Congressional Record, House, June 16, 2021 — House
Summary
This is H2830 of the Congressional Record, House, June 16, 2021, with interleaved columns of one-minute statements. Mrs. Bustos speaks in support of building back the care economy and describes a visit to Lifescape in Rockford, Illinois, saying it expanded its home meal delivery service during the pandemic. Ms. Garcia of Texas urges investment in an inclusive care economy and describes visits to a childcare center and an eldercare center in her district. The page also prints bill text on ESG disclosures, with findings that the Commission does not require companies to disclose environmental, social, and governance matters and a section amending the Securities Exchange Act of 1934, with the views attributed to the speakers.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Congressional Record, House, June 16, 2021 — House.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crec-crec-2021-06-16-crec-2021-06-16-pt1-pgh2830-4-4e5b9a59c8/
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H2830 CONGRESSIONAL RECORD — HOUSE June 16, 2021
LIFESCAPE HELPS FAMILIES b 1230 SEC. 102. FINDINGS.
Congress finds the following:
(Mrs. BUSTOS asked and was given CONGRESS MUST INVEST IN AN (1) The Securities and Exchange Commission
permission to address the House for 1 INCLUSIVE CARE ECONOMY has broad authority to require the disclosure of
minute.) (Ms. GARCIA of Texas asked and was information if such information is in the interest
Mrs. BUSTOS. Mr. Speaker, I rise in of, or is material to investors.
given permission to address the House (2) The Commission does not require compa-
support of efforts to build back our for 1 minute and to revise and extend
care economy. I recently toured a place nies to disclose information related to environ-
her remarks.) mental, social, and governance (‘‘ESG’’) mat-
called Lifescape in Rockford, Illinois, Ms. GARCIA of Texas. Mr. Speaker, I ters, and does not require companies to adhere
where I met a woman named Miss rise today to urge my colleagues to in- to standards for disclosing such information.
Selma. vest in an inclusive care economy to (3) Investors have reported that voluntary dis-
Miss Selma lives with her daughter help our families recover from the dev- closures of ESG metrics are inadequate.
and her granddaughter, and she has astating effects of this pandemic. (4) A rule requiring reporting and standard-
three generations under one roof. ization of ESG disclosures is in the interest of
As the price of childcare and investors.
Three generations where she was the eldercare increases, many mothers and
major caretaker for many years. (5) ESG matters are material to investors, and
women in my district had to leave the the Commission must establish standards for dis-
About a decade ago she had a stroke, workforce. In a country like ours, this closure of such matters.
and so now her daughter has to take is totally unacceptable. Mothers are SEC. 103. ESG DISCLOSURES.
care of her. But she has to go to work the backbone of our society and the (a) IN GENERAL.—Section 14 of the Securities
also. So it is places like Lifescape that pillar of my district. Exchange Act of 1934 (15 U.S.C. 78n) is amended
help families get back to work so they This is why, during our week of ac- by adding at the end the following:
can make sure that their loved ones tion last week, I visited a childcare ‘‘(k) ESG DISCLOSURES.—
are cared for while they also make a center run by a constituent in Deer ‘‘(1) IN GENERAL.—Each issuer the securities
living. of which are registered under section 12 or that
Park servicing children with special is required to file annual reports under section
The global pandemic put a spotlight needs; and I also visited an eldercare 15(d) shall disclose in any proxy or consent so-
on the need to invest in our care econ- center in Pasadena, in my district. licitation material for an annual meeting of the
omy and places like Lifescape. Because I witnessed firsthand the lifesaving, shareholders—
of the CARES Act, Lifescape expanded life-changing benefits out of an inclu- ‘‘(A) a clear description of the views of the
their home meal delivery service by 800 sive care economy for our children and issuer about the link between ESG metrics and
meals every single day and allowed for our seniors. the long-term business strategy of the issuer;
the care of people like Miss Selma. Investing in an inclusive care econ- and
As we continue to negotiate an infra- ‘‘(B) a description of any process the issuer
omy could benefit my district and com- uses to determine the impact of ESG metrics on
structure package, we need to invest in munities of color that lack resources the long-term business strategy of the issuer.
our care economy in order to get our to overcome the impacts of this pan- ‘‘(2) ESG METRICS DEFINED.—In this sub-
national economy back in place. demic. section, the term ‘ESG metrics’ has the meaning
Let’s invest in our most vulnerable given the term in part 210 of title 17, Code of
f with the American Families Plan. Federal Regulations as amended pursuant to
We can recover. ‘‘We can do it,’’ ‘‘Si section 3(b) of the ESG Disclosure Simplification
se puede.’’ Act of 2021.’’.
THE TERRITORIES HEALTH (b) RULEMAKING.—
EQUITY ACT f (1) IN GENERAL.—The Securities and Exchange
(Ms. PLASKETT asked and was given Commission (in this Act referred to as the ‘‘Com-
ESG DISCLOSURE SIMPLIFICATION
permission to address the House for 1 mission’’) shall amend part 210 of title 17, Code
ACT OF 2021 of Federal Regulations (or any successor there-
minute and to revise and extend her re- to) to—
Ms. WATERS. Mr. Speaker, pursuant
marks.) (A) require each issuer, in any filing of the
to House Resolution 473, I call up the
Ms. PLASKETT. Mr. Speaker, today issuer described in such part that requires au-
bill (H.R. 1187) to provide for disclosure
I rise in support of my bill, H.R. 3434, dited financial statements, to disclose environ-
of additional material information
the Territories Health Equity Act of mental, social, and governance metrics (in this
about public companies and establish a title referred to as ESG metrics); and
2021.
Sustainable Finance Advisory Com- (B) define ESG metrics.
This bill will address the existing in- mittee, and for other purposes, and ask (2) SUSTAINABLE FINANCE ADVISORY COM-
equalities the territories face under for its immediate consideration in the MITTEE.—The Sustainable Finance Advisory
Medicaid, Medicare, and other Federal House. Committee established pursuant to section 4(k)
health programs. Importantly, regard- The Clerk read the title of the bill. of the Securities and Exchange Act of 1934 shall,
ing Medicaid, it would provide us with The SPEAKER pro tempore (Mr. not later than 180 days after the date of the first
the equitable share of Federal funding CUELLAR). Pursuant to House Resolu- meeting of such Committee, submit to the Com-
for Medicaid beyond the upcoming fis- mission recommendations about what ESG
tion 473, in lieu of the amendment in metrics the Commission should require issuers to
cal cliff when much of the existing the nature of a substitute rec-
funding for the territories is scheduled disclose.
ommended by the Committee on Fi- (3) MATERIALITY.—It is the sense of Congress
to expire at the end of September 2021. nancial Services printed in the bill, an that ESG metrics, as such term is defined by the
In the midst of a global pandemic, amendment in the nature of a sub- Commission pursuant to paragraph (1), are de
with more Federal attention on how stitute consisting of the text of Rules facto material for the purposes of disclosures
healthcare funding disparities have had Committee Print 117–5 is adopted and under the Securities Exchange Act of 1934 and
a deleterious impact on the finances of the bill, as amended, is considered the Securities Act of 1933.
local governments and hospitals (4) INCORPORATION OF INTERNATIONAL STAND-
read. ARDS.—When amending part 210 of title 17, Code
throughout the country, we believe The text of the bill, as amended, is as of Federal Regulations (or any successor there-
this is an opportune time to press for follows: to) pursuant to paragraph (1), the Commission
equity in Medicaid and Medicare. may, as the Commission determines appropriate,
Be it enacted by the Senate and House of Rep-
The inequities in Federal funding resentatives of the United States of America in incorporate any internationally recognized,
provided to the territories for Medicaid Congress assembled, independent, multi-stakeholder environmental,
and Medicare have put access to afford- SECTION 1. SHORT TITLE. social, and governance disclosure standards.
able healthcare out of reach for too This Act may be cited as the ‘‘Corporate Gov- (5) LOCATION OF DISCLOSURE.—Any disclosure
many in the Virgin Islands and the ernance Improvement and Investor Protection required by paragraph (1) may be included in a
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other territories, making our hospitals’ Act’’. notes section of the filing.
(6) DELAY FOR SMALL ISSUERS.—The Commis-
emergency rooms the primary TITLE I—ESG DISCLOSURE sion may use a phased approach when applying
healthcare provider for one-third of our SIMPLIFICATION any amendments made pursuant to paragraph
population without health insurance, SEC. 101. SHORT TITLE. (1) to small issuers and may determine the cri-
which contributes to unmanageable This title may be cited as the ‘‘ESG Disclosure teria by which an issuer qualifies as a small
costs. Please support H.R. 3434. Simplification Act of 2021’’. issuer for purposes of such phased approach.
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2831
SEC. 104. SUSTAINABLE FINANCE ADVISORY COM- means the provision of finance with respect to issuer with a class of equity securities registered
MITTEE. investments taking into account environmental, under section 12 of this title to submit to the
Section 4 of the Securities Exchange Act of social, and governance considerations. Commission and the shareholders of the issuer a
1934 (15 U.S.C. 78d) is amended by adding at the ‘‘(5) SEC RESPONSE.—The Commission shall, quarterly report containing—
end the following: not later than 6 months after the date on which ‘‘(i) a description of any expenditure for polit-
‘‘(k) SUSTAINABLE FINANCE ADVISORY COM- the Committee submits a report to the Commis- ical activities made during the preceding quar-
MITTEE.— sion pursuant to paragraph (2)(A), publish a re- ter;
‘‘(1) ESTABLISHMENT.—The Commission shall sponse to such report.’’. ‘‘(ii) the date of each expenditure for political
establish a permanent advisory committee to be TITLE II—SHAREHOLDER POLITICAL activities;
called the ‘Sustainable Finance Advisory Com- TRANSPARENCY ‘‘(iii) the amount of each expenditure for po-
mittee’ (in this subsection referred to as the litical activities;
SEC. 201. SHORT TITLE.
‘Committee’). ‘‘(iv) if the expenditure for political activities
‘‘(2) DUTIES OF COMMITTEE.—The Committee This title may be cited as the ‘‘Shareholder was made in support of or in opposition to a
shall— Political Transparency Act of 2021’’. candidate, the name of the candidate and the
‘‘(A) submit a report to the Commission not SEC. 202. FINDINGS. office sought by, and the political party affili-
later than 18 months after the date of the first Congress finds that— ation of, the candidate; and
meeting of the Committee that— (1) corporations make significant political ‘‘(v) the name or identity of trade associations
‘‘(i) identifies the challenges and opportuni- contributions and expenditures that directly or or organizations described in section 501(c) of
ties for investors associated with sustainable fi- indirectly influence the election of candidates the Internal Revenue Code of 1986 and exempt
nance; and and support or oppose political causes; from tax under section 501(a) of such Code
‘‘(ii) recommends policy changes to facilitate (2) decisions to use corporate funds for polit- which receive dues or other payments as de-
the flow of capital towards sustainable invest- ical contributions and expenditures are usually scribed in paragraph (1)(A)(i)(III).
ments, in particular environmentally sustain- made by corporate boards and executives, rather ‘‘(B) PUBLIC AVAILABILITY.—The Commission
able investments; than shareholders; shall ensure that the quarterly reports required
‘‘(B) when solicited, advise the Commission on (3) corporations, acting through boards and under this paragraph are publicly available
sustainable finance; and executives, are obligated to conduct business for through the Internet website of the Commission
‘‘(C) communicate with individuals and enti- the best interests of their owners, the share- and through the EDGAR system in a manner
ties with an interest in sustainable finance. holders; that is searchable, sortable, and downloadable,
‘‘(3) MEMBERSHIP.— (4) historically, shareholders have not had a consistent with the requirements under section
‘‘(A) MEMBERS.— way to know, or to influence, the political ac- 24.
‘‘(i) IN GENERAL.—The Committee shall consist tivities of corporations they own; ‘‘(3) ANNUAL REPORTS.—Not later than 180
of no more than 20 members who shall each (5) shareholders and the public have a right to days after the date of enactment of this sub-
serve for one four-year term. know how corporate managers are spending section, the Commission shall, by rule, require
‘‘(ii) REPRESENTATION.—Each member shall company funds to make political contributions each issuer to include in the annual report of
represent individuals and entities with an inter- and expenditures benefitting candidates, polit- the issuer to shareholders—
est in sustainable finance, such as— ical parties, and political causes; and ‘‘(A) a summary of each expenditure for polit-
‘‘(I) experts on sustainable finance; (6) corporations should be accountable to ical activities made during the preceding year in
‘‘(II) operators of financial infrastructure; shareholders in making political contributions excess of $10,000, and each expenditure for polit-
‘‘(III) entities that provide analysis, data, or or expenditures affecting Federal governance ical activities for a particular election if the
methodologies that facilitate sustainable fi- and public policy. total amount of such expenditures for that elec-
nance; SEC. 203. REPORTING REQUIREMENTS. tion is in excess of $10,000;
‘‘(IV) insurance companies, pension funds, Section 13 of the Securities Exchange Act of ‘‘(B) a description of the specific nature of
asset managers, depository institutions, or credit 1934 (15 U.S.C. 78m) is amended by adding at any expenditure for political activities the issuer
unions; or the end the following: intends to make for the forthcoming fiscal year,
‘‘(V) other financial institutions that inter- ‘‘(s) REPORTING REQUIREMENTS RELATING TO to the extent the specific nature is known to the
mediate investments in sustainable finance or CERTAIN POLITICAL EXPENDITURES.— issuer; and
manage risks related to sustainable develop- ‘‘(1) DEFINITIONS.—In this subsection: ‘‘(C) the total amount of expenditures for po-
ment. ‘‘(A) EXPENDITURE FOR POLITICAL ACTIVI- litical activities intended to be made by the
‘‘(iii) REPRESENTATION OF INTERESTS.—A mem- TIES.—The term ‘expenditure for political activi- issuer for the forthcoming fiscal year.’’.
ber may not represent a single individual or en- ties’— SEC. 204. REPORTS.
tity and shall represent types of individuals and ‘‘(i) means— (a) SECURITIES AND EXCHANGE COMMISSION.—
entities with similar interests in sustainable fi- ‘‘(I) an independent expenditure (as defined The Securities and Exchange Commission
nance. in section 301(17) of the Federal Election Cam- shall—
‘‘(B) SELECTION.— paign Act of 1971 (52 U.S.C. 30101(17))); (1) conduct an annual assessment of the com-
‘‘(i) IN GENERAL.—The Commission shall— ‘‘(II) an electioneering communication (as de- pliance of issuers with section 13(s) of the Secu-
‘‘(I) publish criteria for selection of members fined in section 304(f)(3) of that Act (52 U.S.C. rities Exchange Act of 1934, as added by section
on the website of the Commission and in the 30104(f)(3))) and any other public communica- 203; and
Federal Register; and tion (as defined in section 301(22) of that Act (52 (2) submit to Congress an annual report con-
‘‘(II) solicit applications for membership on U.S.C. 30101(22))) that would be an election- taining the results of the assessment under
the website of the Commission and in the Fed- eering communication if it were a broadcast, paragraph (1).
eral Register. cable, or satellite communication; or (b) GOVERNMENT ACCOUNTABILITY OFFICE.—
‘‘(ii) EQUAL SHARE.—From the individuals ‘‘(III) dues or other payments to trade asso- The Comptroller General of the United States
who submit applications for membership, each ciations or organizations described in section shall periodically evaluate and report to Con-
Commissioner of the Commission shall select an 501(c) of the Internal Revenue Code of 1986 and gress on the effectiveness of the oversight by the
equal number of the members of the Committee. exempt from tax under section 501(a) of that Securities and Exchange Commission of the re-
‘‘(C) PAY.—Members may not receive pay by Code that are, or could reasonably be antici- porting and disclosure requirements under sec-
reason of their service on the Committee but pated to be, used or transferred to another asso- tion 13(s) of the Securities Exchange Act of 1934,
may receive travel or transportation expenses in ciation or organization for the purposes de- as added by section 203.
accordance with applicable provisions under scribed in subclause (I) or (II); and TITLE III—GREATER ACCOUNTABILITY IN
subchapter I of chapter 57 of title 5, United ‘‘(ii) does not include—
PAY
States Code. ‘‘(I) direct lobbying efforts through registered
‘‘(D) MEMBER TRANSPARENCY.—The name of lobbyists employed or hired by the issuer; SEC. 301. SHORT TITLE.
each member and the types of individuals and ‘‘(II) communications by an issuer to its This title may be cited as the ‘‘Greater Ac-
entities that such member represents shall be shareholders and executive or administrative countability in Pay Act of 2021’’.
published on the website of the Commission. personnel and their families; or SEC. 302. PAY RAISE DISCLOSURES.
‘‘(E) STAFF.—The Committee shall be sup- ‘‘(III) the establishment and administration of Section 13 of the Securities Exchange Act of
ported by staff from the Office of the Investor contributions to a separate segregated fund to 1934 (15 U.S.C. 78m), as amended by section 203,
Advocate of the Commission that are dedicated be utilized for political purposes by a corpora- is further amended by adding at the end the fol-
to environmental, social and governance (in this tion. lowing:
subsection referred to as ‘ESG’) issues. ‘‘(B) ISSUER.—The term ‘issuer’ does not in- ‘‘(t) PAY RAISE DISCLOSURES.—An issuer re-
‘‘(F) AUTHORIZATION OF APPROPRIATION.— clude an investment company registered under quired to file an annual report under this sec-
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There are authorized to be appropriated such section 8 of the Investment Company Act of 1940 tion or section 15(d), that is not an emerging
sums as are necessary to finance costs associ- (15 U.S.C. 80a–8). growth company, shall include in such report—
ated with staff dedicated to ESG issues in the ‘‘(2) QUARTERLY REPORTS.— ‘‘(1) the percentage increase in the median of
Office of the Investor Advocate of the Commis- ‘‘(A) REPORTS REQUIRED.—Not later than 180 the annual total compensation of all executive
sion. days after the date of enactment of this sub- officers (as such term is defined in section
‘‘(4) SUSTAINABLE FINANCE.—For the purposes section, the Commission shall amend the report- 240.3b–7 of title 17, Code of Federal Regulations)
of this subsection, the term ‘sustainable finance’ ing rules under this section to require each of the issuer over the last completed fiscal year;
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H2832 CONGRESSIONAL RECORD — HOUSE June 16, 2021
‘‘(2) the percentage increase in the median of and limit damages associated with climate-re- ‘reserves’ under the final rule of the Commission
the annual total compensation of all employees lated events and disasters; and titled ‘Modernization of Oil and Gas Reporting’
of the issuer, excluding executive officers, over (9) a critical component in fighting climate (74 Fed. Reg. 2158; published January 14, 2009).
the last completed fiscal year; change is a transparent accounting of the risks ‘‘(J) GREENHOUSE GAS.—The term ‘greenhouse
‘‘(3) the ratio of the percentage described in that climate change presents and the implica- gas’—
paragraph (1) to the percentage described in tions of continued inaction with respect to cli- ‘‘(i) means carbon dioxide,
paragraph (2); mate change. hydrofluorocarbons, methane, nitrous oxide,
‘‘(4) a comparison of the percentage described SEC. 403. DISCLOSURES RELATING TO CLIMATE perfluorocarbons, sulfur hexafluoride, nitrogen
in paragraph (1) to the percentage change over CHANGE. triflouride, and chlorofluorocarbons;
the same period in the Consumer Price Index for Section 13 of the Securities Exchange Act of ‘‘(ii) includes any other anthropogenically-
All Urban Consumers published by the Bureau 1934 (15 U.S.C. 78m), as amended by section 302, emitted gas that the Administrator of the Envi-
of Labor Statistics of the Department of Labor; is further amended by adding at the end the fol- ronmental Protection Agency determines, after
and lowing: notice and comment, to contribute to climate
‘‘(5) a comparison of the percentage described ‘‘(u) DISCLOSURES RELATING TO CLIMATE change; and
in paragraph (2) to the percentage change over CHANGE.— ‘‘(iii) includes any other anthropogenically-
the same period in the Consumer Price Index for ‘‘(1) DEFINITIONS.—In this subsection: emitted gas that the Intergovernmental Panel on
All Urban Consumers published by the Bureau ‘‘(A) 1.5 DEGREE SCENARIO.—The term ‘1.5 de- Climate Change determines to contribute to cli-
of Labor Statistics of the Department of gree scenario’ means a scenario that aligns with mate change.
Labor.’’. greenhouse gas emissions pathways that aim to ‘‘(K) GREENHOUSE GAS EMISSIONS.—The term
TITLE IV—CLIMATE RISK DISCLOSURE limit global warming to 1.5 degrees Celsius above ‘greenhouse gas emissions’ means the emissions
pre-industrial levels. of greenhouse gas, expressed in terms of metric
SEC. 401. SHORT TITLE. ‘‘(B) APPROPRIATE CLIMATE PRINCIPALS.—The tons of carbon dioxide equivalent.
This title may be cited as the ‘‘Climate Risk term ‘appropriate climate principals’ means— ‘‘(L) PHYSICAL RISKS.—The term ‘physical
Disclosure Act of 2021’’. ‘‘(i) the Administrator of the Environmental risks’ means financial risks to long-lived fixed
SEC. 402. SENSE OF CONGRESS. Protection Agency; assets, locations, operations, or value chains
It is the sense of Congress that— ‘‘(ii) the Administrator of the National Oce- that result from exposure to physical climate-re-
(1) climate change poses a significant and in- anic and Atmospheric Administration; lated effects, including—
creasing threat to the growth and stability of ‘‘(iii) the Director of the Office of Manage-
‘‘(i) increased average global temperatures
the economy of the United States; ment and Budget;
and increased frequency of temperature ex-
(2) many sectors of the economy of the United ‘‘(iv) the Secretary of the Interior;
‘‘(v) the Secretary of Energy; and tremes;
States and many American businesses are ex- ‘‘(ii) increased severity and frequency of ex-
posed to climate-related risk, which may include ‘‘(vi) the head of any other Federal agency, as
determined appropriate by the Commission. treme weather events;
exposure to— ‘‘(iii) increased flooding;
(A) the physical impacts of climate change, ‘‘(C) BASELINE SCENARIO.—The term ‘baseline
scenario’ means a widely-recognized analysis ‘‘(iv) sea level rise;
including the rise of the average global tempera- ‘‘(v) ocean acidification;
ture, accelerating sea-level rise, desertification, scenario in which levels of greenhouse gas emis-
sions, as of the date on which the analysis is ‘‘(vi) increased frequency of wildfires;
ocean acidification, intensification of storms, in- ‘‘(vii) decreased arability of farmland;
crease in heavy precipitation, more frequent and performed, continue to grow, resulting in an in-
‘‘(viii) decreased availability of fresh water;
intense temperature extremes, more severe crease in the global average temperature of 1.5
and
droughts, and longer wildfire seasons; degrees Celsius or more above pre-industrial lev-
‘‘(ix) any other financial risks to long-lived
(B) the economic disruptions and security els.
‘‘(D) CARBON DIOXIDE EQUIVALENT.—The term fixed assets, locations, operations, or value
threats that result from the physical impacts de- chains determined appropriate by the Commis-
scribed in subparagraph (A) including conflicts ‘carbon dioxide equivalent’ means the number of
metric tons of carbon dioxide emissions with the sion, in consultation with appropriate climate
over scarce resources, conditions conducive to principals.
violent extremism, the spread of infectious dis- same global warming potential as one metric ton
‘‘(M) SOCIAL COST OF CARBON.—The term ‘so-
eases, and forced migration; of another greenhouse gas, as determined under
cial cost of carbon’ means the social cost of car-
(C) the transition impacts that result as the table A–1 of subpart A of part 98 of title 40, Code
bon, as described in the technical support docu-
global economy transitions to a clean and re- of Federal Regulations, as in effect on the date
ment entitled ‘Technical Support Document:
newable energy, low-emissions economy, includ- of enactment of this subsection.
