Sustainable practices index for road construction companies - a hierarchical framework

Abstract

In the alignment of ESG (Environmental, Social and Governance) growing importance for investments' decisions this paper presents an index for evaluating sustainable practices of road construction companies. For assessing the sustainable practices, it was developed a hierarchical framework based on environmental, social, and economic dimensions. The practices' themes and its respective practices were found in the literature, and were selected and validate by an expert' panel. That resulted in 12 practices themes and the 37 most relevant practices to the road construction sector. For each practice it was established a set of indicators. For the sustainable practices index, the dimensions and practice's themes weights were determined using the Simplified Process Hierarchical Analysis method, applied to a second experts' panel. By linking the sustainable practices to measurable indicators, it was possible to attain an overall sustainable practices index for road construction companies. The SPC method used in this case study emphasized practices in the social and environmental dimensions, with weights of 0.459 and 0.344. The framework elaborated is practical and expeditious, which has a feasible approach to tackling main ESG issues, helping road construction companies and governments preparedness for the new demands of investors and stakeholders.