Expert Guide on ESG in Real Estate in Turkiye

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Investor

Owner

The target is to reduce greenhouse gas emissions to 21% below 2012 levels by 2030. This target is in line with the Paris Agreement, which aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels. 

As Türkiye is not an EU member, the main challenge concerning ESG-related legislation is the adaptation of all relevant laws and regulations to EU standards. 

There are several pieces of legislation related to energy efficiency and ESG factors relevant for developers and investors in the logistics and industrial sector when selecting project sites, such as the Energy Efficiency Law No. 5627 and the Environmental Law No. 2872. These laws set out the requirements for energy efficiency and environmental protection which must be complied with when selecting project sites. 

The Regulation on Energy Performance in Buildings, aimed at achieving net zero emission buildings by 2053, is gradually making it mandatory for buildings to be more energy-efficient and to utilize renewable energy sources. Starting 1 January 2023, all buildings larger than 5,000 sqm must attain at least energy performance class B and source a minimum of 5% of their energy consumption from renewables like photovoltaic panels, wind energy, or heat pumps. 

To reach this goal, improvements include increasing thermal insulation thickness from 5 cm to 7-8 cm in Istanbul and from 6 cm to 8-9 cm in Ankara, as well as enhancing window insulation values

The primary piece of legislation governing the assessment of a building's vulnerability to natural hazards and its resilience is the Türkiye Building and Earthquake Regulation. This regulation establishes the overall framework for building safety in Türkiye and includes specific provisions for assessing natural hazards and building resilience. Additionally, the Regulation on Environmental Impact Assessment, a supplementary law to Environmental Law No. 2872, outlines the technical and procedural guidelines for assessing the environmental impact of real estate projects. 

Furthermore, there are other important pieces of legislation, such as the Regulation on Buildings in Disaster Areas and the Regulation on Construction Materials, which define the minimum standards buildings must meet to be considered resilient to natural hazards.

The main legislation governing waste management is the Environmental Law No. 2872. This law sets out the general principles of waste management. In addition, the Waste Management Regulations set out further important details relating to the matter.  

It is essential that different types of waste are classified and collected separately at the source/place of generation without mixing with other wastes. 

Further, as per the extended producer responsibility provisions, this type of responsibility covers electrical and electronic goods, packaging, vehicles, batteries and accumulators; such waste must be treated differently. The necessary measures must be taken by the manufacturers, starting from the design of the products, to reduce the negative impact of the products on the environment, to prevent waste, and to support reuse, safe recycling or recovery of waste. 

There are certain health and safety regulations that apply to construction sites, such as the Regulation on Occupational Safety and Health in Construction Works, which sets out specific requirements for construction sites, and the Regulation on the Use of Personal Protective Equipment, which sets out requirements for the use of personal protective equipment at work. 

Investors, developers, and builders who fail to comply with the health and safety regulations may be subject to fines or criminal charges. 

Yes, there are standardized measures or metrics for assessing the energy efficiency of buildings. The most commonly used measure is the Energy Performance Certificate (EPC). The EPC is a rating system that assigns a letter grade to a building based on its energy efficiency. The letter grades range from A (most efficient) to G (least efficient). 

Other standardized measures for assessing the energy efficiency of buildings include: 

• the primary energy consumption of the building; 
• the annual energy cost of the building; 
• the CO2 emissions of the building. 

All new buildings must have an Energy Performance Certificate (EPC) before they can be occupied. EPCs are not compulsory for old buildings, but they have been strongly encouraged since the early 2010s. 

The minimum energy performance requirements depend on the building's size and the type of construction.  

The main requirements for energy performance certificates in Türkiye are that they must be issued by a certified energy assessor accredited by the Ministry of Energy and Natural Resources, and must include information on the building's energy performance. 

In general, the threshold for unlicensed renewable electricity production is 5MW.Any renewable electricity production exceeding 5MW is subject to the Electricity Market License Regulation. 

