diff --git a/.changeset/ten-timers-sneeze.md b/.changeset/ten-timers-sneeze.md
new file mode 100644
index 0000000000..b5b9d66de6
--- /dev/null
+++ b/.changeset/ten-timers-sneeze.md
@@ -0,0 +1,5 @@
+---
+'@sap-cloud-sdk/util': minor
+---
+
+[New Functionality] Add support for setting log level for newly created logger using environment variable `SAP_CLOUD_SDK_LOG_LEVEL`.
diff --git a/packages/util/src/logger/cloud-sdk-logger.spec.ts b/packages/util/src/logger/cloud-sdk-logger.spec.ts
index e0d87dfa26..f9e64d588a 100644
--- a/packages/util/src/logger/cloud-sdk-logger.spec.ts
+++ b/packages/util/src/logger/cloud-sdk-logger.spec.ts
@@ -48,9 +48,25 @@ describe('Cloud SDK Logger', () => {
       delete process.env.VCAP_SERVICES;
     });
 
-    it('creates a new default logger', () => {
+    it('creates a new default logger with default log level info', () => {
       logger = createLogger();
       expect(logger).not.toBeUndefined();
+      expect(logger.level).toEqual('info');
+    });
+
+    it('creates logger with log level from env variable, if one is specified', () => {
+      process.env.SAP_CLOUD_SDK_LOG_LEVEL = 'silly';
+
+      logger = createLogger();
+      expect(logger).not.toBeUndefined();
+      expect(logger.level).toEqual('silly');
+
+      const write = spyOnWrite(logger);
+
+      logger.silly(message);
+
+      expect(write).toHaveBeenCalled();
+      delete process.env.SAP_CLOUD_SDK_LOG_LEVEL;
     });
 
     it('creates a new logger for a module', () => {
diff --git a/packages/util/src/logger/cloud-sdk-logger.ts b/packages/util/src/logger/cloud-sdk-logger.ts
index f331e35230..0c8ceb45b3 100644
--- a/packages/util/src/logger/cloud-sdk-logger.ts
+++ b/packages/util/src/logger/cloud-sdk-logger.ts
@@ -116,6 +116,7 @@ export function createLogger(
       : { ...messageContext };
   const logger = container.get(customFields.messageContext, {
     level:
+      process.env.SAP_CLOUD_SDK_LOG_LEVEL ||
       customLogLevels[customFields.messageContext] ||
       customFields.level ||
       container.options.level ||