You might have encountered the term greenwashing only in recent years, but the practice of making green claims on products and services that really aren't their products goes back longer. And for more than two decades the National Advertising Division (NAD) of the Council of Better Business Bureaus has looked into greenwashing in advertisements and marketing, following policy and procedural guidelines set by the National Advertising Review Council.

In 1988, the NAD ruled on one of its first major cases of green marketing. Archer Daniels Midland Company had run a series of TV ads suggesting that a switch to ethanol-blended fuels would be as good for the planet as "having one-third fewer cars on the road." Not true based on the evidence, the NAD ruled, and recommended that ADM modify its claim.

In the years since, the NAD has issued more than 30 environmental decisions. Cases are initiated through monitoring by NAD staff or through challenges from companies questioning claims by their competitors. The first wave greenwashing came in the early 1990s, and the second started a few years back and continues today, says Andrea Levine, NAD director.

Today's greenwashers rely on many of the same tactics from last decade. The question of degradability and landfill reduction is one favorite form of snake oil. "There was the 1990s ad for plastic utensils that were going to save our precious water resources because you didn't have to wash them," Levine recalls. Just last month, the NAD ruled against Dispoz-O, the maker of Enviroware plastic tableware (PDF), saying that the company couldn't provide reliable scientific evidence that its products break down in months, as claimed.

Gross exaggeration is another popular ploy, as when a 2007 Panasonic promo proclaimed that "Panasonic Plasmas are environmentally friendly. No lead. No mercury. No worries. Most LCD TVs have mercury." The NAD ruled that while it's true that plasma TVs don't contain mercury, their significant energy consumption hardly makes them environmentally friendly.

Then there are hyperbolic statements, including Seventh Generation's suggestion that its household-cleaning products are "as gentle on the planet as they are on people."

Some products do promise some benefit to the planet, but advertisers then make too much of the perceived health risks of their competitors' products. A case in point is formaldehyde-free insulation, marketed thus by Johns Manville: "We got rid of formaldehyde in the insulation. So now all you have to worry about is getting rid of the monsters under the bed." That apparent demonizing of formaldehyde-bonded fiberglass went too far, the NAD ruled.

Not every advertising challenge results in charges of blatant greenwashing. When the Clorox Company had to defend its Green Works product line, the NAD ruled that the cleaners are, in fact, as effective as traditional cleaning products at removing most soils. However, the NAD recommended that Clorox be clear with consumers that Green Works cleaners cannot kill germs or cut through tough grease stains as well as some stronger cleaners that contain disinfectants.

The same dark green versus light green dichotomy that applies to environmentalism goes for greenwashing. "There are always going to be companies that take advantage of what they think consumers want," says Levine. But on the whole, she's "seeing changes that are more than just cosmetic, with companies doing serious soul-searching into their corporate policies and coming up with products that are truly beneficial for all."

Ultimately, she adds, it's consumers who have "the purchase power to drive environmental policy."—Daniel DiClerico | e-mail | Twitter

Essential information: Read our report on buying green products and learn the truth about some green groups.