Bulletin Series
Yale School of Forestry and Environmental Studies
 
Bridges to Sustainability:
Business and Government Working
Together for a Better Environment
A Contribution of the Yale /
Program on Public-Private Partnerships
Joseph A. Miller and Jane Coppock, Bulletin Series Editors
Luis Gomez-Echeverri, Volume Editor
Yale University
New Haven , Connecticut • 1997
The Yale School of Forestry and Environmental Studies Bulletin Series, begun in 1912, issues faculty and student monographs, symposia and workshop proceedings, and other reports on an occasional basis. For information about ordering
copies of this or other Yale F&ES Bulletins, contact:
Publications
Yale School of Forestry and Environmental Studies
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205 Prospect Street
New Haven CT 06511
USA
http://www.yale.edu/forestry/publications
Volume Editor Luis Gomez-Echeverri
Bulletin Editors Joseph A. Miller and Jane Coppock
Bulletin Design R. Richard Solaski
Production Yale University Reprographics & Imaging Services (RIS)
Production Manager Kathleen Schomaker
Cover Image
Landsat MSS (421 RGB) NE Syrian border with Turkey, Euphrates,
Balikh, Khabur Rivers, courtesy of the Yale Center for Earth Observation,
PO Box 208109 Yale Station, New Haven, CT 06520-8109
Cover Design Russell Shaddox, Yale RIS
Paper Mohawk Vellum, Cream White, 60 lb. text, acid free, recycled
Bulletin Number 
ISSN
-
CODEN BYSSDM
© Yale University
Permission is granted to reproduce this volume without prior written consent with the exception of the article by Stephan
Schmidheiny and Federico J. L. Zorraquin which is reproduced here with the permission of MIT Press. Anyone wishing to
reproduce the article in whole or in part must contact the MIT Press, Permissions Dept., 55 Hayward St., Cambridge, MA 02142.
The opinions expressed in this report reflect the views of the individual authors and not necessarily those of their organizations.
Contents
ACKNOWLEDGMENTS
4
SECTION I: TO WHAT EXTENT HAVE THE GOALS OF THE EARTH SUMMIT
ON THE ROLE OF THE PRIVATE SECTOR BEEN MET?
5
Moving Toward Sustainable Development: The Private Sector’s Crucial Role
Maurice F. Strong
6
SECTION II: HOW CAN THE PRIVATE SECTOR BE ENCOURAGED TO PLAY
A GREATER SUPPORTING ROLE IN SUSTAINABLE DEVELOPMENT?
17
Private Capital Flows: New and Additional Resources for Sustainable Development
Bradford S. Gentry and Daniel C. Esty
18
The Role of the Private Sector in Sustainable Infrastructure Development
Theodore Panayotou
46
Incentives for Private Sector Financing of Sustainable Development
David Pearce
70
Steering Business Toward Sustainability: New Strategic Choices Through the Zero Emissions
Approach to Biomass Production
Gunter Pauli
84
SECTION III: WHAT ROLE CAN CAPITAL MARKETS
AND FINANCIAL INSTITUTIONS PLAY?
104
Eco-efficiency and the Financial Markets
Stephan Schmidheiny and Federico J. L. Zorraquin
105
Sustainable Development and the Private Sector: A Financial Institution Perspective
L. Enrique Garcia
130
SECTION IV: THE EMERGING RECORD: SUCCESS STORIES
OF PRIVATE SECTOR LEADERSHIP AND ACTION
142
Business Progress Toward Sustainable Development
Stephan Schmidheiny, Rodney Chase, and Livio De Simone
143
Engaging the Private Sector Through Public-Private Partnerships
The Honourable J. Hugh Faulkner
157
SECTION V: A CAUTIONARY NOTE
173
The Private Sector as a Panacea and Other Myths
Luis Gomez-Echeverri
174

Acknowledgments
I am grateful to many people who have been essential to the creation of this book.
My great thanks to Mr. Maurice Strong whose introductory chapter inspired the rest of us to be a bit
more critical, while at the same time, more optimistic about the potential role of the private sector and of
the important role of government and the UN. Mr. Michael Gucovsky, Special Advisor to the Administrator of UNDP, provided wise and substantive support about the subjects and the important authors who
contributed to this volume. His constant advice to those of us working on environmental issues at UNDP
and his commitment to the environment are not only a source of inspiration to many of us working in
UNDP, but also a model for emulation.
UNDP’s partner in the Program on Public-Private Partnerships is the Yale School of Forestry and Environmental Studies. The School has a long history of engaging the private sector in questions of environmental management. In the 1950s and 60s, it brought company managers to campus to join faculty in an
ongoing seminar on Industrial Forestry. Since the 1970s Conoco Corporation has supported Yale’s Seminar
on Society and Natural Resources, led by Professors William R. Burch, Jr., and Joseph A. Miller of the
School of Forestry and Environmental Studies. The seminar has focused on the relationship between social
systems and natural systems, and on the question of what kinds of individual-social value systems and
institutions must be in place to achieve sustainability.
The 1990s have seen an explosion of programs at the School focusing on the role of the private sector in
environmental management. The Industrial Environmental Management Program, the Corporate Environmental Leadership Seminar for senior managers from industry and government, the Program on Solid
Waste Policy, the Journal of Industrial Ecology and the Yale Center for Environmental Law and Policy are
all actively engaged in work with the private sector. The Yale/UNDP Program on Public-Private Partnerships builds on this strong foundation.
Outgoing Dean Jared Cohon has given his strong support and advice to the formative stages of the
Partnership, as has Professor John Gordon, acting Dean and director of the Steering Committee and Board
of the Yale/UNDP Program on Public-Private Partnerships.
Thanks to the editors of the Bulletin Series, Professor Joseph A. Miller and Assistant Dean Jane
Coppock, for their enduring and hands-on support for this Bulletin. Their leadership and intellectual support have turned this and other volumes in the newly revitalized Bulletin Series into an exciting and important contribution to writing on the environment.
My most important acknowledgments go to Kathleen Schomaker, production manager and copy editor
of this volume, without whose work this Bulletin would never have been possible. It is seeing the light of
day thanks to her efficiency, management skills, and good cheer. Thanks also to Russell Shaddox and the
production staff at RIS for their perseverance and fine spirit. Kate McManus, John Kohl, John Barcroft, and
Simone Mangal, students at the Yale School of Forestry and Environmental Studies, provided projectsaving assistance at critical junctures. Lastly, I would like to thank my wife Karin for her patience and wonderful support.
Luis Gomez-Echeverri
Volume Editor