Sustainability reporting, sectoral analysis of the relationship between corporate financial risk perception and financial performance

Global environmental, social, and economic transformations have compelled businesses to adopt strategies not only focused on profitability but also aligned with sustainability principles. Sustainability reporting enables companies to systematically present their value creation processes to stakeholders within the framework of transparency, accountability, and social responsibility. This process strengthens corporate reputation and enhances risk management capacity. This study analyzes the relationship between sustainability reporting and financial performance for 34 firms operating between 2019 and 2023. Based on ESG scores, CDP climate and water ratings, and financial indicators such as ROA, ROE, leverage, and current ratio, the analysis revealed a positive relationship between ESG and ROA, while the correlation with ROE was weak. Companies with stronger sustainability practices generally showed lower debt levels. In both simple and multiple regression analyses, the impact of ESG and CDP scores on financial indicators was limited; however, the inclusion of the year variable revealed structural effects over time. The Random Forest classification model predicted sustainability reporting status with 80.39% accuracy, identifying leverage, current ratio, and ROA as the most significant predictors. The K-means clustering analysis categorized firms into four distinct groups, emphasizing the importance of integrating sustainability with financial performance. Sectoral analysis revealed that the banking sector had low ESG scores and high leverage, placing it in a weaker position, while the energy sector exhibited a balanced structure. Holding companies, although financially strong, demonstrated higher operational risks. In conclusion, sustainability reporting is a strategic tool that influences corporate structure over the long term. TSRS 1 and TSRS 2 standards require companies to disclose the financial implications of their environmental impacts, thus enhancing the systematic nature of reporting. Firms aligned with these standards are expected to lower capital costs and gain a competitive edge in international markets.