When Maurice Strong needed someone to represent business interests at the 1992 Earth Summit in Rio de Janeiro, he turned to Dr. Stephan Schmidheiny, a Swiss industrialist who had quietly built a reputation for addressing environmental challenges ahead of regulatory requirements. What emerged from that collaboration was the concept of “eco-efficiency,” a term that would reshape how companies think about environmental performance.
Stephan Schmidheiny’s approach to environmental issues was shaped by practical experience. As head of the Swiss Eternit Group, he made the decision to exit asbestos processing in 1981—years before regulatory pressure forced competitors to follow suit. This early experience in anticipating environmental challenges informed his later work on global sustainability frameworks.
The Road to Rio: Creating a Business Voice
The turning point came in 1990 when Maurice Strong, Secretary General of the United Nations Conference on Environment and Development, appointed Schmidheiny as Principal Advisor for Business and Industry. Strong recognized that without meaningful business participation, the upcoming Earth Summit would lack the private sector engagement necessary for practical solutions.
Initially hesitant, Stephan Schmidheiny eventually accepted the role. “What I had seen from my own experience in how the debate on the environment was evolving in Switzerland was that our inability to engage constructively was becoming a fundamental challenge,” he later explained.
To address this challenge, Schmidheiny founded the Business Council for Sustainable Development (BCSD) in 1991. Within less than a year, he assembled 50 top executives from different industries and regions, including leaders from DuPont, Royal Dutch Shell, Dow Chemical, and other major corporations. By the first meeting in spring 1991 in The Hague, there were 48 members, though 35 attended the inaugural meeting. The council’s mission was to develop a business perspective on sustainable development for the Rio Summit.
The recruitment process required considerable effort. Schmidheiny famously flew from Zurich to New York via London on the Concorde to meet DuPont’s chairman Edgar Woolard, arriving within 24 hours of scheduling the meeting. This sense of urgency impressed Woolard, who agreed to participate and helped recruit other CEOs. “Every time he introduced me, he told that story of me dropping everything to get there the next day to meet him,” Schmidheiny later recalled. “I think he thought it was a funny story, but that it also demonstrated my commitment to the project and my respect for him.”
The Birth of Eco-Efficiency
The BCSD’s work culminated in the 1992 book “Changing Course: A Global Business Perspective on Development and the Environment,” which introduced the concept of eco-efficiency to the world. The book, translated into some 20 languages, presented a fundamental shift in thinking about environmental protection and economic growth.
Rather than viewing environmental protection as a cost center, Schmidheiny developed the concept of eco-efficiency, which demonstrated how enterprises could combine environmental protection with economic growth. The term “eco-efficiency” deliberately combined economics and ecology, with the prefix referring to both domains. This approach suggested that environmental improvements could drive economic benefits rather than hinder them, fundamentally challenging the traditional view that environmental protection was merely a cost of doing business.
On June 5, 1992, Dr. Stephan Schmidheiny presented these findings at the Earth Summit in Rio de Janeiro. The presentation, made alongside about 28 council members, marked the formal introduction of eco-efficiency as a business concept, providing a framework that would influence corporate environmental strategies for decades.
Building Institutional Support
Following the Rio Summit, Schmidheiny continued developing the institutional framework for business engagement in sustainability. The BCSD evolved into the World Business Council for Sustainable Development (WBCSD) in 1995, following a merger with the World Industry Council on the Environment. The organization established its secretariat in Geneva and grew to represent over 200 companies globally.
The WBCSD became a platform for developing practical approaches to sustainability. Under Schmidheiny’s leadership, it produced research, case studies, and methodologies that helped companies implement eco-efficiency principles. The organization’s work influenced policy discussions and provided a business voice in international environmental negotiations.
In 2000, Schmidheiny was named honorary president of the WBCSD, recognizing his foundational role in creating the organization. His continued involvement ensured that the principles of eco-efficiency remained central to the council’s work.
