ESG Reporting and Risk Management in Mining

The Growing Importance of ESG in the Mining Sector

The concept of Environmental, Social, and Governance (ESG) has gained global importance as a framework for assessing companies’ sustainability and ethical performance. Environmental factors refer to a company’s impact on nature; social factors refer to its relationships with employees, local communities, and other stakeholders; and governance refers to transparency, accountability, and ethical management practices. 

ESG requires companies to consider not only their potential for profit but also their impact on society and the environment. Environmental factors include areas such as natural resource use, carbon emissions, waste management, and impacts on ecosystems. Social factors encompass employee rights, occupational health and safety, community relations, and ethical standards in the supply chain. Governance focuses on corporate governance principles, transparency, accountability, anti-corruption, and ethical management practices.

The mining sector bears significant responsibility in all three areas due to the nature of its activities. Mining processes leave a large environmental footprint and create significant environmental risks such as land use, water pollution, and damage to biodiversity. In addition, there are significant impacts on the quality of life of local communities, employment conditions, and social balances. For this reason, mining companies are expected not only to comply with legislation but also to establish a transparent and sustainable working culture.

Indeed, investors today consider ESG performance to be a critical priority in their financial decision-making processes. A company’s approach to sustainability is seen as an important indicator of its risk management and long-term value creation potential.

In particular, combating climate change, reducing environmental impacts, and fulfilling social responsibilities have become fundamental conditions for access to finance. Regulations such as the European Green Deal of the European Union impose new obligations on Turkish mining companies, requiring them to reduce carbon emissions, increase energy efficiency, and regularly share sustainable production reports. In this context, it is becoming increasingly important for companies to adopt transparent reporting standards and monitor their performance regularly. From a social perspective, local communities and civil society organizations are demanding more information about the environmental and social impacts of mining projects and expect companies to be accountable.

Maintaining social acceptance, i.e., the acceptance of activities by the community, has become directly linked to effective ESG practices. Therefore, the ESG approach stands out as a strategic element that strengthens the reputation of mining companies, reduces their risks, and supports their long-term success.

World and Turkey Statistics

Many industries around the world are critically dependent on minerals extracted from the earth. From construction to energy, electronics to transportation infrastructure, many basic industries rely on the sustainable supply of these raw materials. In particular, the need for rare earth elements in various high-tech industries has become a topic of increasing concern and strategic priority in recent years. The production of many clean energy technologies, from electric vehicle batteries to wind turbines, depends on the regular supply of these elements.

On the other hand, coal remains one of the leading sources of global energy supply, accounting for approximately one-third of the world’s electricity production. Growing population and energy demand are increasing the importance of mining activities year after year.

In conclusion, the mining sector is not only a key driver of industrial growth but also a fundamental component of the energy transition. The scale of the sector is impressive when viewed in numbers:

The total revenue of the world’s 40 largest mining companies, which represent the vast majority of the mining sector, reached a record level of US$943 billion in 2022, but is estimated to decline to US$792 billion in 2024 due to economic fluctuations and falling commodity prices (Statista). The net profit margin has also seen a significant decline; from approximately 25% in 2010, it has dropped to 11% in 2023. This trend is closely linked to rising operational costs, regulatory pressures, and investments in sustainability.

Globally, the mining sector is responsible for 2 to 7 percent of greenhouse gas emissions (ICMM). This percentage highlights the sector’s critical role in combating climate change. In addition, the global sustainable finance volume reached €1.8 trillion in 2023, with green bonds showing an average annual growth of 15% (Deutsche Bank). This trend indicates that investors are increasingly focusing on sustainable mining practices.

Turkey is a major global player in mining. According to data from the Ministry of Energy and Natural Resources, our country possesses 73% of the world’s boron reserves. In addition, rich mineral resources such as gold, chromium, copper, and coal contribute approximately $5 billion to the Turkish economy each year. In 2024, boron exports broke a record, reaching $1 billion. The mining sector accounts for approximately 1.2% of Turkey’s Gross Domestic Product (GDP) and creates significant employment in rural areas (Ministry of Energy and Natural Resources).

However, the sector is not only on the agenda for its economic contribution, but also for the environmental and social risks it carries. Environmental degradation, loss of natural habitats, social conflicts, and governance challenges are among the key issues that require careful management in mining activities. These issues are increasingly emphasizing the importance of the ESG approach in line with the expectations of investors, regulatory authorities, and society. ESG emerges as a fundamental tool for both supporting sustainable development and enabling companies to create long-term value.

