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Union Calendar No. 37 

117TH CONGRESS 

1ST SESSION H. R. 1187 

[Report No. 117–54] 

To provide for disclosure of additional material information about public 

companies and establish a Sustainable Finance Advisory Committee, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 18, 2021 

Mr. VARGAS (for himself and Mr. GARCI ́A of Illinois) introduced the following 

bill; which was referred to the Committee on Financial Services 

JUNE 8, 2021 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 18, 2021] 


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A BILL 

To provide for disclosure of additional material information 

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


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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘ESG Disclosure Sim5 plification Act of 2021’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The Securities and Exchange Commission 

9 has broad authority to require the disclosure of infor10 mation if such information is in the interest of, or is 

11 material to investors. 

12 (2) The Commission does not require companies 

13 to disclose information related to environmental, so14 cial, and governance (‘‘ESG’’) matters, and does not 

15 require companies to adhere to standards for dis16 closing such information. 

17 (3) Investors have reported that voluntary disclo18 sures of ESG metrics are inadequate. 

19 (4) A rule requiring reporting and standardiza20 tion of ESG disclosures is in the interest of investors. 

21 (5) ESG matters are material to investors, and 

22 the Commission must establish standards for disclo23 sure of such matters. 


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1 SEC. 3. ESG DISCLOSURES. 

2 (a) IN GENERAL.—Section 14 of the Securities Ex3 change Act of 1934 (15 U.S.C. 78n) is amended by adding 

4 at the end the following: 

5 ‘‘(k) ESG DISCLOSURES.— 

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

7 which are registered under section 12 or that is re8 quired to file annual reports under section 15(d) shall 

9 disclose in any proxy or consent solicitation material 

10 for an annual meeting of the shareholders— 

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

12 issuer about the link between ESG metrics and 

13 the long-term business strategy of the issuer; and 

14 ‘‘(B) a description of any process the issuer 

15 uses to determine the impact of ESG metrics on 

16 the long-term business strategy of the issuer. 

17 ‘‘(2) ESG METRICS DEFINED.—In this sub18 section, the term ‘ESG metrics’ has the meaning 

19 given the term in part 210 of title 17, Code of Federal 

20 Regulations as amended pursuant to section 3(b) of 

21 the ESG Disclosure Simplification Act of 2021.’’. 

22 (b) RULEMAKING.— 

23 (1) IN GENERAL.—The Securities and Exchange 

24 Commission (in this Act referred to as the ‘‘Commis25 sion’’) shall amend part 210 of title 17, Code of Fed26 eral Regulations (or any successor thereto) to— 


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

2 issuer described in such part that requires au3 dited financial statements, to disclose environ4 mental, social, and governance metrics (in this 

5 Act referred to as ESG metrics); and 

6 (B) define ESG metrics. 

7 (2) SUSTAINABLE FINANCE ADVISORY COM8 MITTEE.—The Sustainable Finance Advisory Com9 mittee established pursuant to section 4(k) of the Se10 curities and Exchange Act of 1934 shall, not later 

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

12 such Committee, submit to the Commission rec13 ommendations about what ESG metrics the Commis14 sion should require issuers to disclose. 

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

16 that ESG metrics, as such term is defined by the 

17 Commission pursuant to paragraph (1), are de facto 

18 material for the purposes of disclosures under the Se19 curities Exchange Act of 1934 and the Securities Act 

20 of 1933. 

21 (4) INCORPORATION OF INTERNATIONAL STAND22 ARDS.—When amending part 210 of title 17, Code of 

23 Federal Regulations (or any successor thereto) pursu24 ant to paragraph (1), the Commission may, as the 

25 Commission determines appropriate, incorporate any 


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1 internationally recognized, independent, multi-stake2 holder environmental, social, and governance disclo3 sure standards. 

4 (5) LOCATION OF DISCLOSURE.—Any disclosure 

5 required by paragraph (1) may be included in a notes 

6 section of the filing. 

7 (6) DELAY FOR SMALL ISSUERS.—The Commis8 sion may use a phased approach when applying any 

9 amendments made pursuant to paragraph (1) to 

10 small issuers and may determine the criteria by 

11 which an issuer qualifies as a small issuer for pur12 poses of such phased approach. 

