SECTION 1. Short title.

SEC. 101. Short title.

SEC. 102. Findings.

(1) The Securities and Exchange Commission has broad authority to require the disclosure of information if such information is in the interest of, or is material to investors.

(2) The Commission does not require companies to disclose information related to environmental, social, and governance (“ESG”) matters, and does not require companies to adhere to standards for disclosing such information.

(3) Investors have reported that voluntary disclosures of ESG metrics are inadequate.

(4) A rule requiring reporting and standardization of ESG disclosures is in the interest of investors.

(5) ESG matters are material to investors, and the Commission must establish standards for disclosure of such matters.

SEC. 103. ESG disclosures.

SEC. 104. Sustainable Finance Advisory Committee.

“(k) Sustainable Finance Advisory Committee.—

“(1) ESTABLISHMENT.—The Commission shall establish a permanent advisory committee to be called the ‘Sustainable Finance Advisory Committee’ (in this subsection referred to as the ‘Committee’).

“(2) DUTIES OF COMMITTEE.—The Committee shall—

“(A) submit a report to the Commission not later than 18 months after the date of the first meeting of the Committee that—

“(i) identifies the challenges and opportunities for investors associated with sustainable finance; and

“(ii) recommends policy changes to facilitate the flow of capital towards sustainable investments, in particular environmentally sustainable investments;

“(B) when solicited, advise the Commission on sustainable finance; and

“(C) communicate with individuals and entities with an interest in sustainable finance.

“(3) MEMBERSHIP.—

“(A) MEMBERS.—

“(i) IN GENERAL.—The Committee shall consist of no more than 20 members who shall each serve for one four-year term.

“(ii) REPRESENTATION.—Each member shall represent individuals and entities with an interest in sustainable finance, such as—

“(I) experts on sustainable finance;

“(II) operators of financial infrastructure;

“(III) entities that provide analysis, data, or methodologies that facilitate sustainable finance;

“(IV) insurance companies, pension funds, asset managers, depository institutions, or credit unions; or

“(V) other financial institutions that intermediate investments in sustainable finance or manage risks related to sustainable development.

“(iii) REPRESENTATION OF INTERESTS.—A member may not represent a single individual or entity and shall represent types of individuals and entities with similar interests in sustainable finance.

“(B) SELECTION.—

“(i) IN GENERAL.—The Commission shall—

“(I) publish criteria for selection of members on the website of the Commission and in the Federal Register; and

“(II) solicit applications for membership on the website of the Commission and in the Federal Register.

“(ii) EQUAL SHARE.—From the individuals who submit applications for membership, each Commissioner of the Commission shall select an equal number of the members of the Committee.

“(C) PAY.—Members may not receive pay by reason of their service on the Committee but may receive travel or transportation expenses in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code.

“(D) MEMBER TRANSPARENCY.—The name of each member and the types of individuals and entities that such member represents shall be published on the website of the Commission.

“(E) STAFF.—The Committee shall be supported by staff from the Office of the Investor Advocate of the Commission that are dedicated to environmental, social and governance (in this subsection referred to as ‘ESG’) issues.

“(F) AUTHORIZATION OF APPROPRIATION.—There are authorized to be appropriated such sums as are necessary to finance costs associated with staff dedicated to ESG issues in the Office of the Investor Advocate of the Commission.

“(4) SUSTAINABLE FINANCE.—For the purposes of this subsection, the term ‘sustainable finance’ means the provision of finance with respect to investments taking into account environmental, social, and governance considerations.

“(5) SEC RESPONSE.—The Commission shall, not later than 6 months after the date on which the Committee submits a report to the Commission pursuant to paragraph (2)(A), publish a response to such report.”.

SEC. 105. Study on shareholder collective action.