‘‘(E) CLIMATE CHANGE.—The term ‘climate Technical Update of the Social Cost of Carbon
ing financial impacts as climate change fossil for Regulatory Impact Analysis Under Executive
fuel assets becoming stranded and it becomes change’ means a change of climate that is—
‘‘(i) attributed directly or indirectly to human Order 12866’, published by the Interagency
uneconomic for companies to develop fossil fuel Working Group on Social Cost of Greenhouse
activity that alters the composition of the global
assets as policymakers act to limit the worst im- Gases, United States Government, in August
atmosphere; and
pacts of climate change by keeping the rise in 2016 or any successor or substantially related es-
‘‘(ii) in addition to natural climate variability
average global temperature to 1.5 degrees Celsius timate of the monetized damages associated with
observed over comparable time periods.
above pre-industrial levels; and ‘‘(F) COMMERCIAL DEVELOPMENT OF FOSSIL an incremental increase in carbon dioxide emis-
(D) actions by Federal, State, Tribal, terri- FUELS.—The term ‘commercial development of sions in a given year.
torial, and local governments to limit the worst fossil fuels’ includes— ‘‘(N) TRANSITION RISKS.—The term ‘transition
effects of climate change by enacting policies ‘‘(i) exploration, extraction, processing, ex- risks’ means financial risks that are attributable
that keep the global average surface tempera- porting, transporting, refining, and any other to climate change mitigation and adaptation,
ture rise to 1.5 degrees Celsius above pre-indus- significant action with respect to oil, natural including efforts to reduce greenhouse gas emis-
trial levels; gas, coal, or any byproduct thereof or any other sions and strengthen resilience to the impacts of
(3) assessing the potential impact of climate- solid or liquid hydrocarbons that are commer- climate change, including—
related risks on national and international fi- cially produced; and ‘‘(i) costs relating to—
nancial systems is an urgent concern; ‘‘(ii) acquiring a license for any activity de- ‘‘(I) international treaties and agreements;
(4) companies have a duty to disclose finan- scribed in clause (i). ‘‘(II) Federal, State, and local policy;
cial risks that climate change presents to their ‘‘(G) COVERED ISSUER.—The term ‘covered ‘‘(III) new technologies;
investors, lenders, and insurers; issuer’ means an issuer that is required to file ‘‘(IV) changing markets;
(5) the Securities and Exchange Commission an annual report under subsection (a) or section ‘‘(V) reputational impacts relevant to chang-
has a duty to promote a risk-informed securities 15(d). ing consumer behavior; and
market that is worthy of the trust of the public ‘‘(H) DIRECT AND INDIRECT GREENHOUSE GAS ‘‘(VI) litigation; and
as families invest for their futures; EMISSIONS.—The term ‘direct and indirect green- ‘‘(ii) assets that may lose value or become
(6) investors, lenders, and insurers are in- house gas emissions’ includes, with respect to a stranded due to any of the costs described in
creasingly demanding climate risk information covered issuer— subclauses (I) through (VI) of clause (i).
that is consistent, comparable, reliable, and ‘‘(i) all direct greenhouse gas emissions re- ‘‘(O) VALUE CHAIN.—The term ‘value chain’—
clear; leased by the covered issuer; ‘‘(i) means the total lifecycle of a product or
(7) including standardized, material climate ‘‘(ii) all indirect greenhouse gas emissions service, both before and after production of the
change risk and opportunity disclosure that is with respect to electricity, heat, or steam pur- product or service, as applicable; and
useful for decision makers in annual reports to chased by the covered issuer; ‘‘(ii) may include the sourcing of materials,
the Commission will increase transparency with ‘‘(iii) significant indirect emissions, other than production, transportation, and disposal with
respect to risk accumulation and exposure in fi- the emissions described in clause (ii), emitted in respect to the product or service described in
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nancial markets; the value chain of the covered issuer; and clause (i).
(8) requiring companies to disclose climate-re- ‘‘(iv) all indirect greenhouse gas emissions ‘‘(2) FINDINGS.—Congress finds that—
lated risk exposure and risk management strate- that are attributable to assets owned or man- ‘‘(A) short-, medium-, and long-term financial
gies will encourage a smoother transition to a aged, including assets that are partially owned and economic risks and opportunities relating to
clean and renewable energy, low-emissions or managed, by the covered issuer. climate change, and the national and global re-
economy and guide capital allocation to miti- ‘‘(I) FOSSIL FUEL RESERVES.—The term ‘fossil duction of greenhouse gas emissions, constitute
gate, and adapt to, the effects of climate change fuel reserves’ has the meaning given the term information that issuers—
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2833
‘‘(i) may reasonably expect to affect share- ‘‘(II) include greenhouse gas emissions by the issuer are observed for methane leaks, the proc-
holder decision making; and covered issuer during the period covered by the esses and technology that the covered issuer
‘‘(ii) should regularly identify, evaluate, and disclosure; uses to detect methane leaks, the percentage of
disclose; and ‘‘(iii) include reporting standards for dis- assets of the covered issuer that the covered
‘‘(B) the disclosure of information described in closing, with respect to a covered issuer— issuer inspects under that methodology, and
subparagraph (A) should— ‘‘(I) the total amount of fossil fuel-related as- quantitative and time-bound reduction goals of
‘‘(i) identify, and evaluate— sets owned or managed by the covered issuer; the issuer with respect to methane leaks;
‘‘(I) material physical and transition risks and ‘‘(ee) the amount of water that the covered
posed by climate change; and ‘‘(II) the percentage of fossil fuel-related as- issuer withdraws from freshwater sources for
‘‘(II) the potential financial impact of such sets as a percentage of total assets owned or use and consumption in operations of the cov-
risks; managed by the covered issuer; ered issuer; and
‘‘(ii) detail any implications such risks have ‘‘(iv) specify requirements for, and the disclo- ‘‘(ff) the percentage of the water described in
on corporate strategy; sure of, input parameters, assumptions, and an- item (ee) that comes from regions of water stress
‘‘(iii) detail any board-level oversight of mate- alytical choices to be used in climate scenario or that face wastewater management challenges;
rial climate related risks and opportunities; analyses required under subparagraph (B)(i), and
‘‘(iv) allow for intra- and cross-industry com- including— ‘‘(III) any other information that the Commis-
parison, to the extent practicable, of climate-re- ‘‘(I) present value discount rates; and sion determines is—
lated risk exposure through the inclusion of ‘‘(II) time frames to consider, including 5, 10, ‘‘(aa) necessary;
standardized industry-specific and sector-spe- and 20 year time frames; and ‘‘(bb) appropriate to safeguard the public in-
cific disclosure metrics, as identified by the ‘‘(v) include reporting standards and guid- terest; or
Commission, in consultation with the appro- ance with respect to the information required ‘‘(cc) directed at ensuring that investors are
priate climate principals; under subparagraph (B)(iii); informed in accordance with the findings de-
‘‘(v) allow for tracking of performance over ‘‘(B) require that a covered issuer, with re- scribed in paragraph (2);
time with respect to mitigating climate risk expo- spect to a disclosure required under this sub- ‘‘(C) with respect to a disclosure required
sure; and section— under section 13(s) of the Securities Exchange
‘‘(vi) incorporate a price on greenhouse gas ‘‘(i) incorporate into such disclosure— Act of 1934, require that a covered issuer include
emissions in financial analyses that reflects, at ‘‘(I) quantitative analysis to support any in such disclosure any other information, or use
minimum, the social cost of carbon that is at- qualitative statement made by the covered any climate-related or greenhouse gas emissions
tributable to issuers. issuer; metric, that the Commission, in consultation
‘‘(3) DISCLOSURE.—Each covered issuer, in ‘‘(II) the rules established under subpara- with the appropriate climate principals, deter-
any annual report filed by the covered issuer graph (A); mines is—
under subsection (a) or section 15(d), shall, in ‘‘(III) industry-specific metrics that comply ‘‘(i) necessary;
accordance with any rules issued by the Com- with the requirements under subparagraph ‘‘(ii) appropriate to safeguard the public inter-
mission pursuant to this subsection, include in (A)(i); est; or
each such report information regarding— ‘‘(IV) specific risk management actions that ‘‘(iii) directed at ensuring that investors are
‘‘(A) the identification of, the evaluation of the covered issuer is taking to address identified informed in accordance with the findings de-
potential financial impacts of, and any risk- risks; scribed in paragraph (2); and
management strategies relating to— ‘‘(V) a discussion of the short-, medium-, and ‘‘(D) with respect to a disclosure required
‘‘(i) physical risks posed to the covered issuer long-term resilience of any risk management under section 13(s) of the Securities Exchange
by climate change; and strategy, and the evolution of applicable risk Act of 1934, establish how and where the re-
‘‘(ii) transition risks posed to the covered metrics, of the covered issuer under each sce- quired disclosures shall be addressed in the cov-
issuer by climate change; nario described in clause (ii); and ered issuer’s annual financial filing.
‘‘(B) a description of any established cor- ‘‘(VI) the total cost attributable to the direct ‘‘(6) FORMATTING.—The Commission shall re-
porate governance processes and structures to and indirect greenhouse gas emissions of the quire issuers to disclose information in an inter-
identify, assess, and manage climate-related covered issuer, using, at minimum, the social active data format and shall develop standards
risks; cost of carbon; for such format, which shall include electronic
‘‘(C) a description of specific actions that the ‘‘(ii) consider, when preparing any qualitative tags for information that the Commission deter-
covered issuer is taking to mitigate identified or quantitative risk analysis statement con- mines is—
risks; tained in the disclosure— ‘‘(A) necessary;
‘‘(D) a description of the resilience of any ‘‘(I) a baseline scenario that includes physical ‘‘(B) appropriate to safeguard the public in-
strategy the covered issuer has for addressing impacts of climate change; terest; or
climate risks when differing climate scenarios ‘‘(II) a 1.5 degrees scenario; and
‘‘(C) directed at ensuring that investors are
are taken into consideration; and ‘‘(III) any additional climate analysis sce-
informed in accordance with the findings de-
‘‘(E) a description of how climate risk is incor- nario considered appropriate by the Commis-
scribed in paragraph (2).
porated into the overall risk management strat- sion, in consultation with the appropriate cli-
‘‘(7) PERIODIC UPDATE OF RULES.—The Com-
egy of the covered issuer. mate principals;
‘‘(4) RULE OF CONSTRUCTION.—Nothing in mission shall periodically update the rules
‘‘(iii) if the covered issuer engages in the com-
paragraph (3) may be construed as precluding a issued under this subsection.
mercial development of fossil fuels, include in
covered issuer from including, in an annual re- ‘‘(8) COMPILATION OF INFORMATION DIS-
the disclosure—
CLOSED.—The Commission shall, to the max-
port submitted under subsection (a) or section ‘‘(I) an estimate of the total and a
15(d), any information not explicitly referenced imum extent practicable make a compilation of
disaggregated amount of direct and indirect
in such paragraph. the information disclosed by issuers under this
greenhouse gas emissions of the covered issuer
‘‘(5) RULEMAKING.—The Commission, in con- subsection publicly available on the website of
that are attributable to—
sultation with the appropriate climate prin- the Commission and update such compilation at
‘‘(aa) combustion;
cipals, shall, not later than 2 years after the ‘‘(bb) flared hydrocarbons; least once each year.
date of the enactment of this subsection, issue ‘‘(cc) process emissions; ‘‘(9) REPORTS.—
rules with respect to the information that a cov- ‘‘(dd) directly vented emissions; ‘‘(A) REPORT TO CONGRESS.—The Commission
ered issuer is required to disclose pursuant to ‘‘(ee) fugitive emissions or leaks; and shall—
this subsection and such rules shall— ‘‘(ff) land use changes; ‘‘(i) conduct an annual assessment regarding
‘‘(A) establish climate-related risk disclosure ‘‘(II) a description of— the compliance of covered issuers with the re-
rules, which shall— ‘‘(aa) the sensitivity of fossil fuel reserve lev- quirements of this subsection;
‘‘(i) be, to the extent practicable, specialized els to future price projection scenarios that in- ‘‘(ii) submit to the appropriate congressional
for industries within specific sectors of the econ- corporate the social cost of carbon; committees a report that contains the results of
omy, which shall include— ‘‘(bb) the percentage of the reserves of the cov- each assessment conducted under clause (i); and
‘‘(I) the sectors of finance, insurance, trans- ered issuer that will be developed under the sce- ‘‘(iii) make each report submitted under clause
portation, electric power, mining, and non-re- narios established in clause (ii), as well as a (ii) accessible to the public.
newable energy; and forecast for the development prospects of each ‘‘(B) GAO REPORT.—The Comptroller General
‘‘(II) any other sector determined appropriate reserve under the scenarios established in clause of the United States shall periodically evaluate,
by the Commission, in consultation with the ap- (ii); and report to the appropriate congressional
propriate climate principals; ‘‘(cc) the potential amount of direct and indi- committees on, the effectiveness of the Commis-
‘‘(ii) include reporting standards for esti- rect greenhouse gas emissions that are embedded sion in carrying out and enforcing this sub-
section.’’.
ctelli on DSK11ZRN23PROD with HOUSE
mating and disclosing direct and indirect green- in proved and probable reserves, with each such
house gas emissions by a covered issuer, and calculation presented as a total and in sub- SEC. 404. BACKSTOP.
any affiliates of the covered issuer, which divided categories by the type of reserve; If, 2 years after the date of the enactment of
shall— ‘‘(dd) the methodology of the covered issuer this Act, the Securities and Exchange Commis-
‘‘(I) disaggregate, to the extent practicable, for detecting and mitigating fugitive methane sion has not issued the rules required under sec-
total emissions of each specified greenhouse gas emissions, which shall include the frequency tion 13(u) of the Securities Exchange Act of
by the covered issuer; and with which applicable assets of the covered 1934, and until such rules are issued, a covered
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H2834 CONGRESSIONAL RECORD — HOUSE June 16, 2021
issuer (as defined in such section 13(u)) shall be ‘‘(V) Total accrued tax expense recorded on GENERAL LEAVE
deemed in compliance with such section 13(u) if taxable profits or losses. Ms. WATERS. Mr. Speaker, I ask
disclosures set forth in the annual report of ‘‘(VI) Stated capital. unanimous consent that all Member
such issuer satisfy the recommendations of the ‘‘(VII) Total accumulated earnings.
‘‘(VIII) Total number of employees on a full-
may have 5 legislative days within
Task Force on Climate-related Financial Disclo-
sures of the Financial Stability Board as re- time equivalent basis. which to revise and extend their re-
ported in June, 2017, or any successor report, ‘‘(IX) Net book value of tangible assets, marks on H.R. 1187 and to insert extra-
and as supplemented or adjusted by such rules, which, for purposes of this section, does not in- neous material thereon.
guidance, or other comments from the Commis- clude cash or cash equivalents, intangibles, or The SPEAKER pro tempore. Is there
sion. financial assets. objection to the request of the gentle-
SEC. 405. AUTHORIZATION OF APPROPRIATIONS. ‘‘(iii) SPECIAL RULES.—The information listed woman from California?
There are authorized to be appropriated to the in clause (ii) shall be provided, in aggregated or There was no objection.
Securities and Exchange Commission such sums consolidated form, for any constituent entity or
Ms. WATERS. Mr. Speaker, I yield
as may be necessary to carry out this title and entities that have no tax jurisdiction of resi-
dence. In addition, if a constituent entity is an myself such time as I may consume.
the amendments made by this title. Mr. Speaker, I rise in support of H.R.
owner of a constituent entity that does not have
TITLE V—DISCLOSURE OF TAX HAVENS 1187, the Corporate Governance Im-
a jurisdiction of tax residence, then the owner’s
AND OFFSHORING provement and Investor Protection
share of such entity’s revenues and profits will
SEC. 501. SHORT TITLE. be aggregated or consolidated with the informa- Act.
This title may be cited as the ‘‘Disclosure of tion for the owner’s tax jurisdiction of resi- H.R. 1187 is a package of bills de-
Tax Havens and Offshoring Act’’. dence. signed to strengthen investor protec-
SEC. 502. COUNTRY-BY-COUNTRY REPORTING. ‘‘(C) REPORTING PERIOD.—The reporting pe- tions and require companies to provide
(a) COUNTRY-BY-COUNTRY REPORTING.—Sec- riod covered by this paragraph is the period of
tion 13 of the Securities Exchange Act of 1934 the covered entity’s applicable financial state-
environmental, social, and governance
(15 U.S.C. 78m), as amended by section 403, is ment prepared for the 12-month period that ends disclosures, known as ESG. I thank my
further amended by adding at the end the fol- with or within the taxable year of the covered colleague, Representative JUAN
lowing new subsection: issuer. If the covered issuer does not prepare an VARGAS, for his leadership on this
‘‘(v) DISCLOSURE OF FINANCIAL PERFORMANCE annual applicable financial statement, then the package.
ON A COUNTRY-BY-COUNTRY BASIS.— reporting period covered by this paragraph is This bill provides investors with crit-
‘‘(1) DEFINITIONS.—In this subsection— the 12-month period that ends on the last day of ical information on ESG matters by re-
‘‘(A) the term ‘constituent entity’ means, with the taxable year of the covered issuer. quiring public companies to disclose
respect to a covered issuer, any separate busi- ‘‘(D) FILING DEADLINE.—Each covered issuer
ness entity of the covered issuer; shall submit to the Commission a report required
key information to shareholders re-
‘‘(B) the term ‘covered issuer’ means an issuer under this section on or before the due date (in- garding corporate political spending,
who— cluding extensions) for filing that covered worker pay, CEO compensation, cli-
‘‘(i) is a member of a multinational enterprise issuer’s tax return in the tax jurisdiction in mate risk, and country-by-country tax
group; and which the covered issuer’s multinational enter- reporting; and provides issuers with
‘‘(ii) the multinational enterprise group of prise group is resident. clear, consistent standards to disclose
which the issuer is a member has annual rev- ‘‘(E) REGULATION.—The Commission shall, in this information.
enue for the preceding calendar year of not less consultation with the Commissioner of the Inter-
than an amount determined by the Commission
This is key information that inves-
nal Revenue Service and Secretary of the Treas-
to conform to United States or international ury—
tors have been demanding in order to
standards for country-by-country reporting; ‘‘(i) promulgate regulations carrying out this make the best decisions on the short-
and subsection that conform to United States or and long-term viability of the compa-
‘‘(C) the term ‘tax jurisdiction’— international standards for country-by-country nies they are investing in.
‘‘(i) means a country or a jurisdiction that is reporting, including regulations promulgated by It is surprising that, to this day,
not a country but that has fiscal autonomy; and the Internal Revenue Service; and there are no explicit ESG requirements
‘‘(ii) includes a territory or possession of the ‘‘(ii) require disclosure of the accounting and investors are left to piece together
United States that has fiscal autonomy. methods used in calculating the information
‘‘(2) DISCLOSURE.— the story of a company’s material risk
contained in each report filed pursuant to this
‘‘(A) IN GENERAL.—Each covered issuer shall subsection.’’.
with insufficient information. This is
file a report with the Commission that includes (b) RULEMAKING.— unacceptable.
information described in subparagraph (B), and (1) DEADLINES.—The Securities and Exchange So I am pleased that this package of
any other information required by the Commis- Commission (in this section referred to as the bills will improve investor protections
sion, with respect to the reporting period de- ‘‘Commission’’) shall— by holding public companies account-
scribed in subparagraph (C). (A) not later than 1 year after the date of en- able and providing greater trans-
‘‘(B) INFORMATION REQUIRED.—The informa- actment of this Act, issue a proposed rule to parency.
tion described in this subparagraph is as fol- carry out this section and the amendment made
lows: This package includes a number of
by this section; and
‘‘(i) CONSTITUENT ENTITY INFORMATION.—In- (B) not later than 18 months after the date of
bills authored by several hardworking
formation on the constituent entity, including enactment of this Act, issue a final rule to carry members of the Financial Services
the following: out this section and the amendment made by Committee, specifically: Representa-
‘‘(I) The complete legal name of the con- this section. tive JUAN VARGAS, Representative BILL
stituent entity. (2) DATA FORMAT.—The information required FOSTER, Representative Nydia Velaz-
‘‘(II) The tax jurisdiction, if any, in which the to be provided by this section shall be provided quez, Representative SEAN CASTEN, and
constituent entity is resident for tax purposes. by the issuer in a report in a machine readable
‘‘(III) The tax jurisdiction in which the con-
Representative CINDY AXNE.
format prescribed by the Commission, and such Specifically, Mr. VARGAS’ bill, the
stituent entity is organized or incorporated (if report shall be made available to the public on-
different from the tax jurisdiction of residence). line, in such machine readable format as the
ESG Disclosure Simplification Act, re-
‘‘(IV) The tax identification number, if any, Commission shall prescribe. quires public companies to disclose cer-
used for the constituent entity by the tax ad- (3) EFFECTIVE DATE.—Subsection (v) of section tain ESG information to shareholders,
ministration of the constituent entity’s tax juris- 13 of the Securities Exchange Act of 1934, as as well as the impact of the ESG poli-
diction of residence. added by this section, shall become effective 1 cies on their strategies.
‘‘(V) The main business activity or activities year after the date on which the Commission Mr. FOSTER’s bill, the Shareholder
of the constituent entity. issues a final rule under this section.
‘‘(ii) TAX JURISDICTION.—Information on each Political Transparency Act, requires
tax jurisdiction in which one or more con- The SPEAKER pro tempore. The bill, public companies to submit quarterly
stituent entities is resident, presented as an ag- as amended, is debatable for 1 hour reports to the SEC on any and all polit-
gregated or consolidated form of the information equally divided and controlled by the ical expenditures, including dark
for the constituent entities resident in each tax chair and ranking minority member of money.
jurisdiction, including the following: the Committee on Financial Services. Ms. VELÁZQUEZ’s bill, the Greater Ac-
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(I) Revenues generated from transactions The gentlewoman from California countability in Pay Act, sheds light on
with other constituent entities. (Ms. WATERS) and the gentleman from pay disparities, helping to close the
‘‘(II) Revenues not generated from trans-
actions with other constituent entities. Michigan (Mr. HUIZENGA) each will con- gender and racial pay gap.
‘‘(III) Profit or loss before income tax. trol 30 minutes. Ms. AXNE’s bill, the Disclosure of Tax
‘‘(IV) Total income tax paid on a cash basis to The Chair recognizes the gentle- Havens and Offshoring Act, requires
all tax jurisdictions. woman from California. disclosures that discourage companies’
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2835
use of tax havens and encourages repa- and the pay raise percentage of the tors. It will discourage private compa-
triation of taxes to the United States. company’s median employee. This is, nies from going public and encourage
Mr. CASTEN’s bill, the Climate Risk in some ways, duplicative of the man- public companies to go private to avoid
Disclosure Act, requires disclosures datory CEO pay ratio disclosure that these burdensome new nonmaterial and
that encourages companies to plan for Democrats put into the Dodd-Frank useless disclosure requirements.
the impact of climate change on their Act, which itself is an especially use- Sadly, this will hurt the everyday in-
company. less metric; country-by-country tax vestors, our constituents, that the
Each of these bills passed the Finan- and financial reports from multi- Democrats claim they want to help. In
cial Services Committee with unani- national enterprises. This will upend other words, this bill stands to harm
mous Democratic support. I thank all the current country-by-country tax re- everyone saving for retirement, a col-
these Members for their work on these porting rules overseen by the IRS. lege education, or just looking to build
bills, their contributions to the legisla- Mr. Speaker, let’s be clear. My a better life.
tive package, and their leadership on friends across the aisle are using the This is just a bad bill, and I urge a
these important reforms to protect in- Federal securities laws to implement ‘‘no’’ vote on H.R. 1187.
vestors and hold corporations account- their partisan wish list of social policy Mr. Speaker, I reserve the balance of
able. priorities. They are doing it through my time.
This package is the right thing to do mandatory disclosure regimes that are, b 1245
for investors and our markets. It is at best, tangentially related to actual
past time that Congress make ESG re- investment decisions. Ms. WATERS. Mr. Speaker, I yield 3
quirements explicit. For these reasons, To be clear, if information presents a minutes to the gentleman from Cali-
I urge my colleagues to support the material investment risk to a publicly fornia (Mr. VARGAS), our leader and the
bill. traded company, the company is—wait real sponsor on this legislation.
Mr. Speaker, I reserve the balance of for this—already required to disclose Mr. VARGAS. Mr. Speaker, I rise
my time. it. That information is out there for today to support the Corporate Govern-
Mr. HUIZENGA. Mr. Speaker, I yield those companies that have material ance Improvement and Investor Pro-
myself such time as I may consume. risk. tection Act. I particularly thank
I am opposed to this bill, and I rise in Materiality has been, and continues Chairwoman WATERS for her support of
opposition to H.R. 1187. to be, the touchstone of our public the environmental, social, and govern-
Mr. Speaker, today, my Democrat company disclosure regime for more ance metrics. Her efforts have been he-
colleagues, once again, are seeking to than eight decades and has actually roic, and I appreciate it very, very
hijack our securities laws to push left- even been affirmed by the U.S. Su- much.
wing political and social agendas, de- preme Court. It has held the test of Mr. Speaker, when we talk about in-
spite dressing it up as investor protec- time, and we simply cannot just dis- vestors, we are not only talking about
tion. card it to appeal to the Democrats’ large, wealthy institutions. We are
Make no mistake, this bill will in- progressive agenda. talking about teachers. We are talking
crease costs on publicly owned compa- Our capital markets are the best in about people who are working hard for
nies, discourage private companies the world in no small part because ma- their money. We are also talking about
from going public; and, frankly, could teriality is the basis of our disclosure nonprofessional investors who have
encourage not only private companies regime here in the United States, yet found in the stock market a way to
to stay private, but even have and en- my Democrat friends, apparently, want build their savings toward, for exam-
tice public companies to go back to to throw it all away for the sake of ap- ple, homeownership, college tuition,
being private companies. pealing to leftwing stakeholders. and retirement. When we are talking
This is going to result in fewer in- Additionally, H.R. 1187 will greatly about investors, we are also talking
vestment opportunities for everyday expand the SEC’s jurisdiction by re- about pension funds that hold many
American investors, also known as our quiring the SEC to promulgate disclo- hardworking Americans’ retirement
constituents, who are saving for retire- sures on environmental, climate savings.
ment, a college education or simply change, political spending, tax report- When a company engages in practices
looking to just build a better life. ing, and foreign policy issues, among that put its business at risk, it also
In short, this bill will increase the others. risks the funds these investors have en-
number of government-directed, man- This is not the sweet spot for the trusted with it.
datory disclosure requirements on pub- SEC. It does not have the experience in That is why the SEC requires public
licly traded companies, which will in- any of these issues, and is not the ap- companies to disclose material infor-
crease compliance costs on companies propriate entity for determining these mation, meaning information that a
and divert company resources that metrics or industry standards, nor is reasonable investor needs in order to
could have been used to create more the Securities and Exchange Commis- make a voting decision or decide
jobs. sion the appropriate entity to review whether to continue investing in that
Now, to be fair, this is a job-creation and enforce such disclosures. company. Mandated and standard dis-
bill. However, the only jobs created by The SEC knows how to regulate ma- closures of environmental, social, and
this bill will be for a special tranche of teriality. That is their expertise. They governance, or ESG, metrics would
attorneys, corporate compliance coor- are not climatologists or climate sci- provide improved insight into long-
dinators, and the occasional scientist; entists. They are not election law ex- term business performance and areas of
not exactly what an economist would perts. And they most certainly do not potential future risks.
call productive-types of jobs. know international tax law. That is These metrics are material to inves-
Under this bill, public companies the purview of the EPA, NOAA, the tors and central to their protection.
would be required to disclose: FEC, and the IRS. Together, I and my colleagues have
Environmental, social, and govern- Furthermore, smaller public compa- worked to write legislation that would
ance issues, as well as climate risk. nies will bear the burden of additional ensure such protection. My bill—the
These metrics would be set by the Se- compliance costs. This bill fails to ac- first in the package—requires the SEC
curities and Exchange Commission, not count for the impact it will have on to mandate standard ESG disclosures.
