IIED is one of a small group of independent, not-for-profit organisations that has provided core concepts and methods for thinking about sustainability and social change.

The institute's work is currently divided into four main areas: natural resources, climate change, human settlements and sustainable markets.

In 1973, Barbara Ward was asked to become the organisation's first director, and agreed on the condition that development as well as an environmental agenda was integral to its mission.

IIED carried out research and lobbying work on a range of contemporary environment and development topics, using funds obtained from donor organisations and occasionally from corporations and foundations.

It held its first symposium at the 1974 UN World Food Conference and in 1975 joined forces with UNEP to create Earthscan, an information and environment service for media.

IIED continues to both conduct research with partners in dozens of countries and act on a global stage through processes such as various multilateral environmental negotiations.

She was succeeded by William Clark, Brian Walker, Richard Sandbrook, Nigel Cross, Camilla Toulmin, Andrew Norton and, currently, Tom Mitchell, who took over in September 2022.

Previous speakers have included: IIED is generally acknowledged to be a successful organisation – its ideas are pragmatic and pro-poor, and it has helped to influence of major organisations, including the World Bank, the Intergovernmental Panel on Climate Change, the Millennium Ecosystem Assessment, the Department for International Development of the UK government, and Scandinavian aid agencies such as SIDA and DANIDA.

IIED's Environmental Economics programme helped to develop some of the first "green accounting" and eco-taxation techniques that are now used in government and industry.

Richard Sandbrook lobbied some of the world's largest corporations to improve their environmental performance – notably in the mining sector.