[House Report 117-39]
[From the U.S. Government Publishing Office]


117th Congress   }                                             {   Report
                         HOUSE OF REPRESENTATIVES
 1st Session     }                                             {   117-39

======================================================================



 
                  CLIMATE RISK DISCLOSURE ACT OF 2021

                                _______
                                

  May 20, 2021.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2570]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2570) to amend the Securities Exchange Act of 
1934 to require certain disclosures relating to climate change, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     7
Background and Need for Legislation..............................     7
Section-by-Section Analysis of the Legislation...................     8
Hearings.........................................................    10
Committee Consideration..........................................    10
Committee Votes..................................................    10
Committee Oversight Findings.....................................    13
Statement of Performance Goals and Objectives....................    13
New Budget Authority and C.B.O. Cost Estimate....................    13
Committee Cost Estimate..........................................    15
Federal Mandates Statement.......................................    15
Advisory Committee Statement.....................................    15
Applicability to Legislative Branch..............................    15
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................    16
Duplicative Federal Programs.....................................    16
Changes in Existing Law..........................................    16
Minority Views...................................................    46

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Climate Risk Disclosure Act of 2021''.

SEC. 2. SENSE OF CONGRESS.

  It is the sense of Congress that--
          (1) climate change poses a significant and increasing threat 
        to the growth and stability of the economy of the United 
        States;
          (2) many sectors of the economy of the United States and many 
        American businesses are exposed to climate-related risk, which 
        may include exposure to--
                  (A) the physical impacts of climate change, including 
                the rise of the average global temperature, 
                accelerating sea-level rise, desertification, ocean 
                acidification, intensification of storms, increase in 
                heavy precipitation, more frequent and intense 
                temperature extremes, more severe droughts, and longer 
                wildfire seasons;
                  (B) the economic disruptions and security threats 
                that result from the physical impacts described in 
                subparagraph (A) including conflicts over scarce 
                resources, conditions conducive to violent extremism, 
                the spread of infectious diseases, and forced 
                migration;
                  (C) the transition impacts that result as the global 
                economy transitions to a clean and renewable energy, 
                low-emissions economy, including financial impacts as 
                climate change fossil fuel assets becoming stranded and 
                it becomes uneconomic for companies to develop fossil 
                fuel assets as policymakers act to limit the worst 
                impacts of climate change by keeping the rise in 
                average global temperature to 1.5 degrees Celsius above 
                pre-industrial levels; and
                  (D) actions by Federal, State, Tribal, territorial, 
                and local governments to limit the worst effects of 
                climate change by enacting policies that keep the 
                global average surface temperature rise to 1.5 degrees 
                Celsius above pre-industrial levels;
          (3) assessing the potential impact of climate-related risks 
        on national and international financial systems is an urgent 
        concern;
          (4) companies have a duty to disclose financial risks that 
        climate change presents to their investors, lenders, and 
        insurers;
          (5) the Securities and Exchange Commission has a duty to 
        promote a risk-informed securities market that is worthy of the 
        trust of the public as families invest for their futures;
          (6) investors, lenders, and insurers are increasingly 
        demanding climate risk information that is consistent, 
        comparable, reliable, and clear;
          (7) including standardized, material climate change risk and 
        opportunity disclosure that is useful for decision makers in 
        annual reports to the Commission will increase transparency 
        with respect to risk accumulation and exposure in financial 
        markets;
          (8) requiring companies to disclose climate-related risk 
        exposure and risk management strategies will encourage a 
        smoother transition to a clean and renewable energy, low-
        emissions economy and guide capital allocation to mitigate, and 
        adapt to, the effects of climate change and limit damages 
        associated with climate-related events and disasters; and
          (9) a critical component in fighting climate change is a 
        transparent accounting of the risks that climate change 
        presents and the implications of continued inaction with 
        respect to climate change.

SEC. 3. 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) 1.5 degree scenario.--The term `1.5 degree 
                scenario' means a scenario that aligns with greenhouse 
                gas emissions pathways that aim to limit global warming 
                to 1.5 degrees Celsius above pre-industrial levels.
                  ``(B) Appropriate climate principals.--The term 
                `appropriate climate principals' means--
                          ``(i) the Administrator of the Environmental 
                        Protection Agency;
                          ``(ii) the Administrator of the National 
                        Oceanic and Atmospheric Administration;
                          ``(iii) the Director of the Office of 
                        Management and Budget;
                          ``(iv) the Secretary of the Interior;
                          ``(v) the Secretary of Energy; and
                          ``(vi) the head of any other Federal agency, 
                        as determined appropriate by the Commission.
                  ``(C) Baseline scenario.--The term `baseline 
                scenario' means a widely-recognized analysis scenario 
                in which levels of greenhouse gas emissions, as of the 
                date on which the analysis is performed, continue to 
                grow, resulting in an increase in the global average 
                temperature of 1.5 degrees Celsius or more above pre-
                industrial levels.
                  ``(D) Carbon dioxide equivalent.--The term `carbon 
                dioxide equivalent' means the number of metric tons of 
                carbon dioxide emissions with the same global warming 
                potential as one metric ton of another greenhouse gas, 
                as determined under table A-1 of subpart A of part 98 
                of title 40, Code of Federal Regulations, as in effect 
                on the date of enactment of this subsection.
                  ``(E) Climate change.--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.
                  ``(F) Commercial development of fossil fuels.--The 
                term `commercial development of fossil fuels' 
                includes--
                          ``(i) exploration, extraction, processing, 
                        exporting, transporting, refining, and any 
                        other significant action with respect to oil, 
                        natural gas, coal, or any byproduct thereof or 
                        any other solid or liquid hydrocarbons that are 
                        commercially produced; and
                          ``(ii) acquiring a license for any activity 
                        described in clause (i).
                  ``(G) Covered issuer.--The term `covered issuer' 
                means an issuer that is required to file an annual 
                report under subsection (a) or section 15(d).
                  ``(H) Direct and indirect greenhouse gas emissions.--
                The term `direct and indirect greenhouse gas emissions' 
                includes, with respect to a covered issuer--
                          ``(i) all direct greenhouse gas emissions 
                        released by the covered issuer;
                          ``(ii) all indirect greenhouse gas emissions 
                        with respect to electricity, heat, or steam 
                        purchased by the covered issuer;
                          ``(iii) significant indirect emissions, other 
                        than the emissions described in clause (ii), 
                        emitted in the value chain of the covered 
                        issuer; and
                          ``(iv) all indirect greenhouse gas emissions 
                        that are attributable to assets owned or 
                        managed, including assets that are partially 
                        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 Commission titled 
                `Modernization of Oil and Gas Reporting' (74 Fed. Reg. 
                2158; published January 14, 2009).
                  ``(J) Greenhouse gas.--The term `greenhouse gas'--
                          ``(i) means carbon dioxide, 
                        hydrofluorocarbons, methane, nitrous oxide, 
                        perfluorocarbons, sulfur hexafluoride, nitrogen 
                        triflouride, and chlorofluorocarbons;
                          ``(ii) includes any other anthropogenically-
                        emitted gas that the Administrator of the 
                        Environmental Protection 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.
                  ``(K) Greenhouse gas emissions.--The term `greenhouse 
                gas emissions' means the emissions 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 temperatures 
                        and increased frequency of temperature 
                        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 appropriate 
                        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 document 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 estimate of the 
                monetized damages associated with an incremental 
                increase in carbon dioxide emissions in a given year.
                  ``(N) Transition risks.--The term `transition risks' 
                means financial risks that are attributable to climate 
                change mitigation and adaptation, including efforts to 
                reduce greenhouse gas emissions and strengthen 
                resilience to the impacts of climate change, 
                including--
                          ``(i) costs relating to--
                                  ``(I) international treaties and 
                                agreements;
                                  ``(II) Federal, State, and local 
                                policy;
                                  ``(III) new technologies;
                                  ``(IV) changing markets;
                                  ``(V) reputational impacts relevant 
                                to changing consumer behavior; and
                                  ``(VI) litigation; and
                          ``(ii) assets that may lose value or become 
                        stranded due to any of the costs described in 
                        subclauses (I) through (VI) of clause (i).
                  ``(O) Value chain.--The term `value chain'--
                          ``(i) means the total lifecycle of a product 
                        or service, both before and after production of 
                        the product or service, as applicable; and
                          ``(ii) may include the sourcing of materials, 
                        production, transportation, and disposal with 
                        respect to the product or service described in 
                        clause (i).
          ``(2) Findings.--Congress finds that--
                  ``(A) short-, medium-, and long-term financial and 
                economic risks and opportunities relating 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, evaluate, 
                        and disclose; and
                  ``(B) the disclosure of information described in 
                subparagraph (A) should--
                          ``(i) identify, and evaluate--
                                  ``(I) material physical and 
                                transition risks posed by climate 
                                change; and
                                  ``(II) the potential financial impact 
                                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 
                        opportunities;
                          ``(iv) 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 Commission, in consultation 
                        with the appropriate climate principals;
                          ``(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 reflects, 
                        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 subsection (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 covered 
                        issuer by climate change;
                  ``(B) a description of any established corporate 
                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 climate risks 
                when differing climate scenarios are taken into 
                consideration; and
                  ``(E) a description of how climate risk is 
                incorporated into the overall risk management strategy 
                of the covered issuer.
          ``(4) Rule of construction.--Nothing in paragraph (3) may be 
        construed as precluding a covered issuer from including, in an 
        annual report submitted under subsection (a) or section 15(d), 
        any information not explicitly referenced in such paragraph.
          ``(5) Rulemaking.--The Commission, in consultation with the 
        appropriate climate principals, shall, not later than 2 years 
        after the date of the enactment 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--
                  ``(A) establish climate-related risk disclosure 
                rules, which shall--
                          ``(i) be, to the extent practicable, 
                        specialized for industries within specific 
                        sectors of the economy, which shall include--
                                  ``(I) the sectors of finance, 
                                insurance, transportation, electric 
                                power, mining, and non-renewable 
                                energy; and
                                  ``(II) any other sector determined 
                                appropriate by the Commission, in 
                                consultation with the appropriate 
                                climate principals;
                          ``(ii) include reporting standards for 
                        estimating and disclosing direct and indirect 
                        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 
                                emissions by the covered issuer during 
                                the period covered by the disclosure;
                          ``(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 covered 
                                issuer;
                          ``(iv) specify requirements for, and the 
                        disclosure of, input parameters, assumptions, 
                        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, 
                                including 5, 10, and 20 year time 
                                frames; and
                          ``(v) include reporting standards and 
                        guidance with respect to the information 
                        required under subparagraph (B)(iii);
                  ``(B) require that a covered issuer, with respect to 
                a disclosure required under this subsection--
                          ``(i) incorporate into such disclosure--
                                  ``(I) quantitative analysis to 
                                support 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 
                                taking 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;
                          ``(ii) consider, when preparing any 
                        qualitative or quantitative risk analysis 
                        statement contained in the disclosure--
                                  ``(I) a baseline scenario that 
                                includes physical impacts of climate 
                                change;
                                  ``(II) a 1.5 degrees scenario; and
                                  ``(III) any additional climate 
                                analysis scenario considered 
                                appropriate by the Commission, in 
                                consultation 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 
                                        emissions;
                                          ``(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 incorporate the 
                                        social cost of carbon;
                                          ``(bb) the percentage of the 
                                        reserves of the covered issuer 
                                        that will be developed under 
                                        the scenarios established in 
                                        clause (ii), as well as a 
                                        forecast for the development 
                                        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 
                                        categories by the type of 
                                        reserve;
                                          ``(dd) the methodology of the 
                                        covered issuer for detecting 
                                        and mitigating 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 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 management 
                                        challenges; and
                                  ``(III) any other information that 
                                the Commission determines is--
                                          ``(aa) necessary;
                                          ``(bb) appropriate to 
                                        safeguard the public interest; 
                                        or
                                          ``(cc) directed at ensuring 
                                        that investors are informed in 
                                        accordance with the findings 
                                        described 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, determines is--
                          ``(i) necessary;
                          ``(ii) appropriate to safeguard the public 
                        interest; or
                          ``(iii) directed at ensuring that investors 
                        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 required disclosures shall 
                be addressed in the covered issuer's annual financial 
                filing.
          ``(6) Formatting.--The Commission shall require issuers to 
        disclose information in an interactive data format and shall 
        develop standards for such format, which shall include 
        electronic tags for information 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 described in 
                paragraph (2).
          ``(7) Periodic update of rules.--The Commission shall 
        periodically update the rules issued under this subsection.
          ``(8) Compilation of information disclosed.--The Commission 
        shall, to the maximum extent practicable make a compilation of 
        the information disclosed by issuers under this subsection 
        publicly available on the website of the Commission and update 
        such compilation at least once each year.
          ``(9) Reports.--
                  ``(A) Report to congress.--The Commission shall--
                          ``(i) conduct an annual assessment regarding 
                        the compliance of covered issuers with the 
                        requirements of this subsection;
                          ``(ii) submit to the appropriate 
                        congressional 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 General of the 
                United States shall periodically evaluate, and report 
                to the appropriate congressional committees on, the 
                effectiveness of the Commission in carrying out and 
                enforcing this subsection.''.