In Turkey, only 30% of mining companies listed on the Borsa Istanbul comply with sustainability reporting standards. This indicates that there is significant room for improvement in transparency and reporting practices in the sector. The widespread adoption of ESG standards and the establishment of a strong reporting culture play a critical role in creating competitive advantage and accessing international finance.

Reserve Mapping and Scientific Data Infrastructure in Mining in Turkey

The US has detailed mineral, rock, and valuable resource mapping systems and geological data infrastructure covering all layers of the earth’s surface.

Databases such as the Mineral Resources Data System (MRDS) developed by the US Geological Survey (USGS) provide high-precision data for mining planning. These applications facilitate the accurate calculation of reserve potential, the minimization of investment risks, and the creation of sustainable production plans. Similar important geological research and mineral reserve mapping studies are also being carried out in Turkey.

The General Directorate of Mineral Research and Exploration (MTA) conducts comprehensive studies to determine the mineral potential of our country. The Turkey Geological Map and Mineral Resources Database published by the MTA are of critical importance for investors and researchers.

• MTA Official Website – Turkey Mineral Maps
• Ministry of Energy and Natural Resources – Turkey Mining Data

These studies scientifically identify the location of mineral deposits, reserve sizes, geological characteristics, and potential risk areas. However, there is still a need for improvement in terms of transparency and digital accessibility in data sharing. In ESG-compliant mining, the continuous updating and sharing of this data with stakeholders is a critical requirement.

Environmental Factors and Reporting Requirements

Greenhouse Gas Emissions and Carbon Footprint Management

The mining sector is responsible for 2 to 7 percent of global greenhouse gas (GHG) emissions due to its high energy consumption (ICMM). Coal and metal mining activities in Turkey stand out in terms of total carbon footprint. This situation directly impacts both environmental sustainability goals and international competitiveness. For example, coal-based energy use accounts for 60% of total emissions from mining operations. As a result, companies are investing in energy efficiency projects to fulfill their carbon neutrality commitments and facilitate access to financing.

Eldorado Gold’s installation of a solar power plant at its gold mines in Turkey is a successful application in this area. With this investment, the company has reduced its emissions by 15% by meeting a significant portion of its electricity needs from renewable sources. Similarly, Koza Altın and Eti Bakır are using low-emission transportation fleets and testing carbon capture technologies in pilot-scale projects to offset their carbon emissions. Accurate calculation of the carbon footprint requires regular reporting in accordance with standards such as GRI and ISO 14064.

For companies competing in the international market, sharing emission reduction targets and annual progress in sustainability reports is no longer an expectation but a requirement.

Water Use, Waste Management, and Rehabilitation Obligations

Mining operations have a significant impact not only in terms of carbon dioxide emissions but also in terms of water use and waste production. Many open pit operations and metallic mining facilities consume large amounts of fresh water and pose a risk of wastewater contamination during the process. The UNEP Finance Initiative highlights water scarcity as one of the most significant environmental threats facing mining companies. In particular, mining activities in water-stressed regions of Turkey, such as Central Anatolia, make sustainable water management critical.

Tailings, or waste dams, are among the elements with the highest environmental risk potential. Inadequate engineering or maintenance of waste storage sites can lead to serious environmental and social disasters. The 2014 Soma coal mine disaster dramatically demonstrated how negligence in waste management can affect society.

Rehabilitation work is mandatory to compensate for environmental damage after the closure of mining sites. In Turkey, this process is regulated by Environmental Impact Assessment (EIA) regulations. Companies with EIA approval are required to implement measures such as ecosystem restoration, afforestation, and surface water improvement. For example, Koza Altın’s reforestation projects at the Ovacık gold mine are one of the successful examples of the rehabilitation process. Soil improvement efforts carried out after the closure of the facility contributed to the restoration of the vegetation cover in the region.

Closure of Mines and Rehabilitation Responsibility

In mining projects, the closure of mines and the rehabilitation of the land are legal requirements once the economic life of the reserve has been exhausted. Both national legislation and international practices require that end-of-life processes be completed in visual harmony with the environment, that biodiversity be restored, and that land value be improved.

In Turkey, the Environmental Law No. 2872 and the Environmental Impact Assessment (EIA) Regulation establish the constitutional framework for the closure of mining sites. However, delays in closure plans, insufficient rehabilitation budgets, and inadequate oversight are frequently observed in practice. Unfortunately, after some sites are abandoned, negative impacts such as erosion, water pollution, and visual degradation become permanent.

