(FORTUNE Magazine) – Monsanto CEO Robert Shapiro was ambling through a Sheraton Chicago ballroom at the finale of a three-day company offsite not long ago when an employee named Rebecca Tominack walked up and startled him with a tribute: "I want you to know I am with you. As a pledge of loyalty, I'd like to give you this." Removing a nametag from around her neck, she placed it over his head. Her gesture, a response to Shapiro's vision for Monsanto's future, prompted first a trickle, then a stampede, of imitators. By evening's end, more than 100 admiring employees had piled their nametags on Shapiro's neck. Today the mementos are enshrined atop a glass-enclosed wooden pedestal in his office. They symbolize, he says, "something I want so deeply and I care so much about."

What Shapiro, a lanky 58-year-old, cares about--and is betting billions to bring to reality--is transforming Monsanto into a biotech powerhouse capable of helping feed the planet's exploding population at the same time it heals a damaged environment. That's a grandiose vision that scientists have labeled "sustainable development," but his is not a tree-hugging do-gooder's approach. Sure, Shapiro sounds like an impassioned crusader at times, but mainly his message conveys hardheaded business logic. "Look," he says impatiently, "I don't think it ultimately matters whether my soul is pure or I want to make a lot of money for shareowners; we come out at the same place: If Monsanto and other companies can get environmentally better products that people want to market faster at lower costs, we will kick butt in the marketplace."

Basically, Shapiro recognizes the world as a closed system whose limits are already pushing in on us. For example, an estimated 25 billion tons of the world's topsoil are lost each year, irrigation is increasing the salinity of soil, and arable land is disappearing to development. Air is dirty, water is polluted, animal species are disappearing. Scientists fret that the planet can't survive the expected doubling of its 5.8 billion population over the next 30 years without unthinkable degradation. What this means, Shapiro says, is that even if we choose the minimum goal of maintaining the status quo, "we must get twice the yield from every acre of land just to maintain current levels of poverty and malnutrition." By addressing such concerns, Shapiro contends, his company can do good for people, the planet, and his shareholders.

Despite the unknowns, Wall Street buys Shapiro's story. Monsanto's stock price has nearly tripled in the past three years, and last spring split five for one; its current $40 price represents a ratio to estimated 1997 earnings of about 24. There's little secret about the source of investors' enthusiasm. Even though Shapiro's eyes are cast skyward, his feet are firmly planted in the commonsense loam of Monsanto's St. Louis campus. The company, which sold $9.3 billion worth of goods and services in 1996, has delivered an average 22% increase in earnings per share over the past three years before extraordinary items. Returns on equity have averaged about 18%, even while expenditures on R&D have been a hefty 7.5% of revenues. The ratio of long-term debt to capital is a comfortable 38%.

In some ways, Wall Street's response is a vindication of long-term thinking by Shapiro and his predecessor, Richard Mahoney. During the 1980s, Monsanto quietly began to assemble a blue-ribbon panel of molecular biologists to pry open the secrets of transplanting DNA from organisms such as bacteria into plants to make them hardier, tastier, higher-yielding, and better able to resist pests and disease. Since then the company has poured more than $4 billion into R&D and a series of canny acquisitions. Last year Monsanto made a notable debut by introducing its first genetically engineered seeds to farmers.

And that's just the start of an outpouring of products that Shapiro views as planet-friendly. Says the Monsanto boss, a graduate of Harvard and Columbia law school and son of former General Instrument chairman Moses Shapiro: "The earth can't withstand a systematic increase of material things. If we grow by using more stuff, I'm afraid we'd better start looking for a new planet." What, in his judgment, can the earth support? "Exponential increases of information and knowledge. Infotech is going to be our most powerful tool. It will let us miniaturize things, avoid waste, and produce more value without producing more stuff."

Over time, Shapiro intends to transform Monsanto into a "life sciences" enterprise, devoted to improving human health by seeking the synergies in biotech, pharmaceutical research, and food products. Because life sciences is a fast-growing, knowledge-based industry requiring hefty expenditures on R&D, Shapiro will spin off Monsanto's slower-growing $3 billion chemicals operation to shareholders this summer. The life sciences company, analysts predict, will grow 2% to 3% faster annually without chemicals' drag. Once the divestment is complete, Shapiro will command an enterprise with estimated annual revenues of about $7 billion that is composed of three parts: agriculture, with about half of sales; pharmaceuticals, from the G.D. Searle subsidiary, which will contribute a third of revenues; and food products, dominated by the artificial sweetener NutraSweet, which will make up less than 20%.

To move his complex life sciences enterprise forward, Shapiro will need to fulfill three essential roles. First, he must constantly communicate his vision, stressing that Monsanto's research will focus on practical dreams. "The discipline of killing products will be absolutely critical," he says. Shapiro may be able to squash products without creating the sort of stress such acts often place on employees. After all, he is, despite his formidable intellect, a likable and informal man who signs his annual report letter "Bob," not "Robert." During a recent FORTUNE interview, he was tieless and in a brown Oxford shirt, with black undershirt peeking out at the neck. Newly hired organic chemist Akiva Gross recalls his first meeting with him, at which the CEO delivered a lucid history of nutrition, discussed state-of-the-art scientific developments, and summed up how Monsanto should pursue new foodstuffs. "It is difficult to lead scientists because they are usually skeptical of management," says Gross. "But Shapiro talks our language."

