(B) detail any implications such risks have 
on corporate strategy; 
(C) detail any board-level oversight of mate-
rial climate related risks and opportunities; 
(D) allow for intra- and cross-industry 
comparison, to the extent practicable, of climate- 
related risk exposure through the inclusion of 
standardized industry-specific and sector-specific 
disclosure metrics, as identified by the Commis-
sion, in consultation with the appropriate cli-
mate principals; 
(E) allow for tracking of performance over 
time with respect to mitigating climate risk ex-
posure; and 
(F) incorporate a price on greenhouse gas 
emissions in financial analyses that reflects, at 
minimum, the social cost of carbon that is at-
tributable to issuers. 
SEC. 5. 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) the term ‘appropriate climate prin-
cipals’ means— 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
‘‘(i) the Administrator of the Environ-
mental Protection Agency; 
‘‘(ii) the Secretary of Energy; 
‘‘(iii) the Administrator of the Na-
tional Oceanic and Atmospheric Adminis-
tration; 
‘‘(iv) the Director of the Office of Man-
agement and Budget; and 
‘‘(v) the head of any other Federal 
agency determined appropriate by the Com-
mission; 
‘‘(B) the term ‘climate 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; 
‘‘(C) the term ‘covered issuer’ means an 
issuer that is required to file an annual report 
under subsection (a) or section 15(d); 
‘‘(D) the term ‘physical risks’ means finan-
cial risks to long-lived fixed assets, locations, op-
erations, or value chains that result from expo-
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
sure to physical climate-related effects, includ-
ing— 
‘‘(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 
value chains determined appropriate by the 
Commission, in consultation with appro-
priate climate principals; 
‘‘(E) the term ‘transition risks’ means fi-
nancial risks that are attributable to climate 
change mitigation and adaptation, including ef-
forts to reduce greenhouse gas emissions and 
strengthen resilience to the impacts of climate 
change, including— 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
‘‘(i) costs relating to— 
‘‘(I) international treaties and 
agreements; 
‘‘(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). 
‘‘(2) 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 the 
Climate Risk Disclosure Act of 2019, include in each 
such report information regarding— 
‘‘(A) the identification of, the evaluation of 
potential financial impacts of, and any risk- 
management strategies relating to— 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
‘‘(i) physical risks posed to the covered 
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 
identify, assess, and manage climate-related 
risks; 
‘‘(C) a description of specific actions that 
the covered issuer is taking to mitigate identified 
risks; 
‘‘(D) a description of the resilience of any 
strategy the covered issuer has for addressing cli-
mate risks when differing climate scenarios are 
taken into consideration; and 
‘‘(E) a description of how climate risk is in-
corporated into the overall risk management 
strategy of the covered issuer. 
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (2) 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.’’. 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
SEC. 6. RULEMAKING. 
(a) CLIMATE RISK DISCLOSURE RULES.—The Com-
mission, in consultation with the appropriate climate prin-
cipals, shall not later than 2 years after the date of the 
enactment of this Act, issue rules with respect to the infor-
mation that a covered issuer is required to disclose pursu-
ant to section 13(s) of the Securities Exchange Act of 1934 
and such rules shall— 
(1) establish, in consultation with the appro-
priate climate principals, climate-related risk disclo-
sure rules, which shall— 
(A) be, to the extent practicable, specialized 
for industries within specific sectors of the econ-
omy, which shall include— 
(i) the sectors of finance, insurance, 
transportation, electric power, mining, and 
non-renewable energy; and 
(ii) any other sector determined appro-
priate by the Commission, in consultation 
with the appropriate climate principals; 
(B) include reporting standards for esti-
mating and disclosing direct and indirect green-
house gas emissions by a covered issuer, and any 
affiliates of the covered issuer, which shall— 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
(E) not preclude a covered issuer from 
using and disclosing, as compared with the price 
established under subparagraph (D), a higher 
price of greenhouse gas emissions; 
(F) specify requirements for, and the disclo-
sure of, input parameters, assumptions, and an-
alytical choices to be used in climate scenario 
analyses required under paragraph (2)(A), in-
cluding— 
(i) present value discount rates; 
(ii) time frames to consider, including 
