(Reuters) – Bank of America on Friday backed the securities regulator’s proposal requiring U.S.-listed companies to disclose their climate-related risks and greenhouse gas emissions.
The US Securities and Exchange Commission presented the draft rule last month, which aims to help investors better understand the “actual or likely material effects” climate-related risks will have on a company’s operations, strategy and prospects.
“We think the proposal is constructive and moving in the right direction,” said Paul Donofrio, head of sustainability at Bank of America, the country’s second largest asset bank.
Among the key requirements of the proposed rule, companies must state their own direct and indirect emissions of greenhouse gases, so-called Scope 1
and 2 emissions, as well as those generated by suppliers and partners, so-called Scope 3 emissions.“We are all of the opinion that companies provide the market with information that helps everyone understand what a company’s emissions status is and what their plans are to reach net zero … so that market participants can allocate capital (as they see fit). says Mr Donofrio to reporters.
Mr Donofrio, who spent six years as the bank’s chief financial officer, warned that Scope 3 emissions are currently difficult for most companies to calculate accurately, but said the bank supports phasing in these revelations later.
“Scope three revelations, today, may be subject to much uncertainty, would not get the security, therefore do not trust and it may question other revelations,” said Mr. Donofrio.
He added that the bank supports a price of coal, which may reflect “its real cost to society so that people will see the value of these investments.”
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