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 Exchange Act of 1934, and until 
such rules are issued, a covered 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 
recommendations of the Task Force on Climate-related Financial 
Disclosures of the Financial Stability Board as reported in 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 Securities and 
Exchange Commission such sums as may be necessary to carry out this Act 
and the amendments made by this Act.

                          Purpose and Summary

    On April 15, 2021, Representative Sean Casten introduced 
H.R. 2570, the Climate Risk Disclosure Act of 2021, which 
requires public companies to disclose in their annual reports 
information relating to the financial and business risks 
associated with climate change. H.R. 2570 also requires the SEC 
to establish, in consultation with other relevant Federal 
agencies, climate-related risk disclosure metrics and guidance, 
which will be industry-specific, and will require companies to 
make both quantitative and qualitative disclosures.

                  Background and Need for Legislation

    The Securities Exchange Act of 1934 requires public 
companies to file annual reports with the SEC to publicly 
disclose company information that investors would find 
pertinent in making investment decisions.\1\ This reporting 
requirement mandates the disclosure of information related to 
risk exposure, material financial data, and an analysis 
performed by management on the company's financial 
condition.\2\ Although the effects of climate change pose 
significant risks to companies and investors, companies are 
currently not required to report climate-related risk exposure 
and risk management strategies. This bill is similar to Senator 
Warren's Climate Risk Disclosure Act of 2018 (S. 3481) which 
enjoyed broad support from science advocacy groups such as the 
Union of Concerned Scientists; investment management firms such 
as Boston Trust, JSA Financial Group, and Trillium Asset 
Management; investor advocacy groups including Americans for 
Financial Reform, Corporate Accountability, and Public Citizen; 
environmental groups including the Sierra Club, Greenpeace USA, 
and the Center for International Environmental Law; and 
religious groups such as the Adrian Dominican Sisters, 
Daughters of Charity, Province of St. Louise, Sisters of St. 
Francis of Philadelphia, and the Unitarian Universalist 
Association.
---------------------------------------------------------------------------
    \1\See 15 U.S.C. Sec. 78m(a).
    \2\SEC, Form 10-K, General Instructions, available at https://
www.sec.gov/about/forms/form10-k.pdf.
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                      Section-by-Section Analysis


Section 1. Short title

    Section 1 states that the title of the bill is the Climate 
Risk Disclosure Act of 2021.

Section 2. Sense of Congress

    Section 2 sets forth the sense of Congress. Paragraph (1) 
states that continued inaction in addressing climate change 
poses a significant and increasing threat to the growth and 
stability of the United States. Paragraph (2) states that many 
sectors of the economy of the United States and American 
businesses are exposed to multiple channels of climate-related 
risk, which include exposure to: the physical impacts of 
climate change; economic disruptions and security threats that 
result from these physical impacts; the transition impacts that 
result as the global economy transitions to a clean and 
renewable energy, low-emissions economy; and actions by 
Federal, State, Tribal, territorial and local governments to 
limit the worst effects of climate change by limiting the 
global average surface temperature rise to 1.5 degrees Celsius 
above pre-industrial levels.
    Paragraph (3) states that Congress finds that assessing the 
potential impact of climate related risks on national and 
international financial risks that climate change presents to 
their investors, lenders, and insurers is an urgent concern. 
Paragraph (4) states that companies have a duty to disclose 
financial risks that climate change presents to their 
investors, lenders, and insurers. Furthermore, Paragraphs (5) 
through (9) state that the Securities and Exchange Commission 
has a duty to promote a risk-informed securities market which 
includes standardized climate change risk and opportunity 
disclosure that is useful, consistent, reliable and clear for 
decisionmakers in annual reports to the Commission will 
increase transparency with respect to risk accumulation and 
exposure in financial markets.

Section 3. Disclosures relating to climate change

    Section 3 adds a new subsection (s) to section 13 to the 
Securities Exchange Act of 1934. Paragraph (1) of the new 
subsection (s) provides for a number of new definitions: ``1.5 
degree scenario''; ``appropriate climate principals;'' 
``baseline scenario,'' ``carbon dioxide equivalent;'' ``climate 
change;'' ``commercial development of fossil fuels;'' ``covered 
issuer;'' ``direct and indirect greenhouse emissions;'' 
``fossil fuel reserves;'' ``greenhouse gas;'' ``greenhouse gas 
emissions;'' ``physical risks;'' ``social cost of carbon;'' 
``transition risks;'' and ``value chain''.
    Paragraph (2)(A) of the new subsection (s) states that 
Congress finds the short-, medium-, and long-term financial and 
economic risks and opportunities related to climate change and 
the national and global reduction of greenhouse gas emissions 
constitute information that issuers may reasonably expect to 
affect shareholder decisions making and, as such, should 
regularly identify, evaluate, and disclose such information to 
investors and relevant regulators.
    Paragraph (2)(B) amends the Securities and Exchange Act of 
1934 by requiring each covered issuer to identify and evaluate 
physical and transition risks posed by climate change, along 
with their potential impact, as well as provide a description 
of any established corporate governance processes and 
structures to identify, assess, and manage climate-related 
risks.
    Paragraph (3) of the new subsection (s) explicitly requires 
a covered issuer to disclose in its annual report information 
regarding the identification and evaluation of potential 
financial impacts of, and any risk management strategies 
relating to: physical and transition risks the covered issue 
faces due to climate change; a description of any established 
corporate governance processes and structures to identify, 
assess, and manage climate-related risks; a description of the 
actions the covered issuer is taking to mitigate the identified 
risks; a description of the resilience of any strategy the 
covered issuer has for addressing these risks; and description 
of how climate risk is incorporated into the overall risk 
management strategy of the covered issuer.
    Paragraph (4) of the new subsection establishes a rule of 
construction explicitly stating an issuer is not precluded from 
including information in its annual report not explicitly 
reference in this bill.
    Paragraph (5) of the new subsection requires the Commission 
to engage in a rulemaking within 2 years after the date of the 
enactment of this bill to issue rules with respect to the 
information that a covered issuer is required to disclose 
pursuant to this bill.
    Paragraph (6) establishes formatting requirements for 
covered issuers when disclosing the information required to be 
disclosed in this bill.
    Paragraph (7) requires the Commission to periodically 
update the rules issued under this subsection.
    Paragraph (8) requires the Commission, to the extent 
practicable, to compile the information required to be 
disclosed pursuant to this bill and make publicly available on 
the Commission's website on an annual basis.
    Paragraph (9) requires the Commission to conduct an annual 
compliance assessment pursuant to the requirements of this 
subsection and to submit to the appropriate Congressional 
committees a report with the results of each assessment and 
that this report should be made publicly available. It also 
requires the Comptroller General of the United States to 
periodically evaluate and report to the appropriate 
Congressional committees on the Commission's effectiveness on 
carrying out and enforcing this subsection.

Section 4. Backstop

    Section 4 states that if the Securities and Exchange 
Commission has not issued rules pursuant to the requirements of 
this bill within two years of its enactment, a covered issuer 
may be deemed to be in compliance with this bill if the covered 
issuer provides a disclosure that satisfies the recommendations 
of the Task Force on Climate-Related Financial Disclosures of 
the Financial Stability Board as reported in June 2017, or any 
successor report.

Section 5. Authorization of appropriations

    Section 5 states that funds are authorized to be 
appropriated as necessary to carry out this Act.

                                Hearings

    For the purposes of section 3(c)(6) of House rule XIII, the 
Committee on Financial Services' Subcommittee on Investor 
Protection, Entrepreneurship, and Capital Markets held a 
hearing to consider H.R. 2570 entitled,
    In the 117th Congress, the Subcommittee on Investor 
Protection, Entrepreneurship, and Capital Markets held a 
hearing to consider similar legislation entitled ``Climate 
Change and Social Responsibility: Helping Corporate Boards and 
Investors Make Decisions for a Sustainable World,'' on February 
25, 2021. Testifying before the Committee was Andy Green, 
Senior Fellow, Center for American Progress; Heather McTeer 
Toney, Environmental Justice Liaison, Environmental Defense 
Fund and Senior Advisor, Mom's Clean Air Force; Veena Ramani, 
Senior Program Director, Capital Market Systems, Ceres, James 
Andrus, Investment Manager, California Public Employees' 
Retirement System; and Vivek Ramaswamy, Biotech Entrepreneur 
and Author.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 12, 2021, and ordered H.R. 2570 to be reported favorably to 
the House with an amendment in the nature of a substitute by a 
vote of 28 yeas and 24 nays, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 2570:


  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 2570 are to ensure 
that the Securities and Exchange Commission to require that 
companies provide more information on the risks they face from 
climate change.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 2570 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 19, 2021.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2570, the Climate 
Risk Disclosure Act of 2021.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sofia Guo.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.
    
    

    H.R. 2570 would require publicly traded companies to 
annually disclose certain climate-related information to the 
public. Under the bill, such companies would need to describe 
physical and financial risks they would face under different 
climate change scenarios, explain strategies and corporate 
governance processes in place to manage those risks, and 
analyze the social cost associated with the company's 
greenhouse gas emissions. The Securities and Exchange 
Commission (SEC) would be required to establish and 
periodically update rules to implement the climate disclosure 
requirements. The SEC also would be required to annually assess 
and report to the Congress on the compliance of these public 
companies with those rules. The Government Accountability 
Office would be required to periodically evaluate the SEC's 
effectiveness in carrying out and enforcing the new climate 
disclosures.
    Using information from the SEC, CBO estimates that 
implementing H.R. 2570 would have a gross cost of $10 million 
over the 2021-2026 period. CBO expects that the SEC would need 
the services of approximately 20 employees for different 
periods of time at an average annual rate of $270,000 per 
employee to issue and update rules, compile disclosures, and 
assess compliance. However, the SEC is authorized to collect 
fees sufficient to offset its annual appropriation; therefore, 
CBO estimates that the net effect on discretionary spending 
would be insignificant, assuming appropriation actions 
consistent with that authority.
    H.R. 2570 contains private-sector mandates as defined in 
the Unfunded Mandates Reform Act (UMRA). CBO cannot determine 
whether those mandates' aggregate costs would exceed the UMRA 
threshold ($170 million in 2021, adjusted annually for 
inflation).
    By requiring public companies to annually disclose to the 
SEC the effect of climate change on their operations and 
finances, H.R. 2570 would impose a mandate as defined in UMRA. 
The mandate's costs would equal the expenses incurred by those 
companies to comply with the disclosure requirements as 
established through SEC rules.
    In 2010, the SEC published guidance to clarify how publicly 
traded corporations should apply existing SEC disclosure rules 
to the risk that climate change developments may pose to their 
businesses. Such guidance did not establish reporting 
requirements as strict as those set out in H.R. 2570. Based on 
information from industry sources, CBO estimates that a small 
portion, about 15 percent, of public companies are currently 
reporting information related to climate change to investors.
    Because the SEC has not issued the rules required by the 
bill, CBO cannot determine whether the mandates cost would 
exceed the private-sector threshold. However, given the current 
low disclosure rate, the aggregate costs for publicly traded 
companies to comply with the new rules may be substantial.
    Furthermore, if the SEC increased fees to offset the costs 
associated with implementing the bill, H.R. 2570 would increase 
the cost of an existing mandate on private entities required to 
pay those assessments. CBO estimates that the incremental cost 
of the mandate would be roughly $2 million per year, on 
average.
    H.R. 2570 contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contact for this estimate is Sofia Guo (for 
federal costs) and Rachel Austin (for mandates). The estimate 
was reviewed by H. Samuel Papenfuss, Deputy Director of Budget 
Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 2570. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 2570, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 2570, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2570 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 2570 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 2570, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                    SECURITIES EXCHANGE ACT OF 1934