According to international standards, a mine closure process should include the following:

• Making all waste storage areas safe
• Restoring the land to its original topography
• Biological rehabilitation (reforestation, soil improvement)
• Monitoring and reporting processes for at least 5 years

These shortcomings weaken the reliability of ESG reporting and jeopardize social acceptance. In Turkey, it is of great importance that closure plans for sustainable mining are prepared transparently from the outset of the project and subject to independent audit.

Underwater Mining: Potential and Risks

Underwater mining (seabed mining) is an important topic that is gaining prominence on the global mining agenda due to increasing demand. The extraction of critical minerals such as cobalt, nickel, manganese, and rare earth elements from the ocean floor is seen as an important opportunity for the development of clean energy technologies.

Advantages

• Creates new resources due to the depletion of coastal reserves.
• Diversifies the supply chain for strategic minerals.
• Operational efficiency increases thanks to technological advances.

Risks

• Damage to biodiversity may affect the food chain and fishing.
• Water quality degradation and heavy metal pollution may occur.
• International oversight and legal frameworks for extraction processes are not yet sufficiently developed.

Research on underwater mineral potential is ongoing in certain areas of the Black Sea and Mediterranean Sea in Turkey. However, there are no seabed mining operations on an economic scale yet. Rapid expansion of seabed mining is not recommended without conducting impact assessments in line with international standards and developing techniques to minimize ecosystem damage.

Therefore, within the scope of ESG reporting, the following should be ensured for underwater mining projects:

• Transparent EIA processes should be conducted,
• Full compliance with international maritime law obligations should be ensured,
• Opinions should be sought from independent scientific institutions and the results should be shared with the public.

The future of this sector will be shaped by innovative technology investments and the integration of ecosystem protection policies.

Environmental Regulations in Turkey

Turkey’s environmental legislation contains detailed provisions to regulate mining activities and reduce their environmental impacts. The Environmental Law No. 2872 sets the general framework for all industrial activities, while the 2014 EIA Regulation requires the assessment and monitoring of environmental risks in mining projects. These regulations are applied at every stage of the process, from project planning to closure and rehabilitation.

In particular, the preparation of EIA reports and the public consultation phase often come to the fore in large-scale metallic mining projects. The Çaldağ nickel mine project has faced lengthy delays and millions of lira in administrative fines due to environmental incompatibilities and objections from the local community. Similarly, gold mining projects in the Kaz Mountains have sparked widespread public outcry due to their environmental impacts, prompting companies to adopt more transparent reporting practices.

For these reasons, mining companies are required to establish integrated environmental management systems, continuously monitor operational processes, and prepare regular audit reports to ensure compliance with environmental regulations. Environmental compliance has become a critical priority not only for regulatory purposes but also for the sustainability of social acceptance and international investor confidence.

Social Responsibility and Stakeholder Management

Occupational Health and Safety Practices

The mining sector is inherently high-risk in terms of workplace accidents and occupational diseases. Underground operations, the use of explosive materials, heavy equipment, and gas leaks are among the factors that pose serious hazards. Therefore, occupational health and safety (OHS) is one of the top priorities for companies as both a legal and ethical obligation.

The 2014 Soma disaster is etched in memory as the largest workplace accident in Turkey’s mining history. This catastrophe, which resulted from inadequate supervision, insufficient ventilation, and faulty risk management practices, caused the loss of 301 workers’ lives and led to a nationwide review of OHS standards. Following the incident, regulations were tightened, and oversight mechanisms were made more systematic.

The International Labour Organization (ILO) emphasizes the need for comprehensive OSH frameworks in the mining sector. Regular training, risk assessments, emergency plans, and independent audits are fundamental components of a safety culture. For example, Koza Altın has significantly improved its OSH performance by implementing advanced gas monitoring systems, regular drills, and comprehensive on-the-job training in its operations. Additionally, the company has institutionalized a safety culture by encouraging employee representatives to participate in decision-making processes.

Many international mining companies aim to bring their operations into line with international standards by obtaining ISO 45001 Occupational Health and Safety Management System certification.

Relationships with Local Communities, Employees, and Suppliers

Mining projects are often carried out in rural areas, creating both positive and negative impacts on local communities. Relationships developed with communities form the basis of the concept of social license to operate (SLO), which is critical to the success of a project. Social acceptance is not merely a matter of legal permits; it means that the community accepts the project, trusts it, and is willing to cooperate.

