[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1187 Referred in Senate (RFS)]
<DOC>
117th CONGRESS
1st Session
H. R. 1187
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 17, 2021
Received; read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
AN ACT
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 ``Corporate Governance Improvement and
Investor Protection Act''.
TITLE I--ESG DISCLOSURE SIMPLIFICATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``ESG Disclosure Simplification Act
of 2021''.
SEC. 102. FINDINGS.
Congress finds the following:
(1) The Securities and Exchange Commission has broad
authority to require the disclosure of information if such
information is in the interest of, or is material to investors.
(2) The Commission does not require companies to disclose
information related to environmental, social, and governance
(``ESG'') matters, and does not require companies to adhere to
standards for disclosing such information.
(3) Investors have reported that voluntary disclosures of
ESG metrics are inadequate.
(4) A rule requiring reporting and standardization of ESG
disclosures is in the interest of investors.
(5) ESG matters are material to investors, and the
Commission must establish standards for disclosure of such
matters.
SEC. 103. 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
section 3(b) of the ESG Disclosure Simplification Act of
2021.''.
(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 title 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 (1), 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. 104. 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 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 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.''.
SEC. 105. STUDY ON SHAREHOLDER COLLECTIVE ACTION.
Not later than 1 year after the date of the enactment of this Act,
the Securities and Exchange Commission shall--
(1) conduct a study on--
(A) the emergence, viability, and significance of
coalitions of shareholders who wish to preserve and
promote critical employment and ESG standards;
(B) whether and to what extent shareholder
collective action--
(i) occurs; and
(ii) has implications with respect to
filing requirements under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.);
and
(C) any possible anticompetitive activities
associated with shareholder collective action; and
(2) submit to Congress a report that includes--
(A) the findings of the study conducted under
paragraph (1);
(B) guidance, which may include an approved list,
of shareholder engagement activities that are not
considered to involve questions of corporate control;
and
(C) recommendations on regulatory safe harbors for
engagement with respect to sustainability guardrails
and similar restrictions on portfolio company conduct
with a goal of--
(i) preserving economic justice,
environmental systems, and social institutions;
and
(ii) otherwise protecting the common
interests of corporate shareholders and
stakeholders.
TITLE II--SHAREHOLDER POLITICAL TRANSPARENCY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Shareholder Political Transparency
Act of 2021''.
SEC. 202. FINDINGS.
Congress finds that--
(1) corporations make significant political contributions
and expenditures that directly or indirectly influence the
election of candidates and support or oppose political causes;
(2) decisions to use corporate funds for political
contributions and expenditures are usually made by corporate
boards and executives, rather than shareholders;
(3) corporations, acting through boards and executives, are
obligated to conduct business for the best interests of their
owners, the shareholders;
(4) historically, shareholders have not had a way to know,
or to influence, the political activities of corporations they
own;
(5) shareholders and the public have a right to know how
corporate managers are spending company funds to make political
contributions and expenditures benefitting candidates,
political parties, and political causes; and
(6) corporations should be accountable to shareholders in
making political contributions or expenditures affecting
Federal governance and public policy.
SEC. 203. REPORTING REQUIREMENTS.
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m)
is amended by adding at the end the following:
``(s) Reporting Requirements Relating to Certain Political
Expenditures.--
``(1) Definitions.--In this subsection:
``(A) Expenditure for political activities.--The
term `expenditure for political activities'--
``(i) means--
``(I) an independent expenditure
(as defined in section 301(17) of the
Federal Election Campaign Act of 1971
(52 U.S.C. 30101(17)));
``(II) an electioneering
communication (as defined in section
304(f)(3) of that Act (52 U.S.C.
30104(f)(3))) and any other public
communication (as defined in section
301(22) of that Act (52 U.S.C.
30101(22))) that would be an
electioneering communication if it were
a broadcast, cable, or satellite
communication; or
``(III) dues or other payments to
trade associations or organizations
described in section 501(c) of the
Internal Revenue Code of 1986 and
exempt from tax under section 501(a) of
that Code that are, or could reasonably
be anticipated to be, used or
transferred to another association or
organization for the purposes described
in subclause (I) or (II); and
``(ii) does not include--
``(I) direct lobbying efforts
through registered lobbyists employed
or hired by the issuer;
``(II) communications by an issuer
to its shareholders and executive or
administrative personnel and their
families; or
``(III) the establishment and
administration of contributions to a
separate segregated fund to be utilized
for political purposes by a
corporation.
``(B) Issuer.--The term `issuer' does not include
an investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8).
``(2) Quarterly reports.--
``(A) Reports required.--Not later than 180 days
after the date of enactment of this subsection, the
Commission shall amend the reporting rules under this
section to require each issuer with a class of equity
securities registered under section 12 of this title to
submit to the Commission and the shareholders of the
issuer a quarterly report containing--
``(i) a description of any expenditure for
political activities made during the preceding
quarter;
``(ii) the date of each expenditure for
political activities;
``(iii) the amount of each expenditure for
political activities;
``(iv) if the expenditure for political
activities was made in support of or in
opposition to a candidate, the name of the
candidate and the office sought by, and the
political party affiliation of, the candidate;
and
``(v) the name or identity of trade
associations or organizations described in
section 501(c) of the Internal Revenue Code of
1986 and exempt from tax under section 501(a)
of such Code which receive dues or other
payments as described in paragraph
(1)(A)(i)(III).
``(B) Public availability.--The Commission shall
ensure that the quarterly reports required under this
paragraph are publicly available through the Internet
website of the Commission and through the EDGAR system
in a manner that is searchable, sortable, and
downloadable, consistent with the requirements under
section 24.
``(3) Annual reports.--Not later than 180 days after the
date of enactment of this subsection, the Commission shall, by
rule, require each issuer to include in the annual report of
the issuer to shareholders--
``(A) a summary of each expenditure for political
activities made during the preceding year in excess of
$10,000, and each expenditure for political activities
for a particular election if the total amount of such
expenditures for that election is in excess of $10,000;
``(B) a description of the specific nature of any
expenditure for political activities the issuer intends
to make for the forthcoming fiscal year, to the extent
the specific nature is known to the issuer; and
``(C) the total amount of expenditures for
political activities intended to be made by the issuer
for the forthcoming fiscal year.''.
SEC. 204. REPORTS.
(a) Securities and Exchange Commission.--The Securities and
Exchange Commission shall--
(1) conduct an annual assessment of the compliance of
issuers with section 13(s) of the Securities Exchange Act of
1934, as added by section 203; and
(2) submit to Congress an annual report containing the
results of the assessment under paragraph (1).
(b) Government Accountability Office.--The Comptroller General of
the United States shall periodically evaluate and report to Congress on
the effectiveness of the oversight by the Securities and Exchange
Commission of the reporting and disclosure requirements under section
13(s) of the Securities Exchange Act of 1934, as added by section 203.
TITLE III--GREATER ACCOUNTABILITY IN PAY
SEC. 301. SHORT TITLE.
This title may be cited as the ``Greater Accountability in Pay Act
of 2021''.
SEC. 302. PAY RAISE DISCLOSURES.
