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The Impact of Sustainability Reporting on Financial Performance: Evidence from Turkish FBT and TCL Sectors

Author

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  • Serhii Lehenchuk

    (Department of Information Systems in Management and Accounting, Faculty of Business and Services, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine)

  • Iryna Zhyhlei

    (Department of Information Systems in Management and Accounting, Faculty of Business and Services, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine)

  • Olena Ivashko

    (Faculty of Administration and Social Sciences, University of Economics and Innovation in Lublin, 20-209 Lublin, Poland
    Department of Finance, Lesia Ukrainka Volyn National University, 43025 Lutsk, Ukraine)

  • Grzegorz Gliszczyński

    (Faculty of Management, Lublin University of Technology, 20-618 Lublin, Poland)

Abstract

This study investigated the impact of sustainability reporting on financial performance, with a focus on companies in the Turkish food, beverage and tobacco and textile, wearing apparel and leather sectors. The sustainability reports of 48 companies listed on the Istanbul Stock Exchange for 2022 were studied, and the quality of sustainability practices was determined by using a general index (Sustainability Reporting Disclosure Quality Index (SRDQI)) and three partial indices (Environmental Disclosure Quality Index, Social Disclosure Quality Index, and Corporate Governance Disclosure Quality Index (CGDQI)). To analyze the relationships between financial performance and sustainability practices, two types of regression models were developed, based on which eight models were directly examined. The results indicate the complete absence of a statistically significant impact of SRDQI on all financial performance measures used. Among the partial indices, only CGDQI has a significant positive effect on the Assets Turnover Ratio. An analysis of the influence of control variables shows a multidirectional dependence of individual financial performance measures on the size of companies, their age, industry affiliation, as well as on the structure of capital used. Finally, this study provides directions for improving the institutional environment of sustainability reporting for Turkish companies.

Suggested Citation

  • Serhii Lehenchuk & Iryna Zhyhlei & Olena Ivashko & Grzegorz Gliszczyński, 2023. "The Impact of Sustainability Reporting on Financial Performance: Evidence from Turkish FBT and TCL Sectors," Sustainability, MDPI, vol. 15(20), pages 1-13, October.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:20:p:14707-:d:1257011
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    References listed on IDEAS

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