Sustainability Key Performance Indicators Research Articles

The relative importance of ESG pillars: A two‐step machine learning and analytical framework

AbstractThis study aims to contribute to the ongoing and inconclusive debates regarding the relative significance of environmental, social, and governance (ESG) sustainability key performance indicators and their correlation with overall sustainability performance. We present a unique two‐step analytical framework to leverage Thomson Reuters' ESG Score (ASSET4) database to determine the most impactful ESG pillars and their subcomponents at both the firm and industry levels. This framework integrates the Method based on the Removal Effects of Criteria (MEREC) with K‐means cluster analysis. Through the MEREC‐K‐means framework, we determine the two most noteworthy ESG pillars within various industries, subsequently clustering them to form peer groups for comprehensive comparative analysis. We find that while the social and economic pillars are the two fundamental pillars of ESG performance in all industries in general, this prioritization sometimes differs from industry to industry. This research makes theoretical and practical contributions by introducing a novel dimensionality reduction technique in ESG pillars, offering valuable insights for strategic resource allocation in corporate social responsibility (CSR) and sustainability initiatives. The implications of our findings extend broadly to investors, policymakers, and practitioners, empowering them to make more informed decisions.

Sustainability Performance in On-Site Construction Processes: A Systematic Literature Review

One of the most important challenges in the construction industry is to develop projects covering all three dimensions of sustainability: economic, social, and environmental. However, the construction project management literature lacks clarity regarding the fundamental principles and effective strategies for implementing sustainability for on-site construction processes. This article provides a comprehensive analysis of the sustainability dimensions in the construction sector, highlighting sustainability key performance indicators (KPIs) for on-site practices. The analysis stems from a systematic literature review sourced from the Web of Science and Scopus databases. The search identified 17 environmental, 20 social, and 15 economic indicators, with the most relevant being those associated with key terms such as cost, profit, labor, customer satisfaction, community impact, resource utilization, and contaminant management. The theoretical implications of this study contribute a critical framework for integrating the sustainability dimensions into construction practices, advancing the industry’s sustainability. For practitioners, the findings offer a prioritized guide to enhance on-site construction processes (O-SCP) sustainability and provide measurable KPIs for tracking progress toward sustainable development goals. This study not only sheds light on the current application of sustainability in O-SCP but also paves the way for future research to further this field.

Sustainable fixed wireless access with blockchain secured software defined network

Recently, there has been a tremendous increase in the number of service providers offering Fixed Wireless Access (FWA). The main goal of service providers is to offer guaranteed service (GB/month) for all contents by meeting sustainability Key Performance Indicators (KPIs): cost-efficiency and security. To minimize the risk of physical deployment and handle partial recovery, network slicing between service providers is considered by using the same FWA as a service by joint consideration of Infrastructure as a Service (IaaS) and Software as a Service (SaaS). This can only be handled by Software-Defined Network (SDN) controlled OpenFlow-based FWA. However, current OpenFlow switches in the market are used only as IaaS which does not meet cost-efficiency requirement alone. The software-defined OpenFlow tables can be increased by network administrator, which is not recommended because of having no authorization limitation and poses configuration risks on the device. Here, the research question is how can the service providers keep their own network sustainable by using infrastructure in a secure, cost-efficient, and conforming to the standard in a fair way? Therefore, Sustainable Fixed Wireless Access (SFWA) is newly proposed by OpenFlow-based blockchain in this paper. To handle low computational work and fair scheduling, Proof of Stake (PoS) consensus mechanism and Weighted Fair Content Scheduling algorithms are proposed for the validation process of the blocks that stores dynamic configuration details of service providers. At the end of the whole procedure, the valid blockchain is stored in the Secure Policy Database in OpenFlow-based FWA switches. According to performance evaluation, eMBB and URLLC contents can be served by 40% and 53% discount on cost per user with guaranteed service in FWA. The service provider offers a more sustainable network by blockchain-based secured SFWA than the conventional centralized authority-based FWA.