For prosumers who intend to install rooftop solar panels, Article 5/1-ç of the Regulation on Unlicensed Electricity Production in the Electricity Market applies. The application procedure for unlicensed generation of electricity from renewable energy sources is regulated in Article 10 of the Regulation on Unlicensed Electricity Production in the Electricity Market, and requires an application to the competent grid operator. 

According to the Regulation on Unlicensed Electricity Production in the Electricity Market, any commercial trade in electricity which is produced without a license is forbidden. 

Applications by natural or legal persons who intend to install solar cells on roofs are examined by the commission formed by the utility companies. and the costs for installing the system must be borne by the consumer. 

In general, the threshold for unlicensed renewable electricity production is 5MW.Any renewable electricity production exceeding 5MW is subject to the Electricity Market License Regulation. 

For prosumers who intend to install rooftop solar panels, Article 5/1-ç of the Regulation on Unlicensed Electricity Production in the Electricity Market applies. The application procedure for unlicensed generation of electricity from renewable energy sources is regulated in Article 10 of the Regulation on Unlicensed Electricity Production in the Electricity Market, and requires an application to the competent grid operator. 

According to the Regulation on Unlicensed Electricity Production in the Electricity Market, any commercial trade in electricity which is produced without a license is forbidden. 

Applications by natural or legal persons who intend to install solar cells on roofs are examined by the commission formed by the utility companies. and the costs for installing the system must be borne by the consumer. 

The Law on Public Procurement No. 4734 (2022) Article 5/6 requires contracting authorities to consider environmental aspects in public construction procurement procedures. 

No.

Pursuant to the Zoning Regulation, it has been obligatory since 2017 to comply with the TS 9111 Standard for access for people with special needs to buildings and entrances. 

The target is to reduce greenhouse gas emissions to 21% below 2012 levels by 2030. This target is in line with the Paris Agreement, which aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels. 

As Türkiye is not an EU member, the main challenge concerning ESG-related legislation is the adaptation of all relevant laws and regulations to EU standards. 

There are several pieces of legislation related to energy efficiency and ESG factors relevant for developers and investors in the logistics and industrial sector when selecting project sites, such as the Energy Efficiency Law No. 5627 and the Environmental Law No. 2872. These laws set out the requirements for energy efficiency and environmental protection which must be complied with when selecting project sites. 

The Regulation on Energy Performance in Buildings, aimed at achieving net zero emission buildings by 2053, is gradually making it mandatory for buildings to be more energy-efficient and to utilize renewable energy sources. Starting 1 January 2023, all buildings larger than 5,000 sqm must attain at least energy performance class B and source a minimum of 5% of their energy consumption from renewables like photovoltaic panels, wind energy, or heat pumps. 

To reach this goal, improvements include increasing thermal insulation thickness from 5 cm to 7-8 cm in Istanbul and from 6 cm to 8-9 cm in Ankara, as well as enhancing window insulation values. 

The primary piece of legislation governing the assessment of a building's vulnerability to natural hazards and its resilience is the Türkiye Building and Earthquake Regulation. This regulation establishes the overall framework for building safety in Türkiye and includes specific provisions for assessing natural hazards and building resilience. Additionally, the Regulation on Environmental Impact Assessment, a supplementary law to Environmental Law No. 2872, outlines the technical and procedural guidelines for assessing the environmental impact of real estate projects. 

Furthermore, there are other important pieces of legislation, such as the Regulation on Buildings in Disaster Areas and the Regulation on Construction Materials, which define the minimum standards buildings must meet to be considered resilient to natural hazards. 

ESG-related concerns during the negotiation of transaction agreements for real estate investments are not very common or popular, as the concept of green buildings is not widespread due to cost-related difficulties. Also, there is no legal obligation for buildings smaller than 5000 sqm. 

Yes, there are standardized measures or metrics for assessing the energy efficiency of buildings. The most commonly used measure is the Energy Performance Certificate (EPC). The EPC is a rating system that assigns a letter grade to a building based on its energy efficiency. The letter grades range from A (most efficient) to G (least efficient). 

