117TH CONGRESS 

1ST SESSION H. R. 1187 

AN ACT 

To provide for disclosure of additional material information 

about public companies and establish a Sustainable Finance Advisory Committee, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Corporate Governance 

3 Improvement and Investor Protection Act’’. 

4 TITLE I—ESG DISCLOSURE 

5 SIMPLIFICATION 

6 SEC. 101. SHORT TITLE. 

7 This title may be cited as the ‘‘ESG Disclosure Sim8 plification Act of 2021’’. 

9 SEC. 102. FINDINGS. 

10 Congress finds the following: 

11 (1) The Securities and Exchange Commission 

12 has broad authority to require the disclosure of in13 formation if such information is in the interest of, 

14 or is material to investors. 

15 (2) The Commission does not require companies 

16 to disclose information related to environmental, so17 cial, and governance (‘‘ESG’’) matters, and does not 

18 require companies to adhere to standards for dis19 closing such information. 

20 (3) Investors have reported that voluntary dis21 closures of ESG metrics are inadequate. 

22 (4) A rule requiring reporting and standardiza23 tion of ESG disclosures is in the interest of inves24 tors. 
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1 (5) ESG matters are material to investors, and 

2 the Commission must establish standards for disclo3 sure of such matters. 

4 SEC. 103. ESG DISCLOSURES. 

5 (a) IN GENERAL.—Section 14 of the Securities Ex6 change Act of 1934 (15 U.S.C. 78n) is amended by adding 

7 at the end the following: 

8 ‘‘(k) ESG DISCLOSURES.— 

9 ‘‘(1) IN GENERAL.—Each issuer the securities 

10 of which are registered under section 12 or that is 

11 required to file annual reports under section 15(d) 

12 shall disclose in any proxy or consent solicitation 

13 material for an annual meeting of the share14 holders— 

15 ‘‘(A) a clear description of the views of the 

16 issuer about the link between ESG metrics and 

17 the long-term business strategy of the issuer; 

18 and 

19 ‘‘(B) a description of any process the 

20 issuer uses to determine the impact of ESG 

21 metrics on the long-term business strategy of 

22 the issuer. 

23 ‘‘(2) ESG METRICS DEFINED.—In this sub24 section, the term ‘ESG metrics’ has the meaning 

25 given the term in part 210 of title 17, Code of Fed-
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1 eral Regulations as amended pursuant to section 

2 3(b) of the ESG Disclosure Simplification Act of 

3 2021.’’. 

4 (b) RULEMAKING.— 

5 (1) IN GENERAL.—The Securities and Ex6 change Commission (in this Act referred to as the 

7 ‘‘Commission’’) shall amend part 210 of title 17, 

8 Code of Federal Regulations (or any successor there9 to) to— 

10 (A) require each issuer, in any filing of the 

11 issuer described in such part that requires au12 dited financial statements, to disclose environ13 mental, social, and governance metrics (in this 

14 title referred to as ESG metrics); and 

15 (B) define ESG metrics. 

16 (2) SUSTAINABLE FINANCE ADVISORY COM17 MITTEE.—The Sustainable Finance Advisory Com18 mittee established pursuant to section 4(k) of the 

19 Securities and Exchange Act of 1934 shall, not later 

20 than 180 days after the date of the first meeting of 

21 such Committee, submit to the Commission rec22 ommendations about what ESG metrics the Com23 mission should require issuers to disclose. 

24 (3) MATERIALITY.—It is the sense of Congress 

25 that ESG metrics, as such term is defined by the 
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1 Commission pursuant to paragraph (1), are de facto 

2 material for the purposes of disclosures under the 

3 Securities Exchange Act of 1934 and the Securities 

4 Act of 1933. 

5 (4) INCORPORATION OF INTERNATIONAL

6 STANDARDS.—When amending part 210 of title 17, 

7 Code of Federal Regulations (or any successor there8 to) pursuant to paragraph (1), the Commission may, 

9 as the Commission determines appropriate, incor10 porate any internationally recognized, independent, 

11 multi-stakeholder environmental, social, and govern12 ance disclosure standards. 

13 (5) LOCATION OF DISCLOSURE.—Any disclosure 

14 required by paragraph (1) may be included in a 

15 notes section of the filing. 

16 (6) DELAY FOR SMALL ISSUERS.—The Commis17 sion may use a phased approach when applying any 

18 amendments made pursuant to paragraph (1) to 

19 small issuers and may determine the criteria by 

20 which an issuer qualifies as a small issuer for pur21 poses of such phased approach. 

22 SEC. 104. SUSTAINABLE FINANCE ADVISORY COMMITTEE. 

23 Section 4 of the Securities Exchange Act of 1934 (15 

24 U.S.C. 78d) is amended by adding at the end the fol25 lowing: 
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1 ‘‘(k) SUSTAINABLE FINANCE ADVISORY COM2 MITTEE.— 

3 ‘‘(1) ESTABLISHMENT.—The Commission shall 

4 establish a permanent advisory committee to be 

5 called the ‘Sustainable Finance Advisory Committee’ 

6 (in this subsection referred to as the ‘Committee’). 

7 ‘‘(2) DUTIES OF COMMITTEE.—The Committee 

8 shall— 

9 ‘‘(A) submit a report to the Commission 

10 not later than 18 months after the date of the 

11 first meeting of the Committee that— 

12 ‘‘(i) identifies the challenges and op13 portunities for investors associated with 

14 sustainable finance; and 

15 ‘‘(ii) recommends policy changes to fa16 cilitate the flow of capital towards sustain17 able investments, in particular environ18 mentally sustainable investments; 

19 ‘‘(B) when solicited, advise the Commission 

20 on sustainable finance; and 

21 ‘‘(C) communicate with individuals and en22 tities with an interest in sustainable finance. 

23 ‘‘(3) MEMBERSHIP.— 

24 ‘‘(A) MEMBERS.— 
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1 ‘‘(i) IN GENERAL.—The Committee 

2 shall consist of no more than 20 members 

3 who shall each serve for one four-year 

4 term. 

5 ‘‘(ii) REPRESENTATION.—Each mem6 ber shall represent individuals and entities 

7 with an interest in sustainable finance, 

8 such as— 

9 ‘‘(I) experts on sustainable fi10 nance; 

11 ‘‘(II) operators of financial infra12 structure; 

13 ‘‘(III) entities that provide anal14 ysis, data, or methodologies that fa15 cilitate sustainable finance; 

16 ‘‘(IV) insurance companies, pen17 sion funds, asset managers, depository 

18 institutions, or credit unions; or 

19 ‘‘(V) other financial institutions 

20 that intermediate investments in sus21 tainable finance or manage risks re22 lated to sustainable development. 

23 ‘‘(iii) REPRESENTATION OF INTER24 ESTS.—A member may not represent a 

25 single individual or entity and shall rep-
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1 resent types of individuals and entities 

2 with similar interests in sustainable fi3 nance. 

4 ‘‘(B) SELECTION.— 

5 ‘‘(i) IN GENERAL.—The Commission 

6 shall— 

7 ‘‘(I) publish criteria for selection 

8 of members on the website of the 

9 Commission and in the Federal Reg10 ister; and 

11 ‘‘(II) solicit applications for 

12 membership on the website of the 

13 Commission and in the Federal Reg14 ister. 

15 ‘‘(ii) EQUAL SHARE.—From the indi16 viduals who submit applications for mem17 bership, each Commissioner of the Com18 mission shall select an equal number of the 

19 members of the Committee. 

20 ‘‘(C) PAY.—Members may not receive pay 

21 by reason of their service on the Committee but 

22 may receive travel or transportation expenses in 

23 accordance with applicable provisions under 

24 subchapter I of chapter 57 of title 5, United 

25 States Code. 
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1 ‘‘(D) MEMBER TRANSPARENCY.—The 

2 name of each member and the types of individ3 uals and entities that such member represents 

4 shall be published on the website of the Com5 mission. 

6 ‘‘(E) STAFF.—The Committee shall be 

7 supported by staff from the Office of the Inves8 tor Advocate of the Commission that are dedi9 cated to environmental, social and governance 

10 (in this subsection referred to as ‘ESG’) issues. 

11 ‘‘(F) AUTHORIZATION OF APPROPRIA12 TION.—There are authorized to be appropriated 

13 such sums as are necessary to finance costs as14 sociated with staff dedicated to ESG issues in 

15 the Office of the Investor Advocate of the Com16 mission. 

17 ‘‘(4) SUSTAINABLE FINANCE.—For the pur18 poses of this subsection, the term ‘sustainable fi19 nance’ means the provision of finance with respect 

20 to investments taking into account environmental, 

21 social, and governance considerations. 

22 ‘‘(5) SEC RESPONSE.—The Commission shall, 

23 not later than 6 months after the date on which the 

24 Committee submits a report to the Commission pur-
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1 suant to paragraph (2)(A), publish a response to 

2 such report.’’. 

3 SEC. 105. STUDY ON SHAREHOLDER COLLECTIVE ACTION. 

4 Not later than 1 year after the date of the enactment 

5 of this Act, the Securities and Exchange Commission 

6 shall— 

7 (1) conduct a study on— 

8 (A) the emergence, viability, and signifi9 cance of coalitions of shareholders who wish to 

10 preserve and promote critical employment and 

11 ESG standards; 

12 (B) whether and to what extent share13 holder collective action— 

14 (i) occurs; and 

15 (ii) has implications with respect to 

16 filing requirements under the Securities 

17 Exchange Act of 1934 (15 U.S.C. 78a et 

18 seq.); and 

19 (C) any possible anticompetitive activities 

20 associated with shareholder collective action; 

21 and 

22 (2) submit to Congress a report that includes— 

23 (A) the findings of the study conducted 

24 under paragraph (1); 
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1 (B) guidance, which may include an ap2 proved list, of shareholder engagement activities 

3 that are not considered to involve questions of 

4 corporate control; and 

5 (C) recommendations on regulatory safe 

6 harbors for engagement with respect to sustain7 ability guardrails and similar restrictions on 

8 portfolio company conduct with a goal of— 

9 (i) preserving economic justice, envi10 ronmental systems, and social institutions; 

11 and 

12 (ii) otherwise protecting the common 

13 interests of corporate shareholders and 

14 stakeholders. 

