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Journals / Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty / 2026 / Volume: 12 Issue: 1

A Research on the Relationship between ESG Performance of Companies and Systematic Risk

Zühal Arslan(ISPARTA UYGULAMALI BİLİMLER ÜNİVERSİTESİ, BÜYÜKKUTLU UYGULAMALI BİLİMLER FAKÜLTESİ)0000-0002-4757-1260
Mehmet Levent Erdaş(AKDENİZ ÜNİVERSİTESİ, SERİK İŞLETME FAKÜLTESİ)0000-0001-6594-4262
Gamze Göçmen Yağcılar(SÜLEYMAN DEMİREL ÜNİVERSİTESİ)0000-0002-5009-4696
Pages
—
Publication Date
2025-03-31
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Findings reveal that ESG components have a long-term relationship with the Beta coefficient, which represents systematic risk.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Today, companies have started to focus on sustainability efforts to maximize market value and reduce risks.
📊
Key Findings & Data:One of the measures used to express the sustainability performance of companies is environmental, social and governance (ESG) scores.
💡
Conclusion & Impact:Findings reveal that ESG components have a long-term relationship with the Beta coefficient, which represents systematic risk.
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Systematic Risk · Sustainability · ESG Performance

Abstract

Today, companies have started to focus on sustainability efforts to maximize market value and reduce risks. One of the measures used to express the sustainability performance of companies is environmental, social and governance (ESG) scores. High ESG performance is expected to contribute to the systematic risk reduction by lowering the cost of capital, therby increasing market value. This study aims to analyze this relationship for companies traded in Borsa Istanbul that possess ESG ratings. Findings reveal that ESG components have a long-term relationship with the Beta coefficient, which represents systematic risk. In addition, causality tests produce significant findings and a bidirectional causality relationship was detected between the corporate governance score and beta coefficient. When evaluating the results within the scope of environmental and social scores, the causality relationships from ESG environmental and social scores to the beta coefficient are determined. These results offer insights into how sustainability practices can contribute to firms' risk management processes.

Özet

Today, companies have started to focus on sustainability efforts to maximize market value and reduce risks. One of the measures used to express the sustainability performance of companies is environmental, social and governance (ESG) scores. High ESG performance is expected to contribute to the systematic risk reduction by lowering the cost of capital, therby increasing market value. This study aims to analyze this relationship for companies traded in Borsa Istanbul that possess ESG ratings. Findings reveal that ESG components have a long-term relationship with the Beta coefficient, which represents systematic risk. In addition, causality tests produce significant findings and a bidirectional causality relationship was detected between the corporate governance score and beta coefficient. When evaluating the results within the scope of environmental and social scores, the causality relationships from ESG environmental and social scores to the beta coefficient are determined. These results offer insights into how sustainability practices can contribute to firms' risk management processes.

🔖

Cite This Article

Arslan, Z., Erdaş, M. L., Yağcılar, G. G. (2025). A Research on the Relationship between ESG Performance of Companies and Systematic Risk. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, Volume: 12 Issue: 1. https://doi.org/10.30798/makuiibf.1600852

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