The Key Factors for Sustainability Reporting Adoption in the Semiconductor Industry Using the Hybrid FRST-PSO Technique and Fuzzy DEMATEL Approach

Abstract

The proliferation of sustainability reporting (SR) is in response to environmental and social responsibility, but investors are increasingly concerned over the effects of sustainability reporting in corporate sustainability. The Sustainability Accounting Standard Board (SASB)’s sustainability standards are acknowledged as the main framework for implementing this activity, yet the influencing factors among sustainability reports highly correlate and are diverse and complicated, especially in the semiconductor industry, which is the key driving force for economic development in China. To exploit and evaluate those key factors, this research introduces a hybrid model that integrates fuzzy rough set theory with particle swarm optimization (FRST-PSO) and a fuzzy decision-making trial and evaluation laboratory (fuzzy DEMATEL). FRST-PSO is adopted to filter out redundant and irrelevant factors, and the selected results are then inserted into fuzzy DEMATEL to depict the opaque relationships and set up a prioritization strategy for improvement among the factors. According to the findings on the magnitude of the impact, the priorities for improvement are environment, human capital, social capital, leadership and governance, and business model and innovation. Based on the results, an optimal and practical solution is proposed as the basis for information disclosure of sustainability reporting for the semiconductor industry.

Key Traits of Leading Sustainable Firms in the Semiconductor Industry

“…For instance, studies have evaluated the sustainability of Taiwan's semiconductor industry [45] and examined supply chain transparency [46]. Additionally, studies have investigated factors influencing the adoption of sustainability reporting adoption in China's semiconductor industry [4], explored the relationship between ESG factors and financial performance in Malaysian semiconductor firms [47] and ESG management of semiconductor equipment production [48], and examined greenhouse gas(GHG) emissions in semiconductor companies [49].…”

“…In the LPG study, mappings were conducted with the sustainability criteria [4] for the semiconductor industry by focusing on words with a weight of 3. "Corporate brand image" emerged as the most frequent criterion with 24 occurrences, followed by "pollutiondischarge treatment" with 16 occurrences and "recycling/renewable capacity" trailing with 12 occurrences (Table 6).…”

“…While the imperative for sustainable practices within the industry is widely acknowledged, the precise determinants of sustainability performance remain subject to debate [3]. Existing literature offers valuable insights into various aspects of sustainability management within the semiconductor industry, highlighting the multifaceted nature of this challenging task [4].…”

“…Notably, diverging hypotheses exist regarding the key drivers of sustainability performance among semiconductor companies [4]. Some scholars argue for the primacy of technological innovation and operational efficiency in driving sustainability outcomes [5], whereas others emphasize the importance of supply chain transparency and stakeholder engagement [6].…”

“…(3) Unlike previous studies, which have often relied on financial metrics or sales figures to distinguish between high-and low-performing companies, this research employs Sustainalytics' ESG rating as a key indicator of sustainability management performance. (4) In its factor mapping process, the study leverages 13 industry-specific criteria tailored to sustainable management within the semiconductor sector, thereby yielding conclusions that are more attuned to the industry's nuances and themes.…”