15 TITLE II—SHAREHOLDER 

16 POLITICAL TRANSPARENCY 

17 SEC. 201. SHORT TITLE. 

18 This title may be cited as the ‘‘Shareholder Political 

19 Transparency Act of 2021’’. 

20 SEC. 202. FINDINGS. 

21 Congress finds that— 

22 (1) corporations make significant political con23 tributions and expenditures that directly or indi24 rectly influence the election of candidates and sup25 port or oppose political causes; 
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1 (2) decisions to use corporate funds for political 

2 contributions and expenditures are usually made by 

3 corporate boards and executives, rather than share4 holders; 

5 (3) corporations, acting through boards and ex6 ecutives, are obligated to conduct business for the 

7 best interests of their owners, the shareholders; 

8 (4) historically, shareholders have not had a 

9 way to know, or to influence, the political activities 

10 of corporations they own; 

11 (5) shareholders and the public have a right to 

12 know how corporate managers are spending com13 pany funds to make political contributions and ex14 penditures benefitting candidates, political parties, 

15 and political causes; and 

16 (6) corporations should be accountable to share17 holders in making political contributions or expendi18 tures affecting Federal governance and public policy. 

19 SEC. 203. REPORTING REQUIREMENTS. 

20 Section 13 of the Securities Exchange Act of 1934 

21 (15 U.S.C. 78m) is amended by adding at the end the 

22 following: 

23 ‘‘(s) REPORTING REQUIREMENTS RELATING TO CER24 TAIN POLITICAL EXPENDITURES.— 

25 ‘‘(1) DEFINITIONS.—In this subsection: 
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1 ‘‘(A) EXPENDITURE FOR POLITICAL AC2 TIVITIES.—The term ‘expenditure for political 

3 activities’— 

4 ‘‘(i) means— 

5 ‘‘(I) an independent expenditure 

6 (as defined in section 301(17) of the 

7 Federal Election Campaign Act of 

8 1971 (52 U.S.C. 30101(17))); 

9 ‘‘(II) an electioneering commu10 nication (as defined in section 

11 304(f)(3) of that Act (52 U.S.C. 

12 30104(f)(3))) and any other public 

13 communication (as defined in section 

14 301(22) of that Act (52 U.S.C. 

15 30101(22))) that would be an elec16 tioneering communication if it were a 

17 broadcast, cable, or satellite commu18 nication; or 

19 ‘‘(III) dues or other payments to 

20 trade associations or organizations de21 scribed in section 501(c) of the Inter22 nal Revenue Code of 1986 and exempt 

23 from tax under section 501(a) of that 

24 Code that are, or could reasonably be 

25 anticipated to be, used or transferred 
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1 to another association or organization 

2 for the purposes described in sub3 clause (I) or (II); and 

4 ‘‘(ii) does not include— 

5 ‘‘(I) direct lobbying efforts 

6 through registered lobbyists employed 

7 or hired by the issuer; 

8 ‘‘(II) communications by an 

9 issuer to its shareholders and execu10 tive or administrative personnel and 

11 their families; or 

12 ‘‘(III) the establishment and ad13 ministration of contributions to a sep14 arate segregated fund to be utilized 

15 for political purposes by a corpora16 tion. 

17 ‘‘(B) ISSUER.—The term ‘issuer’ does not 

18 include an investment company registered 

19 under section 8 of the Investment Company Act 

20 of 1940 (15 U.S.C. 80a–8). 

21 ‘‘(2) QUARTERLY REPORTS.— 

22 ‘‘(A) REPORTS REQUIRED.—Not later than 

23 180 days after the date of enactment of this 

24 subsection, the Commission shall amend the re25 porting rules under this section to require each 
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1 issuer with a class of equity securities reg2 istered under section 12 of this title to submit 

3 to the Commission and the shareholders of the 

4 issuer a quarterly report containing— 

5 ‘‘(i) a description of any expenditure 

6 for political activities made during the pre7 ceding quarter; 

8 ‘‘(ii) the date of each expenditure for 

9 political activities; 

10 ‘‘(iii) the amount of each expenditure 

11 for political activities; 

12 ‘‘(iv) if the expenditure for political 

13 activities was made in support of or in op14 position to a candidate, the name of the 

15 candidate and the office sought by, and the 

16 political party affiliation of, the candidate; 

17 and 

18 ‘‘(v) the name or identity of trade as19 sociations or organizations described in 

20 section 501(c) of the Internal Revenue 

21 Code of 1986 and exempt from tax under 

22 section 501(a) of such Code which receive 

23 dues or other payments as described in 

24 paragraph (1)(A)(i)(III). 
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1 ‘‘(B) PUBLIC AVAILABILITY.—The Com2 mission shall ensure that the quarterly reports 

3 required under this paragraph are publicly 

4 available through the Internet website of the 

5 Commission and through the EDGAR system in 

6 a manner that is searchable, sortable, and 

7 downloadable, consistent with the requirements 

8 under section 24. 

9 ‘‘(3) ANNUAL REPORTS.—Not later than 180 

10 days after the date of enactment of this subsection, 

11 the Commission shall, by rule, require each issuer to 

12 include in the annual report of the issuer to share13 holders— 

14 ‘‘(A) a summary of each expenditure for 

15 political activities made during the preceding 

16 year in excess of $10,000, and each expenditure 

17 for political activities for a particular election if 

18 the total amount of such expenditures for that 

19 election is in excess of $10,000; 

20 ‘‘(B) a description of the specific nature of 

21 any expenditure for political activities the issuer 

22 intends to make for the forthcoming fiscal year, 

23 to the extent the specific nature is known to the 

24 issuer; and 
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1 ‘‘(C) the total amount of expenditures for 

2 political activities intended to be made by the 

3 issuer for the forthcoming fiscal year.’’. 

4 SEC. 204. REPORTS. 

5 (a) SECURITIES AND EXCHANGE COMMISSION.—The 

6 Securities and Exchange Commission shall— 

7 (1) conduct an annual assessment of the com8 pliance of issuers with section 13(s) of the Securities 

9 Exchange Act of 1934, as added by section 203; and 

10 (2) submit to Congress an annual report con11 taining the results of the assessment under para12 graph (1). 

13 (b) GOVERNMENT ACCOUNTABILITY OFFICE.—The 

14 Comptroller General of the United States shall periodically 

15 evaluate and report to Congress on the effectiveness of the 

16 oversight by the Securities and Exchange Commission of 

17 the reporting and disclosure requirements under section 

18 13(s) of the Securities Exchange Act of 1934, as added 

19 by section 203. 

20 TITLE III—GREATER 

21 ACCOUNTABILITY IN PAY 

22 SEC. 301. SHORT TITLE. 

23 This title may be cited as the ‘‘Greater Accountability 

24 in Pay Act of 2021’’. 
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1 SEC. 302. PAY RAISE DISCLOSURES. 

2 Section 13 of the Securities Exchange Act of 1934 

3 (15 U.S.C. 78m), as amended by section 203, is further 

4 amended by adding at the end the following: 

5 ‘‘(t) PAY RAISE DISCLOSURES.—An issuer required 

6 to file an annual report under this section or section 15(d), 

7 that is not an emerging growth company, shall include in 

8 such report— 

9 ‘‘(1) the percentage increase in the median of 

10 the annual total compensation of all executive offi11 cers (as such term is defined in section 240.3b–7 of 

12 title 17, Code of Federal Regulations) of the issuer 

13 over the last completed fiscal year; 

14 ‘‘(2) the percentage increase in the median of 

15 the annual total compensation of all employees of 

16 the issuer, excluding executive officers, over the last 

17 completed fiscal year; 

18 ‘‘(3) the ratio of the percentage described in 

19 paragraph (1) to the percentage described in para20 graph (2); 

21 ‘‘(4) a comparison of the percentage described 

22 in paragraph (1) to the percentage change over the 

23 same period in the Consumer Price Index for All 

24 Urban Consumers published by the Bureau of Labor 

25 Statistics of the Department of Labor; and 
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1 ‘‘(5) a comparison of the percentage described 

2 in paragraph (2) to the percentage change over the 

3 same period in the Consumer Price Index for All 

4 Urban Consumers published by the Bureau of Labor 

5 Statistics of the Department of Labor.’’. 

6 TITLE IV—CLIMATE RISK 

7 DISCLOSURE 

8 SEC. 401. SHORT TITLE. 

9 This title may be cited as the ‘‘Climate Risk Disclo10 sure Act of 2021’’. 

11 SEC. 402. SENSE OF CONGRESS. 

12 It is the sense of Congress that— 

13 (1) climate change poses a significant and in14 creasing threat to the growth and stability of the 

15 economy of the United States; 

16 (2) many sectors of the economy of the United 

17 States and many American businesses are exposed 

18 to climate-related risk, which may include exposure 

19 to— 

20 (A) the physical impacts of climate change, 

21 including the rise of the average global tem22 perature, accelerating sea-level rise, 

23 desertification, ocean acidification, intensifica24 tion of storms, increase in heavy precipitation, 

25 more frequent and intense temperature ex-
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1 tremes, more severe droughts, and longer wild2 fire seasons; 

3 (B) the economic disruptions and security 

4 threats that result from the physical impacts 

5 described in subparagraph (A) including con6 flicts over scarce resources, conditions condu7 cive to violent extremism, the spread of infec8 tious diseases, and forced migration; 

9 (C) the transition impacts that result as 

10 the global economy transitions to a clean and 

11 renewable energy, low-emissions economy, in12 cluding financial impacts as climate change fos13 sil fuel assets becoming stranded and it be14 comes uneconomic for companies to develop fos15 sil fuel assets as policymakers act to limit the 

16 worst impacts of climate change by keeping the 

17 rise in average global temperature to 1.5 de18 grees Celsius above pre-industrial levels; and 

19 (D) actions by Federal, State, Tribal, ter20 ritorial, and local governments to limit the 

21 worst effects of climate change by enacting poli22 cies that keep the global average surface tem23 perature rise to 1.5 degrees Celsius above pre24 industrial levels; 
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1 (3) assessing the potential impact of climate-re2 lated risks on national and international financial 

3 systems is an urgent concern; 

4 (4) companies have a duty to disclose financial 

5 risks that climate change presents to their investors, 

6 lenders, and insurers; 

7 (5) the Securities and Exchange Commission 

8 has a duty to promote a risk-informed securities 

9 market that is worthy of the trust of the public as 

10 families invest for their futures; 

11 (6) investors, lenders, and insurers are increas12 ingly demanding climate risk information that is 

13 consistent, comparable, reliable, and clear; 

14 (7) including standardized, material climate 

15 change risk and opportunity disclosure that is useful 

16 for decision makers in annual reports to the Com17 mission will increase transparency with respect to 

18 risk accumulation and exposure in financial markets; 

19 (8) requiring companies to disclose climate-re20 lated risk exposure and risk management strategies 

21 will encourage a smoother transition to a clean and 

22 renewable energy, low-emissions economy and guide 

23 capital allocation to mitigate, and adapt to, the ef24 fects of climate change and limit damages associated 

25 with climate-related events and disasters; and 
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1 (9) a critical component in fighting climate 

2 change is a transparent accounting of the risks that 

3 climate change presents and the implications of con4 tinued inaction with respect to climate change. 

