The coverage of strategic environmental assessment (SEA) has been extended to all public sector policies, plans and programmes subject to Scottish jurisdiction. Evaluation of the arguments advanced by the Scottish Executive for using environmental assessment as a tool for environmental governance requires an exploration of some of the contested interpretations of the function of environmental assessment at a strategic level. The paper examines the implications of this extension of the European Union SEA Directive in the context of current arrangements to fit environmental assessment into the UK tradition of integrated policy appraisal. It considers the methodological implications of using SEA explicitly for improving public sector decision making at all levels and across all activities. This enables environmental effects to be taken into account at an early stage in the formulation of government policy, through a transparent system of assessment which encourages public participation.