Modelling Sustainability Performance in Manufacturing Companies

ABSTRACT Nowadays, organisations need to operate with economic, social and environmental goals in mind. Indices objectively quantify such goals; hence, an organisation can develop and compare policies based on future index values. We propose a system dynamics‐based model of a manufacturing company that frames its operations in terms of a set of easily interpretable sustainability performance indices. These include environmental aspects, such as greenhouse gas emissions; social aspects, such as access to collective bargaining; and economic aspects, such as return on investment. To compare these diverse indices and enhance explainability, the model ensures dimensional and structural consistency while comparing them to a benchmark. We demonstrate the structural realism and flexibility of our model using sustainability data from a multinational company and through a scenario analysis. The results show that production management strategies can improve between 1% and 8% overall sustainability performance at the cost of increasing CO 2 emissions by roughly 4%.