The relationship between corporate sustainability performance and earnings quality: An application on BIST

This thesis examines the relationship between corporate sustainability performance and earnings quality. The study evaluates both financial and non-financial data of companies listed in the Borsa Istanbul (BIST) Sustainability 25 Index for the period between 2014 and 2023. Sustainability performance (ESG) of the companies is assessed both as an overall score and by individual components, and the effects of environmental, social, and governance scores on earnings quality are analyzed using panel data regression methods. The primary aim of the research is to reveal the link between sustainability performance and earnings quality, thereby providing insights that may guide corporate behavior in these areas. The findings indicate that, in addition to overall sustainability scores, high performance in the environmental, social, and governance dimensions positively affects earnings quality. In particular, the environmental component is found to have a more pronounced and significant impact on earnings quality compared to the overall sustainability score and the other components. These results suggest that sustainability practices enhance earnings quality, contributing to the provision of more reliable and transparent financial information for investors and other stakeholders.