This study emphasises the growing importance of Environmental, Social and Governance (ESG) criteria in both global and national financial markets by analysing the short- and long-run relationships between the MSCI Emerging Markets Select Index (MSCI EM SI), the Borsa İstanbul Sustainability Index (XUSRD) and the Borsa İstanbul 100 Index (XU100). The integration of ESG principles into financial markets has transformed how investors assess risk and return, becoming even more critical following recent global crises such as climate change, geopolitical instabilities and the COVID-19 pandemic. Consequently, both international and national ESG indices have emerged as key indicators supporting the transition to sustainable financial assets, especially for developing economies. This study employs an empirical analysis using the ARDL Bounds Testing Approach with monthly closing data for the selected indices. The findings reveal no significant short- or long-run relationship between the MSCI EM SI and the XU100 Index. Conversely, the results indicate that the XUSRD Index exhibits a statistically significant interaction with the XU100 Index in both the short- and long-run.
İlknur Ülkü ARMAĞAN (Wed,) studied this question.