Performance measurement in urban development: unfolding a case of sustainability KPIs reporting

PurposeThis study aims to explore the potential dynamics between performance measurement at the organisational level and emerging urban development projects at the macro-institutional field level of sustainability governance and accountability.Design/methodology/approachUsing a theoretical triangulation between three theories, namely contingency theory, institutional theory and social cognitive theory, this study investigates not only the macro-micro dynamics, but also the (recursive) micro-macro dynamics between performance measurement and urban development. Using an Egyptian public sector urban development organisation and its sustainable energy project as an empirical example, interviews, documents and observations were collected.FindingsThe dynamics emerged between field urban development projects and the (unintended) organisational implementation of the performance measurement system, the sustainability key performance indicators (KPIs) reporting system. Contributing to previous literature, these dynamics have been institutionalised through (three) interrelated levels: the (macro-field) urban development contingencies and pressures for sustainability KPIs reporting, the (organisational) institutionalisation of the urban development performance measurement system and then the (micro-organisational) cognitive role of sustainability KPIs reports in (re)making political urban development decisions.Research limitations/implicationsThis study faced some limitations that paved the way for future research axes. For political and security reasons, difficulties were encountered in conducting interviews with government actors in the sustainable energy project under study. Also, due to the practical separation of the environmental sustainability system from the sustainability KPIs reporting system in this case study, environmental sustainability is outside the scope.Practical implicationsSustainability reports may influence public sector decision-making processes in a specific urban development context. These KPIs reports may also increase public sector management opportunities for urban auditing, transparency, accountability and sustainability governance. These KPIs may also guide public sector management to lower prices in poor villages to increase smart energy consumption and improve community health.Social implicationsSustainability reports may increase decision-makers' understanding of consumer behaviours and societal changes. This may help in making appropriate political decisions to improve their welfare and regular smart energy consumption. Not only urban citizens, but this social advantage may also extend to urban development employees through employees' promotion, training and access to government-funded academic and professional scholarships.Originality/valueThis study is an attempt to develop current public sector performance measurement analyses in the emerging urban development field using a triadic analytical approach. This study also fed the literature with an extended case study that clarified the (multi-level) and (two-way) dynamics between performance measurement and urban development.

Improvement and Implementation of Sustainable Key Performance Indicators in Supply Chain Management: The Case of a Furniture Firm

Improvement and Implementation of Sustainable Key Performance Indicators in Supply Chain Management: The Case of a Furniture Firm

SELECTING SUSTAINABILITY KEY PERFORMANCE INDICATORS FOR SMART LOGISTICS ASSESSMENT

The application of smart technologies and applications is becoming increasingly common in the logistics processes of companies and supply chains. However, standard logistics indicators are still used to evaluate their performance, which contradicts the sustainable development strategy of many industrial enterprises and their supply chains. Thus, the article aims to design a methodology for selecting sustainability key performance indicators (SKPIs) suitable for assessing smart logistics and its technologies and applications. The research relies on cluster analysis of the SKPIs recommended in the relevant literature, frequency analysis of indicators used in practice and their comparison. The cluster analysis showed that the primary attention in the references is given to sustainability’s economic and environmental dimensions. Most frequently, the authors highlighted the importance of the following indicators: production-related costs and investments, planning performance and quality, customer satisfaction, energy efficiency, waste intensity and treatment, emissions, and resource efficiency. On the contrary, the frequency analysis corroborated that leading industrial enterprises paid more-or-less balanced attention to all areas of sustainability, but at the company level. The article’s primary result constitutes a methodology comprising six steps, respecting the results of the analyses carried out: (1) Sustainability objectives definition; (2) Establishing SKPIs cluster pool; (3) Definition of criteria for selecting SKPIs clusters; (4) Selection of SKPIs clusters; (5) Definition of SKPIs and their parameters; and (6) Development of SKPIs hierarchical structure.