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
as amended by section 203, is further amended by adding at the end the
following:
``(t) Pay Raise Disclosures.--An issuer required to file an annual
report under this section or section 15(d), that is not an emerging
growth company, shall include in such report--
``(1) the percentage increase in the median of the annual
total compensation of all executive officers (as such term is
defined in section 240.3b-7 of title 17, Code of Federal
Regulations) of the issuer over the last completed fiscal year;
``(2) the percentage increase in the median of the annual
total compensation of all employees of the issuer, excluding
executive officers, over the last completed fiscal year;
``(3) the ratio of the percentage described in paragraph
(1) to the percentage described in paragraph (2);
``(4) a comparison of the percentage described in paragraph
(1) to the percentage change over the same period in the
Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the Department of Labor; and
``(5) a comparison of the percentage described in paragraph
(2) to the percentage change over the same period in the
Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the Department of Labor.''.
TITLE IV--CLIMATE RISK DISCLOSURE
SEC. 401. SHORT TITLE.
This title may be cited as the ``Climate Risk Disclosure Act of
2021''.
SEC. 402. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) climate change poses a significant and increasing
threat to the growth and stability of the economy of the United
States;
(2) many sectors of the economy of the United States and
many American businesses are exposed to climate-related risk,
which may include exposure to--
(A) the physical impacts of climate change,
including the rise of the average global temperature,
accelerating sea-level rise, desertification, ocean
acidification, intensification of storms, increase in
heavy precipitation, more frequent and intense
temperature extremes, more severe droughts, and longer
wildfire seasons;
(B) the economic disruptions and security threats
that result from the physical impacts described in
subparagraph (A) including conflicts over scarce
resources, conditions conducive to violent extremism,
the spread of infectious diseases, and forced
migration;
(C) the transition impacts that result as the
global economy transitions to a clean and renewable
energy, low-emissions economy, including financial
impacts as climate change fossil fuel assets becoming
stranded and it becomes uneconomic for companies to
develop fossil fuel assets as policymakers act to limit
the worst impacts of climate change by keeping the rise
in average global temperature to 1.5 degrees Celsius
above pre-industrial levels; and
(D) actions by Federal, State, Tribal, territorial,
and local governments to limit the worst effects of
climate change by enacting policies that keep the
global average surface temperature rise to 1.5 degrees
Celsius above pre-industrial levels;
(3) assessing the potential impact of climate-related risks
on national and international financial systems is an urgent
concern;
(4) companies have a duty to disclose financial risks that
climate change presents to their investors, lenders, and
insurers;
(5) the Securities and Exchange Commission has a duty to
promote a risk-informed securities market that is worthy of the
trust of the public as families invest for their futures;
(6) investors, lenders, and insurers are increasingly
demanding climate risk information that is consistent,
comparable, reliable, and clear;
(7) including standardized, material climate change risk
and opportunity disclosure that is useful for decision makers
in annual reports to the Commission will increase transparency
with respect to risk accumulation and exposure in financial
markets;
(8) requiring companies to disclose climate-related risk
exposure and risk management strategies will encourage a
smoother transition to a clean and renewable energy, low-
emissions economy and guide capital allocation to mitigate, and
adapt to, the effects of climate change and limit damages
associated with climate-related events and disasters; and
(9) a critical component in fighting climate change is a
transparent accounting of the risks that climate change
presents and the implications of continued inaction with
respect to climate change.
SEC. 403. DISCLOSURES RELATING TO CLIMATE CHANGE.
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
as amended by section 302, is further amended by adding at the end the
following:
``(u) Disclosures Relating to Climate Change.--
``(1) Definitions.--In this subsection:
``(A) 1.5 degree scenario.--The term `1.5 degree
scenario' means a scenario that aligns with greenhouse
gas emissions pathways that aim to limit global warming
to 1.5 degrees Celsius above pre-industrial levels.
``(B) Appropriate climate principals.--The term
`appropriate climate principals' means--
``(i) the Administrator of the
Environmental Protection Agency;
``(ii) the Administrator of the National
Oceanic and Atmospheric Administration;
``(iii) the Director of the Office of
Management and Budget;
``(iv) the Secretary of the Interior;
``(v) the Secretary of Energy; and
``(vi) the head of any other Federal
agency, as determined appropriate by the
Commission.
``(C) Baseline scenario.--The term `baseline
scenario' means a widely-recognized analysis scenario
in which levels of greenhouse gas emissions, as of the
date on which the analysis is performed, continue to
grow, resulting in an increase in the global average
temperature of 1.5 degrees Celsius or more above pre-
industrial levels.
``(D) Carbon dioxide equivalent.--The term `carbon
dioxide equivalent' means the number of metric tons of
carbon dioxide emissions with the same global warming
potential as one metric ton of another greenhouse gas,
as determined under table A-1 of subpart A of part 98
of title 40, Code of Federal Regulations, as in effect
on the date of enactment of this subsection.
``(E) Climate change.--The term `climate change'
means a change of climate that is--
``(i) attributed directly or indirectly to
human activity that alters the composition of
the global atmosphere; and
``(ii) in addition to natural climate
variability observed over comparable time
periods.
``(F) Commercial development of fossil fuels.--The
term `commercial development of fossil fuels'
includes--
``(i) exploration, extraction, processing,
exporting, transporting, refining, and any
other significant action with respect to oil,
natural gas, coal, or any byproduct thereof or
any other solid or liquid hydrocarbons that are
commercially produced; and
``(ii) acquiring a license for any activity
described in clause (i).
``(G) Covered issuer.--The term `covered issuer'
means an issuer that is required to file an annual
report under subsection (a) or section 15(d).
``(H) Direct and indirect greenhouse gas
emissions.--The term `direct and indirect greenhouse
gas emissions' includes, with respect to a covered
issuer--
``(i) all direct greenhouse gas emissions
released by the covered issuer;
``(ii) all indirect greenhouse gas
emissions with respect to electricity, heat, or
steam purchased by the covered issuer;
``(iii) significant indirect emissions,
other than the emissions described in clause
(ii), emitted in the value chain of the covered
issuer; and
``(iv) all indirect greenhouse gas
emissions that are attributable to assets owned
or managed, including assets that are partially
owned or managed, by the covered issuer.
``(I) Fossil fuel reserves.--The term `fossil fuel
reserves' has the meaning given the term `reserves'
under the final rule of the Commission titled
`Modernization of Oil and Gas Reporting' (74 Fed. Reg.
2158; published January 14, 2009).
``(J) Greenhouse gas.--The term `greenhouse gas'--
``(i) means carbon dioxide,
hydrofluorocarbons, methane, nitrous oxide,
perfluorocarbons, sulfur hexafluoride, nitrogen
triflouride, and chlorofluorocarbons;
``(ii) includes any other
anthropogenically-emitted gas that the
Administrator of the Environmental Protection
Agency determines, after notice and comment, to
contribute to climate change; and
``(iii) includes any other
anthropogenically-emitted gas that the
Intergovernmental Panel on Climate Change
determines to contribute to climate change.
``(K) Greenhouse gas emissions.--The term
`greenhouse gas emissions' means the emissions of
greenhouse gas, expressed in terms of metric tons of
carbon dioxide equivalent.
``(L) Physical risks.--The term `physical risks'
means financial risks to long-lived fixed assets,
locations, operations, or value chains that result from
exposure to physical climate-related effects,
including--
``(i) increased average global temperatures
and increased frequency of temperature
extremes;
``(ii) increased severity and frequency of
extreme weather events;
``(iii) increased flooding;
``(iv) sea level rise;
``(v) ocean acidification;
``(vi) increased frequency of wildfires;
``(vii) decreased arability of farmland;
``(viii) decreased availability of fresh
water; and
``(ix) any other financial risks to long-
lived fixed assets, locations, operations, or
value chains determined appropriate by the
Commission, in consultation with appropriate
climate principals.
