[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8960 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8960

  To amend the Investment Advisers Act of 1940 to require large asset 
         managers to establish Sustainable Investment Policies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 14, 2020

      Mr. Levin of Michigan (for himself, Mr. Brendan F. Boyle of 
  Pennsylvania, Mrs. Axne, and Mr. Garcia of Illinois) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Investment Advisers Act of 1940 to require large asset 
         managers to establish Sustainable Investment Policies.

    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 ``Sustainable Investment Policies Act 
of 2020''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) There is now incontrovertible evidence that ESG factors 
        are financially material.
            (2) Decades of policy interpretations from the Department 
        of Labor and Securities and Exchange Commission have created 
        confusion as to fiduciaries' obligations with regard to ESG 
        integration.
            (3) Recent policies of the Securities and Exchange 
        Commission have had a chilling effect on ESG integration and 
        active ownership with a view toward advancing a sustainable 
        economy.

SEC. 3. PURPOSE.

    The purpose of this Act is to require large investment advisors to 
adopt and implement policies to consider Environmental, Social, and 
Governance (ESG) factors when making investments.

SEC. 4. SUSTAINABLE INVESTMENT POLICY OF INVESTMENT ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3) is amended by adding at the end the following:
    ``(o) Sustainable Investment Policy.--
            ``(1) In general.--No person may be registered as an 
        investment adviser under this section unless the person files a 
        sustainable investment policy with the Commission that such 
        person follows in carrying out the duties of an investment 
        adviser.
            ``(2) Contents.--
                    ``(A) In general.--A sustainable investment policy 
                described under paragraph (1) shall include policies of 
                the person, with respect to--
                            ``(i) corporate governance practices by 
                        entities in which the plan invests, including 
                        executive compensation, board diversity, the 
                        independence of board chairs, political 
                        spending and lobbying disclosure;
                            ``(ii) characteristics of workforces 
                        employed by entities in which the plan invests, 
                        including compensation and benefits, health and 
                        safety, diversity and demographics, skills and 
                        training, retention and turnover, full-time and 
                        part-time employment, and the use of 
                        independent contractors;
                            ``(iii) labor and human rights compliance 
                        by entities in which the plan invests, 
                        including workers' freedom of association, the 
                        right to collectively bargain, and the 
                        prevention of employment discrimination, child 
                        labor, and forced labor in company operations 
                        and supply chains;
                            ``(iv) the implementation, to the extent 
                        practicable, of practices which enhance 
                        diversity and inclusion performance within the 
                        workforce, senior leadership, business 
                        procurement, philanthropy and/or board of 
                        directors;
                            ``(v) environmental risks to the assets and 
                        properties of entities in which the funds 
                        advised by the person invest, including--
                                    ``(I) climate risks and 
                                contributions;
                                    ``(II) environmental risks that are 
                                not related to climate, such as 
                                industrial pollution, habitat 
                                destruction, and other forms of 
                                environmental degradation;
                                    ``(III) impact to species 
                                endangerment and extinction; and
                                    ``(IV) pollution of land, air, and 
                                water related to the operation of the 
                                entities invested in by the plan; 
                                pollution of land, air and water 
                                related to the operation of the 
                                entities in which funds advised by the 
                                person invest;
                            ``(vi) due diligence and practices 
                        regarding supply chain management, including 
                        environmental, human rights, and worker 
                        compensation considerations; and
                            ``(vii) tax practices of entities in which 
                        the plan invests, including international tax 
                        avoidance strategies and tax payment 
                        disclosure.
            ``(3) Compliance audit.--
                    ``(A) In general.--Each registered investment 
                adviser shall contract with an auditor (as described in 
                rule 2-10 of section 210.01 of title 17, Code of 
                Federal Regulations) to perform an annual evaluation of 
                the adviser's compliance with the sustainable 
                investment policy filed with the Commission.
                    ``(B) Report.--An auditor performing an evaluation 
                under subparagraph (A) shall file, and make publicly 
                available, a report on such evaluation to the adviser 
                and the Commission.
            ``(4) Fiduciary safe harbor.--The Commission may, by order, 
        determine that an investment adviser has not breached its 
        fiduciary duty with respect to consideration of factors 
        outlined under this subsection if the investment adviser is in 
        compliance with this subsection.''.
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