Introduction

Doughnut economics and planetary boundaries define sustainability through social floors and environmental ceilings, shaping recent sustainable thought. The way in which entities exist within this context is also therefore relevant. From the smallest creature to the cosmos, it is important to consider how entities interplay with this context. This is where the entity model becomes relevant.

What Is an Entity?

Assailing the seven C’s—Creature, Company, Community, City, Country, Continent, and Cosmos.
Source: THRIVE.

An entity refers to a distinct and individual being, object, or thing that exists as a separate and identifiable unit. Indeed, THRIVE considers seven types of entities split up into four levels. These are discussed in the next section.

Nano Level

• Creature: This is an individual of a species. However, we are not limiting the scope to humans. A creature could be anything from a single-celled organism to an animal or even a plant.

Micro Level

• Company: Individuals or a group of people form a company as a legal entity to conduct business. This is often for profit, with defined ownership, structure, and specific aims or objectives. A company could also be a not-for-profit, NGO, or other sort of business collective.

Meso Level

• Community: These are social structures, relationships, cultures, and interactions among individuals or groups within a specific geographic or social area.
• City: A city comprises the urban infrastructure, services, governance, residents, and various elements that constitute its functioning and development.
• Country: It encompasses the political, economic, social, and cultural components of a nation, including government, institutions, population, resources, and policies.
• Continent: It refers to the broader geographic and geological systems within a continent. These encompass diverse ecosystems, populations, economies, and cultures across its landmass.

Macro Level

• Cosmos: Finally, we have the cosmos, which is the larger interconnectedness of celestial bodies, galaxies, and universal systems. At this level, we consider the interactions and interdependencies within the universe.

What is an Entity Model?

An entity model is a structured representation that defines and organises the various entities and their relationships within a system or domain. The ways in which an entity impacts environmental and social sustainability are also important. The methods for measuring an entity’s operational sustainability and the strategies used for its management hold equal importance. Typically, an entity will look to govern its own sustainability performance, as part of its internal management systems. Inconsistency and opacity highlight the necessity for broader accountability in sustainability management, favouring a consistent, top-down regulatory approach.

Measurements and Approaches: Why an Entity Model is Necessary

The use of different measurements and approaches to appraising and measuring sustainability performance has created tensions. Furthermore, there is a lack of approval of different approaches by different bodies. Indeed, some support certain internal measurement approaches while others do not. The global consensus does not universally embrace a scholarly approach to govern the best top-down measurement approach. For consistency in measurement approaches, we need this active engagement. Society needs to naturally integrate many of the different measurement approaches applied (Fedeli, et al., 2019) but from a top-down basis, beyond the boundary of an entity. 

According to Schaltegger (2017), accounting processes and methods are in dire need of innovation. Corporate sustainability requires increased capability in aligning operations, supply chains, and products with environmental goals and societal sustainable development objectives. While companies face much economic competition, they are also affected by the changing social and environmental conditions they’re set within. These entities are one of the main influences upon humanity and our global ecosystem’s path forward. Thereby, this necessitates the effectiveness of corporate sustainability.

Therefore, effective means of measuring and accounting for sustainability performance is needed, across the breadth of products, operations, and supply chains, in adherence to social- and science-based targets. An entity model assists in measuring and accounting by delineating the contexts and boundaries a company works within.  

The Critical and the Pragmatic

Over the last four decades, according to Schaltegger (2017), two different research approaches have been taken regarding conventional sustainability reporting. These are “critical” and “pragmatic.” The critical view has focused on social and environmental misconduct, by companies, and the apparent lack of ability to contribute to sustainable development. The pragmatic view alternately looks at how companies through internal management and accounting measures are able to better enable strategies for better sustainability performance. This pragmatic approach is still needed to be revisited to enable better facilitation of sustainability performance. 

Attitudes to Sustainability

An area where entities fall short of adhering to sustainable development is in embedding the broader requirements of sustainable development into management. While areas such as carbon, water, and material energy are considered within research and practice, impacts such as biodiversity and poverty are often not well considered as part of accounting management (Schaltegger et al., 2017). 

A key for accounting management for companies is that science-based targets are considered in alignment with planetary boundaries (Steffen et al., 2015). While areas most affected by the respective industry should be considered, there also needs to be an understanding of, consideration of, and adherence to broader sustainability issues in alignment with the United Nations‘ sustainable development goals (SDGs). 