Other standardized measures for assessing the energy efficiency of buildings include: 

• the primary energy consumption of the building; 
• the annual energy cost of the building; 
• the CO2 emissions of the building. 

All new buildings must have an Energy Performance Certificate (EPC) before they can be occupied. EPCs are not compulsory for old buildings, but they have been strongly encouraged since the early 2010s. 

The minimum energy performance requirements depend on the building's size and the type of construction.  

The main requirements for energy performance certificates in Türkiye are that they must be issued by a certified energy assessor accredited by the Ministry of Energy and Natural Resources, and must include information on the building's energy performance. 

In general, the threshold for unlicensed renewable electricity production is 5MW. Any renewable electricity production exceeding 5MW is subject to the Electricity Market License Regulation. 

For prosumers who intend to install rooftop solar panels, Article 5/1-ç of the Regulation on Unlicensed Electricity Production in the Electricity Market applies. The application procedure for unlicensed generation of electricity from renewable energy sources is regulated in Article 10 of the Regulation on Unlicensed Electricity Production in the Electricity Market, and requires an application to the competent grid operator. 

According to the Regulation on Unlicensed Electricity Production in the Electricity Market, any commercial trade in electricity which is produced without a license is forbidden. 

Applications by natural or legal persons who intend to install solar cells on roofs are examined by the commission formed by the utility companies. and the costs for installing the system must be borne by the consumer. 

Pursuant to the Charging Service Regulation, which determines the procedures and principles for establishing charging units and stations where electrical energy is provided to electric vehicles, the operation of charging stations connected to the charging network and of the charging network, as well as the provision of charging services, is carried out within the scope of a charging network operator licence obtained from the Energy Market Supervisory Authority. 

As Türkiye is not an EU member state, the CSDDD is not directly applicable. However, due to the obligation of companies to comply with the CSDDD in order to maintain their business with European companies, it will be necessary for Turkish companies to comply with the CSDDD.  

ESG/non-financial reporting obligations are regulated by the Corporate Governance Communiqué published by the Turkish Capital Markets Board. Accordingly, public companies are obligated to indicate in their annual activity report whether or not they apply sustainability principles. If they do not, they must give detailed reasons for this, and list the social and environmental risks arising from non-compliance. 

The target is to reduce greenhouse gas emissions to 21% below 2012 levels by 2030. This target is in line with the Paris Agreement, which aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels. 

As Türkiye is not an EU member, the main challenge concerning ESG-related legislation is the adaptation of all relevant laws and regulations to EU standards. 

There are several pieces of legislation related to energy efficiency and ESG factors relevant for developers and investors in the logistics and industrial sector when selecting project sites, such as the Energy Efficiency Law No. 5627 and the Environmental Law No. 2872. These laws set out the requirements for energy efficiency and environmental protection which must be complied with when selecting project sites. 

The Regulation on Energy Performance in Buildings, aimed at achieving net zero emission buildings by 2053, is gradually making it mandatory for buildings to be more energy-efficient and to utilize renewable energy sources. Starting 1 January 2023, all buildings larger than 5,000 sqm must attain at least energy performance class B and source a minimum of 5% of their energy consumption from renewables like photovoltaic panels, wind energy, or heat pumps. 

To reach this goal, improvements include increasing thermal insulation thickness from 5 cm to 7-8 cm in Istanbul and from 6 cm to 8-9 cm in Ankara, as well as enhancing window insulation values. 

The primary piece of legislation governing the assessment of a building’s vulnerability to natural hazards and its resilience is the Türkiye Building and Earthquake Regulation. This regulation establishes the overall framework for building safety in Türkiye and includes specific provisions for assessing natural hazards and building resilience. Additionally, the Regulation on Environmental Impact Assessment, a supplementary law to Environmental Law No. 2872, outlines the technical and procedural guidelines for assessing the environmental impact of real estate projects. 

