In the region that ushered in the world’s first green bond, banks are now building private databases to help their clients navigate the dark side of ESG.

Nordea Bank Abp, the biggest Nordic lender, says it’s on track to rate 250 companies by the end of the year based on their performance on environmental, social and governance metrics.

The ratings -- the combined work of ESG, quantitative and equity research teams -- draw on over 60,000 data points, and come as the bank responds to clients increasingly desperate at the lack of transparency.

One customer described the current ESG landscape as not just “the Wild West,” but “a jungle within the Wild West,” says Jacob Michaelsen, head of the sustainable finance advisory unit in Nordea’s investment banking operations.

Other banks are also trying to build ESG metric models, as the area remains relatively untouched by cross-border regulation. Already two years ago there were more than 600 different “ratings and rankings,” according to the advisory firm SustainAbility. (Bloomberg LP, the parent of Bloomberg News, also provides ESG data, analysis and indexes.)

The European Union is in the process of rolling out a new taxonomy to help bring more transparency, and business groups, including the ‘Big Four’ accounting firms, have come together to push for single ESG standards. But those measures aren’t moving fast enough for investors or issuers.

Scratching the Surface

For now, asset managers can’t always trust the information they’re getting from issuers, according to Martin Frandsen, co-lead portfolio manager of Danske Bank A/S’s new Global Sustainable Future Fund.