Akademik Veri Yönetim Sistemi
Journal of emerging economies and policy (Online), cilt.9, sa.1, ss.56-63, 2024 (Hakemli Dergi)
ESG stands for Environmental, Social, and Governance, which are three central factors used to measure the sustainability and ethical impact of an investment in a company. ESG criteria are used by investors and financial analysts to evaluate the sustainability and ethical impact of investments, and they are increasingly becoming a standard consideration in investment decision-making processes. In this study, analyses were conducted within the framework of the governance dimension. In other words, the effect of governance ESG scores on firm performance will be determined in the study. Return on Assets (ROA) is used as an indicator of firm performance in the study. In the study, the data for the years 2013-2021 of 12 firms operating in Borsa Istanbul (BIST) whose ESG sustainability scores have been announced continuously are used. The panel-corrected standard errors (PCSE) panel robust estimator is used since the developed models have problems of variance, autocorrelation, and cross-sectional dependence and are resistant to these problems. As a result of the analyses, it is found that the governance ESG score has a positive and significant effect on firm performance. In other words, an increase in the governance ESG score is a factor that increases firm performance. The findings of the study are expected to help regulators and policymakers to formulate policies on ESG disclosure.