A hybrid framework for evaluating corporate sustainability using multi-criteria decision making

Abstract

Firms have to improve sustainable processes and carry out performance measurement in today’s competitive environment as well as optimize their business processes. Corporate sustainability which is the definition of sustainable development on the business scale not only focuses on corporates’ profitability, but also takes into account the environmental and social improvements. In this study, an approach based on a hybrid multi-criteria decision-making (MCDM) method is proposed in order to help firms to evaluate the degree of achieving their economic, environmental, and social goals. Entropy method is used to find out criteria weightings, and then VIKOR (VlseKriterijumska Optimizacija I Kompromisno Resenje), TOPSIS (the Technique for Order Preference by Similarity to Ideal Solution), and MAUT (Multi-Attribute Utility Theory) methods are implemented with the help of the weights obtained to define performance ranking of alternative sustainability reports. Lastly, a combined ranking is obtained by utilizing the three rankings of the mentioned methods via the Borda count method, which is a data fusion technique. By performing a real case of sustainability performance evaluation of a furniture company, it is aimed to assist decision-makers in making integrated decisions for their sustainability performance and improving their activities in terms of sustainability. The results show that VIKOR and MAUT have the same ranking list for economic and environmental dimensions, whereas they produce different results in terms of social dimension. According to the combined results with Borda count method, the best and worst performance years for the economic and environmental dimensions are determined as 2018 and 2013, respectively. On the other hand, 2017 is determined as the best performance year for the social dimension with Borda count method, while 2015 is the year of the lowest performance.