For example, Tüpraş has implemented education, health, and social development programs in the region to gain the support of the local community. Through activities such as school renovations and health screenings, it has built long-term trust. Such investments play a critical role in ensuring the sustainability of projects and preventing potential social conflicts.

Employee welfare is not limited to safe working conditions; fair wage policies, job security, inclusive human resources practices, and career development opportunities are also taken into account. Companies with high employee loyalty and satisfaction are seen to have significant advantages in terms of productivity and reputation.

Supply chain management is also an important aspect of social responsibility. Mining companies are expected to comply with responsible mining practices, ethical standards, and environmental requirements from their suppliers. Eti Maden has an exemplary approach in the sector with its sustainable supply policies and programs aimed at increasing the capacity of local suppliers. Supplier audits, regular reporting, and ethical commitments are commonly used tools for strengthening the chain of responsibility.

Social Impact Assessment and Reporting Methods

Identifying and managing the social impacts of mining projects during the planning stage forms the basis of Social Impact Assessment (SIA) processes. SIAs analyze potential impacts before a project begins, comprehensively examining issues such as displacement, job creation, economic contributions, public health, and impacts on cultural heritage.

The Global Reporting Initiative (GRI) standards are one of the most widely used frameworks for transparent reporting on social performance. Companies are required to share data such as the number of employees, social investments, stakeholder consultations, and complaint mechanisms in their annual sustainability reports.

Additionally, independent third-party audits to monitor social impact performance are highlighted as best practices for transparency. Companies’ sustainable growth strategies rely not only on financial success but also on building lasting and strong connections with society.

Governance Approaches and Ethical Practices

Corporate Governance Structures and Transparency

Strong corporate governance is a fundamental building block for long-term success and stakeholder trust. In capital-intensive sectors with high environmental and social impacts, such as mining, the quality of governance practices becomes even more critical. Effective governance enhances accountability within companies, strengthens stakeholder relationships, and supports ethical decision-making processes.

Mining companies listed on the Borsa Istanbul are required to comply with the Corporate Governance Principles issued by the Capital Markets Board (CMB). These principles cover issues such as transparency, disclosure, board independence, shareholder rights, and prevention of conflicts of interest. The presence of independent members on the board of directors strengthens objectivity in decision-making processes and positively affects corporate performance.

Eldorado Gold has increased the proportion of independent and female board members in order to increase board diversity and include different perspectives in decision-making processes. In addition, the company enhances national and international investor confidence by regularly reporting on its sustainability performance and operational risks. Strong transparent reporting and independent audit mechanisms provide an important advantage in terms of reducing capital costs and encouraging long-term investment.

Anti-Bribery and Compliance Processes

The mining sector is prone to corruption due to the complexity of licensing, land allocation, and permitting processes. Weak transparency in licensing and supplier relations can create fertile ground for bribery and unethical practices. To comply with international standards and prevent reputational risks, mining companies must establish comprehensive compliance and ethical management systems.

Turkey is a signatory to the OECD Anti-Bribery Convention and encourages companies to develop ethical policies and anti-corruption programs. Companies control these risks through employee training, complaint mechanisms, third-party reviews, and regular internal audits.

Koza Altın provides regular ethics training programs to all its employees and subjects suppliers operating in high-risk areas to strict audits. The company also guarantees that allegations of corruption are subject to independent investigations through its “Zero Tolerance” policy. This approach not only ensures compliance with legislation but also plays an important role in gaining the trust of investors and financial institutions.

International companies also adopt standards such as the ISO 37001 Anti-Bribery Management System to certify the quality of their compliance programs. This reduces both financial and reputational risks.

Reporting ESG Performance to the Board of Directors

Boards of directors have key responsibilities in determining, implementing, and monitoring ESG strategies. It is not considered sufficient for ESG issues to remain at the operational level; integrating them into the board agenda is emerging as a best practice.

Task Force on Climate-Related Financial Disclosures (TCFD) recommendations, in particular, suggest addressing the impact of climate risks on financial performance at the board level. Within this framework, boards of directors play an active role in strategic decisions such as setting carbon emission targets, analyzing climate scenarios, and prioritizing environmental investments.

Tüpraş has strengthened the decision-making authority of its board of directors through regular ESG reporting processes. The company reports its ESG performance indicators (emission rates, social investment volume, ethical audit results) to the board of directors at the end of each quarter. This approach ensures that sustainability targets are integrated into performance evaluations and enhances internal accountability.

In addition, some companies have established sustainability committees to ensure that ESG issues are addressed with a specific focus at the board level. These committees contribute to the preparation of comprehensive ESG reports by working closely with risk management, audit, and strategy departments.

