Traces of sustainability in the stock market: A comparative analysis of Türkiye and European Union indices

Abstract

"Sustainability" is a term that has gained magical connotations in recent years, impacting both the economic-financial sphere and all aspects of our lives. It is crucial to ensure development while making it sustainable. Companies have begun transforming themselves accordingly, while governments have implemented regulations to support them. The transformation and evolution of companies in this regard are now being evaluated through sustainability indices on stock exchanges. The European Union (EU) is a leading group of countries worldwide in sustainability, asserting significant influence. Turkey, through its customs union established with the EU in 1996, the initiation of membership negotiations in 2005, and its candidate status, is obligated and committed to aligning with EU policies in all respects. This study compares data from 2014 to 2024 on the sustainability statuses of European companies evaluated by the STOXX Sustainability 40 Index (SUBE) and the Dow Jones Sustainability Eurozone Index (DJSEUZ), with that of Turkish companies assessed by the Borsa Istanbul Sustainability Index (XUSRD). It is observed that the European indices move together, whereas the Borsa Istanbul Index, while similar for many years, has diverged from the European indices in recent years.