Short CommunicationEvaluations of corporate sustainability indicators based on fuzzy similarity graphs

- Fuzzy evaluations of (in)consistencies of 17 sustainability indicators and their subsets is described in details.
- Four subsets of sustainability indicators are represented by different fuzzy similarity graphs and pairwise similarities of these graphs are evaluated.
- The most similar pairs of graphs are those where the Corporate Governance graph is considered.

The paper deals with inconsistencies of composite sustainability indicators and their different subsets (economic, environmental, social, and corporate governance). Corporate sustainability performance is usually highly nonlinear, vague, partially inconsistent and multidimensional. The resulting models are often oversimplified. The key reason is an information shortage which eliminates the unsophisticated applications of classical statistical methods. Numbers are accurate and information intensive. Verbal quantifications are less accurate and therefore not that information intensive. Fuzzy sets and fuzzy reasoning are used to make verbal quantifiers suitable for computer applications. A fuzzy similarity graph is defined. A team of experts identified 17 relevant variables (e.g. Environmental costs, Occupational diseases, Number of complaints received from stakeholders) and 12 company data sets are available. Each company is presented as a fuzzy conditional statement. A set of fuzzy pairwise similarities is generated and used to evaluate five similarity graphs: a Total Graph (based on all 17 variables) and graphs based on relevant specific subsets of variables, Economic, Environmental, Social and Corporate Governance graphs. The topologies of these graphs are significantly different. No prior knowledge of fuzzy reasoning is required.