Developments in the World and Sectoral Expectations

The Development and Investment Bank of Türkiye plays an important role in financing sustainable development by continuing its activities in support of Türkiye’s green transformation.

The Bank’s efforts to combat climate change and goals to increase its contribution to the United Nations’ Sustainable Development Goals place it in a leading position.

Simultaneously, the Bank continues its efforts to develop impact investing and expand its investment banking activities. In addition to focusing on environmental and social responsibility, the Bank adheres to international best practices.

2022 was an important year for Turkish and global capital markets, with a significant increase in the demand from companies to participate in capital markets. This year, the number of listed companies increased to 497, with a total market capitalization of approximately 5.7 trillion TL.

Investments in green and sustainable debt instruments also increased substantially. Additionally, during this period of progress toward the “Century of Türkiye” goal, significant advancements were made in areas such as digital financial services, sustainability, participation finance, financial literacy, and the Risk Center Platform. These developments shape expectations for the Turkish and global economies and present the banking sector with new opportunities.

In 2022, the global emphasis on climate change and sustainability, highlighted by the Paris Agreement, continued to influence strategic priorities across sectors and countries. The Paris Agreement, adopted by the United Nations Framework Convention on Climate Change (UNFCCC), aims to keep global warming below 2°C above pre-industrial levels. The participating countries are gradually implementing measures to meet their commitments regarding this objective.

Another noteworthy development is the European Green Deal (EGD), which serves as a pioneer in the transition to a green economy. This agreement, published by the European Union (EU) in 2019, aims to achieve net zero greenhouse gas emissions by 2050, making Europe the first climate-neutral continent and has taken significant steps in 2022. Increased investments in green initiatives and technology prompted this development. As a result, both EU and non-EU countries have increased their efforts to align their policies and strategies with the EGD’s ambitious goals.

The banking sector, in particular, is responding by further incorporating sustainability principles and the United Nations (UN) Sustainable Development Goals (SDGs) into all its operations and strategies. Globally, more banks are adopting the ‘Principles for Responsible Banking’ presented by the United Nations Environment Program Finance Initiative (UNEP-FI), committing to the integration of these principles into their business models and cultures.

Despite the disruption by the COVID-19 pandemic, Türkiye is still on track to meet its 2053 target of net zero emissions. The Banking Regulation and Supervision Agency (BRSA) approved the Sustainable Banking Strategic Plan in the last quarter of 2021, driving the sector to adopt more sustainable practices. This plan aims to ensure the necessary adaptation of the banking sector of Türkiye to future financial obligations.

2022 was a year of increased action by the banking sector of Türkiye to adopt green finance and sustainability-oriented policies. This indicates that the banking sector of Türkiye is rapidly transitioning to responsible banking practices. However, challenges such as the sector’s short-term financing structure, gaps in green asset identification and taxonomy, and limited analytical capacity on climate-related issues continue to exist. Banks are encouraged through regulation and action plans to address these challenges to embrace a more sustainable banking sector.

The Development and Investment Bank of Türkiye capitalizes on global and sectoral developments by strengthening its green finance portfolios and integrating sustainability principles into all its operations. The Bank is a pioneer in facilitating Türkiye’s transition to a green economy in accordance with the 2053 net zero emissions target.

In 2022, further progress on sustainability is expected, supported by relevant developments increased global awareness, regulatory focus and the untapped potential of green finance. The road ahead will include continued efforts to improve sustainability practices in the banking sector and a broader societal shift towards environmental awareness and action.