Comparison of ESG Methodologies in the Effect of Sustainability Accounting Practices on Financial Performance: A Research within the Scope of BIST Companies

Abstract

Environmental, social, and governance activities are prioritized in sustainability accounting practices. Many rating agencies currently measure these activities as ESG scores, which serve as crucial indicators of sustainable accounting practices. This study aims to determine the effect of sustainability accounting practices on financial performance by comparing different ESG methodologies. To this end, for 58 Borsa İstanbul-listed companies, the relationships between the ESG scores calculated by LSEG for 2024, by S&P Global for 2025, and by CSR HUB for 2025, and the financial performance scores calculated using the MEREC-MARCOS methods were determined via correlation and regression analyses. Statistical analyses revealed that LSEG ESG scores had a significant and positive effect on financial performance; however, S&P Global and CSR HUB ESG scores did not have a significant effect. However, another important finding is that the explanatory power of ESG scores for financial performance varies across ESG data providers. The findings contribute to the literature by demonstrating that, rather than generalizing the relationship between companies’ sustainability accounting practices and their financial performance based on a single organization’s ESG score, separately accounting for scores calculated by different rating agencies would allow for a more accurate assessment. The theoretical implication of this study is that the effect of ESG scores, an indicator of sustainability accounting practices, on the financial performance of businesses may stem not only from country and sector differences but also from the specific calculations of ESG methodologies.