Constructing the FEEM Sustainability Index: A Choquet-Integral Application

33 Pages Posted: 14 Mar 2013

See all articles by Caterina Cruciani

Caterina Cruciani

Ca Foscari University of Venice - Department of Management

Silvio Giove

Ca Foscari University of Venice - Dipartimento di Economia

Mehmet Pinar

Fondazione Eni Enrico Mattei (FEEM)

Matteo Sostero

Fondazione Eni Enrico Mattei

Multiple version iconThere are 2 versions of this paper

Date Written: March 13, 2013

Abstract

This paper presents an application of a multi-attribute aggregation methodology to the construction of a sustainability index. Sustainability is a multi-faceted issue, in which synergies or conflicts may arise among the different components, thus making it a complex concept to which multi attribute methods can be employed. This paper addresses the development of the FEEM Sustainability Index (FEEM SI), a composite index including 19 different indicators grouped in the three classical pillars of sustainability ‒ economic, social and environmental. We present the relevance of multi-attribute aggregation methodologies when dealing with such complex concepts and provide an aggregation methodology used for this case study, the Choquet-integral aggregation. First, we normalize each sustainability indicator with the use of a benchmarking procedure with a smooth target of sustainability. Furthermore, an ad-hoc questionnaire implemented to assess the importance of each sustainability indicator and their interaction with other indicators through expert elicitation. After normalizing each sustainability indicator and computing consensus importance of each sustainability indicator and their interactions for the Choquet-integral aggregation procedure, the overall sustainability index, the FEEM SI is calculated. This paper also conducts robustness analysis and discusses the main implications of the aggregation methodology used.

Keywords: Sustainability Indices, Composite Indicators, Choquet Integral, Multiattribute Value Theory

JEL Classification: C43, C44, Q01, Q56

Suggested Citation

Cruciani, Caterina and Giove, Silvio and Pinar, Mehmet and Sostero, Matteo, Constructing the FEEM Sustainability Index: A Choquet-Integral Application (March 13, 2013). FEEM Working Paper No. 16.2013. Available at SSRN: https://ssrn.com/abstract=2232729 or http://dx.doi.org/10.2139/ssrn.2232729

Caterina Cruciani

Ca Foscari University of Venice - Department of Management ( email )

San Giobbe, Cannaregio 873
Venice, 30121
Italy

Silvio Giove

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Mehmet Pinar (Contact Author)

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

Matteo Sostero

Fondazione Eni Enrico Mattei ( email )

Campo S. M. Formosa, Castello 5252
Venezia, 30122
Italy

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