Paper Number
ECIS2026-2068
Paper Type
CRP
Abstract
Organisations increasingly adopt Environmental, Social, and Governance (ESG) principles, yet managing ESG performance remains challenging due to the complexity of identifying and analysing interdependent Key Performance Indicators (KPIs). Existing approaches, such as Multi-Criteria Decision-Making, rely on subjective judgment and assume static relationships, limiting systemic analysis. This study introduces SD4ESG, a simulation-aided method that leverages System Dynamics to model KPI interdependencies, simulate performance trajectories, and support scenario-based decision-making. Following an echeloned design science research approach, SD4ESG was iteratively developed through expert interviews and validated in two focus group studies using mock-up and real-world cases. The method enables organisations to select high-impact KPIs by evaluating trade-offs across ESG dimensions and to prioritize investments based on dynamic analysis. SD4ESG enhances organisational resilience by stress-testing scenarios under evolving disclosure requirements. This study contributes to IS research by operationalizing simulation for sustainability analytics and providing organisations actionable insights for dynamic KPI analysis and resource allocation.
Recommended Citation
Muselaers, Thijn; van de Ven, Montijn Renard; Aysolmaz, Banu; Ozkan, Baris; and Turetken, Oktay, "Selecting Key Performance Indicators For Environmental, Social, And Governance: A Simulation-Aided Method" (2026). ECIS 2026 Proceedings. 12.
https://aisel.aisnet.org/ecis2026/is_resil/isresilience/12
Selecting Key Performance Indicators For Environmental, Social, And Governance: A Simulation-Aided Method
Organisations increasingly adopt Environmental, Social, and Governance (ESG) principles, yet managing ESG performance remains challenging due to the complexity of identifying and analysing interdependent Key Performance Indicators (KPIs). Existing approaches, such as Multi-Criteria Decision-Making, rely on subjective judgment and assume static relationships, limiting systemic analysis. This study introduces SD4ESG, a simulation-aided method that leverages System Dynamics to model KPI interdependencies, simulate performance trajectories, and support scenario-based decision-making. Following an echeloned design science research approach, SD4ESG was iteratively developed through expert interviews and validated in two focus group studies using mock-up and real-world cases. The method enables organisations to select high-impact KPIs by evaluating trade-offs across ESG dimensions and to prioritize investments based on dynamic analysis. SD4ESG enhances organisational resilience by stress-testing scenarios under evolving disclosure requirements. This study contributes to IS research by operationalizing simulation for sustainability analytics and providing organisations actionable insights for dynamic KPI analysis and resource allocation.