13 SEC. 4. SUSTAINABLE FINANCE ADVISORY COMMITTEE. 

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

15 U.S.C. 78d) is amended by adding at the end the following: 

16 ‘‘(k) SUSTAINABLE FINANCE ADVISORY COMMITTEE.— 

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

18 establish a permanent advisory committee to be called 

19 the ‘Sustainable Finance Advisory Committee’ (in 

20 this subsection referred to as the ‘Committee’). 

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

22 shall— 

23 ‘‘(A) submit a report to the Commission not 

24 later than 18 months after the date of the first 

25 meeting of the Committee that— 


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1 ‘‘(i) identifies the challenges and op2 portunities for investors associated with sus3 tainable finance; and 

4 ‘‘(ii) recommends policy changes to fa5 cilitate the flow of capital towards sustain6 able investments, in particular environ7 mentally sustainable investments; 

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

9 on sustainable finance; and 

10 ‘‘(C) communicate with individuals and en11 tities with an interest in sustainable finance. 

12 ‘‘(3) MEMBERSHIP.— 

13 ‘‘(A) MEMBERS.— 

14 ‘‘(i) IN GENERAL.—The Committee 

15 shall consist of no more than 20 members 

16 who shall each serve for one four-year term. 

17 ‘‘(ii) REPRESENTATION.—Each mem18 ber shall represent individuals and entities 

19 with an interest in sustainable finance, 

20 such as— 

21 ‘‘(I) experts on sustainable fi22 nance; 

23 ‘‘(II) operators of financial infra24 structure; 


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1 ‘‘(III) entities that provide anal2 ysis, data, or methodologies that facili3 tate sustainable finance; 

4 ‘‘(IV) insurance companies, pen5 sion funds, asset managers, depository 

6 institutions, or credit unions; or 

7 ‘‘(V) other financial institutions 

8 that intermediate investments in sus9 tainable finance or manage risks re10 lated to sustainable development. 

11 ‘‘(iii) REPRESENTATION OF INTER12 ESTS.—A member may not represent a sin13 gle individual or entity and shall represent 

14 types of individuals and entities with simi15 lar interests in sustainable finance. 

16 ‘‘(B) SELECTION.— 

17 ‘‘(i) IN GENERAL.—The Commission 

18 shall— 

19 ‘‘(I) publish criteria for selection 

20 of members on the website of the Com21 mission and in the Federal Register; 

22 and 

23 ‘‘(II) solicit applications for mem24 bership on the website of the Commis25 sion and in the Federal Register. 


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1 ‘‘(ii) EQUAL SHARE.—From the indi2 viduals who submit applications for mem3 bership, each Commissioner of the Commis4 sion shall select an equal number of the 

5 members of the Committee. 

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

7 by reason of their service on the Committee but 

8 may receive travel or transportation expenses in 

9 accordance with applicable provisions under sub10 chapter I of chapter 57 of title 5, United States 

11 Code. 

12 ‘‘(D) MEMBER TRANSPARENCY.—The name 

13 of each member and the types of individuals and 

14 entities that such member represents shall be 

15 published on the website of the Commission. 

16 ‘‘(E) STAFF.—The Committee shall be sup17 ported by staff from the Office of the Investor 

18 Advocate of the Commission that are dedicated to 

19 environmental, social and governance (in this 

20 subsection referred to as ‘ESG’) issues. 

21 ‘‘(F) AUTHORIZATION OF APPROPRIA22 TION.—There are authorized to be appropriated 

23 such sums as are necessary to finance costs asso24 ciated with staff dedicated to ESG issues in the 


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1 Office of the Investor Advocate of the Commis2 sion. 

3 ‘‘(4) SUSTAINABLE FINANCE.—For the purposes 

4 of this subsection, the term ‘sustainable finance’ 

5 means the provision of finance with respect to invest6 ments taking into account environmental, social, and 

7 governance considerations. 

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

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

10 Committee submits a report to the Commission pur11 suant to paragraph (2)(A), publish a response to such 

12 report.’’. 


pamtmann on DSKBC07HB2PROD with BILLS

pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 37 

117TH CONGRESS 

1ST SESSION H. R. 1187 

[Report No. 117–54] 

A BILL 

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

JUNE 8, 2021 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBC07HB2PROD with BILLS