Beyond this, most examples of accounting management measure what is easiest to measure (such as carbon and material energy) and do not consider broader links and systemic impacts of operations. For example, the use of integrated reporting has shortcomings when asking for consideration of all six forms of capital. There is no explicit demonstration of how these link to each other systemically. 

However, systems thinking and strong sustainability are interconnected with this matter. Systems thinking examines the utilisation of materials, water, and carbon at every systemic level, spanning from the smallest to the largest scale. It extends beyond mere supply chains, encompassing the diverse ways in which systems interrelate with one another within a comprehensive global perspective on sustainability.

Boundary of an Entity Model

Therefore, when defining the limits of an entity and setting measurement criteria based on these boundaries, this approach overlooks the requirements of context-based metrics. It fails to acknowledge the necessity of considering the wider environmental and social context in which an entity operates and interacts within the broader system. Hence, in measuring sustainability performance with respect only to the most immediately measurable areas of operations, it does not consider the overall impact and adhere to sustainable development or SDGs in the broader sense.  

As Evans et al. (2017) reiterates, adhering to sustainability first requires change through firms adapting to their external environment in order to reflect broader requirements for sustainability. One means of doing this is through using sustainable business models. As Evans again points out here, there is no universal standard for this in addressing sustainability, certainly not systemically. Not only is there a lack of systematic or systemic approaches, but many of the approaches are ad hoc.

Exchange Value

Adam Smith’s view of “exchange value” has underpinned economic thought and today largely remains in business practice. However, value has different contexts, and other perspectives have considered how this links to sustainability, as with values-based innovation. With economics not having the only basis of value but also psychology, sociology and ecology each have different forms of value, and thus sustainable value can be made from environmental, social, and economic value (Evans et al., 2017). 

From this basis, a firm’s business model and operations, as well as sustainability measurement, should be tailored to the context of social and environmental issues it faces and to the broader sustainable development goals and requirements related to them. Integration of these areas and prioritising this ahead of shareholder expectations are what underpins sustainable business models. 

In order for this to occur however, a broader, global, and systemic understanding of environmental and social issues to guide business model operations must be considered if they’re going to be sustainable (Evans et al., 2017). 

A singular entity giving a presentation to a collective entity.

Source: Pexels

moving forward

Understanding what an entity is, is the beginning of environmental wisdom. To learn how to thrive within our current environment, we need to understand what various entities are. After that, we understand the past, present, and future impacts of various entities.

Businesses, governments, and nations are the entities that make the largest impact on our society, both socially and environmentally. They are the least likely to drop beneath the social floor and the most likely to expand beyond the environmental ceiling. Consistency is needed when measuring the impacts of one of these entities. Furthermore, these entities should be encouraged to adopt and adapt to sustainable business models to reduce their environmental impact while remaining profitable.

Why is it essential that we focus on an Entity Model?

This is where the individual entity, you, can begin to effect change. We have the power to vote with our wallets, choosing sustainable products and businesses over those that are exploiting the environment. Sooner or later, the message will begin to get across. When everyone unites in such a manner, the unsustainable business will have no choice but to conform to what we want or go out of business. We are only in the beginning stages, but every step we take towards moulding our world into a sustainable one creates a future. Most of us will not see that future, even if we take the steps now. However, the unborn generations will live in that future and be grateful that we had the courage to make a change.

achieving the United Nations’ Sustainable Development Goals (SDGs) and how they link to Entity Models

The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. At its heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries—developed and developing—in a global partnership. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth—all while tackling climate change and working to preserve our oceans and forests.

(United Nations)

Entity model bears relevance to every SDG but probably none more so than SDG 13: “climate action.” Dealing with climate change means understanding the boundaries that we as either individual or communal entities live within. There is a minimum that we need in order to be thrivable. However, there is a maximum of what we can remove from the environment before biodiversity loss and the eventual collapse of our ecosystem.

Target 13.b

Promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing States, including focusing on women, youth and local and marginalized communities.

(UN Environment Programme, n.d.)

