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Using triple bottom line metrics and multi-criteria methodology in corporate settings

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journal contribution
posted on 2017-03-23, 09:28 authored by Lanka Thabrew, Debra Perrone, Alexandra Ewing, Mark Abkowitz, George Hornberger

With the growing importance of environmental sustainability in the corporate sector, businesses are compelled to progress from assessing and benchmarking their environmental impact to making decisions on how to prioritize impact reduction alternatives. Most often, business decisions are driven by financial metrics, but with sustainability improvements becoming a business goal, it is also important to assess metrics from environmental and social spheres; nevertheless, practically and systematically performing such an assessment is challenging. We present an application of a multi-criteria decision analysis (MCDA) method that addresses the aforementioned challenges in a corporate setting. Our case study company – one of the largest inland marine freight carriers in the United States – promotes a business culture focused on financially viable, yet socially and environmentally responsible solutions. Thus, we combine life cycle analysis (LCA), financial calculation methods, and corporate surveys to quantify environmental, economic, and social performance measures, respectively. Multiattribute utility theory is integrated with analytic hierarchy processes (AHPs) and fuzzy analysis to create a carefully designed framework for corporations with diverse groups of stakeholders. With company leadership, implementation is feasible and successful at prioritizing alternatives among diverse stakeholders. The process provides a platform for negotiation and promotes discussions on decision drivers. The use of MCDA methodologies promoted the inclusion of a suite of metrics that aligned with the company's sense of social and environmental responsibility, generating an in-depth analysis of the alternatives that factored in other things besides economics. Return-on-investments (ROI) calculations, the typical approach used in the corporate setting, would have required significantly less time and effort from the company, but the results of our MCDA application indicated that inclusion of triple bottom line metrics delve deeper into stakeholder preferences. Thus, our case study company gained a holistic view of the candidate alternatives, in addition to creating a platform for structured discussions about company goals and priorities.

Funding

The financial support for this study was obtained from the case study company and the Vanderbilt Institute for Energy and Environment.

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