Environmental and Social Due Diligence in Turkey

Environmental due diligence in Turkey tells a lender or acquirer whether a plant or project complies with Turkish law and, where international finance is involved, how far it is from the IFC Performance Standards, the EBRD Environmental and Social Requirements or the Equator Principles. We carry out environmental and social due diligence, ESIA gap analyses and site assessments in Turkey, read the Turkish permit files at source and report in English, ending with an Environmental and Social Action Plan (ESAP) your legal team can attach to the loan or share purchase agreement.

What environmental due diligence in Turkey involves

Environmental and social due diligence (ESDD) is a structured review of a company, site or project to identify environmental, health and safety, labour and community risks and liabilities before a lending or investment decision. In Turkey it combines a check of Turkish permits and inspection history with a comparison against the lender's or investor's own standards.

The work splits into two broad situations. For an acquisition or a corporate loan, the focus is on existing operations: permits, compliance history, contamination, and the cost of fixing what is wrong. For a new project seeking project finance, the focus is on the Turkish EIA and whether it, together with supplementary studies, meets the standard of an Environmental and Social Impact Assessment (ESIA) acceptable to the lenders.

Which standards apply to projects in Turkey

Turkey is a non-designated country under EP4, which has applied since 1 October 2020. That means compliance with Turkish law alone is not enough for Equator banks, and the IFC Performance Standards and EHS Guidelines apply. EP4 covers project finance where total capital costs are USD 10 million or more, and project-related corporate loans of at least USD 50 million with a tenor of at least two years, among other products.

IFC began a review of its Sustainability Framework, including the Performance Standards, in 2025, with public consultation planned to run into 2028. Until a new version is adopted, the 2012 Performance Standards remain the reference. The EBRD 2024 policy replaced the 2019 policy, so older term sheets that cite "PR1 to PR10" should now be read against ESR 1 to ESR 10.

Project categorisation and what it means for scope

Lenders categorise projects before they define the due diligence scope. Under the IFC framework and EP4, Category A covers projects with potentially significant adverse impacts that are diverse, irreversible or unprecedented, Category B covers limited, site-specific impacts that can be readily addressed, and Category C covers minimal or no adverse impacts. The EBRD uses a similar A, B and C scale, with a separate approach for financial intermediaries.

In Turkey the categories rarely map one to one onto the EIA annexes. An Annex II plant in an organised industrial zone may be Category B, while a wind farm that received a ÇED Olumlu decision after screening can still be Category A if it sits on a migration route or requires land from many smallholders. We give you an early view on the likely category, because it drives the depth of the ESIA, the disclosure period and the cost of the whole exercise.

ESIA versus the Turkish EIA, a typical gap analysis

A Turkish EIA report is a permitting document. It is reviewed by a government commission and focuses on whether the project meets national limits. An ESIA prepared for IFC, EBRD or Equator banks is a risk management document that also has to show how impacts on workers and communities are managed over the life of the project. The gaps are predictable.

A good gap analysis does not rewrite the Turkish EIA. It uses the EIA baseline wherever it is sound, identifies the studies that must be added and states which gaps can be closed before financial close and which can be handled through the ESAP during construction.

Environmental due diligence for acquisitions

For an acquisition of an operating plant, we carry out a Phase I style environmental site assessment adapted to Turkish conditions. The review covers the documents that matter in Turkey and the physical condition of the site.

• EIA decisions and commitment letters, and whether current capacity matches what was approved
• Temporary activity certificates, environmental permits and licences, their expiry dates and permit annexes
• Inspection reports, administrative fines and any orders to stop an activity
• Waste declarations, hazardous waste contracts and electronic transport records
• Soil and groundwater risk, including the activity preliminary information form under the soil pollution regulation
• Major accident status under the Turkish Seveso rules (BEKRA), chemicals registration under KKDIK and safety data sheets
• Occupational health and safety records and, for social due diligence, labour practices and subcontractor management

Where the desk review and site visit point to likely contamination, we scope a Phase II investigation with sampling by an accredited Turkish laboratory and help you decide whether to price the risk, require remediation before completion or ask for a specific indemnity.

How a due diligence review runs

1. Scoping. We agree the standards, the sites, the reliance terms and the report format with you and your legal advisers. Usually 2 to 5 working days.
2. Data room review. We review the Turkish documents directly, so nothing waits for translation, and send a request list for missing items. 1 to 2 weeks.
3. Site visit. A senior consultant visits each site, interviews the plant manager, EHS staff and, where relevant, worker representatives and contractors. One to two days per site for most industrial assets.
4. Authority checks. Where the client authorises it, we confirm permit status in the public registers and with the provincial directorate.
5. Draft report and red flags. A red flag memo can be issued within days of the visit if the deal timetable requires it, followed by the full draft report. Typically 2 to 4 weeks from kick-off for a single site.
6. ESAP and final report. We agree the ESAP wording with the client and the company, then finalise.

The Environmental and Social Action Plan

The ESAP turns findings into obligations. Each line states the action, the standard it addresses, the responsible party, the deliverable that proves completion and the deadline, usually linked to a financing milestone such as first disbursement or completion of construction. Lenders attach the ESAP to the loan agreement, so vague actions such as "improve waste management" create disputes later.

We write actions that the company can actually implement under Turkish law and that a monitoring consultant can verify. Where a Turkish permit must be obtained, the ESAP refers to the correct permit and a realistic timeline, which we take from our environmental permit work.

Monitoring during construction and operation

After financial close, lenders usually require periodic environmental and social monitoring reports, often quarterly during construction and annually or semi-annually in operation. Equator Principle 9 requires independent monitoring for Category A projects and, as appropriate, Category B projects.

We can support the borrower in preparing monitoring reports and implementing the ESAP, or act for lenders as monitoring consultant, but not both on the same project. Monitoring visits check construction environmental management plans, contractor compliance, worker accommodation, grievance logs, emissions and discharge results, and the status of Turkish permits and EIA progress reports. Findings are reported in English with photographs and a tracked ESAP status table.

Why a Turkey-based team helps on due diligence

Most of the evidence in a Turkish due diligence is in Turkish: permit annexes, inspection minutes, EIA commitment letters, OSB discharge agreements and waste contracts. A team that reads them at source finds the conditions that matter, such as a capacity limit in a permit annex or a commitment in an EIA decision, without waiting for translations of hundreds of pages.

Local knowledge also shortens site work. We know how provincial directorates record inspections, which documents a plant in an organised industrial zone should hold, and how informal land use or seasonal labour usually shows up in Anatolian projects. With offices in İzmir, Ankara and Kocaeli, a site visit can usually be arranged within days rather than weeks, which matters when a signing date is fixed.

What we need from you

• Transaction or financing structure and the standards named in the term sheet
• Data room access, including Turkish permits, EIA decisions and inspection records
• Site access and a contact person at each plant
• Any previous ESIA, audit or due diligence reports
• Deal timetable and the report reliance requirements

Cost and timeline drivers

Effort depends on the number and type of sites, whether social due diligence is included, the quality of the data room, the standards involved and how much of an ESIA must be built on top of an existing Turkish EIA. Greenfield projects with land acquisition, sensitive biodiversity or a large construction workforce need the most supplementary work.

Related services

Where the project still needs its Turkish EIA, see our environmental impact assessment in Turkey service, which can be planned to serve the ESIA at the same time. Greenhouse gas quantification under PS3 is covered by our corporate carbon footprint under ISO 14064-1 work, and portfolio companies with sustainability reporting duties can use our ESG reporting service. For the official texts, see the IFC Performance Standards and the EBRD Environmental and Social Policy 2024.