Utilising Environmental Social Governance Rating for Predicting Financial Risk: FTSE 100

Year 2025, Volume: 35 Issue: 3, 1387 - 1404, 23.09.2025

Isik Akin , Meryem Akın , Erdem Bağcı , Arshdeep Singh

https://doi.org/10.18069/firatsbed.1684374

Abstract

The focus of this research is on evaluating the ESG ratings of various FTSE 100 companies and their impact on financial risk. The study aims to analyze how ESG ratings affect the financial risk of FTSE 100 companies and to reveal the impact of profitability and liquidity on ESG ratings. Therefore, we examine the relationship between ESG ratings (Environmental, Social, and Governance) and financial risk for FTSE 100 companies. ESG factors are increasingly recognized as indicators of a company's ability to sustain itself and its financial performance. The utilization of ESG rating data offers several potential benefits, including providing investors and analysts with insights to evaluate companies' long-term sustainability and resilience. The study aims to reveal the connection between ESG ratings and financial risk, as well as investigate the influence of profitability and liquidity on ESG ratings. The research utilizes quantitative methodologies, including regression analysis and panel unit root tests, to analyze the data collected from FTSE 100 companies. The findings suggest a positive association between higher ESG ratings and better financial health, as well as a positive impact of profitability on ESG ratings. However, liquidity metrics do not significantly affect ESG ratings.

Keywords

ESG Ratings , Financial Risk , Profitability , Liquidity , FTSE 100

Finansal Riski Öngörmede Çevresel, Sosyal ve Yönetişim Derecelendirmesinin Kullanımı: FTSE 100 Örneği

Abstract

Bu araştırmanın odak noktası, çeşitli FTSE 100 şirketlerinin ESG derecelendirmelerinin değerlendirilmesi ve finansal risk üzerindeki etkileridir. Çalışmanın amaçları, ESG derecelendirmelerinin FTSE 100 şirketlerinin finansal riskini nasıl etkilediğini analiz etmek ve kârlılık ve likiditenin ESG derecelendirmeleri üzerindeki etkisini ortaya koymaktır. Bu nedenle, FTSE 100 şirketleri özelinde (Çevresel, Sosyal ve Yönetişim) ESG derecelendirmeleri ile finansal risk arasındaki ilişki incelenmektedir. ESG faktörleri, bir şirketin sürdürülebilirliğini ve finansal performansını devam ettirme kapasitesinin göstergeleri olarak giderek daha fazla kabul görmektedir. ESG derecelendirme verilerinin kullanımı, yatırımcılara ve analistlere şirketlerin uzun vadeli sürdürülebilirlik ve dayanıklılıklarını değerlendirmede çeşitli faydalar sunmaktadır. Bu çalışmanın amacı, ESG derecelendirmeleri ile finansal risk arasındaki ilişkiyi ortaya koymak ve kârlılık ile likiditenin ESG derecelendirmeleri üzerindeki etkisini araştırmaktır. Araştırmada, FTSE 100 şirketlerinden elde edilen veriler, regresyon analizi ve panel birim kök testleri gibi nicel yöntemler kullanılarak analiz edilmiştir. Bulgular, yüksek ESG derecelendirmeleri ile daha iyi finansal sağlık arasında pozitif bir ilişki olduğunu ve kârlılığın ESG derecelendirmeleri üzerinde olumlu bir etkisi bulunduğunu göstermektedir. Ancak, likidite ölçütlerinin ESG derecelendirmeleri üzerinde anlamlı bir etkisi bulunmamıştır.

Keywords

ESG Derecelendirmeleri , Finansal Risk , Kârlılık , Likidite , FTSE 100

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