350 Association for Climate and Sustainable Economics and Finance Research Association (SEFIA) examined the approach to climate change of the first 30 companies traded on Borsa Istanbul (BIST 30). According to the report titled “The Outlook of BIST 30 Firms”, almost none of the companies are doing enough to combat climate change.
In the report, the approach to climate change of 25 non-banking companies in BIST 30, which consists of 30 companies with the highest trading volume and market value, and traded in Borsa Istanbul, was evaluated in five criteria: Fossil fuel assets/investments, Clean energy investments, “Net Setting targets for “Zero”, Carbon footprint and “Carbon Neutral”, ESG (Environmental, Social, Governance practices) and other similar ratings.
Only 6 companies in BIST 30 have target dates for net zero
According to the research, only six of the 25 companies examined (Arçelik, Sabancı Holding, Aselsan, Vestel, Şişecam and Pegasus) have target dates for net zero. In other words, these companies aim to reduce their emissions to net zero by a certain date, with options such as energy efficiency, electrification and using renewable energy sources. On the other hand, it is stated that only 11 companies among these 25 companies have a target date for carbon neutrality. (Arçelik, THY, Ford Automotive, Sasa Polyester, Aselsan, Turkcell, Tekfen, Tofaş, TÜPRAŞ, Pegasus and Koç Holding). In other words, these companies aim to balance the total emissions they cause with the amount of emissions they compensate thanks to their environmentalist investments.
On the other hand, in the ESG rating, which evaluates the steps taken by companies in terms of environmental, social and governance, it is revealed that only two companies are low risk in terms of ESG score, and 12 companies are medium risk. The number of companies with high and seriously high ESG scores is announced as 11. In other words, it can be said in the report that 92 percent of the 25 largest companies in the stock market face serious environmental and social risks, while the rate of high and serious high-risk companies is 44 percent.
350 Association for Climate Turkey Coordinator Efe Baysal said, “Turkey, which is a party to the Paris Agreement, which is one of the most important steps in the global fight against climate change, has announced its goal of achieving net-zero emissions for 2053. While it is quite clear that Turkey needs to follow a rapid emission reduction path in order to achieve this target, it is sad to see that Turkey’s largest companies are advancing too far from this path. Our report shows that the private sector, as well as the public sector, must urgently fulfill their responsibilities in order to truly combat climate change.” said.
The report also deals with the Border Carbon Regulation Mechanism (SKDM), which has a significant competitive potential for Turkey, which exports about half of its exports to EU countries. According to the report, four companies that will be directly affected by the EU Border Carbon Tax Mechanism stand out: Erdemir and Kardemir from the iron and steel sector, and Gübretaş and Hektaş from the fertilizer sector. If these companies, which have intense carbon emissions during production, do not reduce their emissions significantly by rearranging their production processes, they are expected to be seriously affected by the Border Carbon Regulation Mechanism. In addition to these companies, Koç Holding, Sabancı Holding and Tekfen Holding, which are also included in BIST 30, are also expected to be indirectly affected by SKDM through group companies in the cement and fossil fuel-based energy sectors, as well as subsidiaries and affiliates.
İbrahim Çiftçi, Financial Research Director of the Sustainable Economy and Finance Research Association (SEFIA), said, “With the implementation of the national emissions trading system in Turkey, some companies will be financially responsible for the carbon they cause in their production processes. However, before that, they will take a hit in price competitiveness by meeting the carbon tax by the EU. In addition to these risks, another major threat that publicly traded companies will face is the expectation that global fund management companies will soon prioritize this transformation in their investment decisions. It is a serious threat both for Borsa İstanbul and for the country’s economy that companies that have difficulties in accessing international finance or borrow at high rates go off the radar of these investors. On the other hand, taking a suitable position through transformation is an opportunity for these companies. In summary, the speed with which companies will adapt to this energy-oriented economic transformation will have an impact on their financial structures,” he said.