Paris Climate Agreement Disclosure Act
Bill: H.R.1780 | Sponsor: Rep. Velazquez, Nydia M. (D-NY)
Policy area: Finance and Financial Sector

Summary:
Paris Climate Agreement Disclosure Act
This bill requires an issuer of securities to annually disclose information related to its greenhouse gas emissions, including whether the issuer has set emissions targets to comply with the goals of the Paris Climate Agreement and actions the issuer has taken or plans to take to achieve such targets.

To amend the Securities Exchange Act of 1934 to require disclosures 
    related to the Paris Climate Agreement, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Paris Climate Agreement Disclosure 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) 197 parties, including the United States, are parties 
        to the United Nations Framework Convention on Climate Change 
        (UNFCCC), the principal framework to stabilize greenhouse gas 
        concentrations at a level that would prevent dangerous human-
        induced interference with the climate system.
            (2) On December 12, 2015, parties of the UNFCCC adopted the 
        Paris Agreement, the first comprehensive agreement among all 
        nations to keep global warming below 2 degrees Celsius.
            (3) The Paris Agreement aims to strengthen the global 
        response to the threat of climate change by holding the 
        increase in the global average temperature to well below 2 
        degrees Celsius above pre-industrial levels and to pursue 
        efforts to limit the temperature increase to 1.5 degrees 
        Celsius above pre-industrial levels, recognizing that this 
        would significantly reduce the risks and impacts of climate 
        change.
            (4) The ``Special Report on Global Warming of 1.5 C'' by 
        the Intergovernmental Panel on Climate Change found that at 1.5 
        degrees Celsius warming, climate-related risks to human health, 
        livelihoods, food security, human security, water supply, and 
        economic growth will all increase, and will increase even more 
        at 2 degrees Celsius warming.
            (5) In 2017, the World Economic Forum issued the Compact 
        for Responsive and Responsible Leadership with 140 CEOs 
        pledging to align their corporate values and strategies with 
        the United Nation's Sustainable Development Goals.
            (6) In September 2020, the World Economic Forum and its 
        International Business Council released Stakeholder Capitalism 
        Metrics--a set of environmental, social and governance metrics 
        and disclosures which measure the long-term enterprise value 
        creation for all stakeholders.
            (7) The September 2020 World Economic Forum report 
        recognizes that there is an emerging consensus among companies 
        that long-term value is most effectively created by serving the 
        interests of all stakeholders.
            (8) On January 26, 2021, 61 CEOs of some of the world's 
        largest companies publicly endorsed the Stakeholder Capitalism 
        Metrics.
            (9) One of the core metrics and disclosures defined in the 
        Stakeholder Capitalism Metrics is for companies to disclose 
        whether they have set, or have committed to set, greenhouse gas 
        emissions targets that are in line with the goals of the Paris 
        Agreement.

SEC. 3. DISCLOSURES RELATED TO GREENHOUSE GAS EMISSIONS.

    (a) In General.--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 Related to the Paris Climate Agreement.--
            ``(1) In general.--Each issuer required to file an annual 
        report under subsection (a) shall include in such report the 
        following:
                    ``(A) Whether the issuer has set, or has committed 
                to achieve, targets that are a balance between 
                greenhouse gas emissions and removals, at a pace 
                consistent with limiting global warming to well below 2 
                degrees Celsius and pursuing efforts to limit it to 1.5 
                degrees Celsius.
                    ``(B) If the issuer is committed to setting such 
                greenhouse gas emission targets in the future, but not 
                at the present--
                            ``(i) by which year the issuer plans to 
                        commit to such greenhouse gas emission targets; 
                        and
                            ``(ii) a detailed explanation for such 
                        position.
                    ``(C) Actions and steps the issuer has taken over 
                the preceding year to achieve such greenhouse gas 
                emission targets.
                    ``(D) Actions and steps the issuer plans to pursue 
                in the forthcoming year to achieve such greenhouse gas 
                emission targets.
                    ``(E) If the issuer has not set, and does not plan 
                on committing to set, such greenhouse gas emission 
                targets--
                            ``(i) a statement to that effect; and
                            ``(ii) a detailed explanation of--
                                    ``(I) why the issuer is not 
                                planning on pursuing such greenhouse 
                                gas emission targets; and
                                    ``(II) whether the issuer supports 
                                the temperature goals outlined in 
                                subparagraph (A) of this section.
            ``(2) Definitions.--In this subsection:
                    ``(A) Greenhouse gas.--The term `greenhouse gas' 
                means carbon dioxide, hydrofluorocarbons, methane, 
                nitrous oxide, perfluorocarbons, sulfur hexafluoride, 
                nitrogen, triflouride, and chlorofluorocarbons.
                    ``(B) Greenhouse gas emissions.--The term 
                `greenhouse gas emissions' means the emissions of 
                greenhouse gases expressed in terms of metric tons of 
                carbon dioxide equivalent.
                    ``(C) Paris climate agreement.--The term `Paris 
                Climate Agreement' means the international agreement 
                adopted by 196 parties, including the United States, at 
                the 21st Conference of Parties to the United Nations 
                Framework Convention on Climate Change in Paris, France 
                on December 12, 2015.
                    ``(D) Temperature goals of the paris climate 
                agreement.--The term `temperature goals of the Paris 
                Climate Agreement' means--
                            ``(i) a collective, long-term objective to 
                        hold the greenhouse gas emissions-induced 
                        increase in temperature to well below 2 degree 
                        Celsius;
                            ``(ii) a goal to pursue efforts to limit 
                        the temperature increase to 1.5 degrees Celsius 
                        above the pre-industrial level;
                            ``(iii) a goal to achieve net-zero 
                        emissions before 2050.
                    ``(E) Removals.--The term `removals' means 
                anthropogenic removals from the atmosphere by any 
                process, activity or mechanism of greenhouse gas, an 
                aerosol or a precursor of a greenhouse gas from the 
                atmosphere.''.
    (b) Rulemaking.--Not later than the end of the 1-year period 
beginning on the date of enactment of this Act, the Securities and 
Exchange Commission shall issue final rules to carry out the amendment 
made by subsection (a).
    (c) Effective Date.--Section 13(s) of the Securities Exchange Act 
of 1934, as added by subsection (a), shall take effect on the effective 
date of the rules issued pursuant to subsection (b).
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