``(M) Social cost of carbon.--The term `social cost
of carbon' means the social cost of carbon, as
described in the technical support document entitled
`Technical Support Document: Technical Update of the
Social Cost of Carbon for Regulatory Impact Analysis
Under Executive Order 12866', published by the
Interagency Working Group on Social Cost of Greenhouse
Gases, United States Government, in August 2016 or any
successor or substantially related estimate of the
monetized damages associated with an incremental
increase in carbon dioxide emissions in a given year.
``(N) Transition risks.--The term `transition
risks' means financial risks that are attributable to
climate change mitigation and adaptation, including
efforts to reduce greenhouse gas emissions and
strengthen resilience to the impacts of climate change,
including--
``(i) costs relating to--
``(I) international treaties and
agreements;
``(II) Federal, State, and local
policy;
``(III) new technologies;
``(IV) changing markets;
``(V) reputational impacts relevant
to changing consumer behavior; and
``(VI) litigation; and
``(ii) assets that may lose value or become
stranded due to any of the costs described in
subclauses (I) through (VI) of clause (i).
``(O) Value chain.--The term `value chain'--
``(i) means the total lifecycle of a
product or service, both before and after
production of the product or service, as
applicable; and
``(ii) may include the sourcing of
materials, production, transportation, and
disposal with respect to the product or service
described in clause (i).
``(2) Findings.--Congress finds that--
``(A) short-, medium-, and long-term financial and
economic risks and opportunities relating to climate
change, and the national and global reduction of
greenhouse gas emissions, constitute information that
issuers--
``(i) may reasonably expect to affect
shareholder decision making; and
``(ii) should regularly identify, evaluate,
and disclose; and
``(B) the disclosure of information described in
subparagraph (A) should--
``(i) identify, and evaluate--
``(I) material physical and
transition risks posed by climate
change; and
``(II) the potential financial
impact of such risks;
``(ii) detail any implications such risks
have on corporate strategy;
``(iii) detail any board-level oversight of
material climate related risks and
opportunities;
``(iv) allow for intra- and cross-industry
comparison, to the extent practicable, of
climate-related risk exposure through the
inclusion of standardized industry-specific and
sector-specific disclosure metrics, as
identified by the Commission, in consultation
with the appropriate climate principals;
``(v) allow for tracking of performance
over time with respect to mitigating climate
risk exposure; and
``(vi) incorporate a price on greenhouse
gas emissions in financial analyses that
reflects, at minimum, the social cost of carbon
that is attributable to issuers.
``(3) Disclosure.--Each covered issuer, in any annual
report filed by the covered issuer under subsection (a) or
section 15(d), shall, in accordance with any rules issued by
the Commission pursuant to this subsection, include in each
such report information regarding--
``(A) the identification of, the evaluation of
potential financial impacts of, and any risk-management
strategies relating to--
``(i) physical risks posed to the covered
issuer by climate change; and
``(ii) transition risks posed to the
covered issuer by climate change;
``(B) a description of any established corporate
governance processes and structures to identify,
assess, and manage climate-related risks;
``(C) a description of specific actions that the
covered issuer is taking to mitigate identified risks;
``(D) a description of the resilience of any
strategy the covered issuer has for addressing climate
risks when differing climate scenarios are taken into
consideration; and
``(E) a description of how climate risk is
incorporated into the overall risk management strategy
of the covered issuer.
``(4) Rule of construction.--Nothing in paragraph (3) may
be construed as precluding a covered issuer from including, in
an annual report submitted under subsection (a) or section
15(d), any information not explicitly referenced in such
paragraph.
``(5) Rulemaking.--The Commission, in consultation with the
appropriate climate principals, shall, not later than 2 years
after the date of the enactment of this subsection, issue rules
with respect to the information that a covered issuer is
required to disclose pursuant to this subsection and such rules
shall--
``(A) establish climate-related risk disclosure
rules, which shall--
``(i) be, to the extent practicable,
specialized for industries within specific
sectors of the economy, which shall include--
``(I) the sectors of finance,
insurance, transportation, electric
power, mining, and non-renewable
energy; and
``(II) any other sector determined
appropriate by the Commission, in
consultation with the appropriate
climate principals;
``(ii) include reporting standards for
estimating and disclosing direct and indirect
greenhouse gas emissions by a covered issuer,
and any affiliates of the covered issuer, which
shall--
``(I) disaggregate, to the extent
practicable, total emissions of each
specified greenhouse gas by the covered
issuer; and
``(II) include greenhouse gas
emissions by the covered issuer during
the period covered by the disclosure;
``(iii) include reporting standards for
disclosing, with respect to a covered issuer--
``(I) the total amount of fossil
fuel-related assets owned or managed by
the covered issuer; and
``(II) the percentage of fossil
fuel-related assets as a percentage of
total assets owned or managed by the
covered issuer;
``(iv) specify requirements for, and the
disclosure of, input parameters, assumptions,
and analytical choices to be used in climate
scenario analyses required under subparagraph
(B)(i), including--
``(I) present value discount rates;
and
``(II) time frames to consider,
including 5, 10, and 20 year time
frames; and
``(v) include reporting standards and
guidance with respect to the information
required under subparagraph (B)(iii);
``(B) require that a covered issuer, with respect
to a disclosure required under this subsection--
``(i) incorporate into such disclosure--
``(I) quantitative analysis to
support any qualitative statement made
by the covered issuer;
``(II) the rules established under
subparagraph (A);
``(III) industry-specific metrics
that comply with the requirements under
subparagraph (A)(i);
``(IV) specific risk management
actions that the covered issuer is
taking to address identified risks;
``(V) a discussion of the short-,
medium-, and long-term resilience of
any risk management strategy, and the
evolution of applicable risk metrics,
of the covered issuer under each
scenario described in clause (ii); and
``(VI) the total cost attributable
to the direct and indirect greenhouse
gas emissions of the covered issuer,
using, at minimum, the social cost of
carbon;
``(ii) consider, when preparing any
qualitative or quantitative risk analysis
statement contained in the disclosure--
``(I) a baseline scenario that
includes physical impacts of climate
change;
``(II) a 1.5 degrees scenario; and
``(III) any additional climate
analysis scenario considered
appropriate by the Commission, in
consultation with the appropriate
climate principals;
``(iii) if the covered issuer engages in
the commercial development of fossil fuels,
include in the disclosure--
``(I) an estimate of the total and
a disaggregated amount of direct and
indirect greenhouse gas emissions of
the covered issuer that are
attributable to--
``(aa) combustion;
``(bb) flared hydrocarbons;
``(cc) process emissions;
``(dd) directly vented
emissions;
``(ee) fugitive emissions
or leaks; and
``(ff) land use changes;
``(II) a description of--
``(aa) the sensitivity of
fossil fuel reserve levels to
future price projection
scenarios that incorporate the
social cost of carbon;
``(bb) the percentage of
the reserves of the covered
issuer that will be developed
under the scenarios established
in clause (ii), as well as a
forecast for the development
prospects of each reserve under
the scenarios established in
clause (ii);
``(cc) the potential amount
of direct and indirect
greenhouse gas emissions that
are embedded in proved and
probable reserves, with each
such calculation presented as a
total and in subdivided
categories by the type of
reserve;
``(dd) the methodology of
the covered issuer for
detecting and mitigating
fugitive methane emissions,
which shall include the
frequency with which applicable
assets of the covered issuer
are observed for methane leaks,
the processes and technology
that the covered issuer uses to
detect methane leaks, the
percentage of assets of the
covered issuer that the covered
issuer inspects under that
methodology, and quantitative
and time-bound reduction goals
of the issuer with respect to
methane leaks;
``(ee) the amount of water
that the covered issuer
withdraws from freshwater
sources for use and consumption
in operations of the covered
issuer; and
``(ff) the percentage of
the water described in item
(ee) that comes from regions of
water stress or that face
wastewater management
challenges; and
``(III) any other information that
the Commission determines is--
``(aa) necessary;
``(bb) appropriate to
safeguard the public interest;
or
``(cc) directed at ensuring
that investors are informed in
accordance with the findings
described in paragraph (2);
``(C) with respect to a disclosure required under
section 13(s) of the Securities Exchange Act of 1934,
require that a covered issuer include in such
disclosure any other information, or use any climate-
related or greenhouse gas emissions metric, that the
Commission, in consultation with the appropriate
climate principals, determines is--
``(i) necessary;
``(ii) appropriate to safeguard the public
interest; or
``(iii) directed at ensuring that investors
are informed in accordance with the findings
described in paragraph (2); and
``(D) with respect to a disclosure required under
section 13(s) of the Securities Exchange Act of 1934,
establish how and where the required disclosures shall
be addressed in the covered issuer's annual financial
filing.
