Efforts to reduce negative impacts from consumption and production include voluntary market-based initiatives. Examples are the concept of eco-labelling and the concept of green procurement. These have emerged as policy instruments with great potentials to steer product innovation and purchasing decisions in a sustainable direction. This potential has been recognized by the United Nations, the European Union, the Organization for Economic Cooperation and Development and national governments through, e.g., various programmes and schemes. The aim of this thesis is to assess current criteria development processes within eco-labelling and green procurement from a strategic sustainability perspective and to describe possible improvement potentials from such a perspective to make these instruments more supportive of sustainable product and service innovation. A previously published framework for strategic sustainable development, including a definition of sustainability and generic guidelines to inform strategies towards sustainability, is adapted and used for this purpose. Criteria development processes in two Swedish eco-labelling programmes and at a governmental expert body for green procurement are studied. This includes interviews with criteria developers, studies of process documents and a case study at the governmental expert body for green procurement in which two criteria development processes were shadowed. The result reveals several strengths but also gaps and thus potentials for improvement. The criteria development processes and the resulting criteria mostly concern the current market supply and a selection of current environmental impacts outside the context of long-term objectives. Neither sustainability nor any other clearly defined long-term objective is agreed upon, and the criteria are not structured to support procurers, suppliers and product developers in a systematic and strategic stepwise approach towards sustainability. Recommended improvements include a more thorough sustainability assessment, communication of clearer objectives, broader competence in the criteria development groups and more emphasis on the dialogue and interaction between key actors. This includes an extended view on both the product concept and actors involved. Based on this, a new criteria development prototype is suggested, which aims at widening the scope from some currently known product impacts to the remaining gap to sustainability. During its further development and implementation, the criteria development prototype will be tested in successive iterations of action research together with experienced practitioners within eco-labelling and green procurement.