Challenges and How to Overcome Them in the Formulation and Implementation Process of a Sustainability Balanced Scorecard (SBSC)

To cope with the increasing importance of sustainability, the Sustainability Balanced Scorecard (SBSC) has been developed to support companies integrating the economic, social and environmental dimensions of sustainability into their business. However, the formulation and implementation process of an SBSC is confronted with multiple challenges that have to be dealt with. This article associates the challenges with four steps of the process in particular: (1) the conceptual integration of the three dimensions into the strategy, (2) the selection of the architecture of the SBSC, (3) the formulation of sustainable key performance indicators and the development of cause-effect chains, and (4) the implementation of the SBSC. For these steps, the article summarizes and outlines the identified challenges, discusses techniques, criteria, guidelines and success factors to overcome them and derives research gaps that need to be addressed. Hence, the article speaks to both researchers and practitioners. For researchers, the article’s contribution is to synthesize the findings of the literature and to identify research gaps. For practitioners, the article’s contribution is to provide a systematic process for companies to improve their sustainability management and performance.

Sustainability and Industry 4.0: Definition of a Set of Key Performance Indicators for Manufacturing Companies

Today, sustainability represents a fundamental concept to be developed and implemented in any industrial context. Therefore, it is essential to be able to measure sustainability performance by proper indicators, along the entire lifecycle and the value chain, considering environmental, economic, and social impacts. Moreover, every manufacturing company should have a specific measuring framework to calculate all the specific parameters. In this direction, the modern digital transition and Industry 4.0 (I4.0) technologies are proposing to transform human–machine relations, with a significant impact on social and organizational aspects. At the same time, digitization can help companies to define and implement sustainability by correlating production with proper evaluation metrics. The aim of this research is to provide a complete overview of sustainability Key Performance Indicators (KPIs) based on the Triple Bottom Line concept, referring to the three sustainability areas. Such an overview can be used by companies to set their specific KPIs and metrics to measure their sustainability level, according to their needs.

Identification and assessment of sustainability performance indicators for construction projects

Improving the sustainability performance of construction projects is essential to the sustainability of regions, nations, and the world as a whole. Sustainability key performance indicators (KPIs) can play an essential role in advancing the practice of sustainable construction. Despite the numerous studies on sustainability indicators, there is still a gap in identifying applicable sustainability KPIs that can be used during the execution phase of construction projects for contractors. This research aims to identify and assess KPIs for monitoring and evaluating the sustainability performance of construction projects during the execution phase. Twenty-two sustainability indicators were identified and shortlisted based on a comprehensive review of related literature. The indicators were grouped into two groups environmental and socio-economic. A survey was then designed and sent to construction professionals in the United Arab Emirates (UAE). Thirty-one respondents evaluated the importance of indicators using pair-wise comparison using the Analytic Hierarchy Process (AHP). The results highlighted that the use of renewable energy indicator was ranked as the most important with a global weight of 0.164 (environmental group). In contrast, the construction site safety indicator was the most important, with a global weight of 0.093 (socio-economic group). This research is important as it fills the identified research gap. Additionally, this study benefits contractors in identifying the most appropriate sustainability indicators for their construction projects to assess sustainability performance during the construction phase.

Organizational Sustainability Transformation through KPIs: A Model for Sustainability Change

The financial industry is argued to play a vital role in transforming our economies toward sustainability, yet little is known on how to achieve such a transformation. In an inductive, qualitative, single case study analysis of a sustainability leader in the financial services industry, we investigate how the introduction of sustainability key performance indicators transformed the organization. Thereby we contribute to the understudied topic of sustainability transformation in the insurance and investment industry and aim to provide a deeper understanding of how this industry’s indirect real-world impact can be effectively leveraged to benefit sustainability. Introducing consistent indicators for sustainability performance essentially helped to overcome the prevailing diffuse and symbolic image of sustainability in the financial industry through non-financial accounting and reporting. Thereby the organization shifted its sustainability strategy away from individual opinions and sustainability advocates toward legitimate and widely accepted performance indicators. Initially triggered by external regulatory pressure and societal norms, introducing reliable key performance indicators activated organizational awareness, initiated changes in corporate governance, and reinforced a pragmatic sustainability transformation that considered numerous stakeholders’ needs. Our derived model illustrates how firms initiating an organizational sustainability transformation can leverage sustainability key performance indicators to (1) activate and commit internal stakeholders, (2) transform governance structures, and (3) establish accountability of actions and in decision-making.

