The remarkable economic and population growth of the 20th century was closely coupled to substantial increases in the extraction and consumption of natural resources, leading to increasingly-damaging negative environmental impact. However, economic growth globally was faster than growth of the rate of consumption of natural resources, and some negative environmental impacts have been reduced. Globally, about 25% less material input was required in 2002 compared to 1980 to produce one unit of real GDP. It appears that some ‘dematerialization’ of the world economy has occurred spontaneously. Accelerating this process of decoupling economic activity from consumption and environmental impacts is fundamental to future human well-being. Future policies will require a better understanding of the process, so the International Resource Panel (IRP) has undertaken to define the key issues and challenges, drawing on peer-reviewed research and experience at multiple levels. A major conclusion from its first report on this topic is that decoupling is feasible, and indeed is already happening, but further sustainability-oriented innovations are urgently required to enable decoupling to support sustainable development more effectively. More transformative change is required to meet the size of the challenge.