There are generally two types of institutions, the formal ones and the informal ones. The formal institutions are the laws and rules made by government and are mentioned in the constitution of a state. In contrary to that the informal institutions are the unwritten rules and customs of the society. The main difference between the two types of institutions is that an authority enforces the formal institutions where the informal one is not enforced. In the paper, we will discuss the roles of both kinds of institutions for promoting sustainable society-environment interaction. We will shed light on how the central laws can effect the environment and also localized rules and