Are companies backing up their eco-friendly claims?

ABC News’ Elizabeth Schulze looks at the practice of “greenwashing,” where companies claiming to be eco-friendly aren’t living up to those pronouncements.
7:02 | 04/13/21

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Transcript for Are companies backing up their eco-friendly claims?
As a threat posed by climate change becomes more pressing many companies say that they are embracing efforts to go green but so are accused of so called green washing with critics saying that their actions don't actually went up to their public pronouncements of sustainable. Or Avaya environmentally friendly practices. ABC's Elizabeth shoals he takes a look. Patagonia says its mission has been clear since it was launched by diehard rock climber Johansson are nearly five decades ago. Do its part to save the planet. Today as the head of Patagonia is apparel division Jenna Johnson homes oversee that commitment to sustainability. Rehired in journal. Knew me this. And money. From the first scene to the store shelf she says the company goes through a pain staking and costly process to ensure products and suppliers meet standards. Like using 100%. Organic cotton. We need. Burden is bitten. Or brew to meet all the standards. As we goes all three pounds you soil and animal means and. Johnson says many companies don't do that work or pay the price to enforce sustainable and ethical production. He even if they say they do it's a growing practice called green washing. How often in the process of going to find your suppliers to make apparel do you find out the companies are green washing where they're saying they're doing one staying in really they're not actually doing it. There's a lot of very strong marketing planes and a lot of year old. And they're living in terms of responsibility. In. Sometimes it's more talk. And who. One recent study from an international consumer protection group found 40% of companies were guilty of green washing making misleading claims about being eco friendly. Now the Treasury Department Federal Reserve CFTC and SEC have created new climate change units. And the acting chair of the Securities and Exchange Commission is calling for clear guidelines for how to judge companies that claim to make decisions. Based on environmental social and governance factors also known as ESG. It's time to moved from the question yes. To the more difficult question of how we obtained disclosure on crime. And the Federal Trade Commission which in forces false or misleading advertising claims is facing a first of its kind complaints. Against oil giant Chevron for alleged green washing so we're. TC under this administration. Takes his complaints seriously and Pulitzer animal. In the complaint Greenpeace and two other advocacy groups alleged Chevron missed leaves consumers with ads like this touting its positive environmental impact he's. Working to find an alternative source of our. New forum. The complaint says Chevron is green washing by spending millions of dollars on ads while investing less than zero point 2% of its capital expenditures. On renewable energy sources just. Shut it most polluting the near the world should not your writing multimillion. Dollar tax telling you are actually pretty tired. In a Seidman to ABC news. Chevron called the allegations frivolous. Saying it's investing three billion dollars between 20/20 one in 20/20 eighths. To advance the energy transition. A Chevron spokesman added we are taking action to reduce the carbon intensity of our operations and assets. Increasing use of renewables and offsets in support of our business. And invest in low carbon technologies to enable commercial solutions. Allegations of green washing our extending to Wall Street to. Tariq fancy was formerly the chief investment officer for sustainable investing at black rock which manages nearly nine trillion dollars in assets. I looked across the data as the world's biggest asset manager it through it started to become obvious to me that. Being responsible. As the company is not actually now profitable. He says too often Wall Street is green washing the public and investors are talking about EST values but taking little concrete action on climate change. Yeah my concern is that when they say that they're doing a bunch of things that are really helpful. And the public believes that it creates a placebo effect we delay action and you know every year matters at this point so what can be. What's the solution here I think honestly it's the only way you can aggressive sweep it attacked the climate crisis is to government action. In a statement to ABC news black rock agreed with the need for stricter government enforcement to avoid green washing. Saying black rock believes screen washing is a risk to investors. And detrimental to the asset management industry's credibility. Which is why we strongly support regulatory initiatives to set consistent standards. An increase transparency for sustainable portfolios. This kind of oversight won't happen overnight. The FTC hasn't green guide that provides a framework for how companies can make environmental claims in advertising it says brands shedding call something eco friendly without offering more details. And defines specific terms like recyclable non toxic or made with renewable energy. But the FTC hasn't updated the guide since 2012. And it still doesn't include terms like sustainable. That don't have a strict definition. Neary angle was the head of advertising practices at the FTC for eighteen years. It can create or agree to the bottom where it's my company is outing and aren't in on images that it doesn't actually order. Other companies may Weinstein is saying thank you. She says government standards have help set the bar for terms like organic. And then more regulations could be needed when it comes to green marketing. But she says it's also up to consumers to scrutinize the products they're buying. What would you say to people who want to buy products that are sustainable. How can they make sure that they aren't a first place and I think if you're looking good idea green product below Ford company to be gang. Why is screened what is it bringing you get into and because it's less packaging weight isn't because it's a cycle we're all really look for those deep else. Patagonia is Jenna Johnson says consumers increasingly want businesses to care about climate change in the environments. But it'll take a bigger push to see meaningful change. Really big grounds. Out for a parents he wore. Responsibility. But we are so low war. In business. I really. OL zoom and between. EU. Well all we want our kids weren't ready and. Officials Lee ABC news Washington.

This transcript has been automatically generated and may not be 100% accurate.

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