Countries like Turkey need to embrace sustainable development.

Sustainability is generally defined as the ability to sustain one’s life while ensuring the continuity of production and diversity. This approach to development is designed to meet the needs of the present without compromising the ability of future generations to meet their own needs. In other words, we call sustainability a holistic approach towards recognizing not only economic parameters of development but also its social and environmental impacts. Therefore, the building blocks of sustainable development are economic, social, and environmental development.

In the past decade, sustainable development has gained more importance globally. It is clearly visible that the objective of the world’s economies is not only to outperform competitors in the production of goods and services but to achieve sustainable development.

To assess the right steps towards the implementation of social and environmental sustainability in the economic and business activities of companies, there is a need to develop sustainable structures for companies. To achieve that, sustainability should be integrated throughout the routine activities of all the companies’ units including finance and sales. Companies, suppliers, and customers who have self-initiated steps towards sustainability should be acknowledged and supported.

Directly related to the concept of sustainable development, climate change is one of the most immediate challenges facing the international community. The increase in greenhouse gas emissions and the need to adopt appropriate state policies to reduce them, as well as the need to achieve higher economic growth, has shifted the attention of most countries to implement sustainability-related policies not only in their production units but their business sectors as well. Steps taken by the financial sector to achieve sustainable development are crucial to the shaping of the future of global business. The implementation of sustainability in the business sector should be closely monitored to achieve the ultimate objective of providing green financial services worldwide as well as in Turkey.

In order to achieve the Sustainable Development Goals (SDGs) by 2030, an annual financing gap of $2 to $3 trillion needs to be filled in developing countries worldwide. Banking systems cover approximately two-thirds of this deficit. New investments in the financial sector will provide the opportunity to lead these countries towards sustainability.

In 2019, the most important development of the last 30 years in the banking sector was recorded. A set of rules on how to do sustainable banking has been published by the United Nations. There are six banks that signed these principles in Turkey. They represent 20.6% of the Turkish banking sector.

Bonds and loans on environmental and social issues, which are considered sustainable financial products, are increasing quickly, with a volume approaching about $1.5 trillion. The targeted total volume is set as $500 trillion. This means investment banks are transferring their resources towards environmental projects to achieve sustainable finance. The number of investors who want to transfer resources to these projects is rising daily.

The regulations concerning institutional governance published by the Capital Market Board in October of last year clearly states that: “It recognizes climate change as an important challenge and therefore expects companies listed in the stock market to reflect the steps taken by them as well as their future plans to address climate change in their 2021 annual reports.”

The steps taken by the regulators such as the Capital Market Board in this regard are essential to achieving sustainability.

The circular economy is yet another important concept in the field of sustainable development. In a circular business model, waste is treated as a resource and converted back to products and services that will bring economic benefits and regeneration of natural systems.

The circular economy plays an important role in the energy sector as well. In the case of Turkey, the country’s most important factors in terms of energy policy goals and strategies include energy saving and efficiency, ensuring energy supply security, reducing external dependency, protecting the environment, and combating climate change. It is also important to note that reducing dependency on imported energy resources can be achieved by practicing principles of the circular economy which Turkey can achieve.

It is also important to note that, today, over 80% of global commercial energy consumption is supplied by finite non-renewable fossil fuels such as oil, natural gas, and coal. This means three-quarters of global greenhouse gas emissions come from fossil energy production. The dominance of fossil fuel consumption has major implications for the global climate, as well as for human health. Although effective steps have been taken to shift towards renewable energies, in 2019, only around 15% of global energy was produced from renewable resources. Advancing the use of renewable energies will eventually increase economic growth by creating new jobs, boosting human welfare, and contributing to a healthier climate.

Studies conducted by the International Renewable Energy Agency (IRENA) indicate that doubling the current utilization rate of renewable energy sources by 2030 will result in an increase of global GDP by up to 1.1% or $1.3 trillion. This positive growth in global GDP could be mostly achieved through increased investment in renewable energy technologies. Such an increase in global GDP can eventually cause global welfare to rise to 3.7% by 2030. The growth of investment in renewable energy technologies will also create new job opportunities for millions of people around the world in the fields of bioenergy, hydropower, and solar.

At the global stage, the European Union aims to be carbon neutral by 2050. Numerous initiatives have been taken by the EU to achieve this objective including protective policies for businesses that comply with principles of sustainable development. In order to keep Turkey as a competitive actor in the global market, there is a need to further increase the country’s competencies in sustainable development and business. There is an immediate need for more radical decisions on modifying the current status of Turkey in terms of its business sustainability competencies.

Therefore, Turkey’s main goal in achieving a sustainable economy should be to develop and grow an economy that is socially fair, inclusive, and environmentally sustainable. The state plays a central role in achieving this national economic objective. The shift towards sustainability will not be easy. However, this shift is inevitable, and Turkey should be prepared for it.