(1) conduct a study on—

(A) the emergence, viability, and significance of coalitions of shareholders who wish to preserve and promote critical employment and ESG standards;

(B) whether and to what extent shareholder collective action—

(i) occurs; and

(ii) has implications with respect to filing requirements under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); and

(C) any possible anticompetitive activities associated with shareholder collective action; and

(2) submit to Congress a report that includes—

(A) the findings of the study conducted under paragraph (1);

(B) guidance, which may include an approved list, of shareholder engagement activities that are not considered to involve questions of corporate control; and

(C) recommendations on regulatory safe harbors for engagement with respect to sustainability guardrails and similar restrictions on portfolio company conduct with a goal of—

(i) preserving economic justice, environmental systems, and social institutions; and

(ii) otherwise protecting the common interests of corporate shareholders and stakeholders.

SEC. 201. Short title.

SEC. 202. Findings.

(1) corporations make significant political contributions and expenditures that directly or indirectly influence the election of candidates and support or oppose political causes;

(2) decisions to use corporate funds for political contributions and expenditures are usually made by corporate boards and executives, rather than shareholders;

(3) corporations, acting through boards and executives, are obligated to conduct business for the best interests of their owners, the shareholders;

(4) historically, shareholders have not had a way to know, or to influence, the political activities of corporations they own;

(5) shareholders and the public have a right to know how corporate managers are spending company funds to make political contributions and expenditures benefitting candidates, political parties, and political causes; and

(6) corporations should be accountable to shareholders in making political contributions or expenditures affecting Federal governance and public policy.

SEC. 203. Reporting requirements.

“(s) Reporting requirements relating to certain political expenditures.—

“(1) DEFINITIONS.—In this subsection:

“(A) EXPENDITURE FOR POLITICAL ACTIVITIES.—The term ‘expenditure for political activities’—

“(i) means—

“(I) an independent expenditure (as defined in section 301(17) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101(17)));

“(II) an electioneering communication (as defined in section 304(f)(3) of that Act (52 U.S.C. 30104(f)(3))) and any other public communication (as defined in section 301(22) of that Act (52 U.S.C. 30101(22))) that would be an electioneering communication if it were a broadcast, cable, or satellite communication; or

“(III) dues or other payments to trade associations or organizations described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of that Code that are, or could reasonably be anticipated to be, used or transferred to another association or organization for the purposes described in subclause (I) or (II); and

“(ii) does not include—

“(I) direct lobbying efforts through registered lobbyists employed or hired by the issuer;

“(II) communications by an issuer to its shareholders and executive or administrative personnel and their families; or

“(III) the establishment and administration of contributions to a separate segregated fund to be utilized for political purposes by a corporation.

“(B) ISSUER.—The term ‘issuer’ does not include an investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a–8).

“(2) QUARTERLY REPORTS.—

“(A) REPORTS REQUIRED.—Not later than 180 days after the date of enactment of this subsection, the Commission shall amend the reporting rules under this section to require each issuer with a class of equity securities registered under section 12 of this title to submit to the Commission and the shareholders of the issuer a quarterly report containing—

“(i) a description of any expenditure for political activities made during the preceding quarter;

“(ii) the date of each expenditure for political activities;

“(iii) the amount of each expenditure for political activities;

“(iv) if the expenditure for political activities was made in support of or in opposition to a candidate, the name of the candidate and the office sought by, and the political party affiliation of, the candidate; and

“(v) the name or identity of trade associations or organizations described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code which receive dues or other payments as described in paragraph (1)(A)(i)(III).

“(B) PUBLIC AVAILABILITY.—The Commission shall ensure that the quarterly reports required under this paragraph are publicly available through the Internet website of the Commission and through the EDGAR system in a manner that is searchable, sortable, and downloadable, consistent with the requirements under section 24.

“(3) ANNUAL REPORTS.—Not later than 180 days after the date of enactment of this subsection, the Commission shall, by rule, require each issuer to include in the annual report of the issuer to shareholders—

“(A) a summary of each expenditure for political activities made during the preceding year in excess of $10,000, and each expenditure for political activities for a particular election if the total amount of such expenditures for that election is in excess of $10,000;

“(B) a description of the specific nature of any expenditure for political activities the issuer intends to make for the forthcoming fiscal year, to the extent the specific nature is known to the issuer; and

“(C) the total amount of expenditures for political activities intended to be made by the issuer for the forthcoming fiscal year.”.

