Multicriteria Decision Analysis (MCDA) for Sustainability Assessment in EU Countries

This paper evaluates the environmental, social, and governance (ESG) performance of the 27 member states of the European Union (EU) to look at the urgent issue of sustainability within the EU. ESG criteria have emerged as critical metrics for measuring the sustainability and ethical impact of both corporate entities and nations. Considering the growing significance of these assessments in influencing responsible investment and policy decisions, this research ranks and evaluates the sustainability performance of EU member states using six multicriteria decision-making (MCDM) techniques: TOPSIS, PROMETHEE II, VIKOR, SIR, ELECTRE, MURAME. Using data from the World Bank for the year 2021, 23 ESG criteria were selected, which included environmental protection, social rights, and governance quality. The selected criteria were carefully normalised using three different normalisation techniques: Vector Normalisation, Maximum Row Normalisation, and Maximum Column Normalisation. In order to guarantee consistency and robustness within the rankings generated by the six MCDM approaches, each normalisation technique was used. The findings underscore the importance of method selection and normalisation in ESG assessments, as different MCDM methods and normalisation techniques can lead to different outcomes. However, the study also demonstrates the value of using multiple methods in tandem to capture the multi-dimensional nature of sustainability.