5 SEC. 403. DISCLOSURES RELATING TO CLIMATE CHANGE. 

6 Section 13 of the Securities Exchange Act of 1934 

7 (15 U.S.C. 78m), as amended by section 302, is further 

8 amended by adding at the end the following: 

9 ‘‘(u) DISCLOSURES RELATING TO CLIMATE

10 CHANGE.— 

11 ‘‘(1) DEFINITIONS.—In this subsection: 

12 ‘‘(A) 1.5 DEGREE SCENARIO.—The term 

13 ‘1.5 degree scenario’ means a scenario that 

14 aligns with greenhouse gas emissions pathways 

15 that aim to limit global warming to 1.5 degrees 

16 Celsius above pre-industrial levels. 

17 ‘‘(B) APPROPRIATE CLIMATE PRIN18 CIPALS.—The term ‘appropriate climate prin19 cipals’ means— 

20 ‘‘(i) the Administrator of the Environ21 mental Protection Agency; 

22 ‘‘(ii) the Administrator of the Na23 tional Oceanic and Atmospheric Adminis24 tration; 
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1 ‘‘(iii) the Director of the Office of 

2 Management and Budget; 

3 ‘‘(iv) the Secretary of the Interior; 

4 ‘‘(v) the Secretary of Energy; and 

5 ‘‘(vi) the head of any other Federal 

6 agency, as determined appropriate by the 

7 Commission. 

8 ‘‘(C) BASELINE SCENARIO.—The term 

9 ‘baseline scenario’ means a widely-recognized 

10 analysis scenario in which levels of greenhouse 

11 gas emissions, as of the date on which the anal12 ysis is performed, continue to grow, resulting in 

13 an increase in the global average temperature 

14 of 1.5 degrees Celsius or more above pre-indus15 trial levels. 

16 ‘‘(D) CARBON DIOXIDE EQUIVALENT.— 

17 The term ‘carbon dioxide equivalent’ means the 

18 number of metric tons of carbon dioxide emis19 sions with the same global warming potential as 

20 one metric ton of another greenhouse gas, as 

21 determined under table A–1 of subpart A of 

22 part 98 of title 40, Code of Federal Regula23 tions, as in effect on the date of enactment of 

24 this subsection. 
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1 ‘‘(E) CLIMATE CHANGE.—The term ‘cli2 mate change’ means a change of climate that 

3 is— 

4 ‘‘(i) attributed directly or indirectly to 

5 human activity that alters the composition 

6 of the global atmosphere; and 

7 ‘‘(ii) in addition to natural climate 

8 variability observed over comparable time 

9 periods. 

10 ‘‘(F) COMMERCIAL DEVELOPMENT OF FOS11 SIL FUELS.—The term ‘commercial develop12 ment of fossil fuels’ includes— 

13 ‘‘(i) exploration, extraction, proc14 essing, exporting, transporting, refining, 

15 and any other significant action with re16 spect to oil, natural gas, coal, or any by17 product thereof or any other solid or liquid 

18 hydrocarbons that are commercially pro19 duced; and 

20 ‘‘(ii) acquiring a license for any activ21 ity described in clause (i). 

22 ‘‘(G) COVERED ISSUER.—The term ‘cov23 ered issuer’ means an issuer that is required to 

24 file an annual report under subsection (a) or 

25 section 15(d). 
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1 ‘‘(H) DIRECT AND INDIRECT GREENHOUSE

2 GAS EMISSIONS.—The term ‘direct and indirect 

3 greenhouse gas emissions’ includes, with respect 

4 to a covered issuer— 

5 ‘‘(i) all direct greenhouse gas emis6 sions released by the covered issuer; 

7 ‘‘(ii) all indirect greenhouse gas emis8 sions with respect to electricity, heat, or 

9 steam purchased by the covered issuer; 

10 ‘‘(iii) significant indirect emissions, 

11 other than the emissions described in 

12 clause (ii), emitted in the value chain of 

13 the covered issuer; and 

14 ‘‘(iv) all indirect greenhouse gas emis15 sions that are attributable to assets owned 

16 or managed, including assets that are par17 tially owned or managed, by the covered 

18 issuer. 

19 ‘‘(I) FOSSIL FUEL RESERVES.—The term 

20 ‘fossil fuel reserves’ has the meaning given the 

21 term ‘reserves’ under the final rule of the Com22 mission titled ‘Modernization of Oil and Gas 

23 Reporting’ (74 Fed. Reg. 2158; published Jan24 uary 14, 2009). 
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1 ‘‘(J) GREENHOUSE GAS.—The term 

2 ‘greenhouse gas’— 

3 ‘‘(i) means carbon dioxide, 

4 hydrofluorocarbons, methane, nitrous 

5 oxide, perfluorocarbons, sulfur 

6 hexafluoride, nitrogen triflouride, and 

7 chlorofluorocarbons; 

8 ‘‘(ii) includes any other 

9 anthropogenically-emitted gas that the Ad10 ministrator of the Environmental Protec11 tion Agency determines, after notice and 

12 comment, to contribute to climate change; 

13 and 

14 ‘‘(iii) includes any other 

15 anthropogenically-emitted gas that the 

16 Intergovernmental Panel on Climate 

17 Change determines to contribute to climate 

18 change. 

19 ‘‘(K) GREENHOUSE GAS EMISSIONS.—The 

20 term ‘greenhouse gas emissions’ means the 

21 emissions of greenhouse gas, expressed in terms 

22 of metric tons of carbon dioxide equivalent. 

23 ‘‘(L) PHYSICAL RISKS.—The term ‘phys24 ical risks’ means financial risks to long-lived 

25 fixed assets, locations, operations, or value 
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1 chains that result from exposure to physical cli2 mate-related effects, including— 

3 ‘‘(i) increased average global tempera4 tures and increased frequency of tempera5 ture extremes; 

6 ‘‘(ii) increased severity and frequency 

7 of extreme weather events; 

8 ‘‘(iii) increased flooding; 

9 ‘‘(iv) sea level rise; 

10 ‘‘(v) ocean acidification; 

11 ‘‘(vi) increased frequency of wildfires; 

12 ‘‘(vii) decreased arability of farmland; 

13 ‘‘(viii) decreased availability of fresh 

14 water; and 

15 ‘‘(ix) any other financial risks to long16 lived fixed assets, locations, operations, or 

17 value chains determined appropriate by the 

18 Commission, in consultation with appro19 priate climate principals. 

20 ‘‘(M) SOCIAL COST OF CARBON.—The term 

21 ‘social cost of carbon’ means the social cost of 

22 carbon, as described in the technical support 

23 document entitled ‘Technical Support Docu24 ment: Technical Update of the Social Cost of 

25 Carbon for Regulatory Impact Analysis Under 
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1 Executive Order 12866’, published by the Inter2 agency Working Group on Social Cost of Green3 house Gases, United States Government, in Au4 gust 2016 or any successor or substantially re5 lated estimate of the monetized damages associ6 ated with an incremental increase in carbon di7 oxide emissions in a given year. 

8 ‘‘(N) TRANSITION RISKS.—The term ‘tran9 sition risks’ means financial risks that are at10 tributable to climate change mitigation and ad11 aptation, including efforts to reduce greenhouse 

12 gas emissions and strengthen resilience to the 

13 impacts of climate change, including— 

14 ‘‘(i) costs relating to— 

15 ‘‘(I) international treaties and 

16 agreements; 

17 ‘‘(II) Federal, State, and local 

18 policy; 

19 ‘‘(III) new technologies; 

20 ‘‘(IV) changing markets; 

21 ‘‘(V) reputational impacts rel22 evant to changing consumer behavior; 

23 and 

24 ‘‘(VI) litigation; and 
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1 ‘‘(ii) assets that may lose value or be2 come stranded due to any of the costs de3 scribed in subclauses (I) through (VI) of 

4 clause (i). 

5 ‘‘(O) VALUE CHAIN.—The term ‘value 

6 chain’— 

7 ‘‘(i) means the total lifecycle of a 

8 product or service, both before and after 

9 production of the product or service, as ap10 plicable; and 

11 ‘‘(ii) may include the sourcing of ma12 terials, production, transportation, and dis13 posal with respect to the product or service 

14 described in clause (i). 

15 ‘‘(2) FINDINGS.—Congress finds that— 

16 ‘‘(A) short-, medium-, and long-term finan17 cial and economic risks and opportunities relat18 ing to climate change, and the national and 

19 global reduction of greenhouse gas emissions, 

20 constitute information that issuers— 

21 ‘‘(i) may reasonably expect to affect 

22 shareholder decision making; and 

23 ‘‘(ii) should regularly identify, evalu24 ate, and disclose; and 
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1 ‘‘(B) the disclosure of information de2 scribed in subparagraph (A) should— 

3 ‘‘(i) identify, and evaluate— 

4 ‘‘(I) material physical and transi5 tion risks posed by climate change; 

6 and 

7 ‘‘(II) the potential financial im8 pact of such risks; 

9 ‘‘(ii) detail any implications such risks 

10 have on corporate strategy; 

11 ‘‘(iii) detail any board-level oversight 

12 of material climate related risks and op13 portunities; 

14 ‘‘(iv) allow for intra- and cross-indus15 try comparison, to the extent practicable, 

16 of climate-related risk exposure through 

17 the inclusion of standardized industry-spe18 cific and sector-specific disclosure metrics, 

19 as identified by the Commission, in con20 sultation with the appropriate climate prin21 cipals; 

22 ‘‘(v) allow for tracking of performance 

23 over time with respect to mitigating cli24 mate risk exposure; and 
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1 ‘‘(vi) incorporate a price on green2 house gas emissions in financial analyses 

3 that reflects, at minimum, the social cost 

4 of carbon that is attributable to issuers. 

5 ‘‘(3) DISCLOSURE.—Each covered issuer, in any 

6 annual report filed by the covered issuer under sub7 section (a) or section 15(d), shall, in accordance 

8 with any rules issued by the Commission pursuant 

9 to this subsection, include in each such report infor10 mation regarding— 

11 ‘‘(A) the identification of, the evaluation of 

12 potential financial impacts of, and any risk13 management strategies relating to— 

14 ‘‘(i) physical risks posed to the cov15 ered issuer by climate change; and 

16 ‘‘(ii) transition risks posed to the cov17 ered issuer by climate change; 

18 ‘‘(B) a description of any established cor19 porate governance processes and structures to 

20 identify, assess, and manage climate-related 

21 risks; 

22 ‘‘(C) a description of specific actions that 

23 the covered issuer is taking to mitigate identi24 fied risks; 
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1 ‘‘(D) a description of the resilience of any 

2 strategy the covered issuer has for addressing 

3 climate risks when differing climate scenarios 

4 are taken into consideration; and 

5 ‘‘(E) a description of how climate risk is 

6 incorporated into the overall risk management 

7 strategy of the covered issuer. 

