This paper examines the growing importance of eco-innovation in aligning sustainability with technological development. It explores the ‘eco-design paradox’, which emphasizes the tension between the need for flexible design and the availability of data required for assessing environmental impacts during early innovation stages. This paradox presents a challenge: the lack of detailed data can have an impact on the ability to make sustainable optimal design decisions as designs are still fluid. The study investigates the essential sustainability aspects to be evaluated in the initial phases of innovation and explores the involvement of decision-makers and entrepreneurs in the sustainability assessment process. The paper uses a robust action research methodology to examine various eco-innovation diagnostic tools in collaboration with two French Institutes of Technology (FITs). A comparative analysis is conducted to assess these tools’ efficacity in evaluating several dimensions of sustainability, including environmental, social, and economic aspects. Our investigation identifies key criteria that are crucial for early-stage sustainability assessments, such as innovation description, systemic vision, functionality, and stakeholder involvement. The findings will guide policy makers, researchers, and practitioners in the field of eco-innovation by providing a comprehensive framework for evaluating and promoting sustainable innovations in their early stages. The insights from our findings show how important expert knowledge is in the eco-innovation diagnostic process. They also demonstrate the need for a more integrated approach to eco-innovation.