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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8959 Introduced in House (IH)]

<DOC>

116th CONGRESS
  2d Session
                                H. R. 8959

To amend the Employee Retirement Income Security Act of 1974 to require 
     retirement plans 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. Garcia of Illinois) introduced the 
 following bill; which was referred to the Committee on Education and 
                                 Labor

_______________________________________________________________________

                                 A BILL

 
To amend the Employee Retirement Income Security Act of 1974 to require 
     retirement plans to establish Sustainable Investment Policies.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirees Sustainable Investment 
Policies Act of 2020''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Fiduciaries for retirement plans should--
                    (A) incorporate all relevant factors, including 
                environmental, social, and governance (hereinafter in 
                this Act referred to as ``ESG'') factors, into 
                investment analysis and decision-making processes, 
                consistent with the investment time horizons of plan 
                participants and beneficiaries;
                    (B) encourage the adoption of best practices for 
                ESG performance in the companies or other entities in 
                which they invest;
                    (C) consider plan participants' and beneficiaries' 
                sustainability-related interests and preferences when 
                making investment decisions;
                    (D) consider the impact of plan investments on the 
                stability and resilience of the financial system; and
                    (E) disclose how they have implemented these 
                commitments.
            (2) There is now incontrovertible evidence that ESG factors 
        are financially material to investors and relevant to 
        investment decisionmaking.

SEC. 3. PURPOSE.

    The purpose of this Act is to require retirement and welfare 
benefit plans that are covered by the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1001 et seq.), to adopt and implement 
policies in consideration of ESG factors when making investment 
decisions, because considering ESG factors is relevant to the fiduciary 
duty of prudence, as such factors help ensure investments' long-term 
sustainability.

SEC. 4. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) Disclosure of Sustainable Investment Policies.--Section 102 of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1022) is 
amended in subsection (b), by inserting ``the sustainable investment 
policy of the plan (as established under section 402(b)(5));'' after 
``collective bargaining agreement;''.
    (b) Establishment of Sustainable Investment Policy.--Section 402 of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1102) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (3), by striking ``and'';
                    (B) in paragraph (4), by striking the period and 
                insert ``, and''; and
                    (C) by inserting after paragraph (4) the following:
            ``(5) provide a sustainable investment policy of the plan 
        in accordance with subparagraph (d) unless the plan elects to 
        rely on the sustainable investment policies of the plan's 
        fiduciaries as defined by section 3(38)''; and
            (2) by adding after subsection (c) the following:
    ``(d)(1) A sustainable investment policy under subsection (b)(5) 
shall include guidelines with respect to--
            ``(A) corporate governance practices by entities in which 
        the plan invests, including executive compensation, board 
        diversity, the independence of board chairs, political spending 
        and lobbying disclosure;
            ``(B) characteristics of workforces employed by entities in 
        which the plan invests, including compensation and benefits, 
        health and safety, diversity and demographics, skills and 
        training, retention and turnover, full-time and part-time 
        employment, and the use of independent contractors;
            ``(C) labor and human rights compliance by entities in 
        which the plan invests, including workers' freedom of 
        association, the right to collectively bargain, and the 
        prevention of employment discrimination, child labor, and 
        forced labor in company operations and supply chains;
            ``(D) the implementation, to the extent practicable, of 
        practices which enhance diversity and inclusion performance 
        within the workforce, senior leadership, business procurement, 
        philanthropy, and/or board of directors;
            ``(E) environmental risks to the assets and properties of 
        entities invested in by the plan and related disclosures, 
        including--
                    ``(i) climate risks and contributions;
                    ``(ii) environmental risks that may not be related 
                to climate, such as industrial pollution, habitat 
                destruction, and other forms of environmental 
                degradation;
                    ``(iii) impact to species endangerment and 
                extinction; and
                    ``(iv) pollution of land, air, and water related to 
                the operation of the entities invested in by the plan;
            ``(F) due diligence and practices regarding supply chain 
        management, including environmental, human rights, and worker 
        compensation considerations; and
            ``(G) tax practices of entities in which the plan invests, 
        including international tax avoidance strategies and tax 
        payment disclosure.
    ``(2) A plan subject to the requirements of section 402(d)(1) shall 
conduct a review of the sustainable investment policy under subsection 
(b)(5) on an annual basis.
    ``(3) Section 404(a) shall not be construed to prohibit a plan 
fiduciary from doing the following:
            ``(A) In choosing among investments with commensurate 
        degrees of risk and rates of return, to select one or more such 
        investments based on environmental, social, and governance 
        considerations.
            ``(B) To monitor or dispose of a plan investment 
        alternative based on considerations that include environmental, 
        social, and governance considerations.
            ``(C) Vote proxies in accordance with the plan's proxy 
        voting guidelines.''.
    (c) Qualified Investment Alternatives.--Section 404(c)(5) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104(c)(5)) 
is amended by adding at the end the following:
            ``(5) A qualified default investment alternative (as 
        defined in section 2550.404c-5(e) of title 29, Code of Federal 
        Regulations, or a successor regulation) may include an 
        investment alternative--
                    ``(A) with an environmental, social, and governance 
                investment mandate; or
                    ``(B) that was selected, in part, on the basis of 
                an environmental, social, and governance 
                consideration.''.
                                 <all>
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