I 

116TH CONGRESS 

2D SESSION H. R. 8960 

To amend the Investment Advisers Act of 1940 to require large asset 

managers to establish Sustainable Investment Policies. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 14, 2020 

Mr. LEVIN of Michigan (for himself, Mr. BRENDAN F. BOYLE of Pennsylvania, Mrs. AXNE, and Mr. GARCI ́A of Illinois) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Investment Advisers Act of 1940 to require 

large asset managers to establish Sustainable Investment 

Policies. 

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 ‘‘Sustainable Invest5 ment Policies Act of 2020’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) There is now incontrovertible evidence that 

9 ESG factors are financially material. 


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1 (2) Decades of policy interpretations from the 

2 Department of Labor and Securities and Exchange 

3 Commission have created confusion as to fiduciaries’ 

4 obligations with regard to ESG integration. 

5 (3) Recent policies of the Securities and Ex6 change Commission have had a chilling effect on 

7 ESG integration and active ownership with a view 

8 toward advancing a sustainable economy. 

9 SEC. 3. PURPOSE. 

10 The purpose of this Act is to require large investment 

11 advisors to adopt and implement policies to consider Envi12 ronmental, Social, and Governance (ESG) factors when 

13 making investments. 

14 SEC. 4. SUSTAINABLE INVESTMENT POLICY OF INVEST15 MENT ADVISERS. 

16 Section 203 of the Investment Advisers Act of 1940 

17 (15 U.S.C. 80b–3) is amended by adding at the end the 

18 following: 

19 ‘‘(o) SUSTAINABLE INVESTMENT POLICY.— 

20 ‘‘(1) IN GENERAL.—No person may be reg21 istered as an investment adviser under this section 

22 unless the person files a sustainable investment pol23 icy with the Commission that such person follows in 

24 carrying out the duties of an investment adviser. 

25 ‘‘(2) CONTENTS.— 


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1 ‘‘(A) IN GENERAL.—A sustainable invest2 ment policy described under paragraph (1) shall 

3 include policies of the person, with respect to— 

4 ‘‘(i) corporate governance practices by 

5 entities in which the plan invests, including 

6 executive compensation, board diversity, 

7 the independence of board chairs, political 

8 spending and lobbying disclosure; 

9 ‘‘(ii) characteristics of workforces em10 ployed by entities in which the plan in11 vests, including compensation and benefits, 

12 health and safety, diversity and demo13 graphics, skills and training, retention and 

14 turnover, full-time and part-time employ15 ment, and the use of independent contrac16 tors; 

17 ‘‘(iii) labor and human rights compli18 ance by entities in which the plan invests, 

19 including workers’ freedom of association, 

20 the right to collectively bargain, and the 

21 prevention of employment discrimination, 

22 child labor, and forced labor in company 

23 operations and supply chains; 

24 ‘‘(iv) the implementation, to the ex25 tent practicable, of practices which enVerDate Sep 11 2014 00:27 Dec 28, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8960.IH H8960

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1 hance diversity and inclusion performance 

2 within the workforce, senior leadership, 

3 business procurement, philanthropy and/or 

4 board of directors; 

5 ‘‘(v) environmental risks to the assets 

6 and properties of entities in which the 

7 funds advised by the person invest, includ8 ing— 

9 ‘‘(I) climate risks and contribu10 tions; 

11 ‘‘(II) environmental risks that 

12 are not related to climate, such as in13 dustrial pollution, habitat destruction, 

14 and other forms of environmental deg15 radation; 

16 ‘‘(III) impact to species 

17 endangerment and extinction; and 

18 ‘‘(IV) pollution of land, air, and 

19 water related to the operation of the 

20 entities invested in by the plan; pollu21 tion of land, air and water related to 

22 the operation of the entities in which 

23 funds advised by the person invest; 

24 ‘‘(vi) due diligence and practices re25 garding supply chain management, includVerDate Sep 11 2014 00:27 Dec 28, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8960.IH H8960

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1 ing environmental, human rights, and 

2 worker compensation considerations; and 

3 ‘‘(vii) tax practices of entities in which 

4 the plan invests, including international 

5 tax avoidance strategies and tax payment 

6 disclosure. 

7 ‘‘(3) COMPLIANCE AUDIT.— 

8 ‘‘(A) IN GENERAL.—Each registered in9 vestment adviser shall contract with an auditor 

10 (as described in rule 2–10 of section 210.01 of 

11 title 17, Code of Federal Regulations) to per12 form an annual evaluation of the adviser’s com13 pliance with the sustainable investment policy 

14 filed with the Commission. 

15 ‘‘(B) REPORT.—An auditor performing an 

16 evaluation under subparagraph (A) shall file, 

17 and make publicly available, a report on such 

18 evaluation to the adviser and the Commission. 

19 ‘‘(4) FIDUCIARY SAFE HARBOR.—The Commis20 sion may, by order, determine that an investment 

21 adviser has not breached its fiduciary duty with re22 spect to consideration of factors outlined under this 

23 subsection if the investment adviser is in compliance 

24 with this subsection.’’. 

Æ 


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