8 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in 

9 paragraph (3) may be construed as precluding a cov10 ered issuer from including, in an annual report sub11 mitted under subsection (a) or section 15(d), any in12 formation not explicitly referenced in such para13 graph. 

14 ‘‘(5) RULEMAKING.—The Commission, in con15 sultation with the appropriate climate principals, 

16 shall, not later than 2 years after the date of the en17 actment of this subsection, issue rules with respect 

18 to the information that a covered issuer is required 

19 to disclose pursuant to this subsection and such 

20 rules shall— 

21 ‘‘(A) establish climate-related risk disclo22 sure rules, which shall— 

23 ‘‘(i) be, to the extent practicable, spe24 cialized for industries within specific sec25 tors of the economy, which shall include— 
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1 ‘‘(I) the sectors of finance, insur2 ance, transportation, electric power, 

3 mining, and non-renewable energy; 

4 and 

5 ‘‘(II) any other sector determined 

6 appropriate by the Commission, in 

7 consultation with the appropriate cli8 mate principals; 

9 ‘‘(ii) include reporting standards for 

10 estimating and disclosing direct and indi11 rect greenhouse gas emissions by a covered 

12 issuer, and any affiliates of the covered 

13 issuer, which shall— 

14 ‘‘(I) disaggregate, to the extent 

15 practicable, total emissions of each 

16 specified greenhouse gas by the cov17 ered issuer; and 

18 ‘‘(II) include greenhouse gas 

19 emissions by the covered issuer during 

20 the period covered by the disclosure; 

21 ‘‘(iii) include reporting standards for 

22 disclosing, with respect to a covered 

23 issuer— 
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1 ‘‘(I) the total amount of fossil 

2 fuel-related assets owned or managed 

3 by the covered issuer; and 

4 ‘‘(II) the percentage of fossil 

5 fuel-related assets as a percentage of 

6 total assets owned or managed by the 

7 covered issuer; 

8 ‘‘(iv) specify requirements for, and the 

9 disclosure of, input parameters, assump10 tions, and analytical choices to be used in 

11 climate scenario analyses required under 

12 subparagraph (B)(i), including— 

13 ‘‘(I) present value discount rates; 

14 and 

15 ‘‘(II) time frames to consider, in16 cluding 5, 10, and 20 year time 

17 frames; and 

18 ‘‘(v) include reporting standards and 

19 guidance with respect to the information 

20 required under subparagraph (B)(iii); 

21 ‘‘(B) require that a covered issuer, with re22 spect to a disclosure required under this sub23 section— 

24 ‘‘(i) incorporate into such disclosure— 
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1 ‘‘(I) quantitative analysis to sup2 port any qualitative statement made 

3 by the covered issuer; 

4 ‘‘(II) the rules established under 

5 subparagraph (A); 

6 ‘‘(III) industry-specific metrics 

7 that comply with the requirements 

8 under subparagraph (A)(i); 

9 ‘‘(IV) specific risk management 

10 actions that the covered issuer is tak11 ing to address identified risks; 

12 ‘‘(V) a discussion of the short-, 

13 medium-, and long-term resilience of 

14 any risk management strategy, and 

15 the evolution of applicable risk 

16 metrics, of the covered issuer under 

17 each scenario described in clause (ii); 

18 and 

19 ‘‘(VI) the total cost attributable 

20 to the direct and indirect greenhouse 

21 gas emissions of the covered issuer, 

22 using, at minimum, the social cost of 

23 carbon; 
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1 ‘‘(ii) consider, when preparing any 

2 qualitative or quantitative risk analysis 

3 statement contained in the disclosure— 

4 ‘‘(I) a baseline scenario that in5 cludes physical impacts of climate 

6 change; 

7 ‘‘(II) a 1.5 degrees scenario; and 

8 ‘‘(III) any additional climate 

9 analysis scenario considered appro10 priate by the Commission, in consulta11 tion with the appropriate climate prin12 cipals; 

13 ‘‘(iii) if the covered issuer engages in 

14 the commercial development of fossil fuels, 

15 include in the disclosure— 

16 ‘‘(I) an estimate of the total and 

17 a disaggregated amount of direct and 

18 indirect greenhouse gas emissions of 

19 the covered issuer that are attrib20 utable to— 

21 ‘‘(aa) combustion; 

22 ‘‘(bb) flared hydrocarbons; 

23 ‘‘(cc) process emissions; 

24 ‘‘(dd) directly vented emis25 sions; 
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1 ‘‘(ee) fugitive emissions or 

2 leaks; and 

3 ‘‘(ff) land use changes; 

4 ‘‘(II) a description of— 

5 ‘‘(aa) the sensitivity of fossil 

6 fuel reserve levels to future price 

7 projection scenarios that incor8 porate the social cost of carbon; 

9 ‘‘(bb) the percentage of the 

10 reserves of the covered issuer 

11 that will be developed under the 

12 scenarios established in clause 

13 (ii), as well as a forecast for the 

14 development prospects of each re15 serve under the scenarios estab16 lished in clause (ii); 

17 ‘‘(cc) the potential amount 

18 of direct and indirect greenhouse 

19 gas emissions that are embedded 

20 in proved and probable reserves, 

21 with each such calculation pre22 sented as a total and in sub23 divided categories by the type of 

24 reserve; 
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1 ‘‘(dd) the methodology of 

2 the covered issuer for detecting 

3 and mitigating fugitive methane 

4 emissions, which shall include the 

5 frequency with which applicable 

6 assets of the covered issuer are 

7 observed for methane leaks, the 

8 processes and technology that the 

9 covered issuer uses to detect 

10 methane leaks, the percentage of 

11 assets of the covered issuer that 

12 the covered issuer inspects under 

13 that methodology, and quan14 titative and time-bound reduction 

15 goals of the issuer with respect to 

16 methane leaks; 

17 ‘‘(ee) the amount of water 

18 that the covered issuer withdraws 

19 from freshwater sources for use 

20 and consumption in operations of 

21 the covered issuer; and 

22 ‘‘(ff) the percentage of the 

23 water described in item (ee) that 

24 comes from regions of water 
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1 stress or that face wastewater 

2 management challenges; and 

3 ‘‘(III) any other information that 

4 the Commission determines is— 

5 ‘‘(aa) necessary; 

6 ‘‘(bb) appropriate to safe7 guard the public interest; or 

8 ‘‘(cc) directed at ensuring 

9 that investors are informed in ac10 cordance with the findings de11 scribed in paragraph (2); 

12 ‘‘(C) with respect to a disclosure required 

13 under section 13(s) of the Securities Exchange 

14 Act of 1934, require that a covered issuer in15 clude in such disclosure any other information, 

16 or use any climate-related or greenhouse gas 

17 emissions metric, that the Commission, in con18 sultation with the appropriate climate prin19 cipals, determines is— 

20 ‘‘(i) necessary; 

21 ‘‘(ii) appropriate to safeguard the 

22 public interest; or 

23 ‘‘(iii) directed at ensuring that inves24 tors are informed in accordance with the 

25 findings described in paragraph (2); and 
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1 ‘‘(D) with respect to a disclosure required 

2 under section 13(s) of the Securities Exchange 

3 Act of 1934, establish how and where the re4 quired disclosures shall be addressed in the cov5 ered issuer’s annual financial filing. 

6 ‘‘(6) FORMATTING.—The Commission shall re7 quire issuers to disclose information in an interactive 

8 data format and shall develop standards for such 

9 format, which shall include electronic tags for infor10 mation that the Commission determines is— 

11 ‘‘(A) necessary; 

12 ‘‘(B) appropriate to safeguard the public 

13 interest; or 

14 ‘‘(C) directed at ensuring that investors 

15 are informed in accordance with the findings 

16 described in paragraph (2). 

17 ‘‘(7) PERIODIC UPDATE OF RULES.—The Com18 mission shall periodically update the rules issued 

19 under this subsection. 

20 ‘‘(8) COMPILATION OF INFORMATION DIS21 CLOSED.—The Commission shall, to the maximum 

22 extent practicable make a compilation of the infor23 mation disclosed by issuers under this subsection 

24 publicly available on the website of the Commission 

25 and update such compilation at least once each year. 
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1 ‘‘(9) REPORTS.— 

2 ‘‘(A) REPORT TO CONGRESS.—The Com3 mission shall— 

4 ‘‘(i) conduct an annual assessment re5 garding the compliance of covered issuers 

6 with the requirements of this subsection; 

7 ‘‘(ii) submit to the appropriate con8 gressional committees a report that con9 tains the results of each assessment con10 ducted under clause (i); and 

11 ‘‘(iii) make each report submitted 

12 under clause (ii) accessible to the public. 

13 ‘‘(B) GAO REPORT.—The Comptroller 

14 General of the United States shall periodically 

15 evaluate, and report to the appropriate congres16 sional committees on, the effectiveness of the 

17 Commission in carrying out and enforcing this 

18 subsection.’’. 

19 SEC. 404. BACKSTOP. 

20 If, 2 years after the date of the enactment of this 

21 Act, the Securities and Exchange Commission has not 

22 issued the rules required under section 13(u) of the Secu23 rities Exchange Act of 1934, and until such rules are 

24 issued, a covered issuer (as defined in such section 13(u)) 

25 shall be deemed in compliance with such section 13(u) if 
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1 disclosures set forth in the annual report of such issuer 

2 satisfy the recommendations of the Task Force on Cli3 mate-related Financial Disclosures of the Financial Sta4 bility Board as reported in June, 2017, or any successor 

5 report, and as supplemented or adjusted by such rules, 

6 guidance, or other comments from the Commission. 

7 SEC. 405. AUTHORIZATION OF APPROPRIATIONS. 

8 There are authorized to be appropriated to the Secu9 rities and Exchange Commission such sums as may be 

10 necessary to carry out this title and the amendments made 

11 by this title. 

12 TITLE V—DISCLOSURE OF TAX 

13 HAVENS AND OFFSHORING 

14 SEC. 501. SHORT TITLE. 

15 This title may be cited as the ‘‘Disclosure of Tax Ha16 vens and Offshoring Act’’. 

17 SEC. 502. COUNTRY-BY-COUNTRY REPORTING. 

18 (a) COUNTRY-BY-COUNTRY REPORTING.—Section 13 

19 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), 

20 as amended by section 403, is further amended by adding 

21 at the end the following new subsection: 

22 ‘‘(v) DISCLOSURE OF FINANCIAL PERFORMANCE ON

23 A COUNTRY-BY-COUNTRY BASIS.— 

24 ‘‘(1) DEFINITIONS.—In this subsection— 
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1 ‘‘(A) the term ‘constituent entity’ means, 

2 with respect to a covered issuer, any separate 

3 business entity of the covered issuer; 

4 ‘‘(B) the term ‘covered issuer’ means an 

5 issuer who— 

6 ‘‘(i) is a member of a multinational 

7 enterprise group; and 

8 ‘‘(ii) the multinational enterprise 

9 group of which the issuer is a member has 

10 annual revenue for the preceding calendar 

11 year of not less than an amount deter12 mined by the Commission to conform to 

13 United States or international standards 

14 for country-by-country reporting; and 

15 ‘‘(C) the term ‘tax jurisdiction’— 

16 ‘‘(i) means a country or a jurisdiction 

17 that is not a country but that has fiscal 

18 autonomy; and 

19 ‘‘(ii) includes a territory or possession 

20 of the United States that has fiscal auton21 omy. 

