Sustainable corporate performance index for manufacturing industry

Abstract

The article presents a methodological approach consisting in the application of a discriminant analysis in evaluations using financial and non-financial ESG and economic indicators, including the establishment of the sustainable corporate performance index of Czech companies from the manufacturing industry. The proposed methodology for comprehensive performance evaluation is adjusted to allow for an assessment of financial and non-financial indicators and their weights. It is particularly necessary to focus on such financial and non-financial indicators that provide to some extent information about the potential risk to companies' sustainability. This will not only allow for an ex post evaluation of companies, but also of their sustainable development. The aim of this paper is to establish sustainable corporate performance index for Czech companies from the manufacturing industry based on defined financial and non-financial ESG and economic performance indicators. Environmental, social, corporate governance and economic indicators are often characterized by a large number of variables that are partly qualitative in nature and can only be evaluated on the basis of a subjective assessment, which inevitably includes various types of knowledge. The sustainable corporate performance index was determined by means of a discriminant analysis. The use of discriminant analysis to measure the comprehensive performance of the company can also improve the accuracy of qualitative aspects captured in a non-deterministic manner. Indicators selected for discriminatory analysis included those relevant financial indicators that relate to sustainability and non-financial indicators that also meet these conditions for Czech company from the manufacturing industry. The result of discriminant analysis is the sustainable corporate performance index, which should reflect the sustainability of companies from the manufacturing industry.