``(6) Formatting.--The Commission shall require issuers to
disclose information in an interactive data format and shall
develop standards for such format, which shall include
electronic tags for information that the Commission determines
is--
``(A) necessary;
``(B) appropriate to safeguard the public interest;
or
``(C) directed at ensuring that investors are
informed in accordance with the findings described in
paragraph (2).
``(7) Periodic update of rules.--The Commission shall
periodically update the rules issued under this subsection.
``(8) Compilation of information disclosed.--The Commission
shall, to the maximum extent practicable make a compilation of
the information disclosed by issuers under this subsection
publicly available on the website of the Commission and update
such compilation at least once each year.
``(9) Reports.--
``(A) Report to congress.--The Commission shall--
``(i) conduct an annual assessment
regarding the compliance of covered issuers
with the requirements of this subsection;
``(ii) submit to the appropriate
congressional committees a report that contains
the results of each assessment conducted under
clause (i); and
``(iii) make each report submitted under
clause (ii) accessible to the public.
``(B) GAO report.--The Comptroller General of the
United States shall periodically evaluate, and report
to the appropriate congressional committees on, the
effectiveness of the Commission in carrying out and
enforcing this subsection.''.
SEC. 404. BACKSTOP.
If, 2 years after the date of the enactment of this Act, the
Securities and Exchange Commission has not issued the rules required
under section 13(u) of the Securities Exchange Act of 1934, and until
such rules are issued, a covered issuer (as defined in such section
13(u)) shall be deemed in compliance with such section 13(u) if
disclosures set forth in the annual report of such issuer satisfy the
recommendations of the Task Force on Climate-related Financial
Disclosures of the Financial Stability Board as reported in June, 2017,
or any successor report, and as supplemented or adjusted by such rules,
guidance, or other comments from the Commission.
SEC. 405. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Securities and
Exchange Commission such sums as may be necessary to carry out this
title and the amendments made by this title.
TITLE V--DISCLOSURE OF TAX HAVENS AND OFFSHORING
SEC. 501. SHORT TITLE.
This title may be cited as the ``Disclosure of Tax Havens and
Offshoring Act''.
SEC. 502. COUNTRY-BY-COUNTRY REPORTING.
(a) Country-by-Country Reporting.--Section 13 of the Securities
Exchange Act of 1934 (15 U.S.C. 78m), as amended by section 403, is
further amended by adding at the end the following new subsection:
``(v) Disclosure of Financial Performance on a Country-by-Country
Basis.--
``(1) Definitions.--In this subsection--
``(A) the term `constituent entity' means, with
respect to a covered issuer, any separate business
entity of the covered issuer;
``(B) the term `covered issuer' means an issuer
who--
``(i) is a member of a multinational
enterprise group; and
``(ii) the multinational enterprise group
of which the issuer is a member has annual
revenue for the preceding calendar year of not
less than an amount determined by the
Commission to conform to United States or
international standards for country-by-country
reporting; and
``(C) the term `tax jurisdiction'--
``(i) means a country or a jurisdiction
that is not a country but that has fiscal
autonomy; and
``(ii) includes a territory or possession
of the United States that has fiscal autonomy.
``(2) Disclosure.--
``(A) In general.--Each covered issuer shall file a
report with the Commission that includes information
described in subparagraph (B), and any other
information required by the Commission, with respect to
the reporting period described in subparagraph (C).
``(B) Information required.--The information
described in this subparagraph is as follows:
``(i) Constituent entity information.--
Information on the constituent entity,
including the following:
``(I) The complete legal name of
the constituent entity.
``(II) The tax jurisdiction, if
any, in which the constituent entity is
resident for tax purposes.
``(III) The tax jurisdiction in
which the constituent entity is
organized or incorporated (if different
from the tax jurisdiction of
residence).
``(IV) The tax identification
number, if any, used for the
constituent entity by the tax
administration of the constituent
entity's tax jurisdiction of residence.
``(V) The main business activity or
activities of the constituent entity.
``(ii) Tax jurisdiction.--Information on
each tax jurisdiction in which one or more
constituent entities is resident, presented as
an aggregated or consolidated form of the
information for the constituent entities
resident in each tax jurisdiction, including
the following:
``(I) Revenues generated from
transactions with other constituent
entities.
``(II) Revenues not generated from
transactions with other constituent
entities.
``(III) Profit or loss before
income tax.
``(IV) Total income tax paid on a
cash basis to all tax jurisdictions.
``(V) Total accrued tax expense
recorded on taxable profits or losses.
``(VI) Stated capital.
``(VII) Total accumulated earnings.
``(VIII) Total number of employees
on a full-time equivalent basis.
``(IX) Net book value of tangible
assets, which, for purposes of this
section, does not include cash or cash
equivalents, intangibles, or financial
assets.
``(iii) Special rules.--The information
listed in clause (ii) shall be provided, in
aggregated or consolidated form, for any
constituent entity or entities that have no tax
jurisdiction of residence. In addition, if a
constituent entity is an owner of a constituent
entity that does not have a jurisdiction of tax
residence, then the owner's share of such
entity's revenues and profits will be
aggregated or consolidated with the information
for the owner's tax jurisdiction of residence.
``(C) Reporting period.--The reporting period
covered by this paragraph is the period of the covered
entity's applicable financial statement prepared for
the 12-month period that ends with or within the
taxable year of the covered issuer. If the covered
issuer does not prepare an annual applicable financial
statement, then the reporting period covered by this
paragraph is the 12-month period that ends on the last
day of the taxable year of the covered issuer.
