Greg Allan, competition manager at the Commerce Commission, said it received regular complaints about misleading "green" claims - Greenpeace accused Cottonsoft of greenwashing last August - and he expected greenwashing to become more of a problem as "green" marketing became more popular.
Advertising Standards Authority chief executive Hilary Souter said it was reviewing its code for environmental claims.
Greenwashing is a global problem. A study in the United States and Canada found most green claims on home and family products were misleading.
But consumers were influenced by them. A Colmar Brunton poll at the end of last year found 60 per cent of New Zealand shoppers factored in at least one green aspect to their purchases.
To combat greenwashing, some companies were opting for third-party accreditation to prove their eco-credentials. But it was not cheap.
Malcolm Rands, founder and director of Ecostore, spent $14,000 having its products assessed for Environmental Choice accreditation. He also spends $5000 a year to use the logo endorsement on its packaging. "It's so easy to claim things," Rands said.
"People trust that if a thing has made it on to supermarket shelves, it must have gone through a rigorous process but that's not the case." Rands admitted it was expensive but felt it had to be done.
"We can make some amazing claims and we can back it up, then we go into a supermarket and see someone else making the same claim with no proof at all."
But Rands said certification was so complex that his company had three or four different kinds, including carbon neutral, environmental choice and animal safety. Allan supported certification but said it was important that the companies doing the certification were completely independent.
Allan said there had been cases when "biodegradable" and "recyclable" had allegedly been used for products, when there were not facilities in New Zealand able to do the biodegrading or recycling. One was currently being dealt with.
The Commerce Commission advised that business names could be misleading if they implied green credentials that did not exist.
Pictures, overstated claims, or convoluted language could also mislead. Words such as "natural", "green" and "organic" were over-used.
