Faced with society’s increasing expectations, the European Union’s Common Agricultural Policy uses environmental management as an increasingly critical criterion in the allocation of farm subsidies, with a shift in focus from production and area-based subsidies to payments for supplying public goods. There is an increasing demand to assess the ecological and environmental performance of farms as public money spent on provision of environmental services requires justification. The objective of this research is to strengthen the basis of the concept of farm-level environmental performance assessment. Firstly we give an overview of indicator-based sustainability assessment tools. Even though there are several diff erent tools developed globally, and the themes and indicators for the assessment of environmental performance are very similar, there are significant differences in terms of data survey among them. Secondly we describe the development and field testing of the ‘Green-point system’ developed in Hungary. This system is able to measure the environmental performance of farms and their value/ capability of providing public goods and sustaining ecosystem services through a framework of farm enterprise calculations and assessments. The Green-point system fits well into the stream of yet scarce approaches and efforts, which in several European countries aim to introduce and strengthen the so-called result-based agri-environmental schemes alongside the currently rather dominant management-based approaches.