``(D) Filing deadline.--Each covered issuer shall
submit to the Commission a report required under this
section on or before the due date (including
extensions) for filing that covered issuer's tax return
in the tax jurisdiction in which the covered issuer's
multinational enterprise group is resident.
``(E) Regulation.--The Commission shall, in
consultation with the Commissioner of the Internal
Revenue Service and Secretary of the Treasury--
``(i) promulgate regulations carrying out
this subsection that conform to United States
or international standards for country-by-
country reporting, including regulations
promulgated by the Internal Revenue Service;
and
``(ii) require disclosure of the accounting
methods used in calculating the information
contained in each report filed pursuant to this
subsection.''.
(b) Rulemaking.--
(1) Deadlines.--The Securities and Exchange Commission (in
this section referred to as the ``Commission'') shall--
(A) not later than 1 year after the date of
enactment of this Act, issue a proposed rule to carry
out this section and the amendment made by this
section; and
(B) not later than 18 months after the date of
enactment of this Act, issue a final rule to carry out
this section and the amendment made by this section.
(2) Data format.--The information required to be provided
by this section shall be provided by the issuer in a report in
a machine readable format prescribed by the Commission, and
such report shall be made available to the public online, in
such machine readable format as the Commission shall prescribe.
(3) Effective date.--Subsection (v) of section 13 of the
Securities Exchange Act of 1934, as added by this section,
shall become effective 1 year after the date on which the
Commission issues a final rule under this section.
TITLE VI--WORKFORCE INVESTMENT DISCLOSURE
SEC. 601. SHORT TITLE.
This title may be cited as the ``Workforce Investment Disclosure
Act of 2021''.
SEC. 602. FINDINGS.
Congress finds the following:
(1) One of the keys to the 20th century post-war economic
success of the United States was the ability to prepare workers
over the course of their lives for success through multiple
sectors across society. Unfortunately, during the several
decades preceding the date of enactment of this Act, there has
been a shift in business norms and in society. While Congress
recognizes that the technology and job skills required for some
jobs has changed dramatically, the private and public
partnership to hire workers at different education levels and
invest in them for the long-term is broken.
(2) Available data from the 10-year period preceding the
date of enactment of this Act suggests that businesses are
investing less in worker training during that time period, not
more.
(3) In the wake of the 2008 global financial crisis, there
was a well-documented decline in overall business investment.
That decline coincides with the wage polarization of workers
and an increase in spending on share buybacks and dividends,
leading several researchers to conclude that companies are de-
emphasizing investment at the expense of increasing returns for
shareholders. The onset of a global pandemic may make that
trend worse, especially with respect to investments in workers.
(4) As part of the overall decline in investment described
in paragraph (3), publicly traded companies are being provided
with incentives to prioritize investments in physical assets
over investments in their workforces, meaning that those
companies are investing in robots instead of individuals. In
fact, there are already signs that automation has increased
during the COVID-19 pandemic.
(5) More than ever, the Federal Government, through company
disclosure practices, needs to understand exactly how companies
are investing in their workers. Over the several months
preceding the date of enactment of this Act, companies across
the United States have taken extreme actions to adapt and
respond to evolving workforce challenges presented by COVID-19.
(6) JUST Capital has been tracking the responses of the
Standard and Poor's 100 largest public companies to their
workers and has found wide variation in the policies
implemented, as well as with respect to the disclosure of those
policies. Through different responses to their workforces, from
layoffs to workplace safety to paid leave, the COVID-19
pandemic is exposing the myriad ways that workforce management
practices of companies pose operational and reputational risks
for short- and long-term financial performance.
(7) Even before the COVID-19 pandemic, there was a growing
body of research establishing a relationship between measurable
workforce management, which is the way that companies manage
their employees, and firm performance. In a study of 2,000
large companies, Harvard Law School's Labor and Work Life
Program found that forward-thinking workforce policies that
prioritize workers, such as how companies train, retain, and
pay their workers, are correlated with long-term financial
performance.
(8) Disclosure of workforce management policies should be
part of a Government-wide economic recovery strategy. Just as a
set of generally accepted accounting principles (commonly known
as ``GAAP'') was urgently adopted after the Great Depression,
standardized, comparable metrics of workforce disclosure
requirements in the context of the COVID-19 pandemic are
critical for investors to accurately measure and project
company performance, both in the present and in the future.
(9) Because many companies already track workforce metrics
internally, moving towards a transparent disclosure regime
would allow investors to better judge whether companies are
managing risks and making the investments in their workforces
that are needed for long-term growth.
(10) Businesses increasingly rely on workforce innovation
and intellectual capital for competitiveness. Workplace
benefits, particularly paid sick leave, medical leave, and
flexible work arrangements, critically support employee mental
and physical well-being.
(11) Race- and gender-based workplace discrimination have
been tied to negative health outcomes, as well as lower
productivity, trust, morale, and satisfaction and higher rates
of absenteeism and turnover. Organizational reporting on
practices to reduce discrimination can increase employee job
satisfaction, performance, and engagement.
(12) According to the Centers for Disease Control and
Prevention, work-related stress is the leading occupational
health risk and, per the American Institute of Stress, job
stress costs United States industry more than $300,000,000,000
per year in accidents, absenteeism, employee turnover,
diminished productivity, and medical, legal, and insurance
costs.
(13) Employee health and well-being is a key asset to
delivering long-term value, with 80 percent of public companies
that took concrete actions on health and well-being having seen
larger improvements in financial performance.
(14) Organizational well-being interventions can create
cost savings of up to 10 dollars for every dollar invested.
Specifically, for every dollar that employers spend on
workplace disease prevention and well-being programs, there is
a $3.27 reduction in employee medical costs and a $2.73
reduction in absenteeism costs. Employers that implement
workplace health promotion programs have seen reductions in
sick leave, health plan costs, and workers' compensation and
disability insurance costs of approximately 25 percent.
(15) The Centers for Disease Control and Prevention has
found that preventable chronic conditions are a major
contributor to insurance premium and employee medical claim
costs, which are at an all-time high, and a Milken Institute
study shows that employers paid $2,600,000,000,000 in 2016 for
the indirect costs of employee chronic disease due to work
absences, lost wages, and reduced economic productivity.
(16) The COVID-19 pandemic has severely impacted employee
physical, mental, and emotional well-being by increasing
stress, depression, burnout, and mortality rates of chronic
disease and by reducing work-life balance and financial
security, with these challenges likely to persist due to
uncertainty and instability even as employees return to work.
Before the COVID-19 pandemic, but especially in the face of
that pandemic, employers that advance policies and practices
that support workforce health, safety, and well-being are
likely to outperform competitors and benefit from lower costs.
SEC. 603. DISCLOSURES RELATING TO WORKFORCE MANAGEMENT.
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
as amended by section 502, is further amended by adding at the end the
following:
``(w) Disclosures Relating to Workforce Management.--
``(1) Definition.--In this subsection, the term `contingent
worker' includes an individual performing work in the usual
course of business on a temporary basis (including through a
labor intermediary, including an individual or entity that
supplies an employer with workers to perform labor) or as an
independent contractor.
``(2) Regulations.--Not later than 2 years after the date
of enactment of this subsection, the Commission, in
consultation with the Secretary of Labor, the Secretary of
Commerce, the Secretary of Treasury, and the Attorney General,
shall promulgate regulations that require each issuer required
to file an annual report under subsection (a) or section 15(d)
to disclose in that report information regarding workforce
management policies, practices, and performance with respect to
the issuer.