TITLE I--REGULATION OF SECURITIES EXCHANGES

           *       *       *       *       *       *       *



                      periodical and other reports

  Sec. 13. (a) Every issuer of a security registered pursuant 
to section 12 of this title shall file with the Commission, in 
accordance with such rules and regulations as the Commission 
may prescribe as necessary or appropriate for the proper 
protection of investors and to insure fair dealing in the 
security--
          (1) such information and documents (and such copies 
        thereof) as the Commission shall require to keep 
        reasonably current the information and documents 
        required to be included in or filed with an application 
        or registration statement filed pursuant to section 12, 
        except that the Commission may not require the filing 
        of any material contract wholly executed before July 1, 
        1962.
          (2) such annual reports (and such copies thereof), 
        certified if required by the rules and regulations of 
        the Commission by independent public accountants, and 
        such quarterly reports (and such copies thereof), as 
        the Commission may prescribe.
Every issuer of a security registered on a national securities 
exchange shall also file a duplicate original of such 
information, documents, and reports with the exchange. In any 
registration statement, periodic report, or other reports to be 
filed with the Commission, an emerging growth company need not 
present selected financial data in accordance with section 
229.301 of title 17, Code of Federal Regulations, for any 
period prior to the earliest audited period presented in 
connection with its first registration statement that became 
effective under this Act or the Securities Act of 1933 and, 
with respect to any such statement or reports, an emerging 
growth company may not be required to comply with any new or 
revised financial accounting standard until such date that a 
company that is not an issuer (as defined under section 2(a) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required 
to comply with such new or revised accounting standard, if such 
standard applies to companies that are not issuers.
  (b)(1) The Commission may prescribe, in regard to reports 
made pursuant to this title, the form or forms in which the 
required information shall be set forth, the items or details 
to be shown in the balance sheet and the earnings statement, 
and the methods to be followed in the preparation of reports, 
in the appraisal or valuation of assets and liabilities, in the 
determination of depreciation and depletion, in the 
differentiation of recurring and nonrecurring income, in the 
differentiation of investment and operating income, and in the 
preparation, where the Commission deems it necessary or 
desirable, of separate and/or consolidated balance sheets or 
income accounts of any person directly or indirectly 
controlling or controlled by the issuer, or any person under 
direct or indirect common control with the issuer; but in the 
case of the reports of any person whose methods of accounting 
are prescribed under the provisions of any law of the United 
States, or any rule or regulation thereunder, the rules and 
regulations of the Commission with respect to reports shall not 
be inconsistent with the requirements imposed by such law or 
rule or regulation in respect of the same subject matter 
(except that such rules and regulations of the Commission may 
be inconsistent with such requirements to the extent that the 
Commission determines that the public interest or the 
protection of investors so requires).
  (2) Every issuer which has a class of securities registered 
pursuant to section 12 of this title and every issuer which is 
required to file reports pursuant to section 15(d) of this 
title shall--
          (A) make and keep books, records, and accounts, 
        which, in reasonable detail, accurately and fairly 
        reflect the transactions and dispositions of the assets 
        of the issuer;
          (B) devise and maintain a system of internal 
        accounting controls sufficient to provide reasonable 
        assurances that--
                  (i) transactions are executed in accordance 
                with management's general or specific 
                authorization;
                  (ii) transactions are recorded as necessary 
                (I) to permit preparation of financial 
                statements in conformity with generally 
                accepted accounting principles or any other 
                criteria applicable to such statements, and 
                (II) to maintain accountability for assets;
                  (iii) access to assets is permitted only in 
                accordance with management's general or 
                specific authorization; and
                  (iv) the recorded accountability for assets 
                is compared with the existing assets at 
                reasonable intervals and appropriate action is 
                taken with respect to any differences; and
          (C) notwithstanding any other provision of law, pay 
        the allocable share of such issuer of a reasonable 
        annual accounting support fee or fees, determined in 
        accordance with section 109 of the Sarbanes-Oxley Act 
        of 2002.
  (3)(A) With respect to matters concerning the national 
security of the United States, no duty or liability under 
paragraph (2) of this subsection shall be imposed upon any 
person acting in cooperation with the head of any Federal 
department or agency responsible for such matters if such act 
in cooperation with such head of a department or agency was 
done upon the specific, written directive of the head of such 
department or agency pursuant to Presidential authority to 
issue such directives. Each directive issued under this 
paragraph shall set forth the specific facts and circumstances 
with respect to which the provisions of this paragraph are to 
be invoked. Each such directive shall, unless renewed in 
writing, expire one year after the date of issuance.
  (B) Each head of a Federal department or agency of the United 
States who issues a directive pursuant to this paragraph shall 
maintain a complete file of all such directives and shall, on 
October 1 of each year, transmit a summary of matters covered 
by such directives in force at any time during the previous 
year to the Permanent Select Committee on Intelligence of the 
House of Representatives and the Select Committee on 
Intelligence of the Senate.
  (4) No criminal liability shall be imposed for failing to 
comply with the requirements of paragraph (2) of this 
subsection except as provided in paragraph (5) of this 
subsection.
  (5) No person shall knowingly circumvent or knowingly fail to 
implement a system of internal accounting controls or knowingly 
falsify any book, record, or account described in paragraph 
(2).
  (6) Where an issuer which has a class of securities 
registered pursuant to section 12 of this title or an issuer 
which is required to file reports pursuant to section 15(d) of 
this title holds 50 per centum or less of the voting power with 
respect to a domestic or foreign firm, the provisions of 
paragraph (2) require only that the issuer proceed in good 
faith to use its influence, to the extent reasonable under the 
issuer's circumstances, to cause such domestic or foreign firm 
to devise and maintain a system of internal accounting controls 
consistent with paragraph (2). Such circumstances include the 
relative degree of the issuer's ownership of the domestic or 
foreign firm and the laws and practices governing the business 
operations of the country in which such firm is located. An 
issuer which demonstrates good faith efforts to use such 
influence shall be conclusively presumed to have complied with 
the requirements of paragraph (2).
  (7) For the purpose of paragraph (2) of this subsection, the 
terms ``reasonable assurances'' and ``reasonable detail'' mean 
such level of detail and degree of assurance as would satisfy 
prudent officials in the conduct of their own affairs.
  (c) If in the judgment of the Commission any report required 
under subsection (a) is inapplicable to any specified class or 
classes of issuers, the Commission shall require in lieu 
thereof the submission of such reports of comparable character 
as it may deem applicable to such class or classes of issuers.
  (d)(1) Any person who, after acquiring directly or indirectly 
the beneficial ownership of any equity security of a class 
which is registered pursuant to section 12 of this title, or 
any equity security of an insurance company which would have 
been required to be so registered except for the exemption 
contained in section 12(g)(2)(G) of this title, or any equity 
security issued by a closed-end investment company registered 
under the Investment Company Act of 1940 or any equity security 
issued by a Native Corporation pursuant to section 37(d)(6) of 
the Alaska Native Claims Settlement Act, or otherwise becomes 
or is deemed to become a beneficial owner of any of the 
foregoing upon the purchase or sale of a security-based swap 
that the Commission may define by rule, and is directly or 
indirectly the beneficial owner of more than 5 per centum of 
such class shall, within ten days after such acquisition or 
within such shorter time as the Commission may establish by 
rule, file with the Commission, a statement containing such of 
the following information, and such additional information, as 
the Commission may by rules and regulations, prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors--
          (A) the background, and identity, residence, and 
        citizenship of, and the nature of such beneficial 
        ownership by, such person and all other persons by whom 
        or on whose behalf the purchases have been or are to be 
        effected;
          (B) the source and amount of the funds or other 
        consideration used or to be used in making the 
        purchases, and if any part of the purchase price is 
        represented or is to be represented by funds or other 
        consideration borrowed or otherwise obtained for the 
        purpose of acquiring, holding, or trading such 
        security, a description of the transaction and the 
        names of the parties thereto, except that where a 
        source of funds is a loan made in the ordinary course 
        of business by a bank, as defined in section 3(a)(6) of 
        this title, if the person filing such statement so 
        requests, the name of the bank shall not be made 
        available to the public;
          (C) if the purpose of the purchases or prospective 
        purchases is to acquire control of the business of the 
        issuer of the securities any plans or proposals which 
        such persons may have to liquidate such issuer, to sell 
        its assets to or merge it with any other persons, or to 
        make any other major change in its business or 
        corporate structure;
          (D) the number of shares of such security which are 
        beneficially owned, and the number of shares concerning 
        which there is a right to acquire, directly or 
        indirectly, by (i) such person, and (ii) by each 
        associate of such person, giving the background, 
        identity, residence, and citizenship of each such 
        associate; and
          (E) information as to any contracts, arrangements, or 
        understandings with any person with respect to any 
        securities of the issuer, including but not limited to 
        transfer of any of the securities, joint ventures, loan 
        or option arrangements, puts or calls, guaranties of 
        loans, guaranties against loss or guaranties of 
        profits, division of losses or profits, or the giving 
        or withholding of proxies, naming the persons with whom 
        such contracts, arrangements, or understandings have 
        been entered into, and giving the details thereof.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) The Commission, by rule or regulation or by order, may 
permit any person to file in lieu of the statement required by 
paragraph (1) of this subsection or the rules and regulations 
thereunder, a notice stating the name of such person, the 
number of shares of any equity securities subject to paragraph 
(1) which are owned by him, the date of their acquisition and 
such other information as the Commission may specify, if it 
appears to the Commission that such securities were acquired by 
such person in the ordinary course of his business and were not 
acquired for the purpose of and do not have the effect of 
changing or influencing the control of the issuer nor in 
connection with or as a participant in any transaction having 
such purpose or effect.
  (6) The provisions of this subsection shall not apply to--
          (A) any acquisition or offer to acquire securities 
        made or proposed to be made by means of a registration 
        statement under the Securities Act of 1933;
          (B) any acquisition of the beneficial ownership of a 
        security which, together with all other acquisitions by 
        the same person of securities of the same class during 
        the preceding twelve months, does not exceed 2 per 
        centum of that class;
          (C) any acquisition of an equity security by the 
        issuer of such security;
          (D) any acquisition or proposed acquisition of a 
        security which the Commission, by rules or regulations 
        or by order, shall exempt from the provisions of this 
        subsection as not entered into for the purpose of, and 
        not having the effect of, changing or influencing the 
        control of the issuer or otherwise as not comprehended 
        within the purposes of this subsection.
  (e)(1) It shall be unlawful for an issuer which has a class 
of equity securities registered pursuant to section 12 of this 
title, or which is a closed-end investment company registered 
under the Investment Company Act of 1940, to purchase any 
equity security issued by it if such purchase is in 
contravention of such rules and regulations as the Commission, 
in the public interest or for the protection of investors, may 
adopt (A) to define acts and practices which are fraudulent, 
deceptive, or manipulative, and (B) to prescribe means 
reasonably designed to prevent such acts and practices. Such 
rules and regulations may require such issuer to provide 
holders of equity securities of such class with such 
information relating to the reasons for such purchase, the 
source of funds, the number of shares to be purchased, the 
price to be paid for such securities, the method of purchase, 
and such additional information, as the Commission deems 
necessary or appropriate in the public interest or for the 
protection of investors, or which the Commission deems to be 
material to a determination whether such security should be 
sold.
  (2) For the purpose of this subsection, a purchase by or for 
the issuer or any person controlling, controlled by, or under 
common control with the issuer, or a purchase subject to 
control of the issuer or any such person, shall be deemed to be 
a purchase by the issuer. The Commission shall have power to 
make rules and regulations implementing this paragraph in the 
public interest and for the protection of investors, including 
exemptive rules and regulations covering situations in which 
the Commission deems it unnecessary or inappropriate that a 
purchase of the type described in this paragraph shall be 
deemed to be a purchase by the issuer for purposes of some or 
all of the provisions of paragraph (1) of this subsection.
  (3) At the time of filing such statement as the Commission 
may require by rule pursuant to paragraph (1) of this 
subsection, the person making the filing shall pay to the 
Commission a fee at a rate that, subject to paragraph (4), is 
equal to $92 per $1,000,000 of the value of securities proposed 
to be purchased. The fee shall be reduced with respect to 
securities in an amount equal to any fee paid with respect to 
any securities issued in connection with the proposed 
transaction under section 6(b) of the Securities Act of 1933, 
or the fee paid under that section shall be reduced in an 
amount equal to the fee paid to the Commission in connection 
with such transaction under this paragraph.
          (4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraph (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) 
        that is applicable under section 6(b) of the Securities 
        Act of 1933 for such fiscal year.
          (5) Fee collections.--Fees collected pursuant to this 
        subsection for fiscal year 2012 and each fiscal year 
        thereafter shall be deposited and credited as general 
        revenue of the Treasury and shall not be available for 
        obligation.
          (6) Effective date; publication.--In exercising its 
        authority under this subsection, the Commission shall 
        not be required to comply with the provisions of 
        section 553 of title 5, United States Code. An adjusted 
        rate prescribed under paragraph (4) shall be published 
        and take effect in accordance with section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)).
          (7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata 
        to amounts and balances of less than $1,000,000.
  (f)(1) Every institutional investment manager which uses the 
mails, or any means or instrumentality of interstate commerce 
