Labels are used to tag/organise process flows in whatever way you need:
Labels can be applied to both process flows and virtual environments. All labels created are added to the same 'pool' - i.e. labels created from within a process flow can also be used to tag virtual environments, and vice versa.
When you register for a Patchworks account, two labels are added to your company profile automatically - productionand staging. If these aren't relevant to your needs, you can choose to update/remove them.