A current concern in many European countries is the environmental impact of agricultural pesticide usage and appropriate policy development to reduce impact. Currently, relatively hazardous pesticides that might be targeted for replacement by other products or management practices are not positively identified, with consequently few incentives for farmers to choose the least environmentally-risky chemicals. There is a lacuna in terms of widely-agreed operational environmental indicators, and an urgent need for comparative environmental assessment tools for pesticides, for use by both agriculturists and policy-makers. Such a system could, for example, provide a basis on which to differentiate an eco-tax according to the environmental threats posed by each product, and thus improve policy effectiveness. The heterogeneity of pesticide chemicals should be taken into account more explicitly in policy design. Through a comparison of different approaches covered in the literature on pesticide environmental classifications, this paper assesses the feasibility of developing environmental banding to improve the effectiveness of pesticide policy. A more pragmatic approach lies in the development of pesticide groupings rather than a continuous scale of environmental burden, i.e. focusing on broad similarities and differences rather than precise individual ordering. In particular, hazard indicators should be considered further, as a first stage in progress towards comprehensive environmental impact measures.