Why Board Engagement Matters in Sustainability

Over the past decade, sustainability has evolved from a corporate agenda item into a fundamental element of how businesses operate. Beginning in the late 2010s and accelerating in the early 2020s, voluntary sustainability reporting in line with the GRI Standards became increasingly widespread. In Türkiye, sustainability took on an additional dimension in 2021, when the country’s ratification of the Paris Agreement brought regulatory expectations into focus.

A significant milestone followed in 2024, when sustainability reporting under the Türkiye Sustainability Reporting Standards (TSRS) became mandatory for companies meeting the criteria defined by the Public Oversight, Accounting and Auditing Standards Authority (KGK). The reports published over the past two years have provided valuable insights into how organizations across different sectors are managing their sustainability agendas. Among the most revealing disclosures is one that TSRS explicitly requires: the role of the board of directors in sustainability governance. As the first wave of 2025 TSRS reports begins to emerge, it is an opportune moment to revisit this critical topic.

TSRS extends well beyond greenhouse gas accounting. At its core, the standard examines how effectively sustainability-related risks and opportunities are embedded within a company’s business model, strategic priorities and decision-making processes. One of the strongest indicators of this integration is found in the Governance section of the report. More than a compliance requirement, these disclosures serve as a litmus test of whether sustainability has truly become part of a company’s governance structure.

Except for a number of well-established financial institutions and corporates that have long regarded sustainability as a strategic priority and have transparently demonstrated their governance structures, many companies appear to have been unprepared for the requirements of TSRS.

A closer look at current disclosures suggests that boards have yet to take ownership of sustainability to the extent required by today’s transition. One of the clearest indicators is the limited presence of board members with sustainability expertise. Likewise, only a small number of companies disclose that executive or board remuneration is linked to sustainability performance.

The relatively limited use of financial analysis related to climate risks and opportunities further suggests that these issues are not yet discussed with sufficient frequency at board level, nor are governance responsibilities consistently assigned in a timely manner. As a result, while companies continue to announce ambitious sustainability commitments, the governance mechanisms and performance incentives needed to deliver on those commitments often remain underdeveloped.

Although sustainability first emerged as a philosophy for the transformation needed to address the world’s climate challenges, it has increasingly become a strategic business imperative shaped by evolving regulatory frameworks. TSRS reflects this shift by moving sustainability beyond disclosure and placing it at the heart of corporate governance. Consequently, the most meaningful transformation must begin where the most important business decisions are made: in the boardroom.

A sustainability strategy that lacks genuine board ownership cannot be fully reflected in corporate reporting, nor can it meaningfully strengthen a company’s long-term resilience. Ultimately, the success of sustainability is defined not only by the ambitions companies communicate, but by whether those ambitions are championed at the highest level of decision-making.

Bilinç Sezgin
Sustainability Lead, 3pmetrics