The sustainability balanced scorecard as a framework for selecting socially responsible investment: An effective MCDM model

W. H. Tsai, W. C. Chou, W. Hsu

Research output: Contribution to journalArticlepeer-review

143 Scopus citations

Abstract

In recent years, sustainable development and social responsibility have become important issues around the globe. Investors are interested in the so-called socially responsible investment (SRI), an investment strategy that employs criteria other than financial risk and return when selecting firms in which to invest. The practice of SRI shows that there are growing numbers of investors who want to take account of more criteria. Given this worldwide trend, the question arises how these issues can be incorporated into the investment decision process. This paper proposes a novel integrated model for selecting SRI stocks and illustrates the practical application of such a model through a case study. This model first applied the decision making trial and evaluation laboratory (DEMATEL) approach to deal with the interdependencies existing among the criteria of organization requires, and then integrated the DEMATEL, the analytic network process, and the zero-one goal programming method to select an optimal portfolio of SRI. Additionally, we used the sustainability balanced scorecard as a multi-criteria framework for SRI evaluation. This integrated model enables the management to obtain the fitting SRI portfolio and achieves the desired spiritual value.

Original languageEnglish
Pages (from-to)1396-1410
Number of pages15
JournalJournal of the Operational Research Society
Volume60
Issue number10
DOIs
StatePublished - Oct 2009

Keywords

  • Analytic network process (ANP)
  • DEMATEL
  • Socially responsible investment (SRI)
  • Sustainability balanced scorecard
  • Zero-one goal programming (ZOGP)

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