in the course of its business as an institutional investment 
manager and which exercises investment discretion with respect 
to accounts holding equity securities of a class described in 
section 13(d)(1) of this title having an aggregate fair market 
value on the last trading day in any of the preceding twelve 
months of at least $100,000,000 or such lesser amount (but in 
no case less than $10,000,000) as the Commission, by rule, may 
determine, shall file reports with the Commission in such form, 
for such periods, and at such times after the end of such 
periods as the Commission, by rule, may prescribe, but in no 
event shall such reports be filed for periods longer than one 
year or shorter than one quarter. Such reports shall include 
for each such equity security held on the last day of the 
reporting period by accounts (in aggregate or by type as the 
Commission, by rule, may prescribe) with respect to which the 
institutional investment manager exercises investment 
discretion (other than securities held in amounts which the 
Commission, by rule, determines to be insignificant for 
purposes of this subsection), the name of the issuer and the 
title, class, CUSIP number, number of shares or principal 
amount, and aggregate fair market value of each such security. 
Such reports may also include for accounts (in aggregate or by 
type) with respect to which the institutional investment 
manager exercises investment discretion such of the following 
information as the Commission, by rule, prescribes--
          (A) the name of the issuer and the title, class, 
        CUSIP number, number of shares or principal amount, and 
        aggregate fair market value or cost or amortized cost 
        of each other security (other than an exempted 
        security) held on the last day of the reporting period 
        by such accounts;
          (B) the aggregate fair market value or cost or 
        amortized cost of exempted securities (in aggregate or 
        by class) held on the last day of the reporting period 
        by such accounts;
          (C) the number of shares of each equity security of a 
        class described in section 13(d)(1) of this title held 
        on the last day of the reporting period by such 
        accounts with respect to which the institutional 
        investment manager possesses sole or shared authority 
        to exercise the voting rights evidenced by such 
        securities;
          (D) the aggregate purchases and aggregate sales 
        during the reporting period of each security (other 
        than an exempted security) effected by or for such 
        accounts; and
          (E) with respect to any transaction or series of 
        transactions having a market value of at least $500,000 
        or such other amount as the Commission, by rule, may 
        determine, effected during the reporting period by or 
        for such accounts in any equity security of a class 
        described in section 13(d)(1) of this title--
                  (i) the name of the issuer and the title, 
                class, and CUSIP number of the security;
                  (ii) the number of shares or principal amount 
                of the security involved in the transaction;
                  (iii) whether the transaction was a purchase 
                or sale;
                  (iv) the per share price or prices at which 
                the transaction was effected;
                  (v) the date or dates of the transaction;
                  (vi) the date or dates of the settlement of 
                the transaction;
                  (vii) the broker or dealer through whom the 
                transaction was effected;
                  (viii) the market or markets in which the 
                transaction was effected; and
                  (ix) such other related information as the 
                Commission, by rule, may prescribe.
          (2) The Commission shall prescribe rules providing 
        for the public disclosure of the name of the issuer and 
        the title, class, CUSIP number, aggregate amount of the 
        number of short sales of each security, and any 
        additional information determined by the Commission 
        following the end of the reporting period. At a 
        minimum, such public disclosure shall occur every 
        month.
  (3) The Commission, by rule or order, may exempt, 
conditionally or unconditionally, any institutional investment 
manager or security or any class of institutional investment 
managers or securities from any or all of the provisions of 
this subsection or the rules thereunder.
  (4) The Commission shall make available to the public for a 
reasonable fee a list of all equity securities of a class 
described in section 13(d)(1) of this title, updated no less 
frequently than reports are required to be filed pursuant to 
paragraph (1) of this subsection. The Commission shall tabulate 
the information contained in any report filed pursuant to this 
subsection in a manner which will, in the view of the 
Commission, maximize the usefulness of the information to other 
Federal and State authorities and the public. Promptly after 
the filing of any such report, the Commission shall make the 
information contained therein conveniently available to the 
public for a reasonable fee in such form as the Commission, by 
rule, may prescribe, except that the Commission, as it 
determines to be necessary or appropriate in the public 
interest or for the protection of investors, may delay or 
prevent public disclosure of any such information in accordance 
with section 552 of title 5, United States Code. 
Notwithstanding the preceding sentence, any such information 
identifying the securities held by the account of a natural 
person or an estate or trust (other than a business trust or 
investment company) shall not be disclosed to the public.
  (5) In exercising its authority under this subsection, the 
Commission shall determine (and so state) that its action is 
necessary or appropriate in the public interest and for the 
protection of investors or to maintain fair and orderly markets 
or, in granting an exemption, that its action is consistent 
with the protection of investors and the purposes of this 
subsection. In exercising such authority the Commission shall 
take such steps as are within its power, including consulting 
with the Comptroller General of the United States, the Director 
of the Office of Management and Budget, the appropriate 
regulatory agencies, Federal and State authorities which, 
directly or indirectly, require reports from institutional 
investment managers of information substantially similar to 
that called for by this subsection, national securities 
exchanges, and registered securities associations, (A) to 
achieve uniform, centralized reporting of information 
concerning the securities holdings of and transactions by or 
for accounts with respect to which institutional investment 
managers exercise investment discretion, and (B) consistently 
with the objective set forth in the preceding subparagraph, to 
avoid unnecessarily duplicative reporting by, and minimize the 
compliance burden on, institutional investment managers. 
Federal authorities which, directly or indirectly, require 
reports from institutional investment managers of information 
substantially similar to that called for by this subsection 
shall cooperate with the Commission in the performance of its 
responsibilities under the preceding sentence. An institutional 
investment manager which is a bank, the deposits of which are 
insured in accordance with the Federal Deposit Insurance Act, 
shall file with the appropriate regulatory agency a copy of 
every report filed with the Commission pursuant to this 
subsection.
  (6)(A) For purposes of this subsection the term 
``institutional investment manager'' includes any person, other 
than a natural person, investing in or buying and selling 
securities for its own account, and any person exercising 
investment discretion with respect to the account of any other 
person.
  (B) The Commission shall adopt such rules as it deems 
necessary or appropriate to prevent duplicative reporting 
pursuant to this subsection by two or more institutional 
investment managers exercising investment discretion with 
respect to the same amount.
  (g)(1) Any person who is directly or indirectly the 
beneficial owner of more than 5 per centum of any security of a 
class described in subsection (d)(1) of this section or 
otherwise becomes or is deemed to become a beneficial owner of 
any security of a class described in subsection (d)(1) upon the 
purchase or sale of a security-based swap that the Commission 
may define by ruleshall file with the Commission a statement 
setting forth, in such form and at such time as the Commission 
may, by rule, prescribe--
          (A) such person's identity, residence, and 
        citizenship; and
          (B) the number and description of the shares in which 
        such person has an interest and the nature of such 
        interest.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) In exercising its authority under this subsection, the 
Commission shall take such steps as it deems necessary or 
appropriate in the public interest or for the protection of 
investors (A) to achieve centralized reporting of information 
regarding ownership, (B) to avoid unnecessarily duplicative 
reporting by and minimize the compliance burden on persons 
required to report, and (C) to tabulate and promptly make 
available the information contained in any report filed 
pursuant to this subsection in a manner which will, in the view 
of the Commission, maximize the usefulness of the information 
to other Federal and State agencies and the public.
  (6) The Commission may, by rule or order, exempt, in whole or 
in part, any person or class of persons from any or all of the 
reporting requirements of this subsection as it deems necessary 
or appropriate in the public interest or for the protection of 
investors.
  (h) Large Trader Reporting.--
          (1) Identification requirements for large traders.--
        For the purpose of monitoring the impact on the 
        securities markets of securities transactions involving 
        a substantial volume or a large fair market value or 
        exercise value and for the purpose of otherwise 
        assisting the Commission in the enforcement of this 
        title, each large trader shall--
                  (A) provide such information to the 
                Commission as the Commission may by rule or 
                regulation prescribe as necessary or 
                appropriate, identifying such large trader and 
                all accounts in or through which such large 
                trader effects such transactions; and
                  (B) identify, in accordance with such rules 
                or regulations as the Commission may prescribe 
                as necessary or appropriate, to any registered 
                broker or dealer by or through whom such large 
                trader directly or indirectly effects 
                securities transactions, such large trader and 
                all accounts directly or indirectly maintained 
                with such broker or dealer by such large trader 
                in or through which such transactions are 
                effected.
          (2) Recordkeeping and reporting requirements for 
        brokers and dealers.--Every registered broker or dealer 
        shall make and keep for prescribed periods such records 
        as the Commission by rule or regulation prescribes as 
        necessary or appropriate in the public interest, for 
        the protection of investors, or otherwise in 
        furtherance of the purposes of this title, with respect 
        to securities transactions that equal or exceed the 
        reporting activity level effected directly or 
        indirectly by or through such registered broker or 
        dealer of or for any person that such broker or dealer 
        knows is a large trader, or any person that such broker 
        or dealer has reason to know is a large trader on the 
        basis of transactions in securities effected by or 
        through such broker or dealer. Such records shall be 
        available for reporting to the Commission, or any self-
        regulatory organization that the Commission shall 
        designate to receive such reports, on the morning of 
        the day following the day the transactions were 
        effected, and shall be reported to the Commission or a 
        self-regulatory organization designated by the 
        Commission immediately upon request by the Commission 
        or such a self-regulatory organization. Such records 
        and reports shall be in a format and transmitted in a 
        manner prescribed by the Commission (including, but not 
        limited to, machine readable form).
          (3) Aggregation rules.--The Commission may prescribe 
        rules or regulations governing the manner in which 
        transactions and accounts shall be aggregated for the 
        purpose of this subsection, including aggregation on 
        the basis of common ownership or control.
          (4) Examination of broker and dealer records.--All 
        records required to be made and kept by registered 
        brokers and dealers pursuant to this subsection with 
        respect to transactions effected by large traders are 
        subject at any time, or from time to time, to such 
        reasonable periodic, special, or other examinations by 
        representatives of the Commission as the Commission 
        deems necessary or appropriate in the public interest, 
        for the protection of investors, or otherwise in 
        furtherance of the purposes of this title.
          (5) Factors to be considered in commission actions.--
        In exercising its authority under this subsection, the 
        Commission shall take into account--
                  (A) existing reporting systems;
                  (B) the costs associated with maintaining 
                information with respect to transactions 
                effected by large traders and reporting such 
                information to the Commission or self-
                regulatory organizations; and
                  (C) the relationship between the United 
                States and international securities markets.
          (6) Exemptions.--The Commission, by rule, regulation, 
        or order, consistent with the purposes of this title, 
        may exempt any person or class of persons or any 
        transaction or class of transactions, either 
        conditionally or upon specified terms and conditions or 
        for stated periods, from the operation of this 
        subsection, and the rules and regulations thereunder.
          (7) Authority of commission to limit disclosure of 
        information.--Notwithstanding any other provision of 
        law, the Commission shall not be compelled to disclose 
        any information required to be kept or reported under 
        this subsection. Nothing in this subsection shall 
        authorize the Commission to withhold information from 
        Congress, or prevent the Commission from complying with 
        a request for information from any other Federal 
        department or agency requesting information for 
        purposes within the scope of its jurisdiction, or 
        complying with an order of a court of the United States 
        in an action brought by the United States or the 
        Commission. For purposes of section 552 of title 5, 
        United States Code, this subsection shall be considered 
        a statute described in subsection (b)(3)(B) of such 
        section 552.
          (8) Definitions.--For purposes of this subsection--
                  (A) the term ``large trader'' means every 
                person who, for his own account or an account 
                for which he exercises investment discretion, 
                effects transactions for the purchase or sale 
                of any publicly traded security or securities 
                by use of any means or instrumentality of 
                interstate commerce or of the mails, or of any 
                facility of a national securities exchange, 
                directly or indirectly by or through a 
                registered broker or dealer in an aggregate 
                amount equal to or in excess of the identifying 
                activity level;
                  (B) the term ``publicly traded security'' 
                means any equity security (including an option 
                on individual equity securities, and an option 
                on a group or index of such securities) listed, 
                or admitted to unlisted trading privileges, on 
                a national securities exchange, or quoted in an 
                automated interdealer quotation system;
                  (C) the term ``identifying activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule or regulation, specifying the time 
                interval during which such transactions shall 
                be aggregated;
                  (D) the term ``reporting activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule, regulation, or order, specifying the time 
                interval during which such transactions shall 
                be aggregated; and
                  (E) the term ``person'' has the meaning given 
                in section 3(a)(9) of this title and also 
                includes two or more persons acting as a 