Transparent, systematic, and independently audited ESG reporting creates a significant competitive advantage for mining companies in meeting regulatory expectations and accessing international finance.

ESG Reporting Standards and Compliance Challenges in Turkey

The Impact of the European Green Deal and Carbon Border Adjustment Mechanism

The European Green Deal is a comprehensive strategy supporting the European Union’s goal of becoming carbon neutral by 2050. This policy closely concerns not only EU countries but also all companies trading with the EU.

Energy-intensive and high-carbon emitting sectors are particularly affected by the new regulations. The Carbon Border Adjustment Mechanism (CBAM), which has been implemented within this framework, marks an important turning point for Turkish mining companies. CBAM introduces carbon pricing for the export of carbon-intensive products such as coal, iron, steel, and aluminum to the EU market.

This regulation, which will be implemented gradually starting in 2026, will require exporting companies to measure, report, and reduce their carbon footprint.

For this reason, Turkish mining companies are rapidly turning to low-carbon production technologies, renewable energy investments, and carbon capture solutions to maintain their competitive strength. Additionally, the high costs of CBAM compliance are bringing financing and technology access issues to the forefront for small and medium-sized enterprises. For example, companies engaged in coal-based production must inevitably undergo a comprehensive transformation process to manage their carbon costs.

Borsa Istanbul Sustainability Reporting Expectations

Borsa Istanbul Sustainability Index expects publicly traded companies to publish regular and transparent ESG performance reports. This index serves as an important indicator for investors to compare companies’ sustainability approaches.

Borsa Istanbul’s expectations include reporting on carbon emissions data, water usage, waste management, occupational health and safety statistics, social impact investments, and ethical compliance processes. Companies must meet certain criteria and standardize their reporting cycle to be included in the index.

Eti Maden is setting an example by publishing sustainability reports that are in line with Borsa Istanbul and international standards, thereby increasing investor confidence. The company’s annual reports include detailed information on its performance data as well as its targets for the coming period. This attracts the interest of international funds and sustainability-focused investors.

However, only a portion of the companies included in the index are able to provide comprehensive and verified ESG data. This highlights the need for more transparent and auditable reporting practices to become widespread.

International Standards and Implementation in Turkey

Global Reporting Initiative (GRI) is the most widely used framework for companies to comprehensively measure and report their sustainability performance. GRI standards cover a wide range of data, from environmental impacts to social investments, and offer significant advantages in terms of international compliance.

The Sustainability Accounting Standards Board (SASB) provides sector-based metrics that make it easier for companies to focus on priority issues in high-risk areas such as mining. For example, energy efficiency, occupational safety performance, and impacts on local communities are among the priority topics in SASB’s mining standard.

Tüpraş prepares comprehensive sustainability reports by adopting GRI standards, while Eldorado Gold reports its ESG performance using the SASB framework with metrics specific to the mining sector. In addition, the Task Force on Climate-related Financial Disclosures (TCFD) encourages the integration of climate risks into financial reports. TCFD recommendations are increasingly being adopted, particularly in carbon-intensive sectors, for risk management and investor disclosure purposes. In Turkey, TCFD compliance is rapidly spreading among international exporting companies and is being encouraged by banks and investors. On this subject, the Tüpraş Sustainability Director addressed the issue in the Tüpraş Sustainability Report: “Adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) has strengthened our climate risk management and attracted green investors.

Sharing our ESG performance transparently enables us to generate resources from international funds and lead the sustainable transformation in the sector.” However, the implementation of these standards in Turkey brings some challenges. Small and medium-sized mining companies often lack the technology and expertise to collect ESG data on a regular basis.

Data collection processes are still manual in many companies. This reduces the consistency and reliability of reporting and makes it difficult to meet investor expectations for transparency.

In addition, full compliance with international standards requires significant investment and capacity building.

It is inevitable for companies to provide training to their personnel, invest in digital data collection infrastructure, and establish independent audit processes. Implementing these steps creates serious cost pressures, especially for mining companies operating in remote regions of Anatolia. Nevertheless, increasing regulatory expectations, sustainability-focused investments, and competitive pressures in export markets are driving companies to rapidly develop their ESG compliance processes. This transformation has the potential to strengthen both the sector’s integration into the global value chain and its social acceptance in the long term. Eti Maden is a publicly owned company that operates Turkey’s boron reserves and is a leader in the global boron market. The company runs long-term social programs to build strong relationships with local communities around its production facilities in Balıkesir.

