I 
117TH CONGRESS 
1ST SESSION H. R. 2570 
To amend the Securities Exchange Act of 1934 to require certain disclosures 
relating to climate change, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 15, 2021 
Mr. CASTEN (for himself, Mr. CARTWRIGHT, Mr. FOSTER, Mr. LOWENTHAL, 
Ms. BARRAGA´N, Mr. NEGUSE, and Mr. LEVIN of California) introduced 
the following bill; which was referred to the Committee on Financial Serv-
ices 
A BILL 
To amend the Securities Exchange Act of 1934 to require 
certain disclosures relating to climate change, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Climate Risk Disclo-
sure Act of 2021’’. 
SEC. 2. SENSE OF CONGRESS. 
It is the sense of Congress that— 
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(1) climate change poses a significant and in-
creasing threat to the growth and stability of the 
economy of the United States; 
(2) many sectors of the economy of the United 
States and many American businesses are exposed 
to climate-related risk, which may include exposure 
to— 
(A) the physical impacts of climate change, 
including the rise of the average global tem-
perature, accelerating sea-level rise, desertifica-
tion, ocean acidification, intensification of 
storms, increase in heavy precipitation, more 
frequent and intense temperature extremes, 
more severe droughts, and longer wildfire sea-
sons; 
(B) the economic disruptions and security 
threats that result from the physical impacts 
described in subparagraph (A) including con-
flicts over scarce resources, conditions condu-
cive to violent extremism, the spread of infec-
tious diseases, and forced migration; 
(C) the transition impacts that result as 
the global economy transitions to a clean and 
renewable energy, low-emissions economy, in-
cluding financial impacts as climate change fos-
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sil fuel assets becoming stranded and it be-
comes uneconomic for companies to develop fos-
sil fuel assets as policymakers act to limit the 
worst impacts of climate change by keeping the 
rise in average global temperature to 1.5 de-
grees Celsius above pre-industrial levels; and 
(D) actions by Federal, State, Tribal, and 
local governments to limit the worst effects of 
climate change by enacting policies that keep 
the global average surface temperature rise to 
1.5 degrees Celsius above pre-industrial levels; 
(3) assessing the potential impact of climate-re-
lated risks on national and international financial 
systems is an urgent concern; 
(4) companies have a duty to disclose financial 
risks that climate change presents to their investors, 
lenders, and insurers; 
(5) the Commission has a duty to promote a 
risk-informed securities market that is worthy of the 
trust of the public as families invest for their fu-
tures; 
(6) investors, lenders, and insurers are increas-
ingly demanding climate risk information that is 
consistent, comparable, reliable, and clear; 
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(7) including standardized, material climate 
change risk and opportunity disclosure that is useful 
for decision makers in annual reports to the Com-
mission will increase transparency with respect to 
risk accumulation and exposure in financial markets; 
(8) requiring companies to disclose climate-re-
lated risk exposure and risk management strategies 
will encourage a smoother transition to a clean and 
renewable energy, low-emissions economy and guide 
capital allocation to mitigate, and adapt to, the ef-
fects of climate change and limit damages associated 
with climate-related events and disasters; and 
(9) a critical component in fighting climate 
change is a transparent accounting of the risks that 
climate change presents and the implications of con-
tinued inaction with respect to climate change. 
SEC. 3. DISCLOSURES RELATING TO CLIMATE CHANGE. 
Section 13 of the Securities Exchange Act of 1934 
(15 U.S.C. 78m) is amended by adding at the end the 
following: 
‘‘(s) 
DISCLOSURES
RELATING
TO
CLIMATE 
CHANGE.— 
‘‘(1) DEFINITIONS.—In this subsection: 
‘‘(A) 1.5 DEGREE
SCENARIO.—The term 
‘1.5 degree scenario’ means a scenario that 
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aligns with greenhouse gas emissions pathways 
that aim for limiting global warming to 1.5 de-
grees Celsius above pre-industrial levels. 
‘‘(B) 
APPROPRIATE
CLIMATE
PRIN-
CIPALS.—The term ‘appropriate climate prin-
cipals’ means— 
‘‘(i) the Administrator of the Environ-
mental Protection Agency; 
‘‘(ii) the Administrator of the Na-
tional Oceanic and Atmospheric Adminis-
tration; 
‘‘(iii) the Director of the Office of 
Management and Budget; 
‘‘(iv) the Secretary of the Interior; 
‘‘(v) the Secretary of Energy; and 
‘‘(vi) the head of any other Federal 
agency, as determined appropriate by the 
Commission. 