Congress; smaller businesses and companies, es- My colleagues’ bills require reporting
Descriptions of any expenditure for pecially those who are looking to go on specific ESG metrics that investors
political activities and donations to public. Or maybe I should say, were have been advocating for over many
ctelli on DSK11ZRN23PROD with HOUSE
political candidates or trade organiza- looking to go public. They certainly do years. I applaud Representatives FOS-
tions by executives, these are duplica- not have the infrastructure or re- TER, VELAZQUEZ, CASTEN, and AXNE for
tive of existing requirements, for ex- sources to spend on fixed costs of com- their legislation.
ample; pliance like this. Additionally, I thank Chair Gensler
The ratio between the pay raise per- H.R. 1187 will result in fewer invest- for his advocacy that investors’ voices
centage of the company’s executives ment opportunities for American inves- are central to materiality.
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H2836 CONGRESSIONAL RECORD — HOUSE June 16, 2021
I have to say, climate change is real, . . . If the standard of materiality is Swiss Re recently found that global
and we have to take it seriously. It is unnecessarily low . . . management’s GDP will decrease by 4 percent if we
not a Member of this House or the fear of exposing itself to substantial li- meet the Paris climate accords, and if
other House taking a snowball, throw- ability may cause it simply to bury the we stay with business as usual, 18 per-
ing it, and saying: See, there is no cli- shareholders in an avalanche of trivial cent.
mate change. information, a result that is hardly Domestically, the CFTC has come to
Climate change is real. Look at what conducive to informed decision- roughly the same conclusion, esti-
happened in Texas this summer. They making.’’ mating that for every 1 degree Celsius
were begging for energy because they We articulated this in a letter to the rise in temperature, we can expect a 1.2
were not prepared because of climate SEC that my colleagues and I sent re- percent reduction in annual GDP
change. They were melting snow in garding their plans for financial disclo- growth.
their bathtubs so they could flush their sure. In that letter, signed by 22 of my Mr. Speaker, I say to my friends that
toilets. Republican colleagues in the House, we that is material. It is a big deal.
If you take a look at what is hap- outline our concerns about the SEC Those economic losses are due to the
pening out in the West today: drought, going far afield of its statutory mission wildfires, droughts, blackouts, and
the unfortunate reality that we face to protect investors; maintain fair, or- superstorms that have already caused
the risk of catastrophic fires. derly, and efficient markets; and facili- $500 billion of damages in the past 4
All of this is climate change, and it is tate capital formation. years, and investors understand this.
about time that we take this very, very We also warn that the nature and The fossil fuel industry has spent 10
seriously as a country. scope of climate change disclosure years slashing prices. And do you know
Some companies already do this. rightfully depends on a particular com- what? They are still losing market
They already disclose the ESG metrics. pany’s business line and their carbon share to lower-cost renewables and effi-
That is why it is important to have an footprint. One-size-fits-all, uniform ciency.
equal playing field where all companies mandates would be deeply misguided ExxonMobil didn’t write down $20 bil-
disclose. for an issue as complex as the impact lion because they are woke. They wrote
Again, I thank Chairwoman WATERS of the climate over many, many years down $20 billion because the free mar-
for her heroic efforts here. I also thank on individual businesses. ket is beating them.
my colleagues. This rings more true here in Con- Investors want to know how to re-
I urge my colleagues on the other gress. Congress does not know what is allocate their capital in response to
side: Take climate change for real. Ac- best for a public company. These deci- that risk. They want to know how to
cept that it is happening. It is real, and sions are best left up to the board that allocate it to more productive uses.
it is catastrophic. And we must take it already has a fiduciary obligation to That is why there were over 140 cli-
seriously. its shareholders to manage this kind of mate-related shareholder proposals at
Mr. HUIZENGA. Mr. Speaker, I yield issue. U.S. companies during the 2020 proxy
4 minutes to the gentleman from Ar- Our publicly traded companies are re- season. But we, in this body, have not
kansas (Mr. HILL), a leader on this sponsive to shareholder engagement. done our job to protect those investors.
issue. Over the last two decades, they have Let us be very clear. When we talk
Mr. HILL. Mr. Speaker, I thank dramatically improved their govern- about investor protection, every com-
Ranking Member HUIZENGA for the ance practices by increasing diverse, pany in the world would like to have
time on the floor today. independent directors and increasing asymmetry of information. Our job is
Mr. Speaker, I would say to my their boards’ attention to the business to make sure that if you love free mar-
friends on the other side of the aisle: judgment rule and fiduciary duty of kets as much as I do, as much as those
We are not debating climate change care. of us on this side of the aisle do, then
here. We are debating the proper way Look at Procter & Gamble as just you have to make sure that they have
to financially disclose risks on finan- one U.S. iconic company. In 2000, their full transparency of information. Right
cial statements of companies that may annual proxy statement was 56 pages. now, public companies have no obliga-
or may not experience impact from cli- Today, it is 111 pages. tion to disclose their exposure to cli-
mate change. Like the vast majority of public com- mate-related risks, nor is there a con-
No one is over here denying about panies in the S&P 500, P&G has signifi- sistent format for those disclosures.
climate. We are here talking about cant disclosures of ESG initiatives, This bill would fix that.
what the right way is to do this. And their political contributions, and their It directs the SEC to issue a rule re-
H.R. 1187 is not the right way to do cli- sales around the world. quiring every public company to dis-
mate disclosure on behalf of taxpayers, Let’s not make it more difficult for close its direct and indirect greenhouse
shareholders, and employees of public public companies. As policymakers, we gas emissions, the total amount of fos-
companies. should be promoting policies that bol- sil fuel-related assets that it owns or
I have spent the better part of four ster investment options for Americans, manages, how its valuation would be
decades in leadership in both public not limit them. This bill limits that. affected if climate change continues at
and private companies, and I have been Mr. Speaker, I encourage my col- its current pace or if policymakers suc-
engaged throughout those years in leagues to vote against the legislation. cessfully restrict greenhouse gas emis-
calling for quality corporate govern- Ms. WATERS. Mr. Speaker, I yield 2 sions to meet the Paris goals, and its
ance practices. I can say with absolute minutes to the gentleman from Illinois risk management strategies related to
authority that mandating these disclo- (Mr. CASTEN). the physical and transitional risks of
sures as outlined in H.R. 1187 is not Mr. CASTEN. Mr. Speaker, I rise in the climate crisis.
only not necessary but would be expen- support of my legislation, the Climate The SPEAKER pro tempore. The
sive and lead to increased litigation Risk Disclosure Act, H.R. 1187. time of the gentleman has expired.
costs. I would like us all to imagine for a Ms. WATERS. Mr. Speaker, I yield an
As my colleagues have already said, moment that you had all of your additional 30 seconds to the gentleman
the information is already to be dis- wealth tied up in a single company, from Illinois.
closed if it meets the materiality and you knew that that company was Mr. CASTEN. Mr. Speaker, I want to
standard. The idea of materiality has on track to lose nearly 20 percent of its reassure my friend from Arkansas that
been refined over many decades, and it value thanks to a known and avoidable the bill does direct the SEC to tailor
is what makes our capital markets the threat. You call the CEO, and the CEO those disclosure requirements to dif-
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envy of the world. responded by saying: We have it taken ferent industries to make sure that the
As Justice Marshall stated in the Su- care of, but I am not going to explain burden is borne most heavily by those
preme Court opinion from 1976: ‘‘Some how. companies with the greatest contribu-
information is of such dubious signifi- That is the reality that the climate tion to that risk.
cance that insistence on its disclosure crisis is creating for our global econ- When it comes to making this transi-
may accomplish more harm than good. omy. tion, markets are some of the most
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2837
powerful tools we have, but efficient v. Northway. In that majority opinion, that is not what happened on Main
markets depend on transparent infor- Justice Thurgood Marshall wrote, and Street back in my district in Iowa.
mation. It is on us to provide that effi- it bears repeating: ‘‘If the standard of They paid their taxes—and many more
ciency, to unleash the power of our en- materiality is unnecessarily low, not paid far below the statutory rate of 21
trepreneurs and our capitalists to cre- only may the corporation and its man- percent.
ate jobs and economic growth, and to agement be subjected to liability for It is not hard to see why this hap-
leave a better planet than the one we insignificant omissions or pens. In 2018, U.S. multinationals
inherited—but only if we act. misstatements, but also management’s booked hundreds of billions of dollars
This is a win for capitalism, a win for fear of exposing itself to substantial li- of tax havens where they basically paid
consumers, and a win for the planet ability may cause it simply to bury the no taxes, including $100 billion alone in
that we will pass on to our grand- shareholders in an avalanche of trivial Bermuda.
children. information, a result that is hardly This costs the U.S. more than $50 bil-
Mr. Speaker, I urge my colleagues to conducive to informed decision- lion per year in taxes. And beyond the
vote in support of this legislation. making.’’ damage that that does, which is exten-
Mr. HUIZENGA. Mr. Speaker, I yield So, this is not about investor protec- sive, it hurts all of the businesses who
4 minutes to the gentleman from Ken- tion. This is about weaponizing Federal are doing the right thing, those that
tucky (Mr. BARR), who has been an out- securities law to discriminate against are on Main Street in all of our com-
standing voice on these particular law-abiding American energy compa- munities, including many small busi-
issues. nies. This is an effort to pick winners nesses across this country who don’t
Mr. BARR. Mr. Speaker, I thank my and losers in the marketplace by the have a subsidiary in Barbados just to
friend from Michigan. government. It is an effort for central avoid taxes.
Mr. Speaker, I rise today in opposi- That is why last weekend, seven of
planning of our economy. It is not
tion to H.R. 1187, with all due respect the world’s largest economies agreed to
about markets. This is about market
to my good friends from California and end the race to the bottom and require
distortion by the Federal Government.
Illinois. We have enjoyed a robust dis- a global minimum tax rate of 15 per-
In committee, I tried to make a com-
cussion and debate on this, which I cent for our corporations. That is going
monsense change to ensure the bill
would argue is a very important topic. to have a big impact on the corpora-
covers only material information so
Mr. Speaker, the statutory mission tions who have been using tax havens,
that investors aren’t buried by that av- but the investors and the public don’t
of the Securities and Exchange Com- alanche. The majority rejected my
mission is to protect investors; main- know which corporations are using
amendment. This shows they are more these loopholes and where they are
tain fair, orderly, and efficient mar- interested in naming and shaming com-
kets; and facilitate capital formation. booking their profits.
panies than providing useful informa- My bill will fix that, by requiring dis-
Its mission, though, is not to reduce tion to investors. closure of very basic information about
carbon emissions. Its mission is not to
solve climate change. b 1300 a company’s operations on a country-
Mr. Speaker, my last point is this: by-country basis, including revenue,
Now, those may be laudable public
the job of the SEC is to protect inves- profit, taxes paid, and number of em-
policy objectives, but they are best
tors, but this bill would compromise ployees they have. This would take in-
handled by the Congress or other Fed-
investor returns by elevating nonpecu- formation large multinational corpora-
eral agencies. This is simply not the
tions already have and give us much–
job of the SEC. niary factors above and ahead of finan-
needed transparency into the inter-
This bill is, unfortunately, the next cial performance.
national tax avoidance strategies com-
episode in the Democrats’ saga to How do we know this? Because fees of
panies use if they are shipping jobs
weaponize financial regulation to ESG funds are 43 percent higher than
overseas. It gives us the information
achieve partisan social and environ- non-ESG funds. And many low-ranked
that we need, and I urge a ‘‘yes’’ vote.
mental goals. Congressional Democrats ESG stocks not only outperformed top- Mr. HUIZENGA. Mr. Speaker, I in-
and the Biden administration know ranked ESG stocks, they outperformed clude in the RECORD the following let-
that they cannot pass the Green New the market overall. ters, a June 14 letter from the National
Deal and other extreme far-left policy We must not harm American inves- Association of Manufacturers, a June
priorities through a Democrat-major- tors. We must not harm American re- 15 letter from the U.S. Chamber of
ity Congress, so they are corrupting an tirement savers by subordinating in- Commerce, and a June 16 letter from
independent Federal financial regu- vestor returns to promote nonpecu- the American Securities Association,
lator to do their bidding. niary policy objectives like social jus- all in opposition to this bill.
The majority claims that this bill is tice, diversity quotas, and lower carbon
NATIONAL ASSOCIATION OF
an effort to improve corporate govern- emissions. MANUFACTURERS,
ance when, in reality, it is a thinly Financial regulations should not be a June 14, 2021
veiled attempt to open a back door to tool for social change. HOUSE OF REPRESENTATIVES,
achieve their socialist wish list and cut Ms. WATERS. Mr. Speaker, I yield 2 Washington, DC.
off financing to legal but politically minutes to the gentlewoman from Iowa DEAR REPRESENTATIVE: On behalf of the
unfashionable industries that they de- (Mrs. AXNE). National Association of Manufacturers, I
Mrs. AXNE. Mr. Speaker, I thank write to express opposition to H.R. 1187, the
spise. Corporate Governance Improvement and In-
The result will be higher energy costs Chairwoman WATERS for putting to- vestor Protection Act.
for the American people, a regressive gether such an important set of cor- Manufacturers are taking the lead in inno-
energy tax on the people in this coun- porate governance reforms, one that vating solutions to climate change, ensuring
try who can the least afford it. absolutely supports investors in this clean air and water, and enhancing diversity
As always, the Democrats think that country, like our teachers who are in- and inclusion—and, importantly, in pro-
the government knows best and is bet- volved in institutional investment for viding information about this critical work
to their investors. Public company reporting
ter equipped than the private market their safety and a dignified retirement.
related to climate change and other environ-
to meet demand. They give no consid- Mr. Speaker, this package will abso- mental, social, and governance topics should
eration to the impacts of significant lutely give everyone more information allow for principles-based disclosure of finan-
cost increases, the bill’s effect on retail about how companies are investing for cially material information relevant to these
investors, or the actual utility of the the long term, and that includes my efforts. The NAM is concerned that the ESG
information they are requesting and its bill, the Disclosure of Tax Havens and Disclosure Simplification Act, the Share-
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materiality for informing investment Offshoring Act. holder Political Transparency Act, the
Last year, 55 profitable U.S. corpora- Greater Accountability in Pay Act, and the
decisions.
Climate Risk Disclosure Act would impose
My friend from Arkansas (Mr. HILL) tions paid no Federal corporate income disclosure mandates that focus on costly
made this point. But the seminal Su- taxes. Let me repeat that. Last year, 55 one-size-fits-all metrics rather than mate-
preme Court case that defines the ma- profitable U.S. corporations paid no rial, decision-useful information for inves-
teriality standard was TSC Industries corporate income taxes—I can tell you, tors.
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H2838 CONGRESSIONAL RECORD — HOUSE June 16, 2021
Similarly, the Disclosure of Tax Havens conducive to informed decision making.’’ certain organizations. This would allow the
and Offshoring Act would impose a signifi- This legislation is incompatible with Justice securities laws to be used as a public rela-
cant compliance burden—while also risking Marshall’s opinion on materiality—a stand- tions tool to silence political opposition.
exposure of valuable and proprietary data— ard that is recognized by SEC Chair Gary Congress should respect the First Amend-
by requiring public reporting of country-by- Gensler. ment rights of all Americans and vote this
country tax information by U.S. companies. In addition, the Chamber has supported bill down.
The United States’ support for Action 13 of previous versions of legislation introduced IMPROVING CORPORATE GOVERNANCE THROUGH
the OECD/G20’s BEPS country-by-country by Representative Gregory Meeks on disclo- DIVERSITY AMENDMENT
reporting initiative was based on the re- sure of corporate board diversity, which have
The ASA appreciates that Congress will be
quirement that these reports, which are ex- garnered bipartisan support. The Chamber
changed between the IRS and other tax au- considering, as an amendment to H.R. 1187,
believes this legislation should be considered
thorities, would remain confidential. this bipartisan legislation to inform inves-
separately. It is regrettable that Representa-
The NAM is engaging with the Securities tors about the diversity of public company
tive Meek’s thoughtful legislation has been
and Exchange Commission as it considers directors. ASA members have long recog-
included in this flawed H.R. 1187.
ways to enhance the comparability of cli- The Chamber opposes H.R. 1187, the ‘‘Cor- nized the benefits of workforce inclusion and
mate and ESG information disclosed by pub- porate Governance Improvement and Inves- have taken actionable steps to hire and train
licly traded companies. Manufacturers are tor Protection Act,’’ and urges you to vote individuals of all backgrounds. The boards
hopeful that any new climate or ESG report- against this legislation. and workforce of ASA members reflect this
ing framework will be flexible, principles- Sincerely, view. We believe the best way to build a sus-
based, and materiality-driven while pro- JACK HOWARD. tainable economy is though inclusion.
viding clarity to publicly traded companies While ASA supports the Improving Cor-
and supporting their efforts to furnish mate- AMERICAN SECURITIES ASSOCIATION, porate Governance Through Diversity Act,
rial information to investors in a com- Washington, DC, June 16, 2021. in April we recommended a number of
parable manner. We encourage Congress to Re H.R. 1187, the Corporate Governance Im- changes to strengthen the bill prior to its
provide appropriate oversight of the SEC’s provement and Investor Protection Act markup by the Financial Services Com-
ongoing work without mandating a one-size- of 2021. mittee. We continue to believe the diversity
fits-all approach. criteria should be expanded to include indi-
Hon. NANCY PELOSI, viduals of diverse viewpoints and diverse
Sincerely, Speaker, House of Representatives,
CHRIS NETRAM, professional/educational backgrounds. The
Washington, DC. inclusion of individuals of different genders,
Vice President, Tax and Hon. KEVIN MCCARTHY,
Domestic Economic Policy. races, ethnicities, viewpoints, and experi-
Minority Leader, House of Representatives, ences is necessary to achieve the policy goals
Washington, DC. Congress rightly seeks to achieve.
U.S. CHAMBER OF COMMERCE, DEAR SPEAKER PELOSI, LEADER MCCARTHY,
Washington, DC, June 15, 2021. Congress should refrain from adopting poli-
AND MEMBERS OF THE HOUSE OF REPRESENTA- cies that would promote boards composed of
TO THE MEMBERS OF THE U.S. HOUSE OF
TIVES: The American Securities Association a club of individuals whose experience tracks
REPRESENTATIVES: The U.S. Chamber of
(ASA) provides this letter regarding H.R. a certain managerial/educational path or re-
Commerce strongly opposes H.R. 1187, the
1187, the ‘‘Corporate Governance Improve- quires adherence to a particular point of
‘‘Corporate Governance Improvement and In-
ment and Investor Protection Act of 2021,’’ view. Today, more than ever, public compa-
vestor Protection Act.’’ While some of the
which is scheduled to be considered by the nies need the benefit of hearing from individ-
underlying goals of H.R. 1187 are laudable,
House of Representatives this week. For uals with different experiences who will
the bill would likely result in significant
multiple reasons set forth below, ASA must question and engage with executives about
costs for Main Street investors and it would
oppose H.R. 1187 and we urge members to the appropriate direction and decision-mak-
fail to achieve its stated objectives. The
vote against the bill. ing of public companies. Unfortunately,
Chamber will consider including votes on
this legislation in our ‘‘How They Voted’’ POLITICAL SPENDING changes to reflect this important priority
scorecard. H.R. 1187 includes a section that would have not been made to the underlying legis-
Over the last several years, the Chamber force corporations to disclose their political lation.
has worked closely with stakeholders to pro- activities. Moving forward with a policy in- REP. HILL AMENDMENT—SEC STUDY
mote a corporate disclosure framework for tended to stifle protected speech suggests The ASA supports the approach taken by
environmental, social, and governance (ESG) this bill is less about providing investors Representative Hill’s amendment, which
factors. This framework acknowledges the with useful information, and more about si- would require the SEC to study the incon-
inherently complex nature of these issues lencing political opponents. Enacting poli- sistencies and differences between ESG re-
and allows companies to disclose industry cies to erect barriers for companies to en- porting frameworks prior to mandating new
specific information. We believe this ap- gage in the political process on policy issues disclosures for public companies.
proach would help ensure investors receive that are fundamental to their business vio- To date, the SEC has failed to conduct
material, decision-useful information while lates the First Amendment. such a study. As a result, the Commission
eliminating the cost of burdensome and im- The ASA strongly opposes this legislation. has no way to know how current ESG disclo-
practical mandates. Given that companies are already required
sure practices already inform investors, or
By contrast, H.R. 1187 would result in an to disclose their political contributions and
what specific areas could be improved upon
unworkable, one-size-fits-all disclosure re- lobbying activity, we fail to see what value
to ensure companies only disclose material
gime for public companies on ESG issues in- duplicative regulation in this instance would
information. This study would lead to a
cluding climate change, executive compensa- add. We also question how the information
more targeted approach that would mitigate
tion, and pay practices. This misguided ap- required by this bill could possibly meet the
unnecessary compliance costs and protect in-
proach would impose enormous compliance test of ‘‘materiality’’ when comparing the
vestors from unworkable mandates.
costs on public companies. It would be espe- actual dollar amounts associated with a pub-
cially harmful to small issuers and emerging lic company’s political activities to the total MANDATORY ESG DISCLOSURES
growth companies (EGCs) without the same revenue of the company. The ASA letter to the Financial Services
compliance resources as large companies. We note that a study found the market’s Committee in April outlined a number of
H.R. 1187 would create yet another barrier to perception of a company’s value based on its recommendations and concerns we had with
going public in the United States, thus re- stock prices is not related to a corporation’s a series of ESG-related bills that were
moving opportunities for retail investors to decision to either engage in or refrain from marked up by the Committee. Unfortu-
build wealth and contribute to the economy. corporate political speech. Shareholders of nately, none of those concerns or questions
Pursuant to the Supreme Court’s land- public companies also seem to understand have been answered.
mark decision on materiality in 1976 (TSC this as large majorities have consistently re- In that letter, we noted the following:
Industries, Inc. v. Northway, Inc.), compa- jected activist shareholder proposals in this ESG disclosure mandates would create an
nies today are already required to disclose area. In short, the owners of the company do unequal and unfair playing field for Amer-
material information related to climate not believe management’s political spending ican businesses vis-à-vis Chinese companies;
change and ESG. H.R. 1187 could veer away impacts a company’s value or its financial Businesses would spend an enormous
from this traditional standard for disclosure performance. While these facts may be in- amount of time and resources reorienting
that has served as a centerpiece of America’s convenient, they should not be dismissed their compliance systems to comply with
well-functioning capital markets for dec- lightly. ESG mandates at a time when policymakers
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ades. In that decision, the Court rejected the As important, this section of the bill seems should want companies to be focused on hir-
idea that a fact is material if it ‘‘might’’ be to run afoul of the First Amendment because ing to help the American economy recover;
important to an investor, and explained that some provisions could have a chilling effect Company management should be permitted
in formulating a materiality standard, it on free speech. Certain politicians have al- to determine what is ‘material’ to its busi-
sought to avoid a scenario in which investors ready made it clear that this disclosure will ness using its own business judgment—just
would be overwhelmed ‘‘in an avalanche of be used to target companies who engage in as management is now permitted to do for
trivial information—a result that is hardly the political process or choose to support other risks that companies face;
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2839
Judgements about material disclosure can is the exact opposite. It is nothing on Colonial Pipeline. And it is a daily
be challenged by investors or the SEC in more than a government-run litmus thing, JBS Foods, ferry services, met-
court, which provides an important check test that politicizes the SEC and con- ropolitan transit authority, and the
that incentivizes companies to provide accu-
tradicts the very important mission of list goes on and on and on and on. So
rate and full disclosure. This process is not
broken, and we see no reason to change it in the SEC. we were out of gas, not out of touch.
this instance; Mandating public companies to dis- And my amendment is simple, it just
The costs of one-size-fits-all disclosure close details that are not financially requires a straightforward, relatively
cannot be justified; relevant or material is an abuse of moderate, disclosure of corporations.
The beneficiaries of a prescriptive one-size- power. Not to mention, we see compa- Do you have a board member that un-
fits-all ESG disclosure regime would be an nies who are willing to disclose this in- derstands cybersecurity? And if you
entrenched professional class on Wall Street
formation on their own, and they are don’t, tell us how you are thinking
of well-heeled corporate attorneys, auditors,
mega-asset managers, proxy advisors, index taking steps to address some of the about it. Tell us what your plan is.
providers, standard setters and investment issues that my friends on the other side I am hearing a lot about pecuniary
banks. This begs the question: why is Con- of the aisle might want to mandate. interest. Let’s ask Colonial Pipeline
gress using climate change as a reason to Just the other day, Ralph Lauren came whether there was a pecuniary interest
adopt policies that will transfer money from out and they said they were going to in not having what happened to them
the public companies owned by America’s publicly disclose this information. It is happen. If you care about addressing
mom-and-pop investors directly to the Wall good for them to do, if they choose to this problem, we are giving companies
Street-industrial-complex? Retirees, work- a choice, either tell us where your ex-
do so, but this puts companies in a po-
ing families, and those investing for a better
future should have an answer to that ques- sition to compete for capital based off pertise lies or how you are going to
tion before the bill moves forward; of virtue signaling rather than the deal with it.
