Sustainability Finance & ESG
ESG Disclosure, Sustainable Finance & Supply Chain Advisory
Sustainability has moved from a voluntary corporate responsibility theme to a binding regulatory framework reshaping how companies report, finance and operate. The EU CSRD, CSDDD, CBAM and Taxonomy together constitute the most comprehensive sustainability regulatory framework in any jurisdiction, with substantial extraterritorial reach to Turkish exporters and corporate groups.
Mermeroglu Legal advises corporates, financial institutions and investors on sustainability finance, ESG disclosure and supply chain due diligence, coordinating with applicable foreign law through experienced partners. Türkiye's position in the sustainability framework is shaped by its 2053 net-zero target, substantial CBAM exposure, EU candidate status alignment and the Turkish Climate Law (Law No. 7544) adopted in 2024 — making cross-border sustainability advisory an immediate operational priority for Turkish businesses.
Legal Framework
Three Intersecting Planes
The Disclosure Plane
Corporate sustainability reporting under CSRD / ESRS, ISSB (IFRS S1 & S2) and TCFD; sustainable investment disclosure under SFDR and MiFID II sustainability preferences; and corporate-level sustainability data — Scope 1, 2 and 3 emissions, biodiversity, water and social metrics. The disclosure plane determines what must be reported, when, against which standards and with what assurance requirements.
The Financial Product Plane
Green bonds, sustainability-linked bonds, sustainable loans, social bonds, transition bonds and sustainability-themed investment vehicles. Each product type engages distinct documentation requirements — ICMA Principles for bonds, LMA / LSTA Principles for loans, SFDR product classification for funds — and increasingly carries regulatory liability for misclassification or greenwashing.
The Operational Plane
Supply chain due diligence under CSDDD, the German LkSG, the French Vigilance Law and the UK Modern Slavery Act; conflict minerals due diligence under the OECD Guidance and EU Regulation 2017/821; forced labour due diligence under the US UFLPA and the EU Forced Labour Regulation; and biodiversity due diligence under the EU Deforestation Regulation and the TNFD framework.
Service Areas
CSRD & Sustainability Reporting
Advisory on EU Corporate Sustainability Reporting Directive compliance — scoping analysis, ESRS materiality assessment, double materiality methodology, reporting infrastructure, assurance requirements and phased application timelines. Includes ISSB-aligned TSRS 1 & 2 compliance for Turkish listed companies under the SPK framework.
CBAM Compliance for Turkish Exporters
Legal and compliance advisory for Turkish exporters in CBAM-covered sectors (cement, iron and steel, aluminium, fertilisers, electricity, hydrogen) — covering emissions monitoring at production facility level, third-party verification requirements, engagement with EU importers, certificate purchase obligations from January 2026 and linkage with the Turkish ETS framework.
CSDDD & Supply Chain Due Diligence
Advisory on EU Corporate Sustainability Due Diligence Directive compliance — scoping, value chain mapping, adverse impact identification and assessment, prevention and mitigation plans, remediation frameworks and the civil liability provisions. Includes comparative advisory on the German LkSG, French Vigilance Law and UK Modern Slavery Act for cross-border supply chain programmes.
Green Bond & Sustainability-Linked Bond Issuance
Legal advisory on green bond, sustainability-linked bond, social bond and transition bond issuances — covering ICMA Principles alignment, use-of-proceeds framework design, key performance indicator structuring, sustainability performance target calibration, second-party opinion process and the EU Green Bond Standard framework for EU-label instruments.
Sustainability-Linked Loans
Structuring and documenting sustainability-linked loan facilities — covering LMA / LSTA Sustainability-Linked Loan Principles compliance, KPI and SPT design, margin ratchet mechanics, reporting and verification obligations and the framework for green loan use-of-proceeds structures under the LMA Green Loan Principles.
EU Taxonomy Alignment
Advisory on EU Taxonomy Regulation compliance — technical screening criteria assessment for substantial contribution to the six environmental objectives, do-no-significant-harm analysis, minimum safeguards assessment and Taxonomy-aligned revenue / capex / opex reporting for CSRD and sustainable finance product disclosure purposes.
Carbon Markets & Turkish ETS
Advisory on the Turkish national emissions trading system — in pilot operation from 2024 with full operation expected from 2026 — covering installation-level monitoring, reporting and verification (MRV) obligations, the framework for allowance allocation and the interaction with the CBAM framework for Turkish installations in covered sectors.
Forced Labour & Conflict Minerals Due Diligence
Advisory on US Uyghur Forced Labor Prevention Act (UFLPA) compliance, EU Forced Labour Regulation due diligence obligations and EU Conflict Minerals Regulation (2017/821) requirements — including supply chain mapping, supplier engagement frameworks and the documentation of due diligence processes to support import clearance and customer-facing compliance representations.
ESG Governance & Board Advisory
Advisory on board-level ESG governance — sustainability governance frameworks, climate oversight duties, ESG committee structures, director liability in climate-related contexts and the integration of sustainability considerations into corporate decision-making under the Turkish Commercial Code and applicable foreign company law frameworks.
Greenwashing Risk & Regulatory Defence
Advisory on greenwashing risk in sustainability communications, financial product classification and public reporting — covering ESMA and national authority enforcement frameworks, SFDR Article 8 / Article 9 classification requirements, the EU Green Claims Directive and the framework for defending greenwashing investigations and enforcement proceedings.
