SUMMARYWe are living in a highly dynamic, human‐dominated Earth System in which non‐linear, abrupt and irreversible changes are not only possible but also probable. These changes require institutional structures capable of steering human society away from critical tipping points and irreversible change and ensuring sustainable livelihoods for all. We see 2012 as a ‘charter moment’, a historic opportunity to transform the institutional framework for sustainable development (IFSD) to better address the critical issues and political dynamics in the 21st century. In this paper, we present ‘The Hakone Vision on Governance for Sustainability in the 21st Century’, which calls for a fundamental restructuring of the IFSD that (i) clearly articulates the ‘aspirations’ of governance for sustainability including objectives and underlying values and norms, (ii) allows for meaningful and accountable participation by a wide range of ‘actors’ to develop solutions ‘from’ people ‘for’ people and (iii) creates an ‘architecture’ to include better configuration of actors, actor groups and their networks, as well as improved institutions and decision‐making mechanisms. We situate the Hakone Vision in the context of discussions of the IFSD and discuss our process for developing the Hakone Vision through a series of ‘world café’ discussions involving academic experts on global environmental governance and policy practitioners working at the local, national and global level. With our assessment of the IFSD and the challenges we face, we suggest that proposals for a Sustainable Development Council in the United Nations warrant further consideration, among others. Copyright © 2012 John Wiley & Sons, Ltd.