Utilising Environmental Social Governance Rating for Predicting Financial Risk: FTSE 100

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Fırat Üniversitesi Sosyal Bilimler Dergisi
Cilt: 35 Sayı: 3
Utilising Environmental Social Governance Rating for Predicting Financial Risk: FTSE 100

Utilising Environmental Social Governance Rating for Predicting Financial Risk: FTSE 100

Authors : Isik Akin, Meryem Akın, Erdem Bağcı, Arshdeep Singh

Pages : 1387-1404

Doi:10.18069/firatsbed.1684374

View : 56 | Download : 58

Publication Date : 2025-09-23

Article Type : Research Paper

Abstract :The focus of this research is on evaluating the ESG ratings of various FTSE 100 companies and their impact on financial risk. The study aims to analyze how ESG ratings affect the financial risk of FTSE 100 companies and to reveal the impact of profitability and liquidity on ESG ratings. Therefore, we examine the relationship between ESG ratings (Environmental, Social, and Governance) and financial risk for FTSE 100 companies. ESG factors are increasingly recognized as indicators of a company\\\'s ability to sustain itself and its financial performance. The utilization of ESG rating data offers several potential benefits, including providing investors and analysts with insights to evaluate companies\\\' long-term sustainability and resilience. The study aims to reveal the connection between ESG ratings and financial risk, as well as investigate the influence of profitability and liquidity on ESG ratings. The research utilizes quantitative methodologies, including regression analysis and panel unit root tests, to analyze the data collected from FTSE 100 companies. The findings suggest a positive association between higher ESG ratings and better financial health, as well as a positive impact of profitability on ESG ratings. However, liquidity metrics do not significantly affect ESG ratings.
Keywords : ESG Derecelendirmeleri, Finansal Risk, Kârlılık, Likidite, FTSE 100

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