Your question shows deep concern for the reliability of labeling, as well as present governmental standards in our country.
It also addresses a health question of its own - are our noses adequate to determine VOC content or must we rely on scientific instruments?
In general, distrust of green labels is well founded, as most are not accurate, reliable or third-party certified.
Even the labels that seem to be valid can be called into question because they all rely on MSDS sheets to evaluate the chemical nature of a product. As I have written in many answers here on GreenHomeGuide, MSDS sheets are government forms voluntarily filled out, and not overseen by anyone. Manufacturers can write whatever they want you to see - and leave out whatever they don't want you to know about - because no one verifies what they say.
For example, proprietary ingredients that are considered "trade secrets" do not need to be listed, nor are chemicals that amount to 1% of the total volume, nor are any unknown hazards. That means if it's not known or listed on the TSCA (Toxic Substance Control Act) of 1976 list of hazards, they don't have to list it on their label. It's now well known that more than 85, 000 chemicals exist; yet only 200 have been classified as hazardous. The rest have been either grandfathered into the system as "not bad enough" or simply never tested.
All of this requires that you do your own homework, which is near impossible unless you have a background in chemistry and are able to convince manufacturers to tell you their trade secrets - both of which are tall orders to fill.
Test before buying
In general, if it smells foul, it's better to stay away from it. Safety first. Our olfactory sense is pretty intelligent and can usually detect odors that are not good for our health, but we can't always rely on it.
It's always best to test out new products to see what impact they have on your health before using them in a major way or before subjecting them to children who are very sensitive.
Volatile organic compounds (VOCs) are those chemicals that combine with ground level ozone to produce smog. The EPA has instituted regulations that control VOC levels to reduce outdoor air pollution only. The agency is not concerned about what you or your baby eat or breathe indoors.
VOCs are both good and bad, and can be smelled if your nose is good. Chemically sensitive people can often smell VOCs better than others, but many people can hardly notice a difference. In either case, it's not easy to know whether the smell is good for you or not. Sometimes VOCs flash off quickly, and sometimes they can continue emitting hazardous odors for months or even years.
Also, just because it is low or zero VOC does not mean it is automatically safe. It only means it contains fewer ingredients with VOCs and says nothing about all the other toxic chemicals not classified as VOCs.
Natural products are usually safer but may not always be tolerated by children. If they have allergies or sensitivities to a particular chemical, they may react quickly. Because all VOCs are different, some are emitted more slowly and in lower concentrations. This can provide us with a false sense of security because the odor may not be "too bad" but over many years of breathing can cause serious health problems.
It's always best to test, test, test for your own personal reactions, do research on the Internet and consult with people who have experience with these products.
For more information:
Read Mary Cordaro's Know How article "The Parent Trap: Avoid Mistakes in Nursery Projects By Following Three Basic Principles".