Regulators in the US and Europe are trying to tighten rules on popular environmental, social and governance investment products, triggering a backlash from investors and businesses.

ESG funds have boomed in recent years, exceeding $350bn in net assets in 2021 in the US, as investors look to fund companies that are addressing climate change and other issues. But murky disclosures and lax standards are driving regulators to tighten the rules.