                partnership, limited partnership, syndicate, or 
                other group, but does not include a foreign 
                central bank.
  (i) Accuracy of Financial Reports.--Each financial report 
that contains financial statements, and that is required to be 
prepared in accordance with (or reconciled to) generally 
accepted accounting principles under this title and filed with 
the Commission shall reflect all material correcting 
adjustments that have been identified by a registered public 
accounting firm in accordance with generally accepted 
accounting principles and the rules and regulations of the 
Commission.
  (j) Off-Balance Sheet Transactions.--Not later than 180 days 
after the date of enactment of the Sarbanes-Oxley Act of 2002, 
the Commission shall issue final rules providing that each 
annual and quarterly financial report required to be filed with 
the Commission shall disclose all material off-balance sheet 
transactions, arrangements, obligations (including contingent 
obligations), and other relationships of the issuer with 
unconsolidated entities or other persons, that may have a 
material current or future effect on financial condition, 
changes in financial condition, results of operations, 
liquidity, capital expenditures, capital resources, or 
significant components of revenues or expenses.
  (k) Prohibition on Personal Loans to Executives.--
          (1) In general.--It shall be unlawful for any issuer 
        (as defined in section 2 of the Sarbanes-Oxley Act of 
        2002), directly or indirectly, including through any 
        subsidiary, to extend or maintain credit, to arrange 
        for the extension of credit, or to renew an extension 
        of credit, in the form of a personal loan to or for any 
        director or executive officer (or equivalent thereof) 
        of that issuer. An extension of credit maintained by 
        the issuer on the date of enactment of this subsection 
        shall not be subject to the provisions of this 
        subsection, provided that there is no material 
        modification to any term of any such extension of 
        credit or any renewal of any such extension of credit 
        on or after that date of enactment.
          (2) Limitation.--Paragraph (1) does not preclude any 
        home improvement and manufactured home loans (as that 
        term is defined in section 5 of the Home Owners' Loan 
        Act (12 U.S.C. 1464)), consumer credit (as defined in 
        section 103 of the Truth in Lending Act (15 U.S.C. 
        1602)), or any extension of credit under an open end 
        credit plan (as defined in section 103 of the Truth in 
        Lending Act (15 U.S.C. 1602)), or a charge card (as 
        defined in section 127(c)(4)(e) of the Truth in Lending 
        Act (15 U.S.C. 1637(c)(4)(e)), or any extension of 
        credit by a broker or dealer registered under section 
        15 of this title to an employee of that broker or 
        dealer to buy, trade, or carry securities, that is 
        permitted under rules or regulations of the Board of 
        Governors of the Federal Reserve System pursuant to 
        section 7 of this title (other than an extension of 
        credit that would be used to purchase the stock of that 
        issuer), that is--
                  (A) made or provided in the ordinary course 
                of the consumer credit business of such issuer;
                  (B) of a type that is generally made 
                available by such issuer to the public; and
                  (C) made by such issuer on market terms, or 
                terms that are no more favorable than those 
                offered by the issuer to the general public for 
                such extensions of credit.
          (3) Rule of construction for certain loans.--
        Paragraph (1) does not apply to any loan made or 
        maintained by an insured depository institution (as 
        defined in section 3 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813)), if the loan is subject to the 
        insider lending restrictions of section 22(h) of the 
        Federal Reserve Act (12 U.S.C. 375b).
  (l) Real Time Issuer Disclosures.--Each issuer reporting 
under section 13(a) or 15(d) shall disclose to the public on a 
rapid and current basis such additional information concerning 
material changes in the financial condition or operations of 
the issuer, in plain English, which may include trend and 
qualitative information and graphic presentations, as the 
Commission determines, by rule, is necessary or useful for the 
protection of investors and in the public interest.
  (m) Public Availability of Security-based Swap Transaction 
Data.--
          (1) In general.--
                  (A) Definition of real-time public 
                reporting.--In this paragraph, the term ``real-
                time public reporting'' means to report data 
                relating to a security-based swap transaction, 
                including price and volume, as soon as 
                technologically practicable after the time at 
                which the security-based swap transaction has 
                been executed.
                  (B) Purpose.--The purpose of this subsection 
                is to authorize the Commission to make 
                security-based swap transaction and pricing 
                data available to the public in such form and 
                at such times as the Commission determines 
                appropriate to enhance price discovery.
                  (C) General rule.--The Commission is 
                authorized to provide by rule for the public 
                availability of security-based swap 
                transaction, volume, and pricing data as 
                follows:
                          (i) With respect to those security-
                        based swaps that are subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1) 
                        (including those security-based swaps 
                        that are excepted from the requirement 
                        pursuant to section 3C(g)), the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                          (ii) With respect to those security-
                        based swaps that are not subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1), but are 
                        cleared at a registered clearing 
                        agency, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                          (iii) With respect to security-based 
                        swaps that are not cleared at a 
                        registered clearing agency and which 
                        are reported to a security-based swap 
                        data repository or the Commission under 
                        section 3C(a)(6), the Commission shall 
                        require real-time public reporting for 
                        such transactions, in a manner that 
                        does not disclose the business 
                        transactions and market positions of 
                        any person.
                          (iv) With respect to security-based 
                        swaps that are determined to be 
                        required to be cleared under section 
                        3C(b) but are not cleared, the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                  (D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                security-based swap transaction and pricing 
                data required to be reported under this 
                paragraph.
                  (E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for security-based 
                swaps described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          (i) to ensure such information does 
                        not identify the participants;
                          (ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional security-based swap 
                        transaction (block trade) for 
                        particular markets and contracts;
                          (iii) to specify the appropriate time 
                        delay for reporting large notional 
                        security-based swap transactions (block 
                        trades) to the public; and
                          (iv) that take into account whether 
                        the public disclosure will materially 
                        reduce market liquidity.
                  (F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the 
                parties to a security-based swap) shall be 
                responsible for reporting security-based swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                  (G) Reporting of swaps to registered 
                security-based swap data repositories.--Each 
                security-based swap (whether cleared or 
                uncleared) shall be reported to a registered 
                security-based swap data repository.
                  (H) Registration of clearing agencies.--A 
                clearing agency may register as a security-
                based swap data repository.
          (2) Semiannual and annual public reporting of 
        aggregate security-based swap data.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                          (i) the trading and clearing in the 
                        major security-based swap categories; 
                        and
                          (ii) the market participants and 
                        developments in new products.
                  (B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          (i) use information from security-
                        based swap data repositories and 
                        clearing agencies; and
                          (ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank 
                        for International Settlements, and such 
                        other regulatory bodies as may be 
                        necessary.
                  (C) Authority of commission.--The Commission 
                may, by rule, regulation, or order, delegate 
                the public reporting responsibilities of the 
                Commission under this paragraph in accordance 
                with such terms and conditions as the 
                Commission determines to be appropriate and in 
                the public interest.
  (n) Security-based Swap Data Repositories.--
          (1) Registration requirement.--It shall be unlawful 
        for any person, unless registered with the Commission, 
        directly or indirectly, to make use of the mails or any 
        means or instrumentality of interstate commerce to 
        perform the functions of a security-based swap data 
        repository.
          (2) Inspection and examination.--Each registered 
        security-based swap data repository shall be subject to 
        inspection and examination by any representative of the 
        Commission.
          (3) Compliance with core principles.--
                  (A) In general.--To be registered, and 
                maintain registration, as a security-based swap 
                data repository, the security-based swap data 
                repository shall comply with--
                          (i) the requirements and core 
                        principles described in this 
                        subsection; and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation.
                  (B) Reasonable discretion of security-based 
                swap data repository.--Unless otherwise 
                determined by the Commission, by rule or 
                regulation, a security-based swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the security-based swap data 
                repository complies with the core principles 
                described in this subsection.
          (4) Standard setting.--
                  (A) Data identification.--
                          (i) In general.--In accordance with 
                        clause (ii), the Commission shall 
                        prescribe standards that specify the 
                        data elements for each security-based 
                        swap that shall be collected and 
                        maintained by each registered security-
                        based swap data repository.
                          (ii) Requirement.--In carrying out 
                        clause (i), the Commission shall 
                        prescribe consistent data element 
                        standards applicable to registered 
                        entities and reporting counterparties.
                  (B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and 
                data maintenance standards for security-based 
                swap data repositories.
                  (C) Comparability.--The standards prescribed 
                by the Commission under this subsection shall 
                be comparable to the data standards imposed by 
                the Commission on clearing agencies in 
                connection with their clearing of security-
                based swaps.
          (5) Duties.--A security-based swap data repository 
        shall--
                  (A) accept data prescribed by the Commission 
                for each security-based swap under subsection 
                (b);
                  (B) confirm with both counterparties to the 
                security-based swap the accuracy of the data 
                that was submitted;
                  (C) maintain the data described in 
                subparagraph (A) in such form, in such manner, 
                and for such period as may be required by the 
                Commission;
                  (D)(i) provide direct electronic access to 
                the Commission (or any designee of the 
                Commission, including another registered 
                entity); and
                  (ii) provide the information described in 
                subparagraph (A) in such form and at such 
                frequency as the Commission may require to 
                comply with the public reporting requirements 
                set forth in subsection (m);
                  (E) at the direction of the Commission, 
                establish automated systems for monitoring, 
                screening, and analyzing security-based swap 
                data;
                  (F) maintain the privacy of any and all 
                security-based swap transaction information 
                that the security-based swap data repository 
                receives from a security-based swap dealer, 
                counterparty, or any other registered entity; 
                and
                  (G) on a confidential basis pursuant to 
                section 24, upon request, and after notifying 
                the Commission of the request, make available 
                security-based swap data obtained by the 
                security-based swap data repository, including 
                individual counterparty trade and position 
                data, to--
                          (i) each appropriate prudential 
                        regulator;
                          (ii) the Financial Stability 
                        Oversight Council;
                          (iii) the Commodity Futures Trading 
                        Commission;
                          (iv) the Department of Justice; and
                          (v) any other person that the 
                        Commission determines to be 
                        appropriate, including--
                                  (I) foreign financial 
                                supervisors (including foreign 
                                futures authorities);
                                  (II) foreign central banks;
                                  (III) foreign ministries; and
                                  (IV) other foreign 
                                authorities.
                  (H) Confidentiality agreement.--Before the 
                security-based swap data repository may share 
                information with any entity described in 
                subparagraph (G), the security-based swap data 
                repository shall receive a written agreement 
                from each entity stating that the entity shall 
                abide by the confidentiality requirements 
                described in section 24 relating to the 
                information on security-based swap transactions 
                that is provided.
          (6) Designation of chief compliance officer.--
                  (A) In general.--Each security-based swap 
                data repository shall designate an individual 
                to serve as a chief compliance officer.
                  (B) Duties.--The chief compliance officer 
                shall--
                          (i) report directly to the board or 
                        to the senior officer of the security-
                        based swap data repository;
                          (ii) review the compliance of the 
                        security-based swap data repository 
                        with respect to the requirements and 
                        core principles described in this 
                        subsection;
                          (iii) in consultation with the board 
                        of the security-based swap data 