Through education scholarships, health screenings, projects supporting women’s employment, and vocational training courses, the company has achieved a high level of social license to operate (SLO) in the region. Eti Maden’s practices demonstrate how sustainable mining can contribute to social development beyond creating economic benefits. Eti Maden Official Website

ESG from a Risk Management Perspective: Opportunities and Threats

Identification and Prioritization of ESG Risks

The mining sector is exposed to multidimensional ESG risks due to its environmental impacts, social dynamics, and complex regulatory structure. These risks include water pollution, air emissions, habitat destruction, conflicts with communities, and weaknesses in corporate governance.

The RepRisk methodology helps companies objectively measure reputation, regulatory, and operational risks by analyzing media, civil society, and stakeholder data. This approach ensures that risks are prioritized based on their potential impact rather than past performance. In Turkey, waste dam failures, water pollution scandals, and the revocation of environmental permits are among the most critical risk categories. In addition, increasing public sensitivity and the influence of social media are causing ESG risks to spread more rapidly.

In recent years, protests against mining projects in provinces such as Erzincan, Artvin, and Manisa have exposed companies to the risk of losing social acceptance. Therefore, proactive risk identification and stakeholder mapping have become prerequisites for sustainable mining.

Analysis of Operational and Financial Impacts

The impact of ESG risks goes beyond damaging reputation; it also leads to operational and financial consequences. Project delays, production disruptions, high fines, and erosion of investor confidence directly result in financial losses.

For example, in the Çaldağ nickel mine project, non-compliance with environmental regulations and negative public perception led to years of delays and millions of lira in costs. However, companies that improve their ESG performance have easier access to sustainable financing sources and gain long-term cost advantages.

Turkey Industrial Development Bank (TSKB) has provided funding for ESG-compliant projects through green bond issuances, enabling the mining sector to secure affordable financing for transitioning to renewable energy, reducing carbon footprints, and making social investments. A high ESG score can attract the attention of international investors and positively impact a company’s credit rating.

ESG-Focused Risk Management Strategies

Effective risk management strategies require the integration of ESG risks into corporate risk management systems. This integration strengthens decision-making processes by addressing financial and operational risks alongside ESG data.

Risk assessment tools include approaches such as matrix analysis, scenario modeling, and stakeholder dialogue. These methods help prioritize risks by determining their severity and likelihood using objective criteria.

Teolupus’ risk management consulting supports companies in complying with ESG regulations, proactively mitigating risks, and developing resilience in times of crisis. Applied training, policy development support, and sustainability reporting solutions are key components of these services.

Sustainable Finance and Green Investment Opportunities

Green finance instruments have rapidly gained traction in Turkey in recent years. Green bonds, sustainability-linked loans, and ESG-themed investment funds play a key role in financing mining companies’ transformation projects.

Sustainable Banking and Finance Network is one of the platforms supporting financing opportunities provided by Turkish banks for low-carbon projects. With the guidance of this network, companies can access more competitive interest rates and long-term credit opportunities for ESG-compliant projects.

TSKB is one of the leading institutions developing financing models that support renewable energy integration, waste management improvements, and rehabilitation projects in the mining sector. For example, credit packages that finance energy efficiency investments facilitate companies’ preparation for CBAM regulations. In the TSKB Sustainable Finance Report, TSKB Management explains this as follows: “Sustainable finance is transforming the Turkish mining sector. In particular, green bonds are opening new doors for the financing of low-carbon projects and clean technology investments. Supporting this transformation in the sector is not only a matter of environmental responsibility, but also a long-term competitive advantage.”

Green investors prioritize companies that are sensitive to ESG criteria in the long term and evaluate ESG performance as an integral part of corporate value.

Risk Management Challenges

The implementation of ESG-focused risk management in the mining sector in Turkey presents several key challenges:

• Data Gaps: Access to reliable, standardized ESG data is limited for most companies. SMEs, in particular, struggle to increase their data collection and analysis capabilities.
• Regulatory Complexity: Environmental Impact Assessment (EIA) obligations and the Carbon Border Adjustment Mechanism (CBAM) create resource-intensive processes. Companies incur additional costs to quickly adapt to regulatory changes.
• Social Conflicts: Protests arising from environmental impacts in regions such as Erzincan, Artvin, and Manisa increase operational risks and may lead to a loss of social acceptance.
• Financial Constraints: Small and medium-sized companies, in particular, struggle to find the necessary financing for ESG compliance investments. This results in a competitive disadvantage and higher financing costs.

