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 ‘‘ESG Disclosure Sim-
plification Act of 2021’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The Securities and Exchange Commission 
has broad authority to require the disclosure of infor-
mation if such information is in the interest of, or is 
material to investors. 
(2) The Commission does not require companies 
to disclose information related to environmental, so-
cial, and governance (‘‘ESG’’) matters, and does not 
require companies to adhere to standards for dis-
closing such information. 
(3) Investors have reported that voluntary disclo-
sures of ESG metrics are inadequate. 
(4) A rule requiring reporting and standardiza-
tion of ESG disclosures is in the interest of investors. 
(5) ESG matters are material to investors, and 
the Commission must establish standards for disclo-
sure of such matters. 
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SEC. 3. ESG DISCLOSURES. 
(a) IN GENERAL.—Section 14 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78n) is amended by adding 
at the end the following: 
‘‘(k) ESG DISCLOSURES.— 
‘‘(1) IN GENERAL.—Each issuer the securities of 
which are registered under section 12 or that is re-
quired to file annual reports under section 15(d) shall 
disclose in any proxy or consent solicitation material 
for an annual meeting of the shareholders— 
‘‘(A) a clear description of the views of the 
issuer about the link between ESG metrics and 
the long-term business strategy of the issuer; and 
‘‘(B) a description of any process the issuer 
uses to determine the impact of ESG metrics on 
the long-term business strategy of the issuer. 
‘‘(2) ESG METRICS
DEFINED.—In this sub-
section, the term ‘ESG metrics’ has the meaning 
given the term in part 210 of title 17, Code of Federal 
Regulations as amended pursuant to section 3(b) of 
the ESG Disclosure Simplification Act of 2021.’’. 
(b) RULEMAKING.— 
(1) IN GENERAL.—The Securities and Exchange 
Commission (in this Act referred to as the ‘‘Commis-
sion’’) shall amend part 210 of title 17, Code of Fed-
eral Regulations (or any successor thereto) to— 
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(A) require each issuer, in any filing of the 
issuer described in such part that requires au-
dited financial statements, to disclose environ-
mental, social, and governance metrics (in this 
Act referred to as ESG metrics); and 
(B) define ESG metrics. 
(2) SUSTAINABLE
FINANCE
ADVISORY
COM-
MITTEE.—The Sustainable Finance Advisory Com-
mittee established pursuant to section 4(k) of the Se-
curities and Exchange Act of 1934 shall, not later 
than 180 days after the date of the first meeting of 
such Committee, submit to the Commission rec-
ommendations about what ESG metrics the Commis-
sion should require issuers to disclose. 
(3) MATERIALITY.—It is the sense of Congress 
that ESG metrics, as such term is defined by the 
Commission pursuant to paragraph (1), are de facto 
material for the purposes of disclosures under the Se-
curities Exchange Act of 1934 and the Securities Act 
of 1933. 
(4) INCORPORATION OF INTERNATIONAL STAND-
ARDS.—When amending part 210 of title 17, Code of 
Federal Regulations (or any successor thereto) pursu-
ant to paragraph (1), the Commission may, as the 
Commission determines appropriate, incorporate any 
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internationally recognized, independent, multi-stake-
holder environmental, social, and governance disclo-
sure standards. 
(5) LOCATION OF DISCLOSURE.—Any disclosure 
required by paragraph (1) may be included in a notes 
section of the filing. 
(6) DELAY FOR SMALL ISSUERS.—The Commis-
sion may use a phased approach when applying any 
amendments made pursuant to paragraph (1) to 
small issuers and may determine the criteria by 
which an issuer qualifies as a small issuer for pur-
poses of such phased approach. 
SEC. 4. SUSTAINABLE FINANCE ADVISORY COMMITTEE. 
Section 4 of the Securities Exchange Act of 1934 (15 
U.S.C. 78d) is amended by adding at the end the following: 
‘‘(k) SUSTAINABLE FINANCE ADVISORY COMMITTEE.— 
‘‘(1) ESTABLISHMENT.—The Commission shall 
establish a permanent advisory committee to be called 
the ‘Sustainable Finance Advisory Committee’ (in 
this subsection referred to as the ‘Committee’). 
