This report evaluates strategies to improve the efficiency with which environmental resources are used to meet human needs. Many firms in OECD countries have developed strategies that involve:- developing goals to reduce resource use and pollutant release while improving customer service;- working towards the goals through innovation in technology, practices, and ways of thinking; and- designing indicators to monitor progress.Similar approaches have been used outside business, for example by governments, communities and groups of households. Such strategies have achieved improvements in material and energy efficiency in the region of 10% to 40%. The full potential for improving eco-efficiency is much greater, but it is only likely to be achieved through coherent government policies for sustainable development. The report identifies policies that can encourage innovation by firms and communities, and provide an economy-wide framework of economic and regulatory incentives for the adoption of more sustainable patterns of production and consumption.