Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports
What the relationship is between a company’s sustainability report and its financial performance is a question awaiting an answer. One answer to this question involves determining the place and impact financial sustainability has with regard to overall sustainability. As such, this article analyzes...
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Istanbul University Press
2022-12-01
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| Series: | İstanbul İktisat Dergisi |
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| Online Access: | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4AE9ED91729849348B0337277FEA0185 |
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| author | Buse Öktem Selahattin Karabınar |
| author_facet | Buse Öktem Selahattin Karabınar |
| author_sort | Buse Öktem |
| collection | DOAJ |
| description | What the relationship is between a company’s sustainability report and its financial performance is a question awaiting an answer. One answer to this question involves determining the place and impact financial sustainability has with regard to overall sustainability. As such, this article analyzes the relationship between the concept of sustainability and the concept of financial failure based on whether companies with a high probability of financial failure published a sustainability report in the same period. As an indicator of financial failure, the Z’’ score developed by Altman and Hotchkiss (2006) for non-manufacturing and specific industries (retailers, telecommunications, airlines, etc.) was taken as the basis. The transportation sector was selected among the companies with published SASB reports because the transportation sector is one of the certain nonmanufacturing sectors for which the Z” score was developed. This sector shows 43 companies that have published SASB reports and financial data to be accessible for 40 companies. However, no Z’’ score has been calculated for companies founded since 2017, thus the Altman Z’’scores were calculated according to the five-year financial statements 39 companies had published between 2016-2020. The study examines whether companies with a Z’’ score under 4.35 (indicating financial difficulty) and companies with a Z’’ score between 4.35-5.85 (indicating the financial gray zone) have published sustainability reports. The results of the paper show the number of companies that published sustainability reports to have increased in recent years, even companies that are in trouble or financial uncertainty. In other words, eight companies were found to be in financial distress for the five years between 2016-2020, with four of these companies having published sustainability reports during that time, three being airline companies and one operating in the automobile sector. |
| format | Article |
| id | doaj-art-0d09875ea9d64be9b56b69f7fe698bc2 |
| institution | Kabale University |
| issn | 2602-3954 |
| language | English |
| publishDate | 2022-12-01 |
| publisher | Istanbul University Press |
| record_format | Article |
| series | İstanbul İktisat Dergisi |
| spelling | doaj-art-0d09875ea9d64be9b56b69f7fe698bc22025-08-20T03:52:52ZengIstanbul University Pressİstanbul İktisat Dergisi2602-39542022-12-0172282384510.26650/ISTJECON2021-1051041123456Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB ReportsBuse Öktem0https://orcid.org/0000-0003-4541-0313Selahattin Karabınar1https://orcid.org/0000-0003-3102-979Xİstanbul Üniversitesi, İstanbul, Türkiyeİstanbul Üniversitesi, İstanbul, TürkiyeWhat the relationship is between a company’s sustainability report and its financial performance is a question awaiting an answer. One answer to this question involves determining the place and impact financial sustainability has with regard to overall sustainability. As such, this article analyzes the relationship between the concept of sustainability and the concept of financial failure based on whether companies with a high probability of financial failure published a sustainability report in the same period. As an indicator of financial failure, the Z’’ score developed by Altman and Hotchkiss (2006) for non-manufacturing and specific industries (retailers, telecommunications, airlines, etc.) was taken as the basis. The transportation sector was selected among the companies with published SASB reports because the transportation sector is one of the certain nonmanufacturing sectors for which the Z” score was developed. This sector shows 43 companies that have published SASB reports and financial data to be accessible for 40 companies. However, no Z’’ score has been calculated for companies founded since 2017, thus the Altman Z’’scores were calculated according to the five-year financial statements 39 companies had published between 2016-2020. The study examines whether companies with a Z’’ score under 4.35 (indicating financial difficulty) and companies with a Z’’ score between 4.35-5.85 (indicating the financial gray zone) have published sustainability reports. The results of the paper show the number of companies that published sustainability reports to have increased in recent years, even companies that are in trouble or financial uncertainty. In other words, eight companies were found to be in financial distress for the five years between 2016-2020, with four of these companies having published sustainability reports during that time, three being airline companies and one operating in the automobile sector.https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4AE9ED91729849348B0337277FEA0185financial failuresustainabilityaltman z’’ score |
| spellingShingle | Buse Öktem Selahattin Karabınar Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports İstanbul İktisat Dergisi financial failure sustainability altman z’’ score |
| title | Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports |
| title_full | Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports |
| title_fullStr | Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports |
| title_full_unstemmed | Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports |
| title_short | Analysis of the Relationship Between Financial Failures and Sustainability Reports of Companies Publishing SASB Reports |
| title_sort | analysis of the relationship between financial failures and sustainability reports of companies publishing sasb reports |
| topic | financial failure sustainability altman z’’ score |
| url | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/4AE9ED91729849348B0337277FEA0185 |
| work_keys_str_mv | AT buseoktem analysisoftherelationshipbetweenfinancialfailuresandsustainabilityreportsofcompaniespublishingsasbreports AT selahattinkarabınar analysisoftherelationshipbetweenfinancialfailuresandsustainabilityreportsofcompaniespublishingsasbreports |