SUSTAINABLE DEVELOPMENT PERFORMANCE OF COMPANIES: A CLUSTER ANALYSIS APPROACH

Sustainable development can be defined as an approach where firms support economic growth while reducing environmental impacts, fulfilling social responsibilities, and adhering to strong governance principles. This study investigates sustainable development performance of non-financial companies listed on Borsa Istanbul by cluster analysis of economic, environmental, social, and governance dimensions of corporate sustainable development. Hierarchical average linkage clustering and k-means clustering are used and both result in three distinct clusters. While the economic dimension shows no significant difference between clusters, significant variations are observed in the environmental, social, and governance dimensions. To understand the characteristics of these clusters further, a comparative analysis of financial ratios, company size, and company age is undertaken. Notably, company size emerges as the sole statistically significant differentiator between the clusters. The cluster with the highest environmental, social, and governance (ESG) scores comprises larger firms compared to the others. Based on the identified sustainable development patterns within each cluster, the study proposes recommendations for enhancing their overall sustainable development performance.