On 21 August 2017 at 20:57 (local time) a very shallow (H = 1.2 km), moderate (Md = 4.0), earthquake hit the volcanic island of Ischia (Southern Italy), causing the death of two people. The study of the damage to the buildings with the European Macroseismic Scale 98 (EMS-98), carried out immediately after the earthquake, highlighted that hilly area of Casamicciola Terme, on the northern side of the Mt. Epomeo, was the most damaged part of the island with locally quite relevant damage (I = VIII EMS). This seismic event is the first damaging earthquake in Ischia during the instrumental era. In fact, this provides, for the first time, the opportunity to integrate historical seismicity, macroseismic observations, instrumental information, and detailed mapping of the geological coseismic effects. In this work we evaluate the effects induced by the 2017 Casamicciola earthquake on the environment using the Environmental Seismic Intensity 2007 (ESI-07) macroseismic scale. This macroseismic analysis, together with the superficial coseismic faulting characteristics and the available geophysical information, allows us to reconsider the source model for the 2017 earthquake and the previous damaging historical earthquakes in the Casamicciola Terme area. The application of the ESI scale to the Casamicciola Terme earthquake of 21 August 2017 and the assignment of seismic intensity offers better spatial resolution, as well as an increase of the time window for the assessment of the seismic hazard, allowing to reduce the implicit uncertainty in the intensity attenuation laws in this peculiar volcano-tectonic setting. Since intensity is linked to the direct measure of damage, and it is commonly used in hazard assessment, we argue that building damage at Casamicciola Terme is strongly influenced by earthquake surface faulting and near field effects, and therefore controlled by the geometry of the seismic source.