Energy labels serve as a crucial tool for educating consumers on the energy efficiency of appliances. These labels enable consumers to make wise decisions that save money and reduce their carbon footprint by providing precise information on energy consumption, while energy-efficient appliances promote sustainability by reducing energy consumption and greenhouse gas emissions and conserving resources. By conserving natural resources by minimizing resource extraction and waste generation, the circular economy promotes sustainable development for future generations. This study observes Malaysian public awareness and knowledge of energy-efficient labeling and its acceptance of energy-labeled appliances. The study collected primary data from 791 participants in selected states of Malaysia. About 74.97% of people are willing to pay more for energy-efficient appliances to support sustainability. The study found that age, employment status, and environmental awareness are important factors that drive the public to spend more on energy-labeled appliances. Energy labels provide information about energy consumption and the environmental impact of products, thus supporting the circular economy. Recognition of their relevance by policymakers, industry stakeholders, and the public is crucial. Besides, the energy labels play a vital role in accomplishing SDG 7, “Affordable and Clean Energy.”