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

Zühal Arslan; Mehmet Levent Erdaş; Gamze Göçmen Yağcılar

Makale detayları

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

Yazarlar:

Zühal Arslan | Mehmet Levent Erdaş | Gamze Göçmen Yağcılar

Yayıncı:

Burdur Mehmet Akif Ersoy University

Ana Başlıklar:

Environment and Climate Finance | Financial Risk Management

Dergi:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.12 Issue 1, pp.348-362

Belge Tipi:

Makale

Yayın Tarihi:

3/2025

Belge Dili:

İngilizce

Document ID (Org No.):

2001344544

pISSN:

2149-1658

Anahtar kelimeler:

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.

 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.

 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.

 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.

Makale detayları

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

Yazarlar:

Zühal Arslan | Mehmet Levent Erdaş | Gamze Göçmen Yağcılar

Yayıncı:

Burdur Mehmet Akif Ersoy University

Ana Başlıklar:

Environment and Climate Finance | Financial Risk Management

Dergi:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.12 Issue 1, pp.348-362

Belge Tipi:

Makale

Yayın Tarihi:

3/2025

Belge Dili:

İngilizce

Document ID (Org No.):

2001344544

pISSN:

2149-1658

Systematic Risk

Sustainability

ESG PerformanceSustainability

Systematic Risk

ESG Performance

Sayı

Makale detayları

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

Yazarlar: Zühal Arslan | Mehmet Levent Erdaş | Gamze Göçmen Yağcılar

Yayıncı: Burdur Mehmet Akif Ersoy University

Ana Başlıklar: Environment and Climate Finance | Financial Risk Management

Dergi: Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.12 Issue 1, pp.348-362

Belge Tipi: Makale

Yayın Tarihi: 3/2025

Belge Dili: İngilizce

Document ID (Org No.): 2001344544

pISSN: 2149-1658

Systematic Risk

Sustainability

ESG PerformanceSustainability

Systematic Risk

ESG Performance

Sayı

Yazarlar:

Zühal Arslan | Mehmet Levent Erdaş | Gamze Göçmen Yağcılar

Yayıncı:

Burdur Mehmet Akif Ersoy University

Ana Başlıklar:

Environment and Climate Finance | Financial Risk Management

Dergi:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.12 Issue 1, pp.348-362

Belge Tipi:

Makale

Yayın Tarihi:

3/2025

Belge Dili:

İngilizce

Document ID (Org No.):

2001344544

pISSN:

2149-1658