5, 10, and 20 year time frames; and 
(iii) minimum pricing of greenhouse 
gas emissions, as established under subpara-
graph (D) and subject to subparagraph (E); 
and 
(G) include, after consultation with the Ad-
ministrator of the Environmental Protection 
Agency, the Secretary of Energy, the Secretary of 
the Interior, the Secretary of Agriculture, the 
Secretary of Transportation, the Chair of the 
Council on Environmental Quality, and the Di-
rector of the Office of Science and Technology 
Policy documentation standards and guidance 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
with respect to the information required under 
paragraph (2)(C); 
(2) require that a covered issuer, with respect to 
a disclosure required under section 13(s) of the Secu-
rities Exchange Act of 1934— 
(A) incorporate into such disclosure— 
(i) quantitative analysis to support 
any qualitative statement made by the cov-
ered issuer; 
(ii) the rules established under para-
graph (1); 
(iii) 
industry-specific 
metrics 
that 
comply with the requirements under para-
graph (1)(A); 
(iv) specific risk management actions 
that the covered issuer is taking to address 
identified risks; 
(v) a discussion of the short-, medium- 
, and long-term resilience of any risk man-
agement strategy, and the evolution of ap-
plicable risk metrics, of the covered issuer 
under each scenario described in paragraph 
(1)(B); and 
(vi) the total cost of carbon attributable 
to the direct and indirect greenhouse gas 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
emissions of the covered issuer, using, at 
minimum, the social cost of carbon; 
(B) consider, when preparing any quali-
tative or quantitative risk analysis statement 
contained in the disclosure— 
(i) a baseline scenario that includes 
physical impacts of climate change; 
(ii) a well below 1.5 degrees scenario; 
and 
(iii) any additional climate analysis 
scenario considered appropriate by the 
Commission, in consultation with the ap-
propriate climate principals; 
(C) if the covered issuer engages in the com-
mercial 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 attributable to— 
(I) combustion; 
(II) flared hydrocarbons; 
(III) process emissions; 
(IV) directly vented emissions; 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
(V) fugitive emissions or leaks; 
and 
(VI) land use changes; 
(ii) a description of— 
(I) the sensitivity of fossil fuel re-
serve levels to future price projection 
scenarios that incorporate the social 
cost of carbon into hydrocarbon pric-
ing; 
(II) the percentage of the reserves 
of the covered issuer that will be devel-
oped under the scenarios established in 
subparagraph (B), as well as a forecast 
for the development prospects of each 
reserve under the scenarios established 
in subparagraph (B); 
(III) the potential amount of di-
rect and indirect greenhouse gas emis-
sions that are embedded in proved and 
probable hydrocarbon reserves, with 
each such calculation presented as a 
total and in subdivided categories by 
the type of reserve; 
(IV) the methodology of the cov-
ered issuer for detecting and miti-
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
gating 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 
quantitative and time-bound reduction 
goals of the issuer with respect to meth-
ane leaks; 
(V) the amount of water that the 
covered issuer withdraws from fresh-
water sources for use and consumption 
in operations of the covered issuer; and 
(VI) the percentage of the water 
described in subclause (V) that comes 
from regions of water stress or that 
face wastewater management chal-
lenges; and 
(iii) any other information that the 
Commission, in consultation with the ap-
propriate climate principals and the Ad-
ministrator of the Environmental Protec-
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS
tion Agency, the Secretary of Energy, the 
Secretary of the Interior, the Secretary of 
Agriculture determines is— 
(I) necessary; 
(II) appropriate to safeguard the 
public interest; or 
(III) directed at ensuring that in-
vestors are informed in accordance 
with the findings described in section 
4; 
(3) with respect to a disclosure required under 
section 13(s) of the Securities Exchange Act of 1934, 
require that a covered issuer include in such disclo-
sure any other information, or use any climate-re-
lated or greenhouse gas emissions metric, that the 
Commission, in consultation with the appropriate cli-
mate principals, determines is— 
(A) necessary; 
(B) appropriate to safeguard the public in-
terest; or 
(C) directed at ensuring that investors are 
informed in accordance with the findings de-
scribed in section 4; and 
(4) with respect to a disclosure required under 
section 13(s) of the Securities Exchange Act of 1934, 
VerDate Sep 11 2014 
23:18 Oct 29, 2020
Jkt 019200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6203
E:\BILLS\H3623.RH
H3623
pbinns on DSKJLVW7X2PROD with BILLS