The rapid growth of sustainable finance has increased the need for transparent and robust decision-support tools for screening environmental, social, and governance (ESG) investment assets. Conventional ESG evaluation methods often rely on composite scores that obscure trade-offs among criteria and inadequately address data imprecision and heterogeneity. This paper proposes a hierarchical interval outranking approach for classifying sustainable finance assets into acceptability categories, rather than producing a full ranking. The method structures ESG criteria hierarchically and represents performance evaluations using intervals to explicitly account for uncertainty, variability, and incomplete information commonly observed in ESG datasets. An outranking-based sorting procedure is then applied to assign assets to predefined classes, such as non-acceptable, acceptable, and priority investments. The framework is demonstrated using publicly available ESG indicators for countries, interpreted as sovereign investment assets, illustrating its ability to deliver transparent, non-compensatory classifications while maintaining interpretability at each aggregation level. The results show that the approach supports consistent and explainable ESG screening decisions, offering a viable alternative to opaque scoring-based methods. The proposed model contributes to sustainable finance research by integrating hierarchical multicriteria decision analysis with interval-based uncertainty handling and provides practical value for portfolio managers and policymakers engaged in responsible investment decision-making.
A sorting-based multicriteria decision model for ESG screening of sovereign investment assets
Authors
- Juan Antonio Granados Montelongo Department of Renewable Natural Resources, Antonio Narro Autonomous Agrarian University, Mexico. https://orcid.org/0009-0006-1701-9797
- Alberto Aguilera Faculty of Political and Social Sciences, Autonomous University of Chihuahua, Mexico.
- Francisco Magallanes Torreón Technological Institute, National Technological Institute of Mexico, Mexico. https://orcid.org/0000-0002-9982-2607
- Juan Antonio Álvarez Gaona Faculty of Marketing, Autonomous University of Coahuila, Mexico. https://orcid.org/0009-0002-3255-510X
- José Daniel Corona Flores Academic Language Unit, Antonio Narro Autonomous Agrarian University, Mexico. https://orcid.org/0000-0002-6735-7034
- Abril Flores Faculty of Accounting and Administration, Autonomous University of Coahuila, Mexico. https://orcid.org/0000-0002-1197-8376

