The Association of Investment Companies surveyed 200 intermediaries.

They were asked to rate their trust in funds’ sustainability claims on a scale of 1 - do not trust at all - to 5, meaning they completely trust the claims.

Only 1% responded with a ‘5’ score, while the majority - 56% - responded with ‘3’, indicating limited trust.

Fears of ‘greenwashing’ could be allayed by more specific information, including examples, they said.

One wealth manager said: “I would need to see real examples in the portfolio. I would need them to say, ‘We looked at company X last year. We really, really liked it. It scored really well on all our stuff but then when we thought about it from a sustainable point of view, we didn't invest in it.’”

Despite their scepticism about ESG claims, financial advisers and wealth managers remained supportive of ESG investing. About four-fifths agreed that “investments should make a positive difference as well as a financial return.”

Nick Britton, head of intermediary communications at the AIC, said: “Advisers and wealth managers are keenly aware of the risks of greenwashing. In the light of this, the FCA’s decision to impose stringent rules on how funds present their sustainability claims looks timely, and it’s one we fully support.”

The City watchdog last week announced plans to clamp down on so-called ‘greenwashing’ - false claims that funds and financial products abide by strict ESG credentials.

The FCA proposed a package of measures in CP22/20 including investment product sustainability labels and restrictions on the use of terms such as ‘ESG’, ‘green’ or ‘sustainable.’ The watchdog will also look at the role of financial advice in ESG recommendations.

Mr Britton said: “ESG investing has faced a perfect storm this year, and this has clearly affected expectations about performance and risk.”

He added that market falls, higher inflation and the war in Ukraine have made many advisers and wealth managers more wary of investing in sustainable funds in the short term, “though they still expect demand for ESG investing in general to increase over the next 12 months.”

• The online survey of 200 retail intermediaries (109 financial advisers and 91 wealth managers) was commissioned by the AIC and conducted by Research in Finance. It was followed by in-depth interviews with 10 selected respondents (seven financial advisers and three wealth managers). The fieldwork was conducted between 11 and 31 July.