ESG Disclosure Simplification Act of 2019
This bill requires an issuer of securities to annually disclose to shareholders certain environmental, social, and governance metrics and their connection to the long-term business strategy of the issuer. The bill also establishes the Sustainable Finance Advisory Committee that must, among other things, recommend to the Securities and Exchange Commission policies to facilitate the flow of capital towards environmentally sustainable investments.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4329 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 4329
To provide for disclosure of additional material information about
public companies and establish a Sustainable Finance Advisory
Committee, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 13, 2019
Mr. Vargas (for himself and Mr. Garcia of Illinois) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To provide for disclosure of additional material information about
public companies and establish a Sustainable Finance Advisory
Committee, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``ESG Disclosure Simplification Act of
2019''.
SEC. 2. ESG DISCLOSURES.
(a) In General.--Section 14 of the Securities Exchange Act of 1934
(15 U.S.C. 78n) is amended by adding at the end the following:
``(k) ESG Disclosures.--
``(1) In general.--Each issuer the securities of which are
registered under section 12 or that is required to file annual
reports under section 15(d) shall disclose in any proxy or
consent solicitation material for an annual meeting of the
shareholders--
``(A) a clear description of the views of the
issuer about the link between ESG metrics and the long-
term business strategy of the issuer; and
``(B) a description of any process the issuer uses
to determine the impact of ESG metrics on the long-term
business strategy of the issuer.
``(2) ESG metrics defined.--In this subsection, the term
`ESG metrics' has the meaning given the term in part 210 of
title 17, Code of Federal Regulations as amended pursuant to
subsection (b) of the ESG Disclosure Simplification Act of
2019.''.
(b) Rulemaking.--
(1) In general.--The Securities and Exchange Commission (in
this Act referred to as the ``Commission'') shall amend part
210 of title 17, Code of Federal Regulations (or any successor
thereto) to--
(A) require each issuer, in any filing of the
issuer described in such part that requires audited
financial statements, to disclose environmental,
social, and governance metrics (in this Act referred to
as ESG metrics); and
(B) define ESG metrics.
(2) Sustainable finance advisory committee.--The
Sustainable Finance Advisory Committee established pursuant to
section 4(k) of the Securities and Exchange Act of 1934 shall,
not later than 180 days after the date of the first meeting of
such Committee, submit to the Commission recommendations about
what ESG metrics the Commission should require issuers to
disclose.
(3) Materiality.--It is the sense of Congress that ESG
metrics, as such term is defined by the Commission pursuant to
paragraph (2), are de facto material for the purposes of
disclosures under the Securities Exchange Act of 1934 and the
Securities Act of 1933.
(4) Incorporation of international standards.--When
amending part 210 of title 17, Code of Federal Regulations (or
any successor thereto) pursuant to paragraph (1), the
Commission may, as the Commission determines appropriate,
incorporate any internationally recognized, independent, multi-
stakeholder environmental, social, and governance disclosure
standards.
(5) Location of disclosure.--Any disclosure required by
paragraph (1) may be included in a notes section of the filing.
(6) Delay for small issuers.--The Commission may use a
phased approach when applying any amendments made pursuant to
paragraph (1) to small issuers and may determine the criteria
by which an issuer qualifies as a small issuer for purposes of
such phased approach.
SEC. 3. SUSTAINABLE FINANCE ADVISORY COMMITTEE.
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(k) Sustainable Finance Advisory Committee.--
``(1) Establishment.--The Securities and Exchange
Commission (in this subsection referred to as the `Commission')
shall establish a permanent advisory committee to be called the
`Sustainable Finance Advisory Committee' (in this subsection
referred to as the `Committee').
``(2) Duties of committee.--The Committee shall--
``(A) submit a report to the Securities and
Exchange Commission not later than 18 months after the
date of the first meeting of the Committee that--
``(i) identifies the challenges and
opportunities for investors associated with
sustainable finance; and
``(ii) recommends policy changes to
facilitate the flow of capital towards
sustainable investments, in particular
environmentally sustainable investments;
``(B) when solicited, advise the Commission on
sustainable finance; and
``(C) communicate with individuals and entities
with an interest in sustainable finance.
``(3) Membership.--
``(A) Members.--
``(i) In general.--The Committee shall
consist of no more than 20 members who shall
each serve for one four-year term.
``(ii) Representation.--Each member shall
represent individuals and entities with an
interest in sustainable finance, such as--
``(I) experts on sustainable
finance;
``(II) operators of financial
infrastructure;
``(III) entities that provide
analysis, data, or methodologies that
facilitate sustainable finance;
``(IV) insurance companies, pension
funds, asset managers, depository
institutions, or credit unions; or
``(V) other financial institutions
that intermediate investments in
sustainable finance or manage risks
related to sustainable development.
``(iii) Representation of interests.--A
member may not represent a single individual or
entity and shall represent types of individuals
and entities with similar interests in
sustainable finance.
``(B) Selection.--
``(i) In general.--The Commission shall--
``(I) publish criteria for
selection of members on the website of
the Commission and in the Federal
Register; and
``(II) solicit applications for
membership on the website of the
Commission and in the Federal Register.
``(ii) Equal share.--From the individuals
who submit applications for membership, each
Commissioner of the Commission shall select an
equal number of the members of the Committee.
``(C) Pay.--Members may not receive pay by reason
of their service on the Committee but may receive
travel or transportation expenses in accordance with
applicable provisions under subchapter I of chapter 57
of title 5, United States Code.
``(D) Member transparency.--The name of each member
and the types of individuals and entities that such
member represents shall be published on the website of
the Commission.
``(E) Staff.--The Committee shall be supported by
staff from the Office of the Investor Advocate of the
Commission that are dedicated to environmental, social
and governance (in this subsection referred to as
`ESG') issues.
``(F) Authorization of appropriation.--There are
authorized to be appropriated such sums as are
necessary to finance costs associated with staff
dedicated to ESG issues in the Office of the Investor
Advocate of the Commission.
``(4) Sustainable finance.--For the purposes of this
subsection, the term `sustainable finance' means the provision
of finance with respect to investments taking into account
environmental, social, and governance considerations.
``(5) SEC response.--The Commission shall, not later than 6
months after the date on which the Committee submits a report
to the Commission pursuant to paragraph (2)(A), publish a
response to such report.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Committee Consideration and Mark-up Session Held.
Committee Consideration and Mark-up Session Held.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 31 - 22.
Reported (Amended) by the Committee on Financial Services. H. Rept. 116-365.
Reported (Amended) by the Committee on Financial Services. H. Rept. 116-365.
Placed on the Union Calendar, Calendar No. 290.
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