The bill imposes a significant cost burden metrics that are relevant in capital Mr. Speaker, if you care about it,
on small companies and undermines capital markets. vote in favor of this amendment and
formation, which is one part of the SEC’s I ask my friends on the other side of vote in favor of this legislation.
three-part mission. Imposing these costs on the aisle: How does this move the nee- Mr. HUIZENGA. Mr. Speaker, I in-
small, emerging growth, and mid-sized com- dle for everyday Americans? Does dis- clude in the RECORD an article from
panies will only serve to further entrench The Wall Street Journal dated from
closing diversity quotas and carbon
the large and mega-cap companies in our
markets who can easily absorb them. We emissions impacts, does that promote 2018, ‘‘California Public Employees
question why Congress would adopt a policy efficiency in the market? I know it Vote Against Pension-Fund Activism.’’
that tips the scales in favor of the same com- does not. And it also doesn’t promote [From the Wall Street Journal, Oct. 18, 2018]
panies that many in this body believe are capital formation in these markets. CALIFORNIA PUBLIC EMPLOYEES VOTE AGAINST
using their market power to harm consumers This mandate only promotes what we PENSION-FUND ACTIVISM
and distort our political economy; and have seen from this Congress and the (By Paul S. Atkins)
An unintended loophole will exempt Chi- administration, an out-of-touch and
nese companies in indexes from this disclo- Playing politics with other people’s sav-
misguided political agenda. This is ings is never popular.
sure. This will unfairly disadvantage Amer-
ican companies and deprive mom-and-pop in- nothing more than liberal fascism, yet The California Public Employees’ Retire-
vestors of disclosure about Communist Chi- another way to push a social agenda in ment System this month said no thank you
na’s emission of greenhouse gases, or wheth- our capital markets. This bill will es- to pension-fund activism. Government work-
er any CCP-controlled Chinese company is sentially create good companies and ers unseated Priya Mathur, the sitting
involved in commission of crimes against hu- Calpers president. She was defeated by Jason
bad companies, and have their future
manity and genocide that Congress. Perez, a police-union official who criticized
be based off the opinions of the mob Ms. Mathur’s focus on environmental, social
CONCLUSION and not their business success. and governance investing, or ESG. Mr. Perez
While ASA opposes this bill, we will con- Just last year, we saw a company emphasizes the agency’s fiduciary duty to
tinue to engage with members and the SEC like Goya Foods come under fire for its maximize investor returns.
to preserve our current disclosure system president’s affiliation with the Repub- Calpers represents almost two million
which ensures investors are provided with lican Party. California public employees, retirees and
material information, including information families. Yet it mostly makes headlines for
that falls into the bucket of ESG. H.R. 1187
The SPEAKER pro tempore. The
time of the gentleman has expired. its activism, such as divestiture from the to-
frustrates this goal, and therefore, we urge bacco industry. ‘‘It’s been used more as a po-
members to oppose it. Mr. HUIZENGA. Mr. Speaker, I yield
litical-action committee than a retirement
Sincerely, an additional 30 seconds to the gen- fund,’’ said Mr. Perez. ‘‘I think the public
CHRISTOPHER A. IACOVELLA, tleman from Florida (Mr. DONALDS). agency [employees] are just sick of the she-
Chief Executive Officer, Mr. DONALDS. Mr. Speaker, the at- nanigans.’’
American Securities Association. tempt to cancel Goya Foods failed, but Americans have always invested to achieve
Mr. HUIZENGA. Mr. Speaker, I yield it exposed the underbelly of the left’s personal goals, such as saving for a house or
2 minutes to the gentleman from Flor- attempt to coerce companies into their kids’ college tuition. Some find that an
ida (Mr. DONALDS), who is a new Mem- bending the knee to the extremists in ESG or issue-specific approach to investing
accords with their personal philosophies.
ber to this House Chamber and an out- the court of public opinion.
There is nothing wrong with people investing
standing Member. In short, Mr. Speaker, this is a bad their own money however they like. But
Mr. DONALDS. Mr. Speaker, full dis- bill. It does not promote efficient mar- Calpers has a fiduciary duty to California
closure, I actually do not sit on the Fi- kets, it destroys them. And it sends our public employees, who rely on it for retire-
nancial Services Committee, but my financial markets into a place where ment security.
career has actually been in financial we should not go in the United States Hester Peirce, a commissioner of the Secu-
services. I spent the last 17 years of my of America. rities and Exchange Commission, recently
life working in banking, insurance, and Ms. WATERS. Mr. Speaker, I yield 1 observed, ‘‘When a pension-fund manager is
minute to the gentleman from Con- making the decision to pursue her moral
financial services.
goals at the risk of financial return, the
I understand the importance of pro- necticut (Mr. HIMES). manager is putting other people’s retire-
tecting investors and ensuring fairness Mr. HIMES. Mr. Speaker, I thank my ments at risk.’’ The danger for Calpers is
in the market, which is part of the mis- colleagues, Mr. VARGAS and Chair- real: In 2016 a consultant found that the
sion of the SEC. In fact, it was so im- woman WATERS, for leading on these fund’s beneficiaries missed up to $3 billion in
portant to me that during my time in important issues. investment gains from 2001–14. The reason? A
the Florida legislature, I introduced Mr. Speaker, I rise in support of this divestiture from tobacco holdings for polit-
legislation that was designed to pro- bill and my amendment that we will be ical purposes.
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tect vulnerable investors, and that leg- considering later today. All this happens as Calpers remain under-
funded. Worse, its beneficiaries are stuck.
islation has actually become law in the My colleague from Florida just ac-
They are locked into the system and cannot
State of Florida. cused us of being out of touch. I wonder vote with their feet.
H.R. 1187 is inconsistent with the if he remembers that 2 weeks ago the While Calpers beneficiaries are demanding
mission of the SEC. It does not protect Nation was out of gas. We were out of a renewed focus on returns, activists con-
investors; it is not fair or efficient. It gas because of a successful cyberattack tinue to work other channels to impose
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H2840 CONGRESSIONAL RECORD — HOUSE June 16, 2021
agenda-driven requirements on public com- there is a substantial likelihood that a Publicly traded companies are al-
panies. Sen. Elizabeth Warren last month reasonable shareholder would consider ready subject to extensive disclosures
unveiled a bill that would direct the SEC to such a disclosure important with re- regarding various risk factors under
mandate that all public companies disclose
fossil-fuel use and greenhouse-gas emissions.
spect to making an investment deci- Federal law. These existing disclosures
This month a petition signed by 17 law pro- sion. However, my colleagues on the must already reflect material climate
fessors and institutional investors, including other side of the aisle refuse to support change information, such as compli-
Calpers, asked the SEC to develop manda- them, including this simple standard. ance with greenhouse gas emissions
tory rules for public companies to disclose By adding these additional disclosure and carbon offsets.
ESG information. requirements to the already substan- I am concerned this bill would do lit-
The petition argues that since there are al- tial list of mandatory disclosures for tle to provide information on how cli-
ready so many requests to the SEC for issue- public companies, H.R. 1187 would also mate change would affect a particular
specific disclosures human-capital manage-
ment, climate, tax, human rights, pay ratios
increase the cost of compliance for investment, but would instead be used
by sex, and political spending—the agency public companies, thereby discouraging by activist shareholders with no real
should impose a broader ESG disclosure private companies from going public. duty to a company or its shareholders
framework. The laundry list of possible dis- Further, I think it is important to to impose progressive political views
closures underscores the problem. Requiring point out that this legislation misses on that company.
companies to account for an ever-changing an opportunity to address China and its The burden of these costs would fall
list of hard-to-quantify social issues dis- daily human rights atrocities. If we largely on smaller public companies
tracts from disclosure’s real, statutory pur- were serious about disclosure, not just with fewer resources. The burden of
pose: giving the reasonable investor material a political agenda, we would be looking these costs would, again, I think, put
information he needs to make investing deci-
at security and democracy threats like this entire issue off in a different direc-
sions.
These proposals always tout purported those that the Chinese Communist tion than where it should be.
benefits to investors, but mandatory disclo- Party and their state-owned enter- Mr. Speaker, I urge a ‘‘no’’ vote on
sure of additional immaterial information prises pose. the bill. It would only benefit large in-
would be harmful. In a 2013 speech, former Bottom line, this legislation would cumbent corporations while others
SEC Chairman Mary Jo White decried the add even more costly and confusing may avoid going public altogether,
‘‘information overload’’ in already bloated disclosure requirements, hurting every- limiting their growth.
annual reports that obscures pertinent dis- day investors, and discouraging initial
closures for investors amid a sea of extra- b 1315
public offerings, all while failing to in-
neous information. She summarized: ‘‘What Ms. WATERS. Mr. Speaker, I include
some investors might want may not be what clude important national security pro-
in the RECORD letters from California
reasonable investors need.’’ Translation: tections.
Mr. Speaker, I urge a ‘‘no’’ vote on Public Employees’ Retirement System,
More information is not necessarily better
the legislation. Public Citizen, the North American Se-
information.
Mandating politicized corporate disclo- Ms. WATERS. Mr. Speaker, I yield 1 curities Administrators Association,
sures doesn’t align with the SEC’s mission to minute to the gentlewoman from Illi- and Principles for Responsible Invest-
protect investors and facilitate capital for- nois (Ms. UNDERWOOD). ment.
mation. Instead, it would divert resources Ms. UNDERWOOD. Mr. Speaker, I CALIFORNIA PUBLIC EMPLOYEES’ RE-
away from business operations and growth. rise in support of this legislation and TIREMENT SYSTEM, EXECUTIVE OF-
It is simply an attempt to shame public com- FICE,
panies into compliance with activists’ de-
my amendment with Representatives
June 14, 2021.
mands. FRANKEL, NADLER, SPEIER, and BLUNT Subject: H.R. 1187, The Corporate Govern-
As Mr. Perez put it, criticizing a proposal ROCHESTER, which would require public ance Improvement and Investor Protec-
to divest from some gun retailers earlier this companies to report on workplace har- tion Act.
year: ‘‘This is nothing more than a political assment settlements in their SEC fil- Hon. NANCY PELOSI
ploy.’’ His push to prioritize performance ings. Speaker, House of Representatives,
over politics clearly resonated with Cali- The amendment is pulled from the Washington, DC.
fornia public employees; lawmakers and pen- EMPOWER Act, a bipartisan bill I am Hon. KEVIN MCCARTHY,
sion-fund managers should take note.
proud to co-lead alongside Congress- Minority Leader, House of Representatives,
Mr. HUIZENGA. Mr. Speaker, I yield woman FRANKEL and my Republican Washington, DC
3 minutes to the gentleman from Ten- and Democratic colleagues. DEAR SPEAKER PELOSI AND MINORITY LEAD-
nessee (Mr. ROSE), and I thank him for ER MCCARTHY: On behalf of the California
For too long, many employers have
his work on the Financial Services Public Employees’ Retirement System, I
tolerated, and even encouraged, a cul- write to express support for the overall di-
Committee. ture of secrecy surrounding workplace
Mr. ROSE. Mr. Speaker, I rise in op- rection of H.R. 1187, the ‘‘Corporate Govern-
harassment, writing settlements off as ance Improvement and Investor Protection
position to H.R. 1187. This legislation is a cost of doing business. Act,’’ which would require public companies
just the latest attempt by my col- This amendment would shine a light to disclose material information on the link
leagues on the other side of the aisle to on major employers that fail to protect between environmental, social, and govern-
implement a far-left social agenda, this their employees, improve transparency ance (ESG) metrics and their long-term busi-
time through our securities laws. for shareholders, and encourage compa- ness strategy, as well as political expendi-
Contrary to the principles-based dis- tures, compensation practices, climate-re-
nies to ensure a safe, healthy, and pro- lated risk and tax expenditures, among other
closure standard that is typical of most ductive workplace. issues. This bill will improve and enhance
material risk disclosures, President This is an important bipartisan pol- corporate disclosures essential to maintain-
Biden and the Democrat-led Securities icy, and I urge my colleagues to vote ing the competitiveness of U.S. financial
and Exchange Commission have advo- ‘‘yes’’ on the amendment and the un- markets.
cated for a separate standardized set of derlying bill. As the largest public defined benefit pen-
disclosure requirements related to cli- Mr. HUIZENGA. Mr. Speaker, could I sion fund in the United States, we manage
mate risk and environmental, social, inquire as to the remaining time on approximately $465 billion in global assets on
and governance or ESG, concerns. This behalf of more than two million members.
each side? Our fiduciary duty requires that we take a
legislation would impose disclosure The SPEAKER pro tempore. The gen- long-term view in assessing whether the
mandates that focus on costly one-size- tleman from Michigan has 111⁄2 minutes companies that we hold in our portfolio are
fits-all metrics rather than material, remaining. The gentlewoman from effectively managed and able to provide the
decision-useful information for inves- California has 161⁄2 minutes remaining. sustainable, risk-adjusted returns that allow
tors. Mr. HUIZENGA. Mr. Speaker, I yield us to meet our commitments to pay benefits
During the markup process, several 1 minute to the gentleman from Wis- earned by these dedicated active and retired
ctelli on DSK11ZRN23PROD with HOUSE
of my colleagues submitted common- consin (Mr. FITZGERALD). public servants for decades to come.
We fundamentally depend on the integrity
sense amendments that would have Mr. FITZGERALD. Mr. Speaker, I
and efficiency of financial markets to meet
added an important materiality stand- rise today in opposition to H.R. 1187. these commitments and rely upon financial
ard. These amendments would have re- This legislation would impose unneces- reporting to provide transparent and rel-
quired disclosure of ESG, climate sary and expensive compliance costs on evant information about the economic per-
change, or compensation metrics where publicly traded companies. formance, conditions, and operations of the
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2841
companies in which we invest. We believe term and long-term success. We support the H.R. ll, the Cybersecurity Disclosure
corporate disclosure of material financial in- establishment of a uniform reporting regime Act, which would require companies to dis-
formation is a precondition to maintaining for climate change risk disclosures that close in their annual reports to the SEC, or
effective and consistent corporate account- would address key issues that impact in their annual proxy statements, whether
ability and sustainable economic growth. As shareowner value, including minimizing any member of their board of directors, or
the Securities and Exchange Commission risk, maximizing returns, and ensuring ac- similar governing body, has expertise or ex-
(‘‘SEC’’) has said in the past: countability from all those involved. perience in cybersecurity and the nature of
‘‘Only through the steady flow of timely, H.R. 3007, the Disclosure of Tax Havens and such expertise or experience. If there are no
comprehensive, and accurate information Offshoring Act, which would require public members of a company’s governing body that
can people make sound investment decisions. companies to annually disclose information have experience or expertise in cybersecu-
The result of this information flow is a far on their subsidiaries and specified country- rity, it would require the company to de-
more active, efficient, and transparent cap- by-country financial information including scribe what other cybersecurity aspects were
ital market that facilitates the capital for- total pre-tax profits, total amounts paid in taken into account by persons responsible
mation so important to our nation’s econ- State, Federal, and foreign taxes, employees, for identifying and evaluating nominees for
omy.’’ and tangible assets. As an investor in many the company’s governing body. We believe
Critically, CalPERS and other pension of the largest public companies in the world, requiring the disclosure of cybersecurity ex-
funds are inhibited from adequately exer- we are acutely aware of the complexities of pertise—or lack thereof—on corporate boards
cising their fiduciary duty without such dis- international taxes, and the increasingly im- will increase transparency for investors and
closures. Disclosure of material financial in- portant role that taxes play in corporate help to ensure that public companies are ap-
formation is necessary to close the informa- profitability. However, current tax disclo- propriately prioritizing cybersecurity and
tion gap that occurs when management of a sures in the United States do not provide in- data privacy matters. It represents a reason-
company is aware or should be aware of cer- vestors with sufficient tax-related informa- able and timely response to the increasing
tain risks, yet such information is not avail- tion to adequately assess companies’ valu- prominence of cybersecurity threats in our
able to shareowners. We believe H.R. 1187 ations and risks. We believe increasing financial markets and the broader economy.
will address critical areas in which more transparency and requiring the disclosure of In sum, CalPERS believes that clear, con-
high-quality, consistent, and comparable dis- overly aggressive international tax planning sistent, and substantive disclosures of cli-
closures by public issuers are necessary, and arrangements helps to reduce systemic risk mate risk, charitable and political expendi-
build a more robust reporting regime that that threatens global markets and ensure tures, human capital management, and
enhances shareowner value over the long- stronger long-term outcomes. board diversity are critical to the long-term
term. We are pleased that the following In addition, we are supportive of including
success of capital markets and, more criti-
measures, which CalPERS has been on the additional provisions in the Corporate Gov-
cally, of investors. Disclosures of such infor-
record in supporting, are included in the Cor- ernance Improvement and Investor Protec-
mation will help investors allocate capital
porate Governance Improvement and Inves- tion Act, such as the following disclosures
and exercise stewardship at companies to en-
tor Protection Act: related to human capital management, board
sure long term sustainable value creation.
H.R. 1187, the ESG Disclosure Simplifica- diversity, and cybersecurity:
H.R. 3471, the Workforce Investment Dis- Such disclosures will also encourage cor-
tion Act, which would, among other things,
closure Act, which would require public com- porations to be more mindful of these risks
require issuers to disclose certain ESG
panies to disclose information about their that could impact their financial success
metrics to shareholders, the connection be-
Human Capital Management (HCM) policies, over the long term, and will provide for
tween those metrics and the issuer’s long-
practices, and performance in their annual greater transparency regarding cash flow,
term business strategy, and the method by
reports. CalPERS expects fair, accurate, and corporate expenditures, and public policy en-
which the issuer determines how ESG
timely reporting on how companies identify gagement.
metrics impact its long-term strategy. We Thank you for considering our views. We
believe the current quality and quantity of and manage risks related to the three forms
look forward to working with Congress to
relevant ESG reporting does not meet inves- of capital: financial, physical, and human.
advance initiatives that will improve cor-
tors’ needs and support the SEC playing a The fact that there are few standards for
porate disclosures in both the public and pri-
prominent role in standardizing and assuring measuring and reporting on human capital
vate markets. Please do not hesitate to con-
the accuracy of ESG data reporting, and that topics makes it difficult for investors to
tact me directly, or your staff can contact
it is reflected in company financials. truly understand related risks and opportu-
Danny Brown, Chief of our Legislative Af-
H.R. 1087, the Shareholder Political Trans- nities when assessing individual companies.
fairs Division, if we can be of any assistance
parency Act, which would require public We believe that rules-based disclosures with
as this measure proceeds.
companies to disclose detailed information numeric metrics provide crucial information
Sincerely,
about their political spending to the SEC to long-term investors, like CalPERS, who
MARCIE FROST,
and shareholders in specified quarterly and are concerned about sustainability over
Chief Executive Officer.
annual reports. The CalPERS Governance & time. We have made recommendations in our --
Sustainability Principles call for responsible comment letter on the SEC’s proposed rule- PUBLIC CITIZEN,
board oversight, including disclosures of cor- making under Regulation S-K for metrics Washington, D.C., June 14, 2021.
porate charitable and political activity to that should be disclosed by all registrants, Re Public Citizen urges a YES vote on H.R.s
ensure alignment with business strategy and including the number of full-time, part-time, 1187, 1087, 1188, 2570, 3007 and amend-
to protect assets on behalf of shareowners. and contingent workers; employee turnover ments.
As fiduciaries, we need to know how our cap- rates; health and safety, employee engage-
ital is being used, including if and when po- ment and diversity statistics. House of Representatives,
litical expenditures are made. SEC rule- H.R. 1277, the Improving Corporate Govern- Washington, DC.
making would bring clarity and consistency ance Through Diversity Act, which would re- DEAR HONORABLE REPRESENTATIVES, On be-
in the format and scope of disclosures and quire public companies to annually disclose half of more than 500,000 members and sup-
provide a cost-effective alternative to pri- the voluntary, self-identified racial, ethnic, porters of Public Citizen across the country,
vate ordering. Furthermore, political ex- gender, and veteran status of their board of we ask you to vote yes on a suite of bills de-
penditure disclosure is consistent with the directors, nominees, and senior executives, signed to improve corporate disclosures re-
SEC’s requirement for public companies to and establishes an advisory group to rec- garding climate, compensation, political
disclose meaningful financial information ommend strategies to increase diversity in spending, taxes, human capital and other im-
and would encourage prudent use of cor- these leadership positions. We support initia- portant issues. These bills were approved by
porate shareowner resources for political ac- tives that promote talent diversity—includ- the House Financial Services Committee and
tivities. ing a broad range of education, experience, arc expected to come before the full House
H.R. 2570, the Climate Risk Disclosure Act, thoughts, perspectives, and competencies—to shortly.
which would require public companies to re- help enable effective board leadership. We H.R. 1087, THE SHAREHOLDER POLITICAL
port financial risks posed to them by climate view board diversity in terms of skill sets, TRANSPARENCY ACT (FOSTER)
change, the processes they use to identify sex, age, nationality, race, sexual orienta- This bill requires firms that are traded on
those risks, and the actions they take to tion, gender identity, disability, and histori- public exchanges to disclose in quarterly
mitigate those risks. Our investment strat- cally underrepresented groups, and believe public reports filed with the Securities and
egy is to make sure our portfolio is resilient requiring public companies to annually dis- Exchange Commission (SEC) the amount,
to short-term and long-term risks, both of close the self-identified racial, ethnic, gen- date, and nature of the company’s expendi-
which include some dimension of climate der, and veteran status of their board of di- tures for political activities. Importantly,
ctelli on DSK11ZRN23PROD with HOUSE
change. We seek to find the investment op- rectors, nominees, and senior executives is this includes indirect political spending, or
portunities that the energy transition an important step toward challenging money given to trade associations or non-
brings, and to bring down emissions that ‘‘group think’’ in corporate boardrooms and profits that play in politics.
contribute to global warming. We believe it C-suites, which can severely limit compa- In Citizens United v. the Federal Elections
is vital that companies identify, manage, nies’ ability to innovate and effectively en- Commission in 2010, the U.S. Supreme Court
and disclose material environmental risks gage with shareowners and other stake- found that political spending is protected
and opportunities relevant to their short- holders. speech and therefore corporations, unions,
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H2842 CONGRESSIONAL RECORD — HOUSE June 16, 2021
and other groups are permitted to make un- relevant financial agencies, climate-related practices to shirk their tax responsibilities,
limited political expenditures, as long as risk disclosure metrics and guidance, which which creates both reputational and finan-
they are not directly given to candidates or will be industry-specific, and will require cial risk.
parties. The Court assumed, however, that companies to make both quantitative and We urge you to approve this bill.
this spending would be disclosed to investors qualitative disclosures. H.R. 1187 requires We also ask your support for amendments
so they could have input. Not addressed by the SEC to define what ESG metrics means expected to be offered to this suite of bills,
the Court, however, was the fact that share- and requires firms to disclose those metrics including:
holders might not be aware of this spending along with how ESG metrics accord with a H.R. 3471, the Workforce Investment Dis-
or specific details of where the money might firm ’s long-term strategy. It also requires closure Act (Axne): this bill would require
be going. In response, a bipartisan group of the SEC to establish a committee that would the SEC to implement petitioned rule-
securities law experts filed a petition with provide advice to the commission on sustain- making that would require public companies
the SEC to require corporations to disclose able finance issues. to disclose human capital management poli-
their political spending activities, and drew Given the physical and transition risks in- cies, practices, and performance. While cor-
more than 1.2 million comments, the most in herent to the ongoing climate crisis and the porations often claim that employees are
SEC history. The SEC has not yet addressed shift away from fossil fuels and carbon-in- their most valuable asset, shareholders know
this decade-old petition, and passage of this tensive industry, investors need more infor- too little about investments in these assets.
mation about companies’ growing climate fi- H.R. 1277, the Improving Corporate Govern-
legislation would jumpstart the rulemaking.
Public Citizen has long championed this nancial risk, their contribution to climate ance Through Diversity Act (Meeks): This
important disclosure requirement. Political change, and their plans for remaining viable bill would require public companies to annu-
spending exposes a company to reputational in a low-carbon future economy. Requiring ally disclose the voluntarily, self-identified
risk when it involves itself controversial the SEC to establish climate-related risk gender, race, ethnicity and veteran status of
issues. Many corporations recognize this disclosure metrics falls squarely within the their board directors. This measure helps
problem. For example, a number of compa- agency’s mission to protect investors; ensure corporations better identify how they are
nies ceased campaign contributions to cer- fair, orderly, and efficient markets; and fa- promoting diversity in the highest ranks.
