May | Sustainability Bulletin
- European Parliament Members Adopt New EU Carbon Removal Certification Scheme
The new European Union Carbon Certification System, developed to assess the effectiveness, transparency, and sustainability of carbon reduction projects and various technologies removing carbon from the atmosphere, was approved by the European Parliament in April 2024. This certification scheme aims to bolster the EU’s efforts to meet its carbon emission reduction targets. It includes a comprehensive audit and certification process that covers all participants and stakeholders from the start to the end of carbon reduction projects.
The system covers renewable energy projects, carbon reduction technologies, and various methods of carbon removal, including storage and recycling. It also supports natural-based solutions such as conservation and restoration of natural resources. The social and environmental impacts of projects are also assessed to ensure compliance with sustainability standards.
This certification system is seen as a step towards effectively implementing EU climate policies, achieving the goals of the Paris Agreement, and taking a leadership role in combating global climate change.
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- Public Oversight Authority Announces Guide on Sector-Specific Application of TSRS 2
Following the publication of the Turkish Sustainability Reporting Standards (TSRS) in the Official Gazette No. 32414(M) on December 29, 2023, the Public Oversight Authority released a guide on April 29, 2024, for the sector-specific application of TSRS 2. This guide mandates that businesses consider certain requirements listed in both TSRS1 and TSRS2 when preparing their disclosure reports.
Additionally, the announcement highlighted that the technical working group of the International Sustainability Standards Board (“ISSB”) has prepared draft texts containing climate-related disclosures for 68 different sub-sectors. These drafts, published as the “Guide for Sector-Specific Implementation of TSRS 2,” serve as a guiding resource for businesses and are now available to the public. Links to the relevant draft texts and the announcement can be found below.
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- Türkiye İş Bankası Launches “100th Year Bond” in Celebration of Its Centennial
Türkiye İş Bankası has issued its first green debt instrument, the “100th Year Bond,” in celebration of its centennial. The subscription period, held from April 15 to 19, 2024, saw a total demand of 7.7 billion Turkish Lira. The bond, which began maturing on April 22, 2024, will conclude on August 26, 2024, aligning with the 100th anniversary of the bank’s founding.
Hakan Aran, General Manager of Türkiye İş Bankası, stated, “The public offering of the 100th Year Bond reflects our desire to share the joy of our centenary with all our stakeholders and the nation, alongside our social responsibility initiatives and core activities. Therefore, I find the 100th Year Bond to be of great significance.” He also mentioned that for every investor participating in the offering, a tree will be donated to TEMA.
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- European Commission Approves Revised Directive on Energy Performance of Buildings Under the European Green Deal
The European Commission has approved the Revised Directive on the Energy Performance of Buildings as part of the European Green Deal. This directive outlines the framework for emissions and energy use in residential, workplace, school, hospital, and other public buildings across EU member states. Considering national characteristics, the directive aims to improve human health and quality of life. While member states retain the discretion to choose the scope of measures and buildings, there is an expected increase in demand for clean technologies produced in Europe, which should also lead to employment growth.
With this directive, each member state is tasked with adopting its national method to reduce the average primary energy use in residential buildings by 16% by 2030 and by 20-22% by 2035. Non-residential buildings performing in the bottom 16% must be renovated by 2030, and those in the bottom 26% by 2033. Additionally, member states have the option to exempt certain categories of buildings, including historic buildings and holiday homes, from these requirements. To support citizens in renovating their homes, the directive requires the establishment of advisory centres for building renovation.
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- Science Based Targets Initiative (SBTi) Board of Trustees Issues Statement on Scope 3 Emissions
The Science Based Targets Initiative (SBTi), established in 2015 to aid companies in reducing greenhouse gas emissions, announced in January that revising the Corporate Net-Zero Standards to include additional guidance on managing Scope 3 emissions was a priority. Over the past six months, SBTi has conducted extensive consultations and reviewed survey results, which led to the decision to expand the use of Scope 3 emissions reduction beyond the current limits. SBTi will consult with a broader group of stakeholders and seek necessary collaborations, including the responsible use of environmental attribute certificates in setting Scope 3 targets.
SBTi will delegate the verification of carbon credits’ quality to relevant organizations, facilitating clearer access to and understanding of the rules for those interested. This move is seen as a way to accelerate the decarbonization of value chains through compensatory measures, while companies advance in eliminating carbon emissions through innovation and technology improvements.
As part of the standard revision process, following consultations with all relevant stakeholders, SBTi plans to publish the initial draft of the basic rules for the potential use of environmental attribute certificates for Scope 3 emission reduction by July 2024.
*Scope 3 encompasses all emissions not directly owned or controlled by the company but that the company indirectly impacts in its upstream and downstream value chain.
**Environmental attribute certificates are tools used to quantify, verify, and monitor the environmental benefits associated with climate mitigation activities or projects.
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- European Parliament Approves EU Electricity Market Reform
The European Union’s Electricity Market Reform, composed of a regulation and a directive aimed at making the EU electricity market more stable, affordable, and sustainable, was approved by the European Parliament on April 11, 2024. The reform, designed to protect consumers against volatile prices, will ensure clear access to information on fixed or variable pricing in electricity contracts and prohibit suppliers from unilaterally changing contract terms.
The reform envisages the use of “Contracts for Difference (CfD)” or equivalent plans in energy investments stemming from both nuclear and electricity production. Under CfD, a public authority will compensate energy producers if market prices fall significantly, while recovering payments when prices surge.
Additionally, under certain conditions, the EU can declare a regional or EU-wide electricity price crisis, allowing member states to implement temporary measures to set electricity prices for SMEs and energy-intensive industrial consumers.
The enactment of the reform awaits formal approval by the EU Council, following the endorsement from the Parliament.
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- Australian Court Rules Against Vanguard in Greenwashing Case
The Australian federal court has ruled against Vanguard Investments Australia in a landmark greenwashing case. The decision was based on Vanguard’s misleading conduct concerning one of its ESG funds, specifically the inclusion of investments in fossil fuel activities, contrary to claims made about the fund’s exclusion of such investments.
The case was initiated by the Australian Securities and Investments Commission (ASIC) in 2023, after Vanguard claimed to be sensitive towards fossil fuel activities while ASIC argued that the investments within the fund did not meet ESG criteria.
This case marks the first greenwashing lawsuit initiated by ASIC that has resulted in a financial penalty. The ruling emphasizes the need for other companies to reassess their sustainable investment claims. Following the verdict, ASIC Deputy Chair Sarah Court remarked that the case sends a clear message to firms about accurately reflecting their sustainable investment practices.
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- Turkish Presidency of Climate Change Publishes Mitigation and Adaptation Strategy and Action Plans
Turkey aims to reduce emissions by 41% by 2030, according to its Updated National Contribution Statement. In alignment with this target, the Presidency of Climate Change has developed two strategic plans: the Climate Change Mitigation Strategy and Action Plan (İDASEP) and the Climate Change Adaptation Strategy and Action Plan (İDUSEP) for the implementation period of 2024-2030.
İDASEP addresses strategies and actions for sectors such as industry, energy, buildings, transportation, waste, and agriculture, as well as Land Use, Land Use Change, and Forestry (LULUCF). İDUSEP focuses on sectors highly susceptible to the impacts of climate change. İDASEP comprises 49 strategies and 260 actions, while İDUSEP consists of 40 strategies and 129 actions.
These plans are crucial for Turkey to meet its 2030 targets for combating climate change and reducing emissions.
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