The purpose of this study is to evaluate the impact of Environmental, Social and Governance (ESG) risk ratings on the financial performance of selected banks in the Borsa Istanbul (BIST) Banking Sector Index based on 2023 by using LODECI and CRADIS hybrid Multi-Criteria Decision Making (MCDM) model. The LODECI method, used for criterion weighting in the study, is a technique that objectively determines the importance levels of criteria while integrating the perspectives of two fundamental approaches: Entropy and MEREC methods. It also creates acceptable and robust weight vectors. The performance rankings of the companies are determined using the CRADIS method, which constructs utility functions based on ideal and anti-ideal values. In determining the financial performance rankings of the banks included in the analysis, a scoring is first conducted based on financial ratios and ESG risk ratings, and then the scores are recalculated excluding ESG risk ratings from the analysis. The scores calculated for both cases are compared, and it has been determined that including ESG risk ratings in the analysis causes differences in performance scores and rankings. In the performance ranking conducted with ESG risk ratings included, GARAN, AKBNK, and YKBNK are in the top three, while HALKB, VAKBN, and QNBFB are in the bottom three. In the performance ranking conducted with ESG risk ratings excluded, GARAN, SKBNK, and AKBNK are in the top three, while HALKB, VAKBN, and ISCTR are in the bottom three. Considering the scores and rankings of the CRADIS method, it has been observed that, in general, banks with lower ESG risk ratings have higher financial performance rankings, while those with higher ESG risk ratings have lower rankings. These results provide significant evidence regarding the impact of ESG risks on the Turkish banking system. The motivation behind this research stems from the very limited studies on the effect of ESG risk on the performance of banks listed on BIST, and it is believed that this research makes a valuable contribution to the literature in this field.