                        repository, a body performing a 
                        function similar to the board of the 
                        security-based swap data repository, or 
                        the senior officer of the security-
                        based swap data repository, resolve any 
                        conflicts of interest that may arise;
                          (iv) be responsible for administering 
                        each policy and procedure that is 
                        required to be established pursuant to 
                        this section;
                          (v) ensure compliance with this title 
                        (including regulations) relating to 
                        agreements, contracts, or transactions, 
                        including each rule prescribed by the 
                        Commission under this section;
                          (vi) establish procedures for the 
                        remediation of noncompliance issues 
                        identified by the chief compliance 
                        officer through any--
                                  (I) compliance office review;
                                  (II) look-back;
                                  (III) internal or external 
                                audit finding;
                                  (IV) self-reported error; or
                                  (V) validated complaint; and
                          (vii) establish and follow 
                        appropriate procedures for the 
                        handling, management response, 
                        remediation, retesting, and closing of 
                        noncompliance issues.
                  (C) Annual reports.--
                          (i) In general.--In accordance with 
                        rules prescribed by the Commission, the 
                        chief compliance officer shall annually 
                        prepare and sign a report that contains 
                        a description of--
                                  (I) the compliance of the 
                                security-based swap data 
                                repository of the chief 
                                compliance officer with respect 
                                to this title (including 
                                regulations); and
                                  (II) each policy and 
                                procedure of the security-based 
                                swap data repository of the 
                                chief compliance officer 
                                (including the code of ethics 
                                and conflict of interest 
                                policies of the security-based 
                                swap data repository).
                          (ii) Requirements.--A compliance 
                        report under clause (i) shall--
                                  (I) accompany each 
                                appropriate financial report of 
                                the security-based swap data 
                                repository that is required to 
                                be furnished to the Commission 
                                pursuant to this section; and
                                  (II) include a certification 
                                that, under penalty of law, the 
                                compliance report is accurate 
                                and complete.
          (7) Core principles applicable to security-based swap 
        data repositories.--
                  (A) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this title, the swap data 
                repository shall not--
                          (i) adopt any rule or take any action 
                        that results in any unreasonable 
                        restraint of trade; or
                          (ii) impose any material 
                        anticompetitive burden on the trading, 
                        clearing, or reporting of transactions.
                  (B) Governance arrangements.--Each security-
                based swap data repository shall establish 
                governance arrangements that are transparent--
                          (i) to fulfill public interest 
                        requirements; and
                          (ii) to support the objectives of the 
                        Federal Government, owners, and 
                        participants.
                  (C) Conflicts of interest.--Each security-
                based swap data repository shall--
                          (i) establish and enforce rules to 
                        minimize conflicts of interest in the 
                        decision-making process of the 
                        security-based swap data repository; 
                        and
                          (ii) establish a process for 
                        resolving any conflicts of interest 
                        described in clause (i).
                  (D) Additional duties developed by 
                commission.--
                          (i) In general.--The Commission may 
                        develop 1 or more additional duties 
                        applicable to security-based swap data 
                        repositories.
                          (ii) Consideration of evolving 
                        standards.--In developing additional 
                        duties under subparagraph (A), the 
                        Commission may take into consideration 
                        any evolving standard of the United 
                        States or the international community.
                          (iii) Additional duties for 
                        commission designees.--The Commission 
                        shall establish additional duties for 
                        any registrant described in section 
                        13(m)(2)(C) in order to minimize 
                        conflicts of interest, protect data, 
                        ensure compliance, and guarantee the 
                        safety and security of the security-
                        based swap data repository.
          (8) Required registration for security-based swap 
        data repositories.--Any person that is required to be 
        registered as a security-based swap data repository 
        under this subsection shall register with the 
        Commission, regardless of whether that person is also 
        licensed under the Commodity Exchange Act as a swap 
        data repository.
          (9) Rules.--The Commission shall adopt rules 
        governing persons that are registered under this 
        subsection.
  (o) Beneficial ownership.--For purposes ofthis section and 
section 16, a person shall be deemed to acquire 
beneficialownership of an equity security based on the purchase 
or sale of asecurity-based swap, only to the extent that the 
Commission, by rule,determines after consultation with the 
prudential regulators and the Secretaryof the Treasury, that 
the purchase or sale of the security-based swap, or classof 
security-based swap, provides incidents of ownership comparable 
to directownership of the equity security, and that it is 
necessary to achieve thepurposes of this section that the 
purchase or sale of the security-based swaps,or class of 
security-based swap, be deemed the acquisition of 
beneficialownership of the equitysecurity.
  (p) Disclosures Relating to Conflict Minerals Originating in 
the Democratic Republic of the Congo.--
          (1) Regulations.--
                  (A) In general.--Not later than 270 days 
                after the date of the enactment of this 
                subsection, the Commission shall promulgate 
                regulations requiring any person described in 
                paragraph (2) to disclose annually, beginning 
                with the person's first full fiscal year that 
                begins after the date of promulgation of such 
                regulations, whether conflict minerals that are 
                necessary as described in paragraph (2)(B), in 
                the year for which such reporting is required, 
                did originate in the Democratic Republic of the 
                Congo or an adjoining country and, in cases in 
                which such conflict minerals did originate in 
                any such country, submit to the Commission a 
                report that includes, with respect to the 
                period covered by the report--
                          (i) a description of the measures 
                        taken by the person to exercise due 
                        diligence on the source and chain of 
                        custody of such minerals, which 
                        measures shall include an independent 
                        private sector audit of such report 
                        submitted through the Commission that 
                        is conducted in accordance with 
                        standards established by the 
                        Comptroller General of the United 
                        States, in accordance with rules 
                        promulgated by the Commission, in 
                        consultation with the Secretary of 
                        State; and
                          (ii) a description of the products 
                        manufactured or contracted to be 
                        manufactured that are not DRC conflict 
                        free (``DRC conflict free'' is defined 
                        to mean the products that do not 
                        contain minerals that directly or 
                        indirectly finance or benefit armed 
                        groups in the Democratic Republic of 
                        the Congo or an adjoining country), the 
                        entity that conducted the independent 
                        private sector audit in accordance with 
                        clause (i), the facilities used to 
                        process the conflict minerals, the 
                        country of origin of the conflict 
                        minerals, and the efforts to determine 
                        the mine or location of origin with the 
                        greatest possible specificity.
                  (B) Certification.--The person submitting a 
                report under subparagraph (A) shall certify the 
                audit described in clause (i) of such 
                subparagraph that is included in such report. 
                Such a certified audit shall constitute a 
                critical component of due diligence in 
                establishing the source and chain of custody of 
                such minerals.
                  (C) Unreliable determination.--If a report 
                required to be submitted by a person under 
                subparagraph (A) relies on a determination of 
                an independent private sector audit, as 
                described under subparagraph (A)(i), or other 
                due diligence processes previously determined 
                by the Commission to be unreliable, the report 
                shall not satisfy the requirements of the 
                regulations promulgated under subparagraph 
                (A)(i).
                  (D) DRC conflict free.--For purposes of this 
                paragraph, a product may be labeled as ``DRC 
                conflict free'' if the product does not contain 
                conflict minerals that directly or indirectly 
                finance or benefit armed groups in the 
                Democratic Republic of the Congo or an 
                adjoining country.
                  (E) Information available to the public.--
                Each person described under paragraph (2) shall 
                make available to the public on the Internet 
                website of such person the information 
                disclosed by such person under subparagraph 
                (A).
          (2) Person described.--A person is described in this 
        paragraph if--
                  (A) the person is required to file reports 
                with the Commission pursuant to paragraph 
                (1)(A); and
                  (B) conflict minerals are necessary to the 
                functionality or production of a product 
                manufactured by such person.
          (3) Revisions and waivers.--The Commission shall 
        revise or temporarily waive the requirements described 
        in paragraph (1) if the President transmits to the 
        Commission a determination that--
                  (A) such revision or waiver is in the 
                national security interest of the United States 
                and the President includes the reasons 
                therefor; and
                  (B) establishes a date, not later than 2 
                years after the initial publication of such 
                exemption, on which such exemption shall 
                expire.
          (4) Termination of disclosure requirements.--The 
        requirements of paragraph (1) shall terminate on the 
        date on which the President determines and certifies to 
        the appropriate congressional committees, but in no 
        case earlier than the date that is one day after the 
        end of the 5-year period beginning on the date of the 
        enactment of this subsection, that no armed groups 
        continue to be directly involved and benefitting from 
        commercial activity involving conflict minerals.
          (5) Definitions.--For purposes of this subsection, 
        the terms ``adjoining country'', ``appropriate 
        congressional committees'', ``armed group'', and 
        ``conflict mineral'' have the meaning given those terms 
        under section 1502 of the Dodd-Frank Wall Street Reform 
        and Consumer Protection Act.
  (q) Disclosure of Payments by Resource Extraction Issuers.--
          (1) Definitions.--In this subsection--
                  (A) the term ``commercial development of oil, 
                natural gas, or minerals'' includes 
                exploration, extraction, processing, export, 
                and other significant actions relating to oil, 
                natural gas, or minerals, or the acquisition of 
                a license for any such activity, as determined 
                by the Commission;
                  (B) the term ``foreign government'' means a 
                foreign government, a department, agency, or 
                instrumentality of a foreign government, or a 
                company owned by a foreign government, as 
                determined by the Commission;
                  (C) the term ``payment''--
                          (i) means a payment that is--
                                  (I) made to further the 
                                commercial development of oil, 
                                natural gas, or minerals; and
                                  (II) not de minimis; and
                          (ii) includes taxes, royalties, fees 
                        (including license fees), production 
                        entitlements, bonuses, and other 
                        material benefits, that the Commission, 
                        consistent with the guidelines of the 
                        Extractive Industries Transparency 
                        Initiative (to the extent practicable), 
                        determines are part of the commonly 
                        recognized revenue stream for the 
                        commercial development of oil, natural 
                        gas, or minerals;
                  (D) the term ``resource extraction issuer'' 
                means an issuer that--
                          (i) is required to file an annual 
                        report with the Commission; and
                          (ii) engages in the commercial 
                        development of oil, natural gas, or 
                        minerals;
                  (E) the term ``interactive data format'' 
                means an electronic data format in which pieces 
                of information are identified using an 
                interactive data standard; and
                  (F) the term ``interactive data standard'' 
                means standardized list of electronic tags that 
                mark information included in the annual report 
                of a resource extraction issuer.
          (2) Disclosure.--
                  (A) Information required.--Not later than 270 
                days after the date of enactment of the Dodd-
                Frank Wall Street Reform and Consumer 
                Protection Act, the Commission shall issue 
                final rules that require each resource 
                extraction issuer to include in an annual 
                report of the resource extraction issuer 
                information relating to any payment made by the 
                resource extraction issuer, a subsidiary of the 
                resource extraction issuer, or an entity under 
                the control of the resource extraction issuer 
                to a foreign government or the Federal 
                Government for the purpose of the commercial 
