Effect of disclosures on sustainability performance indicators on financial performance

Companies provide information on the economic, environmental and social effects and consequences of their activities through sustainability reports within the framework of accountability. The main purpose of this study is to investigate the effect of the level of information on economic, environmental and social performance in sustainability reports on financial performance. In addition, it has been researched whether the level of information disclosed for sustainability performance differs according to the variables of sector, company size, company age and ownership structure. For this purpose, among the companies traded in the Borsa İstanbul (BIST), 30 companies that published the sustainability report according to Global Reporting Initiative (GRI) reporting principles during 2008-2014 were identified. According to the results obtained in the study, the level of information disclosed for economic performance differs according to company size and the level of information disclosed for environmental performance differs according to the sector. However, level of information disclosed for economic, environmental, social and total performance differ according to ownership structure. Furthermore, the level of information disclosed for environmental performance has been found to have a positive effect on the return on assets and return on equity and the level of information disclosed for social performance has been found to have a positive effect on the return on assets. The level of information disclosed for economic, environmental and social performance has been found that do not have generally any significant effect on market value/book value (MV/BV) ratio and price/earning (P/E) ratio, which are market-based measures. Keywords: Sustainability reporting, Global reporting initiative, Financial performance