4 Ways to Figure Out How 'Green' a Product Really Is

Those alluring labels claiming items to be "all natural," "eco-friendly" and "organic" are often inaccurate, inflated, unsubstantiated or otherwise misleading, says Brian Clark Howard, editor at TheDailyGreen.com, a green living site. (TheDailyGreen.com is published by Hearst Corp.; SmartMoney.com is a joint venture of Hearst and Dow Jones, which is owned by News Corp.) Such deceptive practices even have their own term in the eco-world's lexicon: greenwashing. And unfortunately, it's fairly rampant.

In 2007, specialty researcher TerraChoice Environmental Marketing studied 1,753 environmental claims on 1,018 products found at major retailers. All but one carried claims that could be proven false or that were potentially confusing for consumers.

"When you use your money to buy an environmentally-friendly product, you think you're doing something to help the environment, not preserve the status quo," says University of Oregon professor Kim Sheehan, co-founder of GreenWashingIndex.com, a partnership between the university and Texas-based researcher EnviroMedia Social Marketing that evaluates ads making green claims. Among the worst offenders are auto makers and energy companies, she says, but few industries are altogether clean.

Now, with consumer spending on the decline, retailers are even more desperate to boost sales and many see jumping on the green bandwagon as the perfect solution. After all, nearly 90% of shoppers consider the health and environmental impact of products when deciding what to buy, according to Consumer Reports. "Hearing [an eco-friendly] claim is enough to make many consumers choose one brand over another," says Sheehan. It can be profitable, too, with 70% of shoppers willing to pay up to a 20% premium for a product or service that claims to be eco-friendly, reports Mambo Sprouts Marketing, a market researcher specializing in organic and healthy living products.

The resulting tidal wave of green products entering the market has spurred the Federal Trade Commission into action. The agency is reviewing its outdated green marketing guidelines, which haven't been revised since 1998. "Advertisers are always trying to put the best light on things," explains FTC spokesman Frank Dorman. While some greenwashing is done with the intent to deceive, sometimes there's simply just a difference of opinion about what items qualify as "natural" or "earth-friendly," he says. In either case, consumers need better protections. Through May, the FTC will debate everything from the standards of "carbon neutral" to the meaning of "sustainable." Proposals for the new guidelines are expected to be out later this year.

Until those new rules are in place, consumers need to exercise a level of skepticism regarding eco-claims. Just scanning the product's label won't give you a clear indication of its legitimacy, says Elliot Laws, senior counsel specializing in environmental issues at Washington, D.C.-based law firm Pillsbury Winthrop Shaw Pittman LLC. "It's going to take a little homework."

Here are four tips to help you assess just how green the product you're buying really is:

The more details, the better.
A label that says "recycled" is fine, but one that states "100% post-consumer recycled content" is far better. The more detailed the claim, the less likely it is that the company is hiding not-so-green practices behind vague wording. "It's not fair to expect consumers to become scientists in the supermarket," says Joel Makower, executive editor for GreenBiz.com, which analyzes green business practices. Precise wording makes it easier for you to verify the claim, or compare the product against its competitors.

Learn the lingo.
The U.S. Department of Agriculture regulates the use of "organic" on food packaging, while the FTC has set out specific guidelines for items labeled as "recycled." However, regulation pretty much stops there. Terms like "natural," "cruelty-free" and "nontoxic," have no standard definition, guaranteeing very little when found in advertising, says Sheehan. Others are irrelevant, like "CFC-free." (Chlorofluorocarbons were banned almost 30 years ago — no product contains them.) Before you shop, check out common label language using Consumer Reports' free eco-label tool to see which words are worth looking for.