The Global Risks Report underscores the critical importance of addressing climate change over the next decade. ESG (Environmental, Social, and Governance) frameworks are essential for organizations to navigate these challenges effectively.
Att. Nihal Mashaki
To start, we'd love to learn more about you. Could you tell us about your educational journey and how it led you to your current career?
I pursued my passion for law at Galatasaray University, earning my undergraduate degree. My career began in 2005 as a lawyer, and in 2008, I transitioned to the financial services sector with Turkiye Finans Bank, a subsidiary of Saudi National Bank (SNB). There, I established and led the Board General Secretariat and various committees, becoming the Director of Corporate Governance and Company Secretary. I later served as Chief Legal Officer. My efforts in corporate governance earned me a nomination for "the Best Company Secretary of the Year" by the Institute of Chartered Secretaries and Administrators (ICSA) in 2016.
In 2018, I became Advisor to the Group CEO at Şişecam, leading corporate governance and compliance initiatives across local and global projects. In 2021, I collaborated with the Group CEO of Karadeniz Holding to design the governance framework for Karpowership. Currently, I serve as an independent board member at various listed companies, including Alarko Holding and MegaMetal. In addition to my board duties, I actively advise companies on enhancing operational excellence, streamlining decision-making processes, and achieving sustainability goals.
Since 2012, I have been a member of the Corporate Governance Association of Turkey (TKYD) and hold professional certifications from London Business School, ICSA, EM, and IFC, focusing on leadership, corporate governance, and sustainability. As an IFC trained trainer in DEI (Diversity, Equity, and Inclusion) and Sustainability and Climate Disclosure, I contribute to the IFC's sustainability and corporate governance trainer-to-trainer (ToT) program.
I am committed to promoting gender diversity on corporate boards in Turkey, supporting the European Bank for Reconstruction and Development (EBRD) project since 2020 as a member and co-chairwoman of committees. Additionally, I play a pivotal role as a board member and professional trainer at TKYD and as a founding executive member of the TKYD International Corporate Governance Institute (TKYD Institute), where I chair the ESG Working Group.
With a multicultural perspective and awareness of diversity and inclusion, my journey has been marked by a dedication to advancing corporate governance practices and sustainability agendas globally.
“Financial institutions that prioritize ESG practices often see improved stakeholder engagement, as their transparent reporting on social responsibility initiatives and governance practices strengthens relationships with clients and investors.”
The Global Risks Report of the World Economic Forum defines "combatting climate change" as the most important global risk for the next decade. In this context, what can be said about the importance and structure of ESG for organizations?
The Global Risks Report underscores the critical importance of addressing climate change over the next decade. ESG (Environmental, Social, and Governance) frameworks are essential for organizations to navigate these challenges effectively.
ESG principles help companies integrate sustainability into their core strategies, ensuring long-term resilience and value creation. For instance, in the energy sector, companies are increasingly investing in renewable energy sources to reduce their carbon footprint and comply with evolving regulations.
This approach not only mitigates risks associated with climate change, such as extreme weather events and resource scarcity, but also enhances stakeholder trust through transparency and accountability.
“By emphasizing robust corporate governance practices, such as those promoted by the Corporate Governance Association of Turkey (TKYD), boards can effectively support and embed strong ESG practices. This enhances long-term value and resilience, builds stakeholder trust, and contributes to sustainable business success.”
Financial institutions that prioritize ESG practices often see improved stakeholder engagement, as their transparent reporting on social responsibility initiatives and governance practices strengthens relationships with clients and investors. Additionally, manufacturing companies adopting sustainable production processes and responsible resource management demonstrate how ESG integration can lead to sustainable growth and long-term success.
To effectively structure ESG within organizations, it is crucial to establish clear, measurable goals aligned with the company’s mission and values, embed ESG principles into core business strategies, actively engage with stakeholders to understand their concerns and expectations, and develop robust reporting mechanisms to track ESG performance.
By focusing on these elements, organizations across various sectors can navigate the critical risks of climate change and contribute positively to global sustainability goals.
Could you provide information about ESG (Environmental, Social, and Governance) Criteria, which are used to evaluate companies' sustainability performance and measure sustainable business practices?
ESG criteria are a set of standards used to measure a company’s sustainability and ethical impact, providing a comprehensive framework for evaluating and improving business practices.
Environmental criteria assess how a company performs as a steward of nature, examining its efforts in areas such as reducing carbon emissions, managing waste, and conserving natural resources.
Social criteria evaluate how a company manages relationships with its employees, suppliers, customers, and communities, focusing on aspects like labor practices, human rights, and community engagement.
Governance criteria scrutinize a company’s leadership, executive pay, audits, internal controls, and shareholder rights, ensuring that there are strong policies and transparent practices in place.
By evaluating these criteria, companies can assess their sustainability performance, identify areas for improvement, and implement strategies for sustainable growth. For example, in the manufacturing sector, companies may focus on reducing emissions and waste through innovative technologies and sustainable production processes.
In the financial sector, firms might prioritize ethical lending practices, ensuring that they support projects with positive social impacts and engage with communities to promote financial inclusion.
Incorporating ESG criteria into business practices not only helps companies minimize their environmental footprint and improve social outcomes but also enhances governance structures, leading to increased transparency and accountability.
This holistic approach to sustainability enables companies to build long-term resilience, attract responsible investors, and create value for all stakeholders.
“Incorporating ESG criteria into business practices not only helps companies minimize their environmental footprint and improve social outcomes but also enhances governance structures, leading to increased transparency and accountability. This holistic approach to sustainability enables companies to build long-term resilience, attract responsible investors, and create value for all stakeholders.”