‘‘(C) BASELINE
SCENARIO.—The term 
‘baseline scenario’ means a widely recognized 
analysis scenario in which levels of greenhouse 
gas emissions, as of the date on which the anal-
ysis is performed, continue to grow, resulting in 
an increase in the global average temperature 
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of 1.5 degrees Celsius or more above pre-indus-
trial levels. 
‘‘(D) CARBON
DIOXIDE
EQUIVALENT.— 
The term ‘carbon dioxide equivalent’ means the 
number of metric tons of carbon dioxide emis-
sions with the same global warming potential as 
one metric ton of another greenhouse gas, as 
determined under table A–1 of subpart A of 
part 98 of title 40, Code of Federal Regula-
tions, as in effect on the date of enactment of 
this subsection. 
‘‘(E) CLIMATE
CHANGE.—The term ‘cli-
mate change’ means a change of climate that 
is— 
‘‘(i) attributed directly or indirectly to 
human activity that alters the composition 
of the global atmosphere; and 
‘‘(ii) in addition to natural climate 
variability observed over comparable time 
periods. 
‘‘(F) COMMERCIAL DEVELOPMENT OF FOS-
SIL
FUELS.—The term ‘commercial develop-
ment of fossil fuels’ includes— 
‘‘(i) 
exploration, 
extraction, 
proc-
essing, exporting, transporting, refining, 
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and any other significant action with re-
spect to oil, natural gas, coal, or any by-
product thereof or any other solid or liquid 
hydrocarbons that are commercially pro-
duced; or 
‘‘(ii) acquiring a license for any activ-
ity described in clause (i). 
‘‘(G) COVERED
ISSUER.—The term ‘cov-
ered issuer’ means an issuer that is required to 
file an annual report under subsection (a) or 
section 15(d). 
‘‘(H) DIRECT AND INDIRECT GREENHOUSE 
GAS EMISSIONS.—The term ‘direct and indirect 
greenhouse gas emissions’ includes, with respect 
to a covered issuer— 
‘‘(i) all direct greenhouse gas emis-
sions released by the covered issuer; 
‘‘(ii) all indirect greenhouse gas emis-
sions with respect to electricity, heat, or 
steam purchased by the covered issuer; 
‘‘(iii) significant indirect emissions, 
other than the emissions described in 
clause (ii), emitted in the value chain of 
the covered issuer; and 
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‘‘(iv) all indirect greenhouse gas emis-
sions that are attributable to assets owned 
or managed, including assets that are par-
tially owned or managed, by the covered 
issuer. 
‘‘(I) FOSSIL FUEL RESERVES.—The term 
‘fossil fuel reserves’ has the meaning given the 
term ‘reserves’ under the final rule of the Com-
mission titled ‘Modernization of Oil and Gas 
Reporting’ (74 Fed. Reg. 2158; published Jan-
uary 14, 2009). 
‘‘(J) 
GREENHOUSE
GAS.—The 
term 
‘greenhouse gas’— 
‘‘(i) means carbon dioxide, hydrofluo-
rocarbons, methane, nitrous oxide, perfluo-
rocarbons, sulfur hexafluoride, nitrogen 
triflouride, and chlorofluorocarbons; 
‘‘(ii) includes any other anthropogeni-
cally emitted gas that the Administrator of 
the Environmental Protection Agency de-
termines, after notice and comment, to 
contribute to climate change; and 
‘‘(iii) includes any other anthropogeni-
cally emitted gas that the Intergovern-
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mental Panel on Climate Change deter-
mines to contribute to climate change. 
‘‘(K) GREENHOUSE GAS EMISSIONS.—The 
term ‘greenhouse gas emissions’ means the 
emissions of greenhouse gas, expressed in terms 
of metric tons of carbon dioxide equivalent. 
‘‘(L) PHYSICAL RISKS.—The term ‘phys-
ical risks’ means financial risks to long-lived 
fixed assets, locations, operations, or value 
chains that result from exposure to physical cli-
mate-related effects, including— 
‘‘(i) increased average global tempera-
tures and increased frequency of tempera-
ture extremes; 
‘‘(ii) increased severity and frequency 
of extreme weather events; 
‘‘(iii) increased flooding; 
‘‘(iv) sea level rise; 
‘‘(v) ocean acidification; 
‘‘(vi) increased frequency of wildfires; 
‘‘(vii) decreased arability of farmland; 
‘‘(viii) decreased availability of fresh 
water; and 
‘‘(ix) any other financial risks to long- 
lived fixed assets, locations, operations, or 
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value chains determined appropriate by the 
Commission, in consultation with appro-
priate climate principals. 
