Ban formally opened the Rio+20 summit on sustainable development which brings together 191 UN members, including 86 presidents and heads of government.
The high-profile event comes 20 years after Rio's first Earth Summit when nations vowed to roll back climate change, desertification and species loss.
The summit was launched to a three-minute movie, 'State of the Planet: Welcome to the Anthropocene' that gave a visual trip through the dramatic changes in the environment since the Industrial Revolution.
The Anthropocene is the name given by many scientists for a new era in Earth's history. It derives from Greek words to indicate the era of humans.
Summit participants then heard a moving appeal by Brittany Trilford, a 17-year-old student from New Zealand, challenging leaders to lay the foundation for a more sustainable world.
'I stand here with fire in my heart. I'm confused and angry at the state of the world. We are here to solve the problems that we have caused as a collective, to ensure that we have a future,' Trilford, winner of the 'Date with History' youth video speech contest, said.
'I am here to fight for my future... I would like to end by asking you to consider why you are here and what you can do here. I would like you to ask yourselves: Are you here to save face? Or are you here to save us?'
A total of 191 speakers are expected to take the floor until Friday when the summit leaders are to give their seal of approval to a 53-page draft document agreed on by their negotiators Tuesday.
The draft outlines measures for tackling the planet's many environmental ills and lifting billions out of poverty through policies that nurture rather than squander natural resources.
In his remarks, the UN secretary general praised Brazil, the summit host, for securing a deal on the summit's final draft statement.
'I am pleased that negotiations have reached a successful conclusion... We are now in sight of a historic agreement,' the UN chief said.
'The world is watching to see if words will translate into action as we know they must. Rio+20 is not an end but a beginning. It's time for all of us to think globally and long term, beginning here now in Rio, for time is not on our side,' he said.
Brazilian President Dilma Rousseff, who was elected president of the conference, said she had no doubt 'that we will be up to the challenges that the global situation imposes on us.'
As the summit got under way, eight multilateral development banks announced that they would set aside $175 billion to finance sustainable transport systems over the next decade.
The pledge was made jointly by the World Bank, Asian Development Bank, African Development Bank, Inter-American Development Bank, CAF-Development Bank of Latin America, European Bank for Reconstruction and Development, European Investment Bank and Islamic Development Bank.
Transport is one of the fastest-growing source of greenhouse gases, driven especially by urban growth in giant emerging economies.
Around a billion people are likely to move to cities over the next 20 years, which means traffic congestion, air pollution and road accidents will become major urban challenges.
Some of the most contentious issues discussed at the conference were proposed measures to promote a green economy and the 'Sustainable Development Goals' that are set to replace the United Nations' Millennium Development Goals after they expire in 2015.
Connie Hedegaard, the European Union commissioner for climate change, said Europe had pushed for a more ambitious text.
'I think that many Europeans, including the ministers, the presidency, the commission, fought for more ambition, fought for more commitments, more deadlines,' she told AFP. 'We do not get everything we want, but we secure progress.
Environmentalist groups were scathing in their criticism of the draft.
'We were offered a common vision of inaction and destruction,' Daniel Mittler, political director of Greenpeace International, told AFP.
'There's absolutely nothing there for people and the planet,' he added.
The leaders, including French President Francois Hollande, South African President Jacob Zuma, Prime Ministers Manmohan Singh of India and Wen Jiabao of China, will hear a message from astronauts in the International Space Station on Wednesday.
But US President Barack Obama, British Prime Minister David Cameron and German Chancellor Angela Merkel will be absent.
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