I 

117TH CONGRESS 

1ST SESSION H. R. 3605 

To amend the Investment Advisers Act of 1940 to enable consideration 

and promote disclosure and transparency of sustainable investment policies by large asset managers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2021 

Mr. LEVIN of Michigan (for himself, Mrs. AXNE, Mr. BRENDAN F. BOYLE

of Pennsylvania, 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 enable 

consideration and promote disclosure and transparency 

of sustainable investment policies by large asset managers, 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 ‘‘Sustainable Invest5 ment Policies Act of 2021’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


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1 (1) Environmental, social, and governance (in 

2 this Act referred to as ‘‘ESG’’) include the potential 

3 for economic benefits, such as local job creation and 

4 economic development, in addition to investment re5 turns, as provided by investments sometimes re6 ferred to as ‘‘Economically Targeted Investments’’ 

7 or ‘‘ETIs’’. 

8 (2) There is now incontrovertible evidence that 

9 ESG factors can have substantial effects on invest10 ment performance and are important to many inves11 tors and that investors have a significant interest in 

12 such findings. 

13 (3) Investor findings show a dramatic interest 

14 in investments that consider ESG factors. 

15 (4) Decades of policy interpretations from the 

16 Department of Labor and the Securities and Ex17 change Commission have created confusion as to the 

18 obligations of a fiduciary with regard to ESG 

19 intergration. 

20 (5) Recent policies of the Securities and Ex21 change Commission have had a chilling effect on 

22 ESG integration and active ownership with a view 

23 toward advancing a sustainable economy. 


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1 SEC. 3. SUSTAINABLE INVESTMENT POLICY OF INVEST2 MENT ADVISERS. 

3 Section 203 of the Investment Advisers Act of 1940 

4 (15 U.S.C. 80b–3) is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(o) SUSTAINABLE INVESTMENT POLICY.— 

7 ‘‘(1) IN GENERAL.—No person may be reg8 istered as an investment adviser under this section 

9 unless such person— 

10 ‘‘(A) files a sustainable investment policy 

11 with the Commission; and 

12 ‘‘(B) complies with such policy in carrying 

13 out the duties of an investment adviser. 

14 ‘‘(2) CONTENTS.—A sustainable investment 

15 policy described under paragraph (1)(A) shall in16 clude the policies of the person with respect to the 

17 following: 

18 ‘‘(A) Environmental concerns, including 

19 environmental risks to the assets and properties 

20 of entities in which the funds invest, includ21 ing— 

22 ‘‘(i) climate risks and contributions; 

23 ‘‘(ii) associated environmental risks, 

24 including— 

25 ‘‘(I) industrial pollution; 

26 ‘‘(II) habitat destruction; 


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1 ‘‘(III) deforestation; and 

2 ‘‘(IV) other forms of environ3 mental degradation; and 

4 ‘‘(iii) pollution of land, air, or water 

5 related to the operation of the entities in 

6 which fund invests. 

7 ‘‘(B) Social considerations, including— 

8 ‘‘(i) characteristics of workforces em9 ployed by entities in which the fund in10 vests, including— 

11 ‘‘(I) compensation and benefits; 

12 ‘‘(II) health and safety; 

13 ‘‘(III) diversity and demo14 graphics; 

15 ‘‘(IV) skills and training; 

16 ‘‘(V) retention and turnover; 

17 ‘‘(VI) full-time and part-time em18 ployment; and 

19 ‘‘(VII) the use of independent 

20 contractors; 

21 ‘‘(ii) labor and human rights compli22 ance by entities in which the fund invests, 

23 including— 

24 ‘‘(I) workers’ freedom of associa25 tion; 


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1 ‘‘(II) the right to collectively bar2 gain; and 

3 ‘‘(III) the prevention of employ4 ment discrimination, child labor, and 

5 forced labor in the operations and 

6 supply chains of the entity; 

7 ‘‘(iii) the implementation of practices 

8 which enhance diversity and inclusion per9 formance within the workforce, senior lead10 ership, business procurement, philan11 thropy, and the board of directors; 

12 ‘‘(iv) due diligence and practices re13 garding supply chain management, includ14 ing— 

15 ‘‘(I) environmental consider16 ations; 

17 ‘‘(II) human rights; and 

18 ‘‘(III) workers’ compensation 

19 considerations; and 

20 ‘‘(v) the potential for achieving eco21 nomic benefits in addition to investment 

22 returns. 

23 ‘‘(C) Governance considerations, includ24 ing— 


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1 ‘‘(i) corporate governance practices by 

2 entities in which the fund invests; and 

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

4 the fund invests, including international 

5 tax avoidance strategies and tax payment 

6 disclosure. 

7 ‘‘(D) Other relevant economically targeted 

8 investment, or environmental, social, and gov9 ernance considerations and factors. 

10 ‘‘(3) COMPLIANCE AUDIT.— 

11 ‘‘(A) IN GENERAL.—Not less than annu12 ally, each registered investment adviser shall 

13 contract with an auditor to perform an audit of 

14 the adviser’s compliance with the sustainable 

15 investment policy filed with the Commission. 

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

17 evaluation under subparagraph (A) shall file, 

18 and make publicly available, a report on such 

19 evaluation to the adviser and the Commission. 

20 ‘‘(C) FIDUCIARY SAFE HARBOR.—The 

21 Commission may, by order, determine that an 

22 investment adviser has not breached its fidu23 ciary duty with respect to consideration of fac24 tors outlined under this subsection if the investVerDate Sep 11 2014 05:35 Jun 24, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3605.IH H3605

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1 ment adviser is in compliance with this sub2 section.’’. 

Æ 


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