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ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Organizations
Volume 5 - 2024 |
doi: 10.3389/frsus.2024.1417512
Sustainable Performance Evaluation of the Banking Industry Based on CPT-TOPSIS: A Case Study of Commercial Banks in China
Provisionally accepted- Inner Mongolia Technical College of Construction, Hohhot, China
The issue of sustainable development in financial institutions has become a primary concern for both the industry and investors. This study proposes a comprehensive decision-making method by integrating Cumulative Prospect Theory (CPT) with the traditional TOPSIS model for the sustainability assessment of commercial banks. Building on previous research, this study establishes a multi-criteria framework under the Global Reporting Initiative (GRI) that includes five major dimensions: economic, social, environmental, governance, and financial, along with 15 indicators. The study employs this model to conduct a comprehensive evaluation of five Chinese commercial banks. The results indicate that the Bank of China (BOC) ranked first in sustainability performance, particularly excelling in the environmental dimension compared to the second-ranked Industrial and Commercial Bank of China (ICBC), highlighting the importance of environmental indicators in the sustainability assessment of commercial banks. Empirical analysis shows that this model considers cognitive biases at the psychological level while accounting for uncertainties and risk preferences, offering significant advantages over the entropy-weighted TOPSIS model. The contribution of this paper lies in the pioneering introduction of Cumulative Prospect Theory into the study of sustainable development in Chinese commercial banks, combined with 15 related indicators under the GRI framework, providing new theoretical and practical insights for banking performance and sustainability research. This model effectively narrows the gap between the sustainability assessment practices of large Chinese commercial banks and international standards and holds promise as a useful tool for analyzing and improving sustainable development strategies in the banking sector.
Keywords: sustainable development, Cumulative prospect theory, TOPSIS model, Commercial banks, Multi-criteria Decision Analysis
Received: 15 Apr 2024; Accepted: 27 Aug 2024.
Copyright: © 2024 Lu. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence:
Chao Lu, Inner Mongolia Technical College of Construction, Hohhot, China
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