The effect of corporate sustainability on financial performance of firms: A research on the firms in BİST corporate sustainability index

The concept of corporate sustainability has become an extremely important concept all over the World after the Brundtland Report published by World Commission on Environment and Development (WCED) in 1987. The Brundtland Report defines sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". While in the past years, the businesses were only producing goods and services, in today's World, the responsibilities of the businesses have been increasing gradually. The businesses are now perceived not just as economical entities but also as the leaders of social and economical transiton. In the sense, the businesses place more emphasis on corporate sustainability practices. The purpose of this study is to determine whether the corporate sustainability practices of firms affect their financial performances. In this study, publicly available financial information of 35 non-bank firms placed in BİST Corporate Sustainability Index within the period of 2013-2016 was analysed with panel data analysis. After the tests to determine the estimator which will be used in the model, Drscoll-Kraay robust estimator was selected. As a result of the analysis, the existence of a positive and statistically significant effect of corporate sustainability on financial performances of firms was founded.