Abstract.

Environmental issues constitute one of the major challenges to industry. The concept of sustainable development as formulated in the Rio Declaration on Environment and Development will in the future be the guiding principle for industrial activity worldwide.

This paper discusses the environmental challenge as seen from a management point of view and emphasizes the need for a more proactive and integrated environmental management based upon the complexity and importance of the issues at hand. Environmental management may become one of the dominating management functions in the future and should be developed accordingly. 1. PREAMBLE The challenge facing industrial leaders today is limited growth and insufficient profitability coupled with high demands for sustainable development. Is it at all possible to reconcile the many requirements and desires and simultaneously improve the economic performance? The Norwegian Prime Minister, Gro Harlem Brundtland, speaking at the 1990 Industry Forum of the International Chamber of Commerce (ICC) emphasized the challenge as follows: 'The concept of sustainability is a demanding one, both for governments and industry and for other actors in society. It calls for a radical rethinking in the way we conduct our business. Such transformations require leadership within industry itself".

Two years ago, at United Nations Conference on Environment and Development (UNCED) in Rio politicians agreed on principles which were proclaimed essential for protecting the integrity of the global environment. The words of UNCEDs Secretary General, Maurice Strong, capture the essence and the magnitude of the challenge ahead of us: 'We need to find a viable and equitable balance between environment and development'. 2. THE ENVIRONMENTAL CHALLENGE Sustainability is steadily moving up on the political agenda. It is becoming an issue that nobody can afford to neglect; least of all industry leaders. Companies must meet basic current environmental issues as well as wider corporate citizenship issues.

Politicians on the international scene are clear on the long-term objectives, although they are still nego- Proceedings of the 14th World Petroleum Congress 0 1994 The Executive Board of the World Petroleum Congress Published by John Wiley & Sons tiating the means to reach them'.'. Future economic development will have to be based on sustainable development. Economic non-sustainable growth will be fought with all means at hand by politicians, pressure groups and media.

In addition to these political challenges which manifest themselves as laws, regulations, requirements and standards both on the national scene as well as on the international business arena, as business leaders we also have to face new - business or branch standards influencing our strategic, envir

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