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Integrating Sustainability into Risk Management through Analytical Network Process

Author

Listed:
  • Eliana Judith Yazo-Cabuya

    (Facultad de Ciencias Naturales e Ingeniería, Universidad de Bogotá Jorge Tadeo Lozano, Carrera 4 #22-61, Bogotá 110311, Colombia)

  • Asier Ibeas

    (Departamento de Telecomunicaciones e Ingeniería de Sistemas, Universitat Autònoma de Barcelona, 08193 Barcelona, Spain)

  • Jorge Aurelio Herrera-Cuartas

    (Facultad de Ciencias Naturales e Ingeniería, Universidad de Bogotá Jorge Tadeo Lozano, Carrera 4 #22-61, Bogotá 110311, Colombia)

Abstract

Sustainable risk management is becoming widely accepted, making the incorporation of environmental, social, and governance (ESG) issues into strategic planning areas crucial to a responsible business philosophy. This article aims to rank organizational sub-risks with a focus on sustainability, offering a methodology based on the analytical network process (ANP) method to improve decision-making and reduce misrepresentation in qualitative evaluation criteria. An integrated approach is presented, starting with the characterization of five risk typologies based on global reports and then prioritizing risks and sub-risks using the ANP method. The sustainability sub-risks with the highest level of prioritization for each risk typology are (1) massive data fraud or theft incident (technological risk), (2) deficit in economic growth (economic risk), (3) water depletion (environmental risk), (4) lack of ethics in the conduct of business (geopolitical risk), and (5) chemical safety (social risk). Finally, a cosine similarity analysis is developed to compare the results obtained with the results of a risk prioritization performed with the analytical hierarchy process (AHP) method. The differences between the methods generate a similar risk prioritization; the high similarity indicates the consistency of the relationships and the prioritization of the criteria showing convergence. It is essential to mention that the results should be interpreted cautiously, considering the specific context in which this methodology is developed, and we recommend a periodic verification of risks and sub-risks.

Suggested Citation

  • Eliana Judith Yazo-Cabuya & Asier Ibeas & Jorge Aurelio Herrera-Cuartas, 2024. "Integrating Sustainability into Risk Management through Analytical Network Process," Sustainability, MDPI, vol. 16(6), pages 1-28, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:6:p:2384-:d:1356347
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    References listed on IDEAS

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    1. Daimi, Sarra & Rebai, Sonia, 2023. "Sustainability performance assessment of Tunisian public transport companies: AHP and ANP approaches," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    2. Wolfgang Ossadnik & Stefanie Schinke & Ralf H. Kaspar, 2016. "Group Aggregation Techniques for Analytic Hierarchy Process and Analytic Network Process: A Comparative Analysis," Group Decision and Negotiation, Springer, vol. 25(2), pages 421-457, March.
    3. Labiba Noshin Asha & Ying Huang & Nita Yodo & Haitao Liao, 2023. "A Quantitative Approach of Measuring Sustainability Risk in Pipeline Infrastructure Systems," Sustainability, MDPI, vol. 15(19), pages 1-17, September.
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