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Rating ESG key performance indicators in the airline industry

Author

Listed:
  • Alan Francisco Caraveo Gomez Llanos

    (Constructor University)

  • Annas Vijaya

    (Constructor University
    Universitas Ma Chung)

  • Hendro Wicaksono

    (Constructor University)

Abstract

The environmental, social, and governance (ESG) integration finds itself in a transition with rapid developments worldwide, given that the pandemic incentivized companies and investors to focus on other social and governance measures such as ESG ratings. However, the divergence of ratings from the ESG and a lack of transparency lead the companies to report voluntary indicators without standardization. This study aimed to identify the ESG criteria and the most suitable set of key performance indicators (KPIs) in the airline industry after the impact of COVID-19. Furthermore, the second objective was to determine the appropriate weights and ranking of the identified criteria. The multi-criteria decision-making analytical hierarchical process was applied for this purpose. Additionally, the use of intuitionistic variables delivers a comprehensive model for rating the airlines according to their ESG performance. The most relevant criteria found in the study were critical risk management, greenhouse gas emissions, and systemic risk management. Regarding the KPIs, the top-3 weights were the number of flight accidents, jet fuel consumed and sustainable aviation used, and the number of digital transformation initiatives.

Suggested Citation

  • Alan Francisco Caraveo Gomez Llanos & Annas Vijaya & Hendro Wicaksono, 2024. "Rating ESG key performance indicators in the airline industry," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 27629-27653, November.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:11:d:10.1007_s10668-023-03775-z
    DOI: 10.1007/s10668-023-03775-z
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    References listed on IDEAS

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