22 ‘‘(2) DISCLOSURE.— 

23 ‘‘(A) IN GENERAL.—Each covered issuer 

24 shall file a report with the Commission that in25 cludes information described in subparagraph 
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1 (B), and any other information required by the 

2 Commission, with respect to the reporting pe3 riod described in subparagraph (C). 

4 ‘‘(B) INFORMATION REQUIRED.—The in5 formation described in this subparagraph is as 

6 follows: 

7 ‘‘(i) CONSTITUENT ENTITY INFORMA8 TION.—Information on the constituent en9 tity, including the following: 

10 ‘‘(I) The complete legal name of 

11 the constituent entity. 

12 ‘‘(II) The tax jurisdiction, if any, 

13 in which the constituent entity is resi14 dent for tax purposes. 

15 ‘‘(III) The tax jurisdiction in 

16 which the constituent entity is orga17 nized or incorporated (if different 

18 from the tax jurisdiction of residence). 

19 ‘‘(IV) The tax identification num20 ber, if any, used for the constituent 

21 entity by the tax administration of the 

22 constituent entity’s tax jurisdiction of 

23 residence. 

24 ‘‘(V) The main business activity 

25 or activities of the constituent entity. 
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1 ‘‘(ii) TAX JURISDICTION.—Informa2 tion on each tax jurisdiction in which one 

3 or more constituent entities is resident, 

4 presented as an aggregated or consolidated 

5 form of the information for the constituent 

6 entities resident in each tax jurisdiction, 

7 including the following: 

8 ‘‘(I) Revenues generated from 

9 transactions with other constituent 

10 entities. 

11 ‘‘(II) Revenues not generated 

12 from transactions with other con13 stituent entities. 

14 ‘‘(III) Profit or loss before in15 come tax. 

16 ‘‘(IV) Total income tax paid on a 

17 cash basis to all tax jurisdictions. 

18 ‘‘(V) Total accrued tax expense 

19 recorded on taxable profits or losses. 

20 ‘‘(VI) Stated capital. 

21 ‘‘(VII) Total accumulated earn22 ings. 

23 ‘‘(VIII) Total number of employ24 ees on a full-time equivalent basis. 
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1 ‘‘(IX) Net book value of tangible 

2 assets, which, for purposes of this sec3 tion, does not include cash or cash 

4 equivalents, intangibles, or financial 

5 assets. 

6 ‘‘(iii) SPECIAL RULES.—The informa7 tion listed in clause (ii) shall be provided, 

8 in aggregated or consolidated form, for any 

9 constituent entity or entities that have no 

10 tax jurisdiction of residence. In addition, if 

11 a constituent entity is an owner of a con12 stituent entity that does not have a juris13 diction of tax residence, then the owner’s 

14 share of such entity’s revenues and profits 

15 will be aggregated or consolidated with the 

16 information for the owner’s tax jurisdiction 

17 of residence. 

18 ‘‘(C) REPORTING PERIOD.—The reporting 

19 period covered by this paragraph is the period 

20 of the covered entity’s applicable financial state21 ment prepared for the 12-month period that 

22 ends with or within the taxable year of the cov23 ered issuer. If the covered issuer does not pre24 pare an annual applicable financial statement, 

25 then the reporting period covered by this para-
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1 graph is the 12-month period that ends on the 

2 last day of the taxable year of the covered 

3 issuer. 

4 ‘‘(D) FILING DEADLINE.—Each covered 

5 issuer shall submit to the Commission a report 

6 required under this section on or before the due 

7 date (including extensions) for filing that cov8 ered issuer’s tax return in the tax jurisdiction 

9 in which the covered issuer’s multinational en10 terprise group is resident. 

11 ‘‘(E) REGULATION.—The Commission 

12 shall, in consultation with the Commissioner of 

13 the Internal Revenue Service and Secretary of 

14 the Treasury— 

15 ‘‘(i) promulgate regulations carrying 

16 out this subsection that conform to United 

17 States or international standards for coun18 try-by-country reporting, including regula19 tions promulgated by the Internal Revenue 

20 Service; and 

21 ‘‘(ii) require disclosure of the account22 ing methods used in calculating the infor23 mation contained in each report filed pur24 suant to this subsection.’’. 

25 (b) RULEMAKING.— 
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1 (1) DEADLINES.—The Securities and Exchange 

2 Commission (in this section referred to as the ‘‘Com3 mission’’) shall— 

4 (A) not later than 1 year after the date of 

5 enactment of this Act, issue a proposed rule to 

6 carry out this section and the amendment made 

7 by this section; and 

8 (B) not later than 18 months after the 

9 date of enactment of this Act, issue a final rule 

10 to carry out this section and the amendment 

11 made by this section. 

12 (2) DATA FORMAT.—The information required 

13 to be provided by this section shall be provided by 

14 the issuer in a report in a machine readable format 

15 prescribed by the Commission, and such report shall 

16 be made available to the public online, in such ma17 chine readable format as the Commission shall pre18 scribe. 

19 (3) EFFECTIVE DATE.—Subsection (v) of sec20 tion 13 of the Securities Exchange Act of 1934, as 

21 added by this section, shall become effective 1 year 

22 after the date on which the Commission issues a 

23 final rule under this section. 
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1 TITLE VI—WORKFORCE 

2 INVESTMENT DISCLOSURE 

3 SEC. 601. SHORT TITLE. 

4 This title may be cited as the ‘‘Workforce Investment 

5 Disclosure Act of 2021’’. 

6 SEC. 602. FINDINGS. 

7 Congress finds the following: 

8 (1) One of the keys to the 20th century post9 war economic success of the United States was the 

10 ability to prepare workers over the course of their 

11 lives for success through multiple sectors across soci12 ety. Unfortunately, during the several decades pre13 ceding the date of enactment of this Act, there has 

14 been a shift in business norms and in society. While 

15 Congress recognizes that the technology and job 

16 skills required for some jobs has changed dramati17 cally, the private and public partnership to hire 

18 workers at different education levels and invest in 

19 them for the long-term is broken. 

20 (2) Available data from the 10-year period pre21 ceding the date of enactment of this Act suggests 

22 that businesses are investing less in worker training 

23 during that time period, not more. 

24 (3) In the wake of the 2008 global financial cri25 sis, there was a well-documented decline in overall 
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1 business investment. That decline coincides with the 

2 wage polarization of workers and an increase in 

3 spending on share buybacks and dividends, leading 

4 several researchers to conclude that companies are 

5 de-emphasizing investment at the expense of increas6 ing returns for shareholders. The onset of a global 

7 pandemic may make that trend worse, especially 

8 with respect to investments in workers. 

9 (4) As part of the overall decline in investment 

10 described in paragraph (3), publicly traded compa11 nies are being provided with incentives to prioritize 

12 investments in physical assets over investments in 

13 their workforces, meaning that those companies are 

14 investing in robots instead of individuals. In fact, 

15 there are already signs that automation has in16 creased during the COVID–19 pandemic. 

17 (5) More than ever, the Federal Government, 

18 through company disclosure practices, needs to un19 derstand exactly how companies are investing in 

20 their workers. Over the several months preceding the 

21 date of enactment of this Act, companies across the 

22 United States have taken extreme actions to adapt 

23 and respond to evolving workforce challenges pre24 sented by COVID–19. 
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1 (6) JUST Capital has been tracking the re2 sponses of the Standard and Poor’s 100 largest pub3 lic companies to their workers and has found wide 

4 variation in the policies implemented, as well as with 

5 respect to the disclosure of those policies. Through 

6 different responses to their workforces, from layoffs 

7 to workplace safety to paid leave, the COVID–19 

8 pandemic is exposing the myriad ways that work9 force management practices of companies pose oper10 ational and reputational risks for short- and long11 term financial performance. 

12 (7) Even before the COVID–19 pandemic, there 

13 was a growing body of research establishing a rela14 tionship between measurable workforce management, 

15 which is the way that companies manage their em16 ployees, and firm performance. In a study of 2,000 

17 large companies, Harvard Law School’s Labor and 

18 Work Life Program found that forward-thinking 

19 workforce policies that prioritize workers, such as 

20 how companies train, retain, and pay their workers, 

21 are correlated with long-term financial performance. 

22 (8) Disclosure of workforce management poli23 cies should be part of a Government-wide economic 

24 recovery strategy. Just as a set of generally accepted 

25 accounting principles (commonly known as 
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1 ‘‘GAAP’’) was urgently adopted after the Great De2 pression, standardized, comparable metrics of work3 force disclosure requirements in the context of the 

4 COVID–19 pandemic are critical for investors to ac5 curately measure and project company performance, 

6 both in the present and in the future. 

7 (9) Because many companies already track 

8 workforce metrics internally, moving towards a 

9 transparent disclosure regime would allow investors 

10 to better judge whether companies are managing 

11 risks and making the investments in their 

12 workforces that are needed for long-term growth. 

13 (10) Businesses increasingly rely on workforce 

14 innovation and intellectual capital for competitive15 ness. Workplace benefits, particularly paid sick 

16 leave, medical leave, and flexible work arrangements, 

17 critically support employee mental and physical well18 being. 

19 (11) Race- and gender-based workplace dis20 crimination have been tied to negative health out21 comes, as well as lower productivity, trust, morale, 

22 and satisfaction and higher rates of absenteeism and 

23 turnover. Organizational reporting on practices to 

24 reduce discrimination can increase employee job sat25 isfaction, performance, and engagement. 
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1 (12) According to the Centers for Disease Con2 trol and Prevention, work-related stress is the lead3 ing occupational health risk and, per the American 

4 Institute of Stress, job stress costs United States in5 dustry more than $300,000,000,000 per year in ac6 cidents, absenteeism, employee turnover, diminished 

7 productivity, and medical, legal, and insurance costs. 

8 (13) Employee health and well-being is a key 

9 asset to delivering long-term value, with 80 percent 

10 of public companies that took concrete actions on 

11 health and well-being having seen larger improve12 ments in financial performance. 

13 (14) Organizational well-being interventions can 

14 create cost savings of up to 10 dollars for every dol15 lar invested. Specifically, for every dollar that em16 ployers spend on workplace disease prevention and 

17 well-being programs, there is a $3.27 reduction in 

18 employee medical costs and a $2.73 reduction in ab19 senteeism costs. Employers that implement work20 place health promotion programs have seen reduc21 tions in sick leave, health plan costs, and workers’ 

22 compensation and disability insurance costs of ap23 proximately 25 percent. 

