The effect of sustainability research in capital markets on the financial performance of the companies

Sustainability research in capital markets involves assessments of companies' environmental, social, and governance (ESG) performances. These studies evaluate whether companies are managed sustainably and are crucial for investors who utilize this information to make investment decisions in capital markets. Recently, there has been increased interest in the impact of sustainability research on companies' financial performance. Specifically, companies with low ESG performance are more likely to exhibit lower financial performance. Therefore, investors may prefer to avoid companies with low ESG performance by taking into account the results of sustainability research. Furthermore, the findings of sustainability research can be used to assess companies' environmental, social, and governance risks. These risks encompass events and conditions that could adversely affect companies' future financial performance. For example, environmental risks may arise from factors such as natural disasters and climate change. Social risks may originate from social factors like employee rights and societal expectations. Governance risks may stem from managerial errors or conflicts within company management. This study utilizes Multiple Criteria Decision Making Methods to evaluate the financial performance of companies included in the BIST Sustainability Index. The aim is to determine the ranking results of companies with the best and worst financial performance between 2019 and 2021, compare the methods, and identify companies with stable financial performance through a final ranking. Social risks include factors such as employee rights and societal expectations, while governance risks may arise from errors in company management or conflicts within the management. Sustainability research can have positive or negative effects on companies' financial performance.