Assessing the Environmental Sustainability Performance of the Banking Sector: A Novel Integrated Grey Multi-Criteria Decision-Making (MCDM) Approach

The objective of this work is to analyze the environmental sustainability performance of deposit banks traded in Borsa Istanbul (BIST) through the application a novel integrated grey Multi-Criteria Decision-Making (MCDM) approach.The grey combined model proposed for the assessment of environmental performance in the banking sector integrates the Logarithmic Objective Weighting Based on Percentage Change (LOPCOW) and Proximity Indexed Value (PIV) algorithms.In the first stage, the importance weights of the criteria were determined using the Grey LOPCOW objective weighting technique, which enables a comprehensive and robust weighting system.Following this, the Grey PIV method was employed to assess the banks' environmental sustainability performance.To demonstrate the robustness and applicability of the suggested MCDM framework, several sensitivity analyses and comparative assessments were conducted.The empirical findings imply that the most significant environmental performance indicator affecting the environmental sustainability performance of deposit banks is "amount of disposed waste".Moreover, Yap Kredi was identified to be the bank with the highest environmental sustainability performance compared to its competitors in the BIST banking industry.The findings obtained through sensitivity and comparative analyses indicate that the introduced hybrid decision model in the existing work constitutes a robust, defendable, and effective framework for assessing the environmental sustainability performance of banking institutions.Lastly, the findings have important implications for bank management, regulators, and policymakers, offering valuable insights for the enhancement of sustainability practices within the banking industry.This work contributes to the growing body of literature on environmental performance measurement in the financial sector and provides a methodological foundation for future sustainability assessments in similar contexts.