The goal of this study is to reveal the relationship between the amount of carbon emissions that firms emit into the atmosphere and financial performance of the firms. In this context, the data of 41 firms listed in the “Borsa Istanbul Sustainability Index” between 2017-2021 are examined. “Panel data analysis” methods were administered in the research. As consequences of the research, it is inferred that carbon emission intensity, size, leverage and growth variables have a significant impact on “Tobin’s Q Ratio and ROA”. Only the “growth” variable has a significant impact on “ROE”. However, the study shows that total carbon emission has no significant impact on “ROA, Tobin’s Q Ratio and ROE”. Limited research with in this content has been found in the national literature. Within this scope, the study is a pioneering research on determining the relationship between carbon emissions and financial performance of companies traded in the "BIST Sustainability Index" and is assessed to contribute to practitioners and the literature regarding the findings obtained.
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