New Communiqué on Green Asset Ratio of Banks Published

The Communiqué on the Calculation of Green Asset Ratio of Banks (the “Communiqué”) was published in the Official Gazette dated 11 April 2025 and numbered 32867, and has entered into force. The Communiqué sets out the methodology for calculating and reporting the green asset ratio and related key performance indicators, with the aim of measuring the extent to which banks contribute to the financing of environmentally sustainable activities.

The main provisions of the Communiqué regarding the calculation and reporting of the green asset ratio are as follows:

• Primary Key Performance Indicator: “Green Asset Ratio”. The primary performance indicator introduced by the Communiqué is the green asset ratio. This ratio is calculated by dividing compliant assets on banks’ non-consolidated balance sheets by total assets within the scope of the green asset ratio. The calculation is based on the following definitions:
  • Total assets within the scope of the green asset ratio. The gross carrying amounts (measured at amortized cost) of all on-balance sheet financial assets, excluding receivables from central government bodies, central banks, supranational institutions, and assets tracked in trading accounts.
  • Eligible assets. Amongst the total assets within the scope of the green asset ratio, the gross carrying amounts (measured at amortized cost) of on-balance sheet assets related to economic activities that fall within the scope of technical screening criteria ^[1].
  • Compliant assets. This refers to the sum of the gross carrying amounts, measured at amortized cost, of the “eligible assets” related to economic activities, which (i) substantially contribute to one or more environmental objectives^[2], (ii) do not significantly harm any other environmental objective, and (iii) comply with minimum social safeguards.^[3]
• Secondary Key Performance Indicators. In addition to the green asset ratio, the Communiqué introduces two secondary indicators: The ratio of “compliant assets to eligible assets”^[4] and “eligible assets to total assets within the scope of the green asset ratio.”
• Reporting. Banks are required to report their green asset ratios to the Banking Regulation and Supervision Agency (the “Agency”) beginning 30 June 2025. They must also implement systems for documentation, classification, monitoring, and control of relevant assets, develop related policies, adapt their databases accordingly, and establish a reporting framework.
• Independent Verifiers. Banks must substantiate the data used for determining compliance with the technical screening criteria through supporting documentation such as emission reports, feasibility studies, energy efficiency audit reports or equivalent documentation issued by independent verifiers. Verification may also rely on nationally or internationally recognized certificates, technology assessment tools, or investment expenditure documentation. These records must be retained and made available for audit. Independent verifiers must be natural or legal persons authorized by the Turkish Accreditation Agency (TÜRKAK), or by other relevant public institutions, agencies, or professional organizations with public institution status.

[1] In the draft communiqué previously released for public consultation by the Banking Regulation and Supervision Board, the technical screening criteria were included as an annex. However, this annex was omitted from the final version of the Communiqué that entered into force. Instead, Article 6 provides that the Board may adopt technical screening criteria determined by competent public authorities. Pursuant to this provision, the Board may, for example, decide that criteria issued by the Ministry of Environment and Urbanization or another relevant authority will also apply under the Communiqué.

[2] These environmental objectives include (i) climate change mitigation, (ii) climate change adaptation, (iii) transition to a circular economy, (iv) sustainable use and protection of water and marine resources, (v) pollution prevention and control and (vi) protection and restoration of biodiversity and ecosystems.

[3] The definitions of each of these conditions are set out in Articles 5 to 8 of the Communiqué. The annexes to the draft communiqué previously published by the Board had included criteria for the “Do No Significant Harm” principle and the “Minimum Social Safeguards”; however, these annexes were not included in the final version that entered into force. However, Articles 6 and 7 of the Communiqué -similar to the approach adopted for the technical screening criteria- provide that the Banking Regulation and Supervision Board may decide to apply standards determined by competent public authorities on these matters under the Communiqué.

[4] In the draft communiqué published by the Banking Regulation and Supervision Board, the primary key performance indicator was defined as the ratio of “aligned assets to eligible assets.” However, in the version of the Communiqué that has entered into force, the primary performance indicator has been revised.