                development of oil, natural gas, or minerals, 
                including--
                          (i) the type and total amount of such 
                        payments made for each project of the 
                        resource extraction issuer relating to 
                        the commercial development of oil, 
                        natural gas, or minerals; and
                          (ii) the type and total amount of 
                        such payments made to each government.
                  (B) Consultation in rulemaking.--In issuing 
                rules under subparagraph (A), the Commission 
                may consult with any agency or entity that the 
                Commission determines is relevant.
                  (C) Interactive data format.--The rules 
                issued under subparagraph (A) shall require 
                that the information included in the annual 
                report of a resource extraction issuer be 
                submitted in an interactive data format.
                  (D) Interactive data standard.--
                          (i) In general.--The rules issued 
                        under subparagraph (A) shall establish 
                        an interactive data standard for the 
                        information included in the annual 
                        report of a resource extraction issuer.
                          (ii) Electronic tags.--The 
                        interactive data standard shall include 
                        electronic tags that identify, for any 
                        payments made by a resource extraction 
                        issuer to a foreign government or the 
                        Federal Government--
                                  (I) the total amounts of the 
                                payments, by category;
                                  (II) the currency used to 
                                make the payments;
                                  (III) the financial period in 
                                which the payments were made;
                                  (IV) the business segment of 
                                the resource extraction issuer 
                                that made the payments;
                                  (V) the government that 
                                received the payments, and the 
                                country in which the government 
                                is located;
                                  (VI) the project of the 
                                resource extraction issuer to 
                                which the payments relate; and
                                  (VII) such other information 
                                as the Commission may determine 
                                is necessary or appropriate in 
                                the public interest or for the 
                                protection of investors.
                  (E) International transparency efforts.--To 
                the extent practicable, the rules issued under 
                subparagraph (A) shall support the commitment 
                of the Federal Government to international 
                transparency promotion efforts relating to the 
                commercial development of oil, natural gas, or 
                minerals.
                  (F) Effective date.--With respect to each 
                resource extraction issuer, the final rules 
                issued under subparagraph (A) shall take effect 
                on the date on which the resource extraction 
                issuer is required to submit an annual report 
                relating to the fiscal year of the resource 
                extraction issuer that ends not earlier than 1 
                year after the date on which the Commission 
                issues final rules under subparagraph (A).
          (3) Public availability of information.--
                  (A) In general.--To the extent practicable, 
                the Commission shall make available online, to 
                the public, a compilation of the information 
                required to be submitted under the rules issued 
                under paragraph (2)(A).
                  (B) Other information.--Nothing in this 
                paragraph shall require the Commission to make 
                available online information other than the 
                information required to be submitted under the 
                rules issued under paragraph (2)(A).
          (4) Authorization of appropriations.--There are 
        authorized to be appropriated to the Commission such 
        sums as may be necessary to carry out this subsection.
  (r) Disclosure of Certain Activities Relating to Iran.--
          (1) In general.--Each issuer required to file an 
        annual or quarterly report under subsection (a) shall 
        disclose in that report the information required by 
        paragraph (2) if, during the period covered by the 
        report, the issuer or any affiliate of the issuer--
                  (A) knowingly engaged in an activity 
                described in subsection (a) or (b) of section 5 
                of the Iran Sanctions Act of 1996 (Public Law 
                104-172; 50 U.S.C. 1701 note);
                  (B) knowingly engaged in an activity 
                described in subsection (c)(2) of section 104 
                of the Comprehensive Iran Sanctions, 
                Accountability, and Divestment Act of 2010 (22 
                U.S.C. 8513) or a transaction described in 
                subsection (d)(1) of that section;
                  (C) knowingly engaged in an activity 
                described in section 105A(b)(2) of that Act; or
                  (D) knowingly conducted any transaction or 
                dealing with--
                          (i) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13224 (66 Fed. Reg. 49079; relating to 
                        blocking property and prohibiting 
                        transactions with persons who commit, 
                        threaten to commit, or support 
                        terrorism);
                          (ii) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13382 (70 Fed. Reg. 38567; relating to 
                        blocking of property of weapons of mass 
                        destruction proliferators and their 
                        supporters); or
                          (iii) any person or entity identified 
                        under section 560.304 of title 31, Code 
                        of Federal Regulations (relating to the 
                        definition of the Government of Iran) 
                        without the specific authorization of a 
                        Federal department or agency.
          (2) Information required.--If an issuer or an 
        affiliate of the issuer has engaged in any activity 
        described in paragraph (1), the issuer shall disclose a 
        detailed description of each such activity, including--
                  (A) the nature and extent of the activity;
                  (B) the gross revenues and net profits, if 
                any, attributable to the activity; and
                  (C) whether the issuer or the affiliate of 
                the issuer (as the case may be) intends to 
                continue the activity.
          (3) Notice of disclosures.--If an issuer reports 
        under paragraph (1) that the issuer or an affiliate of 
        the issuer has knowingly engaged in any activity 
        described in that paragraph, the issuer shall 
        separately file with the Commission, concurrently with 
        the annual or quarterly report under subsection (a), a 
        notice that the disclosure of that activity has been 
        included in that annual or quarterly report that 
        identifies the issuer and contains the information 
        required by paragraph (2).
          (4) Public disclosure of information.--Upon receiving 
        a notice under paragraph (3) that an annual or 
        quarterly report includes a disclosure of an activity 
        described in paragraph (1), the Commission shall 
        promptly--
                  (A) transmit the report to--
                          (i) the President;
                          (ii) the Committee on Foreign Affairs 
                        and the Committee on Financial Services 
                        of the House of Representatives; and
                          (iii) the Committee on Foreign 
                        Relations and the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate; and
                  (B) make the information provided in the 
                disclosure and the notice available to the 
                public by posting the information on the 
                Internet website of the Commission.
          (5) Investigations.--Upon receiving a report under 
        paragraph (4) that includes a disclosure of an activity 
        described in paragraph (1) (other than an activity 
        described in subparagraph (D)(iii) of that paragraph), 
        the President shall--
                  (A) initiate an investigation into the 
                possible imposition of sanctions under the Iran 
                Sanctions Act of 1996 (Public Law 104-172; 50 
                U.S.C. 1701 note), section 104 or 105A of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010, an Executive order 
                specified in clause (i) or (ii) of paragraph 
                (1)(D), or any other provision of law relating 
                to the imposition of sanctions with respect to 
                Iran, as applicable; and
                  (B) not later than 180 days after initiating 
                such an investigation, make a determination 
                with respect to whether sanctions should be 
                imposed with respect to the issuer or the 
                affiliate of the issuer (as the case may be).
          (6) Sunset.--The provisions of this subsection shall 
        terminate on the date that is 30 days after the date on 
        which the President makes the certification described 
        in section 401(a) of the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010 (22 U.S.C. 
        8551(a)).
  (s) Disclosures Relating to Climate Change.--
          (1) Definitions.--In this subsection:
                  (A) 1.5 degree scenario.--The term ``1.5 
                degree scenario'' means a scenario that aligns 
                with greenhouse gas emissions pathways that aim 
                to limit global warming to 1.5 degrees Celsius 
                above pre-industrial levels.
                  (B) Appropriate climate principals.--The term 
                ``appropriate climate principals'' means--
                          (i) the Administrator of the 
                        Environmental Protection Agency;
                          (ii) the Administrator of the 
                        National Oceanic and Atmospheric 
                        Administration;
                          (iii) the Director of the Office of 
                        Management and Budget;
                          (iv) the Secretary of the Interior;
                          (v) the Secretary of Energy; and
                          (vi) the head of any other Federal 
                        agency, as determined appropriate by 
                        the Commission.
                  (C) Baseline scenario.--The term ``baseline 
                scenario'' means a widely-recognized analysis 
                scenario in which levels of greenhouse gas 
                emissions, as of the date on which the analysis 
                is performed, continue to grow, resulting in an 
                increase in the global average temperature of 
                1.5 degrees Celsius or more above pre-
                industrial levels.
                  (D) Carbon dioxide equivalent.--The term 
                ``carbon dioxide equivalent'' means the number 
                of metric tons of carbon dioxide emissions with 
                the same global warming potential as one metric 
                ton of another greenhouse gas, as determined 
                under table A-1 of subpart A of part 98 of 
                title 40, Code of Federal Regulations, as in 
                effect on the date of enactment of this 
                subsection.
                  (E) Climate change.--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.
                  (F) Commercial development of fossil fuels.--
                The term ``commercial development of fossil 
                fuels'' includes--
                          (i) exploration, extraction, 
                        processing, exporting, transporting, 
                        refining, and any other significant 
                        action with respect to oil, natural 
                        gas, coal, or any byproduct thereof or 
                        any other solid or liquid hydrocarbons 
                        that are commercially produced; and
                          (ii) acquiring a license for any 
                        activity described in clause (i).
                  (G) Covered issuer.--The term ``covered 
                issuer'' means an issuer that is required to 
                file an annual report under subsection (a) or 
                section 15(d).
                  (H) Direct and indirect greenhouse gas 
                emissions.--The term ``direct and indirect 
                greenhouse gas emissions'' includes, with 
                respect to a covered issuer--
                          (i) all direct greenhouse gas 
                        emissions released by the covered 
                        issuer;
                          (ii) all indirect greenhouse gas 
                        emissions with respect to electricity, 
                        heat, or steam purchased by the covered 
                        issuer;
                          (iii) significant indirect emissions, 
                        other than the emissions described in 
                        clause (ii), emitted in the value chain 
                        of the covered issuer; and
                          (iv) all indirect greenhouse gas 
                        emissions that are attributable to 
                        assets owned or managed, including 
                        assets that are partially 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 
                Commission titled ``Modernization of Oil and 
                Gas Reporting'' (74 Fed. Reg. 2158; published 
                January 14, 2009).
                  (J) Greenhouse gas.--The term ``greenhouse 
                gas''--
                          (i) means carbon dioxide, 
                        hydrofluorocarbons, methane, nitrous 
                        oxide, perfluorocarbons, sulfur 
                        hexafluoride, nitrogen triflouride, and 
                        chlorofluorocarbons;
                          (ii) includes any other 
                        anthropogenically-emitted gas that the 
                        Administrator of the Environmental 
                        Protection 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.
                  (K) Greenhouse gas emissions.--The term 
                ``greenhouse gas emissions'' means the 
                emissions 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 
                        temperatures and increased frequency of 
                        temperature 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 appropriate 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 
                document 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 
                estimate of the monetized damages associated 
                with an incremental increase in carbon dioxide 
                emissions in a given year.
                  (N) Transition risks.--The term ``transition 
                risks'' means financial risks that are 
                attributable to climate change mitigation and 
                adaptation, including efforts to reduce 
                greenhouse gas emissions and strengthen 
                resilience to the impacts of climate change, 
                including--
                          (i) costs relating to--
                                  (I) international treaties 
                                and agreements;
                                  (II) Federal, State, and 
                                local policy;
                                  (III) new technologies;
                                  (IV) changing markets;
                                  (V) reputational impacts 
                                relevant to changing consumer 
                                behavior; and
                                  (VI) litigation; and
                          (ii) assets that may lose value or 
                        become stranded due to any of the costs 
                        described in subclauses (I) through 
                        (VI) of clause (i).
                  (O) Value chain.--The term ``value chain''--
                          (i) means the total lifecycle of a 
                        product or service, both before and 
                        after production of the product or 
                        service, as applicable; and
