Americans love labels. Successful buzzwords, catch-phrases and hooks take off like the wind, and then blow out of control in just about every direction.

That’s how one company’s mission and ideal becomes another’s marketing pitch, with the consumer stuck in the middle trying to figure out the difference.

Over the years, that is precisely what has developed with “ESG investing,” the acronym for “environmental, social and governance” factors that individual investors, financial advisers and money managers increasingly are putting into play.

As a result, “ESG investing” is more confused and confusing than ever before. It’s not hard to find competing funds sporting the ESG label whose ideals and processes are as different as Democrats and Republicans, diametrically opposed thinking that’s pitched to the public as if it’s pursuing the exact same mission.

That’s why the Securities & Exchange Commission recently proposed changing/enhancing disclosures so that investors have a chance of figuring out which type of ESG fund is for them.

Truthfully, while I expect the SEC proposal to pass, I doubt it will have much real impact until or unless consumers dig in to understand the problem.

I’ve got my shovel here, so let’s dig into the dirt around ESG now so that you don’t have to wait for laws to change to make sure that you’re getting your money’s worth if environmental, social and governance issues are part of your investment thinking.

What is now ESG investing began as “socially responsible investing,” which started in the 1960s but was popularized a few decades later as investors boycotted stocks or entire industries that were seen as supporting apartheid in South Africa, or that were recognized as polluters, or contributed to social ills like smoking or gambling.

In those early days, however, you’d find one socially responsible fund that excluded Treasury bonds under the premise that the government “contributed to the war machine,” and then a competing fund that bought Treasuries “because the government supports the arts.”

With the rise of fund-rating firms trying to lump similar issues together, the “socially responsible” label ultimately faded because there was no standard to what it really meant, yet it implied that everyone else was somehow socially irresponsible.

Thus, the label was replaced by “social investing.”

The idea still involved investing with a conscience, typically avoiding investments in “sin stocks” and often eschewing corporate bad actions (oil and coal producers due to pollution, for example) in favor of “sustainable investing” in, for example, alternative-energy producers.

Fast-forward to studies showing that companies that are good corporate citizens — who care about the environment and follow the best accounting/management/oversight practices — tend to do better in the long run, even though those traits are not readily viewable in financial statements.

At that point, for many money managers, it became less about investing to a set of values and more about looking for the factors that lead to corporate success.

There are still funds that appeal to investors with a particular agenda, based on religious beliefs, personal values and more.

But many funds marketed today as ESG are not built around any set of beliefs; they simply integrate non-financial factors into the investment process.

Speaking on the “Money Life with Chuck Jaffe” podcast from the recent Morningstar Investment Conference, for example, Tony Tursich from the Calamos Global Sustainable Equities Fund (CGSIX) pointedly explained, “We are not looking to inject our values into the investment process. It’s about what makes a company a better company.”

But because, as Tursich noted, “Everyone has their own definition of ESG,” consumers may not be getting exactly what they pay for.

Consider an issue like climate change, clearly a part of the environmental portion of ESG.

You can find ESG funds that believe the energy transition requires rapid phase-out of fossil fuels and immediate widespread adoption of cleaner energy sources like wind, solar and nuclear. And then there are funds which believe the energy transition allows for continued use of fossil fuels, but with greater reliance on natural gas than coal, and new technologies such as carbon capture to contain or reduce emissions.

I’ll leave the debate to others, simply noting that the disagreement explains how several recent studies show that as many as two-thirds of funds and ETFs with ESG in their name were holding stocks that would not have passed the traditional social screens.

This leads to charges of “greenwashing,” where ESG might be more marketing hype than reality.

Here is where the SEC is stepping in, categorizing certain ESG strategies broadly, then requiring better disclosure.

As a result, funds focused on environmental factors likely will be required to disclose the greenhouse gas emissions associated with their holdings, and funds using proxy voting to push for their ESG strategy will have to disclose their voting record specific to their stated mission.

In short, if a fund or ETF claims to achieve a certain ESG impact, the SEC wants some proof.

Conversely, the proposal would prohibit funds from using ESG-related terms in their names if the factors don’t carry any additional weight in the investment process. That means “integration funds” (like Tursich’s fund at Calamos), soon may have to drop words like “sustainable.”

For now, however, investors are left to their own devices, aware that ESG sounds great but often falls short.

That leaves values-based investors to check under the hood to ensure a fund’s execution on environmental, social and governance issues meets their personal beliefs. Examine the portfolio to see if management feels the way you do about ESG, or if they just stuck the label on there to get your attention.

“There is no standardization on ESG strategies – it can be all about personal values or it can be just about investment factors – and that’s what has to change,” says Tom Lydon, vice chairman of VettaFi, a new data-driven research firm tracking funds and ETFs. “Until it does, don’t just trust the label.”