SEC. 204. Reports.

SEC. 301. Short title.

SEC. 302. Pay raise disclosures.

“(t) Pay raise disclosures.—An issuer required to file an annual report under this section or section 15(d), that is not an emerging growth company, shall include in such report—

“(1) the percentage increase in the median of the annual total compensation of all executive officers (as such term is defined in section 240.3b–7 of title 17, Code of Federal Regulations) of the issuer over the last completed fiscal year;

“(2) the percentage increase in the median of the annual total compensation of all employees of the issuer, excluding executive officers, over the last completed fiscal year;

“(3) the ratio of the percentage described in paragraph (1) to the percentage described in paragraph (2);

“(4) a comparison of the percentage described in paragraph (1) to the percentage change over the same period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor; and

“(5) a comparison of the percentage described in paragraph (2) to the percentage change over the same period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.”.

SEC. 401. Short title.

SEC. 402. Sense of Congress.

(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. 403. Disclosures relating to climate change.

“(u) 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. 404. Backstop.

SEC. 405. Authorization of appropriations.

SEC. 501. Short title.

SEC. 502. Country-by-country reporting.

SEC. 601. Short title.

SEC. 602. Findings.

(1) One of the keys to the 20th century post-war economic success of the United States was the ability to prepare workers over the course of their lives for success through multiple sectors across society. Unfortunately, during the several decades preceding the date of enactment of this Act, there has been a shift in business norms and in society. While Congress recognizes that the technology and job skills required for some jobs has changed dramatically, the private and public partnership to hire workers at different education levels and invest in them for the long-term is broken.

(2) Available data from the 10-year period preceding the date of enactment of this Act suggests that businesses are investing less in worker training during that time period, not more.

(3) In the wake of the 2008 global financial crisis, there was a well-documented decline in overall business investment. That decline coincides with the wage polarization of workers and an increase in spending on share buybacks and dividends, leading several researchers to conclude that companies are de-emphasizing investment at the expense of increasing returns for shareholders. The onset of a global pandemic may make that trend worse, especially with respect to investments in workers.

(4) As part of the overall decline in investment described in paragraph (3), publicly traded companies are being provided with incentives to prioritize investments in physical assets over investments in their workforces, meaning that those companies are investing in robots instead of individuals. In fact, there are already signs that automation has increased during the COVID–19 pandemic.

(5) More than ever, the Federal Government, through company disclosure practices, needs to understand exactly how companies are investing in their workers. Over the several months preceding the date of enactment of this Act, companies across the United States have taken extreme actions to adapt and respond to evolving workforce challenges presented by COVID–19.

(6) JUST Capital has been tracking the responses of the Standard and Poor’s 100 largest public companies to their workers and has found wide variation in the policies implemented, as well as with respect to the disclosure of those policies. Through different responses to their workforces, from layoffs to workplace safety to paid leave, the COVID–19 pandemic is exposing the myriad ways that workforce management practices of companies pose operational and reputational risks for short- and long-term financial performance.

(7) Even before the COVID–19 pandemic, there was a growing body of research establishing a relationship between measurable workforce management, which is the way that companies manage their employees, and firm performance. In a study of 2,000 large companies, Harvard Law School’s Labor and Work Life Program found that forward-thinking workforce policies that prioritize workers, such as how companies train, retain, and pay their workers, are correlated with long-term financial performance.

(8) Disclosure of workforce management policies should be part of a Government-wide economic recovery strategy. Just as a set of generally accepted accounting principles (commonly known as “GAAP”) was urgently adopted after the Great Depression, standardized, comparable metrics of workforce disclosure requirements in the context of the COVID–19 pandemic are critical for investors to accurately measure and project company performance, both in the present and in the future.

