Sustainability-linked loans: Practical observations and thoughts

Sustainability linked loans (SLLs) have become increasingly popular in financings. We analyze some practical observations and considerations for lenders in relation to the main characteristics, principles and elements to consider in relation to sustainability-linked loans. 

Read the full publication, "Sustainability-linked loans: Practical observations and thoughts."

Circular economy: New consumer rights and a ban on green washing

Recent proposals by the European Commission set out a number of amendments to key EU directives with a view to enabling the consumer to make more environmentally-friendly choices and banning commercial practices that hinder sustainable purchasing (the Proposals). It is intended to promote a more circular economy by allowing products to be evaluated and selected for how sustainable they are (particularly based on how durable and reparable they are) and encourage more sustainable products to be designed

Read the full publication, "Circular economy: New consumer rights and a ban on green washing."

Stimulating the use of and demand for green hydrogen in Europe

Green hydrogen is expected to play a key role in achieving the Green Deal objective of making the EU climate neutral (with net-zero greenhouse gas emissions) by 2050. The EU Hydrogen Strategy sets an ambitious target of 40 GW electrolyser capacity by 2030. One of the challenges in expanding the roll-out of green hydrogen is that its production is not yet cost-competitive with blue and grey hydrogen (produced from fossil fuels), due to high production, conversion, transport and storage costs. The European Commission (EC) is trying to stimulate the use of and demand for green hydrogen, for example by making its use mandatory in industry, and by including new targets for 2030 in its proposed amendments to the recast Renewable Energy Directive (RED III).

Read the full publication, "Stimulating the use of and demand for green hydrogen in Europe."

Carbon capture terms

Interest in carbon capture projects has soared over the past year. To document commercial terms, some parties are re-purposing concepts from gas and refined coal deals. Others are cutting brand new agreements from whole cloth. The market will eventually coalesce around a set of standard terms, but it is not there yet. This article describes key terms we are seeing parties negotiate in carbon capture agreements.

Read the full publication, "Carbon capture terms."


Ministry of Trade of Turkey released an action plan for compliance with the European Green Deal

Following the declaration of the European Green Deal, the Turkish Republic Ministry of Trade of Turkey released an action plan for compliance with the European Green Deal for harmonization of Turkey's efforts with the EU's actual and planned policy changes. The action plan includes 32 objectives and 81 actions in nine 9 categories to power Turkey's transition to a more sustainable and greener economy. In addition to maintaining and improving competitiveness in exports, almost half of which is made to the EU zone countries, Turkey also aims to help deepen its integration with the EU. Turkey stresses importance on the Action Plan as part of strengthening the integration it provides to global supply chains and attracting green investments to Turkey. Main objectives of the Action Plan are similar to the Green Deal:

  • Limiting carbon emissions (border carbon regulations)
  • Green and circular economy
  • Green financing
  • Clean, economical and secure energy supply
  • Sustainable agriculture
  • Sustainable smart transportation
  • Combating climate change
  • Adopting diplomacy principles
  • Informatory and awareness activities regarding European Green Deal

Public Oversight Accounting and Auditing Standards Authority empowered to determine Turkish Sustainability Reporting Standards

In November 2021, the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB) under the IFRS Foundation at COP26, the UN global summit to address the climate change. The ISSB was formed to develop comprehensive global reporting standards regarding sustainability to enable for investors for making informed investments decisions. To be able to meet the global sustainability standards, through the Omnibus Law No: 7408 published in the Official Gazette on June 4, 2022; Article 88 of the Turkish Commercial Code No: 6102 was amended to grant the Public Oversight Accounting and Auditing Standards Authority the power to determine and publish Turkish Sustainability Standards compatible with the international standards. In its reasoning about the relevant amendment, the lawmaker emphasizes the growing significance of accessing qualified and comparative information on the risks and opportunities in terms of sustainability during the investment decisions and its aim that the standards to be set by the relevant authority will serve for investors' easy access to convenient information about sustainability during their decision making.

Capital Markets Board obliged certain listed companies to make sustainability compliance reporting in the template announced by the board

On its weekly bulletin dated 23 June 2022 and numbered 34/977 and as per the Communiqué on Corporate Governance (II-17.1), the Capital Markets Board of Turkey obliged the listed companies under the Primary Market, Star Market and Low-End Market to make their annual sustainability reporting for the year 2022 over the Template Sustainability Report announced in the relevant weekly bulletin over the Public Disclosure Platform. It is further reminded that companies shall announce their compliance with the sustainability standards along with their financials and inclusion of such template into the annual activity reports is left at the discretion of the companies.

