Sabah is at a crossroads. The State still retains approximately 50% of its original forest, but most of these forests are found in the interior parts of the State and most of them are logged over and devoid of significant timber resources. Around this forested area is a rapidly developing landscape with secondary regrowth, plantations, mines, and the fields and villages where the rural population makes a living. Use of its natural capital has allowed the state to develop quickly, benefiting many of its people. Unfortunately, there are costs to this development. Loss and degradation of forests has led to high species extinction risks and increasingly negative effects on human populations, for example from flooding, freshwater pollution, landslides, and declining fisheries. Unless remaining natural resources, such as forests are managed more sustainably, Sabah could lose an important and internationally recognized asset, and a significant source of income. The choice that the people of Sabah have is to continue along the present path of unsustainable environmental use and cope with the development costs, or to seek some level of stabilization in which development aspirations are balanced with environmental and social sustainability. Sabah’s state government institutions have expressed a desire to reduce the environmental impacts of the current economic development and to seek more sustainable ways to develop and use the land, waters, and natural resources of the island. At the same time, these governments are targeting an expansion of agricultural production, an improved and expanded infrastructural network, hydro-electrical projects, and other developments that potentially clash with the stated goals to maintain forest cover and its environmental services. As a result, Sabah is in urgent need for a holistic and practical development plan that takes ecological concepts into consideration and determines optimal use of resources and minimization of trade-off costs. Sabah is moving in the right direction with regard to such sustainability goals. In fact, Sabah appears to be ahead compared to other parts of Borneo Island or even in broader South East Asia. The State has the opportunity to be a model for a “Green Economy” throughout the island, as well as in the developing world - a green economy which would results in improved human well-being and social equity while significantly reducing environmental risks and ecological scarcities. What is needed is a development plan for the state, supported by all main government organizations in which any proposed developments are carefully considered in terms of their long-term economic, environmental and social impacts. The Heart of Borneo Initiative (HoB) has provided Sabah with a framework for state-wide sustainable development plans. HoB is a transboundary collaboration between Brunei, Indonesia and Malaysia to effectively manage and conserve equatorial rainforests included within its boundaries for the benefit of people and nature. The first Strategic Plan of Action (SPA) was produced in 2008, designed to be a roadmap for each country’s participation to accomplish the overall HoB vision. Since then, HoB in Sabah has had many successes, including an increase in protected area from about 939,000 ha in 2008 (or about 12.7% of the total land mass of the state) to a staggering 1,300,000 ha in 2013 (19.0% of the land mass). These new protected areas have increased the overall connectivity in Sabah’s networks of forests and thus increased the survival chances of endangered wildlife. Other successes include reforestation and restoration efforts that aim to restore forest functionality in over 150,000 ha; the application of reduced- Impact Logging practices in all commercial forest reserves; the development of new funding mechanisms to protect the rich biodiversity of the state; and the development of State Action Plans (SAPs) for three iconic totally protected species: orangutan, Bornean elephant and Sumatran rhino. In the spirit of refreshing and recommitting to the common HoB tri-lateral vision, a revised Strategic Plan of Action for the period 2014-2020 was commissioned by the Sabah State Committee, and this document is the result. This document: • Presents the HoB and green development objectives in the light of national policies, and points out potential for synergy and conflict; • It presents the major issues and challenges identified during the HoB consultation process that led to the development of this document; • It provides insight into factors that enable green development in Sabah; • It provides specific recommendations for follow up action.