiatives in the financial sector and raising awareness of environmental, social and governance criteria. Measures included standardising sustainability and emissions data; preparing a national green taxonomy; regulating climate-risk management in banking; developing sustainable financial products; and training specialised staff. It also included measures to raise the real sector’s knowledge and awareness of sustainable finance, develop carbon markets, expand instruments such as social impact bonds and blue bonds, and increase institutional-investor demand for sustainable finance instruments.
Taken together, these provisions indicate that creating new financing instruments alone is not considered sufficient for green finance to develop. Strengthening the data infrastructure, enabling the banking sector to adapt to the process and directing investors towards sustainable finance instruments are also targeted. This approach shows that green-finance development is intended to be supported through reforms in several areas.
In particular, the preparation of a national taxonomy, the development of sustainable financial products and the integration of climate risks into the financial system provide an important foundation for the development of the green-finance market. They can create a common basis for implementation for both investors and financial institutions.
Preparing a national strategy in the field of green finance was also among the priority objectives of the Ministry of Treasury and Finance Strategic Plan.
The Medium-Term Programme (2025–2027) also included objectives for financing the green transition. It envisaged establishing a carbon-pricing mechanism to support the transition to a low-carbon economy; putting the National Green Finance Strategy and Action Plan into practice; completing legislative work on the Türkiye Green Taxonomy; and developing standards that enable businesses to prepare sustainability reports.
The Medium-Term Programme covering 2026–2028 further broadened the objectives in sustainable finance. It provides for greater use of sustainable-finance resources, the development of sustainable-finance infrastructure, the wider use of green-banking practices, the development of new products and services, and the preparation of regulations on green and sustainable debt instruments. Implementing the National Green Finance Strategy and Action Plan is also listed among the Ministry’s responsibilities.
When the two Medium-Term Programmes are assessed together, the work in sustainable finance appears to have become more concrete over time. While the first programme focused more on preparing the necessary regulations, the second focused on implementation and on developing financial instruments. This indicates that work to develop green finance is progressing in stages.
Finally, the Climate Law that entered into force in 2025 established the main legal framework for climate finance, the Emissions Trading System, green and sustainable capital-market instruments and other financing mechanisms. The Action Plan has thus emerged as an integrated policy text shaped by earlier policy documents and regulations in force, and designed to support their implementation.
Policies on green finance in Türkiye have been developed in recent years so as to complement one another. Yet for the green-finance market to develop in a substantive sense, the regulations envisaged in those documents must be implemented, adopted in financial markets and used effectively by the private sector, in addition to the preparation of policy documents.
Purpose of the Action Plan
The core purpose of preparing the National Green Finance Strategy and Action Plan is to bring together the fragmented objectives and practices relating to green finance in Türkiye within a common framework. Both needs identified in earlier national policy documents and examples of practice from other countries were considered, with the aim of defining the way forward for green finance more systematically.
The main aims include defining a roadmap for green-finance instruments, mechanisms and policies; managing implementation effectively; strengthening coordination between relevant institutions; and increasing predictability in financial markets.
The Plan’s objectives demonstrate that, alongside the development of new financing instruments, importance is attached to the coordination and implementation process needed to ensure their effective use. This indicates that green finance is treated as a multidimensional process requiring coordinated action by different institutions.
Scope of the Action Plan
Drawing on international practice, the Action Plan covers measures for integrating climate-change and environmental, social and governance factors into the financial sector’s decision-making and risk-management processes. It also includes actions to develop green financial instruments, establish relevant standards and strengthen the capacity of public institutions and the financial sector.
The Plan states that the identified actions will be implemented in cooperation with the relevant institutions and according to the stated timetable. It establishes eleven targets and forty-five actions under three core objectives: “Establishing the Necessary Infrastructure for a Transparent and Measurable Green Finance Ecosystem”; “Strengthening Institutional Capacity and Human Resources in Green Finance”; and “Establishing Market Mechanisms for the Development of Green Finance.”
The provisions on scope show that the Action Plan does not focus solely on financing sources. It adopts a broad framework that also covers the operation of the financial system, human resources, standards and market mechanisms. This demonstrates the intention to take simultaneous steps in different areas for the development of green finance.
Preparation Process
The Action Plan was prepared under the coordination of the Ministry of Treasury and Finance. The views of relevant public institutions and organisations, regulatory and supervisory bodies, sector representatives and market participants were sought. The consultations helped establish a framework to support the financial sector’s alignment with sustainability principles, and efforts were made to reflect the views and recommendations of relevant institutions in the Action Plan.
Historical Context
Türkiye’s efforts to address climate change developed as environmental issues began to be included in development plans. Environmental objectives first appeared in the Fourth Five-Year Development Plan; the sustainable-development approach was adopted in the Seventh Development Plan; and climate change was addressed for the first time in the Eighth Five-Year Development Plan.
Internationally, Türkiye became a Party to the United Nations Framework Convention on Climate Change in 2004, the Kyoto Protocol in 2009 and the Paris Agreement in 2021. Following ratification of the Paris Agreement, Türkiye periodically updated its Nationally Determined Contributions, increased its greenhouse-gas-emission reduction targets and began to develop new policies and practices in line with the 2053 Net Zero Emissions Target.
