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In the recent past, companies’ environmental, social, and governance (ESG)-related strategies and practices in these dimensions have been of broad interest. The volume of research exploring the association between ESG scores and financial performance and nonfinancial performance has been increasing. Thus, the aim of this research is to examine the influence of ESG (environmental, social, and governance) scores on financial distress. To that end, panel data analysis was conducted on the firm data of the BIST Sustainability 25 index for 2018–2023. The empirical analysis demonstrated a positive and statistically significant relationship between ESG and financial distress. The findings indicate that companies adhering to ESG criteria decrease their financial distress risk and that ESG performance increases the financial resilience of companies.

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Sustainability and Financial Distress: An Assessment from the ESG Perspective

  • 章节

  • 发表日期：

    2026年

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  • Şenol Doğan,
  • Dilber Doğan

摘要

In the recent past, companies’ environmental, social, and governance (ESG)-related strategies and practices in these dimensions have been of broad interest. The volume of research exploring the association between ESG scores and financial performance and nonfinancial performance has been increasing. Thus, the aim of this research is to examine the influence of ESG (environmental, social, and governance) scores on financial distress. To that end, panel data analysis was conducted on the firm data of the BIST Sustainability 25 index for 2018–2023. The empirical analysis demonstrated a positive and statistically significant relationship between ESG and financial distress. The findings indicate that companies adhering to ESG criteria decrease their financial distress risk and that ESG performance increases the financial resilience of companies.