Policy Influence and Academic Recognition
Stephan Schmidheiny’s work extended beyond business organizations to policy development. From 1997 to 1998, he served as Co-Chair of the OECD High Level Advisory Group on the Environment, working alongside Jonathan Lash of the World Resources Institute. The group’s report recommended that sustainable development become a general principle for OECD countries.
The advisory group’s work contributed to the OECD’s recognition of sustainable development as a priority, demonstrating how business concepts like eco-efficiency could influence policy frameworks. The report served as a foundation for discussions at the 1998 OECD Ministerial Meeting.
Universities recognized Schmidheiny’s contributions with honorary doctorates from Yale University, INCAE Business School in Costa Rica, Universidad Católica Andrés Bello in Venezuela, and Rollins College in Florida. These academic honors acknowledged his role in developing theoretical frameworks for sustainable business practices.
Continued Development of Ideas
Stephan Schmidheiny continued refining his ideas about sustainable business practices through subsequent publications. In 1996, he co-authored “Financing Change: The Financial Community, Eco-efficiency, and Sustainable Development” with Federico Zorraquín, examining how financial markets could evaluate environmental performance.
The 2002 book “Walking the Talk: The Business Case for Sustainable Development,” co-authored with Chad Holliday and Philip Watts, provided practical examples of how companies were implementing sustainable practices. The book demonstrated that eco-efficiency principles could be applied across industries and geographies.
Corporate Board Experience
Schmidheiny’s sustainability expertise was sought by major corporations. He served on the boards of UBS for 18 years, Nestlé for 15 years, and BBC Brown Boveri for 16 years. His board experience provided practical insights into how large corporations could integrate environmental considerations into business strategy.
At BBC Brown Boveri, he played a role in the merger with Sweden’s Asea to create ABB, demonstrating how environmental considerations could be integrated into major corporate transactions. His involvement with the Swiss watch industry through SMH (later Swatch Group) showed how traditional industries could adapt to changing environmental expectations.
Legacy and Current Relevance
Today, the concept of eco-efficiency developed by Dr. Stephan Schmidheiny remains relevant as companies face increasing pressure to address climate change and environmental degradation. The principle of creating economic value while reducing environmental impact has become standard practice in corporate sustainability.
The frameworks developed by the WBCSD continue to influence how companies measure and report environmental performance. The organization’s methodologies for calculating carbon footprints, water usage, and resource efficiency build on the theoretical foundations established by Schmidheiny’s early work.
Modern sustainability initiatives, from the UN Sustainable Development Goals to the Paris Climate Agreement, incorporate principles that trace back to the eco-efficiency concept. The idea that environmental protection and economic growth can be mutually reinforcing has become a cornerstone of sustainable development thinking.
Schmidheiny’s work demonstrated that business leaders could contribute to environmental solutions by developing practical frameworks for corporate action. His approach of combining economic and environmental considerations created a model that remains influential in contemporary sustainability efforts.
The evolution from a single concept introduced at the 1992 Rio Summit to a global framework for sustainable business practices illustrates the lasting impact of Schmidheiny’s contribution to environmental thinking. His work helped establish the foundation for how modern companies approach the relationship between business success and environmental responsibility.# Dr. Stephan Schmidheiny: The Swiss Entrepreneur Who Coined ‘Eco-Efficiency’ Before It Was Mainstream
In the annals of sustainability leadership, few figures have shaped the global conversation as fundamentally as Dr. Stephan Schmidheiny. Long before environmental, social, and governance (ESG) criteria became investment imperatives, and decades before “green business” entered the corporate lexicon, this Swiss industrialist was pioneering the theoretical framework that would define sustainable capitalism for generations.
The journey that led Schmidheiny to create the term “eco-efficiency” began with a profound realization in the late 1980s. As head of the Swiss Eternit Group, he made the prescient decision to exit asbestos processing in 1981—years before regulatory pressure would force competitors to follow suit. This early experience in anticipating environmental challenges would prove formative in his later work on global sustainability.