The Green Deal Action Plan was published in 2021 and the Climate Council convened in 2022 to set out advisory decisions guiding Türkiye’s climate policies. Subsequent Medium-Term Programmes, the Twelfth Development Plan and other policy documents gave more extensive treatment to financing the green transition, sustainable finance and access to international financing resources. Finally, the entry into force of the Climate Law strengthened the legal framework for addressing climate change and established core provisions on financial mechanisms.
This evolution shows that Türkiye’s understanding of how to address climate change has changed substantially over time. Earlier approaches focused principally on environmental protection; in recent years, finance, investment and economic transformation have become integral to the process. Green finance is therefore viewed not only as an instrument supporting environmental objectives, but as one of the principal mechanisms for financing the transition to a low-carbon economy.
Structure of Türkiye’s Financial Sector and Sustainability Overview
The Action Plan states that Türkiye’s financial sector, with its strong regulatory structure, developing digital infrastructure and institutional capacity, plays an important role in financing the green transition. The sector comprises banking, capital markets, insurance, the private pension system, financial leasing and financial technologies.
The Plan highlights the weight of banking within the financial system and notes the strength of the sector’s capital adequacy, liquidity structure and risk-management capacity. It also states that capital markets offer companies an alternative source of finance, while insurance and the private pension system are important for increasing long-term savings and reducing climate-related risks. Developments in digital banking, electronic payments and open banking are also said to facilitate access to financial services.
Given the financial sector’s current structure, an important foundation exists for implementing green-finance practices. The effectiveness of this foundation, however, will depend on putting regulations into practice, financial institutions adapting to the process and wider use of green-finance instruments. In this respect, the Action Plan is one of the key documents that will guide the financial sector in the green transition.
The Role of the Turkish Financial Sector in the 2053 Net Zero Emissions Target
The Action Plan also addresses the role the financial sector will assume in line with Türkiye’s 2053 Net Zero Emissions Target. In this context, many institutions, particularly the Banking Regulation and Supervision Agency, the Capital Markets Board, the Central Bank of the Republic of Türkiye and the Public Oversight, Accounting and Auditing Standards Authority, have prepared guidance and regulations in green finance. Examples include the Green Deal Action Plan, the Sustainable Banking Strategic Plan, sustainability reporting standards, regulations on the green asset ratio and the Climate Law.
Regulatory developments affecting the financial sector in recent years demonstrate that an important preparatory process is under way in green finance. Regulation covering banking, capital markets and sustainability reporting aims to align the financial system with climate targets. The National Green Finance Strategy and Action Plan brings these initiatives together in a common framework, with the aim of strengthening inter-institutional coordination and making green-finance practices more systematic.
Alignment with Global Climate Finance
The Action Plan also refers to the Ministry of Treasury and Finance’s cooperation with international financial institutions. It notes that financing provided by the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank and other international organisations has supported numerous climate projects in energy, transport, industry, agriculture and infrastructure. Work is also continuing to enable Türkiye to benefit more from international climate funds.
Furthermore, under the Sustainable Financing Framework prepared by the Ministry of Treasury and Finance, Türkiye issued its first international green bond in 2023 and used the proceeds to finance green projects.
These developments show Türkiye’s intention to make greater use of international green-finance sources. Cooperation with international financial institutions, green-bond issuance and measures under the sustainable-financing framework all support this objective. However, deriving greater long-term benefit from these sources will depend on implementing the measures envisaged in the Action Plan. In this regard, the Plan provides a roadmap that can contribute to a more effective use of international green-finance opportunities.
Relationship Between Türkiye’s Sustainability Policies and the Green Finance Strategy
The National Green Finance Strategy and Action Plan is a complementary strategy that supports other policy documents prepared in line with Türkiye’s objectives for combating climate change and achieving sustainable development. While documents such as the Climate Change Mitigation Strategy and Action Plan, the Climate Change Adaptation Strategy and Action Plan, the Green Deal Action Plan and the Climate Law set out climate objectives, the National Green Finance Strategy and Action Plan aims to create the financing infrastructure required to achieve them.
The Action Plan seeks to mobilise the financial resources needed to reduce greenhouse-gas emissions, strengthen adaptation to climate change and increase sustainable investments. It envisages developing green-finance instruments, extending sustainability practices in financial markets and integrating environmental criteria into investment processes.
There is also a complementary relationship between the Green Deal Action Plan and the National Green Finance Strategy and Action Plan. The Green Deal Action Plan sets out the transformation to be undertaken in sectors such as energy, industry and transport; the National Green Finance Strategy and Action Plan aims to develop mechanisms to finance that transformation. It therefore seeks to link sectoral transformation objectives with financing instruments.
Unlike other sustainability documents, the National Green Finance Strategy and Action Plan focuses directly on the financing dimension. Rather than setting new climate objectives, it aims to establish the financial infrastructure needed to support implementation of existing objectives.
