AbstractMany organizations present their environmental work in the form of annual reports and use the indicators in them for follow‐up. However, internal communication and management is needed for environmental improvements. The indicators found in reports may be suitable for external communication, but are they also suitable internally and operationally?This article reviews the existing literature on environmental indicators. With the help of an operational approach, from organisation theory, and a life‐cycle approach, indicators are analysed. The analysis shows that formulating indicators for internal management is not an easy task; available guidelines are of little help. It is concluded that the environment can be managed internally by relating indicators. Therefore, an additional set of indicators for internal management and a wider responsibility for the life cycle are recommended. The analysis and recommendations are illustrated with examples drawn from the field of property management. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.