Finance can save the planet. It just needs better data.

There’s an old joke where a tourist asks a local how to get to a scenic landmark. “Well, I wouldn’t start from here,” the resident tells the traveler. Asset managers face a similar challenge when it comes to meeting their climate responsibilities. They’re starting from a suboptimal place. But I’m optimistic that the data they rely on can improve dramatically, providing a more informed environment in which to make investment decisions without straying into greenwashing.

Shareholders have punished the stock prices of European fund management firms in recent months amid concern they’ll be found to have overstated the climate-friendly credibility of their products, Bloomberg News reported this week. The wariness comes after Germany’s DWS Group GmbH came under scrutiny from regulators inquiring into its use of environmental, social and governance marketing.

I sympathize with fund managers, whose role as society’s chief allocators of capital has pushed them to the forefront of the ESG debate. They face an incredibly tricky task when trying to assay the non-financial credentials of the companies they invest in. A landmark study published two years ago showed a sufficiently wide divergence in the ESG ratings applied by six different providers as to render them almost useless. The authors dubbed the problem “Aggregate Confusion.”

“It is very difficult,” Anne Richards, who helps oversee more than $700 billion as chief executive officer of Fidelity International, told an online conference organized by MSCI Inc. earlier this month. “It’s important that we don’t let that mean we do nothing. Our aim and ambition is to be directionally correct rather than precisely wrong.”

The asset management industry recognizes it needs better information. More than 100 investment firms with a combined $40 trillion of assets have signed up to a project called the Transition Pathway Initiative, which aims to scrutinize the climate-change plans of 10,000 companies and make its results freely available. The backers include BlackRock Inc., the world’s biggest money manager with $9.6 trillion, Legal and General Group Plc’s fund arm with $1.8 trillion, and Abrdn Plc which oversees $734 billion.

And capitalism will motivate market-driven improvements. As appetite grows for improved data, in response to government pressure and/or commercial demand, there’s money to be made for whichever number-crunching company can calibrate the best mousetrap. A study published last year by Boston-based consultancy firm Opimas suggested that the market for ESG metrics is growing at an annual rate of 20%, with demand for ESG indexes climbing by 35% a year. The total spend on such data-driven products was expected to reach $1 billion this year, the report estimated.

Improving individual company metrics doesn’t happen for free either. Smaller firms in particular will struggle to allocate personnel to do the gathering and disseminating. But bear in mind that having a dedicated human resources function was considered a luxury 30 years ago. As the value of human capital was acknowledged as a core component of any business, HR officers have become essential for even the smallest of start-ups. Data-collecting will similarly become just part of the cost of doing business.

More than 2,600 organizations support the global Task Force on Climate-Related Financial Disclosures, with more than 1,000 joining in the past year. The TFCD, which aims to standardize the metrics companies provide on their environmental impact, said in its annual report earlier this month that more than half of the 1,650 firms it surveyed now disclose climate-related risks to their businesses. Those efforts, combined with the work of the International Financial Reporting Standards Foundation, which governs global accounting rules, mean the corporate world is moving toward a unified standard of reporting requirements.

Anne Simpson, the director for governance and sustainability at $470 billion California Public Employees’ Retirement System, likens the shift to the introduction of time-and-motion studies on factory floors, when the mere presence of clipboard-wielding analysts boosted productivity: “Paying attention itself becomes a form of influence,” she told the MSCI investing conference this month.

The best way to avoid allegations of greenwashing is to improve the data on which asset allocation decisions are made. Accounting standards, measurements of risk and return and thematic-driven strategies have all been refined and improved in recent years. There’s no reason to doubt that at least the major quantitative inputs into ESG considerations can be similarly corralled in the near future — even if the qualitative measures remain a bit slippery.