‘‘(M) SOCIAL COST OF CARBON.—The term 
‘social cost of carbon’ means the social cost of 
carbon, as described in the technical support 
document entitled ‘Technical Support Docu-
ment: Technical Update of the Social Cost of 
Carbon for Regulatory Impact Analysis Under 
Executive Order 12866’, published by the Inter-
agency Working Group on Social Cost of Green-
house Gases, United States Government, in Au-
gust 2016 or any successor or substantially re-
lated estimate of the monetized damages associ-
ated with an incremental increase in carbon di-
oxide emissions in a given year. 
‘‘(N) TRANSITION RISKS.—The term ‘tran-
sition risks’ means financial risks that are at-
tributable to climate change mitigation and ad-
aptation, including efforts to reduce greenhouse 
gas emissions and strengthen resilience to the 
impacts of climate change, including— 
‘‘(i) costs relating to— 
‘‘(I) international treaties and 
agreements; 
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‘‘(II) Federal, State, and local 
policy; 
‘‘(III) new technologies; 
‘‘(IV) changing markets; 
‘‘(V) reputational impacts rel-
evant to changing consumer behavior; 
and 
‘‘(VI) litigation; and 
‘‘(ii) assets that may lose value or be-
come stranded due to any of the costs de-
scribed in subclauses (I) through (VI) of 
clause (i). 
‘‘(O) VALUE
CHAIN.—The term ‘value 
chain’— 
‘‘(i) means the total lifecycle of a 
product or service, both before and after 
production of the product or service, as ap-
plicable; and 
‘‘(ii) may include the sourcing of ma-
terials, production, transportation, and dis-
posal with respect to the product or service 
described in clause (i). 
‘‘(2) FINDINGS.—Congress finds that— 
‘‘(A) short-, medium-, and long-term finan-
cial and economic risks and opportunities relat-
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ing to climate change, and the national and 
global reduction of greenhouse gas emissions, 
constitute information that issuers— 
‘‘(i) may reasonably expect to affect 
shareholder decision making; and 
‘‘(ii) should regularly identify, evalu-
ate, and disclose; and 
‘‘(B) the disclosure of information de-
scribed in paragraph (1) should— 
‘‘(i) identify, and evaluate— 
‘‘(I) material physical and transi-
tion risks posed by climate change; 
and 
‘‘(II) the potential financial im-
pact of such risks; 
‘‘(ii) detail any implications such risks 
have on corporate strategy; 
‘‘(iii) detail any board-level oversight 
of material climate related risks and op-
portunities; 
‘‘(iv) allow for intra- and cross-indus-
try comparison, to the extent practicable, 
of climate-related risk exposure through 
the inclusion of standardized industry-spe-
cific and sector-specific disclosure metrics, 
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as identified by the Commission, in con-
sultation with the appropriate climate prin-
cipals; 
‘‘(v) allow for tracking of performance 
over time with respect to mitigating cli-
mate risk exposure; and 
‘‘(vi) incorporate a price on green-
house gas emissions in financial analyses 
that reflects, at minimum, the social cost 
of carbon that is attributable to issuers. 
‘‘(3) DISCLOSURE.—Each covered issuer, in any 
annual report filed by the covered issuer under sub-
section (a) or section 15(d), shall, in accordance 
with any rules issued by the Commission pursuant 
to this subsection, include in each such report infor-
mation regarding— 
‘‘(A) the identification of, the evaluation of 
potential financial impacts of, and any risk- 
management strategies relating to— 
‘‘(i) physical risks posed to the cov-
ered issuer by climate change; and 
‘‘(ii) transition risks posed to the cov-
ered issuer by climate change; 
‘‘(B) a description of any established cor-
porate governance processes and structures to 
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identify, assess, and manage climate-related 
risks; 
‘‘(C) a description of specific actions that 
the covered issuer is taking to mitigate identi-
fied risks; 
‘‘(D) a description of the resilience of any 
strategy the covered issuer has for addressing 
climate risks when differing climate scenarios 
are taken into consideration; and 
‘‘(E) a description of how climate risk is 
incorporated into the overall risk management 
strategy of the covered issuer. 
