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

Yıl 2025, Cilt: 10 Sayı: Özel Sayı, 59 - 87, 31.10.2025

Berrak Tekgün

https://doi.org/10.30784/epfad.1813013

Öz

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.

Anahtar Kelimeler

ESG Sustainability , G-LOPCOW , G-MSD , G-PIV , Grey System Theory , Turkish banks

Türk Bankacılık Sektöründe ESG Sürdürülebilirlik Performansının Değerlendirilmesi: Gri LOPCOW–MSD–PIV Yaklaşımı

Öz

Kaynakça

• Abdel-Basset, M., Mohamed, R., Elhoseny, M., Abouhawash, M., Nam, Y. and AbdelAziz, N.M. (2021). Effcient MCDM model for evaluating the performance of commercial banks: A case study. Computers, Materials and Continua, 67(3), 2729-2746. https://doi.org/10.32604/cmc.2021.015316
• Akbulut, O.Y. (2019). Analyzing the performance of İşbank between 2009-2018 years by CRITIC and EDAS methods. Journal of Research in Economics, Politics & Finance, 4(2), 249-263. https://doi.org/10.30784/epfad.594762
• Akbulut, O.Y. (2024). Assessing the environmental sustainability performance of the banking sector: a novel integrated grey Multi-Criteria Decision-Making (MCDM) approach. International Journal of Knowledge and Innovation Studies, 2(4), 239-258. Retrieved from https://www.acadlore.com/journals/IJKIS
• Akbulut, O.Y. and Aydın, Y. (2024). A hybrid multidimensional performance measurement model using the MSD-MPSI-RAWEC model for Turkish Banks. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, 11(3), 1157-1183. https://doi.org/10.30798/makuiibf.1464469
• Azmi, W., Hassan, M.K., Houston, R. and Karim, M.S. (2021). ESG activities and banking performance: International evidence from emerging economies. Journal of International Financial Markets, Institutions and Money, 70, 101277. https://doi.org/10.1016/j.intfin.2020.101277
• Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality: An International Journal, 30(1), 98-115. https://doi.org/10.1108/MEQ-12-2017-0149
• Churchman, C.W. and Ackoff, R.L. (1954). An approximate measure of value. Journal of the Operations Research Society of America, 2(2), 172-187. https://doi.org/10.1287/opre.2.2.172
• Çetenak, E.H., Ersoy, E. and Işık, Ö. (2022). The effect of ESG (environmental, social and governance) scores on firm performance: Evidence from Turkish banking industry. Erciyes University Journal of Economics and Administrative Sciences, 63, 75-82. https://doi.org/10.18070/erciyesiibd.1212587
• da Cunha, Í.G.F., Policarpo, R.V.S., de Oliveira, P.C.S., Zanon, L.G. and do Nascimento Rebelatto, D.A. (2025). Exploring ESG indicators and the sustainable development goals: A fuzzy multi‐criteria approach to cause‐and‐effect analysis. Business Strategy & Development, 8(3), e70155. https://doi.org/10.1002/bsd2.70155
• Demir, E. (2025). Multi-criteria sustainability performance analysis of commercial banks in Türkiye based on MPSI and RAWEC methods. International Journal of Insurance and Finance, 5(1), 45-58. https://doi.org/10.52898/ijif.2025.4
• Deng, J.L. (1982). Control problems of grey systems. Systems & Control Letters, 1(5), 288-294. https://doi.org/10.1016/S0167-6911(82)80025-X
• Diakoulaki, D., Mavrotas, G. and Papayannakis, L. (1995). Determining objective weights in multiple criteria problems: The Critic method. Computers & Operations Research, 22(7), 763–770. https://doi.org/10.1016/0305-0548(94)00059-H
• Dohrmann, M., Martinez‐Blasco, M., Moring, A. and Margarit, J.C. (2024). Environmental performance and firm performance in Europe: The moderating role of board governance. Corporate Social Responsibility and Environmental Management, 31(6), 5863-5880. https://doi.org/10.1002/csr.2898