Second, and tougher, will be staying abreast of tricky technology. Today Monsanto's scientific eggheads labor painstakingly to advance the art of gene splicing, which involves extracting genes from bacteria and plants and inserting them into other plants. One idea is to render crops pest- and disease-resistant so farmers can eventually eliminate chemical spraying. The four genetically engineered seeds Monsanto introduced last year were cotton and potatoes immune to certain insects and soybeans and canola able to survive Monsanto's popular Roundup herbicide. Farmers loved them, and their success has propelled the company to a strong start: 14 of 24 genetically engineered seeds approved by U.S. regulatory agencies in the past two years belong to Monsanto or its partners. This year the company and its partners will introduce seeds for corn that are resistant to some insects, cotton that can stand up to Roundup weed killer, and canola that produces improved oils.

To pay for these innovations, Monsanto is blessed with a cash cow: its wildly successful Roundup herbicide. This 25-year-old product is so popular with farmers that its importance to Monsanto can't be overstated: Roundup provides about 40% of operating earnings.

No one at Monsanto thinks achieving Shapiro's vision will be easy. Robert Fraley, who heads agricultural biotech R&D, confesses that his worst nightmare is that pests thwarted by Monsanto's scientists will eventually adapt and create an untamed new menace. This issue also troubles the Union of Concerned Scientists, which issues working papers on strategies to counteract potential biotech catastrophes. Monsanto's solutions include creating "refuge" areas. Refuges are fields planted nearby with the same crop but with seeds that aren't genetically altered. The idea: Insects that have grown resistant through mutation will mate with "normal" pests and produce offspring no longer resistant because the mutant gene is recessive.

Another variable lies in the potential public backlash. Many environmentalists question whether designer crops can do much to clean up pollution, and they worry that biotech products are being introduced too quickly without understanding their impact. But so far, U.S. consumers accept the idea of eating genetically engineered food, despite efforts by Greenpeace and other environmental groups to stir up opposition. A few years ago a noisy outcry slowed the approval process of Monsanto's first biotech product, a hormone that increases cows' milk production by about 10% to 15%. But sales of the product, called Posilac, grew 45% last year.

Food science professor Thomas Hoban of North Carolina State University, who has interviewed thousands of U.S. and Japanese consumers for projects paid for by the Department of Agriculture and the Grocery Manufacturers of America, maintains that much of the flap over genetic engineering is a Luddite-like nonevent. Well over two-thirds of Americans and about 80% of the Japanese he interviewed say they'll buy designer produce.

Finally, for Shapiro's dream to become reality, he must balance long- and short-term financial interests while walking on a high wire only a Wallenda wannabe would relish. Institutional investors will continue to demand 20%-plus increases in earnings per share, a pace Shapiro admits will be harder to meet in the next few years. But he says he won't use the cost of building his brave new world as an excuse for poor performance today. He's acutely aware of his responsibility to keep Wall Street happy: "I have seen no evidence that companies unsuccessful in the short term are successful in the long term."

Last year his credibility with investors soared when Monsanto unveiled a novel compensation plan for top managers. Executives are required to buy Monsanto stock on the open market financed by an interest-bearing loan from the company. If shareholder total return over the next five years ranks in the top 25% of companies in Standard & Poor's industrials index, the company will forgive the loan. If not, executives will have to pay it back. Declares NatWest Securities analyst Mark Wiltamuth: "The plan puts management on the investors' side." Shapiro's personal exposure is $6 million.

Nevertheless, some investors lost their nerve last December when Monsanto spent more than $1 billion for a small Iowa seed company called Holden's Foundation Seeds ($45 million in sales). Paying 23 times sales was too much for the faint of heart, who pushed the stock back about $2 a share to $38. The acquisition stirred up a nascent fear that Monsanto might be overreaching. After all, critics point out, business history is littered with corpses of failed visionaries. Says one consultant: "Many visionaries go overboard, and Shapiro could too." The comment sends an electric charge through the CEO. "I think that's fundamentally right," he concedes, "but we haven't lost our marbles in some visionary growth kick! We didn't want Holden's at any price, but it was an auction, and we saw value there."

It's not yet clear whether Shapiro's scheme to make a buck by being green is an idea whose time has come--or a black hole where shareholders' money will disappear. But one thing is certain: He's prepared to take enormous risks to see a new biotech day dawn. He concedes that no one knows today how to operate on an environmentally sustainable basis, but a lot of smart people at Monsanto are fired up to figure it out. And for inspiration, he can always gaze at that sculpture of nametags in his office.

REPORTER ASSOCIATE Alicia Hills Moore