‘‘(2) DUTIES
OF
COMMITTEE.—The Committee 
shall— 
‘‘(A) submit a report to the Commission not 
later than 18 months after the date of the first 
meeting of the Committee that— 
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‘‘(i) identifies the challenges and op-
portunities for investors associated with sus-
tainable finance; and 
‘‘(ii) recommends policy changes to fa-
cilitate the flow of capital towards sustain-
able investments, in particular environ-
mentally sustainable investments; 
‘‘(B) when solicited, advise the Commission 
on sustainable finance; and 
‘‘(C) communicate with individuals and en-
tities with an interest in sustainable finance. 
‘‘(3) MEMBERSHIP.— 
‘‘(A) MEMBERS.— 
‘‘(i) IN
GENERAL.—The Committee 
shall consist of no more than 20 members 
who shall each serve for one four-year term. 
‘‘(ii) REPRESENTATION.—Each mem-
ber shall represent individuals and entities 
with an interest in sustainable finance, 
such as— 
‘‘(I) experts on sustainable fi-
nance; 
‘‘(II) operators of financial infra-
structure; 
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‘‘(III) entities that provide anal-
ysis, data, or methodologies that facili-
tate sustainable finance; 
‘‘(IV) insurance companies, pen-
sion funds, asset managers, depository 
institutions, or credit unions; or 
‘‘(V) other financial institutions 
that intermediate investments in sus-
tainable finance or manage risks re-
lated to sustainable development. 
‘‘(iii) REPRESENTATION
OF
INTER-
ESTS.—A member may not represent a sin-
gle individual or entity and shall represent 
types of individuals and entities with simi-
lar interests in sustainable finance. 
‘‘(B) SELECTION.— 
‘‘(i) IN
GENERAL.—The Commission 
shall— 
‘‘(I) publish criteria for selection 
of members on the website of the Com-
mission and in the Federal Register; 
and 
‘‘(II) solicit applications for mem-
bership on the website of the Commis-
sion and in the Federal Register. 
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‘‘(ii) EQUAL SHARE.—From the indi-
viduals who submit applications for mem-
bership, each Commissioner of the Commis-
sion shall select an equal number of the 
members of the Committee. 
‘‘(C) PAY.—Members may not receive pay 
by reason of their service on the Committee but 
may receive travel or transportation expenses in 
accordance with applicable provisions under sub-
chapter I of chapter 57 of title 5, United States 
Code. 
‘‘(D) MEMBER TRANSPARENCY.—The name 
of each member and the types of individuals and 
entities that such member represents shall be 
published on the website of the Commission. 
‘‘(E) STAFF.—The Committee shall be sup-
ported by staff from the Office of the Investor 
Advocate of the Commission that are dedicated to 
environmental, social and governance (in this 
subsection referred to as ‘ESG’) issues. 
‘‘(F) 
AUTHORIZATION
OF
APPROPRIA-
TION.—There are authorized to be appropriated 
such sums as are necessary to finance costs asso-
ciated with staff dedicated to ESG issues in the 
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Office of the Investor Advocate of the Commis-
sion. 
‘‘(4) SUSTAINABLE FINANCE.—For the purposes 
of this subsection, the term ‘sustainable finance’ 
means the provision of finance with respect to invest-
ments taking into account environmental, social, and 
governance considerations. 
‘‘(5) SEC RESPONSE.—The Commission shall, 
not later than 6 months after the date on which the 
Committee submits a report to the Commission pur-
suant to paragraph (2)(A), publish a response to such 
report.’’. 
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Union Calendar No. 37 
117TH CONGRESS 
1ST SESSION 
H. R. 1187 
[Report No. 117–54] 
A BILL 
To provide for disclosure of additional material in-
formation about public companies and establish a 
Sustainable Finance Advisory Committee, and 
for other purposes. 
JUNE 8, 2021 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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