Improving products and production processes is necessary to ensure the competitiveness of the organisation. As part of these improvements, the popular approach is to use the FMEA method (Failure Mode and Effect Analysis). In the traditional FMEA approach, only the qualitative aspect is included, i.e., the analysis of the quality level of products or processes, its possible incompatibilities, and then proposing improving actions for them. It seems insufficient in times of expansion of the idea of sustainable development and dynamically changing customer requirements. Hence, the purpose of the research is to develop a fuzzy QE-FMEA method to simultaneously analyze hazards for product quality and the natural environment. This method will be based on a fuzzy decision environment. The main elements of originality of the developed method are: (i) extension of the characteristics of the selection of ratings for indicators with triangular fuzzy numbers and the development of a new characteristics of the selection of ratings for the environmental impact indicator, (ii) development of a selection matrix for the qualitative-environmental indicator (QE) according to the rules of triangular fuzzy numbers, (iii) determination of the method of estimating the value of the threat priority, additionally considering the qualitative-environmental indicator (RQE). The complement of research is developed procedure of the Fuzzy QE-FMEA method. It was shown that it is possible to include the effects of incompatibilities (effects of defects occurring in products or processes), which were simultaneously assessed considering the importance and impact on the natural environment. This method will be useful for any company for analysing defects of any products or processes mainly with significant impact on the natural environment.