According to Paul Donofrio, the head of sustainability at Bank of America, the SEC’s proposal for climate disclosures is “constructive and headed in the right direction.” Donofrio voiced further support for the SEC’s proposal, opining that these “disclosures  will help everybody understand what the emission status is at a company.”
That Bank of America–the second-largest bank by assets in the United States–has announced that it generally supports the SEC’s proposal is significant, to say the least. If a number of substantial corporations approve of and express support for the SEC’s proposal, it is more likely to be ultimately enacted. Not only do such statements reflect “buy-in” from the regulated industry, but this public support can also provide political cover for politicians who would otherwise object to the SEC’s proposal. (For example, conservative Republicans with extensive ties to business may no longer object–or object as strenuously–to this proposal from the Biden Administration’s SEC.)
Of course, the rationale underpinning Bank of America’s support for the SEC’s proposal is not completely clear. One possibility is that the SEC’s proposal, which provides a common standard, will be easier to comply with than a myriad of different standards and proposals from investors or other government regulators. Alternatively, it could also be the case that the SEC’s proposed climate disclosures, which impose a compliance burden on companies, will ultimately favor Bank of America and similar large corporations over smaller organizations, as Bank of America and similarly situated companies have greater resources available to satisfy this additional regulatory burden. It will be noteworthy if the comment letters submitted by Bank of America and similar organizations reveal a common perspective on the SEC’s proposal.
At this point, both regulators and securities law practitioners are awaiting and reviewing the reaction of industry, investors, politicians, and consumers to the SEC’s proposed climate disclosures. Once those have been submitted, the SEC’s next steps as it moves to enact the proposed–or modified–rules will become more clear.
Bank of America (BAC.N) on Friday voiced support for the securities regulator’s proposal requiring U.S.-listed companies to disclose their climate-related risks and greenhouse gas emissions.
©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 101