A proposed hierarchical framework for Prioritizing Industry 4.0 technologies to improve environmental performance of manufacturing companies and environmental SDGs

Abstract

This study draws insights from the dynamic capabilities theory about industry 4.0 and sustainability as critical issues for maintaining firms’ competitiveness in international markets. There is still a scarcity of literature about the environmental impacts of adopting Industry 4.0 technologies (I4.0T) and their contribution towards enhancing environmental management accounting systems and attaining sustainable development goals (SDGs). Although companies’ managers are aware of environmental issues which have forced them to adopt I4.0T, they hesitate to invest in these technologies because of limited financial resources. The research objectives are exploring the positive environmental impacts of I4.0T and their contribution towards the environmental SDGs and developing a hierarchical framework to prioritize I4.0T. To achieve these objectives, three phases of research methodology were followed. First, we review the extant literature to identify commonly utilized I4.0T, their positive environmental impacts, and their contribution towards attaining SDGs. Second, a hierarchical framework using an analytical hierarchical process was proposed. Third, the proposed framework is applied to five leather firms to test its applicability. The findings indicate that waste management is the most important environmental aspect, and the Internet of Things is the most important technology, followed by big data and cloud computing technologies. This study offers significant theoretical and practical implications, and significant opportunities for future research.

Keywords

• Industry 4.0 technologies
• environmental management accounting
• environmental accounting information
• corporate social responsibility
• circular economy
• analytical hierarchical process