H.R. ll, the Cybersecurity Disclosure Act
tain lawmakers associated with the January cilitate capital formation. Indeed, the agen-
(Himes): This bill would require the SEC to
6; 2021 insurrection at the Capitol and in con- cy has expressed its intention to explore a
issue rules to require companies in their an-
nection to the voter suppression bills moving climate disclosure rule. Adopting this legis-
nual reports to the SEC or in their annual
through statehouses. lation would explicitly clarify the SEC’s au-
While some corporate political spending is proxy statements to disclose whether any
thority to adopt such a rule in the face of po-
already voluntarily disclosed, a considerable member of their board of directors, or simi-
tential legal challenges from issuers and ide-
amount is funneled through trade associa- lar governing body, has expertise or experi-
ological opponents alike.
tions such as the U.S. Chamber of Com- ence in cybersecurity and the nature of such
At the same time, it is important to re-
merce, which deploys large numbers of expertise or experience. If there are no mem-
member that climate change is not just an
agents to meet with members of Congress. bers of a company’s governing body that
environmental crisis, but one of social jus-
Often, the Chamber advances or promotes have experience or expertise in cybersecu-
tice, wealth distribution, equity and human
policies that an individual company may rity, the bill would require the company to
rights. It is vitally important that disclo-
find uncomfortable were they associated describe what other cybersecurity aspects
sures from issuers include elements of envi-
with it openly, such as opposition to climate were taken into account by persons respon-
ronmental and climate justice, as well as
reform or worker safety measures. If compa- sible for identifying and evaluating nomi-
other ESG issues like political spending; tax;
nies’ spending on backward issues became nees for the company’s governing body.
lobbying; diversity, equity, and inclusion;
With high-level hacks recently grinding
known to the public, it could lead to mate- and human capital management practices to
important companies to a halt and cyberse-
rial, reputational harm and ultimately sub- allow investors to make a holistic assess-
curity affecting all walks of life, investors
tract from shareholder value. ment of an issuer’s overall sustainability and
Public Citizen heartily endorses this meas- should be aware of how well corporations are
make more informed investment decisions.
ure. prepared to defend themselves against at-
Despite many firms reporting some ESG
tack.
H.R. 1188, THE GREATER ACCOUNTABILITY IN PAY data, the available information has not sat- Public Citizen strongly urges you to vote
ACT (VELÁZQUEZ) isfied the needs of investors because it essen- yes on these important pieces of legislation
This bill would require public companies, tially allows firms to self-determine and re- and amendments to provide greater informa-
excluding emerging growth companies, to port which climate risks are material. Many tion to investors, watchdog organizations,
disclose certain employee pay raise informa- firms provide only vague, boilerplate disclo- and the public at large.
tion, comparing the CEO with the median- sures or do not address climate risk at all. For questions, please contact Bartlett
paid employee at the firm. This measure Management is often overly optimistic about Naylor.
builds on a reform in the Dodd-Frank Wall a firm’s climate resilience, may not fully un- Sincerely,
Street Reform and Consumer Protection Act derstand what investors actually believe is PUBLIC CITIZEN.
that first required identification of the me- material or want to know, and may have an --
dian-paid worker at a firm. This requirement interest in obscuring parts of the picture, NORTH AMERICAN SECURITIES
meant that firms were required to add one leading to drastic under-reporting of risks. ADMINISTRATORS ASSOCIATION, INC.,
more item regarding employees to the sole The provisions in this bill represent a major Washington, DC, June 15, 2021.
requirement existing, namely, the number of step forward in terms of the quality of infor- Re H.R. 1187, the Corporate Governance and
employees. mation that would be available to investors. Investor Protection Act of 2021.
For a half-century, the fruits of produc- We strongly encourage you to support
Hon. NANCY PELOSI,
tivity gains have clotted in the C-suite, with these bills.
Speaker, House of Representatives,
average workers receiving little or no in- H.R. 3007, THE DISCLOSURE OF TAX HAVENS AND Washington, DC.
crease in real compensation. This has led to OFFSHORING ACT (AXNE) Hon. KEVIN MCCARTHY,
income and wealth inequality. During the This bill would require public companies to Minority Leader, House of Representatives,
pandemic, this played out in the need for disclose their total pre-tax profits, and total Washington, DC.
trillions of dollars in emergency relief, as av- amounts paid in state, federal, and foreign DEAR SPEAKER PELOSI AND LEADER MCCAR-
erage people lacked the savings to survive a taxes on a country-by-country basis. The bill THY: On behalf of the North American Secu-
temporary loss of employment. Disclosures would also require companies to disclose a rities Administrators Association, Inc.
of these pay gaps can help lawmakers devise number of specific tax-related items for each (‘‘NASAA’’), I am writing to express
more ambitious reforms to address the wid- of its subsidiaries, as well as on a consoli- NASAA’s support for several provisions of
ening gap between those workers who truly dated basis, such as total accrued tax ex- H.R. 1187, the Corporate Governance and In-
drive the economy and elites. penses, stated capital, and total accumulated vestor Protection Act, which the House is
Public Citizen urges you to support this earnings. This legislation would ensure in- scheduled to consider this week, as amended
bill. vestors and the public at large are provided and favorably reported by the House Com-
H.R. 2570, THE CLIMATE RISK DISCLOSURE ACT with enough information to discern if the mittee on Rules on June 14, 2020. As further
(CASTEN) AND H.R. 1187, THE ESG DISCLOSURE companies they are invested in are partici- detailed below, NASAA also strongly sup-
SIMPLIFICATION ACT (VARGAS) pating in risky behavior like corporate tax ports two amendments to H.R. 1187 that were
Both of these bills deal with the increasing avoidance. Many U.S. multinational compa- made in order by the Committee on Rules.
demand from investors and the public for in- nies use accounting maneuvers to book their The first such amendment addresses disclo-
ctelli on DSK11ZRN23PROD with HOUSE
formation related to environmental, social profits in low- or no-tax jurisdictions, or sure of information related to the diversity
and governance (ESG) issues. H.R. 2570 would ‘‘tax havens.’’ This legislation to mandate on the boards of directors of U.S. public com-
require public companies to disclose in their public country-by-country reporting would panies, while the second amendment address-
annual reports information relating to the indeed aim to discourage and curb the trend es disclosure of cybersecurity expertise at
financial and business risks associated with of corporations’ profit shifting to tax havens the leadership level of such companies. I sin-
climate change. The bill also requires the as these public reports would shed light on cerely appreciate your attention to NASAA’s
SEC to establish, in consultation with other corporations that aggressively use avoidance views.
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2843
(1) THE ESG DISCLOSURE SIMPLIFICATION ACT organized cyber-attacks has continued to corporate board diversity to be an indication
(TITLE I) grow with ever-increasing frequency. Over of good governance, which improves both
Increasingly, investors view a company’s the past year, moreover, this threat has ac- corporate performance and investor rela-
environmental, social, and governance, or celerated further due in part to the COVID– tions. Most recently, in NASAA’s Legislative
‘‘ESG’’ practices, as a material metric for 19 pandemic. Because many millions of Agenda for the 117th Congress, state securi-
determining whether to invest. To date, how- Americans are conducting much or most of ties regulators called for Congress to pass
ever, there are no uniform standards for the their lives online—and because an unprece- legislation ‘‘to require public companies to
reporting of environmental and certain other dented number of U.S. employees arc work- disclose information that demonstrates the
ESG factors in the United States. In the ab- ing remotely—cybercriminals and scammers diversity on their boards, or the lack there-
sence of such standards, public companies have an abundance of opportunities to infil- of, as well as information regarding the di-
lack clarity when making disclosures relat- trate business security networks to install versity of their corporate operations.’’
ing to ESG considerations. In some cases, malware, steal personally identifiable infor- NASAA congratulates the House for its de-
they may have incentives to make selective mation (‘‘PII’’) of customers and clients, and cision to consider including the Improving
or potentially misleading disclosures about create other problems. Corporate Governance Through Diversity
the benefits of their practices, products, or Incentivizing publicly traded companies to Act as an amendment to H.R. 1187, and we
services. Title I of H.R. 1187, the Corporate consider whether they have appropriate cy- urge its passage.
Governance and Investor Protect Act, seeks bersecurity expertise on their governing Thank you for your consideration of
to remedy that problem. body is a common-sense way to promote NASAA’s views. If we may be of further as-
The ESG Disclosure Simplification Act, as greater attention to cybersecurity risk by sistance, please do not hesitate to contact
embodied in Title I, would require public public corporations. Investors and customers me or Michael Canning, NASAA’s Director of
companies to disclose in filings with the U.S. are well-served by policies that encourage Policy and Government Affairs.
Securities and Exchange Commission companies to consider such risks Sincerely,
(‘‘SEC’’) and any proxy or solicitation mate- proactively, as opposed to after a data LISA HOPKINS,
rials that describe the ‘‘views of the issuer breach has already occurred when investors NASAA President,
regarding links between ESG metrics and and customers have already been harmed. General Counsel and
the long-term strategy of the issuer’’ and Importantly, the Cybersecurity Disclosure Senior Deputy Com-
any process the issuer uses to determine the Act does not require companies to do any- missioner of Securi-
long-term business strategy of the issuer. thing beyond disclosing information; the bill ties, West Virginia.
Further, the bill would express the non- encourages companies to act in their own Ms. WATERS. Mr. Speaker, I have no
binding ‘‘Sense of Congress’’ that ‘‘environ- best interests by creating an incentive for further speakers, and I am prepared to
mental, social, and governance [ESG] them to prioritize cybcrsecurity expertise at close. I reserve the balance of my time
metrics’’ are ‘‘de-facto material’’ for the pur- the senior levels of leadership. until the gentleman from Michigan
poses of disclosure under the Securities Ex- NASAA shares Congress’s interest in ad-
change Act of 1934. The bill would also create yields back.
dressing the threat cybersecurity risk has on Mr. HUIZENGA. Mr. Speaker, just a
a new permanent ‘‘Sustainable Finance Ad- public companies and investors. We are
visory Committee’’ within the SEC, that pleased to support Amendment #1, and we
point of information for the chair from
would, within 18 months of its first meeting, urge its passage. California: We have one more speaker,
be required to submit ‘‘recommendations
(3) THE IMPROVING CORPORATE GOVERNANCE
and I will be prepared to close.
about what ESG metrics’’ the SEC should re-
THROUGH DIVERSITY ACT (AMENDMENT #11)
Mr. Speaker, I yield 5 minutes to the
quire to be disclosed. gentleman from Kentucky (Mr. BARR).
The time has come to provide investors The Improving Corporate Governance
Mr. BARR. Mr. Speaker, I thank the
seeking to understand factors relating to a Through Diversity Act, as filed as an amend-
ment to H.R. 1187, is identical to stand-alone gentleman for yielding.
company’s ESG profile with the ability to
legislation entitled H.R. 1277, the Improving Mr. Speaker, once again, the bill we
accurately understand and weigh ESG risks
in their investment decisions, and Congress Corporate Governance Through Diversity have been considering today is puzzling
can play an important role in this regard. Act. NASAA was pleased to support H.R. 1277 for Republicans, as it probably is for a
NASAA has previously called for Congress to was it was considered and approved by the large number of my Democratic friends
enact legislation that would direct the SEC House Financial Services Committee in as well.
to develop a uniform standard for ESG re- April 2020 and is pleased to again support the On the one hand, the far left seeks to
porting by public companies so that inves- bill as an amendment to H.R. 1187. blame so much of what is bad in the
tors can understand companies’ real prac- The Improving Corporate Governance world on large public companies. But
tices and impact, and ‘‘make ‘head-to-head’ Through Diversity Act would require public
then they turn around and claim that
comparisons between competing invest- companies to disclose annual information on
ments.’’ NASAA has also urged that Con- the voluntary self-identified racial, ethnic, these same companies will see the light
gress consider legislation that would direct gender, and veteran composition of their and embrace extreme leftwing policies
the SEC to establish a task force to consoli- boards of directors and executive officers. if only they disclose more of their ac-
date, to the extent possible, themes from ex- The bill would also require that such compa- tivities in obscure SEC reports. Mind
isting reporting frameworks and standards nies disclose whether their boards of direc- you, these are perfectly legal activi-
in order to catalyze faster progress toward tors have adopted any ‘‘policy, plan or strat- ties, too.
standardization.’’ Title I of H.R. 1187 marks egy’’ to promote diversity among these bod- But no serious Member of the House
an opportunity to ‘‘move the ball forward’’ ies, and would instruct the SEC’s Office of can believe the world works like this.
on both of these recommendations; there- Minority and Women Inclusion to develop The far left wants to claim they are he-
fore, NASAA is pleased to support its pas- and publish ‘‘best practices,’’ in order to help
sage. public companies comply with the new diver-
roes using the Securities and Exchange
(2) THE CYBERSECURITY DISCLOSURE ACT sity reporting requirements. In addition, the Commission to fight the scourges of
(AMENDMENT #1) Act would establish a new ‘‘Diversity Advi- our time, from foreign dictatorships to
The Cybersecurity Disclosure Act, as filed sory Group’’ within the SEC, which would be environmental degradation. But in re-
as an amendment to H.R. 1187, is identical to exempt from the Federal Advisory Com- ality, they are weaponizing financial
stand-alone legislation recently introduced mittee Act, and be comprised of representa- regulation, and their support for this
in the Senate as S. 808. NASAA was pleased tives from the Federal government, state bill comes in the form of empty polit-
to support this important legislation at the and local governments, academia, and the ical rhetoric masquerading as sound
time of its introduction, and we are pleased private sector. Under the Act, the Advisory corporate governance. Make no mis-
to support its inclusion in H.R. 1187. Group would be tasked with identifying
strategies to ‘‘increase gender, racial and
take, Mr. Speaker, this bill is about po-
The Cybersecurity Disclosure Act would
require publicly traded companies to include ethnic diversity among members of the liticizing securities regulation.
in their annual disclosure filings with the board of directors of the issuer,’’ and be re- Far from this fantasy land live the
SEC information detailing whether any quired to report periodically to Congress and majority of House Members who under-
member of their governing body, such as the public. stand that there are actual urgent
their board of directors or general partner, NASAA has repeatedly called for Congress problems we can solve only if we work
possesses expertise or experience in cyberse- to examine the current state of corporate together to address them.
curity. If no member has such expertise or board composition with an eye toward en- Perhaps the gravest of these prob-
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experience, companies would be required to couraging greater diversity. In doing so, lems is represented by the goals of the
detail what, if any, other cybersecurity con- NASAA has noted that leading research indi-
Chinese Communist Party, which is
siderations were considered by the persons cates that greater board diversity correlates
responsible for identifying and evaluating with sound corporate governance and en- perpetrating the great crime of our age
nominees for the governing body. hances the performance of public companies. against the Uighurs and other minori-
For nearly a decade, the list of public com- We have also noted evidence that shows that ties in China. Beijing is also working
panies and financial institutions targeted by investors themselves increasingly regard to stamp out the vibrant democratic
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H2844 CONGRESSIONAL RECORD — HOUSE June 16, 2021
culture in Hong Kong, hoping all the The SPEAKER pro tempore. Is there needs to maintain the ability to exer-
while that Congress will look the other objection to the request of the gen- cise its own independent judgment and
way. tleman from Kentucky? expertise when deciding whether and
If we are truly concerned by public There was no objection. how best to impose new disclosure re-
companies that may be working with Mr. HUIZENGA. Mr. Speaker, I yield quirements.’’
bad actors—particularly bad actors re- myself the balance of my time. I want She also said at one point that the
sponsible for China’s worst human to make sure we are clear not only Securities and Exchange Commission
rights abuses—then burying their with my colleagues but to those who was not prepared to do enforcement on
names on the SEC’s website will may be listening and watching today. areas that they had no expertise. She
achieve absolutely nothing. We need to Our side of the aisle has a couple of was referring to conflict minerals.
ensure that they are referred to the problems with this legislation today. That was also part of the Dodd-Frank
Treasury Department so that we can First and foremost is the structure; Act.
impose sanctions, and that is what my next is the content; and then third, we So, we have a number of issues that
motion to recommit will do. have to question motivation. are in this content. Earlier, my col-
Under this MTR, instead of reporting What is the problem with the struc- league, the chair from California, sub-
on malign Chinese companies to the ture? mitted a letter from CalPERS in sup-
SEC—an agency that has long ac- My friend from Connecticut talked port of this. Earlier, just prior to that,
knowledged its lack of expertise and, about an issue that we have a lot of I had submitted an article from The
frankly, its lack of capability and in- agreement on, and I say to him: Amen, Wall Street Journal where CalPERS
terest in pursuing foreign policy hallelujah, let’s talk about cybersecu- had actually had a massive regime
goals—we will instead make sure that rity. Let’s talk about how corporations change—this was in 2018—regarding
entities in corporate supply chains are are going to be held responsible for this pension fund activism.
flagged for the Treasury when public that. At the time, Mr. Perez, who was
companies have reason to believe they However, my colleague from Iowa is elected as the president of CalPERS,
are involved in atrocities in Xinjiang, talking about corporate tax law and said:
from mass surveillance to forced labor country-by-country tax reporting. CalPERS has been used more as a political
and other violations of basic human Now, that might be a good issue, but it action committee than a retirement fund. I
rights. is the wrong committee. I wondered to think the public agency employees are just
Companies will also be able to sound myself if Chairman DINGELL, who sick of the shenanigans.
the alarm on entities complicit in Chi- chaired the Ways and Means Com- Hester Peirce, a Commissioner with
na’s assault on Hong Kong’s freedoms, mittee for a few decades, and my col- the Securities and Exchange Commis-
allowing OFAC at the Treasury to de- league from Michigan, would have al- sion, recently observed: ‘‘When a pen-
termine whether it can impose new lowed this committee mission creep. sion fund manager is making the deci-
sanctions. Actually, I don’t wonder. I know ex- sion to pursue her moral goals at the
We must cut off offenders from the actly what he would have said: Hell, risk of financial return, the manager is
global economy until China changes no. This is in my committee. putting other people’s retirements at
course. We must rely on appeals to This issue is in the wrong committee, risk.’’
their bottom line and not their con- and Financial Services is not the right She was referring to the person
science. That is the power of U.S. sanc- and proper place to be doing that. whom Mr. Perez had beaten in that
tions. Let’s look at the content of these election.
Mr. Speaker, if we adopt the motion bills. We are not debating climate, and The danger is real. In 2016, a consult-
to recommit, we will instruct the Com- we are not debating these social issues ant found that the CalPERS fund bene-
mittee on Financial Services to con- that need to be addressed. We are de- ficiaries missed up to $3 billion in in-
sider my amendment to H.R. 1178. My bating who is responsible for enforcing vestment gains from 2001 to 2014. The
amendment doesn’t pretend we can these. We are not debating the failures reason? A divestiture of tobacco hold-
fight genocide, authoritarianism, mass and flaws of humans. We are ques- ings for political purposes.
detentions, mass surveillance, and tioning who should be the enforcer of I wonder if this might be why some of
other human rights violations with these regulations and if they are the motivation for those on the other
meaningless rhetoric on corporate equipped to do so. side, that they want to cover them-
transparency, none of which keeps Chi- Now, not that long ago, before selves. They want to make sure they
na’s leaders up at night. defunding the police was a popular are not open to the liability of retirees
There are over 1 million Uighurs de- item to discuss, the SEC was com- or others with a fiduciary being held
tained in China and over 100 facilities monly called on all sides the cop on the responsible for bad decisionmaking
covering millions of square feet sus- beat. They were the cops on the beat when they use these amorphous, non-
pected as sites of forced labor. It is an who were the enforcers. They were the defined issues to make political state-
insult to Beijing’s victims to claim ones who were coming along and say- ments rather than investment choices.
that disclosure tweaks from the SEC ing: We are going to make sure that Madam Speaker, at the end of the
will stop this. Securities regulation there is no fraud as we protect inves- day, what we have here is a problem
will not stop this. tors; we are going to make sure that not just of the issues but of the en-
Mr. Speaker, we can either pass half we have efficient markets; and we are forcement. I believe that if we are ask-
measures that we know won’t work and going to make sure that we are build- ing the ‘‘cop on the beat,’’ the Securi-
then wring our hands later when the ing capital. ties and Exchange Commission, to do a
problem remains unresolved, or we can Here is the problem: They are not job that is up to the streets and main-
articulate what we want to target and prepared and equipped to do so. tenance department, then no one could
take real action. The former is beneath Don’t take my word for it. Let’s look expect that they are prepared for that.
the dignity of this House. at President Obama’s head of the Secu- How can we expect that they are going
Measly disclosures in securities fil- rities and Exchange Commission, Mary to be able to do this?
ings, transforming 10–Ks from 100 pages Jo White, who said: ‘‘When disclosure With that, and including my opening
to thousands of pages, that is not going gets to be too much or strays from its statement where we looked at the dis-
to solve the problem. The former is be- core purposes, it can lead to ‘informa- incentive to make sure there are more
neath the dignity of the House. The tion overload,’ a phenomenon in which investment opportunities for everyday
latter is embodied in my amendment: ever-increasing amounts of disclosure investors—our constituents—I must re-
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sanctions, OFAC using the power of the make it difficult for investors to focus main opposed to H.R. 1187.
U.S. Department of the Treasury. on the information that is material Madam Speaker, I yield back the bal-
Mr. Speaker, I ask unanimous con- and most relevant to their decision- ance of my time.
sent to insert the text of my amend- making as investors in our financial Ms. WATERS. Madam Speaker, may
ment in the RECORD immediately prior markets. To safeguard the benefits of I inquire as to how much time is re-
to the vote on the motion to recommit. this ‘signature mandate,’ the SEC maining.
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2845
The SPEAKER pro tempore (Mrs. form the Human Capital Management dinarily successful year it’s been, financially,
MCBATH). The gentlewoman from Cali- Coalition has petitioned the SEC to for America’s biggest CEOs—even at many of
fornia has 161⁄2 minutes remaining. adopt rules to require issuers to dis- the companies hit hardest by the events of the
Ms. WATERS. Madam Speaker, I close information related to their pandemic. The Times highlights how compa-
yield myself the balance of my time. human capital management policies, nies like AT&T, Hilton, Boeing, and Norwegian
Madam Speaker, this bill provides practices, and performance. Cruise Line all took billions of dollars in losses
urgently needed investor protections in 2020 but still managed to pay each of their
by requiring the Securities and Ex- b 1330
CEOs more than $20 million.
change Commission to adopt clear, When the SEC solicited comments on Unfortunately, excessive compensation
consistent standards for ESG metrics. political spending disclosures in 2011, it packages received by many of America’s
Without the information requirements received over one million comments; CEOs is not a new or isolated event. The dis-
in this bill, investors are left with in- by far more comments than any other parity between executive compensation and
consistent information across compa- SEC rulemaking petition, and the vast the average worker pay has been growing for
nies and are ultimately unable to fully majority of which were overwhelm- decades. In August 2019, the Economic Policy
assess their investment decisions. ingly favorable. Yet the SEC’s efforts Institute produce a report which highlights that,
Investors deserve to know the risks were stymied because the Senate mi- even before the pandemic, CEOs were earn-
they are exposed to with relation to nority leader has personally insisted on ing far more than the typical worker, with CEO
climate change, political expenditures, statutorily prohibiting the SEC from pay growing 940 percent between 1978 and
and other important factors. We must even studying the issue. 2018 while the wages for the typical worker
make this right and take action to However, we are currently without grew by just 11.9 percent over that same pe-
bring accountability to public compa- clear, consistent standards for this in- riod.
nies. formation to be disclosed. Investors Additional transparency on pay ratios will
Some or all of the provisions of this will continue to be left in the dark. It also benefit investors, as data is key to their
package have been supported by Public is time we give investors and markets decision-making process. A balanced pay ratio
Citizen, AFL–CIO, SEIU, California the information they have been de- is an indicator of a company’s strong long-
Public Employees’ Retirement System, manding for so long. term performance and further pay ratio disclo-
Americans for Financial Reform, Coun- And let me be absolutely clear about sures would provide better insight on a com-
cil of Institutional Investors, United who we are fighting for. The other side pany’s strategy, its values, and long-term out-
Nations Principles for Responsible In- has taken up the issue, as it tends to look.
vestment, Americans for Tax Fairness, want to protect these big public cor- In order to get our economy back on track
North American Securities Adminis- porations from disclosures. for everyone, we must increase worker pay
trators Association, FACT Coalition, It is for the American workers, the and ensure that CEO pay ratios are in line
Oxfam America, Ceres, and Sierra retirees, who worked their whole lives with a corporation’s fundamentals. I urge my
Club, among others. to save for retirement, for the public
For years, investors and market par- colleagues to vote YES on bill.
pension funds investing on behalf of The SPEAKER pro tempore. All time
ticipants have been demanding more our Nation’s teachers and our fire-
and better disclosures regarding ESG for debate has expired.
fighters, and other frontliners. We are Each further amendment printed in
matters, which research shows can fighting to ensure they have been given
have significant impacts on the short- House Report 117–59 not earlier consid-
the tools they need to protect what ered as part of amendments en bloc
and long-term values of companies.
they have worked so hard for, to pursuant to section 4 of House Resolu-
For example, a report issued by the
achieve the American Dream. tion 473, shall be considered only in the
BlackRock Investment Institute found
So I would urge all of my colleagues order printed in the report, may be of-
that companies that score high on ESG
measures are better able to adapt to who are concerned about not only the fered only by a Member designated in
environmental and societal changes, retail investors, but concerned about the report, shall be considered as read,
use resources more efficiently, have the institutional investors who are re- shall be debatable for the time speci-
more productive employees, and tend sponsible for these teachers and these fied in the report equally divided and
to face lower risk of reputational dam- firefighters and these others that I controlled by the proponent and an op-
age and regulatory action. have alluded to, and their ability to ponent, may be withdrawn by the pro-
Matters related to climate risk, the feel safe and comfortable that deci- ponent at any time before the question
ways companies invest in their workers sions are being made that are in the is put thereon, shall not be subject to
and further diversity, spend their cash best interest of the people who are in- amendment, and shall not be subject to
on political expenditures, their global vested in them. a demand for division of the question.
