All the planet's natural systems are in decline and the rate of decline is accelerating. According to a study published in 2000 by the Worldwide Fund for Nature, the natural wealth of the earth's forests, freshwater and marine ecosystems has declined by one-third since 1970. The world's major fisheries are on the verge of collapse, and water scarcity and land degradation threaten our ability to feed the more than 6 billion people that now inhabit the planet. Other major threats include climate change and mass extinctions. Many scientists believe that if current trends continue, we can expect massive ecosystem collapses in two or three decades that substantially reduce the life-support capacity of the planet.

Our social capital is also in decline. The gap between rich and poor is growing. Extreme poverty and ecological decline fuel each other. Hungry people will despoil the environment if that gets them another meal. As the environment becomes less fruitful, this feeds the cycle of poverty.

These trends must be reversed and the time to start is now.

A few decades ago, it might have been reasonable to expect national governments to take the lead in addressing the sustainability challenge. No longer. Over the course of recent decades, globalisation has swept the planet like a firestorm. From 1990 to 1999, the world export of goods and services climbed from $5.1 trillion to $6.8 trillion, according to the International Monetary Fund. The longer-term trend shows a similar trajectory. Between 1950 and 1998, world export of goods increased 17-fold - from $311 billion to $5.4 trillion - while the global economy expanded only sixfold.

Economic globalisation has been accompanied by the triumph of free-market capitalism. Increasingly, national governments are letting private enterprise take over. Over the 1991-1999 period, 94% of the 1,035 changes worldwide in national laws governing direct foreign investment created a more favourable environment for that activity. Global privatisation revenues quadrupled between 1988 and 1998, with total privatisation revenues reaching $735 billion.

These developments have transformed the governance landscape. Nation-states have much less control over political and economic events than they once did. Multilateral institutions are trying to fill the gap but with mixed and often controversial results. This has created a governance gap big enough to drive a deteriorating planet through.

Civil society and business are the two sectors whose power has grown the most over the past decade. There are now nearly 30,000 international non-governmental organisations (NGOs) worldwide, up from 15,000 in 1995 and 5,000 in 1990. Although civil society continues to be formally excluded from many of the chambers where globally significant decisions are reached, it has enormous power to agitate and influence. Monsanto Corporation effectively lost its license to operate because of civil society's outrage at the company's attempts to impose genetically-modified crops on the world community. Much of civil society is clamouring for an aggressive response to the sustainability crisis, but the sector lacks the financial resources and organisational coherence to implement dramatic, lasting changes on its own.

That leaves it to the business sector to don the leadership mantle. Leading the shift into sustainability takes three things: a 'can-do' culture, a healthy capacity for innovation, and the resources to follow through effectively. Corporations have all three in spades.

They have something else as well - unprecedented power. Globalisation, the retreat of government and the triumph of free-market capitalism have transferred enormous amounts of power to the corporate sector. Today, 51 of the world's 100 largest economic entities are corporations; only 49 are countries. The world's top 200 corporations are responsible for over a quarter of the economic activity on the globe.

With power comes responsibility and also accountability. Theoretically nothing requires corporations to assume a governance role, but the reality is they are already doing so. "Around the globe, more and more corporations are beginning to act like governments," an April 2000 Christian Science Monitor article proclaimed. "They negotiate with guerrilla leaders, build roads, and set up schools. Increasingly, they're setting labour standards in places where nations can't or won't." Like it or not, believe in it or not, governance is what global corporations do, even if by default.

In assuming a governance role, corporations are meeting the expectations of the public, which increasingly wants companies to proactively address the world's problems. In a global survey conducted in 2000, the market research company Environics International found that 40% of respondents had given thought to punishing a company perceived as not socially responsible, while 20% had "avoided the product of a company or spoken out to others against the company. Meanwhile, consumers [are] just as likely to 'reward' a company perceived as socially responsible." These findings led Environics to conclude that "major companies in the 21st Century will be expected to … demonstrate commitment to society's values by actively contributing to social and environmental goals, as well as economic ones."

Given the continuing unravelling of the social and environmental fabric, as well as public expectations vis-à-vis their behaviour, corporations have a very strong self-interest in tackling sustainability-related issues. Philosophically, this is not really all that much of a stretch. From their earliest days, the purpose of corporations has been to deliver products and services that meet human wants and needs as defined by society's values and beliefs. Companies that do this well flourish, those that do it badly die. This is the essence of capitalism. Creative destruction (a term coined by the economist Joseph Schumpeter) is why the market works.

Today, people need basic amenities such as potable water and healthy, nutritious food. They want a healthy environment. They also want a gratifying quality-of-life. The companies that meet these wants and needs in the years ahead will do well. Those that do not will not.