A Quantitative Approach for Assessing Sustainability Performance of Corporations

This paper proposes a probabilistic model for assessing corporate sustainability performance. The need for probabilistic approaches to sustainability measurement is on the rise. Existing approaches to measuring strong sustainability, which emphasize the non-substitutability of resources, overwhelmingly focus on the national- or regional-levels. Few “strong” sustainability models explicitly address performance at the company level. The model proposed in this paper is also unique in that it addresses situations where the variables used to measure performance are dependent on one another. Existing approaches focus on independent variables. The model is provided in a generalized form and offers a straightforward approach to assessing the sustainability performance of corporations. Also discussed in the paper are some managerial and academic implications of the model.