human rights records, their tax avoid- So I would ask for an ‘‘aye’’ vote on It shall be in order at any time after
ance strategies, and how they invest in this very, very comprehensive and seri- debate for the chair of the Committee
crucial corporate infrastructure such ous legislation. on Financial Services or her designee
as cybersecurity are all significant and Madam Speaker, I yield back the bal- to offer amendments en bloc consisting
material factors in companies’ short- ance of my time. of further amendments printed in
and long-term viability. Ms. VELÁZQUEZ. Madam Speaker, I rise in House Report 117–59, not earlier dis-
Investors, who are the true owners of strong support of H.R. 1187. Importantly, this posed of. Amendments en bloc shall be
our Nation’s public companies, recog- package contains language from my legisla- considered as read, shall be debatable
nize the importance of this information tion, the Greater Accountability in Pay Act that for 20 minutes equally divided and con-
to their decisionmaking and have been requires public companies to disclose the pay trolled by the chair and ranking minor-
demanding this information for years. raise percentage of its executives and the pay ity member of the Committee on Fi-
For example, in 2018, a coalition of raise percentage of its median employees nancial Services or their respective
public pension funds asset managers over the past year and compare each to the designees, shall not be subject to
and others representing over $5 trillion rate of inflation. It also requires these compa- amendment, and shall not be subject to
in assets petitioned the SEC for rule- nies to disclose the ratio between the two pay a demand for division of the question.
making on mandatory ESG disclosures. raise percentages. AMENDMENT NO. 1 OFFERED BY MR. BURGESS
Over 2,300 investment managers, asset This legislation is the next logical step of the The SPEAKER pro tempore. It is now
managers, and service providers rep- CEO pay ratio disclosure requirement in the in order to consider amendment No. 1
resenting over $80 trillion in assets Dodd-Frank Act. The COVID–19 pandemic printed in House Report 117–59.
under management have become sig- has left millions of working-class Americans Mr. BURGESS. Madam Speaker, I
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natories to the United Nations Prin- feeling vulnerable and uncertain about their have an amendment at the desk.
ciples for Responsible Investment, economic future—with many individuals and The SPEAKER pro tempore. The
which commits to incorporating ESG families facing reduced hours, furloughs, or Clerk will designate the amendment.
factors into their investment decisions. outright dismissals. The text of the amendment is as fol-
A group of 35 institutional investors However, an article published by the New lows:
representing over $6.6 trillion in assets York Times in April demonstrates the extraor- Page 45, after line 19, insert the following:
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H2846 CONGRESSIONAL RECORD — HOUSE June 16, 2021
‘‘(3) INCLUSION OF NOTICE WITH RESPECT TO So I do want to be clear. I am op- vesting in research and development,
FEDERAL CORPORATE TAX INCREASES.—With posed to Congress forcing disclosure of increasing worker wages, or shoring up
respect to each disclosure made by a covered immaterial information, as H.R. 1187 their bottom lines to make sure they
issuer pursuant to paragraph (2), if the Fed-
eral corporate tax rate in effect during the
would require. But if Congress is going could weather times of crisis.
reporting period is higher than the Federal to require companies to disclose other According to the Center on Budget
corporate tax rate applicable on June 1, 2021, immaterial information, then it is only and Policy Priorities, Trump’s tax plan
the disclosure shall contain the following ad- appropriate for Congress to require the gave the top 400 highest income tax-
ditional information: disclosure of the effects of higher payers an additional $15 million per
‘‘(A) With respect to any disclosure of taxes. Requiring disclosures of certain year. Compare this to the $2.8 million
taxes paid to the Federal Government, the tax-related information will not pro- the average college graduate will earn
disclosure shall include a calculation of what in their lifetime.
such payment would have been had the Fed-
vide the whole picture without also
looking at the impact of tax hikes. This amendment absolutely and com-
eral corporate tax rate remained the same as
If we are forcing disclosure of all this pletely ignores the harm done to hard-
it was on June 1, 2021.
‘‘(B) The following notice: ‘As a result of a tax-related information that we have working Americans and focuses on al-
change in U.S. Federal corporate tax law en- heard the Democrats propose, then why leged harm to the large corporations.
acted during the lllll Administra- shouldn’t investors know exactly and This amendment suggests our Nation’s
tion(s), our company has lll fewer dollars plainly how a President’s tax increase largest companies should not be paying
to pay its workforce, invest in our business, bill impacts the bottom line of the their fair share, while American work-
or return capital to its investors.’. (With the ers are forced to pay for Republicans’
companies, those same companies in
first blank filled in with the name of each corporate handouts.
President since June 1, 2021, during whose which they have invested their life sav-
ings? Madam Speaker, I urge my col-
term legislation was enacted to raise the leagues to reject this amendment, and
Federal corporate tax rate, and with the sec- As our economy continues to recover
ond blank filled in with the difference be- from the pandemic, the public deserves I reserve the balance of my time.
Mr. BURGESS. Madam Speaker, I
tween the actual taxes paid by the covered to know how these policies, good and
issuer to the Federal Government during the yield myself the balance of my time.
bad, would impact economic growth Look, I am not enthusiastic about
reporting period and what that payment and their livelihoods.
amount would have been had the Federal Congress forcing disclosure of immate-
Since Congressional Democrats are rial information. But if we are going to
corporate tax rate remained the same as it
was on June 1, 2021.)’’.
insistent in using this legislation to do it, if we are going to do it, then, at
The SPEAKER pro tempore. Pursu- push their agenda on social changes the very least, we should be honest.
ant to House Resolution 473, the gen- and climate change, then I urge my And to the extent tax increases are
tleman from Texas (Mr. BURGESS) and colleagues to support this amendment, going to harm the company’s ability to
a Member opposed each will control 5 as it will tell investors a more com- invest in its workers and invest in
minutes. plete story. itself, we should disclose that as well.
The Chair recognizes the gentleman Madam Speaker, I reserve the bal- Look, there was a time where cor-
from Texas. ance of my time. porate inversions were a big problem in
Mr. BURGESS. Madam Speaker, I Ms. WATERS. Madam Speaker, I this country. You haven’t heard of cor-
yield myself such time as I may con- claim time in opposition to the amend- porate inversions since December of
sume. ment. 2017, and the reason was because the
This amendment is designed to high- The SPEAKER pro tempore. The gen- Tax Cuts and Jobs Act made it unnec-
light the impact that increased taxes tlewoman from California is recognized essary for companies to take their dol-
have on companies and their work- for 5 minutes. lars and their jobs overseas. So now
force. Ms. WATERS. Madam Speaker, I
Like many Members of this body, I those dollars and those jobs stay for
strongly oppose Mr. BURGESS’ amend-
owned my own business prior to being American workers.
ment. This amendment is interesting After the passage of the American
elected to Congress. I know firsthand to me because Republicans have, with- Tax Cuts and Jobs Act, actual revenues
what it takes to make a payroll, ex- out fail, consistently cited the materi-
pand your business, keep the lights on. to the Treasury rose. And had it not
ality standard both here on the House been for the imposition of the pan-
Running a business takes the owner’s floor and in the Financial Services
blood, sweat, and tears to succeed, but demic, those tax cuts would have been
Committee as a basis to oppose very paid for because the Congressional
it also requires capital. Heavier taxes important disclosures.
can have significant impacts on a com- Budget Office assigned a very anemic
Republicans have argued over and rate of growth to their projections
pany’s operation, certainly a com- over again that we do not need to enact
pany’s access to capital and their over- when they cited the CBO score prior to
any new disclosures because companies
all fiscal health. that bill’s passage.
are already required to disclose any This is an important concept. If we
If we are to follow the premise of this and all material information. But, with
bill, that investors need the Federal are going to level immaterial informa-
this amendment, it seems their pur- tion into a company’s disclosures, let’s
Government to mandate the disclosure ported commitment to materiality has
of immaterial information, then the disclose what happens when Congress
gone out the window so that they can applies additional tax rates to those
impact of tax hikes must be included.
bring attention to their massive tax companies as well. It is the right thing
That is why I am offering this amend-
cuts for the rich. to do.
ment.
In 2018, when the United States Gov- I urge my colleagues to vote for this
This amendment would require pub-
licly traded companies that pay Fed- ernment should have been focused on amendment. It is the only thing that
eral taxes to disclose the effects of any growing the real economy for Amer- can make the underlying bill perhaps
future U.S. corporate tax increases. ican workers, the former President make a little more sense.
Specifically, the company must cal- pushed forward the largest tax give- Madam Speaker, I yield back the bal-
culate and disclose the difference be- away to our country’s largest corpora- ance of my time.
tween the amount in taxes it would tions and executives in history. This Ms. WATERS. Madam Speaker, I
have paid under laws in effect on June government handout provided corpora- yield myself the balance of my time.
1, 2021, and the actual amount paid tions and executives with $2 trillion in Mr. BURGESS’ amendment is a gim-
after the taxes were increased. tax cuts and giveaways, saddling the mick intended to distract from the im-
Additionally, the company must ac- United States Government with debt. portant goals of this package. It in-
knowledge in writing which President Make no mistake, these tax cuts did sinuates that corporations should not
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signed the higher taxes into law. not go primarily to workers, but, in- be paying their fair share, while hard-
Finally, the company must specify stead, they went overwhelmingly to working taxpayers foot the bill. So I
the decreased amount of capital that it the top 1 percent. The year after the urge my colleagues to join me in re-
now has to pay its workforce, reinvest Trump tax cuts were implemented, jecting Mr. BURGESS’ amendment.
in the company, or return capital to public companies spent nearly $1 tril- Madam Speaker, I yield back the bal-
shareholders. lion in stock buybacks, rather than in- ance of my time.
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2847
The SPEAKER pro tempore. Pursu- are investing in their workers. Over the sev- absenteeism costs. Employers that imple-
ant to House Resolution 473, the pre- eral months preceding the date of enactment ment workplace health promotion programs
vious question is ordered on the of this Act, companies across the United have seen reductions in sick leave, health
States have taken extreme actions to adapt plan costs, and workers’ compensation and
amendment offered by the gentleman and respond to evolving workforce chal- disability insurance costs of approximately
from Texas (Mr. BURGESS). lenges presented by COVID–19. 25 percent.
The question is on the amendment. (6) JUST Capital has been tracking the re- (15) The Centers for Disease Control and
The question was taken; and the sponses of the Standard and Poor’s 100 larg- Prevention has found that preventable
Speaker pro tempore announced that est public companies to their workers and chronic conditions are a major contributor
the noes appeared to have it. has found wide variation in the policies im- to insurance premium and employee medical
Mr. BURGESS. Madam Speaker, on plemented, as well as with respect to the dis- claim costs, which are at an all-time high,
that I demand the yeas and nays. closure of those policies. Through different and a Milken Institute study shows that em-
The SPEAKER pro tempore. Pursu- responses to their workforces, from layoffs ployers paid $2,600,000,000,000 in 2016 for the
to workplace safety to paid leave, the indirect costs of employee chronic disease
ant to section 3(s) of House Resolution COVID–19 pandemic is exposing the myriad due to work absences, lost wages, and re-
8, the yeas and nays are ordered. ways that workforce management practices duced economic productivity.
Pursuant to clause 8 of rule XX, fur- of companies pose operational and (16) The COVID–19 pandemic has severely
ther proceedings on this question are reputational risks for short- and long-term impacted employee physical, mental, and
postponed. financial performance. emotional well-being by increasing stress,
AMENDMENTS EN BLOC OFFERED BY MS. WATERS (7) Even before the COVID–19 pandemic, depression, burnout, and mortality rates of
OF CALIFORNIA there was a growing body of research estab- chronic disease and by reducing work-life
lishing a relationship between measurable balance and financial security, with these
Ms. WATERS. Madam Speaker, pur-
workforce management, which is the way challenges likely to persist due to uncer-
suant to section 4 of House Resolution that companies manage their employees, and tainty and instability even as employees re-
473, I offer amendments en bloc. firm performance. In a study of 2,000 large turn to work. Before the COVID–19 pan-
The SPEAKER pro tempore. The companies, Harvard Law School’s Labor and demic, but especially in the face of that pan-
Clerk will designate the amendments Work Life Program found that forward- demic, employers that advance policies and
en bloc. thinking workforce policies that prioritize practices that support workforce health,
Amendments en bloc 1 consisting of workers, such as how companies train, re- safety, and well-being are likely to out-
amendment Nos. 2, 3, 5, 6, 7, and 9 tain, and pay their workers, are correlated perform competitors and benefit from lower
with long-term financial performance. costs.
printed in House Report 117–59, offered
(8) Disclosure of workforce management
by Ms. WATERS of California: policies should be part of a Government-wide SEC. 603. DISCLOSURES RELATING TO WORK-
AMENDMENT NO. 2 OFFERED BY MRS. AXNE OF economic recovery strategy. Just as a set of FORCE MANAGEMENT.
IOWA generally accepted accounting principles Section 13 of the Securities Exchange Act
Add at the end the following: (commonly known as ‘‘GAAP’’) was urgently of 1934 (15 U.S.C. 78m), as amended by section
TITLE VI—WORKFORCE INVESTMENT adopted after the Great Depression, stand- 502, is further amended by adding at the end
DISCLOSURE ardized, comparable metrics of workforce the following:
disclosure requirements in the context of the
SEC. 601. SHORT TITLE. ‘‘(w) DISCLOSURES RELATING TO WORKFORCE
COVID–19 pandemic are critical for investors
This title may be cited as the ‘‘Workforce to accurately measure and project company MANAGEMENT.—
Investment Disclosure Act of 2021’’. performance, both in the present and in the ‘‘(1) DEFINITION.—In this subsection, the
SEC. 602. FINDINGS. future. term ‘contingent worker’ includes an indi-
Congress finds the following: (9) Because many companies already track vidual performing work in the usual course
(1) One of the keys to the 20th century workforce metrics internally, moving to- of business on a temporary basis (including
post-war economic success of the United wards a transparent disclosure regime would through a labor intermediary, including an
States was the ability to prepare workers allow investors to better judge whether com- individual or entity that supplies an em-
over the course of their lives for success panies are managing risks and making the ployer with workers to perform labor) or as
through multiple sectors across society. Un- investments in their workforces that are an independent contractor.
fortunately, during the several decades pre- needed for long-term growth. ‘‘(2) REGULATIONS.—Not later than 2 years
ceding the date of enactment of this Act, (10) Businesses increasingly rely on work- after the date of enactment of this sub-
there has been a shift in business norms and force innovation and intellectual capital for section, the Commission, in consultation
in society. While Congress recognizes that competitiveness. Workplace benefits, par- with the Secretary of Labor, the Secretary
the technology and job skills required for ticularly paid sick leave, medical leave, and of Commerce, the Secretary of Treasury, and
some jobs has changed dramatically, the pri- flexible work arrangements, critically sup- the Attorney General, shall promulgate reg-
vate and public partnership to hire workers port employee mental and physical well- ulations that require each issuer required to
at different education levels and invest in being. file an annual report under subsection (a) or
them for the long-term is broken. (11) Race- and gender-based workplace dis- section 15(d) to disclose in that report infor-
(2) Available data from the 10-year period crimination have been tied to negative mation regarding workforce management
preceding the date of enactment of this Act health outcomes, as well as lower produc- policies, practices, and performance with re-
suggests that businesses are investing less in tivity, trust, morale, and satisfaction and spect to the issuer.
worker training during that time period, not higher rates of absenteeism and turnover. ‘‘(3) RULES.—Consistent with the require-
more. Organizational reporting on practices to re- ment under paragraph (4), each annual re-
(3) In the wake of the 2008 global financial duce discrimination can increase employee port filed with the Commission in accord-
crisis, there was a well-documented decline job satisfaction, performance, and engage- ance with the regulations promulgated under
in overall business investment. That decline ment. paragraph (2) shall include disclosure of the
coincides with the wage polarization of (12) According to the Centers for Disease following with respect to the issuer filing the
workers and an increase in spending on share Control and Prevention, work-related stress report for the year covered by the report:
buybacks and dividends, leading several re- is the leading occupational health risk and, ‘‘(A) Workforce demographic information,
searchers to conclude that companies are de- per the American Institute of Stress, job including—
emphasizing investment at the expense of in- stress costs United States industry more ‘‘(i) the number of full-time employees, the
creasing returns for shareholders. The onset than $300,000,000,000 per year in accidents, ab- number of part-time employees, and the
of a global pandemic may make that trend senteeism, employee turnover, diminished number of contingent workers (including
worse, especially with respect to invest- productivity, and medical, legal, and insur- temporary and contract workers) with re-
ments in workers. ance costs. spect to the issuer, which shall include de-
(4) As part of the overall decline in invest- (13) Employee health and well-being is a mographic information with respect to those
ment described in paragraph (3), publicly key asset to delivering long-term value, with categories of individuals, including informa-
traded companies are being provided with in- 80 percent of public companies that took tion regarding race, ethnicity, and gender;
centives to prioritize investments in phys- concrete actions on health and well-being ‘‘(ii) any policies or practices of the issuer
ical assets over investments in their having seen larger improvements in finan- relating to subcontracting, outsourcing, and
workforces, meaning that those companies cial performance. insourcing individuals to perform work for
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are investing in robots instead of individ- (14) Organizational well-being interven- the issuer, which shall include demographic
uals. In fact, there are already signs that au- tions can create cost savings of up to 10 dol- information with respect to those individ-
tomation has increased during the COVID–19 lars for every dollar invested. Specifically, uals, including information regarding race,
pandemic. for every dollar that employers spend on ethnicity, and gender; and
(5) More than ever, the Federal Govern- workplace disease prevention and well-being ‘‘(iii) whether the percentage of contingent
ment, through company disclosure practices, programs, there is a $3.27 reduction in em- workers with respect to the issuer has
needs to understand exactly how companies ployee medical costs and a $2.73 reduction in changed, including temporary and contract
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H2848 CONGRESSIONAL RECORD — HOUSE June 16, 2021
workers, as compared with the previous an- tainability are considered when setting pay the Securities Exchange Act of 1934 (15
nual report filed by the issuer under this and making promotion decisions; and U.S.C. 78m(a), 78o(d)); and
subsection. ‘‘(v) policies and practices relating to any (3) the term ‘‘issuer’’ has the meaning
‘‘(B) Workforce stability information, in- incentives and bonuses provided to employ- given the term in section 3(a) of the Securi-
cluding information about the voluntary ees and any policies or practices designed to ties Exchange Act of 1934 (15 U.S.C. 78c(a)).
turnover or retention rate, the involuntary counter any risks created by such incentives (b) COMPLIANCE.—If, as of the date that is
turnover rate, the internal hiring rate, and and bonuses. 2 years after the date of enactment of this
the internal promotion rate, as well as infor- ‘‘(G) Workforce recruiting and needs, in- Act, the Commission has not promulgated
mation about workers who transition be- cluding— the regulations required under subsection
tween employee and contingent workers, and ‘‘(i) the number of new jobs created, seek- (w) of section 13 of the Securities Exchange
the horizontal job change rate by quintile ing to be filled, and filled, disaggregated Act of 1934 (15 U.S.C. 78m), as added by sec-
and demographic information. based on classification status; tion 603, a covered issuer, during the period
‘‘(C) Workforce composition, including— ‘‘(ii) the share of new jobs that require a beginning on that date and ending on the
‘‘(i) data on diversity (including racial, bachelor’s degree or higher; date on which the Commission promulgates
ethnic, self-reported sexual orientation, and ‘‘(iii) information regarding the quality of those regulations, shall be deemed to be in
gender composition) for senior executives hire for jobs described in clause (i); and compliance with such subsection (w) if dis-
and other individuals in the workforce; and ‘‘(iv) the retention rate for individuals closures set forth in the annual report of the
‘‘(ii) any policies, audits, and programming hired to fill the jobs described in clause (i). covered issuer satisfy the public disclosure
expenditures relating to diversity. ‘‘(H) Workforce engagement and produc- standards of the International Organization
‘‘(D) Workforce skills and capabilities, in- tivity, including information regarding poli- for Standardization’s ISO 30414, or any suc-
cluding— cies and practices of the issuer relating to— cessor standards for external workforce re-
‘‘(i) information about training and cross- ‘‘(i) engagement, productivity, and mental porting, as supplemented or adjusted by
training of employees and contingent work- well-being of employees and contingent rules, guidance, or other comments from the
ers by quintile and demographic informa- workers, as determined in consultation with Commission.
tion, distinguishing between compliance the Department of Labor; and SEC. 605. SEC STUDY.
training, career development training, job ‘‘(ii) freedom of association and work-life (a) DEFINITIONS.—In this section, the terms
performance or technical training, and train- balance initiatives, including flexibility and ‘‘Commission’’ and ‘‘issuer’’ have the mean-
ing tied to recognized postsecondary creden- the ability of the workforce to work re- ings given those terms in section 604(a).
tials; motely, as determined in consultation with (b) STUDY.—The Commission shall conduct
‘‘(ii) average number of hours of training the Department of Labor. a study about the value to investors of—
for each employee and contingent worker; ‘‘(4) DISAGGREGATION OF INFORMATION.—To (1) information about the human rights
‘‘(iii) total spending on training for all em- the maximum extent feasible, the informa- commitments of issuers required to file an-
ployees and contingent workers; tion described in paragraph (3) shall be nual reports under section 13(a) of the Secu-
‘‘(iv) average spending per employee or disaggregated by— rities Exchange Act of 1934 (15 U.S.C. 78m(a)),
contingent worker; ‘‘(A) the workforce composition described including information about any principles
‘‘(v) training utilization rates; and in subparagraph (C)(i) of that paragraph; used to evaluate risk, constituency consulta-
‘‘(vi) whether completion of training op- ‘‘(B) wage quintiles of the employees of the tion processes, and supplier due diligence;
portunities translates into value added ben- issuer for the year covered by the applicable and
efit for workers, as determined by wage in- annual report; and (2) with respect to issuers required to file
creases or internal promotions. ‘‘(C) the employment status of individuals annual reports under section 13(a) of the Se-
‘‘(E) Workforce health, safety, and well- performing services for the issuer, including curities Exchange Act of 1934 (15 U.S.C.
being, including information regarding— whether those individuals are full-time em- 78m(a)), information about—
‘‘(i) the frequency, severity, and lost time ployees, part-time employees, or contingent (A) violations of the Fair Labor Standards
due to injuries, physical and mental illness, workers. Act of 1938 (29 U.S.C. 201 et seq.) by those
and fatalities; ‘‘(5) TREATMENT OF EMERGING GROWTH COM- issuers;
‘‘(ii) the scope, frequency, and total ex- PANIES.—The Commission may exempt (B) violations of worker misclassification
penditure on workplace health, safety, and emerging growth companies from any disclo- by those issuers;
well-being programs; sure required under subparagraph (D), (E), (C) surveys regarding employee satisfac-
‘‘(iii) the total dollar value of assessed (F), (G), or (H) of paragraph (3) if the Com- tion, well-being, and engagement;
fines under the Occupational Safety and mission determines that such an exemption (D) the number and overall percentage of
Health Act of 1970 (29 U.S.C. 651 et seq.); is necessary or appropriate in the public in- quality jobs, as determined by compensation
‘‘(iv) the total number of actions brought terest. above median wage and comprehensive em-
under section 13 of the Occupational Safety ‘‘(6) FALSE OR MISLEADING STATEMENTS.— ployer-provided benefits; and
and Health Act of 1970 (29 U.S.C. 662) to pre- ‘‘(A) IN GENERAL.—Except as provided in (E) information about workforce invest-
vent imminent dangers; subparagraph (B), it shall be unlawful for ment trends, as determined by at least a 3-
‘‘(v) the total number of actions brought any person, in any report or document filed year time period.
under this subsection, to make or cause to be (c) REPORT.—Not later than 1 year after
against the issuer under section 11(c) of the
made any untrue statement of a material the date of enactment of this Act, the Com-
Occupational Safety and Health Act of 1970
fact or omit to state a material fact required mission shall submit to Congress a report
(29 U.S.C. 660(c));
to be stated in the report or document or that contains the results of the study re-
‘‘(vi) any findings of workplace harassment
necessary to make the statement made, in quired to be conducted under subsection (b),
or workplace discrimination during the 5 fis-
the light of the circumstances under which it with recommendations for additional disclo-
cal year period of the issuer preceding the
is made, not misleading. sure regulations based on the findings, and
fiscal year in which the report is filed; and
‘‘(B) EXCEPTION.—A person shall not be lia- any actions the Commission plans to take to
‘‘(vii) communication channels and griev-
ble under subparagraph (A) if the person enhance disclosures based on the findings.
ance mechanisms in place for employees and
contingent workers. shows that the person had, after reasonable AMENDMENT NO. 3 OFFERED BY MS. LOIS
‘‘(F) Workforce compensation and incen- investigation, reasonable ground to believe, FRANKEL OF FLORIDA
tives, including information regarding— and did believe, at the time the applicable Add at the end the following:
‘‘(i) total workforce costs, including sala- statement was made, that the statement was TITLE VI—PREVENTING AND RESPOND-
ries and wages, health benefits, other ancil- true and that there was no omission to state ING TO WORKPLACE HARASSMENT
lary benefit costs, and pension costs; a material fact necessary to make the state- SEC. 601. SEC FILINGS AND MATERIAL DISCLO-
‘‘(ii) workforce benefits, including paid ment made, in the light of the circumstances SURES AT PUBLIC COMPANIES.
