Voluntary agreements with industry in the field of environmental policy offer many examples of overcompliance with respect to environmental standards. The explanation of such phenomena seems still to be a puzzle for environmental economists. However overcompliance appears less surprising considering firms strategies aimed to internalise environmental quality, given asymmetric information between firms and consumers. Even in perfectly competitive industries imperfect information about quality gives rise to market failures causing inefficiencies due to adverse selection and moral hazard. Typically these inefficiencies differ in sign with respect to those pertaining to negative externalities. As in this case efficiency improvements are linked to an increase in output and/ or market exchanges, these same improvements are not only socially desirable but also worthwhile from the point of view of firms. We model then the choice of the environmental quality of products in a one-shot game between a monopolist firms and consumers, to show the existence of inefficient equilibria where quality is low because of moral hazard problems. The firm can however change his equilibrium strategy in a repeated but finite game in order to build an environmental reputation if we suppose that consumers information is not only imperfect about quality but also incomplete with respect to some institutional features that characterise markets. These features may concern the actual existence of a threat either of a stricter regulation by the government or of the potential entry of another firm offering higher quality (green) products. Both arguments are often invoked as explanations for the good environmental performance of some firms subscribing voluntary agreements. We take account of them in a simple two periods model to show the existence of a perfect bayesian equilibrium in mixed strategies where the firm can revert to the production of green products in order to influence consumersÕ beliefs. Due to the peculiarity of environmental information (green products are credence goods) we claim that reputation viewed as an implicit contracts is not sufficient in this case and an explicit agreement is then necessary in order to establish monitoring and controlling procedures to verify the performance of firms. These procedures can explain per se the necessity of firm to acquire credibility as producers of environmental friendly goods through the diffusion of voluntary agreements.