Spread Analysis of the Sustainability-Linked Bonds Tied to an Issuer’s Greenhouse Gases Emissions Reduction Target

Sustainability-Linked Bonds (SLBs) are a new type of general corporate purpose bond in which payments are tied to an issuer’s sustainability key performance indicators (KPIs) with respect to the environmental, social, and governance (ESG) criteria. The structure is complementary to green bonds. The Tesco SLBs are linked to the firm’s ability to cut its greenhouse gas emissions by 60%. The priority is to reduce its reliance on nonrenewable grid electricity, which contributed 65% of Tesco’s global carbon emissions footprint. Tesco accounts for 1% of electricity demand in the UK. Failure to meet the goals will result in a coupon step-up by 25 basis points on the last three coupons. The aim of our study is to investigate the presence of, how we call it ‘ESG spread’, marked by negative yield difference between SLB and regular bonds. It is something similar to ‘greenium’, that is, a premium paid by bondholders for green bonds when compared to nongreen bonds. We compare the bid and ask yields of SLBs with the interpolated yields, calculated for the yields of Tesco and Carrefour notes. Then, we look into the SLB yields in coupon step-up scenario to answer the question if the issuer’s failure to keep up with KPIs results in changing of ESG spread from negative to positive.

Analysis of Future Technological Changes in Science

Rapid technological advancement provides a major potential to fulfill the agenda 2030 and the 2030 Agenda For sustainable development. Technological breakthroughs can help to eradicate poverty, monitor environmental sustainability key performance indicators, enhance food security, promote resource efficiency and effectiveness, enable deep structural transition, support social integration, combat ailments, and enhance access to higher education. Technology advancement also creates new policy problems, threatening to outrun authorities' and society's ability to respond to the changing brought about by new technology. Automation may have an uncertain and possibly detrimental effect on the economy, profitability, internationalization, and competitiveness. In that regard, this paper will focus on the technological changes in the field of science. The paper will start on an analysis of the effect of fast technological development on global disparities, then literature survey before evaluating the technological changes in science.

Recent developments in sustainable lean six sigma frameworks: literature review and directions

Practical and theoretical evidence suggests that Sustainable Lean Six Sigma contributes to an organization’s performance as it highlights environmental aspects. However, the theoretical contribution of Sustainable Lean Six Sigma has not been discussed enough in the literature, and many companies do not know where to begin integrating Sustainability and Lean Six Sigma in operation management. This paper aims to identify and discuss recent developments in Sustainable Lean Six Sigma frameworks through a systematic literature review, considering the benefits, outcomes, tools and practices, sustainability key performance indicators and critical success factors. The results show that Lean Six Sigma tools have been adapted to incorporate the measurement of environmental waste. However, sustainability key performance indicators must improve and there are few empirical studies on critical success factors for Sustainable Lean Six Sigma. This study also identified gaps in Sustainable Lean Six Sigma frameworks and gives directions for future research.

Determining sustainability key performance indicators for food loss reduction

Determining sustainability key performance indicators for food loss reduction

AccountAbility’s AA1000AP standard: a framework for integrating sustainability into organisations