``(3) Rules.--Consistent with the requirement under
paragraph (4), each annual report filed with the Commission in
accordance with the regulations promulgated under paragraph (2)
shall include disclosure of the following with respect to the
issuer filing the report for the year covered by the report:
``(A) Workforce demographic information,
including--
``(i) the number of full-time employees,
the number of part-time employees, and the
number of contingent workers (including
temporary and contract workers) with respect to
the issuer, which shall include demographic
information with respect to those categories of
individuals, including information regarding
race, ethnicity, and gender;
``(ii) any policies or practices of the
issuer relating to subcontracting, outsourcing,
and insourcing individuals to perform work for
the issuer, which shall include demographic
information with respect to those individuals,
including information regarding race,
ethnicity, and gender; and
``(iii) whether the percentage of
contingent workers with respect to the issuer
has changed, including temporary and contract
workers, as compared with the previous annual
report filed by the issuer under this
subsection.
``(B) Workforce stability information, including
information about the voluntary turnover or retention
rate, the involuntary turnover rate, the internal
hiring rate, and the internal promotion rate, as well
as information about workers who transition between
employee and contingent workers, and the horizontal job
change rate by quintile and demographic information.
``(C) Workforce composition, including--
``(i) data on diversity (including racial,
ethnic, self-reported sexual orientation, and
gender composition) for senior executives and
other individuals in the workforce; and
``(ii) any policies, audits, and
programming expenditures relating to diversity.
``(D) Workforce skills and capabilities,
including--
``(i) information about training and cross-
training of employees and contingent workers by
quintile and demographic information,
distinguishing between compliance training,
career development training, job performance or
technical training, and training tied to
recognized postsecondary credentials;
``(ii) average number of hours of training
for each employee and contingent worker;
``(iii) total spending on training for all
employees and contingent workers;
``(iv) average spending per employee or
contingent worker;
``(v) training utilization rates; and
``(vi) whether completion of training
opportunities translates into value added
benefit for workers, as determined by wage
increases or internal promotions.
``(E) Workforce health, safety, and well-being,
including information regarding--
``(i) the frequency, severity, and lost
time due to injuries, physical and mental
illness, and fatalities;
``(ii) the scope, frequency, and total
expenditure on workplace health, safety, and
well-being programs;
``(iii) the total dollar value of assessed
fines under the Occupational Safety and Health
Act of 1970 (29 U.S.C. 651 et seq.);
``(iv) the total number of actions brought
under section 13 of the Occupational Safety and
Health Act of 1970 (29 U.S.C. 662) to prevent
imminent dangers;
``(v) the total number of actions brought
against the issuer under section 11(c) of the
Occupational Safety and Health Act of 1970 (29
U.S.C. 660(c));
``(vi) any findings of workplace harassment
or workplace discrimination during the 5 fiscal
year period of the issuer preceding the fiscal
year in which the report is filed; and
``(vii) communication channels and
grievance mechanisms in place for employees and
contingent workers.
``(F) Workforce compensation and incentives,
including information regarding--
``(i) total workforce costs, including
salaries and wages, health benefits, other
ancillary benefit costs, and pension costs;
``(ii) workforce benefits, including paid
leave, health care, child care, and retirement,
including information regarding benefits that
are provided--
``(I) to full-time employees and
not to part-time employees; or
``(II) to employees and not to
contingent workers;
``(iii) total contributions made to
unemployment insurance by the issuer, how many
employees to whom those contributions apply,
and the total amount paid in unemployment
compensation to individuals who were laid off
by the issuer;
``(iv) policies and practices regarding how
performance, productivity, equity, and
sustainability are considered when setting pay
and making promotion decisions; and
``(v) policies and practices relating to
any incentives and bonuses provided to
employees and any policies or practices
designed to counter any risks created by such
incentives and bonuses.
``(G) Workforce recruiting and needs, including--
``(i) the number of new jobs created,
seeking to be filled, and filled, disaggregated
based on classification status;
``(ii) the share of new jobs that require a
bachelor's degree or higher;
``(iii) information regarding the quality
of hire for jobs described in clause (i); and
``(iv) the retention rate for individuals
hired to fill the jobs described in clause (i).
``(H) Workforce engagement and productivity,
including information regarding policies and practices
of the issuer relating to--
``(i) engagement, productivity, and mental
well-being of employees and contingent workers,
as determined in consultation with the
Department of Labor; and
``(ii) freedom of association and work-life
balance initiatives, including flexibility and
the ability of the workforce to work remotely,
as determined in consultation with the
Department of Labor.
``(4) Disaggregation of information.--To the maximum extent
feasible, the information described in paragraph (3) shall be
disaggregated by--
``(A) the workforce composition described in
subparagraph (C)(i) of that paragraph;
``(B) wage quintiles of the employees of the issuer
for the year covered by the applicable annual report;
and
``(C) the employment status of individuals
performing services for the issuer, including whether
those individuals are full-time employees, part-time
employees, or contingent workers.
``(5) Treatment of emerging growth companies.--The
Commission may exempt emerging growth companies from any
disclosure required under subparagraph (D), (E), (F), (G), or
(H) of paragraph (3) if the Commission determines that such an
exemption is necessary or appropriate in the public interest.
``(6) False or misleading statements.--
``(A) In general.--Except as provided in
subparagraph (B), it shall be unlawful for any person,
in any report or document filed under this subsection,
to make or cause to be made any untrue statement of a
material fact or omit to state a material fact required
to be stated in the report or document or necessary to
make the statement made, in the light of the
circumstances under which it is made, not misleading.
``(B) Exception.--A person shall not be liable
under subparagraph (A) if the person shows that the
person had, after reasonable investigation, reasonable
ground to believe, and did believe, at the time the
applicable statement was made, that the statement was
true and that there was no omission to state a material
fact necessary to make the statement made, in the light
of the circumstances under which it is made, not
misleading.
``(C) No private right of action.--Nothing in this
paragraph may be construed as creating a private right
of action.
``(7) Exemption.--This subsection shall not apply to an
investment company registered under section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8).''.
SEC. 604. BACKSTOP.
(a) Definitions.--In this section--
(1) the term ``Commission'' means the Securities and
Exchange Commission;
(2) the term ``covered issuer'' means an issuer that is
required to file an annual report under section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(a), 78o(d)); and
(3) the term ``issuer'' has the meaning given the term in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)).
(b) Compliance.--If, as of the date that is 2 years after the date
of enactment of this Act, the Commission has not promulgated the
regulations required under subsection (w) of section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m), as added by section
603, a covered issuer, during the period beginning on that date and
ending on the date on which the Commission promulgates those
regulations, shall be deemed to be in compliance with such subsection
(w) if disclosures set forth in the annual report of the covered issuer
satisfy the public disclosure standards of the International
Organization for Standardization's ISO 30414, or any successor
standards for external workforce reporting, as supplemented or adjusted
by rules, guidance, or other comments from the Commission.
SEC. 605. SEC STUDY.
(a) Definitions.--In this section, the terms ``Commission'' and
``issuer'' have the meanings given those terms in section 604(a).
