The new Biden administration could make good on an election promise and require companies to begin disclosing information on sustainability metrics in the years ahead.

President-elect Joseph Biden has said on the campaign trial that he would push companies to give more details on environmental risks and greenhouse-gas emissions within their operations and supply chains, as part of a broader agenda to combat climate change, the Wall Street Journal reports.

Corporate America currently chooses whether or not to disclose annual sustainability reports. Under Securities and Exchange Commission regulations, public companies are only required to reveal ESG information if they deem it material to investors’ perception of their businesses.

“There’s a growing pressure for mandatory disclosures of public companies about climate change risk,” Amy Borrus, executive director of the Council of Institutional Investors, told the WSJ.

As more call for detailed reports on environmental, social, and governance factors, the number of companies reporting sustainability efforts has increased over the years to meet the rising demand for socially conscious investing. For instance, 90% of companies in the S&P 500 index issued sustainability reports in 2019, up from about 20% in 2011, according to the Governance & Accountability Institute Inc.

Yet without the threat of enforceable standards or regulations, companies can still pick and choose what they want to disclose, which has put them at odds with investors seeking a clear picture of potential non-financial risks and a company’s ESG performance across sectors.

“Until we have some authoritative body, and maybe regulation mandating what to do, it’s just going to be the Wild, Wild West when it comes to standards and reporting for the time being,” Louis Coppola, executive vice president at the Governance & Accountability Institute, told the WSJ.

There exist a number of ESG metrics from different indexers and regions. Consequently, many are calling for a standardization of ESG principles.

“The lack of standardization does make it difficult to adopt any one particular standard,” Devinder Ahuja, CFO of Atlanta-based aluminum producer Novelis Inc, told the WSJ. “The Biden administration is going to be much more active on this agenda.”

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