The commercial for the Chevrolet Volt was simultaneously innocuous and noteworthy. There was the requisite eco-imagery of blue sky, happy kids, and a sprawling green field surrounding the Volt, a plug-in, hybrid sedan that gets up to 40 miles "without a drop of gas." As the announcer put it, Chevy has gone from "gas-friendly to gas-free."

But the small print that flashed at the end of the ad captured the Volt's true distinctiveness: "Not yet available for sale."

That's right. General Motors has vigorously flagged a car that is many, many miles from the market—and might not ever get there. The Economist and other publications report that the Volt's make-or-break battery technology has not been fully developed; GM merely "hopes" to start mass production by late 2010. GM is pulling out all the stops to get the vehicle into showrooms, and I'd be thrilled if it succeeds. But right now, the Volt is still more concept than car.

So why has GM shifted its buzz-machine into overdrive—kicking out ads, PR releases, and keynote speeches with ever-growing fervor—for a hybrid that no one can buy? Well, it's not about the car. It's about the company.

At a time when fuel-sucking, Paleolithic SUVs are helping to drive the US auto industry into a ditch, GM is hoping that its phantom Volt will give it a pristine green sheen. Apparently, the PR blitz is already succeeding. The automotive press reports that GM has "boosted its environmental image" since it rolled out a Volt prototype at last year's Detroit auto show.

While the rise in misleading green-marketing claims for products has been well-documented by researchers and widely reported by the press, the greenwashing of entire companies has been far less studied—even though it's far more pernicious. When a $181 billion giant like GM uses a car it can't sell to green up its image, it runs the dangerous risk of breeding consumer cynicism toward companies whose products are genuinely green and readily available for purchase.

GM is hardly the only big company to wrap itself in the mantle of green goodliness while engaging in practices that are less than "earth friendly." Toyota rode the Prius to green ascendancy, even as it launched the hulking, V-8 powered Tundra and joined a lobbying group (that included GM) in opposing an increase in federal fuel economy standards, according to the New York Times.

BP used its "Beyond Petroleum" ad campaign to bolster its green credentials and highlight its comparatively modest spending on renewable energy, while it continued to make mega-investments in oil and natural gas. Now, BP might well stand for "Back to Petroleum," as the Guardian newspaper reports that with crude topping $100 per barrel, the colossus is considering selling off its alternative-energy business and returning to its all-petrol roots.

Then there's General Electric, whose "eco-imagination" marketing effort touts the conglomerate as environmentally friendly. Last year, GE tried to have it both ways when it and other corporate giants including Caterpillar and Alcoa joined four environmental groups to endorse sweeping cuts in heat-trapping emissions, a move that ultimately aimed to avert some of the worst consequences of global warming. According to BusinessWeek, the partnership was widely hailed as a "watershed in corporate environmentalism." At the same time, however, all three companies supported the efforts of an industry trade group, the Center for Energy & Economic Development, to fight mandatory cuts in greenhouse gases. So there's another way that GE, Caterpillar, and Alcoa are contributing to global warming—they still spew that heat-trapping gas called hypocrisy.

Greenwashing scouts speak of the "hidden trade-off," where a single environmental attribute, rather than a holistic set of characteristics, is used to assert that a product is "green." But with many aspiring green giants, the hidden tradeoff applies to the company, not just the product. They use the promise of a single breakthrough innovation or the badge from a narrow cluster of environmental deeds to give their brands a greener luster than they actually deserve.

The hidden tradeoff is not just a marketing gimmick. It is symptomatic of a company's difficult journey toward becoming a new kind of organization, where an environmental ethos is at the core of its DNA. Make no mistake: no company, including Seventh Generation, has attained the ultimate goal of fully embedding sustainability into all of its business activities. Given that every organization is to some degree imperfect, it's vital that companies are transparent about their environmental shortcomings as well their successes. Only by acknowledging their negative impacts on society and the planet, can companies then begin to develop strategies and processes for mitigating them.

So yes, GE deserves praise for investing, in 2006, $900 million in cleaner technology R&D. GM warrants credit for putting 150 engineers to work on the Volt and the electronic propulsion system that powers it. But both of these efforts remain relatively isolated within their parent organizations. So long as GM, GE and the rest resist revealing their environmental blemishes, they will continue to traffic in hidden tradeoffs and half-truths—and invite that greenwashing label.
Given that we truly need these bell-weather companies of old capitalism to shift to this new era of "responsible capitalism," the rest of us would be wise to keep the carrot and stick close at hand. That means rewarding big companies when they genuinely do right by the environment and calling them out when they do wrong. And when it comes to their green-marketing claims, we'll have to continue reading the fine print.