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 Re-
porting’ (74 Fed. Reg. 2158; published January 
14, 2009). 
‘‘(J) GREENHOUSE GAS.—The term ‘green-
house gas’— 
‘‘(i) 
means 
carbon 
dioxide, 
hydrofluorocarbons, methane, nitrous oxide, 
perfluorocarbons, sulfur hexafluoride, nitro-
gen triflouride, and chlorofluorocarbons; 
‘‘(ii) 
includes 
any 
other 
anthropogenically-emitted gas that the Ad-
ministrator of the Environmental Protec-
tion Agency determines, after notice and 
comment, to contribute to climate change; 
and 
‘‘(iii) 
includes 
any 
other 
anthropogenically-emitted 
gas 
that 
the 
Intergovernmental 
Panel 
on 
Climate 
Change determines to contribute to climate 
change. 
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‘‘(K) GREENHOUSE
GAS
EMISSIONS.—The 
term ‘greenhouse gas emissions’ means the emis-
sions of greenhouse gas, expressed in terms of 
metric tons of carbon dioxide equivalent. 
‘‘(L) PHYSICAL RISKS.—The term ‘physical 
risks’ means financial risks to long-lived fixed 
assets, locations, operations, or value chains that 
result from exposure to physical climate-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 
value chains determined appropriate by the 
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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 doc-
ument entitled ‘Technical Support Document: 
Technical Update of the Social Cost of Carbon 
for Regulatory Impact Analysis Under Executive 
Order 12866’, published by the Interagency 
Working Group on Social Cost of Greenhouse 
Gases, United States Government, in August 
2016 or any successor or substantially related es-
timate of the monetized damages associated with 
an incremental increase in carbon dioxide emis-
sions in a given year. 
‘‘(N) TRANSITION RISKS.—The term ‘transi-
tion risks’ means financial risks that are attrib-
utable to climate change mitigation and adapta-
tion, including efforts to reduce greenhouse gas 
emissions and strengthen resilience to the im-
pacts 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 prod-
uct or service, both before and after produc-
tion of the product or service, as applicable; 
and 
‘‘(ii) may include the sourcing of mate-
rials, 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 described 
in subparagraph (A) 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 oppor-
tunities; 
‘‘(iv) allow for intra- and cross-indus-
try comparison, to the extent practicable, of 
climate-related risk exposure through the in-
clusion of standardized industry-specific 
and sector-specific disclosure metrics, as 
identified by the Commission, in consulta-
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tion with the appropriate climate prin-
cipals; 
‘‘(v) allow for tracking of performance 
over time with respect to mitigating climate 
risk exposure; and 
‘‘(vi) incorporate a price on greenhouse 
gas emissions in financial analyses that re-
flects, 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 information 
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 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 
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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 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. 
‘‘(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 disclosure 
rules, which shall— 
‘‘(i) be, to the extent practicable, spe-
cialized for industries within specific sectors 
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 covered 
issuer; and 
‘‘(II) include greenhouse gas emis-
sions 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 cov-
ered 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 re-
quired 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, using, 
at minimum, the social cost of carbon; 
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‘‘(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 
principals; 
‘‘(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 attributable 
to— 
‘‘(aa) combustion; 
‘‘(bb) flared hydrocarbons; 
‘‘(cc) process emissions; 
‘‘(dd) directly vented emis-
sions; 
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‘‘(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 sce-
narios established in clause (ii), 
as well as a forecast for the devel-
opment prospects of each reserve 
under the scenarios established 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 presented as 
a total and in subdivided cat-
egories by the type of reserve; 
‘‘(dd) the methodology of the 
covered issuer for detecting and 
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mitigating fugitive methane emis-
sions, which shall include the fre-
quency with which applicable as-
sets of the covered issuer are ob-
served for methane leaks, the proc-
esses and technology that the cov-
ered issuer uses to detect methane 
leaks, the percentage of assets of 
the covered issuer that the covered 
issuer inspects under that method-
ology, and quantitative 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 
comes from regions of water stress 
or that face wastewater manage-
ment challenges; and 
‘‘(III) any other information that 
the Commission determines is— 
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‘‘(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 include 
in such disclosure any other information, or use 
any climate-related or greenhouse gas emissions 
metric, that the Commission, in consultation 
with the appropriate climate principals, deter-
mines is— 
‘‘(i) necessary; 
‘‘(ii) appropriate to safeguard the pub-
lic interest; or 
‘‘(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-
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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 for-
mat, which shall include electronic tags for informa-
tion 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 de-
scribed 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 ex-
tent practicable make a compilation of the informa-
tion disclosed by issuers under this subsection pub-
licly available on the website of the Commission and 
update such compilation at least once each year. 
‘‘(9) REPORTS.— 
‘‘(A) REPORT TO CONGRESS.—The Commis-
sion shall— 
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‘‘(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 contains 
the results of each assessment conducted 
under clause (i); and 
‘‘(iii) make each report submitted 
under clause (ii) accessible to the public. 
‘‘(B) GAO REPORT.—The Comptroller Gen-
eral of the United States shall periodically evalu-
ate, and report to the appropriate congressional 
committees on, the effectiveness of the Commis-
sion in carrying out and enforcing this sub-
section.’’. 
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 Securities Ex-
change Act of 1934, and until such rules are issued, a cov-
ered issuer (as defined in such section 13(s)) shall be deemed 
in compliance with such section 13(s) if disclosures set forth 
in the annual report of such issuer satisfy the recommenda-
tions of the Task Force on Climate-related Financial Dis-
closures of the Financial Stability Board as reported in 
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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 Securi-
ties and Exchange Commission such sums as may be nec-
essary to carry out this Act and the amendments made by 
this Act. 
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Union Calendar No. 22 
117TH CONGRESS 
1ST SESSION 
H. R. 2570 
[Report No. 117–39] 
A BILL 
To amend the Securities Exchange Act of 1934 to 
require certain disclosures relating to climate 
change, and for other purposes. 
MAY 20, 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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