Although it is recognised that the individual and the external world are linked in complex and mutual ways and can only be treated together as one phenomenon there is little evidence that transactionalist approaches, despite potentially providing a truly distinctive approach for environmental psychology, have been fully understood or operationalised. We take as our starting point the theoretical proposition that individuals are the sum of their social relations, i.e., they are the cause and consequence of their relations to others and the environment. Therefore environmental psychology should give priority to examining the reciprocity between people and environment and the ways in which they mutually reproduce the material conditions for their existence. Drawing on the example of sustainable development, we argue that any attempt to develop a sustainable society has to understand how the relationships between individuals and their social contexts can be changed. Thus the emphasis in a transformative environmental psychology should shift to the relations of production and consumption and the social and political relations within which values, attitudes and behaviours are formed, and unsustainable ways of living and working as well as the environment are produced and reproduced.