Greenwashing was coined by suburban NY environmentalist Jay Westerveld in 1986, in an essay regarding the hotel industry's practice of placing green placards in each room, promoting reuse of guest-towels, ostensibly to "save the environment". Westerveld noted that, in most cases, little or no effort toward waste recycling was being implemented by these institutions, due in part to the lack of cost-cutting affected by such practice. Westerveld opined that the actual objective of this "green campaign" on the part of many hoteliers was, in fact, profit increase. Westerveld hence monikered this and other outwardly environmentally-conscientious acts with a greater, underlying purpose of profit increase as greenwashing.

The term is generally used when significantly more money or time has been spent advertising being green (that is, operating with consideration for the environment), rather than spending resources on environmentally sound practices. This is often portrayed by changing the name or label of a product, to give the feeling of nature, for example putting an image of a forest on a bottle containing harmful chemicals. Environmentalists often use greenwashing to describe the actions of energy companies, which are traditionally the largest polluters.

http://en.wikipedia.org/wiki/Greenwash