Furthermore, there are other important pieces of legislation, such as the Regulation on Buildings in Disaster Areas and the Regulation on Construction Materials, which define the minimum standards buildings must meet to be considered resilient to natural hazards. 

The main legislation governing waste management is the Environmental Law No. 2872. This law sets out the general principles of waste management. In addition, the Waste Management Regulations set out further important details relating to the matter.  

It is essential that different types of waste are classified and collected separately at the source/place of generation without mixing with other wastes. 

Extended producer responsibility covers electrical and electronic goods, packaging, vehicles, batteries and accumulators. The necessary measures must be taken by the manufacturers, starting from the design of the products, to reduce the negative impact of the products on the environment, to prevent waste, and to support reuse, safe recycling or recovery of waste. 

The main piece of legislation relating to lease agreements is the Turkish Code of Obligations No. 6098, which sets out the general provisions applicable to lease agreements. It is possible to include special provisions in lease agreements; however, such provisions cannot be contrary to the mandatory provisions of the Turkish Code of Obligations. In any case, green lease provisions are currently not popular. 

Yes, there are standardized measures or metrics for assessing the energy efficiency of buildings. The most commonly used measure is the Energy Performance Certificate (EPC). The EPC is a rating system that assigns a letter grade to a building based on its energy efficiency. The letter grades range from A (most efficient) to G (least efficient). 

Other standardized measures for assessing the energy efficiency of buildings include: 

• the primary energy consumption of the building; 
• the annual energy cost of the building; 
• the CO2 emissions of the building. 

All new buildings must have an Energy Performance Certificate (EPC) before they can be occupied. EPCs are not compulsory for old buildings, but they have been strongly encouraged since the early 2010s. 

The minimum energy performance requirements depend on the building's size and the type of construction.  

The main requirements for energy performance certificates in Türkiye are that they must be issued by a certified energy assessor accredited by the Ministry of Energy and Natural Resources, and must include information on the building's energy performance. 

In general, the threshold for unlicensed renewable electricity production is 5MW.Any renewable electricity production exceeding 5MW is subject to the Electricity Market License Regulation. 

For prosumers who intend to install rooftop solar panels, Article 5/1-ç of the Regulation on Unlicensed Electricity Production in the Electricity Market applies. The application procedure for unlicensed generation of electricity from renewable energy sources is regulated in Article 10 of the Regulation on Unlicensed Electricity Production in the Electricity Market, and requires an application to the competent grid operator. 

According to the Regulation on Unlicensed Electricity Production in the Electricity Market, any commercial trade in electricity which is produced without a license is forbidden. 

Applications by natural or legal persons who intend to install solar cells on roofs are examined by the commission formed by the utility companies, and the costs for installing the system must be borne by the consumer. 

Pursuant to the Charging Service Regulation, which determines the procedures and principles for establishing charging units and stations where electrical energy is provided to electric vehicles, the operation of charging stations connected to the charging network and of the charging network, as well as the provision of charging services, is carried out within the scope of a charging network operator licence obtained from the Energy Market Supervisory Authority. 

The Law on Public Procurement No. 4734 (2022) Article 5/6 requires contracting authorities to consider environmental aspects in public construction procurement procedures. 

As Türkiye is not an EU member state, the CSDD is not directly applicable. However, due to the obligation of companies to comply with the CSDDD in order to maintain their business with European companies, it will be necessary for Turkish companies to comply with the CSDDD. 

ESG/non-financial reporting obligations are regulated by the Corporate Governance Communiqué published by the Turkish Capital Markets Board. Accordingly, public companies are obligated to indicate in their annual activity report whether or not they apply sustainability principles. If they do not, they must give detailed reasons for this, and list the social and environmental risks arising from non-compliance. 

Pursuant to the Zoning Regulation, it has been obligatory since 2017 to comply with the TS 9111 Standard for access for people with special needs to buildings and entrances.