Refining Environmental Sustainability Governance Reports through Fuzzy Systems Evaluation and Scoring

Abstract

Environmental, Social, and Governance (ESG) reports have become essential tools for enterprises to showcase their commitment to sustainable development and social responsibility. However, discrepancies persist regarding the criteria, assessments, and ratings disclosed in these reports. Moreover, there is a need for more objective methods to determine the weight distribution of indicator items. This study introduces a novel approach utilizing semantic variables in fuzzy theory and a multiple logic fuzzy inference system to develop an ESG environmental management performance assessment model. Therefore, this paper aims to develop a novel approach utilizing semantic variables and a multiple logic fuzzy inference system to quantitatively evaluate the sustainable performance of an environmental management plan. This research also aims to ensure fair and objective assessment outcomes, providing valuable guidance for enterprises in implementing performance management strategies. Key aspects investigated include the impact of membership functions, the extended utilization of semantic variables and logical rules, a comparative analysis of traditional weight assessments, and the limitations of applying fuzzy theory. Through comprehensive discussions and calculations, it is evident that fuzzy theory offers considerable flexibility in application. By tailoring fuzzy rules and selecting appropriate membership functions, diverse application scenarios can be accommodated. The Fuzzy systems evaluation and scoring EMP model generates EMP evaluation scores ranging from 1.76 to 8.29 for Gaussian membership, 1.80 to 8.19 for Triangular membership-A, 1.92 to 8.00 for Triangular membership-B, and 1.81 to 8.19 for Quadrilateral trapezoidal membership, based on simulated rating scenarios using the semantic variables of completeness and feasibility. This approach successfully incorporates distribution logic from subjective membership degrees to evaluate EMP scores. The findings demonstrate that fuzzy theory enables the consideration of multiple factors and facilitates the provision of objective-level membership, underscoring its potential in addressing complex evaluation challenges. This study illuminates the versatility of the fuzzy system theory, with its applications poised to extend across various domains.