Abstract Environmental design (eco-design) has been identified in both academic and policy circles as a point of intervention in the product lifecycle to promote environmental performance. The benefit of eco-design would be enhanced by rooting it firmly within theoretical design principles and establishing ‘sustainability’ as a functional requirement within a regulatory framework. Formulating such an innovative approach requires first understanding current practices of eco-design in industry. This paper, therefore, addresses three questions: 1) To what extent is the design process structured in practice as suggested by design theory? 2) What, if any, environmental issues do designers consider to be relevant to their products? and 3) To what extent are environmental issues incorporated into product design? Targeting primarily large UK based companies, the authors conducted open ended interviews in conjunction with a postal survey of a sample of manufacturing companies incorporating a wide range of industrial sectors. Critically, many designers are not following good design practice, which limits the possibilities for radical environmental innovation. The environmental design behaviour of companies reflects a complex balance of designers' understanding of environmental issues and the extent of the design space, influenced by legal requirements, economic and supply chain constraints. A more effective regulatory strategy informed by good design practice is required to assist companies in achieving an effective implementation of eco-design.