24 (15) The Centers for Disease Control and Pre25 vention has found that preventable chronic condi-
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1 tions are a major contributor to insurance premium 

2 and employee medical claim costs, which are at an 

3 all-time high, and a Milken Institute study shows 

4 that employers paid $2,600,000,000,000 in 2016 for 

5 the indirect costs of employee chronic disease due to 

6 work absences, lost wages, and reduced economic 

7 productivity. 

8 (16) The COVID–19 pandemic has severely im9 pacted employee physical, mental, and emotional 

10 well-being by increasing stress, depression, burnout, 

11 and mortality rates of chronic disease and by reduc12 ing work-life balance and financial security, with 

13 these challenges likely to persist due to uncertainty 

14 and instability even as employees return to work. 

15 Before the COVID–19 pandemic, but especially in 

16 the face of that pandemic, employers that advance 

17 policies and practices that support workforce health, 

18 safety, and well-being are likely to outperform com19 petitors and benefit from lower costs. 

20 SEC. 603. DISCLOSURES RELATING TO WORKFORCE MAN21 AGEMENT. 

22 Section 13 of the Securities Exchange Act of 1934 

23 (15 U.S.C. 78m), as amended by section 502, is further 

24 amended by adding at the end the following: 
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1 ‘‘(w) DISCLOSURES RELATING TO WORKFORCE MAN2 AGEMENT.— 

3 ‘‘(1) DEFINITION.—In this subsection, the term 

4 ‘contingent worker’ includes an individual per5 forming work in the usual course of business on a 

6 temporary basis (including through a labor inter7 mediary, including an individual or entity that sup8 plies an employer with workers to perform labor) or 

9 as an independent contractor. 

10 ‘‘(2) REGULATIONS.—Not later than 2 years 

11 after the date of enactment of this subsection, the 

12 Commission, in consultation with the Secretary of 

13 Labor, the Secretary of Commerce, the Secretary of 

14 Treasury, and the Attorney General, shall promul15 gate regulations that require each issuer required to 

16 file an annual report under subsection (a) or section 

17 15(d) to disclose in that report information regard18 ing workforce management policies, practices, and 

19 performance with respect to the issuer. 

20 ‘‘(3) RULES.—Consistent with the requirement 

21 under paragraph (4), each annual report filed with 

22 the Commission in accordance with the regulations 

23 promulgated under paragraph (2) shall include dis24 closure of the following with respect to the issuer fil25 ing the report for the year covered by the report: 
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1 ‘‘(A) Workforce demographic information, 

2 including— 

3 ‘‘(i) the number of full-time employ4 ees, the number of part-time employees, 

5 and the number of contingent workers (in6 cluding temporary and contract workers) 

7 with respect to the issuer, which shall in8 clude demographic information with re9 spect to those categories of individuals, in10 cluding information regarding race, eth11 nicity, and gender; 

12 ‘‘(ii) any policies or practices of the 

13 issuer relating to subcontracting, outsourc14 ing, and insourcing individuals to perform 

15 work for the issuer, which shall include de16 mographic information with respect to 

17 those individuals, including information re18 garding race, ethnicity, and gender; and 

19 ‘‘(iii) whether the percentage of con20 tingent workers with respect to the issuer 

21 has changed, including temporary and con22 tract workers, as compared with the pre23 vious annual report filed by the issuer 

24 under this subsection. 
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1 ‘‘(B) Workforce stability information, in2 cluding information about the voluntary turn3 over or retention rate, the involuntary turnover 

4 rate, the internal hiring rate, and the internal 

5 promotion rate, as well as information about 

6 workers who transition between employee and 

7 contingent workers, and the horizontal job 

8 change rate by quintile and demographic infor9 mation. 

10 ‘‘(C) Workforce composition, including— 

11 ‘‘(i) data on diversity (including ra12 cial, ethnic, self-reported sexual orienta13 tion, and gender composition) for senior 

14 executives and other individuals in the 

15 workforce; and 

16 ‘‘(ii) any policies, audits, and pro17 gramming expenditures relating to diver18 sity. 

19 ‘‘(D) Workforce skills and capabilities, in20 cluding— 

21 ‘‘(i) information about training and 

22 cross-training of employees and contingent 

23 workers by quintile and demographic infor24 mation, distinguishing between compliance 

25 training, career development training, job 
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1 performance or technical training, and 

2 training tied to recognized postsecondary 

3 credentials; 

4 ‘‘(ii) average number of hours of 

5 training for each employee and contingent 

6 worker; 

7 ‘‘(iii) total spending on training for all 

8 employees and contingent workers; 

9 ‘‘(iv) average spending per employee 

10 or contingent worker; 

11 ‘‘(v) training utilization rates; and 

12 ‘‘(vi) whether completion of training 

13 opportunities translates into value added 

14 benefit for workers, as determined by wage 

15 increases or internal promotions. 

16 ‘‘(E) Workforce health, safety, and well17 being, including information regarding— 

18 ‘‘(i) the frequency, severity, and lost 

19 time due to injuries, physical and mental 

20 illness, and fatalities; 

21 ‘‘(ii) the scope, frequency, and total 

22 expenditure on workplace health, safety, 

23 and well-being programs; 

24 ‘‘(iii) the total dollar value of assessed 

25 fines under the Occupational Safety and 
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1 Health Act of 1970 (29 U.S.C. 651 et 

2 seq.); 

3 ‘‘(iv) the total number of actions 

4 brought under section 13 of the Occupa5 tional Safety and Health Act of 1970 (29 

6 U.S.C. 662) to prevent imminent dangers; 

7 ‘‘(v) the total number of actions 

8 brought against the issuer under section 

9 11(c) of the Occupational Safety and 

10 Health Act of 1970 (29 U.S.C. 660(c)); 

11 ‘‘(vi) any findings of workplace har12 assment or workplace discrimination dur13 ing the 5 fiscal year period of the issuer 

14 preceding the fiscal year in which the re15 port is filed; and 

16 ‘‘(vii) communication channels and 

17 grievance mechanisms in place for employ18 ees and contingent workers. 

19 ‘‘(F) Workforce compensation and incen20 tives, including information regarding— 

21 ‘‘(i) total workforce costs, including 

22 salaries and wages, health benefits, other 

23 ancillary benefit costs, and pension costs; 

24 ‘‘(ii) workforce benefits, including 

25 paid leave, health care, child care, and re-
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1 tirement, including information regarding 

2 benefits that are provided— 

3 ‘‘(I) to full-time employees and 

4 not to part-time employees; or 

5 ‘‘(II) to employees and not to 

6 contingent workers; 

7 ‘‘(iii) total contributions made to un8 employment insurance by the issuer, how 

9 many employees to whom those contribu10 tions apply, and the total amount paid in 

11 unemployment compensation to individuals 

12 who were laid off by the issuer; 

13 ‘‘(iv) policies and practices regarding 

14 how performance, productivity, equity, and 

15 sustainability are considered when setting 

16 pay and making promotion decisions; and 

17 ‘‘(v) policies and practices relating to 

18 any incentives and bonuses provided to em19 ployees and any policies or practices de20 signed to counter any risks created by such 

21 incentives and bonuses. 

22 ‘‘(G) Workforce recruiting and needs, in23 cluding— 

24 ‘‘(i) the number of new jobs created, 

25 seeking to be filled, and filled, 
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1 disaggregated based on classification sta2 tus; 

3 ‘‘(ii) the share of new jobs that re4 quire a bachelor’s degree or higher; 

5 ‘‘(iii) information regarding the qual6 ity of hire for jobs described in clause (i); 

7 and 

8 ‘‘(iv) the retention rate for individuals 

9 hired to fill the jobs described in clause (i). 

10 ‘‘(H) Workforce engagement and produc11 tivity, including information regarding policies 

12 and practices of the issuer relating to— 

13 ‘‘(i) engagement, productivity, and 

14 mental well-being of employees and contin15 gent workers, as determined in consulta16 tion with the Department of Labor; and 

17 ‘‘(ii) freedom of association and work18 life balance initiatives, including flexibility 

19 and the ability of the workforce to work re20 motely, as determined in consultation with 

21 the Department of Labor. 

22 ‘‘(4) DISAGGREGATION OF INFORMATION.—To 

23 the maximum extent feasible, the information de24 scribed in paragraph (3) shall be disaggregated by— 
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1 ‘‘(A) the workforce composition described 

2 in subparagraph (C)(i) of that paragraph; 

3 ‘‘(B) wage quintiles of the employees of the 

4 issuer for the year covered by the applicable an5 nual report; and 

6 ‘‘(C) the employment status of individuals 

7 performing services for the issuer, including 

8 whether those individuals are full-time employ9 ees, part-time employees, or contingent workers. 

10 ‘‘(5) TREATMENT OF EMERGING GROWTH COM11 PANIES.—The Commission may exempt emerging 

12 growth companies from any disclosure required 

13 under subparagraph (D), (E), (F), (G), or (H) of 

14 paragraph (3) if the Commission determines that 

15 such an exemption is necessary or appropriate in the 

16 public interest. 

17 ‘‘(6) FALSE OR MISLEADING STATEMENTS.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), it shall be unlawful for any 

20 person, in any report or document filed under 

21 this subsection, to make or cause to be made 

22 any untrue statement of a material fact or omit 

23 to state a material fact required to be stated in 

24 the report or document or necessary to make 

25 the statement made, in the light of the cir-
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1 cumstances under which it is made, not mis2 leading. 

3 ‘‘(B) EXCEPTION.—A person shall not be 

4 liable under subparagraph (A) if the person 

5 shows that the person had, after reasonable in6 vestigation, reasonable ground to believe, and 

7 did believe, at the time the applicable statement 

8 was made, that the statement was true and that 

9 there was no omission to state a material fact 

10 necessary to make the statement made, in the 

11 light of the circumstances under which it is 

12 made, not misleading. 

13 ‘‘(C) NO PRIVATE RIGHT OF ACTION.— 

14 Nothing in this paragraph may be construed as 

15 creating a private right of action. 

16 ‘‘(7) EXEMPTION.—This subsection shall not 

17 apply to an investment company registered under 

18 section 8 of the Investment Company Act of 1940 

19 (15 U.S.C. 80a–8).’’. 

