Environmentalism is all the rage these days. Americans drink organic beers and spend money to make their homes more environmentally friendly. One recent survey found that the majority of Americans are willing to pay more for a product if they know it will benefit the environment.

So it shouldn’t be too surprising that the market has become flooded with products that are advertised with buzzwords like green, organic, sustainable, environmentally friendly, natural and biodegradable, just to name a few. In fact, there are 80 different environmental buzzwords like these used in the U.S. alone and about 600 used worldwide, according to The Washington Post. Yet when EcoLogo, a third-party environmental certification group, analyzed more than 2,000 North American products that claimed to be environmentally friendly in one way or another, they found that 98% “lacked proof to justify their claims.”

How to Avoid Being Greenwashed

Until now, the federal government has done relatively little to fight instances of green fraud. The New York Times reports that the Federal Trade Commission is authorized to crack down on businesses that are “misrepresenting their practices to clients,” but during the Bush administration, the FTC did not file any complaints of products making these sorts of environmental claims. Since Obama has taken office though, several complaints have been filed. Even more importantly though, the FTC has signaled that it will make changes to its environmental marketing guidelines for the first time in more than a decade.

The term most often used to describe deceptive green marketing is greenwashing, and as we’ll see, plenty of companies are guilty of doing this to varying degrees. So, before you throw down your hard-earned cash on a product that you think might save the world, make sure to look for endorsements of the products from other third-party groups like Ecologo and Energy Star and, ideally, stick to products that offer additional information on their Web sites in the interest of transparency.


No company has more problems right now with their public image than BP, thanks to the Gulf Coast oil spill, but even before the current catastrophe, the company angered many environmentalists. In 2000, BP decided to rebrand itself as an environmentally friendly company, changing its name from British Petroleum to Beyond Petroleum and spending $200 million on a marketing blitz to promote its greenness. Yet, as PR Watch has pointed out, BP’s green operations account for a microscopic part of its overall budget and profits. And in the time since BP has been rechristened, the company has been responsible for costly oil spills and explosions in Alaska, Texas and now the entire Gulf Coast.


Earlier this year, Tyson (Stock Quote: TSN) settled a lawsuit over its use of the phrase “raised without antibiotics.” Tyson tried to convince consumers that their chicken was healthy and raised in an environmentally conscious way. However, the U.S. Department of Agriculture discovered that Tyson actually injected antibiotics into the chickens before they were born just so they could claim the chickens technically weren’t “raised” on it. From a consumer perspective, there isn’t very much difference. Either way, you are paying to eat a chicken that has been injected with antibiotics. So Tyson was ordered to pay as much as $50 to any customer who bought chicken with that claim on the label.


Last year, the FTC took action against Kmart over the company’s false claims that one of its products was biodegradable. The item in question was a brand of disposable plates sold at Kmart called American Fare. The truth is that these plates may be biodegradable over hundreds of years, but in the short-term, they still end up sitting in landfills or burning up in incinerators.


In 2008, Clorox launched a green cleaning product line called Green Works in an attempt to join the environmental marketing movement. The cleaning products were quickly placed on shelves in major stores like Wal-Mart (Stock Quote: WMT), but as The Big Money has pointed out, there are several reasons to distrust Clorox’s green claims. As it turns out, some of the products contain synthetic dyes (which goes against Green Works’ claims of being “all natural”) and include a chemical known as sodium lauryl sulfate, a skin irritant (which goes against claims that the product is “safe”). Despite all this, Green Works is currently certified as green-friendly by the EPA.


The Big Money also points out dubious claims made by Sephora, the popular cosmetics retialer. In the past, Sephora has touted its “natural” products and “green conscience,” yet some items such as the Tarte vitamin infused lip gloss and Cargo’s PlantLove lipstick have been shown to contain “high levels of harmful chemicals and cancer-causing agents.”

General Motors

In the past few years, GM (Stock Quote: GM) has come under fire for touting its green credentials while producing environmentally unfriendly cars like the Hummer. But the best moment by far came last year when GM very publicly considered changing its logo from blue to green in order to signal its rebirth as an environmentally friendly company. As Fast Company noted at the time, “GM's focus on green is practically forced--almost every major and niche auto company is racing to put out as many hybrids and PHEVs as possible. It certainly doesn't deserve any special recognition for foresight.” No, the award for foresight should go to Ford, who has found much success putting out hybrids like the Fusion and Escape while GM was busy playing with color templates.


A number of blogs have bashed Huggies’ line of green diapers for blurring the truth. Huggies markets its Pure and Natural line with the phrase “natural materials” made with “organic cotton,” yet according to BusinessPundit, the company “won’t reveal whether the cotton is certified organic [and] for inexplicable reasons, the diapers also don’t include organic cotton on the inside surface of the diaper, which actually touches the baby’s skin.”


It doesn’t take an environmental scientist to realize that something made of fur may be “natural” but it’s not “environmentally friendly,” since an animal had to harmed in the process. But that didn’t stop the Fur Council of Canada from launching a strange “Fur is Green” campaign back in 2007 with the slogan “Fur, the ultimate eco-clothing… protecting nature, while pampering yourself!”


Last year, the FTC went after four companies including Sami Designs and Pure Bamboo for claiming their products were environmentally friendly and made of “100% bamboo fiber” when they were actually made of rayon, a man-made product that includes a “harsh chemical that releases hazardous air pollutants.” Of course, the FTC did find a moment for levity, accusing the companies of “bamboo-zling consumers.” Regulating companies and making wise cracks? Not bad, guys.


The last time we criticized Apple (Stock Quote: AAPL) in a piece, many readers thought we were being unnecessarily abusive toward the company, so I’ll say two things upfront: 1) I love Apple and own an iPod, iPhone and Mac and 2) In this case, Apple isn’t as bad as some other companies we’ve already mentioned on this list. That said, Apple is not as environmentally friendly as one might expect from a company with Al Gore on its board. In the past, some have complained that Apple does not do enough to recycle its computers. More recently, Apple was criticized over its claim of being “the world’s greenest family of notebooks,” as the Better Business Bureau argued they were exaggerating ever so slightly.

SC Johnson

SC Johnson currently faces a lawsuit on its Shout and Windex products after one consumer discovered that the company just created its own “Greenlist” label to appear environmentally friendly rather than trying to qualify for a label from a third-party environmental group. It’s unclear as of now whether SC Johnson is turning out anything particularly egregious, but The Wall Street Journal reports that this could prove to be a  landmark case since it specifically targets companies’ abilities to assign themselves a green label.

For more deceptive companies, check out our list of the biggest liars in business.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.