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Journals / Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2022 / Sayı: 63

THE EFFECT OF ESG (ENVIRONMENTAL, SOCIAL AND GOVERNANCE) SCORES ON FIRM PERFORMANCE: EVIDENCE FROM TURKISH BANKING INDUSTRY

ESG (ÇEVRESEL, SOSYAL VE KURUMSAL YÖNETİM) SKORUNUN FİRMA PERFORMANSINA ETKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ

Emin Hüseyin Çetenak(NİĞDE ÖMER HALİSDEMİR ÜNİVERSİTESİ)0000-0003-2900-4948
Ersan Ersoy(UŞAK ÜNİVERSİTESİ)0000-0003-4079-2834
Özcan Işık(SİVAS CUMHURİYET ÜNİVERSİTESİ)0000-0003-2230-8738
Pages
75–82
Publication Date
2022-12-30
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AI Summary & Key Takeaways

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

In the analyzes performed using the PCSE and FGLS panel data estimators, it has been concluded that the total ESG, social (SPS) and corporate governance (GPS) scores of the banks positively affect the accounting and market-based performance indicators (ROA and Tobin’s Q).

📌 3 Key Takeaways

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Objective & Hypothesis:ESG scores are a measure that reveals the performance of companies regarding their investments and activities in the fields of environmental, social, and corporate governance.
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Key Findings & Data:The aim of this study is to investigate the effect of ESG scores on financial performance of Turkish commercial banks in the period of 2010-2020.
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Conclusion & Impact:In the analyzes performed using the PCSE and FGLS panel data estimators, it has been concluded that the total ESG, social (SPS) and corporate governance (GPS) scores of the banks positively affect the accounting and market-based performance indicators (ROA and Tobin’s Q).
🔬Design:Modeling & Simulation
📍Scope:2010-2020 Verileri
⚙️Variables:ESG · Sürdürülebilirlik · Banka Performansı

Abstract

ESG scores are a measure that reveals the performance of companies regarding their investments and activities in the fields of environmental, social, and corporate governance. In recent years, this concept, which emerged because of companies developing reporting models by considering the demands from stakeholders, has begun to become more decisive on the financial decisions of all stakeholders. The aim of this study is to investigate the effect of ESG scores on financial performance of Turkish commercial banks in the period of 2010-2020. In the analyzes performed using the PCSE and FGLS panel data estimators, it has been concluded that the total ESG, social (SPS) and corporate governance (GPS) scores of the banks positively affect the accounting and market-based performance indicators (ROA and Tobin’s Q). On the other hand, it was seen that the environmental (EPS) score did not have a statistically significant effect on both performance indicators. In addition, the results show that the Covid-19 pandemic has led to a decrease in banks’ performance as measured by ROA and Tobin’s Q. Analysis outcomes indicate that giving more importance to non-financial reporting and ESG activities will contribute to enhancing firm performance.

Özet

ESG skorları, firmaların çevresel, sosyal ve kurumsal yönetim alanlarındaki yatırım ve faaliyetleri ile ilgili performansını ortaya koyan bir ölçüttür. Son yıllarda firmaların paydaşlardan gelen talepleri dikkate alarak çeşitli raporlama modelleri geliştirmesi sonucunda ortaya çıkan bu kavram, tüm paydaşların finansal kararları üzerinde daha fazla belirleyici olmaya başlamıştır. Bu çalışmanın amacı Türkiye’de faaliyet gösteren mevduat bankalarında ESG skorlarının finansal performans üzerindeki etkisini araştırmaktır. Çalışma 2010-2020 dönemini kapsamaktadır. PCSE ve FGLS panel veri tahmincileri kullanarak yapılan analizlerde, bankaların toplam ESG, sosyal (SPS) ve kurumsal yönetim (GPS) skorlarının muhasebe ve piyasa temelli performans göstergelerini (ROA ve Tobin Q) pozitif yönde etkilediği tespit edilmiştir. Diğer taraftan çevresel (EPS) skorunun her iki performans göstergesi üzerinde de istatistiksel olarak anlamlı bir etkiye sahip olmadığı görülmüştür. Ayrıca sonuçlar, Covid-19 pandemisinin bankaların ROA ve Tobin Q ile ölçülen performanslarında azalışa yol açtığını göstermektedir. Analiz bulguları firma performansını artırmada finansal olmayan raporlamaya ve ESG faaliyetlerine daha fazla önem verilmesi gerektiğini işaret etmektedir.

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Cite This Article

Çetenak, E. H., Ersoy, E., Işık, Ö. (2022). THE EFFECT OF ESG (ENVIRONMENTAL, SOCIAL AND GOVERNANCE) SCORES ON FIRM PERFORMANCE: EVIDENCE FROM TURKISH BANKING INDUSTRY. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Sayı: 63, 75–82. https://doi.org/10.18070/erciyesiibd.1212587

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