An examination of inclusion in the BIST sustainability index from the perspective of companies

Companies that adopt sustainability criterias generate multifaceted value by contributing to their employees, the environment, society, and the overall economy. However, the costs encountered during the adaptation process to these criterias cause some business owners to approach sustainability practices with hesitation. The primary objective of this study is to promote the adoption of the environmental, social, and governance dimensions of sustainability and to highlight the potential gains associated with such practices. Within the scope of the research, the financial data from the past three years of 42 companies that have been continuously listed in the Borsa Istanbul Sustainability Index for at least five years were analyzed. For each year, 11 financial ratios were calculated and compared with sectoral averages. These comparisons were interpreted using ratio analysis, horizontal analysis, and vertical analysis methods. Following company-based evaluations, sectoral findings were assessed, and finally, all results were analyzed collectively to examine the impact of sustainability on financial performance. The findings reveal that sustainability practices provide greater financial benefits to privately-owned companies compared to those with public ownership. Among sectors, the most positive effect was observed in the banking sector, while holding and technology companies were found to be less affected in terms of profitability ratios. Overall, sustainability practices had the most significant impact on companies' financial structure ratios, with reduced levels of debt and strengthened equity structures. On the other hand, liquidity ratios were identified as the least affected indicators, whereas net profit margin and return on equity emerged as the financial metrics most positively influenced after the debt ratio. By presenting sector- and ratio-based comparative findings, this study contributes to the literature as a reference for advanced financial analyses. Moreover, by demonstrating both general and sector-specific financial advantages, this study may encourage a broader institutional adoption of sustainability criteria. Keywords: BIST, Corporate sustainability, Environmental social governance (ESG), Sustainability index, Ratio analysis