This paper focuses on the terms of reference of the 1997 Kyoto Protocol of
the United Nations Framework Convention on Climate Change, which was drafte
d to support environmental sustainability through the mitigation of global
warming. The paper provides information oil the main features of the protoc
ol, especially the commercial incentives for companies in industrialised co
untries to reduce greenhouse gas emissions. Particular attention is paid to
the role of the operations manager and strategist in the selection of proc
esses, plant and equipment to meet these commercial incentives, and the loc
ation of industrial facilities under conditions of political and economic u
ncertainty. The paper demonstrates the importance of the political and econ
omic factors influencing environmental investment decisions, particularly t
hose factors which often lie outside the usual terms of reference of operat
ions managers.