Global SDG composite indicator: A new methodological proposal that combines compensatory and non‐compensatory aggregations

Abstract This paper presents a Global Sustainable Development Goals Composite Indicator to assess the grade in the achieving of targets associated with the Sustainable Development Goals (SDGs) approved in the 2030 Agenda. Based on a critical analysis of the SDG Index, we propose a new aggregation methodology that combines compensatory and non‐compensatory aggregation rules. At a first level, a compensatory indicator is obtained by means of a generalized average which is penalized according to the horizontal heterogeneity of each country and the number of uncontrolled indicators in the territory. At a second level, the set of compensatory indicators of each SDG is aggregated by means of a synthetic non‐compensatory indicator based on an ordinal Benefit of the Doubt model. An empirical study is presented for a set of 32 OECD member countries, which shows the potential of this new tool for planning sustainable development policies focused on the identification of weaknesses.