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The number of eco‐labeling schemes is rising dramatically, yet the rigor and credibility of such schemes remains uneven. Whereas some eco‐labeling organizations (ELOs) comply with best practice guidelines designed to increase the credibility of their standards through attention to good operating principles, such as transparency and impartiality, others do not. Within this article, I attempt to explain this variation through multivariate regression analysis of an original cross‐sectoral dataset of transnational ELO policies and practices. I find compelling evidence to suggest that ELOs with environmental non‐governmental organization (ENGO) partners, nonprofit structures, or broad transnational reach are most likely to comply with best practices. I also find that private ELOs are more likely to disregard best practices than public ones. Conversely, I find little evidence that levels of industry funding or sector‐specific competition dynamics affect best practice compliance. This study contributes new data, a new method of comparison, and new findings to the growing literature on transnational governance.