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A ESG rating model for European SMEs using multi-criteria decision aiding

Author

Listed:
  • Diana Barro

    (Department of Economics, Ca' Foscari University of Venice)

  • Marco Corazza

    (Department of Economics, Ca' Foscari University of Venice)

  • Gianni Filograsso

    (Department of Economics, Ca' Foscari University of Venice)

Abstract

Through ESG assessment, companies can effectively measure their exposure to environmental, social, and governance (ESG) risks identifying opportunities for long-term sustainable growth and future social and environmental impact. This process is crucial for listed small and medium-sized enterprises (SMEs) wanting additional support in their ESG transition. The importance of such assessments will only intensify in the future as the implementation of the Sustainable Finance Disclosure Regulation (SFRD) and the Corporate Sustainability Reporting Directive (CSRD) will require all listed companies to be on equal footing. In this contribution, we propose to apply a multi-criteria method (MURAME) to assess the sustainability profiles of SMEs. The methodology, which allows for measuring a firm's environmental, social, and governance (ESG) efforts, is applied to a sample of European-listed SMEs with the aim of identifying ESG leaders and laggards and analyzing potential sector-specific effects. The obtained ranking results show some degree of robustness across different model parameterizations. Furthermore, we propose to model the benefits of voluntary disclosure of sustainability information under a prudential scoring framework.

Suggested Citation

  • Diana Barro & Marco Corazza & Gianni Filograsso, 2023. "A ESG rating model for European SMEs using multi-criteria decision aiding," Working Papers 2023: 27, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2023:27
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    corporate social responsibility; sustainability policy; small- and medium-sized enterprises; multi-criteria decision making;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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