• Dou, J., Mirza, N., Umar, M. and Horobet, A. (2025). ESG uncertainties and valuation implications: Evidence from the EU banking sector. Research in International Business and Finance, 76, 102872. https://doi.org/10.1016/j.ribaf.2025.102872
• Durdu, D., Akbulut, O.Y. and Aydın, Y. (2025). Evaluating corporate financial performance in the Turkish insurance sector using an integrated grey decision-making framework. Journal of Research in Economics, Politics & Finance, 10(3), 1293-1317. https://doi.org/10.30784/epfad.1644941
• Durmuş, C.N., Çanakçıoğlu, M., Topak, M.S. and Gorcun, O.F. (2025). Evaluation of banking performance of the Balkan countries in type-2 neutrosophic fuzzy environment. Journal of Intelligent Decision Making and Information Science, 2, 366-385. https://doi.org/10.59543/jidmis.v2i.13389
• Ecer, F. and Pamucar, D. (2022). A novel LOPCOW‐DOBI multi‐criteria sustainability performance assessment methodology: An application in developing country banking sector. Omega, 112, 102690. https://doi.org/10.1016/j.omega.2022.102690
• Ersoy, E., Swiecka, B., Grima, S., Özen, E. and Romanova, I. (2022). The impact of ESG scores on bank market value? Evidence from the US banking industry. Sustainability, 14(15), 9527. https://doi.org/10.3390/su14159527
• Freeman, R.E. (1984). Stakeholder management: A strategic approach. Marchfield: Pitman.
• Goel, A., Sahay, N. and Tyagi, A. (2024). Bank performance evaluation of sustainability strategy dimensions in the emerging market using the MCDM approach. Corporate and Business Strategy Review, 5(3), 106-116. Retrieved from https://virtusinterpress.org/
• Gupta, S., Mathew, M., Gupta, S. and Dawar, V. (2021b). Benchmarking the private sector banks in India using MCDM approach. Journal of Public Affairs, 21(2), e2409. https://doi.org/10.1002/pa.2409
• Gupta, S., Mathew, M., Syal, G. and Jain, J. (2021a). A hybrid MCDM approach for evaluating the financial performance of public sector banks in India. International Journal of Business Excellence, 24(4), 481-501. https://doi.org/10.1504/IJBEX.2021.117648
• Hoang, P.D., Nguyen, L.T. and Tran, B.Q. (2024). Assessing environmental, social and governance (ESG) performance of global electronics industry: An integrated MCDM approach-based spherical fuzzy sets. Cogent Engineering, 11(1), 2297509. https://doi.org/10.1080/23311916.2023.2297509
• Hussain, S., Chen, J.H. and Hussain, T. (2024). Decision-making framework for improving bank performance in emerging markets: The analysis of AHP-TOPSIS and AHP-GRA models. Journal of Central Banking Theory and Practice, 13(3), 191-218. doi:10.2478/jcbtp-2024-0027
• Işık, Ö. (2023). ESG activities and financial performance in banking industry. International Journal of Insurance and Finance, 3(2), 53-64. https://doi.org/10.52898/ijif.2023.10
• Işık, Ö. and Adalar, İ. (2025). A multi-criteria sustainability performance assessment based on the extended CRADIS method under intuitionistic fuzzy environment: a case study of Turkish non-life insurers. Neural Computing and Applications, 37(5), 3317-3342. https://doi.org/10.1007/s00521-024-10803-0
• Işık, Ö., Adalar, İ. and Shabir, M. (2025a). Measuring efficiency, productivity and sustainability performance for Islamic banks: A fuzzy expert-based multi-criteria decision support model using spherical fuzzy information. International Journal of Islamic and Middle Eastern Finance and Management, Advance online publication. https://doi.org/10.1108/IMEFM-09-2024-0477