(b) Study.--The Commission shall conduct a study about the value to
investors of--
(1) information about the human rights commitments of
issuers required to file annual reports under section 13(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)),
including information about any principles used to evaluate
risk, constituency consultation processes, and supplier due
diligence; and
(2) with respect to issuers required to file annual reports
under section 13(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a)), information about--
(A) violations of the Fair Labor Standards Act of
1938 (29 U.S.C. 201 et seq.) by those issuers;
(B) violations of worker misclassification by those
issuers;
(C) surveys regarding employee satisfaction, well-
being, and engagement;
(D) the number and overall percentage of quality
jobs, as determined by compensation above median wage
and comprehensive employer-provided benefits; and
(E) information about workforce investment trends,
as determined by at least a 3-year time period.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Commission shall submit to Congress a report that
contains the results of the study required to be conducted under
subsection (b), with recommendations for additional disclosure
regulations based on the findings, and any actions the Commission plans
to take to enhance disclosures based on the findings.
TITLE VII--PREVENTING AND RESPONDING TO WORKPLACE HARASSMENT
SEC. 701. SEC FILINGS AND MATERIAL DISCLOSURES AT PUBLIC COMPANIES.
(a) Definitions.--In this section--
(1) the term ``Form 10-K'' means the form described in
section 249.310 of title 17, Code of Federal Regulations, or
any successor regulation; and
(2) the term ``issuer'' has the meaning given the term in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)).
(b) Findings.--Congress finds that--
(1) shareholders and the public should know whether
corporations--
(A) are expending company funds to resolve, settle,
or litigate claims of workplace harassment, including
sexual harassment; and
(B) along with the executives and managers of those
corporations--
(i) are complying with prohibitions against
workplace harassment, including sexual
harassment; and
(ii) facilitate a culture of silence,
disrespect, intimidation, and abuse that
negatively impacts the health and safety of the
workers of those corporations and the value of
those corporations; and
(2) the requirements of this section will--
(A) establish necessary transparency and
accountability; and
(B) provide an incentive for corporations to--
(i) promptly address workplace harassment,
including sexual harassment, as that misconduct
occurs; and
(ii) foster a culture in which workplace
harassment is not protected and does not occur.
(c) Information Required.--Not later than 1 year after the date of
enactment of this Act, the Securities and Exchange Commission shall
promulgate a regulation that requires any issuer that is required to
submit an annual report using Form 10-K to include in any such
submission--
(1) during the period covered by the submission--
(A) with respect to workplace harassment, including
sexual harassment, and retaliation for reporting,
resisting, opposing, or assisting in the investigation
of workplace harassment--
(i) the number of settlements reached by
the issuer as a signatory or when the issuer is
a beneficiary of a release of claims; and
(ii) whether any judgments or awards
(including awards through arbitration or
administrative proceedings) were entered
against the issuer in part or in whole, or any
payments made in connection with a release of
claims; and
(B) the total amount paid by the issuer or another
party as a result of--
(i) the settlements described in
subparagraph (A)(i); and
(ii) the judgments described in
subparagraph (A)(ii); and
(2) information regarding whether, in the aggregate,
including the period covered by the submission, there have been
three or more settlements reached by, or judgments against, the
issuer with respect to workplace harassment, including sexual
harassment, or retaliation for reporting, resisting, opposing,
or assisting in the investigation of workplace harassment that
relate to a particular individual employed by the issuer,
without identifying that individual by name.
TITLE VIII--CYBERSECURITY DISCLOSURE
SEC. 801. SHORT TITLE.
This title may be cited as the ``Cybersecurity Disclosure Act of
2021''.
SEC. 802. CYBERSECURITY TRANSPARENCY.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by inserting after section 14B (15 U.S.C. 78n-2) the following:
``SEC. 14C. CYBERSECURITY TRANSPARENCY.
``(a) Definitions.--In this section--
``(1) the term `cybersecurity' means any action, step, or
measure to detect, prevent, deter, mitigate, or address any
cybersecurity threat or any potential cybersecurity threat;
``(2) the term `cybersecurity threat'--
``(A) means an action, not protected by the First
Amendment to the Constitution of the United States, on
or through an information system that may result in an
unauthorized effort to adversely impact the security,
availability, confidentiality, or integrity of an
information system or information that is stored on,
processed by, or transiting an information system; and
``(B) does not include any action that solely
involves a violation of a consumer term of service or a
consumer licensing agreement;
``(3) the term `information system'--
``(A) has the meaning given the term in section
3502 of title 44, United States Code; and
``(B) includes industrial control systems, such as
supervisory control and data acquisition systems,
distributed control systems, and programmable logic
controllers;
``(4) the term `NIST' means the National Institute of
Standards and Technology; and
``(5) the term `reporting company' means any company that
is an issuer--
``(A) the securities of which are registered under
section 12; or
``(B) that is required to file reports under
section 15(d).
``(b) Requirement To Issue Rules.--Not later than 360 days after
the date of enactment of this section, the Commission shall issue final
rules to require each reporting company, in the annual report of the
reporting company submitted under section 13 or section 15(d) or in the
annual proxy statement of the reporting company submitted under section
14(a)--
``(1) to disclose whether any member of the governing body,
such as the board of directors or general partner, of the
reporting company has expertise or experience in cybersecurity
and in such detail as necessary to fully describe the nature of
the expertise or experience; and
``(2) if no member of the governing body of the reporting
company has expertise or experience in cybersecurity, to
describe what other aspects of the reporting company's
cybersecurity were taken into account by any person, such as an
official serving on a nominating committee, that is responsible
for identifying and evaluating nominees for membership to the
governing body.
``(c) Cybersecurity Expertise or Experience.--For purposes of
subsection (b), the Commission, in consultation with NIST, shall define
what constitutes expertise or experience in cybersecurity using
commonly defined roles, specialties, knowledge, skills, and abilities,
such as those provided in NIST Special Publication 800-181, entitled
`National Initiative for Cybersecurity Education (NICE) Cybersecurity
Workforce Framework', or any successor thereto.''.
TITLE IX--DATA RELATING TO DIVERSITY DISCLOSURE
SEC. 901. SHORT TITLE.
This title may be cited as the ``Improving Corporate Governance
Through Diversity Act of 2021''.
SEC. 902. SUBMISSION OF DATA RELATING TO DIVERSITY BY ISSUERS.
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
as amended by section 502, is further amended by adding at the end the
following:
``(w) Submission of Data Relating to Diversity.--
``(1) Definitions.--In this subsection--
``(A) the term `executive officer' has the meaning
given the term in section 230.501(f) of title 17, Code
of Federal Regulations, as in effect on the date of
enactment of this subsection; and
``(B) the term `veteran' has the meaning given the
term in section 101 of title 38, United States Code.
``(2) Submission of disclosure.--Each issuer required to
file an annual report under subsection (a) shall disclose in
any proxy statement and any information statement relating to
the election of directors filed with the Commission the
following:
``(A) Demographic data, based on voluntary self-
identification, on the racial, ethnic, gender identity,
and sexual orientation composition of--
``(i) the board of directors of the issuer;
``(ii) nominees for the board of directors
of the issuer; and
``(iii) the executive officers of the
issuer.
``(B) The status of any member of the board of
directors of the issuer, any nominee for the board of
directors of the issuer, or any executive officer of
the issuer, based on voluntary self-identification, as
a veteran.
