Developing a composite sustainability index for real estate projects using multiple criteria decision making

Abstract

Increasing interest in the incorporation of sustainability concerns at different levels of the decision-making process has taken place over the years. This means that firm activity should not be exclusively driven by economic objectives, but also take into account both environmental demands and social needs. It is widely known that business projects are one of the most effective ways to promote change in organizations. For this reason, business projects in the real estate industry are of great importance for countries’ economies, namely due to the significant impact that the real estate sector has on the environment and the society. This paper sought to develop a composite sustainability index for real estate projects by using multiple criteria decision making (MCDM) methods. After validation, the practical application of our index ranked environmental criteria in first place. These were followed by social criteria and then economic criteria. The results also reveal that the involvement of additional stakeholders can affect the structure of the composite index. Advantages, shortcomings and managerial implications of our proposal are also discussed.