• Işık, Ö., Shabir, M., Demir, G., Puska, A. and Pamucar, D. (2025c). A hybrid framework for assessing Pakistani commercial bank performance using multi-criteria decision-making. Financial Innovation, 11(1), 38. https://doi.org/10.1186/s40854-024-00728-x
• Işık, Ö., Zolfani, S.H., Shabir, M. and Šaparauskas, J. (2025b). A grey-based hybrid decision support framework for assessing the Environmental, Social, and Governance (ESG) sustainable performance: A case study of BIST-listed banks. Technological and Economic Development of Economy, 31(4), 1237-1273. https://doi.org/10.3846/tede.2025.24359
• Karadağ Ak, Ö., Hazar, A. and Babuşcu, Ş. (2025). Evaluation of the financial performance of development and investment banks with entropy-based ARAS method. Macroeconomics and Finance in Emerging Market Economies, 18(2), 441-461. https://doi.org/10.1080/17520843.2022.2035523
• Karadağ Albayrak, Ö. (2021). Gri sistem teorisi tabanlı çok kriterli karar verme teknikleri ve uygulama örnekleri teori ve uygulama. Ankara: Gazi Kitabevi.
• Karki, U., Kumar, A. and Sharma, D. (2025). Banking in sustainability: an integrated MCDM framework for evaluating the environmental, social, and governance (ESG) sustainable banking performance. Global Knowledge, Memory and Communication, Advance online publication. https://doi.org/10.1108/GKMC-04-2024-0241
• Lombardi Netto, A., Salomon, V.A. and Ortiz‐Barrios, M.A. (2025). An environmental, social, and governance (ESG) model for multiple criteria analysis of investments. International Transactions in Operational Research, 33(1), 489-506. https://doi.org/10.1111/itor.70026
• López-Penabad, M.C., Iglesias-Casal, A., Neto, J.F.S. and Maside-Sanfiz, J.M. (2023). Does corporate social performance improve bank efficiency? Evidence from European banks. Review of Managerial Science, 17(4), 1399-1437. https://doi.org/10.1007/s11846-022-00579-9
• Manta, F., Boscia, V., Conca, L., Borgia, M. and Toma, P. (2025). The Impact of Bank Riskiness on the Quality of ESG Disclosure: Empirical Evidence from European Banks. Business Strategy and the Environment, 34(4), 4206-4226. https://doi.org/10.1002/bse.4193
• Mirza, N., Umar, M., Lobont, O.R. and Safi, A. (2025). ESG lending, technology investment and banking performance in BRICS: Navigating sustainability and financial stability. China Finance Review International, 15(2), 324-336. https://doi.org/10.1108/CFRI-09-2024-0496
• Mufazzal, S. and Muzakkir, S.M. (2018). A new multi-criterion decision making (MCDM) method based on proximity indexed value for minimizing rank reversals. Computers & Industrial Engineering, 119, 427-438. https://doi.org/10.1016/j.cie.2018.03.045
• Peci, A., Dervishaj, B. and Puška, A. (2025). Using fuzzy analytic hierarchy process and technique for order of preference by similarity to the ideal solution in performance evaluation in the Albanian banking sector. Journal of Risk and Financial Management, 18(3), 116. https://doi.org/10.3390/jrfm18030116
• Puška, A., Nedeljković, M., Šarkoćević, Ž., Golubović, Z., Ristić, V. and Stojanović, I. (2022). Evaluation of agricultural machinery using multi-criteria analysis methods. Sustainability, 14(14), 8675. https://doi.org/10.3390/su14148675
• Reig-Mullor, J. and Brotons-Martinez, J. M. (2021). The evaluation performance for commercial banks by intuitionistic fuzzy numbers: The case of Spain. Soft Computing, 25(14), 9061-9075.https://doi.org/10.1007/s00500-021-05847-6
