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Evaluating ESG Sustainability Performance in the Turkish Banking Industry: A Grey LOPCOW-MSD-PIV Approach

Author

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  • Berrak Tekgün

Abstract

This study introduces a novel grey-based multi-criteria decision-making (MCDM) framework designed to assess the Environmental, Social, and Governance (ESG) sustainability performance of banks listed on Borsa İstanbul (BIST). The suggested hybrid grey-based model integrates two objective weighting techniques—Grey Logarithmic Percentage Change-Driven Objective Weighting (G-LOPCOW) and Grey Modified Standard Deviation (G-MSD)—with the Grey Preference Index Value (G-PIV) ranking procedure to effectively manage epistemic uncertainty inherent in sustainability data. Ten ESG indicators obtained from the Refinitiv Eikon database for the 2021–2023 period form the analytical foundation of the sustainability assessment. The integrated weighting process identifies community engagement, product responsibility, and shareholder relations as the most influential determinants shaping banks’ sustainability profiles. Based on the G-PIV results, İşbank, Yapı Kredi, and TSKB rank as the top-performing institutions. The empirical findings not only provide valuable insights into the ESG positioning of Turkish banks but also offer a replicable methodological framework for practitioners and policymakers seeking data-driven sustainability benchmarking. Furthermore, the study contributes to the growing body of literature on grey system-based decision models, reinforcing their utility in addressing ambiguity and partial information in complex financial and sustainability evaluations.

Suggested Citation

  • Berrak Tekgün, 2025. "Evaluating ESG Sustainability Performance in the Turkish Banking Industry: A Grey LOPCOW-MSD-PIV Approach," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 10(SI), pages 59-87.
    • Handle: RePEc:ahs:journl:v:10:y:2025:i:si:p:59-87
    DOI: 10.30784/epfad.1813013
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    References listed on IDEAS

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    1. Marcel Dohrmann & Monica Martinez‐Blasco & Andreas Moring & Jordi Cuadros Margarit, 2024. "Environmental performance and firm performance in Europe: The moderating role of board governance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(6), pages 5863-5880, November.
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    More about this item

    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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