I 

116TH CONGRESS 

1ST SESSION H. R. 4329 

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 

SEPTEMBER 13, 2019 

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

bill; which was referred to the Committee on Financial Services 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘ESG Disclosure Sim5 plification Act of 2019’’. 

6 SEC. 2. ESG DISCLOSURES. 

7 (a) IN GENERAL.—Section 14 of the Securities Ex8 change Act of 1934 (15 U.S.C. 78n) is amended by adding 

9 at the end the following: 


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1 ‘‘(k) ESG DISCLOSURES.— 

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

3 of which are registered under section 12 or that is 

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

5 shall disclose in any proxy or consent solicitation 

6 material for an annual meeting of the share7 holders— 

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

9 issuer about the link between ESG metrics and 

10 the long-term business strategy of the issuer; 

11 and 

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

13 issuer uses to determine the impact of ESG 

14 metrics on the long-term business strategy of 

15 the issuer. 

16 ‘‘(2) ESG METRICS DEFINED.—In this sub17 section, the term ‘ESG metrics’ has the meaning 

18 given the term in part 210 of title 17, Code of Fed19 eral Regulations as amended pursuant to subsection 

20 (b) of the ESG Disclosure Simplification Act of 

21 2019.’’. 

22 (b) RULEMAKING.— 

23 (1) IN GENERAL.—The Securities and Ex24 change Commission (in this Act referred to as the 

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


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1 Code of Federal Regulations (or any successor there2 to) to— 

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

4 issuer described in such part that requires au5 dited financial statements, to disclose environ6 mental, social, and governance metrics (in this 

7 Act referred to as ESG metrics); and 

8 (B) define ESG metrics. 

9 (2) SUSTAINABLE FINANCE ADVISORY COM10 MITTEE.—The Sustainable Finance Advisory Com11 mittee established pursuant to section 4(k) of the 

12 Securities and Exchange Act of 1934 shall, not later 

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

14 such Committee, submit to the Commission rec15 ommendations about what ESG metrics the Com16 mission should require issuers to disclose. 

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

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

19 Commission pursuant to paragraph (2), are de facto 

20 material for the purposes of disclosures under the 

21 Securities Exchange Act of 1934 and the Securities 

22 Act of 1933. 

23 (4) INCORPORATION OF INTERNATIONAL

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

25 Code of Federal Regulations (or any successor thereVerDate Sep 11 2014 04:05 Sep 14, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4329.IH H4329

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1 to) pursuant to paragraph (1), the Commission may, 

2 as the Commission determines appropriate, incor3 porate any internationally recognized, independent, 

4 multi-stakeholder environmental, social, and govern5 ance disclosure standards. 

6 (5) LOCATION OF DISCLOSURE.—Any disclosure 

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

8 notes section of the filing. 

9 (6) DELAY FOR SMALL ISSUERS.—The Commis10 sion may use a phased approach when applying any 

11 amendments made pursuant to paragraph (1) to 

12 small issuers and may determine the criteria by 

13 which an issuer qualifies as a small issuer for pur14 poses of such phased approach. 

15 SEC. 3. SUSTAINABLE FINANCE ADVISORY COMMITTEE. 

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

17 U.S.C. 78d) is amended by adding at the end the fol18 lowing: 

19 ‘‘(k) SUSTAINABLE FINANCE ADVISORY COM20 MITTEE.— 

21 ‘‘(1) ESTABLISHMENT.—The Securities and Ex22 change Commission (in this subsection referred to as 

23 the ‘Commission’) shall establish a permanent advi24 sory committee to be called the ‘Sustainable Finance 


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1 Advisory Committee’ (in this subsection referred to 

2 as the ‘Committee’). 

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

4 shall— 

5 ‘‘(A) submit a report to the Securities and 

6 Exchange Commission not later than 18 

7 months after the date of the first meeting of 

8 the Committee that— 

9 ‘‘(i) identifies the challenges and op10 portunities for investors associated with 

11 sustainable finance; and 

12 ‘‘(ii) recommends policy changes to fa13 cilitate the flow of capital towards sustain14 able investments, in particular environ15 mentally sustainable investments; 

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

17 on sustainable finance; and 

18 ‘‘(C) communicate with individuals and en19 tities with an interest in sustainable finance. 

20 ‘‘(3) MEMBERSHIP.— 

21 ‘‘(A) MEMBERS.— 

22 ‘‘(i) IN GENERAL.—The Committee 

23 shall consist of no more than 20 members 

24 who shall each serve for one four-year 

25 term. 


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1 ‘‘(ii) REPRESENTATION.—Each mem2 ber shall represent individuals and entities 

3 with an interest in sustainable finance, 

4 such as— 

5 ‘‘(I) experts on sustainable fi6 nance; 

7 ‘‘(II) operators of financial infra8 structure; 

9 ‘‘(III) entities that provide anal10 ysis, data, or methodologies that fa11 cilitate sustainable finance; 

12 ‘‘(IV) insurance companies, pen13 sion funds, asset managers, depository 

14 institutions, or credit unions; or 

15 ‘‘(V) other financial institutions 

16 that intermediate investments in sus17 tainable finance or manage risks re18 lated to sustainable development. 

19 ‘‘(iii) REPRESENTATION OF INTER20 ESTS.—A member may not represent a 

21 single individual or entity and shall rep22 resent types of individuals and entities 

23 with similar interests in sustainable fi24 nance. 

25 ‘‘(B) SELECTION.— 


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1 ‘‘(i) IN GENERAL.—The Commission 

2 shall— 

3 ‘‘(I) publish criteria for selection 

4 of members on the website of the 

5 Commission and in the Federal Reg6 ister; and 

7 ‘‘(II) solicit applications for 

8 membership on the website of the 

9 Commission and in the Federal Reg10 ister. 

11 ‘‘(ii) EQUAL SHARE.—From the indi12 viduals who submit applications for mem13 bership, each Commissioner of the Com14 mission shall select an equal number of the 

15 members of the Committee. 

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

17 by reason of their service on the Committee but 

18 may receive travel or transportation expenses in 

19 accordance with applicable provisions under 

20 subchapter I of chapter 57 of title 5, United 

21 States Code. 

22 ‘‘(D) MEMBER TRANSPARENCY.—The 

23 name of each member and the types of individ24 uals and entities that such member represents 


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1 shall be published on the website of the Com2 mission. 

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

4 supported by staff from the Office of the Inves5 tor Advocate of the Commission that are dedi6 cated to environmental, social and governance 

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

8 ‘‘(F) AUTHORIZATION OF APPROPRIA9 TION.—There are authorized to be appropriated 

10 such sums as are necessary to finance costs as11 sociated with staff dedicated to ESG issues in 

12 the Office of the Investor Advocate of the Com13 mission. 

14 ‘‘(4) SUSTAINABLE FINANCE.—For the pur15 poses of this subsection, the term ‘sustainable fi16 nance’ means the provision of finance with respect 

17 to investments taking into account environmental, 

18 social, and governance considerations. 

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

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

21 Committee submits a report to the Commission pur22 suant to paragraph (2)(A), publish a response to 

23 such report.’’. 

Æ 


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