ESG Integration in Strategic Innovation Management of Aerospace Enterprises: A Sustainable Decision-Making Framework

The European aerospace industry is currently undergoing a phase of integrating innovation objectives, which can be aligned both with competitiveness and airworthiness, but also with the sustainability agenda and ESG reporting mandates of the European Union. In this paper, we offer an ESG-integrated SIM (Strategic Innovation Management) decision framework for aerospace enterprises (OEMs, tier suppliers and MROs) working within EU member states, focusing on the significant divergences between ESG disclosures and portfolio-level innovation decision-making. The paper links a structured literature with the policy synthesis for defining EU-focused ESG indicators, a mapping of ESG integration points through the lifecycle of aerospace innovation and a hybrid multi-criteria decision analysis (MCDA) modelling. The Analytic Hierarchy Process (AHP) to quantify ESG priorities depends on the elicitation of experts (n=7, EU-based, and 5-15 years’ experience). Then, the different innovation alternatives are ranked (under uncertainty) with the help of the use of Fuzzy TOPSIS which represents expert judgments expressed through linguistic terms mapped to triangular fuzzy numbers. The findings show that Critical Risk Management (26.3%) and GHG Emissions (22.9%) significantly contribute to the weighting structure, due to the joint safety-climate exposure of the sector. An illustrative portfolio ranking results indicate that the SAF-propulsion prototype has achieved the highest closeness coefficient (CC=0.77) followed by Circular Manufacturing R&D (CC=0.75) and AI-driven lifecycle governance (CC=0.71). The ranking highlights practical trade-offs between direct impact on decarbonization, social transition benefits and governance, audit and preparedness. On the whole, the framework has realized ESG as an auditable layer for decision making within SIM with clear and repeatable project selection that is consistent under EU climate and governance objectives. It is still adaptable to long development cycles and intricate supply chains typical of aerospace innovation.