There is a wide gap between what investors expect and what the sustainable investment funds they use put their money into, a new report has suggested.

Which? found the vast majority of investors it asked were confident their money was not being invested in fossil fuels, weapons, tobacco or companies which contribute to deforestation.

It surveyed 7,375 members of whom 289 invest in environmental, social and governance (ESG) funds.

But in contrast to what its members think, Which? found that some of the biggest ESG funds invest in fossil fuel companies, including US giants Chevron and Exxon Mobil, and food giants such as McDonald’s, Mondelez and Nestle which have been linked to deforestation in the Amazon rainforest.

Investors want to know that when they put their money into ESG investments, they’re investing in a more sustainable future, but this research suggests something quite different

Vanguard, whose ESG fund invests in the three food giants, highlighted the importance of working with companies to help them change.

“If a company does not make progress in addressing risks to long-term business sustainability, such as deforestation, we will hold them accountable through engagement and our voting power as a shareholder,” it said in response to the organisation.

One of the world’s biggest ESG investors, BlackRock, defended its investments – which include oil giants – on similar grounds, Which? said.

“However, only 2% of those surveyed said their favoured ESG strategy would be investing in controversial companies to encourage them to become more sustainable,” Which? said.

It added that 64% wanted their money to go to companies that try to improve society or the environment.

“Investors want to know that when they put their money into ESG investments, they’re investing in a more sustainable future, but this research suggests something quite different,” said Jenny Ross, Which? money editor.

“We found that many such funds are falling short of investors’ expectations, which could leave some customers shocked by the companies and industries they are unknowingly backing.

“To help investors make more informed decisions, there must be transparent information for ESG funds, to prevent conscientious consumers from putting their money into funds that don’t do what they say on the tin.”