(9) Because many companies already track workforce metrics internally, moving towards a transparent disclosure regime would allow investors to better judge whether companies are managing risks and making the investments in their workforces that are needed for long-term growth.

(10) Businesses increasingly rely on workforce innovation and intellectual capital for competitiveness. Workplace benefits, particularly paid sick leave, medical leave, and flexible work arrangements, critically support employee mental and physical well-being.

(11) Race- and gender-based workplace discrimination have been tied to negative health outcomes, as well as lower productivity, trust, morale, and satisfaction and higher rates of absenteeism and turnover. Organizational reporting on practices to reduce discrimination can increase employee job satisfaction, performance, and engagement.

(12) According to the Centers for Disease Control and Prevention, work-related stress is the leading occupational health risk and, per the American Institute of Stress, job stress costs United States industry more than $300,000,000,000 per year in accidents, absenteeism, employee turnover, diminished productivity, and medical, legal, and insurance costs.

(13) Employee health and well-being is a key asset to delivering long-term value, with 80 percent of public companies that took concrete actions on health and well-being having seen larger improvements in financial performance.

(14) Organizational well-being interventions can create cost savings of up to 10 dollars for every dollar invested. Specifically, for every dollar that employers spend on workplace disease prevention and well-being programs, there is a $3.27 reduction in employee medical costs and a $2.73 reduction in absenteeism costs. Employers that implement workplace health promotion programs have seen reductions in sick leave, health plan costs, and workers’ compensation and disability insurance costs of approximately 25 percent.

(15) The Centers for Disease Control and Prevention has found that preventable chronic conditions are a major contributor to insurance premium and employee medical claim costs, which are at an all-time high, and a Milken Institute study shows that employers paid $2,600,000,000,000 in 2016 for the indirect costs of employee chronic disease due to work absences, lost wages, and reduced economic productivity.

(16) The COVID–19 pandemic has severely impacted employee physical, mental, and emotional well-being by increasing stress, depression, burnout, and mortality rates of chronic disease and by reducing work-life balance and financial security, with these challenges likely to persist due to uncertainty and instability even as employees return to work. Before the COVID–19 pandemic, but especially in the face of that pandemic, employers that advance policies and practices that support workforce health, safety, and well-being are likely to outperform competitors and benefit from lower costs.

SEC. 603. Disclosures relating to workforce management.

“(w) Disclosures relating to workforce management.—

“(1) DEFINITION.—In this subsection, the term ‘contingent worker’ includes an individual performing work in the usual course of business on a temporary basis (including through a labor intermediary, including an individual or entity that supplies an employer with workers to perform labor) or as an independent contractor.

“(2) REGULATIONS.—Not later than 2 years after the date of enactment of this subsection, the Commission, in consultation with the Secretary of Labor, the Secretary of Commerce, the Secretary of Treasury, and the Attorney General, shall promulgate regulations that require each issuer required to file an annual report under subsection (a) or section 15(d) to disclose in that report information regarding workforce management policies, practices, and performance with respect to the issuer.

“(3) RULES.—Consistent with the requirement under paragraph (4), each annual report filed with the Commission in accordance with the regulations promulgated under paragraph (2) shall include disclosure of the following with respect to the issuer filing the report for the year covered by the report:

“(A) Workforce demographic information, including—

“(i) the number of full-time employees, the number of part-time employees, and the number of contingent workers (including temporary and contract workers) with respect to the issuer, which shall include demographic information with respect to those categories of individuals, including information regarding race, ethnicity, and gender;

“(ii) any policies or practices of the issuer relating to subcontracting, outsourcing, and insourcing individuals to perform work for the issuer, which shall include demographic information with respect to those individuals, including information regarding race, ethnicity, and gender; and

“(iii) whether the percentage of contingent workers with respect to the issuer has changed, including temporary and contract workers, as compared with the previous annual report filed by the issuer under this subsection.