• Russo, M.V. and Fouts, P.A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40(3), 534-559. https://doi.org/10.5465/257052
• Suchman, M.C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571-610. https://doi.org/10.5465/amr.1995.9508080331
• Torkayesh, A.E., Zolfani, S.H., Kahvand, M. and Khazaelpour, P. (2021). Landfill location selection for healthcare waste of urban areas using hybrid BWM-grey MARCOS model based on GIS. Sustainable Cities and Society, 67, 102712. https://doi.org/10.1016/j.scs.2021.102712
• Trung, D.D., Dudić, B., Dung, H.T. and Truong, N.X. (2024). Innovation in Financial Health Assessment: Applying MCDM Techniques to Banks in Vietnam. Economics: Innovative & Economic Research Journal, 12(2). 21-33. https://doi.org/10.2478/eoik-2024-0011
• Ulutaş, A., Balo, F., Sua, L., Demir, E., Topal, A. and Jakovljević, V. (2021). A new integrated grey MCDM model: Case of warehouse location selection. Facta Universitatis, Series: Mechanical Engineering, 19(3), 515-535. https://doi.org/10.22190/FUME210424060U
• Ulutaş, A., Topa, A., Karabasevic, D., Zavadskas, E. K., Demirbaş, M. and Üre, S. (2025). A Novel Grey MCDM Model Assessing Macroeconomic Performance of G7 Countries. Journal of Grey System, 37(3), 61-72. Retrieved from https://jgrey.nuaa.edu.cn/EN/0957-3720/home.shtml
• Ulutaş, A., Topal, A., Görçün, Ö. F. and Ecer, F. (2024). Evaluation of third-party logistics service providers for car manufacturing firms using a novel integrated grey LOPCOW-PSI-MACONT model. Expert Systems with Applications, 241, 122680. https://doi.org/10.1016/j.eswa.2023.122680
• Ünlü, U. and Çıtak, Ö. (2025). Assessing corporate sustainability in Turkish banks: WASPAS and ARAS approaches in the Covid-19 and the post-Covid-19 era. Journal of Research in Economics, Politics & Finance, 10(2), 758-780. https://doi.org/10.30784/epfad.1678030
• Ünlü, U. and Yalçın, N. (2023). A financial performance evaluation of commercial banks traded on Borsa Istanbul with a multi-dimensional perspective. International Journal of Trade and Global Markets, 17(2), 151-171. https://doi.org/10.1504/IJTGM.2023.130734
• Ünlü, U., Yalçın, N. and Avşarlıgil, N. (2022). Analysis of efficiency and productivity of commercial banks in Turkey pre-and during COVID-19 with an integrated MCDM approach. Mathematics, 10(13), 2300. https://doi.org/10.3390/math10132300
• van Puyvelde, S., Caers, R., du Bois, C. and Jegers, M. (2012). The governance of nonprofit organizations: Integrating agency theory with stakeholder and stewardship theories. Nonprofit and Voluntary Sector Quarterly, 41(3), 431–451. https://doi.org/10.1177/0899764011409757
• Yang, Y., Yang, M. and Shan, Z. (2025). Decision making method for operational performance of Chinese commercial banks based on scenario fuzzy sets. Scientific Reports, 15(1), 19829. https://doi.org/10.1038/s41598-025-04584-2
• Yu, K., Wu, Q., Chen, X., Wang, W. and Mardani, A. (2024). An integrated MCDM framework for evaluating the environmental, social, and governance (ESG) sustainable business performance. Annals of Operations Research, 342(1), 987-1018. https://doi.org/10.1007/s10479-023-05616-8
• Zavadskas, E.K., Kaklauskas, A., Turskis, Z. and Tamošaitiene, J. (2008). Selection of the effective dwelling house walls by applying attributes values determined at intervals. Journal of Civil Engineering and Management, 14(2), 85-93. https://doi.org/10.3846/1392-3730.2008.14.3