Eco-labelling schemes help consumers make decisions about the products they buy and whether they are environmentally friendly. There are several existing eco-label schemes around the world including the German Green Spot, the Nordic Swan and the US Green Seal. Most current eco-label programs are ‘cradle to grave’, that is, they involve some form of analysis based on the environmental consequences of their manufacture, use and disposal.

Eco-labelling makes a form of positive statement that identifies a certain product or service as less harmful to the environment than other similar products or services.

Eco-labels can cover a range of environmental attributes, which may include health issues, atmospheric impacts or other environmental impacts, packaging and other industial issues to name few. Labels allow consumers to make comparisons among products/services in the category and essentially vote their preferences in the market when making purchasing decisions.

An eco-label is a graphic symbol and/or a short descriptive text applied on a product, package, or inserted in a brochure or in another informative document that accompanies the product and offers information about at least one and at most these environmental impacts generated by the respective product.

Based on overseas experience, appropiate eco-labelling with associated verification and certification procedures is a driver for the increassed uptake of recycled content and/or sustainable products. Eco-labels belong to the class of "new environmental policy instruments" (NEPls) together with voluntary agreements, eco-taxes and tradable permits. Eco-labels are complementary policy instruments relative to traditional regulation but also to other market based instruments. They mainly rely on moral persuasion by influencing the custumer's attitude toward protecting the environment and choosing eco-products and/or products with a reduced impact upon the environment.

Eco-labels may be distinguished by whether they are government sponsored or managed by the private sector. Currently, there is no universal standard for eco-labels. To date, approximately 28 countries have established national eco-labelling programs. A large number of these are voluntary. The voluntary, private sponsored labelling scheme do not involve the government and have two sub-categories: those with criteria imposed by third parties and those based on self-declaration by manufacturers. Eco-labels may address different types of products, which is the case of most of the existing eco-labelling schemes, may address the services sector or both.

Eco-labels are increasingly based on the life cycle assessment (LCA) of a product. LCA informs the consumer about the transfer of environmental harm in stages of the products life cycle.