Sector Intersections
Sectors in Which This Practice is Engaged
Sustainability and ESG work touches every sector but with particular intensity in carbon-intensive industries, financial services and consumer-facing operations. The principal sector intersections include:
- Manufacturing & Industrial Products — CBAM compliance, CSRD reporting, CSDDD due diligence and supply chain transparency for in-scope goods.
- Energy & Renewables / Oil & Gas — sustainable finance, EU Taxonomy alignment, green bonds, sustainability-linked loans and climate transition planning.
- Mining & Metals — conflict minerals due diligence, IFC Performance Standards alignment, water and biodiversity disclosure.
- Financial Institutions — sustainable finance product development, sustainability-linked lending, climate risk management and EU SFDR compliance.
- Transport & Logistics — maritime decarbonisation, FuelEU Maritime compliance, EU ETS for shipping and transport emissions reporting.
- Real Estate & Hospitality — green building certification, sustainability-linked real estate finance and EU Taxonomy alignment for property assets.
- Construction & Infrastructure — sustainable construction standards, materials disclosure and project-level ESG framework alignment.
- Technology, Media & Telecommunications — data centre sustainability, AI energy consumption disclosure and technology sustainability claims.
Jurisdictional Reach
Cross-Border Sustainability Advisory
Sustainability finance and ESG frameworks vary substantially across jurisdictions in scope, enforcement and integration with traditional corporate and financial regulation. Mermeroglu Legal advises on sustainability matters engaging the regulatory frameworks of the following jurisdictions, among others:
Türkiye occupies a distinctive position — simultaneously facing substantial extraterritorial obligations as a major EU exporter (CBAM, CSRD, CSDDD) while developing its own domestic sustainability architecture through the Climate Law (Law No. 7544), the Turkish ETS, ISSB-aligned capital markets disclosure requirements and BDDK sustainability framework guidance.
For detailed advice on jurisdictions not listed above — including emerging sustainability regulatory regimes, country-specific ETS frameworks or jurisdiction-specific supply chain due diligence requirements — please direct your enquiry through the firm's contact channels.
Standards & Instruments
International and Regional Instruments
Sustainability and ESG work engages a substantial framework of international agreements, standards and instruments. The most operationally significant include:
Paris Agreement (2015)
The Paris Agreement under the UNFCCC establishes the framework for nationally determined contributions to climate mitigation, in force in over 190 States including Türkiye (ratified October 2021, 2053 net-zero target). The Agreement underpins much of the regulatory architecture driving sustainability investment, transition planning and climate-related disclosure globally.
UN Guiding Principles on Business & Human Rights
The UNGPs provide the international soft-law framework for business respect for human rights, forming the substantive foundation of the EU CSDDD, the German LkSG, the French Vigilance Law and equivalent national supply chain due diligence frameworks. The UNGPs' Protect-Respect-Remedy framework structures the design of corporate human rights due diligence programmes.
IFRS S1 & S2 (ISSB Standards)
The IFRS Sustainability Disclosure Standards address general sustainability disclosures (IFRS S1) and climate-related disclosures (IFRS S2). Adopted in over twenty jurisdictions including Türkiye (as TSRS 1 & 2), the UK, Japan, Singapore, Australia and Brazil — and the baseline for ESRS mandatory standards under the EU CSRD framework.
EU CSRD & CSDDD
The Corporate Sustainability Reporting Directive (phased application 2024–2028) and the Corporate Sustainability Due Diligence Directive (phased application from 2027) together constitute the core of the EU mandatory sustainability framework. Both carry substantial extraterritorial reach to non-EU groups with significant EU operations — directly affecting Turkish exporters and corporate groups.
EU CBAM & Taxonomy Regulation
The Carbon Border Adjustment Mechanism (full operation from January 2026) imposes carbon pricing on imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen — directly affecting Turkish exporters. The EU Taxonomy Regulation establishes the classification framework for environmentally sustainable activities with technical screening criteria across six environmental objectives.
ICMA & LMA Sustainable Finance Principles
The ICMA Green, Social, Sustainability and Sustainability-Linked Bond Principles provide the voluntary industry-standard framework for sustainable bonds, operationally significant for substantially all internationally placed instruments. The LMA / LSTA / APLMA Green Loan Principles and Sustainability-Linked Loan Principles provide the equivalent framework for sustainable lending documentation.
Our Approach
How Mermeroglu Legal Engages
Sustainability and ESG mandates routinely engage the disclosure framework of the issuer's home jurisdiction, the regulatory framework of the operating jurisdictions, the sustainability requirements of financing arrangements and the extraterritorial reach of frameworks such as the EU CSRD, CSDDD and CBAM. Our practice is structured to coordinate across those legal systems through a single point of accountability.
Each mandate is led by a single matter principal at the firm, supported by an internal team drawing on sustainability and ESG, banking and finance, capital markets, corporate and regulatory practices. Where the matter requires advice on the law of jurisdictions outside Türkiye, we work through long-standing alliance arrangements with foreign counsel, including in Brussels, London, the Gulf and Asia.
Our approach to sustainability work places particular emphasis on the integration of regulatory compliance with commercial sustainability strategy. The most effective compliance frameworks are those built into operational decision-making rather than treated as separate reporting exercises. We treat sustainability integration as substantive legal work requiring engagement at the strategic level.
We maintain continuing advisory relationships with corporate and financial clients on sustainability matters, given the rate of regulatory change that characterises the field. The frequency of substantive change in the international sustainability framework requires standing engagement rather than transactional review.
INITIAL ENQUIRIES
Complex multi-jurisdictional sustainability matters and supply chain due diligence implementation are handled through coordinated internal and alliance teams.
Contact Us