Company stakeholders have become more engaged with risk issues and seek more assurance in recognizing and managing current and future risks across the company. In this process, what are the expectations of stakeholders from ESG managers?
Stakeholders are increasingly attuned to risk issues and expect greater assurance in a company’s ability to recognize and manage both current and future risks. They look to ESG managers to provide transparency, accountability, and proactive risk management strategies.
ESG managers are expected to ensure that companies are not only compliant with regulations but are also leaders in implementing sustainable practices that mitigate risks and capitalize on opportunities. This involves continuous engagement with stakeholders, clear communication of ESG initiatives, and robust reporting mechanisms.
For instance, in the energy sector, stakeholders expect detailed reports on how companies are transitioning to renewable energy and managing climate-related risks.
What would you like to say about the role of boards of directors in supporting and embedding strong ESG practices within companies?
The role of boards in supporting and embedding strong ESG practices within companies is paramount. Effective corporate governance is essential in this process, with boards providing strategic oversight to integrate ESG considerations into the company’s core strategy.
Boards must hold management accountable for ESG performance, set clear goals, and monitor progress. Fostering a culture of sustainability involves promoting transparency in ESG reporting and engaging with stakeholders to integrate their feedback into the company's initiatives.
For practical implementation, boards should set specific, measurable, and achievable ESG goals, integrate ESG risks into the overall risk management framework, and enhance ESG reporting aligned with standards like the GRI or SASB. Promoting board diversity and providing continuous ESG training for board members and senior management are also critical.
By emphasizing robust corporate governance practices, such as those promoted by the Corporate Governance Association of Turkey (TKYD), boards can effectively support and embed strong ESG practices. This enhances long-term value and resilience, builds stakeholder trust, and contributes to sustainable business success.
Could you provide information about the role of ESG in managing natural and human-made disasters, fire, and life safety risks?
ESG plays a significant role in managing risks related to natural and human-made disasters, including fire and life safety.
Environmental criteria help companies minimize their impact on ecosystems and prepare for climate-related risks.
Social criteria ensure that companies prioritize the safety and well-being of their employees and communities.
Governance criteria ensure that there are strong policies and procedures in place to manage these risks effectively. By addressing these areas, companies can better protect their assets, employees, and communities from disasters.
For instance, in the construction sector, adhering to ESG criteria can lead to the implementation of safer building practices and emergency preparedness plans.
This might involve using sustainable materials that are more resistant to natural disasters or ensuring that construction sites are equipped with adequate fire safety measures and evacuation protocols.
Similarly, in the energy sector, particularly within oil and gas companies, ESG criteria are crucial for managing disaster risks. Many global energy firm, has implemented robust ESG strategies to mitigate the risks associated with oil spills and gas leaks, which can have catastrophic environmental and human impacts.
Others invests in advanced technologies for detecting leaks early, reducing the environmental impact of potential spills, and conducts regular environmental impact assessments to develop response plans for extreme weather events.
They provide comprehensive safety training for all employees to ensure preparedness in emergencies and engage with local communities to develop disaster response plans, ensuring surrounding populations are protected and informed.
Additionally, these companies have established stringent policies for risk management, including regular audits and reviews of their disaster preparedness protocols, with the board of directors actively overseeing ESG initiatives to ensure accountability and continuous improvement.
“To effectively structure ESG within organizations, it is crucial to establish clear, measurable goals aligned with the company’s mission and values, embed ESG principles into core business strategies, actively engage with stakeholders to understand their concerns and expectations, and develop robust reporting mechanisms to track ESG performance. “
By integrating ESG principles, companies in various sectors not only safeguard their operations but also enhance their reputation and stakeholder trust.
This holistic approach to risk management illustrates the vital role of ESG in promoting resilience and sustainability across industries.
Could you provide information about the activities and work of the ESG Working Group?
The TKYD ESG Working Group was established on 2022 and I have been chairing the group since 2023 our aim is to foster the development of projects and activities related to ESG, share global and local ESG developments with its members, raise awareness, and promote best practices.
Our initiatives include organizing workshops, seminars, and conferences that cover a broad spectrum of ESG topics. We also conduct in-depth research, publish reports, and collaborate with other organizations such as IFC, BRSA, CMB and others to advance ESG initiatives.
Our aim is to deepen the understanding of ESG principles and support companies in implementing effective ESG strategies. For instance, our recent workshop on integrating ESG into corporate governance attracted participants from various industry sectors, providing them with practical insights and strategies for ESG integration. The Working Group is committed to creating platforms for continuous learning and dialogue to ensure that our members stay at the forefront of ESG developments.
Could you share some information about the ESG Certificate Program?
The TKYD Institute's ESG Certificate Program 2024/1 is designed to equip organizations with the necessary knowledge and skills to drive long-term growth through the adoption of ESG principles.
This program, supported by the International Finance Corporation (IFC) and Boğaziçi University’s Center for Applied Research in Finance, offers a comprehensiv curriculum covering environmental sustainability, social responsibility, and governance practices.
The program consists of 10 training modules and two experience-sharing webinars, totaling 44 hours over 12 days. It culminates in a graduation ceremony at Boğaziçi University. Participants benefit from rich content delivered by esteemed experts and engage in practical group work to develop strategies for approaching their boards with structured, convincing practices and roadmaps.
“ESG managers are expected to ensure that companies are not only compliant with regulations but are also leaders in implementing sustainable practices that mitigate risks and capitalize on opportunities.”
Feedback from past participants highlights significant improvements in sustainability reporting and stakeholder engagement within their organizations.
The program not only addresses regulatory requirements but also emphasizes the importance of adopting ESG as a core business strategy to stay competitive in a rapidly changing global landscape.
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