diff --git a/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryObservationConvention.java b/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryObservationConvention.java
index 53e035b8..c99d21ab 100644
--- a/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryObservationConvention.java
+++ b/spring-cloud-config-server/src/main/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryObservationConvention.java
@@ -16,6 +16,7 @@
 
 package org.springframework.cloud.config.server.environment;
 
+import io.micrometer.common.KeyValue;
 import io.micrometer.common.KeyValues;
 import io.micrometer.common.docs.KeyName;
 import io.micrometer.observation.Observation;
@@ -35,21 +36,20 @@ class ObservationEnvironmentRepositoryObservationConvention
 	@Override
 	public KeyValues getLowCardinalityKeyValues(ObservationEnvironmentRepositoryContext context) {
 		KeyValues keyValues = KeyValues.empty();
-		keyValues = appendIfPresent(keyValues, DocumentedConfigObservation.LowCardinalityTags.ENVIRONMENT_CLASS,
+		keyValues = appendWithValueOrUseDefault(keyValues,
+				DocumentedConfigObservation.LowCardinalityTags.ENVIRONMENT_CLASS,
 				context.getEnvironmentRepositoryClass().getName());
-		keyValues = appendIfPresent(keyValues, DocumentedConfigObservation.LowCardinalityTags.LABEL,
+		keyValues = appendWithValueOrUseDefault(keyValues, DocumentedConfigObservation.LowCardinalityTags.LABEL,
 				context.getLabel());
-		keyValues = appendIfPresent(keyValues, DocumentedConfigObservation.LowCardinalityTags.PROFILE,
+		keyValues = appendWithValueOrUseDefault(keyValues, DocumentedConfigObservation.LowCardinalityTags.PROFILE,
 				context.getProfile());
-		return appendIfPresent(keyValues, DocumentedConfigObservation.LowCardinalityTags.APPLICATION,
+		return appendWithValueOrUseDefault(keyValues, DocumentedConfigObservation.LowCardinalityTags.APPLICATION,
 				context.getApplication());
 	}
 
-	private KeyValues appendIfPresent(KeyValues keyValues, KeyName profile, String value) {
-		if (StringUtils.hasText(value)) {
-			keyValues = keyValues.and(profile.withValue(value));
-		}
-		return keyValues;
+	private KeyValues appendWithValueOrUseDefault(KeyValues keyValues, KeyName keyName, String value) {
+		value = StringUtils.hasText(value) ? value : KeyValue.NONE_VALUE;
+		return keyValues.and(keyName.withValue(value));
 	}
 
 	@Override
diff --git a/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryWrapperTests.java b/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryWrapperTests.java
index 0e72d6e4..fcdefbdf 100644
--- a/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryWrapperTests.java
+++ b/spring-cloud-config-server/src/test/java/org/springframework/cloud/config/server/environment/ObservationEnvironmentRepositoryWrapperTests.java
@@ -18,6 +18,7 @@ package org.springframework.cloud.config.server.environment;
 
 import java.util.Arrays;
 
+import io.micrometer.common.KeyValue;
 import io.micrometer.observation.Observation;
 import io.micrometer.observation.tck.TestObservationRegistry;
 import org.junit.jupiter.api.Test;
@@ -70,6 +71,50 @@ class ObservationEnvironmentRepositoryWrapperTests {
 		});
 	}
 
+	@Test
+	void shouldCreateRootObservationForCompositeWithDefaultValues() {
+		TestObservationRegistry registry = TestObservationRegistry.create();
+		EnvironmentRepository delegate = new MyEnvRepo();
+		EnvironmentRepository composite = new CompositeEnvironmentRepository(Arrays.asList(delegate), registry, true);
+		EnvironmentRepository wrapper = ObservationEnvironmentRepositoryWrapper.wrap(registry, composite);
+
+		wrapper.findOne("foo", "bar", null);
+
+		assertThat(registry).hasHandledContextsThatSatisfy(contexts -> {
+			contexts.stream()
+				.filter(context -> context.getName().equals("spring.cloud.config.environment.find")
+						&& contextExists(context, "spring.cloud.config.environment.class",
+								"org.springframework.cloud.config.server.environment.CompositeEnvironmentRepository")
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.label")
+							.getValue()
+							.equals(KeyValue.NONE_VALUE)
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.application")
+							.getValue()
+							.equals("foo")
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.profile")
+							.getValue()
+							.equals("bar"))
+				.findFirst()
+				.orElseThrow(
+						() -> new AssertionError("There's no observation for the Composite EnvironmentRepository"));
+			contexts.stream()
+				.filter(context -> context.getName().equals("spring.cloud.config.environment.find") && contextExists(
+						context, "spring.cloud.config.environment.class",
+						"org.springframework.cloud.config.server.environment.ObservationEnvironmentRepositoryWrapperTests$MyEnvRepo")
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.label")
+							.getValue()
+							.equals(KeyValue.NONE_VALUE)
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.application")
+							.getValue()
+							.equals("foo")
+						&& context.getLowCardinalityKeyValue("spring.cloud.config.environment.profile")
+							.getValue()
+							.equals("bar"))
+				.findFirst()
+				.orElseThrow(() -> new AssertionError("There's no observation for the wrapped EnvironmentRepository"));
+		});
+	}
+
 	private boolean contextExists(Observation.Context context, String tagName, String tagValue) {
 		return context.getLowCardinalityKeyValues()
 			.stream()