Efficiency and ranking of sustainability index of India using DEA-TOPSIS

Abstract

Purpose

This study aims to assign efficiency score and then ranking the Indian companies known for best practices to control carbon-emission in the environment. It is destined to benchmark one company for best performance on the basis of selected alternatives among its peer group companies.

Design/methodology/approach

The present study has used a hybrid model by applying data envelopment analysis (DEA)-technique for order performance by similarity to ideal solution (TOPSIS) to measure the efficiency and ranking of various decision units on the basis of specified variables.

Findings

The findings of DEA have given the best alternative or best decision-making unit (DMU) among the set of 25 DMUs considered for empirical testing. The DEA technique is used with TOPSIS, which is another popular multi-criteria decision model. The integrated DEA-TOPSIS model has helped to compute the efficiency score of all 25 DMUs of study and also provide a unique rank to each of the efficient unit identified with the help of DEA technique.

Practical implications

The findings of the study have provided Benchmark Company amongst the companies following best practices for saving energy and having best operating profits too. This benchmark business unit can be studied extensively by peer group companies to compare various parameters affecting their efficiency and profits both.

Social implications

The findings of the study will promote the socially responsible practices by corporate citizens and adopt the practices to reduce their carbon footprints. It will also suggest to socially responsible investors to select the benchmark and most efficient companies for investment purpose.

Originality/value

The study is original in terms of measuring efficiency and ranking of companies known for best practices for controlling their carbon footprints and suggesting a benchmark company to its peer group. Also, the integrated approach of using DEA-TOPSIS for such type of studies also makes it distinctive from earlier work done in the related field.

Citation

Mehta, K., Sharma, R. and Vyas, V. (2019), "Efficiency and ranking of sustainability index of India using DEA-TOPSIS", Journal of Indian Business Research, Vol. 11 No. 2, pp. 179-199. https://doi.org/10.1108/JIBR-02-2018-0057