A dynamic framework for benchmarking sustainability in water utilities

Ensuring the sustainability of water utilities (WUs) is crucial for improving long-term water and sanitation services. This study proposes a novel methodological framework for dynamic sustainability benchmarking through the development of the Sustainability Change Index (SCHI). The SCHI is decomposed into two components: the Sustainability Internal Change Index (SII) and the Sustainability External Change Index (SEI), which allow for a detailed analysis of the underlying drivers of sustainability performance. The methodology is applied to a panel of 28 Chilean WUs over 2013–2023. Results highlight the ability of the proposed framework to capture dynamic sustainability trajectories in water utilities, revealing significant heterogeneity across utilities and over time. Beyond quantifying changes, the SCHI offers insights into whether improvements stem from internal operational progress or from shifts in external benchmarks, which is particularly relevant for regulatory evaluation and utility management. The empirical application in Chile demonstrates the framework’s usefulness in identifying drivers of sustainability change and also provides reflections that can inform targeted policy interventions. The proposed model, grounded in multi-criteria decision analysis (MCDA) and incorporating stakeholder and expert preferences through the Best-Worst Method, is broadly applicable to other contexts, offering regulators and water service managers a robust tool for monitoring, benchmarking, and fostering sustainability transitions.