An integrated pollution-generating technology and temperature alignment rating model for eco-efficiency estimation

Abstract

Measuring environmental efficiency, or eco-efficiency, has become increasingly critical as regulatory frameworks tighten in developed countries, requiring companies to mitigate climate change actively. Data Envelopment Analysis (DEA) is a widely used, non-parametric method for assessing eco-efficiency in comparable decision-making units (DMUs). Traditionally, DEA has relied on single-technology models, which are effective for macro-level analyses but present challenges in micro-level studies involving pollutants due to incompatibility with the material balance principle. This study applies an established DEA approach based on pollution-generating technologies to evaluate the eco-efficiency of 25 food retailers, incorporating both operational and environmental performance. For the first time in a DEA-based application, we link eco-efficiency scores with temperature alignment scores. This emerging sustainability metric assesses a company’s compatibility with the Paris Agreement’s 1.5 °C target. Our findings reveal that focusing solely on emission reduction based on DEA recommendations does not necessarily ensure alignment with global climate goals, underscoring the importance of an integrated assessment approach. Moreover, pure benchmarking based on empirical observations is insufficient; assessing sustainability improvements requires concrete measures, such as upgrading refrigeration systems or implementing energy-efficient technologies. This study provides practical insights for corporate decision-makers and policymakers, supporting more comprehensive, sustainability-driven management actions in the retail sector.