Only One in Nine Companies in Turkey Creates Sustainable Value!

Sustainable Value Creation Status in Turkey

Only one in nine companies in Turkey can create sustainable value. The "Sustainable Value Creation 2026" research by Bain & Company reveals that only 11% of companies will provide returns above their capital costs and grow their revenues above inflation by 2025. In global terms, this rate is 39%, indicating that Turkey needs serious development in sustainability.

Why Is This Important?

Sustainable value creation is critical for the long-term financial success of companies. According to the research, companies demonstrating sustainable performance offer their investors an average annual return of 16%, while the return for other companies is only 8%. This shows that sustainability strategies are important not only environmentally but also financially.

39% of companies in Turkey have provided returns above capital costs in the last ten years, while only 24% have recorded real growth. Therefore, this data shows that the economic climate in Turkey still presents a challenging environment for sustainable value creation. In this context, it is becoming increasingly important for companies to view sustainability not as an obligation but as an opportunity. It should be noted that creating sustainable value is essential not only for companies but for the entire economy.

Sustainable strategies help companies reduce costs and increase efficiency while also contributing to reducing environmental impacts. This situation can support economic growth in the long run. The Turkish business world can become more competitive both in the domestic market and on the international stage by adopting these strategies. However, for this transition to be healthy, companies need to place more importance on education and knowledge sharing. Additionally, increasing awareness of sustainability issues is also crucial for the public to support this change.

Key Figures and Comparisons

Criteria	Turkey	Global Average
Return Above Capital Costs	11%	39%
Real Growth	24%	-
Annual Shareholder Return	16%	8%

Local Context and Historical Perspective

In recent years, high inflation and currency fluctuations in Turkey have negatively affected the financial performance of companies. This situation complicates companies' efforts in sustainable value creation and consequently reduces investor confidence. On the other hand, Turkey's 11% performance, while above the 8% average in Europe, lags significantly behind America. This indicates that Turkish companies need to develop sustainability strategies to become more competitive in foreign markets.

Historically, Turkish companies have generally focused on volume growth but have not made sufficient progress in capital efficiency. This weakens Turkey's international competitiveness. During periods of high inflation, companies need to reconsider their financial management strategies to target sustainable growth. Additionally, deficiencies in Turkey's sustainability may adversely affect its trade relations with the European Union. For the country to achieve its sustainability targets, both the private sector and government authorities must work together.

Particularly, Turkey's strategic position and young population offer potential opportunities in the field of sustainability. However, to capitalize on these opportunities, companies need to adopt more innovative and environmentally friendly approaches. State-supported projects and incentives can contribute to progress in sustainability. Moreover, the effective implementation of these projects will facilitate Turkey's compliance with international sustainability standards. It is crucial for Turkey to evaluate this potential by making strides in renewable energy investments and environmentally friendly technologies. The role of local governments in this process represents a critical point in achieving sustainable development goals.

Sectors That Could Be Affected and Individual Measures

Sustainable value creation is becoming more important, especially in resource-intensive sectors such as energy, construction, and manufacturing. Companies in these sectors should adopt sustainability strategies to reduce their environmental impacts and optimize costs. For instance, moving towards renewable energy sources in the energy sector can provide both environmental and financial benefits. Additionally, using sustainable materials and developing innovative solutions related to energy efficiency in the construction sector is also essential.

Individually, investors' preference for companies with sustainable value creation criteria can help these companies find more resources and support. In this context, raising awareness among investors and integrating sustainability criteria into investment decision-making processes is crucial. Consumers' preference for environmentally friendly products can encourage companies to adopt sustainable practices. Furthermore, social media and digital platforms emerge as effective tools for individuals to raise awareness on this issue. Education programs and social media campaigns can be effective ways to inform the public about sustainability. Such campaigns can inform the general public about environmental issues while encouraging companies to engage in social responsibility projects. Educating young people with environmental awareness can significantly contribute to future sustainability efforts.

In the Turkish business world, individual measures begin with conscious consumer choices. Purchasing sustainable products, supporting environmentally friendly companies, and ensuring energy efficiency are simple yet effective actions individuals can take. Moreover, individuals can contribute to sustainability efforts by participating in local environmental projects and engaging in activities that create social awareness. Environmental awareness education at the university and school level can increase the sensitivity of young generations towards sustainability.

Frequently Asked Questions

What is sustainable value creation?

Sustainable value creation is defined as companies providing returns above their capital costs and growing their revenues above inflation.

What is the rate of companies creating sustainable value in Turkey?

Approximately 11% of companies in Turkey create sustainable value.

What is this rate globally?

Globally, this rate has been determined to be 39%.

What is the importance of sustainable companies for investors?

Sustainable companies have the potential to provide higher returns to investors in the long run.

What are the sustainability strategies of Turkish companies?

The sustainability strategies of Turkish companies include focusing on capital efficiency and reducing environmental impacts.

Editor's Note: Sustainable value creation is a critical factor not only for environmental sustainability but also for financial sustainability. Turkish companies need to take strategic steps to improve their performance in this area.