“(B) Workforce stability information, including information about the voluntary turnover or retention rate, the involuntary turnover rate, the internal hiring rate, and the internal promotion rate, as well as information about workers who transition between employee and contingent workers, and the horizontal job change rate by quintile and demographic information.

“(C) Workforce composition, including—

“(i) data on diversity (including racial, ethnic, self-reported sexual orientation, and gender composition) for senior executives and other individuals in the workforce; and

“(ii) any policies, audits, and programming expenditures relating to diversity.

“(D) Workforce skills and capabilities, including—

“(i) information about training and cross-training of employees and contingent workers by quintile and demographic information, distinguishing between compliance training, career development training, job performance or technical training, and training tied to recognized postsecondary credentials;

“(ii) average number of hours of training for each employee and contingent worker;

“(iii) total spending on training for all employees and contingent workers;

“(iv) average spending per employee or contingent worker;

“(v) training utilization rates; and

“(vi) whether completion of training opportunities translates into value added benefit for workers, as determined by wage increases or internal promotions.

“(E) Workforce health, safety, and well-being, including information regarding—

“(i) the frequency, severity, and lost time due to injuries, physical and mental illness, and fatalities;

“(ii) the scope, frequency, and total expenditure on workplace health, safety, and well-being programs;

“(iii) the total dollar value of assessed fines under the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.);

“(iv) the total number of actions brought under section 13 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 662) to prevent imminent dangers;

“(v) the total number of actions brought against the issuer under section 11(c) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 660(c));

“(vi) any findings of workplace harassment or workplace discrimination during the 5 fiscal year period of the issuer preceding the fiscal year in which the report is filed; and

“(vii) communication channels and grievance mechanisms in place for employees and contingent workers.

“(F) Workforce compensation and incentives, including information regarding—

“(i) total workforce costs, including salaries and wages, health benefits, other ancillary benefit costs, and pension costs;

“(ii) workforce benefits, including paid leave, health care, child care, and retirement, including information regarding benefits that are provided—

“(I) to full-time employees and not to part-time employees; or

“(II) to employees and not to contingent workers;

“(iii) total contributions made to unemployment insurance by the issuer, how many employees to whom those contributions apply, and the total amount paid in unemployment compensation to individuals who were laid off by the issuer;

“(iv) policies and practices regarding how performance, productivity, equity, and sustainability are considered when setting pay and making promotion decisions; and

“(v) policies and practices relating to any incentives and bonuses provided to employees and any policies or practices designed to counter any risks created by such incentives and bonuses.

“(G) Workforce recruiting and needs, including—

“(i) the number of new jobs created, seeking to be filled, and filled, disaggregated based on classification status;

“(ii) the share of new jobs that require a bachelor’s degree or higher;

“(iii) information regarding the quality of hire for jobs described in clause (i); and

“(iv) the retention rate for individuals hired to fill the jobs described in clause (i).

“(H) Workforce engagement and productivity, including information regarding policies and practices of the issuer relating to—

“(i) engagement, productivity, and mental well-being of employees and contingent workers, as determined in consultation with the Department of Labor; and

“(ii) freedom of association and work-life balance initiatives, including flexibility and the ability of the workforce to work remotely, as determined in consultation with the Department of Labor.

“(4) DISAGGREGATION OF INFORMATION.—To the maximum extent feasible, the information described in paragraph (3) shall be disaggregated by—

“(A) the workforce composition described in subparagraph (C)(i) of that paragraph;

“(B) wage quintiles of the employees of the issuer for the year covered by the applicable annual report; and

“(C) the employment status of individuals performing services for the issuer, including whether those individuals are full-time employees, part-time employees, or contingent workers.

“(5) TREATMENT OF EMERGING GROWTH COMPANIES.—The Commission may exempt emerging growth companies from any disclosure required under subparagraph (D), (E), (F), (G), or (H) of paragraph (3) if the Commission determines that such an exemption is necessary or appropriate in the public interest.