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (3) may be construed as precluding a cov-
ered issuer from including, in an annual report sub-
mitted under subsection (a) or section 15(d), any in-
formation not explicitly referenced in such para-
graph. 
‘‘(5) RULEMAKING.—The Commission, in con-
sultation with the appropriate climate principals, 
shall, not later than 2 years after the date of the en-
actment of this subsection, issue rules with respect 
to the information that a covered issuer is required 
to disclose pursuant to this subsection and such 
rules shall— 
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‘‘(A) establish climate-related risk disclo-
sure rules, which shall— 
‘‘(i) be, to the extent practicable, spe-
cialized for industries within specific sec-
tors of the economy, which shall include— 
‘‘(I) the sectors of finance, insur-
ance, transportation, electric power, 
mining, and non-renewable energy; 
and 
‘‘(II) any other sector determined 
appropriate by the Commission, in 
consultation with the appropriate cli-
mate principals; 
‘‘(ii) include reporting standards for 
estimating and disclosing direct and indi-
rect greenhouse gas emissions by a covered 
issuer, and any affiliates of the covered 
issuer, which shall— 
‘‘(I) disaggregate, to the extent 
practicable, total emissions of each 
specified greenhouse gas by the cov-
ered issuer; and 
‘‘(II) include greenhouse gas 
emissions by the covered issuer during 
the period covered by the disclosure; 
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‘‘(iii) include reporting standards for 
disclosing, with respect to a covered 
issuer— 
‘‘(I) the total amount of fossil 
fuel-related assets owned or managed 
by the covered issuer; and 
‘‘(II) the percentage of fossil 
fuel-related assets as a percentage of 
total assets owned or managed by the 
covered issuer; 
‘‘(iv) specify requirements for, and the 
disclosure of, input parameters, assump-
tions, and analytical choices to be used in 
climate scenario analyses required under 
subparagraph (B)(i), including— 
‘‘(I) present value discount rates; 
and 
‘‘(II) time frames to consider, in-
cluding 5, 10, and 20 year time 
frames; and 
‘‘(v) include reporting standards and 
guidance with respect to the information 
required under subparagraph (B)(iii); 
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‘‘(B) require that a covered issuer, with re-
spect to a disclosure required under this sub-
section— 
‘‘(i) incorporate into such disclosure— 
‘‘(I) quantitative analysis to sup-
port any qualitative statement made 
by the covered issuer; 
‘‘(II) the rules established under 
subparagraph (A); 
‘‘(III) industry-specific metrics 
that comply with the requirements 
under subparagraph (A)(i); 
‘‘(IV) specific risk management 
actions that the covered issuer is tak-
ing to address identified risks; 
‘‘(V) a discussion of the short-, 
medium-, and long-term resilience of 
any risk management strategy, and 
the 
evolution 
of 
applicable 
risk 
metrics, of the covered issuer under 
each scenario described in clause (ii); 
and 
‘‘(VI) the total cost attributable 
to the direct and indirect greenhouse 
gas emissions of the covered issuer, 
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using, at minimum, the social cost of 
carbon; 
‘‘(ii) consider, when preparing any 
qualitative or quantitative risk analysis 
statement contained in the disclosure— 
‘‘(I) a baseline scenario that in-
cludes physical impacts of climate 
change; 
‘‘(II) a 1.5 degrees scenario; and 
‘‘(III) any additional climate 
analysis scenario considered appro-
priate by the Commission, in consulta-
tion with the appropriate climate prin-
cipals; 
‘‘(iii) if the covered issuer engages in 
the commercial development of fossil fuels, 
include in the disclosure— 
‘‘(I) an estimate of the total and 
a disaggregated amount of direct and 
indirect greenhouse gas emissions of 
the covered issuer that are attrib-
utable to— 
‘‘(aa) combustion; 
‘‘(bb) flared hydrocarbons; 
‘‘(cc) process emissions; 
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‘‘(dd) directly vented emis-
sions; 
‘‘(ee) fugitive emissions or 
leaks; and 
‘‘(ff) land use changes; 
‘‘(II) a description of— 
‘‘(aa) the sensitivity of fossil 
fuel reserve levels to future price 
projection scenarios that incor-
porate the social cost of carbon; 
‘‘(bb) the percentage of the 
reserves of the covered issuer 
that will be developed under the 
scenarios established in clause 
(ii), as well as a forecast for the 
development prospects of each re-
serve under the scenarios estab-
lished in clause (ii); 
‘‘(cc) the potential amount 
of direct and indirect greenhouse 