Successful management of these risks will strengthen mining companies’ long-term resilience and integration into the global value chain.

The Role of Internal Audit and Independent Audit Functions

Auditing and Verifying ESG Performance

Regular auditing of ESG performance is critical for both ensuring legal compliance and strengthening investor confidence. Internal audit units verify the accuracy, completeness, and consistency of sustainability data, identifying potential errors or omissions in reporting. Internal audit reports provide an important basis for boards of directors to review ESG strategies.

Independent verification takes the reliability of reports to the next level. Internationally recognized frameworks such as the ISAE 3000 standard are widely used in the assurance process for sustainability reports. These audits examine critical indicators such as carbon emissions data, water usage, and occupational health performance to document the level of accuracy.

For example, Tüpraş regularly has its sustainability reports reviewed by third-party auditors to confirm that they comply with international standards, thereby increasing investor confidence. In addition, independent verification contributes to positioning ESG reporting as a document that reflects actual performance rather than a “marketing tool.”

Many large mining companies worldwide obtain assurance from global audit firms for their ESG reports, and this practice is increasingly gaining traction in Turkey as well.

Integration of Internal Control Systems with ESG

While traditional internal control systems typically focus on financial reporting and operational risks, integrating ESG factors into these control frameworks has become a necessity. Companies now evaluate environmental responsibility, social impact, and ethical governance risks not as separate areas of monitoring but as integral parts of all their processes.

Aligning internal control systems with ESG objectives enables the regular collection of data, the monitoring of policy implementation, and the timely correction of deviations. For example, establishing automatic control points for carbon emissions reporting reduces the risk of misstatements. Similarly, integrating occupational health and safety data with ERP systems enhances data integrity.

Teolupus’ internal audit and control consulting services facilitate the integration of ESG criteria into companies’ processes. We support companies in areas such as creating control matrices, developing risk assessment tools, and providing sustainability awareness training to employees. As a result, operational efficiency can increase, reporting accuracy can be strengthened, and audit costs can be reduced in the long term.

The Impact of Transparent Reporting on Corporate Reputation

Transparent reporting in the ESG field enables companies to not only fulfill their regulatory obligations but also strengthen stakeholder trust. Customers, investors, employees, and the community expect clear information about the social and environmental impacts of activities.

PwC’s Global CEO Survey found that companies with strong ESG reporting significantly increased their brand value, employee engagement, and investor interest. Transparency strengthens companies’ ability to inspire public confidence, especially in times of crisis.

Eti Maden shares its sustainability reports with the public, clearly documenting its environmental impacts, contributions to society, and ethical compliance programs in boron production. This approach has strengthened the company’s acceptance among local communities and reinforced its relationships with international customers.

Companies’ transparent reporting efforts are not limited to reputation management. They also create an important competitive advantage in green bond issuances, sustainability-linked loans, and international certification processes. Companies that are proactive in response to the reporting requirements introduced by the European Green Deal are gaining a strong position in export markets.

Looking Ahead: A Roadmap for Sustainability in Mining

New Trends: Digital Reporting and Blockchain-Based Traceability

In the mining sector of the future, sustainability will be more closely intertwined with digitalization. Digital ESG reporting platforms automate companies’ data collection, verification, and analysis processes, thereby enhancing both transparency and audit capacity. These platforms enable real-time monitoring of a wide range of indicators, from carbon emissions to water usage.

Blockchain technology is another important trend that is emerging as a way to increase traceability and trust at every stage of the supply chain. Thanks to blockchain-based traceability systems, the entire process from the point of extraction of raw materials to the final product can be documented and certified. This method makes it easier for both regulators and consumers to verify sustainable resource use.

Eldorado Gold is researching blockchain-based traceability solutions and developing pilot applications for its operations in Turkey. The company’s goal is to make the source of gold production traceable with certification and to strengthen its sustainability commitments to international customers.

In the coming years, the accuracy and speed of ESG reporting will increase significantly with the combination of AI-powered reporting tools, sensor-based automatic data recording systems, and blockchain integration.