“(6) FALSE OR MISLEADING STATEMENTS.—

“(A) IN GENERAL.—Except as provided in subparagraph (B), it shall be unlawful for any person, in any report or document filed under this subsection, to make or cause to be made any untrue statement of a material fact or omit to state a material fact required to be stated in the report or document or necessary to make the statement made, in the light of the circumstances under which it is made, not misleading.

“(B) EXCEPTION.—A person shall not be liable under subparagraph (A) if the person shows that the person had, after reasonable investigation, reasonable ground to believe, and did believe, at the time the applicable statement was made, that the statement was true and that there was no omission to state a material fact necessary to make the statement made, in the light of the circumstances under which it is made, not misleading.

“(C) NO PRIVATE RIGHT OF ACTION.—Nothing in this paragraph may be construed as creating a private right of action.

“(7) EXEMPTION.—This subsection shall not apply to an investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a–8).”.

SEC. 604. Backstop.

SEC. 605. SEC study.

SEC. 701. SEC filings and material disclosures at public companies.

SEC. 801. Short title.

SEC. 802. Cybersecurity transparency.

SEC. 901. Short title.

SEC. 902. Submission of data relating to diversity by issuers.

“(w) Submission of data relating to diversity.—

“(1) DEFINITIONS.—In this subsection—

“(A) the term ‘executive officer’ has the meaning given the term in section 230.501(f) of title 17, Code of Federal Regulations, as in effect on the date of enactment of this subsection; and

“(B) the term ‘veteran’ has the meaning given the term in section 101 of title 38, United States Code.

“(2) SUBMISSION OF DISCLOSURE.—Each issuer required to file an annual report under subsection (a) shall disclose in any proxy statement and any information statement relating to the election of directors filed with the Commission the following:

“(A) Demographic data, based on voluntary self-identification, on the racial, ethnic, gender identity, and sexual orientation composition of—

“(i) the board of directors of the issuer;

“(ii) nominees for the board of directors of the issuer; and

“(iii) the executive officers of the issuer.

“(B) The status of any member of the board of directors of the issuer, any nominee for the board of directors of the issuer, or any executive officer of the issuer, based on voluntary self-identification, as a veteran.

“(C) Whether the board of directors of the issuer, or any committee of that board of directors, has, as of the date on which the issuer makes a disclosure under this paragraph, adopted any policy, plan, or strategy to promote racial, ethnic, and gender diversity among—

“(i) the board of directors of the issuer;

“(ii) nominees for the board of directors of the issuer; or

“(iii) the executive officers of the issuer.

“(3) ALTERNATIVE SUBMISSION.—In any 1-year period in which an issuer required to file an annual report under subsection (a) does not file with the Commission a proxy statement or an information statement relating to the election of directors, the issuer shall disclose the information required under paragraph (2) in the first annual report of issuer that the issuer submits to the Commission after the end of that 1-year period.

“(4) ANNUAL REPORT.—Not later than 18 months after the date of enactment of this subsection, and annually thereafter, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and publish on the website of the Commission, a report that analyzes the information disclosed under paragraphs (2) and (3) and identifies any trends with respect to such information.

“(5) BEST PRACTICES.—

“(A) IN GENERAL.—The Director of the Office of Minority and Women Inclusion of the Commission shall, not later than 3 years after the date of enactment of this subsection, and every 3 years thereafter, publish best practices for compliance with this subsection.

“(B) COMMENTS.—The Director of the Office of Minority and Women Inclusion of the Commission may, pursuant to subchapter II of chapter 5 of title 5, United States Code, solicit public comments related to the best practices published under subparagraph (A).”.

SEC. 903. Diversity advisory group.

SEC. 1001. Short title.

SEC. 1002. Disclosure of certain activities relating to the Xinjiang Uyghur Autonomous Region.

SEC. 1101. Study and report on small businesses and ESG disclosures.