20 SEC. 604. BACKSTOP. 

21 (a) DEFINITIONS.—In this section— 

22 (1) the term ‘‘Commission’’ means the Securi23 ties and Exchange Commission; 

24 (2) the term ‘‘covered issuer’’ means an issuer 

25 that is required to file an annual report under sec-
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1 tion 13(a) or section 15(d) of the Securities Ex2 change Act of 1934 (15 U.S.C. 78m(a), 78o(d)); and 

3 (3) the term ‘‘issuer’’ has the meaning given 

4 the term in section 3(a) of the Securities Exchange 

5 Act of 1934 (15 U.S.C. 78c(a)). 

6 (b) COMPLIANCE.—If, as of the date that is 2 years 

7 after the date of enactment of this Act, the Commission 

8 has not promulgated the regulations required under sub9 section (w) of section 13 of the Securities Exchange Act 

10 of 1934 (15 U.S.C. 78m), as added by section 603, a cov11 ered issuer, during the period beginning on that date and 

12 ending on the date on which the Commission promulgates 

13 those regulations, shall be deemed to be in compliance 

14 with such subsection (w) if disclosures set forth in the an15 nual report of the covered issuer satisfy the public disclo16 sure standards of the International Organization for 

17 Standardization’s ISO 30414, or any successor standards 

18 for external workforce reporting, as supplemented or ad19 justed by rules, guidance, or other comments from the 

20 Commission. 

21 SEC. 605. SEC STUDY. 

22 (a) DEFINITIONS.—In this section, the terms ‘‘Com23 mission’’ and ‘‘issuer’’ have the meanings given those 

24 terms in section 604(a). 
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1 (b) STUDY.—The Commission shall conduct a study 

2 about the value to investors of— 

3 (1) information about the human rights com4 mitments of issuers required to file annual reports 

5 under section 13(a) of the Securities Exchange Act 

6 of 1934 (15 U.S.C. 78m(a)), including information 

7 about any principles used to evaluate risk, constitu8 ency consultation processes, and supplier due dili9 gence; and 

10 (2) with respect to issuers required to file an11 nual reports under section 13(a) of the Securities 

12 Exchange Act of 1934 (15 U.S.C. 78m(a)), informa13 tion about— 

14 (A) violations of the Fair Labor Standards 

15 Act of 1938 (29 U.S.C. 201 et seq.) by those 

16 issuers; 

17 (B) violations of worker misclassification 

18 by those issuers; 

19 (C) surveys regarding employee satisfac20 tion, well-being, and engagement; 

21 (D) the number and overall percentage of 

22 quality jobs, as determined by compensation 

23 above median wage and comprehensive em24 ployer-provided benefits; and 
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1 (E) information about workforce invest2 ment trends, as determined by at least a 3-year 

3 time period. 

4 (c) REPORT.—Not later than 1 year after the date 

5 of enactment of this Act, the Commission shall submit to 

6 Congress a report that contains the results of the study 

7 required to be conducted under subsection (b), with rec8 ommendations for additional disclosure regulations based 

9 on the findings, and any actions the Commission plans to 

10 take to enhance disclosures based on the findings. 

11 TITLE VII—PREVENTING AND 

12 RESPONDING TO WORKPLACE 

13 HARASSMENT 

14 SEC. 701. SEC FILINGS AND MATERIAL DISCLOSURES AT 

15 PUBLIC COMPANIES. 

16 (a) DEFINITIONS.—In this section— 

17 (1) the term ‘‘Form 10–K’’ means the form de18 scribed in section 249.310 of title 17, Code of Fed19 eral Regulations, or any successor regulation; and 

20 (2) the term ‘‘issuer’’ has the meaning given 

21 the term in section 3(a) of the Securities Exchange 

22 Act of 1934 (15 U.S.C. 78c(a)). 

23 (b) FINDINGS.—Congress finds that— 

24 (1) shareholders and the public should know 

25 whether corporations— 
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1 (A) are expending company funds to re2 solve, settle, or litigate claims of workplace har3 assment, including sexual harassment; and 

4 (B) along with the executives and man5 agers of those corporations— 

6 (i) are complying with prohibitions 

7 against workplace harassment, including 

8 sexual harassment; and 

9 (ii) facilitate a culture of silence, dis10 respect, intimidation, and abuse that nega11 tively impacts the health and safety of the 

12 workers of those corporations and the 

13 value of those corporations; and 

14 (2) the requirements of this section will— 

15 (A) establish necessary transparency and 

16 accountability; and 

17 (B) provide an incentive for corporations 

18 to— 

19 (i) promptly address workplace har20 assment, including sexual harassment, as 

21 that misconduct occurs; and 

22 (ii) foster a culture in which work23 place harassment is not protected and does 

24 not occur. 
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1 (c) INFORMATION REQUIRED.—Not later than 1 year 

2 after the date of enactment of this Act, the Securities and 

3 Exchange Commission shall promulgate a regulation that 

4 requires any issuer that is required to submit an annual 

5 report using Form 10–K to include in any such submis6 sion— 

7 (1) during the period covered by the submis8 sion— 

9 (A) with respect to workplace harassment, 

10 including sexual harassment, and retaliation for 

11 reporting, resisting, opposing, or assisting in 

12 the investigation of workplace harassment— 

13 (i) the number of settlements reached 

14 by the issuer as a signatory or when the 

15 issuer is a beneficiary of a release of 

16 claims; and 

17 (ii) whether any judgments or awards 

18 (including awards through arbitration or 

19 administrative proceedings) were entered 

20 against the issuer in part or in whole, or 

21 any payments made in connection with a 

22 release of claims; and 

23 (B) the total amount paid by the issuer or 

24 another party as a result of— 
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1 (i) the settlements described in sub2 paragraph (A)(i); and 

3 (ii) the judgments described in sub4 paragraph (A)(ii); and 

5 (2) information regarding whether, in the ag6 gregate, including the period covered by the submis7 sion, there have been three or more settlements 

8 reached by, or judgments against, the issuer with re9 spect to workplace harassment, including sexual har10 assment, or retaliation for reporting, resisting, op11 posing, or assisting in the investigation of workplace 

12 harassment that relate to a particular individual em13 ployed by the issuer, without identifying that indi14 vidual by name. 

15 TITLE VIII—CYBERSECURITY 

16 DISCLOSURE 

17 SEC. 801. SHORT TITLE. 

18 This title may be cited as the ‘‘Cybersecurity Disclo19 sure Act of 2021’’. 

20 SEC. 802. CYBERSECURITY TRANSPARENCY. 

21 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

22 et seq.) is amended by inserting after section 14B (15 

23 U.S.C. 78n–2) the following: 

24 ‘‘SEC. 14C. CYBERSECURITY TRANSPARENCY. 

25 ‘‘(a) DEFINITIONS.—In this section— 
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1 ‘‘(1) the term ‘cybersecurity’ means any action, 

2 step, or measure to detect, prevent, deter, mitigate, 

3 or address any cybersecurity threat or any potential 

4 cybersecurity threat; 

5 ‘‘(2) the term ‘cybersecurity threat’— 

6 ‘‘(A) means an action, not protected by the 

7 First Amendment to the Constitution of the 

8 United States, on or through an information 

9 system that may result in an unauthorized ef10 fort to adversely impact the security, avail11 ability, confidentiality, or integrity of an infor12 mation system or information that is stored on, 

13 processed by, or transiting an information sys14 tem; and 

15 ‘‘(B) does not include any action that sole16 ly involves a violation of a consumer term of 

17 service or a consumer licensing agreement; 

18 ‘‘(3) the term ‘information system’— 

19 ‘‘(A) has the meaning given the term in 

20 section 3502 of title 44, United States Code; 

21 and 

22 ‘‘(B) includes industrial control systems, 

23 such as supervisory control and data acquisition 

24 systems, distributed control systems, and pro25 grammable logic controllers; 
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1 ‘‘(4) the term ‘NIST’ means the National Insti2 tute of Standards and Technology; and 

3 ‘‘(5) the term ‘reporting company’ means any 

4 company that is an issuer— 

5 ‘‘(A) the securities of which are registered 

6 under section 12; or 

7 ‘‘(B) that is required to file reports under 

8 section 15(d). 

9 ‘‘(b) REQUIREMENT TO ISSUE RULES.—Not later 

10 than 360 days after the date of enactment of this section, 

11 the Commission shall issue final rules to require each re12 porting company, in the annual report of the reporting 

13 company submitted under section 13 or section 15(d) or 

14 in the annual proxy statement of the reporting company 

15 submitted under section 14(a)— 

16 ‘‘(1) to disclose whether any member of the 

17 governing body, such as the board of directors or 

18 general partner, of the reporting company has exper19 tise or experience in cybersecurity and in such detail 

20 as necessary to fully describe the nature of the ex21 pertise or experience; and 

22 ‘‘(2) if no member of the governing body of the 

23 reporting company has expertise or experience in cy24 bersecurity, to describe what other aspects of the re25 porting company’s cybersecurity were taken into ac-
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1 count by any person, such as an official serving on 

2 a nominating committee, that is responsible for iden3 tifying and evaluating nominees for membership to 

4 the governing body. 

5 ‘‘(c) CYBERSECURITY EXPERTISE OR EXPERI6 ENCE.—For purposes of subsection (b), the Commission, 

7 in consultation with NIST, shall define what constitutes 

8 expertise or experience in cybersecurity using commonly 

9 defined roles, specialties, knowledge, skills, and abilities, 

10 such as those provided in NIST Special Publication 800– 

11 181, entitled ‘National Initiative for Cybersecurity Edu12 cation (NICE) Cybersecurity Workforce Framework’, or 

13 any successor thereto.’’. 

14 TITLE IX—DATA RELATING TO 

15 DIVERSITY DISCLOSURE 

16 SEC. 901. SHORT TITLE. 

17 This title may be cited as the ‘‘Improving Corporate 

18 Governance Through Diversity Act of 2021’’. 

19 SEC. 902. SUBMISSION OF DATA RELATING TO DIVERSITY 

20 BY ISSUERS. 

21 Section 13 of the Securities Exchange Act of 1934 

22 (15 U.S.C. 78m), as amended by section 502, is further 

23 amended by adding at the end the following: 

24 ‘‘(w) SUBMISSION OF DATA RELATING TO DIVER25 SITY.— 
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1 ‘‘(1) DEFINITIONS.—In this subsection— 

2 ‘‘(A) the term ‘executive officer’ has the 

3 meaning given the term in section 230.501(f) of 

4 title 17, Code of Federal Regulations, as in ef5 fect on the date of enactment of this subsection; 

6 and 

7 ‘‘(B) the term ‘veteran’ has the meaning 

8 given the term in section 101 of title 38, United 

9 States Code. 

10 ‘‘(2) SUBMISSION OF DISCLOSURE.—Each 

11 issuer required to file an annual report under sub12 section (a) shall disclose in any proxy statement and 

13 any information statement relating to the election of 

14 directors filed with the Commission the following: 

15 ‘‘(A) Demographic data, based on vol16 untary self-identification, on the racial, ethnic, 

17 gender identity, and sexual orientation composi18 tion of— 

19 ‘‘(i) the board of directors of the 

20 issuer; 

21 ‘‘(ii) nominees for the board of direc22 tors of the issuer; and 

23 ‘‘(iii) the executive officers of the 

24 issuer. 
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1 ‘‘(B) The status of any member of the 

2 board of directors of the issuer, any nominee 

3 for the board of directors of the issuer, or any 

4 executive officer of the issuer, based on vol5 untary self-identification, as a veteran. 