The boundaries of an entity in a developing nation are more stringent than that of a developed nation. As they have often been exploited by developed nations, they have less access to natural resources, and thus, their environmental ceiling is much lowered. Moreover, many in developed nations live beneath the social floor, so it will take much elevating to raise them where they belong. Thus, an entity model is a vital component of effective climate change-related planning and management, not only in developing nations but those that are already developed. Understanding social, environmental, and economic boundaries is the key to solving issues.

A Thrivable Framework

Systemic Holistic Model

THRIVE, or The Holistic Regenerative Innovative Value Entity, underpins the THRIVE Framework, a transdisciplinary modelling system foreseeing outcomes before actions. Its goal is to assess present initiatives’ potential, facilitating societal transformation towards a “beyond sustainable” future. The SDGs set the goals, while the THRIVE Framework acts as the strategy for their achievement.

The Systemic Holistic Model (SHM) was created from research from significant journal articles. These articles are the basis of the 12 Foundational Focus Factors (FFFs) and present processes we can use to accomplish tasks in reaching sustainability goals. The THRIVE Framework rests on these FFFs, serving as both theories and guidelines. These FFFs can be categorised into four categories: significance, scale, scope, and shift—the Four Quadrants. When measuring the scope of something, we can use the scope quadrant FFFs. When measuring the significance, we use significance FFFs. These four quadrants cover the processes in a holistic way. As a whole, they are a framework covering all the crucial areas needed to achieve thrivability.

These FFFs aid in navigating crises like natural disasters and climate change, offering insights from years of extensive research. They identify the essential conditions required for transitioning humanity towards Thrivability, surpassing mere sustainability.

Sustainability isn’t solely survival but thriving. The 12 FFFs and THRIVE platform use backcasting, akin to envisioning a dream future and strategically planning steps to achieve it. Unlike mere future prediction, backcasting involves setting goals, addressing obstacles, and planning actions by working backward. This approach is commonly employed in sustainability planning to aim ambitiously and innovate pathways towards sustainability.

Complex, Wicked Problems

Complex, wicked problems represent one of the Foundational Focus Factors (FFFs), depicting intricate social, cultural, political, or economic issues. The balance of which is challenging to resolve. These problems arise from volatile, uncertain, complex, and ambiguous circumstances. Entities are both the causes of and the solutions to every complex, wicked problem. Exceeding these boundaries, whether social or environmental, causes these problems. Therefore, remaining within these boundaries will avoid creating further problems and help solve the ones already created.

Entity Model

The Entity Model FFF focuses on what different entities are capable of. It sits within the scope quadrant of the SHM. An entity could range from a tiny cell to the entire universe. These models establish boundaries that set their limits. THRIVE’s logo, a ciambella chart, highlights two crucial boundaries for humanity. One is the social floor, ensuring the minimum for an entity’s survival. The other is the environmental ceiling, preventing excessive resource extraction. Entity model is a key aspect of systems thinking in order to understand the impact of the entity on the entire system.

Strong Sustainability

Strong sustainability ensures entities view natural resources as finite resources. Finite resources are unexchangeable for money. Strong sustainability, in contrast to weak sustainability, is not just about mitigating the worst impacts of climate change to ensure our survival. It is about allowing nature to regenerate, thus enabling ecosystems to bounce back and flourish. It also means recognising that if we want prosperity, it needs to fall within the boundaries of what is compatible with the earth’s ecosystems. To remain within boundaries, entities must assume a mindset of strong sustainability.

The Entity Model of THRIVE

THRIVE Project is dedicated to humanity. Furthermore, it invests interest in issues fundamental to the well-being of our society. The passionate volunteers at THRIVE research, educate, and advocate on all things concerning sustainability. THRIVE’s mission is to safeguard human well-being in all domains and the well-being of nature and every living being.

THRIVE is an entity, just like you, me, and every other community, corporation, government, and nation. We can thrive by remaining within our boundaries. There is no need to suffer or go without things we need. To do this, we must understand what we are, what we need, and what impacts our past, present, and future have. Humanity needs to be accountable. That is the primary step that our species should collectively take to learn to live within the thrivable zone. The next steps are up to you.

If you want to remain within your thrivable boundaries with us, you can explore our homepage where you can subscribe to our newsletter, tune in to our podcast, view our YouTube videos, peruse our blogs, or engage with experts in our webinars.