Regulation on Green Certificate for Buildings and Developments came into force

The Regulation on Green Certificate for Buildings and Developments (Regulation) in Turkey came into force after its publication in the Official Gazette dated 12 June 2022, which aims to establish assessment and certification systems, which will help reducing the negative impacts of buildings and developments on the environment. The Regulation covers the assessment and certification of the sustainable environmental, social and economic performance of existing and new buildings and settlements, and it is implemented by the Ministry of Environment, Urbanization and Climate Change. With the Regulation, green buildings, green developments, green certificate, green certificate experts, green certificate assessment experts and training institutions are defined. According to the Regulation, obtaining a green certificate is voluntary and the owner of a building or development who wishes to obtain a green certificate shall receive services from the green certificate expert and the assessment body which is the Turkish Environment Agency. The assessment guidelines attached to the Regulation set out the criteria to obtain a green certificate.

Principle Decision on the Conditions of Protection and Use of Natural Protected Areas in Turkey is published

Principle Decision on the Conditions of Protection and Use of Natural Protected Areas (Decision) defines strictly protected sensitive areas, qualified natural protected areas and sustainable use of protected areas and further explains the conditions of protection and use of those protected areas. Pursuant to the Decision, in strictly protected sensitive areas, it is allowed to take emergency actions but it is not allowed to conduct mining activities. Although there is full prohibition on construction in these areas, the activities which may be allowed in case of difficulty, subject to the conditions, scope and duration, are determined according to the assessment to be made by the relevant Regional Commissions for the Protection of Natural Assets are listed. In qualified natural protected areas, structures in accordance with the legislation that existed before registration and cannot be allowed to be renewed within the scope of this Resolution can be used until they complete their economic life, mining activities are not allowed and activities that can be done with the assessment of Regional Commissions for the Protection of Natural Assets are listed. Finally, sustainable use and protected areas are not subjected to the restrictions set out for other protected areas, detailed instructions are stated in the Decision.

National Sustainability Development Coordination Agency is established

The Turkish Presidency announced the incorporation of the National Sustainability Development Coordination Agency led by Strategy and Budget Director and composing of deputy ministers, presidents of Turkish Cooperation and Coordination Agency, Turkish Human Rights and Equality Authority and Turkish Statistics Agency to monitor and coordinate the application of sustainability development purposes at national level.

Regulation on the Environmental Impact Assessment is published to repeal the previous regulation dated 2014

Turkey published a new Environmental Impact Assessment Regulation in the Official Gazette dated 29 July 2022 (the New Regulation), repealing the previous Environmental Impact Assessment Regulation which was in effect for the last eight years (the Old Regulation). The New Regulation includes certain important amendments and responds to current topics, such as sustainability and ESG concerns. The New Regulation became effective as of 29 July 2022. However, for the existing project for which the Environmental Impact Assessment (EIA) application/project presentation files were submitted to the relevant authorities before the above-mentioned effectiveness date, only the favorable provisions of the New Regulation will be applied. Otherwise these projects will continue to be subject to the regime under the Old Regulation. Some of the notable amendments made in the Regulation are as follows:

  1. Content of the EIA application and project presentation forms is enriched, especially with sustainability and ESG assessments;
  2. Definition of stakeholders ("public") has been narrowed;
  3. Stakeholder consulting processes have been updated with the new notion of "stakeholder participation plan"
  4. "Cumulative impact assessment" concept has been introduced
  5. Capacity increases in "legally exempt projects" and "out of scope projects" became subject to EIA
  6. Change of project owner and project transfer processes are clarified
  7. Shorter validity period for EIA positive decisions but inclusion of "court decisions" in the "force majeure" definition

Inclusion of sustainability and ESG topics into the EIA processes will incentivize public authorities to specialize in and obtain knowledge about these issues. The New Regulation takes significant steps in taking the concerns on the potential negative effects of renewable energy as well as other large-scale social infrastructure projects into account.


Global Head of Corporate, M&A and Securities
Partner, Pekin Bayar Mizrahi
Counsel, Pekin Bayar Mizrahi

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