"Understanding and Preventing Greenwash: A Business Guide (opens PDF)" was just published by BSR and Futerra Sustainability Communications. The report finds that trust in business is at record lows with only 13 percent trusting advertising. (I'm frankly surprised they could find a survey pool where even 13 percent say they trust advertising.)
Highlighting continued growth in demand for environmentally responsible products (nearly 40% of the American market now chooses green products over other options), the report finds that greenwash is bad for business and cites ways customers, regulatory bodies, NGO's, and the media are beginning to stop greenwash.
The authors urge that businesses understand the US Federal Trade Commission's "Guides for the Use of Environmental Marketing Claims" and take precautionary measures to avoid being accused of Greenwash--the FTC has begun to step in, recently charging Kmart with making "false and unsubstantiated claims that their paper products are 'biodegradable.'"--and provides example practices for reducing the risk of greenwash, including Lifecycle Analyses and NGO partnerships.
Maybe greenwash is a gateway drug, and mainstream companies will now begin to move beyond greening their PR message to greening their actions.