Originally appeared on Bosphorus Consulting in November 2014
Borsa Istanbul announced on 31 October that it is launching a sustainability index. For this year’s launch, 15 companies listed on its exchange have been included in the index. The list is an attempt to boost investment in Turkish corporates and to promote the importance of environment, social and corporate governance issues (ECG) (IR Magazine, “Turkish stock exchange launches sustainability index”, 10 November 2014), with companies’ performance being evaluated based on issues such as human rights, climate change, bribery and board practice.
This is in line with the growing attention paid to ECG globally. BNY Mellon’s report, Global Trends in Investor Relations, from last year found that 47% of Western European companies are now actively engaging with ECG issues and numbers are increasing globally. It is no surprise then that Turkcell, the only company to be listed on both Borsa Istanbul and the NYSE, is among the 15 companies listed. This year, Turkcell issued what was already its third sustainability report, clearly showing it to be ahead of the trend. However, Turkcell is somewhat of an outlier and, given that so far only 15 companies are to be listed, it is clear the Turkish corporate community has a long way to go to demonstrating its commitment to ECG. The first step is organizing a coherent policy towards ECG; the second is communicating what actions have been taken as part of that policy in a transparent and direct manner. For companies based in emerging markets such as Turkey, convincing investors that they are a safe bet is an uphill struggle to say the least. Over the last two years, Turkey has been afflicted by a series of scandals, which have damaged the country’s perception among investors. Key to shaking off the image of an uncertain emerging market is keeping up with positive global trends in investor relations, arguably one of the most important of which being ECG.