Integrating Sustainability into Risk Management through Analytical Network Process

Eliana Judith Yazo-Cabuya (), Asier Ibeas and Jorge Aurelio Herrera-Cuartas
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Eliana Judith Yazo-Cabuya: Facultad de Ciencias Naturales e Ingeniería, Universidad de Bogotá Jorge Tadeo Lozano, Carrera 4 #22-61, Bogotá 110311, Colombia
Asier Ibeas: Departamento de Telecomunicaciones e Ingeniería de Sistemas, Universitat Autònoma de Barcelona, 08193 Barcelona, Spain
Jorge Aurelio Herrera-Cuartas: Facultad de Ciencias Naturales e Ingeniería, Universidad de Bogotá Jorge Tadeo Lozano, Carrera 4 #22-61, Bogotá 110311, Colombia

Sustainability, 2024, vol. 16, issue 6, 1-28

Abstract: Sustainable risk management is becoming widely accepted, making the incorporation of environmental, social, and governance (ESG) issues into strategic planning areas crucial to a responsible business philosophy. This article aims to rank organizational sub-risks with a focus on sustainability, offering a methodology based on the analytical network process (ANP) method to improve decision-making and reduce misrepresentation in qualitative evaluation criteria. An integrated approach is presented, starting with the characterization of five risk typologies based on global reports and then prioritizing risks and sub-risks using the ANP method. The sustainability sub-risks with the highest level of prioritization for each risk typology are (1) massive data fraud or theft incident (technological risk), (2) deficit in economic growth (economic risk), (3) water depletion (environmental risk), (4) lack of ethics in the conduct of business (geopolitical risk), and (5) chemical safety (social risk). Finally, a cosine similarity analysis is developed to compare the results obtained with the results of a risk prioritization performed with the analytical hierarchy process (AHP) method. The differences between the methods generate a similar risk prioritization; the high similarity indicates the consistency of the relationships and the prioritization of the criteria showing convergence. It is essential to mention that the results should be interpreted cautiously, considering the specific context in which this methodology is developed, and we recommend a periodic verification of risks and sub-risks.

Keywords: organizational risks with a focus on sustainability; risk management; multi-criteria decision-making methodologies (MCDM); analytical hierarchy process (AHP); analytical network process (ANP) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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