Recommendations for Improving ESG Maturity

Mining companies are advised to implement the following strategic steps to permanently improve their sustainability performance:

• Adopt International Standards: Reporting in full compliance with GRI, SASB, and TCFD frameworks increases the confidence of global investors and provides a competitive advantage in markets such as the EU. Leading companies such as Tüpraş and Eti Maden have successfully integrated these standards into their reporting processes.
• Technology Investments: The use of artificial intelligence and the Internet of Things (IoT) technologies in environmental monitoring activities improves both data quality and the timeliness of reports. For example, sensor-based water quality measurement enables early detection of risks by monitoring the status of waste dams in real time.
• Stakeholder Engagement: Establishing regular dialogue platforms with local communities, regulatory agencies, and civil society organizations contributes to strengthening social acceptance. Identifying stakeholder expectations in advance facilitates risk mitigation.
• Leveraging Teolupus Expertise: Teolupus’ sustainability consulting supports companies in developing ESG strategies, preparing policy documents, and establishing independent reporting processes. In addition, internal capacity can be developed through training programs and internal audit systems.

These recommendations are critical for enhancing ESG maturity and translating sustainability goals into tangible results.

Opportunities for Sustainable Transformation in the Turkish Mining Sector

Turkey has the potential to become a regional leader in sustainable mining thanks to its strategic mineral reserves, young workforce, and strong logistics infrastructure. In particular, the Customs Union modernization and the Green Deal Action Plan with the European Union are creating new investment and partnership opportunities for Turkish companies.

The European Investment Bank’s 2023 Sustainability Report emphasizes long-term financing sources for low-carbon mining projects. These opportunities include attractive loan and grant programs for renewable energy integration, emission reduction investments, and digital traceability projects.

Additionally, access to the international green bond market opens doors to low-cost financing for companies that document their ESG performance. Many mining companies operating in Turkey have begun securing financing for innovative projects through EU funds and development banks.

These future transformation opportunities offer significant potential for reducing the environmental impact of the mining sector while also creating jobs and driving technological development. In this context, public-private partnerships and international collaborations will be among the most important drivers supporting the rapid adoption of sustainable mining.

Conclusions and Recommendations

ESG performance is no longer an option for mining companies, but a strategic necessity that is the cornerstone of sustainable growth and global competitiveness. Mining companies operating in Turkey will gain significant competitive advantages by not only complying with legal obligations, but also aligning themselves with international expectations.

Regulations such as the European Union’s Green Deal and Carbon Border Adjustment Mechanism (CBAM) will make it more difficult to export carbon-intensive products in the coming period; companies investing in low-carbon technologies will come to the fore. ESG’s role in reducing operational risks, facilitating access to finance, and enhancing brand value are critical factors for the sector’s long-term success.

• Proactive Compliance: Companies should start preparing for CBAM and EU regulations today by strengthening their carbon calculation, emission reduction, and reporting infrastructure. This not only protects against penalties but also accelerates access to green funds.
• Stakeholder Engagement: Building social trust through open, transparent, and continuous communication with local communities, employees, and regulatory bodies ensures the sustainability of social acceptance. Taking stakeholder expectations into account at every stage of the project reduces the risk of conflict.
• Sustainable Vision: ESG goals should be an integral part of corporate strategy and a priority on the board agenda. A long-term vision is critical for both reputation management and financial success.

Teolupus’ ESG solutions can help companies make systematic progress in all these areas. Whether it’s carbon footprint reporting, social impact assessment, or governance standards implementation, Teolupus’ experienced consultants support companies on their sustainable growth journey.

Managing the complex world of ESG requires the guidance of experienced experts. Teolupus accompanies you every step of the way with its solution-oriented approach specific to the mining sector.

Our comprehensive ESG consulting, effective risk management systems, and independent internal audit services help your company achieve its sustainability goals while building stronger relationships with international investors and stakeholders.

At Teolupus, we help mining companies not only comply with today’s regulations but also build a future-ready, agile, and resilient structure.

Our risk management services make a difference by systematically addressing your processes in the following areas:

• If your process is critical to your business strategy, but your current performance is falling short of expectations.
• If your competitors are executing the same processes more effectively, efficiently, or at a lower cost.
• If your processes have long cycle times and you want to gain a cost advantage through increased operational efficiency.
• If your customers frequently complain about the process, or their needs are changing rapidly.
• If new technologies and digital solutions are becoming widespread in your industry.
• If the performance of the process is weak compared to benchmarks.
• If you need innovation to create a competitive advantage.

When you feel the need to improve your processes for these and similar reasons, Teolupus expertise designs the most suitable solutions for you. We support you in systematically measuring and evaluating risks, developing new business models aligned with your ESG goals, and preparing a sustainable transformation plan.

To gain a competitive advantage in the global market and elevate your ESG performance to the next level, contact Teolupus today and learn more about our sustainability consulting services.

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