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Environmental corporate responsibility for investments evaluation: an alternative multi-objective programming model

Author

Listed:
  • Panos Xidonas

    (ESSCA École de Management)

  • Haris Doukas

    (National Technical University of Athens)

  • George Mavrotas

    (National Technical University of Athens)

  • Olena Pechak

    (National Technical University of Athens)

Abstract

Current financial and economic crisis, as well as growing environmental pressures put seriously under question traditional development patterns. The need to develop alternative models able to address current economic situation through the exploitation of sustainable patterns is of crucial importance. The innovation of this current study is the incorporation of energy and environmental corporate responsibility (EECR) in decision making, supporting particularly the development of a new model for investment evaluation. A bi-objective programming model is introduced in order to provide the Pareto optimal portfolios (Pareto set) based on the net present value of projects and the EECR score of firms. A systematic decision making approach using Monte Carlo simulation and multi-objective programming is also developed in order to deal with the inherent uncertainty in the objective functions’ coefficients. The robustness of the Pareto set as a whole, as well as the robustness of the individual Pareto optimal portfolios is also assessed. The proposed approach facilitates banking organizations and institutions to the selection of firms applying for financial support and credit granting, within the frame of their EECR. Finally, an illustrative real-world application of the proposed model is presented.

Suggested Citation

  • Panos Xidonas & Haris Doukas & George Mavrotas & Olena Pechak, 2016. "Environmental corporate responsibility for investments evaluation: an alternative multi-objective programming model," Annals of Operations Research, Springer, vol. 247(2), pages 395-413, December.
    • Handle: RePEc:spr:annopr:v:247:y:2016:i:2:d:10.1007_s10479-015-1820-x
    DOI: 10.1007/s10479-015-1820-x
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    2. Li-Ting Yeh, 2021. "Integrating corporate image of corporate social responsibility, stock price crash risk and profitability into a dynamic corporate sustainability performance measurement," Annals of Operations Research, Springer, vol. 305(1), pages 325-345, October.
    3. K. Liagkouras & K. Metaxiotis & G. Tsihrintzis, 2022. "Incorporating environmental and social considerations into the portfolio optimization process," Annals of Operations Research, Springer, vol. 316(2), pages 1493-1518, September.
    4. Fernando García & Jairo González-Bueno & Javier Oliver & Nicola Riley, 2019. "Selecting Socially Responsible Portfolios: A Fuzzy Multicriteria Approach," Sustainability, MDPI, vol. 11(9), pages 1-14, April.
    5. Gkonis, Nikolaos & Arsenopoulos, Apostolos & Stamatiou, Athina & Doukas, Haris, 2020. "Multi-perspective design of energy efficiency policies under the framework of national energy and climate action plans," Energy Policy, Elsevier, vol. 140(C).
    6. Sujeet Kumar Singh & Shiv Prasad Yadav, 2018. "Intuitionistic fuzzy multi-objective linear programming problem with various membership functions," Annals of Operations Research, Springer, vol. 269(1), pages 693-707, October.
    7. Chen-En Hou & Wen-Min Lu & Shiu-Wan Hung, 2019. "Does CSR matter? Influence of corporate social responsibility on corporate performance in the creative industry," Annals of Operations Research, Springer, vol. 278(1), pages 255-279, July.

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