The effects of companies inclusion in the BİST 25 sustainablity index on stocks

Production is the basis of economy and companies produce using natural resources for profit. However it has been understood that natural resources are not unlimited and future generations should be considered. This awareness led companies to turn to sustainability efforts and to the obligation to conserve natural resources. The adoption of the concept of sustainability has led to the identification of international frameworks and the creation of ESG standards. Sustainability indices have been created in the exchanges to ensure that companies comply with the ESG standards. In our study, the effect of being included in the BIST 25 Sustainability Index on the share prices of the companies was investigated. Panel data analysis was performed using 13 companies' 9 quarter financial data from the last quarter of 2021 to the last quarter of 2023 . Stock prices were used as the dependent variable ; ROA , ROE , net profit margin , F/K ratio, Tobin's q and inflation rate as the independent variable .Both the model of constant effects abd incidental effects have been tested. The results showed a positive effect of entering the index in both models. According to the Hausman test , the model of incidental effects was found to be more meaningful. This study highligted the positive impact of entering BIST 25 Sustainability Index on the financial performance of companies and the importance of sustainability efforts.