PurposeThis study aims to evaluate corporate sustainability integration by evaluating corporate practices against the sustainability principles of inclusivity, materiality, responsiveness and impact outlined in AccountAbility’s AA1000 Accountability Principles (AA1000AP) standard.Design/methodology/approachData comprise 12 semi-structured interviews with senior managers of listed New Zealand companies. Findings are evaluated against AccountAbility’s principles of inclusivity, materiality, responsiveness and impact, which are based on a normative view of stakeholder theory.FindingsIn terms of inclusivity, stakeholder engagement is primarily monologic and is directed more towards traditional stakeholder groups. However, social media, which is gaining popularity, has the potential to facilitate greater dialogic stakeholder engagement. While most companies undertake a materiality assessment (with varying degrees of rigour) to support sustainability reporting, only some use it to drive planning and decision-making. Companies demonstrate responsiveness to stakeholder concerns through corporate governance and sustainability initiatives. Companies are monitoring and measuring their impact on stakeholders using sustainability key performance indicators (KPIs). However, measuring traditional metrics is easier than measuring areas such as the community. In rare instances, the executive’s remuneration is linked to these sustainability KPIs.Practical implicationsThe study findings offer useful examples of the integration of sustainability into corporate processes and systems. Practitioners may find the insights useful in understanding how sustainability is currently being integrated into corporate practices by best practice New Zealand companies. Regulators may consider incorporating AA1000AP into their corporate governance guidelines. Finally, academics may find the study useful for teaching business and accounting courses and to guide the next generation of business managers.Originality/valueFirst, the study brings together four streams of research on how sustainability reports are prepared (inclusivity, materiality, responsiveness and impact) in a single study. Second, the findings offer novel insights by evaluating corporate sustainability against the requirements of a standard that has received little academic attention.

The diffusion of sustainability key performance indicators in a developing country context

PurposeDrawing upon Abrahamson's (1991) typology of innovation diffusion, this study aims to investigate the factors underpinning diffusion of sustainability key performance indicators (SKPIs) in a developing country.Design/methodology/approachA qualitative study was conducted in Sri Lanka involving semi-structured interviews with managers, as users of SKPIs (demand-side), and both consultants and academics, as agents in diffusion process (supply-side).FindingsDiffusion of SKPIs was found to be driven by efficient-choice considerations, with fashion motives intertwined with these. The diffusion was influenced by developing country context issues relating to market competition, education, government and culture. It was somewhat surprising that market forces played a key role to the extent they did. Minimal stakeholder pressure was found to undermine the diffusion process, contrasting with developed countries in which key stakeholders act as catalysts. The developing country context appears to slow down the pace, rather than alter the pattern, of diffusion of SKPIs.Research limitations/implicationsThis study is limited by its focus on SKPI adopters, which does not permit to draw insights regarding motivations of non-adopters.Originality/valueThis study draws upon Abrahamson's typology to explore the diffusion of SKPIs in the poorly understood developing country context. The findings provide insights into driving forces behind diffusion of SKPIs, suggesting the developing country context creates “stickiness” that influences pace rather than the pattern of diffusion of SKPIs.

PARADIS - A process integrating tool for rapid generation and evaluation of holistic renovation scenarios

Recent research in building renovation seeks methods for the development of more holistic renovation scenarios that live up to a broader set of sustainability objectives and criteria, and that involve more stakeholders in the earlier stages of the design process. This paper presents a methodology for development of a Building Information Modeling (BIM) based decision support system PARADIS, which generates and evaluates optimal and holistic renovation scenarios tailored toward the renovation of dwellings in a Danish context. PARADIS supports the renovation sector with the following features: (a) optimizing the selection process of renovation alternatives, and the generation of renovation scenarios, through specific renovation typologies and constraints; (b) evaluating standard sustainability Key Performance Indicators (e.g. energy consumption, investment cost, indoor thermal comfort, etc.) over the generated renovation scenarios; and (c) visualizing the generated renovation scenarios for ease of comprehension by the designers, and for enabling discussion between expert stakeholders (i.e. engineers, contractors, facilities managers) and non-expert stakeholders (e.g. building occupants, owners, etc.). PARADIS thus supports informed decision making for optimal renovation scenario design. The first complete integrated toolchain, including a ready-to-release prototype of the PARADIS Revit plug-in, is demonstrated in this paper and empirically evaluated on a large apartment block in Denmark.