leave, health care, child care, and retire- under which it is made, not misleading. (a) DEFINITIONS.—In this section—
ment, including information regarding bene- ‘‘(C) NO PRIVATE RIGHT OF ACTION.—Nothing (1) the term ‘‘Form 10–K’’ means the form
fits that are provided— in this paragraph may be construed as cre- described in section 249.310 of title 17, Code of
‘‘(I) to full-time employees and not to part- ating a private right of action. Federal Regulations, or any successor regu-
time employees; or ‘‘(7) EXEMPTION.—This subsection shall not lation; and
‘‘(II) to employees and not to contingent apply to an investment company registered (2) the term ‘‘issuer’’ has the meaning
workers; under section 8 of the Investment Company given the term in section 3(a) of the Securi-
‘‘(iii) total contributions made to unem- Act of 1940 (15 U.S.C. 80a–8).’’. ties Exchange Act of 1934 (15 U.S.C. 78c(a)).
ctelli on DSK11ZRN23PROD with HOUSE
ployment insurance by the issuer, how many SEC. 604. BACKSTOP. (b) FINDINGS.—Congress finds that—
employees to whom those contributions (a) DEFINITIONS.—In this section— (1) shareholders and the public should
apply, and the total amount paid in unem- (1) the term ‘‘Commission’’ means the Se- know whether corporations—
ployment compensation to individuals who curities and Exchange Commission; (A) are expending company funds to re-
were laid off by the issuer; (2) the term ‘‘covered issuer’’ means an solve, settle, or litigate claims of workplace
‘‘(iv) policies and practices regarding how issuer that is required to file an annual re- harassment, including sexual harassment;
performance, productivity, equity, and sus- port under section 13(a) or section 15(d) of and
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2849
(B) along with the executives and man- an information system or information that subsection (a) shall disclose in any proxy
agers of those corporations— is stored on, processed by, or transiting an statement and any information statement
(i) are complying with prohibitions against information system; and relating to the election of directors filed
workplace harassment, including sexual har- ‘‘(B) does not include any action that sole- with the Commission the following:
assment; and ly involves a violation of a consumer term of ‘‘(A) Demographic data, based on vol-
(ii) facilitate a culture of silence, dis- service or a consumer licensing agreement; untary self-identification, on the racial, eth-
respect, intimidation, and abuse that nega- ‘‘(3) the term ‘information system’— nic, gender identity, and sexual orientation
tively impacts the health and safety of the ‘‘(A) has the meaning given the term in composition of—
workers of those corporations and the value section 3502 of title 44, United States Code; ‘‘(i) the board of directors of the issuer;
of those corporations; and and ‘‘(ii) nominees for the board of directors of
(2) the requirements of this section will— ‘‘(B) includes industrial control systems, the issuer; and
(A) establish necessary transparency and such as supervisory control and data acquisi- ‘‘(iii) the executive officers of the issuer.
accountability; and tion systems, distributed control systems, ‘‘(B) The status of any member of the
(B) provide an incentive for corporations and programmable logic controllers; board of directors of the issuer, any nominee
to— ‘‘(4) the term ‘NIST’ means the National for the board of directors of the issuer, or
(i) promptly address workplace harass- Institute of Standards and Technology; and any executive officer of the issuer, based on
ment, including sexual harassment, as that ‘‘(5) the term ‘reporting company’ means voluntary self-identification, as a veteran.
misconduct occurs; and any company that is an issuer— ‘‘(C) Whether the board of directors of the
(ii) foster a culture in which workplace ‘‘(A) the securities of which are registered issuer, or any committee of that board of di-
harassment is not protected and does not under section 12; or rectors, has, as of the date on which the
occur. ‘‘(B) that is required to file reports under issuer makes a disclosure under this para-
(c) INFORMATION REQUIRED.—Not later than section 15(d). graph, adopted any policy, plan, or strategy
1 year after the date of enactment of this ‘‘(b) REQUIREMENT TO ISSUE RULES.—Not to promote racial, ethnic, and gender diver-
Act, the Securities and Exchange Commis- later than 360 days after the date of enact- sity among—
sion shall promulgate a regulation that re- ment of this section, the Commission shall ‘‘(i) the board of directors of the issuer;
quires any issuer that is required to submit issue final rules to require each reporting ‘‘(ii) nominees for the board of directors of
an annual report using Form 10–K to include company, in the annual report of the report- the issuer; or
in any such submission— ing company submitted under section 13 or ‘‘(iii) the executive officers of the issuer.
(1) during the period covered by the sub- section 15(d) or in the annual proxy state- ‘‘(3) ALTERNATIVE SUBMISSION.—In any 1-
mission— ment of the reporting company submitted year period in which an issuer required to
(A) with respect to workplace harassment, under section 14(a)— file an annual report under subsection (a)
including sexual harassment, and retaliation ‘‘(1) to disclose whether any member of the does not file with the Commission a proxy
for reporting, resisting, opposing, or assist- governing body, such as the board of direc- statement or an information statement re-
ing in the investigation of workplace harass- tors or general partner, of the reporting lating to the election of directors, the issuer
ment— company has expertise or experience in cy- shall disclose the information required under
(i) the number of settlements reached by bersecurity and in such detail as necessary paragraph (2) in the first annual report of
the issuer as a signatory or when the issuer to fully describe the nature of the expertise issuer that the issuer submits to the Com-
is a beneficiary of a release of claims; and or experience; and mission after the end of that 1-year period.
(ii) whether any judgments or awards (in- ‘‘(2) if no member of the governing body of ‘‘(4) ANNUAL REPORT.—Not later than 18
cluding awards through arbitration or ad- the reporting company has expertise or expe- months after the date of enactment of this
ministrative proceedings) were entered rience in cybersecurity, to describe what subsection, and annually thereafter, the
against the issuer in part or in whole, or any other aspects of the reporting company’s cy- Commission shall submit to the Committee
payments made in connection with a release bersecurity were taken into account by any on Banking, Housing, and Urban Affairs of
of claims; and person, such as an official serving on a nomi- the Senate and the Committee on Financial
(B) the total amount paid by the issuer or nating committee, that is responsible for Services of the House of Representatives,
another party as a result of— identifying and evaluating nominees for and publish on the website of the Commis-
(i) the settlements described in subpara- membership to the governing body. sion, a report that analyzes the information
graph (A)(i); and ‘‘(c) CYBERSECURITY EXPERTISE OR EXPERI- disclosed under paragraphs (2) and (3) and
(ii) the judgments described in subpara- ENCE.—For purposes of subsection (b), the identifies any trends with respect to such in-
graph (A)(ii); and Commission, in consultation with NIST, formation.
(2) information regarding whether, in the shall define what constitutes expertise or ex- ‘‘(5) BEST PRACTICES.—
aggregate, including the period covered by perience in cybersecurity using commonly ‘‘(A) IN GENERAL.—The Director of the Of-
the submission, there have been three or defined roles, specialties, knowledge, skills, fice of Minority and Women Inclusion of the
more settlements reached by, or judgments and abilities, such as those provided in NIST Commission shall, not later than 3 years
against, the issuer with respect to workplace Special Publication 800–181, entitled ‘Na- after the date of enactment of this sub-
harassment, including sexual harassment, or tional Initiative for Cybersecurity Education section, and every 3 years thereafter, publish
retaliation for reporting, resisting, opposing, (NICE) Cybersecurity Workforce Frame- best practices for compliance with this sub-
or assisting in the investigation of work- work’, or any successor thereto.’’. section.
place harassment that relate to a particular AMENDMENT NO. 6 OFFERED BY MR. MEEKS OF ‘‘(B) COMMENTS.—The Director of the Office
individual employed by the issuer, without NEW YORK of Minority and Women Inclusion of the
identifying that individual by name. Commission may, pursuant to subchapter II
Add at the end the following:
AMENDMENT NO. 5 OFFERED BY MR. HIMES OF
of chapter 5 of title 5, United States Code,
TITLE VI—DATA RELATING TO DIVERSITY solicit public comments related to the best
CONNECTICUT
DISCLOSURE practices published under subparagraph
Add at the end the following:
SEC. 601. SHORT TITLE. (A).’’.
TITLE VI—CYBERSECURITY DISCLOSURE This title may be cited as the ‘‘Improving SEC. 603. DIVERSITY ADVISORY GROUP.
SEC. 601. SHORT TITLE. Corporate Governance Through Diversity (a) DEFINITIONS.—For the purposes of this
This title may be cited as the ‘‘Cybersecu- Act of 2021’’. section:
rity Disclosure Act of 2021’’. SEC. 602. SUBMISSION OF DATA RELATING TO DI- (1) ADVISORY GROUP.—The term ‘‘Advisory
SEC. 602. CYBERSECURITY TRANSPARENCY. VERSITY BY ISSUERS. Group’’ means the Diversity Advisory Group
The Securities Exchange Act of 1934 (15 Section 13 of the Securities Exchange Act established under subsection (b).
U.S.C. 78a et seq.) is amended by inserting of 1934 (15 U.S.C. 78m), as amended by section (2) COMMISSION.—The term ‘‘Commission’’
after section 14B (15 U.S.C. 78n–2) the fol- 502, is further amended by adding at the end means the Securities and Exchange Commis-
lowing: the following: sion.
‘‘SEC. 14C. CYBERSECURITY TRANSPARENCY. ‘‘(w) SUBMISSION OF DATA RELATING TO DI- (3) ISSUER.—The term ‘‘issuer’’ has the
‘‘(a) DEFINITIONS.—In this section— VERSITY.— meaning given the term in section 3(a) of the
‘‘(1) the term ‘cybersecurity’ means any ‘‘(1) DEFINITIONS.—In this subsection— Securities Exchange Act of 1934 (15 U.S.C.
action, step, or measure to detect, prevent, ‘‘(A) the term ‘executive officer’ has the 78c(a)).
deter, mitigate, or address any cybersecurity meaning given the term in section 230.501(f) (b) ESTABLISHMENT.—The Commission shall
threat or any potential cybersecurity threat; of title 17, Code of Federal Regulations, as in establish a Diversity Advisory Group, which
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(2) the term ‘cybersecurity threat’— effect on the date of enactment of this sub- shall be composed of representatives from—
‘‘(A) means an action, not protected by the section; and (1) the Federal Government and State and
First Amendment to the Constitution of the ‘‘(B) the term ‘veteran’ has the meaning local governments;
United States, on or through an information given the term in section 101 of title 38, (2) academia; and
system that may result in an unauthorized United States Code. (3) the private sector.
effort to adversely impact the security, ‘‘(2) SUBMISSION OF DISCLOSURE.—Each (c) STUDY AND RECOMMENDATIONS.—The Ad-
availability, confidentiality, or integrity of issuer required to file an annual report under visory Group shall—
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H2850 CONGRESSIONAL RECORD — HOUSE June 16, 2021
(1) carry out a study that identifies strate- TITLE VI—UYGHUR FORCED LABOR ‘‘(B) XUAR.—The term ‘XUAR’ means the
gies that can be used to increase gender iden- DISCLOSURE Xinjiang Uyghur Autonomous Region.’’.
tity, racial, ethnic, and sexual orientation SEC. 601. SHORT TITLE. (b) REPEAL.—The amendment made by this
diversity among members of boards of direc- This division may be cited as the ‘‘Uyghur section shall be repealed on the earlier of—
tors of issuers; and Forced Labor Disclosure Act’’. (1) the date that is 8 years after the date of
(2) not later than 270 days after the date on the enactment of this section; or
SEC. 602. DISCLOSURE OF CERTAIN ACTIVITIES
which the Advisory Group is established, RELATING TO THE XINJIANG (2) the date on which the President sub-
submit to the Commission, the Committee UYGHUR AUTONOMOUS REGION. mits to Congress (including the Office of the
on Banking, Housing, and Urban Affairs of (a) IN GENERAL.—Section 13 of the Securi- Law Revision Council) a determination that
the Senate, and the Committee on Financial ties Exchange Act of 1934 (15 U.S.C. 78m), as the Government of the People’s Republic of
Services of the House of Representatives a amended by section 502, is further amended China has ended mass internment, forced
report that— by adding at the end the following: labor, and any other gross violations of
(A) describes any findings from the study ‘‘(w) DISCLOSURE OF CERTAIN ACTIVITIES human rights experienced by Uyghurs,
conducted under paragraph (1); and RELATING TO THE XINJIANG UYGHUR AUTONO- Kazakhs, Kyrgyz, and members of other per-
(B) makes recommendations regarding MOUS REGION.— secuted groups in the Xinjiang Uyghur Au-
strategies that issuers could use to increase ‘‘(1) IN GENERAL.—Not later than the end of tonomous Region.
gender identity, racial, ethnic, and sexual the 180-day period beginning on the date of The SPEAKER pro tempore. Pursu-
orientation diversity among board members. enactment of this subsection, the Commis- ant to House Resolution 473, the gen-
(d) ANNUAL REPORT.—Not later than 1 year sion shall issue rules to require each issuer tlewoman from California (Ms.
after the date on which the Advisory Group required to file an annual report under this WATERS) and the gentleman from
submits the report required under subsection section or section 15(d) or a proxy statement
Michigan (Mr. HUIZENGA) each will con-
(c)(2), and annually thereafter, the Commis- under section 14 to disclose in each such re-
sion shall submit to the Committee on Bank- port or proxy statement whether, during the trol 10 minutes.
ing, Housing, and Urban Affairs of the Sen- period covered by the report or proxy state- The Chair recognizes the gentle-
ate and the Committee on Financial Services ment— woman from California.
of the House of Representatives a report that ‘‘(A) the issuer or any affiliate of the b 1345
describes the status of gender identity, ra- issuer, directly or indirectly, engaged with
cial, ethnic, and sexual orientation diversity an entity or the affiliate of an entity to im- Ms. WATERS. Madam Speaker, I rise
among members of the boards of directors of port— in support of the amendments en bloc,
issuers. ‘‘(i) manufactured goods, including elec- and I yield myself such time as I may
tronics, food products, textiles, shoes, auto consume.
(e) PUBLIC AVAILABILITY OF REPORTS.—The
parts, polysilicon, and teas, that are sourced Madam Speaker, I rise in strong sup-
Commission shall make all reports of the Ad-
from or through the XUAR; port of this en bloc package of Demo-
visory Group available to issuers and the
‘‘(ii) manufactured goods containing mate-
public, including on the website of the Com- cratic amendments to H.R. 1187, the
rials that are sourced from or through the
mission. Corporate Governance Improvement
XUAR; or
(f) INAPPLICABILITY OF FEDERAL ADVISORY ‘‘(iii) goods manufactured by an entity en- and Investor Protection Act.
COMMITTEE ACT.—The Federal Advisory gaged in labor transfers from the XUAR; These amendments include critical
Committee Act (5 U.S.C. App.) shall not ‘‘(B) with respect to any goods or materials provisions offered by my colleagues,
apply with respect to the Advisory Group or described under subparagraph (A), whether Representative HIMES, Representative
the activities of the Advisory Group. the goods or material originated in forced AXNE, Representative PHILLIPS, Rep-
AMENDMENT NO. 7 OFFERED BY MR. PHILLIPS OF
labor camps; and resentative WEXTON, Representative
MINNESOTA
‘‘(C) with respect to each manufactured FRANKEL, and Representative MEEKS.
good or material described under subpara-
These provisions strengthen H.R. 1187
Page 9, after line 10, insert the following: graph (A)—
‘‘(i) the nature and extent of the commer- by requiring public companies to dis-
SEC. 105. STUDY ON SHAREHOLDER COLLECTIVE close key information related to cyber-
ACTION. cial activity related to such good or mate-
rial; security, corporate board diversity,
Not later than 1 year after the date of the ‘‘(ii) the gross revenue and net profits, if human rights abuses, human capital
enactment of this Act, the Securities and any, attributable to the good or material; management, and the ways companies
Exchange Commission shall— and are investing in and protecting their
(1) conduct a study on— ‘‘(iii) whether the issuer or the affiliate of
(A) the emergence, viability, and signifi-
workforce.
the issuer intends to continue with such im-
cance of coalitions of shareholders who wish Investors, the true owners of public
portation.
to preserve and promote critical employ- ‘‘(2) AVAILABILITY OF INFORMATION.—The companies, need this information be-
ment and ESG standards; Commission shall make all information dis- cause of the significant effects they
(B) whether and to what extent share- closed pursuant to this subsection available can have on the bottom lines and oper-
holder collective action— to the public on the website of the Commis- ations of the companies they are in-
(i) occurs; and sion. vesting their hard-earned money in. In-
(ii) has implications with respect to filing ‘‘(3) REPORTS.— vestors need this information to hold
requirements under the Securities Exchange ‘‘(A) ANNUAL REPORT TO CONGRESS.—The companies accountable.
Act of 1934 (15 U.S.C. 78a et seq.); and Commission shall—
(C) any possible anticompetitive activities Madam Speaker, I urge my col-
‘‘(i) conduct an annual assessment of the
associated with shareholder collective ac- compliance of issuers with the requirements
leagues to support these important
tion; and of this subsection; and measures, and I reserve the balance of
(2) submit to Congress a report that in- ‘‘(ii) issue a report to Congress containing my time.
cludes— the results of the assessment required under Mr. HUIZENGA. Madam Speaker, I
(A) the findings of the study conducted clause (i). rise in opposition to the amendments
under paragraph (1); ‘‘(B) GAO REPORT.—The Comptroller Gen- en bloc, and I yield myself such time as
(B) guidance, which may include an ap- eral of the United States shall periodically I may consume.
proved list, of shareholder engagement ac- evaluate and report to Congress on the effec- Madam Speaker, let’s be honest. If
tivities that are not considered to involve tiveness of the oversight by the Commission
questions of corporate control; and the original bill wasn’t bad enough,
of the disclosure requirements under this
(C) recommendations on regulatory safe subsection.
Democrats’ en bloc amendments com-
harbors for engagement with respect to sus- ‘‘(4) DEFINITIONS.—In this subsection: plete the picture. With this amend-
tainability guardrails and similar restric- ‘‘(A) FORCED LABOR CAMP.—The term ment, Democrats are packaging even
tions on portfolio company conduct with a ‘forced labor camp’ means— more non-investment-relevant social
goal of— ‘‘(i) any entity engaged in the ‘mutual priorities that only serve to feed pro-
(i) preserving economic justice, environ- pairing assistance’ program which subsidizes testers and dissidents with information
mental systems, and social institutions; and the establishment of manufacturing facili- to be used in naming and shaming com-
(ii) otherwise protecting the common in-
ctelli on DSK11ZRN23PROD with HOUSE
ties in XUAR; panies.
terests of corporate shareholders and stake- ‘‘(ii) any entity using convict labor, forced
holders. I had mentioned earlier that in some
labor, or indentured labor described under
section 307 of the Tariff Act of 1930 (19 U.S.C. of the bills in this package, we have
AMENDMENT NO. 9 OFFERED BY MS. WEXTON OF some potential impossibility of work-
VIRGINIA
1307); and
‘‘(iii) any other entity that the Commis- ing with each other. There are others
Add at the end the following: sion determines is appropriate. that don’t belong in our committee.
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2851
Then there are other bills that don’t said, I very much care about the Chi- that have gone private or stayed pri-
make sense if we really, truly are try- nese Communist Party’s human rights vate in response to these amendments.
ing to protect investors from fraud and abuses. We need to be focused on that. I think that is one of the things,
trying to build capital in our country, I think many of the underlying con- Madam Speaker, that is getting lost in
which is the directive of the Securities cerns that motivate this legislation this. Those that have will continue to
and Exchange Commission. and amendment are important. But the have those options. Those that are try-
Let’s look at some of the specific in- public company disclosure regime is ing to build a future are going to get
formation companies would be required simply the wrong vehicle for address- frozen out once again.
to disclose under these amendments ing those concerns. For that reason, I oppose this amend-
and how it benefits everyday investors. The SEC’s mission is to: one, protect ment, and I reserve the balance of my
Take the workforce and human cap- investors from fraud; two, maintain time.
ital management disclosure amend- fair, orderly, and efficient markets; Ms. WATERS. Madam Speaker, I
ment, for example. How exactly is a and, three, facilitate capital formation. yield 1 minute to the gentlewoman
company supposed to measure and dis- These packages of bills do not do that, from Iowa (Mrs. AXNE).
close, in a comprehensible and com- and nothing in the SEC’s mission looks Mrs. AXNE. Madam Speaker, in the
parable manner, ‘‘employee engage- remotely like enforcing foreign policy last century, businesses have become
ment’’ and ‘‘alignment with business goals or labor law. much less reliant on physical assets
strategy’’? Mary Jo White had pointed that out and more reliant on their workers.
Additionally, how does disclosing the regarding the conflict minerals portion In fact, virtually every business that
company’s policies relating to ‘‘free- of the Dodd-Frank law. Once again, I talk to says that the people are their
dom of association and work-life bal- Democrats are more than comfortable most important asset. Yet, we have
ance initiatives’’ help everyday inves- with shoving the SEC into subject mat- minimal information about the em-
tors evaluate the risks of investing in ter areas where they have zero exper- ployees and what we are doing to in-
that company? tise rather than getting the policy vest in our workers.
My friends on the other side have My amendment would address that
right.
been pretty adamantly opposed to There are real downsides to this ap- by giving us more information from
Robinhood, but those who are looking proach my colleagues are taking. Man- public companies about workforce
to use Robinhood might actually like training, pay, benefits, health and safe-
datory disclosure increases compliance
that work-life balance. That is kind of ty, and turnover and promotion rates.
costs. The more complicated and tech-
millennial type of language that is By the way, these are sets of data that
nical the information required to be re-
being used in here.
ported in disclosures, the more special- are already being collected by most
This amendment might as well re-
ized the attorneys and compliance ex- public companies.
quire companies to disclose their pol-
perts a company needs to adhere to a The pandemic, though, has only driv-
icy on dogs in the office and whether
law. en home how important it is for com-
their canine coworkers are purebreds
If I need to spell that out for you, panies to make sure that their workers
or mixed breed types of rescue dogs.
This doesn’t have relevance and mate- that is money that companies cannot stay safe and healthy for their com-
riality to investors. spend on its workforce and investing in pany’s success. It is obvious that com-
It is also worth highlighting an their business, in equipment, and in panies with workers who are more en-
amendment that requires American their wages, or returning money to ev- gaged and invested will do better,
companies to disclose whether the eryday investors who have invested in which is why investors want this infor-
company or an affiliate of the company those companies. mation.
directly or indirectly engaged with an Moreover, just to be clear, because My amendment would encourage bet-
entity or the affiliate of an entity re- my Democrat friends keep talking ter corporate practices by giving inves-
garding the importation of not only about how badly investors want this tors and the public the information
goods from the Xinjiang Uighur Auton- information, under the disclosure re- they want about which companies are
omous Region but also goods that have quirements in these amendments, ev- truly investing in their workers.
materials originally sourced from the eryday investors aren’t the ones who Madam Speaker, I urge a ‘‘yes’’ vote.
XUAR. benefit. Social activists, as well as Mr. HUIZENGA. Madam Speaker, I
Well, this is a redo from last Con- compliance professionals—that is, law- am prepared to close, and I reserve the
gress, and now that Democrats have yers and accountants—are the ones balance of my time.
one-party control, their motives are who will reap the biggest reward under Ms. WATERS. Madam Speaker, I
clear. The bill requires companies to these amendments. yield 1 minute to the gentleman from
show if their affiliates are indirectly We are helping the elite workforce New York (Mr. MEEKS).
engaged with affiliates of certain com- with the bill and these amendments. Mr. MEEKS. Madam Speaker, I
panies. Instead of helping investors participate thank Chairwoman WATERS for her
To put it simply, American compa- in our capital markets and helping leadership on the Financial Services
nies would be required to disclose un- American workers, these amendments Committee.
knowable information and face securi- will leave everyday investors buried in Today, I urge bipartisan support for
ties fraud charges for any disclosures that are, at most, tangen- H.R. 1187, including the passage of my
misstatements or omissions. tially related to investment. amendment, the Improving Corporate
Now, let’s not have any doubt: This Meanwhile, smaller public companies Governance Through Diversity Act.
side of the aisle has been highlighting with shoestring compliance budgets As we continue these conversations
the Uighur situation for a very long will have to delay raising wages for about equity and closing the racial
time through bills, through amend- workers in order to reallocate that cap- wealth gap, this amendment is a key
ments, through sanctions, advocating ital to hiring more lawyers. component because it will empower in-
those and holding China and the CCP At its core, this amendment just vestors with better data to drive diver-
responsible. heightens the key problem with the sity efforts in corporate America. This
But, again, under this legislation, original bill. The additional disclosures is precisely because investors recognize
they will violate the law for trying to will disincentivize private companies that profit, performance, and inclusive
disclose unknowable information. from going public, which will inhibit governance are logically intertwined.
Why would a company want to go everyday investors, our constituents, That is why my amendment, which I
public under that regime? And how from participating in our capital mar- want to thank Representative MALO-
ctelli on DSK11ZRN23PROD with HOUSE
does disclosing such indecipherable in- kets and will limit their choices of NEY and Representative TORRES for
formation help everyday investors public companies to invest in. working with me on, seeks to enhance
make more informed investment deci- Let’s not eliminate access and oppor- the SEC’s current diversity disclosure
sions? tunities to everyday investors, espe- regime by requiring public companies
Now, just to make sure my Democrat cially when rich investors will still to disclose race, ethnicity, gender iden-
friends don’t twist my words, like I have access to investing in companies tity, sexual orientation, and veteran
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H2852 CONGRESSIONAL RECORD — HOUSE June 16, 2021
status on the boards and in the C- So, no, investors don’t look at this this information, they are at a great
suites. information. They don’t want this in- disadvantage.
