The Effect of Corporate Sustainability Practices on Financial Performance

Abstract

In this chapter, the impact of corporate sustainability practices (CSP) on corporate financial performance (CFP) is investigated in terms of Turkish manufacturing industry. In this context, 16 sustainable companies vs. 21 control companies in 2016 and 16 sustainable companies vs. 24 control companies in 2017 are examined. Thirty-seven financial performance variables within seven groups are used, and non-parametric Mann-Whitney U test is applied. In 2016, four out of seven significant variables point out that sustainable companies perform better than control sample; however, in 2017, three out of four significant variables indicate the opposite. Therefore, the results are mixed, and it is concluded that implementing environmental, social, and governance (ESG) criteria do not have a noticeable positive effect on financial performances of manufacturing industry companies, at least in the short-term.