An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies
Environmental, Social, and Governance (ESG) scores reflect how major corporations are evaluated based on ethical practices and sustainability efforts. This study aims to analyse the factors at the firm level that influence the ESG scores of 34 companies traded on Borsa Istanbul between 2018 and 2022...
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Sivas Cumhuriyet Üniversitesi
2025-01-01
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| Series: | Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi |
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| Online Access: | https://dergipark.org.tr/tr/download/article-file/4214532 |
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| author | Sinan Aytekin Nida Abdioğlu |
| author_facet | Sinan Aytekin Nida Abdioğlu |
| author_sort | Sinan Aytekin |
| collection | DOAJ |
| description | Environmental, Social, and Governance (ESG) scores reflect how major corporations are evaluated based on ethical practices and sustainability efforts. This study aims to analyse the factors at the firm level that influence the ESG scores of 34 companies traded on Borsa Istanbul between 2018 and 2022. While the dependent variables are the ESG scores, the independent variables are financial leverage (LEV),c the logarithm of total assets (SIZE), return on invested capital (ROIC), return on capital employed (ROCE), market to book value (MB) ratio, and foreign net transactions/total volume (YS) ratio. The analyses are carried out individually, focusing on the three distinct aspects of corporate sustainability: environmental, social, and governance. This study employs fixed-effect panel data analysis utilizing the Driscoll and Kraay (1998) estimators. According to the results of the analyses, it is found that the variables LEV, ROCE, YS, and SIZE have positive impacts on ESG scores. Furthermore, the criteria that make up the ESG score are also examined separately. It is determined that the environmental criterion (ENV) is positively influenced by the variables LEV, ROCE, MB, and SIZE. The social criterion (SOC) is positively and significantly influenced by the variables LEV, ROCE, MB, and SIZE, while the variable ROIC has a negative effect. The governance criterion (GOV) is positively influenced by the variables ROCE, YS, and SIZE, while the variable MB has a negative impact on the criterion. The results of the analyses are in line with the legitimacy theory and agency theory. |
| format | Article |
| id | doaj-art-a2fe3f74f99b47cfa6f5ed08024a554e |
| institution | Kabale University |
| issn | 1303-1279 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Sivas Cumhuriyet Üniversitesi |
| record_format | Article |
| series | Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi |
| spelling | doaj-art-a2fe3f74f99b47cfa6f5ed08024a554e2025-02-02T14:34:25ZengSivas Cumhuriyet ÜniversitesiCumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi1303-12792025-01-012619510410.37880/cumuiibf.15501282057An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul CompaniesSinan Aytekin0https://orcid.org/0000-0003-1502-2643Nida Abdioğlu1https://orcid.org/0000-0002-8498-9893BALIKESİR ÜNİVERSİTESİBANDIRMA ONYEDİ EYLÜL ÜNİVERSİTESİ, İKTİSADİ VE İDARİ BİLİMLER FAKÜLTESİEnvironmental, Social, and Governance (ESG) scores reflect how major corporations are evaluated based on ethical practices and sustainability efforts. This study aims to analyse the factors at the firm level that influence the ESG scores of 34 companies traded on Borsa Istanbul between 2018 and 2022. While the dependent variables are the ESG scores, the independent variables are financial leverage (LEV),c the logarithm of total assets (SIZE), return on invested capital (ROIC), return on capital employed (ROCE), market to book value (MB) ratio, and foreign net transactions/total volume (YS) ratio. The analyses are carried out individually, focusing on the three distinct aspects of corporate sustainability: environmental, social, and governance. This study employs fixed-effect panel data analysis utilizing the Driscoll and Kraay (1998) estimators. According to the results of the analyses, it is found that the variables LEV, ROCE, YS, and SIZE have positive impacts on ESG scores. Furthermore, the criteria that make up the ESG score are also examined separately. It is determined that the environmental criterion (ENV) is positively influenced by the variables LEV, ROCE, MB, and SIZE. The social criterion (SOC) is positively and significantly influenced by the variables LEV, ROCE, MB, and SIZE, while the variable ROIC has a negative effect. The governance criterion (GOV) is positively influenced by the variables ROCE, YS, and SIZE, while the variable MB has a negative impact on the criterion. The results of the analyses are in line with the legitimacy theory and agency theory.https://dergipark.org.tr/tr/download/article-file/4214532esg performanesustainabilityfirm performanceprofitabilitybistesg performansısürdürülebilirlikfirma performansıkarlılıkbi̇st |
| spellingShingle | Sinan Aytekin Nida Abdioğlu An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi esg performane sustainability firm performance profitability bist esg performansı sürdürülebilirlik firma performansı karlılık bi̇st |
| title | An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies |
| title_full | An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies |
| title_fullStr | An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies |
| title_full_unstemmed | An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies |
| title_short | An Analysis of the Determinants of Environmental, Social and Governance (ESG) Scores at the Firm level on Borsa İstanbul Companies |
| title_sort | analysis of the determinants of environmental social and governance esg scores at the firm level on borsa istanbul companies |
| topic | esg performane sustainability firm performance profitability bist esg performansı sürdürülebilirlik firma performansı karlılık bi̇st |
| url | https://dergipark.org.tr/tr/download/article-file/4214532 |
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