9. Impact on Operating Profitability by Greenhouse Gas Statements: A Research in BIST Sustainability Index Companies

This study determines whether greenhouse gas (GHG) emission statements are subject to assurance audits, and whether they affect the operating profitability of companies. Two secondary questions are explored. First, does the profitability of companies requesting assurance engagements vary by sector? Second, are regulations relating to the verification of GHG emissions in Turkey an effective control over the companies’ assurance demands? This study used data from fifty BIST Sustainability Index companies’ sustainability reports from 2011 to 2017. It was determined whether the sustainability reports included a company-disclosed assurance report on GHG emissions, and the results were summarized in Microsoft Excel. Profitability ratios were used to determine whether and to what extent assurance engagements were performed by verification bodies (ROA—return on assets ratio, ROE -Return on Equity). The data were subjected to frequency, crosstab, and parametric and nonparametric analyses using SPSS statistical software. The rate of BIST Sustainability Index companies requesting an assurance engagement was quite low (at 20%), and possession of an assurance engagement did not significantly affect company profitability. By sector, although there was a significant difference in the profitability of companies with an assurance engagement report, those in the financial sector were found to be more profitable than in other sectors. However, companies with an assurance engagement report in the transportation, telecommunication, and warehousing sectors exhibited the lowest profitability among the sectors. This study takes a research-based approach to investigate assurance engagements in GHG emission reports in Turkey. The study is original because there are few studies in Turkey.