What Are Thresholds & Allocations, and Why Are They Necessary for Sustainable System Value Creation?

Figure 1:Thresholds & Allocations = Doughnuts & Pies
Figure 2: Doughnut Economics & Planetary Boundaries (Sources: Kate Raworth, Doughnut Economics, Chelsea Green, 2017; Stockholm Resilience Centre, Planetary Boundaries)
Figure 3:Context-Based Water Allocation (Rylan Dobson & Alexis Morgan, “From Conflict to Context-Based Metrics,” REVOLVE #22: Liquidity, Winter 2016/17)
Figure 4:The Conceptual Development of Thresholds & Allocations (adapted from CSO, 2018)
Figure 5:Sustainability Quotient (Mark McElroy, Social Footprints, 2008)
  • Mapping: The Reporting 3.0 Strategy Continuum (covered in Part 5 of this series) enables plotting of practices, impacts, business models, etc. on the spectrum from incremental improvement through sustainability (defined by thresholds and allocations) to regeneration and thriving;
  • Implementation: The Reporting 3.0 Integral Materiality Process (covered in Part 6 of this series) applies thresholds and allocations in its context-based approach to materiality;
  • Governance: The UNEP Raising the Bar report also recommends: Multilateral organizations should collaborate to create a global governance body of scientists, governments, businesses, NGOs and other stakeholders to provide guidance on methodologies for determining ecological (and social) thresholds, as well as guidance on approaches to allocations, all of which are broadly applicable to the business level.
  • Identify thresholds & norms for sustaining the carrying capacities of systems-level capital resources in the commons that are vital to stakeholder wellbeing, based on a comprehensive review of research in physical and social sciences and practice in the field.
  • Design and validate allocation methodologies that apportion fair share responsibility for jointly preserving and enriching capital resources vital to stakeholder wellbeing.
  • Disseminate consensus-based thresholds/norms/allocations with “off-the-shelf” ease-of-use in mind to facilitate global mainstreaming of such practices.
Figure 6: From Shareholder Value to Shared Value to System Value (Future Fit Foundation, System Value Creation, April 2017)



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