6 ‘‘(C) Whether the board of directors of the 

7 issuer, or any committee of that board of direc8 tors, has, as of the date on which the issuer 

9 makes a disclosure under this paragraph, 

10 adopted any policy, plan, or strategy to promote 

11 racial, ethnic, and gender diversity among— 

12 ‘‘(i) the board of directors of the 

13 issuer; 

14 ‘‘(ii) nominees for the board of direc15 tors of the issuer; or 

16 ‘‘(iii) the executive officers of the 

17 issuer. 

18 ‘‘(3) ALTERNATIVE SUBMISSION.—In any 1- 

19 year period in which an issuer required to file an an20 nual report under subsection (a) does not file with 

21 the Commission a proxy statement or an information 

22 statement relating to the election of directors, the 

23 issuer shall disclose the information required under 

24 paragraph (2) in the first annual report of issuer 
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1 that the issuer submits to the Commission after the 

2 end of that 1-year period. 

3 ‘‘(4) ANNUAL REPORT.—Not later than 18 

4 months after the date of enactment of this sub5 section, and annually thereafter, the Commission 

6 shall submit to the Committee on Banking, Housing, 

7 and Urban Affairs of the Senate and the Committee 

8 on Financial Services of the House of Representa9 tives, and publish on the website of the Commission, 

10 a report that analyzes the information disclosed 

11 under paragraphs (2) and (3) and identifies any 

12 trends with respect to such information. 

13 ‘‘(5) BEST PRACTICES.— 

14 ‘‘(A) IN GENERAL.—The Director of the 

15 Office of Minority and Women Inclusion of the 

16 Commission shall, not later than 3 years after 

17 the date of enactment of this subsection, and 

18 every 3 years thereafter, publish best practices 

19 for compliance with this subsection. 

20 ‘‘(B) COMMENTS.—The Director of the Of21 fice of Minority and Women Inclusion of the 

22 Commission may, pursuant to subchapter II of 

23 chapter 5 of title 5, United States Code, solicit 

24 public comments related to the best practices 

25 published under subparagraph (A).’’. 
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1 SEC. 903. DIVERSITY ADVISORY GROUP. 

2 (a) DEFINITIONS.—For the purposes of this section: 

3 (1) ADVISORY GROUP.—The term ‘‘Advisory 

4 Group’’ means the Diversity Advisory Group estab5 lished under subsection (b). 

6 (2) COMMISSION.—The term ‘‘Commission’’ 

7 means the Securities and Exchange Commission. 

8 (3) ISSUER.—The term ‘‘issuer’’ has the mean9 ing given the term in section 3(a) of the Securities 

10 Exchange Act of 1934 (15 U.S.C. 78c(a)). 

11 (b) ESTABLISHMENT.—The Commission shall estab12 lish a Diversity Advisory Group, which shall be composed 

13 of representatives from— 

14 (1) the Federal Government and State and local 

15 governments; 

16 (2) academia; and 

17 (3) the private sector. 

18 (c) STUDY AND RECOMMENDATIONS.—The Advisory 

19 Group shall— 

20 (1) carry out a study that identifies strategies 

21 that can be used to increase gender identity, racial, 

22 ethnic, and sexual orientation diversity among mem23 bers of boards of directors of issuers; and 

24 (2) not later than 270 days after the date on 

25 which the Advisory Group is established, submit to 

26 the Commission, the Committee on Banking, Hous-
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1 ing, and Urban Affairs of the Senate, and the Com2 mittee on Financial Services of the House of Rep3 resentatives a report that— 

4 (A) describes any findings from the study 

5 conducted under paragraph (1); and 

6 (B) makes recommendations regarding 

7 strategies that issuers could use to increase 

8 gender identity, racial, ethnic, and sexual ori9 entation diversity among board members. 

10 (d) ANNUAL REPORT.—Not later than 1 year after 

11 the date on which the Advisory Group submits the report 

12 required under subsection (c)(2), and annually thereafter, 

13 the Commission shall submit to the Committee on Bank14 ing, Housing, and Urban Affairs of the Senate and the 

15 Committee on Financial Services of the House of Rep16 resentatives a report that describes the status of gender 

17 identity, racial, ethnic, and sexual orientation diversity 

18 among members of the boards of directors of issuers. 

19 (e) PUBLIC AVAILABILITY OF REPORTS.—The Com20 mission shall make all reports of the Advisory Group avail21 able to issuers and the public, including on the website 

22 of the Commission. 

23 (f) INAPPLICABILITY OF FEDERAL ADVISORY COM24 MITTEE ACT.—The Federal Advisory Committee Act (5 
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1 U.S.C. App.) shall not apply with respect to the Advisory 

2 Group or the activities of the Advisory Group. 

3 TITLE X—UYGHUR FORCED 

4 LABOR DISCLOSURE 

5 SEC. 1001. SHORT TITLE. 

6 This division may be cited as the ‘‘Uyghur Forced 

7 Labor Disclosure Act’’. 

8 SEC. 1002. DISCLOSURE OF CERTAIN ACTIVITIES RELATING 

9 TO THE XINJIANG UYGHUR AUTONOMOUS 

10 REGION. 

11 (a) IN GENERAL.—Section 13 of the Securities Ex12 change Act of 1934 (15 U.S.C. 78m), as amended by sec13 tion 502, is further amended by adding at the end the 

14 following: 

15 ‘‘(w) DISCLOSURE OF CERTAIN ACTIVITIES RELAT16 ING TO THE XINJIANG UYGHUR AUTONOMOUS REGION.— 

17 ‘‘(1) IN GENERAL.—Not later than the end of 

18 the 180-day period beginning on the date of enact19 ment of this subsection, the Commission shall issue 

20 rules to require each issuer required to file an an21 nual report under this section or section 15(d) or a 

22 proxy statement under section 14 to disclose in each 

23 such report or proxy statement whether, during the 

24 period covered by the report or proxy statement— 
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1 ‘‘(A) the issuer or any affiliate of the 

2 issuer, directly or indirectly, engaged with an 

3 entity or the affiliate of an entity to import— 

4 ‘‘(i) manufactured goods, including 

5 electronics, food products, textiles, shoes, 

6 auto parts, polysilicon, and teas, that are 

7 sourced from or through the XUAR; 

8 ‘‘(ii) manufactured goods containing 

9 materials that are sourced from or through 

10 the XUAR; or 

11 ‘‘(iii) goods manufactured by an entity 

12 engaged in labor transfers from the 

13 XUAR; 

14 ‘‘(B) with respect to any goods or mate15 rials described under subparagraph (A), wheth16 er the goods or material originated in forced 

17 labor camps; and 

18 ‘‘(C) with respect to each manufactured 

19 good or material described under subparagraph 

20 (A)— 

21 ‘‘(i) the nature and extent of the com22 mercial activity related to such good or 

23 material; 
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1 ‘‘(ii) the gross revenue and net prof2 its, if any, attributable to the good or ma3 terial; and 

4 ‘‘(iii) whether the issuer or the affil5 iate of the issuer intends to continue with 

6 such importation. 

7 ‘‘(2) AVAILABILITY OF INFORMATION.—The 

8 Commission shall make all information disclosed 

9 pursuant to this subsection available to the public on 

10 the website of the Commission. 

11 ‘‘(3) REPORTS.— 

12 ‘‘(A) ANNUAL REPORT TO CONGRESS.— 

13 The Commission shall— 

14 ‘‘(i) conduct an annual assessment of 

15 the compliance of issuers with the require16 ments of this subsection; and 

17 ‘‘(ii) issue a report to Congress con18 taining the results of the assessment re19 quired under clause (i). 

20 ‘‘(B) GAO REPORT.—The Comptroller 

21 General of the United States shall periodically 

22 evaluate and report to Congress on the effec23 tiveness of the oversight by the Commission of 

24 the disclosure requirements under this sub25 section. 
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1 ‘‘(4) DEFINITIONS.—In this subsection: 

2 ‘‘(A) FORCED LABOR CAMP.—The term 

3 ‘forced labor camp’ means— 

4 ‘‘(i) any entity engaged in the ‘mutual 

5 pairing assistance’ program which sub6 sidizes the establishment of manufacturing 

7 facilities in XUAR; 

8 ‘‘(ii) any entity using convict labor, 

9 forced labor, or indentured labor described 

10 under section 307 of the Tariff Act of 

11 1930 (19 U.S.C. 1307); and 

12 ‘‘(iii) any other entity that the Com13 mission determines is appropriate. 

14 ‘‘(B) XUAR.—The term ‘XUAR’ means 

15 the Xinjiang Uyghur Autonomous Region.’’. 

16 (b) REPEAL.—The amendment made by this section 

17 shall be repealed on the earlier of— 

18 (1) the date that is 8 years after the date of the 

19 enactment of this section; or 

20 (2) the date on which the President submits to 

21 Congress (including the Office of the Law Revision 

22 Council) a determination that the Government of the 

23 People’s Republic of China has ended mass intern24 ment, forced labor, and any other gross violations of 

25 human rights experienced by Uyghurs, Kazakhs, 
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1 Kyrgyz, and members of other persecuted groups in 

2 the Xinjiang Uyghur Autonomous Region. 

3 TITLE XI—OTHER MATTERS 

4 SEC. 1101. STUDY AND REPORT ON SMALL BUSINESSES 

5 AND ESG DISCLOSURES. 

6 (a) IN GENERAL.—Not later than 1 year after the 

7 date of the enactment of this Act, the Securities and Ex8 change Commission, in coordination with the Director of 

9 the Office of the Advocate for Small Business Capital For10 mation and the Investor Advocate of the Office of the In11 vestor Advocate, shall— 

12 (1) conduct a study on the issues small busi13 nesses face with respect to complying with disclosure 

14 requirements related to environmental, social, and 

15 governance metrics; and 

16 (2) submit a report to Congress that includes— 

17 (A) the results of the study required under 

18 paragraph (1); and 

19 (B) recommendations with respect to small 

20 business compliance with such disclosure re21 quirements. 

22 (b) DEFINITION OF SMALL BUSINESS.—In this sec23 tion, the term ‘‘small business’’ has the meaning given the 
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1 term ‘‘small business concern’’ under section 3 of the 

2 Small Business Act (15 U.S.C. 632). 

Passed the House of Representatives June 16, 2021. 

Attest: 

Clerk. 
117TH CONGRESS 

1ST SESSION H. R. 1187 

AN ACT 

To provide for disclosure of additional material infor other purposes. Sustainable Finance Advisory Committee, and formation about public companies and establish a