The impact of sustainability reporting and financialperformance on stock prices: The case of BIST 100

The concept of sustainability extends beyond the mere satisfaction of present-day needs by means of efficient resource utilization; it encompasses a comprehensive approach that ensures the capacity of future generations to fulfill their own needs. This approach demonstrates that the environmental, economic, and social dimensions cannot be addressed independently of one another. Rather, they require a balanced interaction between these three fundamental elements. In this context, the sustainable development approach differs from the understanding that targets only economic growth. Rather, it addresses development within a multidimensional and inclusive framework, adopting as its fundamental principles the preservation of environmental integrity, the enhancement of social welfare, and the fair benefit of all segments of society from this process. In recent times, stakeholders have begun to demand not only financial information but also non-financial information in their decision-making processes regarding companies. This development has increased the importance of the concept of sustainability. Consequently, companies have initiated the practice of producing sustainability reports that incorporate environmental and social information, in addition to financial reports. The objective of these reports is to provide transparent information regarding companies' environmental, social, and governance practices. The objective of this study is to analyze the impact of companies' sustainability reporting on financial performance and stock prices. To this end, data from companies listed on the BIST 100 Index between 2011:Q1 and 2024:Q4 was utilized to examine the relationships between stock prices and P/E, earnings per share, leverage ratio, ROA, ROE, and P/B. Additionally, the model incorporated a dummy variable to account for the observed variation in the publication of sustainability reports among companies. The AMG method was utilized as the analytical approach in the study. The findings of the study indicated that fluctuations in earnings per share and changes in the P/B ratio exert a substantial and favorable influence on changes in stock prices. Conversely, fluctuations in the leverage ratio, ROA, and the publication of sustainability reports by companies have been observed to exert a substantial and adverse influence. In this context, it is imperative to enhance the reliability of sustainability reports by promoting independent auditing and assurance mechanisms and aligning them with international standards. Furthermore, the development of training programs for companies and investors is imperative. Moreover, the frequency of sustainability reports should be augmented, with reports published not only annually but also quarterly. Additionally, the scope of the Sustainability Index should be expanded. Keywords: Sustainability reports, Financial performance, Stock prices.