Recent legislation passed by the European Parliament underscores the need for Turkish firms to adapt rapidly if they wish to keep trading with EU countries. On January 1, an expansion of the ‘German Supply Chain Law’ took effect while the European Commission approved ‘European Sustainability Reporting Standards’ for included companies, which will be applied as of July 31, 2023, as a part of the ‘Corporate Sustainability Reporting Directive’ (CSRD). Significantly, the European Parliament also ratified the groundbreaking ‘European Artificial Intelligence Act’ on March 13, marking the first legal regulation of artificial intelligence (AI) use globally and implying strict responsibilities for all players in the AI value chain, from providers to users, particularly for high-risk AI systems.
For Turkish firms, compliance is not optional, but necessary for their corporate transformation, including technical upgrades and significant revisions to business processes and job descriptions. An interdisciplinary approach is key to navigating these legislative waters successfully. The EU’s Corporate Sustainability Directive stands on three pillars: corporate governance, environmental sensitivity including meticulous criteria to reduce the environmental impact, and social rights of the workforce, such as fair wages and anti-discrimination measures.
The AI Act, expected to phase in from 2025, mandates that companies align with ethical standards across a wide range of technologies, from simple tools to complex learning algorithms like ChatGPT, with special duties assigned according to AI system risk levels.
Professor Şule Aydeniz emphasizes that while these changes may imply steep initial outlays, failing to transform can result in significant financial losses, including termination of EU exports. She indicates that sustainable practices not only enhance a company’s international prestige but are becoming a baseline for international trade.
To support this green transition, the Turkish government has introduced sustainability reporting systems, and financial institutions offer various green and social finance options to encourage companies toward sustainability.
Professor Aydeniz’s last point is proactive: the industries must tailor their approach to sustainability, demonstrating a clear commitment to progress—this initial step is crucial for continued trade with EU partnerships. As regulatory frameworks solidify, Turkish companies must stay informed and adaptable to maintain and grow their market presence in Europe.
Current Market Trends:
Turkish companies are increasingly integrating sustainability and AI advancements into their operations, responding to a global trend towards responsible and technologically advanced business practices. European market demand for environmentally friendly products and ethical business conduct is influencing companies outside the EU to adopt similar standards. Investment in AI applications across various sectors—especially in manufacturing, healthcare, and finance—is on the rise, as businesses seek to improve efficiency, reduce costs, and enhance customer experiences.
Forecasts:
The adoption of European sustainability and AI standards by Turkish companies is likely to grow, with businesses that can make this transition expected to see significant benefits in market access within the EU. The increased integration of AI is also expected to lead to higher productivity, innovative services, and new job opportunities, although it may also result in certain roles becoming obsolete.
Key Challenges or Controversies:
Despite the potential advantages, there are notable challenges. The financial burden of transitioning to green technologies and AI systems may be heavy, particularly for small and medium-sized enterprises (SMEs). Furthermore, there is a debate around the ethical use of AI and potential job displacement. Balancing technological advancement with the need to preserve employment and protect privacy remains a sensitive issue.
Advantages:
Compliance with European standards allows Turkish companies to tap into the lucrative EU market sustainably. Engaging in environmental and socially responsible practices boosts brand value and consumer trust. Adoption of AI can lead to greater competitiveness through efficiency and innovation.
Disadvantages:
Transition costs can be significant, and the adaptation process may require extensive restructuring of business operations. There is also a risk of skill gaps, as the workforce may need retraining to keep up with new technological requirements. Navigating complex EU legislation and ensuring continuous compliance can be a daunting task for some businesses.
Related Links:
For further information about European sustainability and AI regulations, you might refer to the official website of the European Union at Europa, or the website of the European Parliament at European Parliament. For resources on Turkey’s trade and investment policies, you can visit the official website of Turkey’s Ministry of Trade at Ministry of Trade.
Turkish companies face the imperative of balancing the pursuit of next-generation technological efficiency with sustainable growth and corporate responsibility, echoing a global push towards more ethical, user-oriented, and environmentally sound industry practices.
The source of the article is from the blog rugbynews.at