Sustainability key performance indicators and the global reporting initiative: usage and challenges in a developing country context

PurposeFirst, this paper aims to explore the extent of the global reporting initiative (GRI) sustainability key performance indicator (KPI) usage in sustainability reporting by businesses operating in Sri Lanka. Second, using a contingency theory approach, this research examines the factors which promote or inhibit the use of the GRI framework to adopt sustainability KPIs in a developing country context, Sri Lanka.Design/methodology/approachContent analysis and semi-structured interviews are used in this study to explore the key factors which affect the usage of the GRI framework by Sri Lankan companies in adopting sustainability KPIs and reporting on sustainability.FindingsThe findings indicate that the GRI framework is increasingly used for sustainability reporting by Sri Lankan companies because of its flexibility, consistency, legitimacy and its focus on continuous improvement. However, company managers also shed light on the extensive number of KPIs in the GRI framework making selections challenging and the consequent difficulties associated with adapting these KPIs for companies operating in a developing country context.Research limitations/implicationsThis study contributes to extending the broader literature on sustainability reporting in developing countries and specifically on sustainability KPIs. Second, this paper adds to the current empirical research on sustainability reporting in Sri Lanka where the literature is still sparse. Third, this study highlights the key factors that support or hinder the usage of the GRI framework in a developing country context.Practical implicationsImportant insights for GRI, other standard-setting agencies and businesses can be drawn from the findings of this study. By capitalising further on the training and the educational courses provided by GRI, GRI can be involved in mitigating some of the pressing issues faced by the reporting companies.Originality/valueThis study adds to the limited research on sustainability reporting and sustainability KPIs in developing country contexts. It shows how companies in Sri Lanka are engaging with sustainability KPIs and sustainability reporting, but are also constrained by the GRI framework as its standards are not tailored to issues in developing countries.

Application of principles from the International < IR > Framework for including sustainability disclosures within South African integrated reports

With the introduction of integrated reporting, organisations are now encouraged to integrate sustainability disclosures within their integrated reports, in addition to traditional sustainability reporting practices. The purpose of this study is to investigate whether the International < IR > Framework (the Framework) led to a change in how South African listed companies included sustainability disclosures in their integrated reports, looking specifically at the degree of integration of sustainability disclosures, the use of sustainability key performance indicators (KPIs), and the materiality and balance of sustainability disclosures included, which are all based on principles in the Framework. Interpretive content analysis is used to compare the integrated reports in 2011, when integrated reporting became mandatory in South Africa, and 2015, when the Framework was adopted. The results show that there was a significant change in the level of integration and materiality of sustainability disclosures, but there was no significant change in the use of KPIs and the balance of disclosures. This study does not seek to measure the quality of the sustainability disclosures included in the integrated reports beyond the level of the application of Framework principles. This study provides unique insight into how South African companies adapted their sustainability disclosures within their integrated reports in response to the Framework.

Sustainability Key Performance Indicators in Islamic Banking Sectors of Malaysia and Pakistan: A Scale Based Evidence

The marvelous development in the Islamic banking necessitates sustainable practices in the emerging industry. This study intends to ascertain the most followed or usual sustainability key performance indicators (KPIs) in the Islamic banking industry of Malaysia and Pakistan. For developing the sustainability KPIs index, the study follows the systematic steps as highlighted by prior such studies. The index composed of 109 items in 7 main sections of sustainability reporting adapted to collect data through content analysis for 21 Islamic banks from both the countries for the year 2016. Despite significant heterogeneity among the Islamic banks of the two countries, it is found that they show good compliance with the sustainability indicators. Though the Islamic banking industry of Pakistan is small than that of Malaysia, but still it is good in reporting sustainable practices except for environment and product responsibility, where the latter has an edge over the former. The study contributes a theoretical deliverable i.e. sustainability KPIs index for the Islamic banking industry through testing it with data from 21 Islamic banks from Malaysia and Pakistan. The findings could be significant for practitioners, regulators, policymakers, and especially the Islamic banking industry of both countries.