Effect of ESG Scores on Firm Performance: Evidence from Borsa Istanbul Sustainability Index

This study aims to analyze the relationship between environment, social and governance (ESG) scores and firm performance of the companies in the BIST Sustainability Index. The individual environment, social and governance scores, and the firm performance dataset of the 62 companies in the BIST Sustainability Index for the year 2022 are analyzed by applying multiple regression analysis. Two models are formed to analyze this relationship by using net profit margin as the indicator of profitability and earning per share as the indicator of firm value of the representation of firm performance. The results show that there is a positive relationship between environment score and profitability, whereas there is a negative relationship between social score and profitability. Additionally, it is found that there is a positive relationship between social score and firm value.