ISO 14020 series of standards provide guidance for establishing ecolabels and a classification based on three label types, I, II, and III. They also determine the consideration of product’s life cycle and application of the life cycle assessment (LCA) in ecolabeling. Still, the large number and variety of existing ecolabels has led to consumer confusion in the recent years. The objective of this paper is to propose a characterization scheme for ecolabels and to provide recommendations for the enhancement of existing ecolabel classification, questioning the current sufficiency of ISO. To reach the objective, we first create a sample of ecolabels covering forest and paper products as an example, to narrow down the enormous number of existing ecolabels (over 460 as of August 2018). Second, we analyze their content, purpose, and awarding criteria through a desk research. In parallel, scientific publication, reports, and standards are also analyzed. Third, based on the obtained information, we define a list of ecolabel characterization attributes and their options and observe tendencies in ecolabel development. Ultimately, based on the outcomes of the proposed characterization scheme, we give recommendations for enhancement. Ultimately, we compare a sample of 45 ecolabels against 18 attributes of the proposed characterization scheme, including, among others, their ISO typology, life cycle perspective, awarding format, covered environmental aspects, and scope. Regarding type I or type III label, ISO seems to be explicit and their requirements are well respected, including how LCA is to be applied. However, approximately 60% of the explored ecolabels in our sample did not declare any ISO typology, whereas none assigned a type II classification. These “undefined” ecolabels, as we call them, apply different awarding formats and criteria in combination and hybrid forms that are not recognized and described by ISO or any other observed classification approach. Misuse of the term “LCA” is also perceived in such “undefined” initiatives. We conclude that the current ISO standards on ecolabels belittle the consequences that the increased number of undefined ecolabels brings. We provide a list of recommendations for the enhancement of the current ISO classification in seven topics, namely, awarding format, aspects diversity, operation scope, verification, reconsideration of the usability of ISO 14021, new ISO classification, and transparency. Limitations of the study and outlook conclude the work.