                          (ii) may include the sourcing of 
                        materials, production, transportation, 
                        and disposal with respect to the 
                        product or service described in clause 
                        (i).
          (2) Findings.--Congress finds that--
                  (A) short-, medium-, and long-term financial 
                and economic risks and opportunities relating 
                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, 
                        evaluate, and disclose; and
                  (B) the disclosure of information described 
                in subparagraph (A) should--
                          (i) identify, and evaluate--
                                  (I) material physical and 
                                transition risks posed by 
                                climate change; and
                                  (II) the potential financial 
                                impact 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 opportunities;
                          (iv) 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 Commission, in 
                        consultation with the appropriate 
                        climate principals;
                          (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 reflects, 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 subsection (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 
                        covered issuer by climate change;
                  (B) a description of any established 
                corporate 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 
                climate risks when differing climate scenarios 
                are taken into consideration; and
                  (E) a description of how climate risk is 
                incorporated into the overall risk management 
                strategy of the covered issuer.
          (4) Rule of construction.--Nothing in paragraph (3) 
        may be construed as precluding a covered issuer from 
        including, in an annual report submitted under 
        subsection (a) or section 15(d), any information not 
        explicitly referenced in such paragraph.
          (5) Rulemaking.--The Commission, in consultation with 
        the appropriate climate principals, shall, not later 
        than 2 years after the date of the enactment 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--
                  (A) establish climate-related risk disclosure 
                rules, which shall--
                          (i) be, to the extent practicable, 
                        specialized for industries within 
                        specific sectors of the economy, which 
                        shall include--
                                  (I) the sectors of finance, 
                                insurance, transportation, 
                                electric power, mining, and 
                                non-renewable energy; and
                                  (II) any other sector 
                                determined appropriate by the 
                                Commission, in consultation 
                                with the appropriate climate 
                                principals;
                          (ii) include reporting standards for 
                        estimating and disclosing direct and 
                        indirect 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 
                                emissions by the covered issuer 
                                during the period covered by 
                                the disclosure;
                          (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 covered 
                                issuer;
                          (iv) specify requirements for, and 
                        the disclosure of, input parameters, 
                        assumptions, 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, 
                                including 5, 10, and 20 year 
                                time frames; and
                          (v) include reporting standards and 
                        guidance with respect to the 
                        information required under subparagraph 
                        (B)(iii);
                  (B) require that a covered issuer, with 
                respect to a disclosure required under this 
                subsection--
                          (i) incorporate into such 
                        disclosure--
                                  (I) quantitative analysis to 
                                support 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 taking 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;
                          (ii) consider, when preparing any 
                        qualitative or quantitative risk 
                        analysis statement contained in the 
                        disclosure--
                                  (I) a baseline scenario that 
                                includes physical impacts of 
                                climate change;
                                  (II) a 1.5 degrees scenario; 
                                and
                                  (III) any additional climate 
                                analysis scenario considered 
                                appropriate by the Commission, 
                                in consultation 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 
                                        emissions;
                                          (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 incorporate the 
                                        social cost of carbon;
                                          (bb) the percentage 
                                        of the reserves of the 
                                        covered issuer that 
                                        will be developed under 
                                        the scenarios 
                                        established in clause 
                                        (ii), as well as a 
                                        forecast for the 
                                        development 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 
                                        categories by the type 
                                        of reserve;
                                          (dd) the methodology 
                                        of the covered issuer 
                                        for detecting and 
                                        mitigating 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 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 management 
                                        challenges; and
                                  (III) any other information 
                                that the Commission determines 
                                is--
                                          (aa) necessary;
                                          (bb) appropriate to 
                                        safeguard the public 
                                        interest; or
                                          (cc) directed at 
                                        ensuring that investors 
                                        are informed in 
                                        accordance with the 
                                        findings described 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, determines is--
                          (i) necessary;
                          (ii) appropriate to safeguard the 
                        public interest; or
                          (iii) directed at ensuring that 
                        investors 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 
                required disclosures shall be addressed in the 
                covered issuer's annual financial filing.
          (6) Formatting.--The Commission shall require issuers 
        to disclose information in an interactive data format 
        and shall develop standards for such format, which 
        shall include electronic tags for information 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 
                described in paragraph (2).
          (7) Periodic update of rules.--The Commission shall 
        periodically update the rules issued under this 
        subsection.
          (8) Compilation of information disclosed.--The 
        Commission shall, to the maximum extent practicable 
        make a compilation of the information disclosed by 
        issuers under this subsection publicly available on the 
        website of the Commission and update such compilation 
        at least once each year.
          (9) Reports.--
                  (A) Report to congress.--The Commission 
                shall--
                          (i) conduct an annual assessment 
                        regarding the compliance of covered 
                        issuers with the requirements of this 
                        subsection;
                          (ii) submit to the appropriate 
                        congressional 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 General of 
                the United States shall periodically evaluate, 
                and report to the appropriate congressional 
                committees on, the effectiveness of the 
                Commission in carrying out and enforcing this 
                subsection.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    Committee Republicans believe H.R. 2570 is another 
Democrat-driven, unnecessary, mandatory disclosure requirement 
on public companies. This bill will increase the cost of 
compliance for public companies, discourage private companies 
from going public, and encourage public companies to go 
private. This will result in fewer investment opportunities for 
everyday Americans participating in our capital markets to save 
for retirement, a college education or to build a better life.
    This bill represents yet another attempt to hijack our 
securities laws and backdoor a partisan social agenda that 
progressives have long sought but cannot achieve in other 
sectors. In fact, Senator Elizabeth Warren's (D-MA) press 
release announcing the introduction of her Senate companion to 
this bill proudly acknowledges that intent.
    By stating this bill will ``accelerate the market 
transition from fossil fuels to cleaner and more sustainable 
energy sources that mitigate climate change,'' Senator Warren 
emphasizes that the purpose of this bill is to reduce 
greenhouse gas emissions, not enhance shareholder value.\1\ As 
expected, like so many of the Democrat-sponsored mandatory 
disclosure bills, the bill is intended to appease social 
activists and ``woke'' corporations not help everyday 
investors.
---------------------------------------------------------------------------
    \1\See Senator Elizabeth Warren, ``Warren, Casten, Colleagues 
Reintroduce Bill Requiring Public Companies to Disclose Climate-Related 
Risks'' (April 15, 2021), available at https://www.warren.senate.gov/
newsroom/press-releases/warren-casten-colleagues-reintroduce-bill-
requiring-public-companies-to-disclose-climate-related-
risks#::text=Senator%20Warren%20and%2
0I%20introduced,massive%20and%20rapidly%20growing%20risk.
---------------------------------------------------------------------------
    The Securities Exchange Act of 1934 currently requires 
public companies to file annual reports with the Securities and 
Exchange Commission (SEC) to publicly disclose information that 
investors would find important to making investment decisions. 
If information related to climate change and climate risk is 
material to the investors of a public company--that is, 
provides investment decision-useful information--those 
companies are already required to make those disclosures under 
current law and are already disclosing it.
    H.R. 2570's approach is misguided because:
           The materiality standard has served as the 
        basis for America's public company disclosure regime 
        for eight decades. This standard has helped the U.S. 
        public markets become the best in the world.
           It is irresponsible for Congress to mandate 
        a disclosure with a laundry list of technical data 
        points without first examining all of the various 
        climate change disclosure frameworks voluntarily used 
        by many companies.
           H.R. 2570's disclosures are intended to name 
        and shame carbon-heavy industries.
                    This is evident from the required 
                disclosure of ``total cost of carbon 
                attributable to the direct and indirect 
                greenhouse gas emissions.''
           It is unclear how companies are able to 
        reasonably and accurately identify ``indirect'' 
        greenhouse gas emissions or make accurate forecasts for 
        a 20-year time frame, yet any misstatement or falsity 
        would trigger liability for securities fraud under the 
        bill.
           H.R. 2570 will discourage companies from 
        pursuing economically productive opportunities like 
        acquiring other companies or going public just to avoid 
        having to report seemingly undesirable surface-level 
        information.
                    This is evident by the broad definition of 
                ``indirect'' greenhouse gas emissions.
           The SEC does not have expertise in 
        environmental, climate change, or energy issues. The 
        SEC is not the appropriate entity for determining 
        reporting metrics, industry standards, and formatting. 
        Efforts aimed at encouraging environmental or climate-
        related disclosures for public companies are best left 
        to experts within those industries and individual 
        company shareholders.
    Committee Republicans asked a series of questions to which 
the bill sponsor could not answer, including:
           How many shareholder resolutions requiring 
        the information mandated by H.R. 2570 have won a 
        shareholder vote? For example, have any shareholder 
        resolutions requiring annual disclosure of a company's 
        ``social cost of carbon'' won a shareholder vote? If 
        so, how many resolutions have won, and what percentage 
        of such resolutions does that number represent?
           In order to properly write regulations per 
        H.R. 2570, the SEC staff will need a high fluency in 
        climate and environmental science. As such, how many 
        climate and environmental scientists are currently 
        employed by the SEC?
           Under H.R. 2570, the SEC is to consult with 
        federal agencies that possess climate and environmental 
        expertise, but these agencies do not specialize in 
        financial or investment disclosures. How frequently 
        does the SEC write financial disclosure regulations in 
        consultation with federal agencies that have no 
        expertise in financial disclosures?
    In addition, Committee Republicans offered two amendments. 
The first would ensure the materiality standard remains in 
place by only requiring companies to make H.R. 2570's 
disclosures if there is a substantial likelihood that a 
reasonable shareholder would consider such information 
important to making an investment decision. The second 
amendment would require SEC staff to analyze and report to this 
Committee on the various voluntary climate change disclosure 
frameworks, including the differences and conflicting factors 
between the reporting frameworks. Both amendments were rejected 
by Democrats on a party line vote.
    In conclusion, this misguided bill simply piles on 
unnecessary, costly, and potentially confusing disclosures on 
companies that do not need to make them. H.R. 2570 will make 
being a public company less appealing in America. It will 
prevent or cut off everyday Americans' access to those 
companies and investment opportunities. Instead of attacking 
companies and reducing investment options, Committee 
Republicans want to support American businesses and everyday 
Americans trying to save their hard-earned money.
    For these reasons, Committee Republicans are opposed to the 
bill.
                                   Patrick T. McHenry.
                                   Bill Posey.
                                   Bill Huizenga.
                                   Andy Barr.
                                   J. French Hill.
                                   Lee M. Zeldin.
                                   Alexander X. Mooney.
                                   Ted Budd.
                                   Trey Hollingsworth.
                                   John W. Rose (TN).
                                   Lance Gooden.
                                   Van Taylor.
                                   Frank D. Lucas.
                                   Blaine Luetkemeyer.
                                   Ann Wagner.
                                   Roger Williams.
                                   Tom Emmer.
                                   Barry Loudermilk.
                                   Warren Davidson.
                                   David Kustoff.
                                   Anthony Gonzalez (OH).
                                   Bryan Steil.
                                   William R. Timmons, IV.