This study investigates the influence of Environmental, Social, and Governance (ESG) scores on the clustering and community formation of companies within various network models. Using daily closing prices of 78 companies in the Borsa Istanbul Sustainability Index, correlation, mutual information, and causality networks were constructed. Community detection revealed that companies within the same sector (particularly financial and manufacturing) form tight-knit communities. Nonparametric tests showed that ESG factors (emission, CSR strategy, innovation, human rights) significantly influenced community formation. Companies with strong emission reduction and CSR strategies formed more cohesive communities, highlighting sustainability's role in shaping financial networks. The findings underscore the critical role of ESG factors in financial market dynamics and promote sustainable investment practices.

Larissa M. Batrancea, Ömer Akgüller, Mehmet Ali Balcı, Anca Nichita