By Elizabeth Dilts Marshall

NEW YORK (Reuters), Friday, the Bank of America endorsed the proposal of the Securities Regulator requiring U.S.-listed businesses to disclose their climate-related risk and greenhouse gas emission.

Last month the U.S. Securities and Exchange Commission released a draft rule. It aimed to assist investors in better understanding the “actual and likely material impacts” that climate-related risk will have on companies’ business, strategies, and outlook.

Paul Donofrio from Bank of America (NYSE) said, “We believe the proposal is constructive” and that it was headed in the correct direction. He’s the head of sustainability at Bank of America. It is second by assets.

The SEC’s draft rule, which is 500 pages long, has been reviewed by the bank. It plans to submit comments letters before the deadline.

The proposed rule requires companies to disclose both their direct and indirect greenhouse gas emission, also known as Scope 1 or 2, as well as the emissions of suppliers and partners. Scope 3 emissions are among its key requirements.

Donofrio said that all companies are committed to providing information to the market that helps everyone know the status of a company’s emissions and the plans for getting to net zero. “This will enable the market to make capital allocations in the best possible way,” Donofrio explained to reporters.

Donofrio spent six years at the bank as its chief financial officer. However, Donofrio cautioned companies that Scope 3 emissions are difficult for them to calculate correctly, and said that they support phasing these disclosures in the future.

Donofrio explained that “Scope 3 disclosures might be subjected to uncertainty today. It would not get assurance and might bring into question other disclosures.”

The bank supported a carbon price, adding that it could be reflected on “its true costs to society” so people can see the benefits of the investments.