Evaluating Environmental, Social, and Governance Criteria and Green Finance Investment Strategies Using Fuzzy AHP and Fuzzy WASPAS

• Published in: Sustainability 2023-04, Vol.15 (8), p.6786
• Main Authors: Meng, Xiaokai, Shaikh, Ghulam Muhammad
• Format: Article
• Language: English
• Subjects: Banking industry; Business; Carbon; Climate change; Corporate governance; Corporate social responsibility; Corporate sustainability; Criteria; Decision making; Environmental policy; Evaluation; Financial institutions; Fuzzy algorithms; Fuzzy logic; Fuzzy systems; International finance; Investment advisors; Investment policy; Investments; Literature reviews; Management; Performance evaluation; Rankings; Social aspects; Social factors; Socially responsible investments; Sustainability; Sustainable development
• ISSN: 2071-1050; 2071-1050
• DOI: 10.3390/su15086786

The evaluation and prioritization of environmental, social, and governance (ESG) factors are critical for green finance investment strategies. However, ESG criteria are complex and varied concepts that call for a systematic and reliable ranking system to handle ambiguity and uncertainty in decision-makers’ preferences and assessments. The objective of this study was to examine and prioritize environmental, social, and governance (ESG) factors and investment strategies for the development of green finance. Although ESG criteria have gained importance recently, some research gaps still need to be filled. For this purpose, evaluating ESG criteria and integrating them with green finance investment strategies is imperative. This study employed the fuzzy analytical hierarchy process (AHP) method to assess and rank ESG criteria and sub-criteria and the fuzzy weighted aggregated sum product assessment (WASPAS) method to assess and prioritize the key investment strategies for the development of green finance. According to the fuzzy AHP findings, governance and social factors are secondary to environmental considerations in the creation of green finance. Green bonds, ESG integration, and renewable energy funds are essential to green finance methods, according to the fuzzy WASPAS data. This research provides information on creating sustainable and ethical investment strategies for green finance and successfully including ESG factors in investment decision-making processes.