gas emissions that are embedded 
in proved and probable reserves, 
with each such calculation pre-
sented as a total and in sub-
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divided categories by the type of 
reserve; 
‘‘(dd) the methodology of 
the covered issuer for detecting 
and mitigating fugitive methane 
emissions, which shall include the 
frequency with which applicable 
assets of the covered issuer are 
observed for methane leaks, the 
processes and technology that the 
covered issuer uses to detect 
methane leaks, the percentage of 
assets of the covered issuer that 
the covered issuer inspects under 
that methodology, and quan-
titative and time-bound reduction 
goals of the issuer with respect to 
methane leaks; 
‘‘(ee) the amount of water 
that the covered issuer withdraws 
from freshwater sources for use 
and consumption in operations of 
the covered issuer; and 
‘‘(ff) the percentage of the 
water described in item (ee) that 
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comes from regions of water 
stress or that face wastewater 
management challenges; and 
‘‘(III) any other information that 
the Commission determines is— 
‘‘(aa) necessary; 
‘‘(bb) appropriate to safe-
guard the public interest; or 
‘‘(cc) directed at ensuring 
that investors are informed in ac-
cordance with the findings de-
scribed in paragraph (2); 
‘‘(C) with respect to a disclosure required 
under section 13(s) of the Securities Exchange 
Act of 1934, require that a covered issuer in-
clude in such disclosure any other information, 
or use any climate-related or greenhouse gas 
emissions metric, that the Commission, in con-
sultation with the appropriate climate prin-
cipals, determines is— 
‘‘(i) necessary; 
‘‘(ii) appropriate to safeguard the 
public interest; or 
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‘‘(iii) directed at ensuring that inves-
tors are informed in accordance with the 
findings described in paragraph (2); and 
‘‘(D) with respect to a disclosure required 
under section 13(s) of the Securities Exchange 
Act of 1934, establish how and where the re-
quired disclosures shall be addressed in the cov-
ered issuer’s annual financial filing. 
‘‘(6) FORMATTING.—The Commission shall re-
quire issuers to disclose information in an interactive 
data format and shall develop standards for such 
format, which shall include electronic tags for infor-
mation that the Commission determines is— 
‘‘(A) necessary; 
‘‘(B) appropriate to safeguard the public 
interest; or 
‘‘(C) directed at ensuring that investors 
are informed in accordance with the findings 
described in paragraph (2). 
‘‘(7) PERIODIC UPDATE OF RULES.—The Com-
mission shall periodically update the rules issued 
under this subsection. 
‘‘(8) COMPILATION
OF
INFORMATION
DIS-
CLOSED.—The Commission shall, to the maximum 
extent practicable make a compilation of the infor-
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mation disclosed by issuers under this subsection 
publicly available on the website of the Commission 
and update such compilation at least once each year. 
‘‘(9) REPORTS.— 
‘‘(A) REPORT TO CONGRESS.—The Com-
mission shall— 
‘‘(i) conduct an annual assessment re-
garding the compliance of covered issuers 
with the requirements of this subsection; 
‘‘(ii) submit to the appropriate con-
gressional committees a report that con-
tains the results of each assessment con-
ducted under clause (i); and 
‘‘(iii) make each report submitted 
under clause (ii) accessible to the public. 
‘‘(B) GAO 
REPORT.—The Comptroller 
General of the United States shall periodically 
evaluate, and report to the appropriate congres-
sional committees on, the effectiveness of the 
Commission in carrying out and enforcing this 
subsection.’’. 
SEC. 4. BACKSTOP. 
If, 2 years after the date of the enactment of this 
Act, the Securities and Exchange Commission has not 
issued the rules required under section 13(s) of the Securi-
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ties Exchange Act of 1934, and until such rules are issued, 
a covered issuer (as defined in such section 13(s)) shall 
be deemed in compliance with such section 13(s) if disclo-
sures set forth in the annual report of such issuer satisfy 
the recommendations of the Task Force on Climate-re-
lated Financial Disclosures of the Financial Stability 
Board as reported in June, 2017, or any successor report, 
and as supplemented or adjusted by such rules, guidance, 
or other comments from the Commission. 
SEC. 5. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Com-
mission such sums as may be necessary to carry out this 
Act and the amendments made by this Act. 
Æ 
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