``(C) Whether the board of directors of the issuer,
or any committee of that board of directors, has, as of
the date on which the issuer makes a disclosure under
this paragraph, adopted any policy, plan, or strategy
to promote racial, ethnic, and gender diversity among--
``(i) the board of directors of the issuer;
``(ii) nominees for the board of directors
of the issuer; or
``(iii) the executive officers of the
issuer.
``(3) Alternative submission.--In any 1-year period in
which an issuer required to file an annual report under
subsection (a) does not file with the Commission a proxy
statement or an information statement relating to the election
of directors, the issuer shall disclose the information
required under paragraph (2) in the first annual report of
issuer that the issuer submits to the Commission after the end
of that 1-year period.
``(4) Annual report.--Not later than 18 months after the
date of enactment of this subsection, and annually thereafter,
the Commission shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives, and publish
on the website of the Commission, a report that analyzes the
information disclosed under paragraphs (2) and (3) and
identifies any trends with respect to such information.
``(5) Best practices.--
``(A) In general.--The Director of the Office of
Minority and Women Inclusion of the Commission shall,
not later than 3 years after the date of enactment of
this subsection, and every 3 years thereafter, publish
best practices for compliance with this subsection.
``(B) Comments.--The Director of the Office of
Minority and Women Inclusion of the Commission may,
pursuant to subchapter II of chapter 5 of title 5,
United States Code, solicit public comments related to
the best practices published under subparagraph (A).''.
SEC. 903. DIVERSITY ADVISORY GROUP.
(a) Definitions.--For the purposes of this section:
(1) Advisory group.--The term ``Advisory Group'' means the
Diversity Advisory Group established under subsection (b).
(2) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(3) Issuer.--The term ``issuer'' has the meaning given the
term in section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)).
(b) Establishment.--The Commission shall establish a Diversity
Advisory Group, which shall be composed of representatives from--
(1) the Federal Government and State and local governments;
(2) academia; and
(3) the private sector.
(c) Study and Recommendations.--The Advisory Group shall--
(1) carry out a study that identifies strategies that can
be used to increase gender identity, racial, ethnic, and sexual
orientation diversity among members of boards of directors of
issuers; and
(2) not later than 270 days after the date on which the
Advisory Group is established, submit to the Commission, the
Committee on Banking, Housing, and Urban Affairs of the Senate,
and the Committee on Financial Services of the House of
Representatives a report that--
(A) describes any findings from the study conducted
under paragraph (1); and
(B) makes recommendations regarding strategies that
issuers could use to increase gender identity, racial,
ethnic, and sexual orientation diversity among board
members.
(d) Annual Report.--Not later than 1 year after the date on which
the Advisory Group submits the report required under subsection (c)(2),
and annually thereafter, the Commission shall submit to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives a report that
describes the status of gender identity, racial, ethnic, and sexual
orientation diversity among members of the boards of directors of
issuers.
(e) Public Availability of Reports.--The Commission shall make all
reports of the Advisory Group available to issuers and the public,
including on the website of the Commission.
(f) Inapplicability of Federal Advisory Committee Act.--The Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply with respect to
the Advisory Group or the activities of the Advisory Group.
TITLE X--UYGHUR FORCED LABOR DISCLOSURE
SEC. 1001. SHORT TITLE.
This division may be cited as the ``Uyghur Forced Labor Disclosure
Act''.
SEC. 1002. DISCLOSURE OF CERTAIN ACTIVITIES RELATING TO THE XINJIANG
UYGHUR AUTONOMOUS REGION.
(a) In General.--Section 13 of the Securities Exchange Act of 1934
(15 U.S.C. 78m), as amended by section 502, is further amended by
adding at the end the following:
``(w) Disclosure of Certain Activities Relating to the Xinjiang
Uyghur Autonomous Region.--
``(1) In general.--Not later than the end of the 180-day
period beginning on the date of enactment of this subsection,
the Commission shall issue rules to require each issuer
required to file an annual report under this section or section
15(d) or a proxy statement under section 14 to disclose in each
such report or proxy statement whether, during the period
covered by the report or proxy statement--
``(A) the issuer or any affiliate of the issuer,
directly or indirectly, engaged with an entity or the
affiliate of an entity to import--
``(i) manufactured goods, including
electronics, food products, textiles, shoes,
auto parts, polysilicon, and teas, that are
sourced from or through the XUAR;
``(ii) manufactured goods containing
materials that are sourced from or through the
XUAR; or
``(iii) goods manufactured by an entity
engaged in labor transfers from the XUAR;
``(B) with respect to any goods or materials
described under subparagraph (A), whether the goods or
material originated in forced labor camps; and
``(C) with respect to each manufactured good or
material described under subparagraph (A)--
``(i) the nature and extent of the
commercial activity related to such good or
material;
``(ii) the gross revenue and net profits,
if any, attributable to the good or material;
and
``(iii) whether the issuer or the affiliate
of the issuer intends to continue with such
importation.
``(2) Availability of information.--The Commission shall
make all information disclosed pursuant to this subsection
available to the public on the website of the Commission.
``(3) Reports.--
``(A) Annual report to congress.--The Commission
shall--
``(i) conduct an annual assessment of the
compliance of issuers with the requirements of
this subsection; and
``(ii) issue a report to Congress
containing the results of the assessment
required under clause (i).
``(B) GAO report.--The Comptroller General of the
United States shall periodically evaluate and report to
Congress on the effectiveness of the oversight by the
Commission of the disclosure requirements under this
subsection.
``(4) Definitions.--In this subsection:
``(A) Forced labor camp.--The term `forced labor
camp' means--
``(i) any entity engaged in the `mutual
pairing assistance' program which subsidizes
the establishment of manufacturing facilities
in XUAR;
``(ii) any entity using convict labor,
forced labor, or indentured labor described
under section 307 of the Tariff Act of 1930 (19
U.S.C. 1307); and
``(iii) any other entity that the
Commission determines is appropriate.
``(B) XUAR.--The term `XUAR' means the Xinjiang
Uyghur Autonomous Region.''.
(b) Repeal.--The amendment made by this section shall be repealed
on the earlier of--
(1) the date that is 8 years after the date of the
enactment of this section; or
(2) the date on which the President submits to Congress
(including the Office of the Law Revision Council) a
determination that the Government of the People's Republic of
China has ended mass internment, forced labor, and any other
gross violations of human rights experienced by Uyghurs,
Kazakhs, Kyrgyz, and members of other persecuted groups in the
Xinjiang Uyghur Autonomous Region.
TITLE XI--OTHER MATTERS
SEC. 1101. STUDY AND REPORT ON SMALL BUSINESSES AND ESG DISCLOSURES.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Securities and Exchange Commission, in
coordination with the Director of the Office of the Advocate for Small
Business Capital Formation and the Investor Advocate of the Office of
the Investor Advocate, shall--
(1) conduct a study on the issues small businesses face
with respect to complying with disclosure requirements related
to environmental, social, and governance metrics; and
(2) submit a report to Congress that includes--
(A) the results of the study required under
paragraph (1); and
(B) recommendations with respect to small business
compliance with such disclosure requirements.
(b) Definition of Small Business.--In this section, the term
``small business'' has the meaning given the term ``small business
concern'' under section 3 of the Small Business Act (15 U.S.C. 632).
Passed the House of Representatives June 16, 2021.
Attest:
CHERYL L. JOHNSON,
Clerk.