The SPEAKER pro tempore. The formation, and they don’t view it as And so I would simply ask my col-
time of the gentleman has expired. material to the investment decisions leagues to understand whose side we
Ms. WATERS. Madam Speaker, I that they are making. are on. We are on the side of the retail
yield an additional 30 seconds to the So you have to ask the question, investors and the institutional inves-
gentleman from New York. then: Who is requiring or requesting tors who are handling all of the money
Mr. MEEKS. Madam Speaker, the this information? I suspect it is more of our frontline workers who are in-
American economy cannot reach its about appeasing social activists. It is vesting for their retirement.
full potential without fully redressing not about the workers and it is cer- I would ask for a ‘‘yea’’ vote on these
persistent barriers that have kept tainly not about the investors. This is en bloc amendments.
whole communities from being able to about making sure that the virtue sig- Madam Speaker, I yield back the bal-
build wealth and share in opportunities naling that is required in today’s cor- ance of my time.
The SPEAKER pro tempore. Pursu-
of prosperity. porate world—may I add, for large cor-
ant to House Resolution 473, the pre-
Mr. HUIZENGA. Madam Speaker, I porations, because there are plenty of
vious question is ordered on the
reserve the balance of my time. small and medium-sized, even publicly amendments en bloc offered by the
Ms. WATERS. Madam Speaker, I traded companies that are bucking gentlewoman from California (Ms.
yield 1 minute to the gentlewoman this. WATERS).
from Florida (Ms. LOIS FRANKEL). But for these large corporations who The question is on the amendments
Ms. LOIS FRANKEL of Florida. have massive, massive compliance de- en bloc.
Madam Speaker, I thank Representa- partments that are chock-full of attor- The question was taken; and the
tive WATERS for her leadership on this neys, chock-full of CPAs and others Speaker pro tempore announced that
issue. that are going to work through this, the noes appeared to have it.
Madam Speaker, I want to highlight and they are going to hire their friends Ms. WATERS. Madam Speaker, on
some language in this en bloc amend- in the consulting world to make sure that I demand the yeas and nays.
ment that is very important to the that they are dotting the I’s and cross- The SPEAKER pro tempore. Pursu-
working women of this country. The ing the T’s, that is who it is really ant to section 3(s) of House Resolution
provision requires publicly traded com- about. 8, the yeas and nays are ordered.
panies to disclose the number and mon- Sadly, unfortunately, who ultimately Pursuant to clause 8 of rule XX, fur-
etary amounts of settlements and judg- ends up losing in that equation is the ther proceedings on this question are
ments in connection with workplace worker and the investor, our constitu- postponed.
harassment claims. ents. AMENDMENT NO. 4 OFFERED BY MR. HILL
This will not only improve trans- Madam Speaker, with that, I yield The SPEAKER pro tempore (Mr.
parency and accountability for public back the balance of my time. BLUMENAUER). It is now in order to con-
companies, but it will provide incen- Ms. WATERS. Madam Speaker, I sider amendment No. 4 printed in
tives for them to foster respectful, safe yield myself the balance of my time to House Report 117–59.
workplaces free from harassment and close. Mr. HILL. Mr. Speaker, I have an
to make sure that there are con- I urge my colleagues to join me in amendment at the desk.
sequences when workplace abuses standing up for our Nation’s investors The SPEAKER pro tempore. The
occur. and workers to vote ‘‘yes’’ for these Clerk will designate the amendment.
Democratic amendments. The text of the amendment is as fol-
Here is the thing. Up to 80 percent of
I do believe that Mr. HUIZENGA cor- lows:
women have experienced some form of Strike titles I through V and insert the fol-
workplace harassment, and there are rectly described who they are working lowing:
serious implications that often result: for. He just talked about how big these SEC. 2. SEC STUDY ON ESG AND CLIMATE-RE-
physical and mental health problems, corporations are and how much they LATED DISCLOSURES.
career interruptions, and lower earn- have to manage. (a) STUDY.—
ings. Enduring this kind of harassment Of course, prior to him, Mr. BURGESS (1) IN GENERAL.—The Securities and Ex-
talked about, yes, the tax breaks that change Commission shall carry out a study
at work can even discourage women of all disclosure frameworks described in
from advancing their careers, which they receive, and they should receive
paragraph (2) that any U.S.-listed public
only makes the gender wage gap worse. more tax breaks. However, they are company may use when making disclosures
All persons must have safe work- worried about these corporations and to investors, whether voluntarily or pursu-
places to reach their full potential, and their ability to comply, despite the ant to law.
investors should know more about the fact they have all of the accountants (2) DISCLOSURE FRAMEWORKS.—The disclo-
workplaces they are putting their they need, they have all of the per- sure frameworks described in this paragraph
money behind. Transparency should sonnel they need, they have all of the are as follows:
management they need. They have ev- (A) Disclosure frameworks related to envi-
add motivation to employers to keep ronmental, social, and governance (‘‘ESG’’)
their employees safe, and that is good erything that they need to be in com-
metrics.
for everyone. pliance. (B) Disclosure frameworks related to the
We are simply saying it is time for climate.
b 1400 them to disclose information that the (b) REPORT.—The Commission shall issue a
Mr. HUIZENGA. Madam Speaker, I investors have been asking and begging report to the Congress containing—
yield myself such time as I may con- for. (1) all findings and determinations made in
sume to close. And, of course, they often refer to carrying out the study required under sub-
Madam Speaker, this was claimed the retail investors. But the institu- section (a)(1); and
earlier by one of the authors that in- (2) a description of all inconsistencies be-
tional investors must be included in
tween the frameworks described under sub-
vestors wanted this information, I be- this decision because they are the ones section (a)(2).
lieve was the quote. that are in control of the teachers and (c) ESG AND CLIMATE DISCLOSURE RULE-
Well, I ask the question: If investors the firefighters and the workers on the MAKING CONTINGENT ON STUDY.—Issuers are
want this information, as claimed, front lines and all of that money that not required to make any disclosures related
then they can bring a vote to the they are investing for them, and they to ESG or the climate that were not required
shareholders to require these disclo- have got to protect them. The way that on the date of enactment of this Act unless—
(1) such disclosures are required by a rule
sures. Evidence, Madam Speaker, you protect them is making sure that of the Commission; and
ctelli on DSK11ZRN23PROD with HOUSE
would dictate and show that precious the investors understand how to make (2) such rule is issued taking into account
few of these types of issues have actu- good decisions based on information. the finding and determinations of the study
ally been brought to shareholder meet- If the big corporations, with all that required under subsection (a)(1).
ings, where they are voted on. In the they have to be able to operate, do not The SPEAKER pro tempore. Pursu-
rare times that they have, even fewer give them this information, do not ant to House Resolution 473, the gen-
have actually been approved. have this information, do not share tleman from Arkansas (Mr. HILL) and a
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2853
Member opposed each will control 5 Ms. WATERS. Mr. Speaker, I strong- any public company may use when
minutes. ly oppose the amendment offered by making disclosures to our investors,
The Chair recognizes the gentleman Mr. HILL. This amendment would gut whether voluntarily or pursuant to a
from Arkansas. the entirety of H.R. 1187. Bizarrely, statute. And it would analyze the dif-
Mr. HILL. Mr. Speaker, as I noted in this amendment offered by my col- ferences and conflicting factors be-
our debate earlier today, I stand in op- league has an odd focus on climate tween the reporting frameworks. This
position to the legislation en bloc of- change, suggesting that we need more information is what we need in Con-
fered by the majority, and that is why study about the financial risk of cli- gress, and we should be able to review
I am offering an amendment that re- mate change. Let me be very clear: cli- it before drafting, let alone voting on
places the entire underlying bill with a mate change is real. We cannot alter legislation that will lead to a man-
study to be conducted by the Securities the Earth’s orbit or the Moon’s orbit or dated new disclosure framework.
and Exchange Commission. click our heels three times and wish for Mr. Speaker, my amendment is sim-
The amendment would require the ply good governance that will replace
climate change to magically disappear.
SEC to summarize and describe any in- In fact, the impacts of climate the bill with a study, and I believe that
consistencies in the methodologies re- is the right way to go. I urge my col-
change are already apparent and are af-
lated to environmental, social, and
fecting global financial markets. Un- leagues to support this.
governance metrics before—repeat, be- Mr. Speaker, I yield back the balance
fortunately, studies show that market
fore—they mandate any type of disclo- of my time.
prices currently fail to factor in the
sure from public companies. Ms. WATERS. Mr. Speaker, I yield
My amendment will provide us with risks of climate change to the tune of
trillions of dollars. myself the balance of my time to close.
much-needed information on the dif- Mr. HILL’s amendment would com-
ferences between the five or six stand- Mr. HILL’s amendment would also
allow companies to continue to engage pletely gut H.R. 1187 and would prevent
ard setters, among many others, cur-
in legally risky tax-avoidance schemes investors from accessing critical envi-
rently in the market. They all have dif-
to funnel limitless amounts of cor- ronmental, social, and governance in-
ferent approaches and ways to measure
porate dark money into politics and to formation that they need to make the
climate and other ESG risks. This
enrich CEOs while worker wages re- best investment decisions possible and
causes confusion, Mr. Speaker, and tur-
main stagnant. This is precisely the in- hold the companies they own account-
moil, both for the public companies
trying to determine these metrics and formation that investors want to know able.
about the companies that they own. I urge my colleagues to vote ‘‘no’’ on
issue their financials and for investors
I urge my colleagues to reject this Mr. HILL’s amendment, and I yield
trying to understand what has been
disclosed. amendment. I reserve the balance of back the balance of my time.
As we have discussed during the gen- my time. The SPEAKER pro tempore. Pursu-
eral debate, H.R. 1187 is a compilation Mr. HILL. Mr. Speaker, we are not in ant to House Resolution 473, the pre-
of five different bills. During this Kansas anymore, since we are using vious question is ordered on the
amendment debate, I want to focus ‘‘Wizard of Oz’’ analogies. To put a amendment offered by the gentleman
particularly on the bills offered by the finer point on it, we are not debating from Arkansas (Mr. HILL).
gentleman from California (Mr. climate. We are debating the right way The question is on the amendment.
to disclose financial risk for climate, The question was taken; and the
VARGAS) and the gentleman from Illi-
nois (Mr. CASTEN). from climate. Speaker pro tempore announced that
When we marked these bills up in the To put a finer point on it, a report re- the noes appeared to have it.
Financial Services Committee, I point- leased by the Governance & Account- Mr. HILL. Mr. Speaker, on that I de-
ed out that even though Democrats be- ability Institute features a breakdown mand the yeas and nays.
lieve these bills are in alignment, as The SPEAKER pro tempore. Pursu-
of all the Standard & Poor’s 500 pub-
they both address the need for climate- ant to section 3(s) of House Resolution
licly traded companies that are cur-
related disclosure, they are in tension 8, the yeas and nays are ordered.
rently disclosing climate risk and Pursuant to clause 8 of rule XX, fur-
with one another. which standard setter they are using.
For example, Congressman VARGAS’ ther proceedings on this question are
The outcome shows that 51 percent
bill suggests that a disclosure system postponed.
use one company, 14 percent use an-
is sufficient by providing an annual re- other, and 5 percent use another. Vast- b 1415
port describing the long-term ESG ly different outcomes. And, in fact, the AMENDMENT NO. 8 OFFERED BY MS. SCHRIER
strategy and ESG-related metrics, bill proposed by the majority dictates The SPEAKER pro tempore. It is now
which presumably would include cli- which one of those should be used, and in order to consider amendment No. 8
mate risk. it happens to be the one that only 5 printed in House Report 117–59.
On the other hand, Congressman percent of companies are currently Ms. SCHRIER. Mr. Speaker, I have
CASTEN says that a disclosure should
using. an amendment at the desk made in
report the same metrics, but addition- So there are five or six of these dif- order by the rule.
ally needs to disclose the social and
ferent standard setters out there, and The SPEAKER pro tempore. The
human impact of a company’s actions,
it is important for the commission to Clerk will designate the amendment.
analyze how the company’s reputation
figure out which one of these makes The text of the amendment is as fol-
might be affected by climate, detail
the most sense before we mandate in a lows:
the board’s oversight, and has a long Add at the end the following:
list of statutory additions. rulemaking.
Bogging down these companies with TITLE VI—OTHER MATTERS
The Democrats often say that we
need to mandate measuring climate additional, unclear, unwieldy disclo- SEC. 601. STUDY AND REPORT ON SMALL BUSI-
sures just to prove a political point is NESSES AND ESG DISCLOSURES.
risk because this is science. But (a) IN GENERAL.—Not later than 1 year
Deloitte & Touche reported that not just unfair, it is expensive. It leads
after the date of the enactment of this Act,
science has not agreed on the method- to increased litigation risk and hurts the Securities and Exchange Commission, in
ology for measuring climate risks, and long-term capital formation. This is coordination with the Director of the Office
even when companies try to measure not how we should be operating as pol- of the Advocate for Small Business Capital
these risks, the information isn’t meas- icymakers and precisely why I am of- Formation and the Investor Advocate of the
ured consistently, timely, and in a rel- fering this amendment to get the work Office of the Investor Advocate, shall—
done right up front before it turns into (1) conduct a study on the issues small
evant way, increasing uncertainty.
another government mandate. businesses face with respect to complying
Mr. Speaker, I reserve the balance of
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My amendment is simply good gov- with disclosure requirements related to envi-
my time. ronmental, social, and governance metrics;
Ms. WATERS. Mr. Speaker, I claim ernance. It will replace the bill with a
and
time in opposition. study of all disclosure frameworks re- (2) submit a report to Congress that in-
The SPEAKER pro tempore. The gen- lated to the environment, social and cludes—
tlewoman from California is recognized governance metrics, as well as those (A) the results of the study required under
for 5 minutes. particularly related to climate that paragraph (1); and
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H2854 CONGRESSIONAL RECORD — HOUSE June 16, 2021
(B) recommendations with respect to small submitted an amendment to the Rules 1187, will help smaller public compa-
business compliance with such disclosure re- Committee that would have exempted nies by ensuring that the SEC is fac-
quirements. small businesses from the onerous and toring in the unique issues that small-
(b) DEFINITION OF SMALL BUSINESS.—In this
section, the term ‘‘small business’’ has the
unnecessary requirements of this bill, er public companies face while also cre-
meaning given the term ‘‘small business con- and, sadly, that amendment was not ating clear, consistent regulatory
cern’’ under section 3 of the Small Business made in order. I think that may have standards that reduce regulatory un-
Act (15 U.S.C. 632). achieved the same goal in a certainly certainty, all while providing investors
The SPEAKER pro tempore. Pursu- much more clear manner for the au- and markets with this critical informa-
ant to House Resolution 473, the gen- thor. tion.
tlewoman from Washington (Ms. This bill will be particularly burden- Mr. HUIZENGA. Mr. Speaker, I con-
SCHRIER) and a Member opposed each some on small businesses that don’t tinue to support this amendment, and I
will control 5 minutes. have the resources to pay all the ex- am happy to accept it.
The Chair recognizes the gentle- penses associated with complying with Mr. Speaker, I yield back the balance
woman from Washington. these disclosures, such as lawyers, ac- of my time.
Ms. SCHRIER. Mr. Speaker, I yield countants, and other ESG consultants. Ms. SCHRIER. Mr. Speaker, I urge
myself such time as I may consume. I know the chairwoman had men- my colleagues to support this amend-
Mr. Speaker, my amendment to this tioned that somehow my statements ment that is a commonsense amend-
bill is very simple. It would ensure that earlier and the statements of my col- ment to support our local small busi-
this important legislation does not leagues were supportive of large busi- nesses.
place undue burden on small busi- ness and their support of this. It is ac- Mr. Speaker, I yield back the balance
nesses. tually the exact opposite. I could really of my time.
In so many areas throughout my dis- care less what the Fortune 50 think The SPEAKER pro tempore. Pursu-
trict, our Main Street businesses are about this. ant to House Resolution 473, the pre-
just now finally getting back on their I am concerned about that bottom 50. vious question is ordered on the
feet. They have faced unprecedented I am worried about those up-and-com- amendment offered by the gentle-
challenges during this past pandemic ing companies that are going to have woman from Washington (Ms.
year. In fact, one small business owner those precious resources sucked into SCHRIER).
in Auburn almost didn’t apply for any more compliance that, again, does not The question is on the amendment.
Federal financial assistance because have relevance or materiality to inves- The question was taken; and the
she was so overwhelmed by the poten- tors, nor is it actually requested by in- Speaker pro tempore announced that
tial paperwork. vestors. the ayes appear to have it.
Even before the pandemic, small But this bill is a prime example of Ms. WATERS. Mr. Speaker, on that I
businesses were bogged down with pa- Wall Street versus Main Street, and I demand the yeas and nays. The
perwork and administrative burdens, commend my colleague for fighting for SPEAKER pro tempore. Pursuant to
things that can be easily handled by a Main Street with this amendment. section 3(s) of House Resolution 8, the
large corporation but that really are I am prepared to accept this amend- yeas and nays are ordered.
too much of a burden and can put a ment because I hope it will help small Pursuant to clause 8 of rule XX, fur-
Main Street shop out of business. businesses. ther proceedings on this question are
When we implement this legislation, Ms. SCHRIER. Mr. Speaker, I thank postponed.
we should also understand what effect my colleague for his commendation on AMENDMENT NO. 10 OFFERED BY MS. PLASKETT.
it will have on small businesses and the amendment. The SPEAKER pro tempore. It is now
make it as easy as possible for them to Mr. Speaker, I yield 2 minutes to the in order to consider amendment No. 10
disclose this important information. gentlewoman from California (Ms. printed in House Report 117–59.
That is why my amendment requires WATERS), the chairwoman of the House Ms. PLASKETT. Mr. Speaker, I have
the Sustainable Finance Advisory Committee on Financial Services. an amendment at the desk.
Commission to study issues small busi- Ms. WATERS. Mr. Speaker, this The SPEAKER pro tempore. The
nesses may face when complying with amendment offered by Representative Clerk will designate the amendment.
requirements of this bill and order rec- SCHRIER requires the SEC to work with The text of the amendment is as fol-
ommendations to ease regulatory bur- the Office of the Advocate for Small lows:
dens for these businesses. Business Capital Formation and the Of- Page 41, line 8, insert ‘‘means’’ after ‘‘ ‘tax
As we move forward in creating fice of the Investor Advocate to study jurisdiction’ ’’.
the issues smaller public companies Page 41, line 9, strike ‘‘means’’.
transparency for large corporations, it Page 41, beginning line 9, strike ‘‘or a ju-
is important that we do so without cre- may face in reporting ESG disclosures,
risdiction that is not a country but that has
ating burdens that could really hamper and to make recommendations for the fiscal autonomy; and’’ and insert ‘‘; or’’.
the recovery of small businesses. SEC to consider. Page 41, strike lines 12 through 14.
This is a commonsense amendment, Disclosures of ESG-related matters Page 41, after line 11, insert the following:
and I urge my colleagues to support its are critical to investors in markets, ‘‘(ii) a jurisdiction that is not a country
adoption. and it is imperative that public compa- but that has fiscal autonomy.’’.
Mr. Speaker, I reserve the balance of nies provide investors, the true owners The SPEAKER pro tempore. Pursu-
my time. of these companies, with this impor- ant to House Resolution 473, the gen-
Mr. HUIZENGA. Mr. Speaker, I claim tant information. However, it is just as tlewoman from the Virgin Islands (Ms.
the time in opposition to this amend- important for us to ensure that public PLASKETT) and a Member opposed each
ment, although I am not opposed to it. companies of all sizes are able to com- will control 5 minutes.
The SPEAKER pro tempore. Without ply with these disclosure requirements. The Chair recognizes the gentle-
objection, the gentleman from Michi- To address this, my colleague, Rep- woman from the Virgin Islands.
gan is recognized for 5 minutes. resentative SCHRIER, has introduced an Ms. PLASKETT. Mr. Speaker, I yield
There was no objection. amendment that requires the SEC to myself such time as I may consume.
Mr. HUIZENGA. Mr. Speaker, I ap- work with the Office of the Advocate I rise in support of this amendment.
preciate the goals of this amendment, for Small Business Capital Formation This amendment proposes a technical
and I applaud my colleague from Wash- and the Office of the Investor Advocate change in title 5 of this bill, the Disclo-
ington. We should be concerned about to study the issues that smaller public sure of Tax Havens and Offshoring Act,
the effects of this bill and ESG report- companies face in disclosing ESG mat- to simply clarify that a ‘‘tax jurisdic-
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ing on small businesses, and I would ters, and to make recommendations for tion’’ includes either a country or a ju-
say that this is a step in the right di- the SEC to tailor these disclosure re- risdiction that is not a country but has
rection. quirements to assist smaller public fiscal autonomy.
However, I don’t believe this amend- companies. My concern, as the bill presently
ment actually goes far enough. The Ms. SCHRIER’s amendment, along states, is that certain words used in
ranking member of the full committee with Mr. VARGAS’ provision in H.R. that part of the bill will be highly
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June 16, 2021 CONGRESSIONAL RECORD — HOUSE H2855
problematic to U.S. territories, includ- its policy; the meaning of tax jurisdic- National Independence Day as a legal public
ing my district, and our efforts to ad- tion would remain as either a country holiday. All points of order against consider-
dress very important tax policy issues or ‘‘a jurisdiction that is not a country ation of the bill are waived. The bill shall be
considered as read. All points of order
that have arisen in the last few years. but has fiscal autonomy.’’ against provisions in the bill are waived. The
My amendment seeks to correct the Mr. Speaker, at this time I yield 1 previous question shall be considered as or-
bill’s definition of a tax jurisdiction by minute to the gentlewoman from Cali- dered on the bill and on any amendment
removing its words explicitly analyzing fornia (Ms. WATERS), the chairwoman thereto to final passage without intervening
U.S. territories without the United of the Financial Services Committee. motion except: (1) one hour of debate equally
States. While these specific words sepa- Ms. WATERS. Mr. Speaker, I under- divided and controlled by the chair and rank-
rating the territories from the rest of ing minority member of the Committee on
stand that my friend and colleague, Oversight and Reform or their respective
the United States would be removed, Ms. PLASKETT, has raised some con- designees; and (2) one motion to commit.
the rest of the language would be left cerns about the treatment of terri- The SPEAKER pro tempore. The gen-
as it currently exists in the bill: A ‘‘tax tories in this bill, and I want to assure tlewoman from Pennsylvania is recog-
jurisdiction’’ would mean either a her that the staff has done everything nized for 1 hour.
country or a jurisdiction that is not a possible in the bill text to ensure that Ms. SCANLON. Mr. Speaker, for the
country but that has fiscal autonomy. territories are included in this bill and purpose of debate only, I yield the cus-
My concern is with the language to not treated disparately. tomary 30 minutes to the gentleman
explicitly distinguish U.S. territories The language in this bill is con- from Pennsylvania (Mr.
from the sovereign United States in sistent with regulations promulgated RESCHENTHALER), pending which I yield
such a way. under the Obama administration re- myself such time as I may consume.
First, it would be inconsistent with garding country-by-country tax report- During consideration of this resolu-
the current structure of the Securities ing, which were carefully written to tion, all time is yielded for the purpose
Exchange Act of 1934, which this bill ensure territories were not excluded. of debate only.
seeks to amend. Under that law, each I want to make clear that nothing in GENERAL LEAVE
of the U.S. territories are defined and this bill should be intended to suggest Ms. SCANLON. Mr. Speaker, I ask
treated as States. that territories are tax havens. In fact, unanimous consent that all Members
Secondly, it would be contrary to the I have worked with my colleague, Mr. be given 5 legislative days to revise and
position that the United States has SAN NICOLAS, on this bill text. We be- extend their remarks.
taken in its deliberations with the Eu- lieve that the enhanced disclosures in The SPEAKER pro tempore. Is there
ropean Union and the OECD in re- this bill, which will include territories, objection to the request of the gentle-
sponse to blacklisting of U.S. terri- should help encourage investment in woman from Pennsylvania?
tories in 2017 and 2018. the territories and hold corporations There was no objection.
A letter from the Secretary of Treas- accountable for lack of investment in Ms. SCANLON. Mr. Speaker, today,
ury to the Council of the European territories. the Committee on Rules met and re-
Union addressing this issue reads: ‘‘The I want to ensure Ms. PLASKETT that I ported a rule, House Resolution 479,
United States disagrees with the Coun- take her concerns seriously, and I in- providing for consideration of S. 475,
cil’s decision to consider U.S. terri- tend to work with her to make sure the Juneteenth National Independence
tories separately from the United that what she is identifying as perhaps Day Act, under a closed rule.
States.’’ incorrectly being defined as tax havens The rule provides 1 hour of debate
It would be more difficult for the equally divided and controlled by the
is an issue that I will deal with.
United States to make this argument if chair and ranking minority member of
legislation is adopted by Congress lend- b 1430 the Committee on Oversight and Re-
ing credence to the argument that U.S. Ms. PLASKETT. Mr. Speaker, since I form and one motion to recommit.
territories should be treated as tax ju- have assurances from both the chair- Mr. Speaker, we are here today to
risdictions without the United States woman and the committee that they consider an important and timely bill,
as a whole. will continue to work with us to ensure S. 475, which parallels H.R. 1320 intro-
Importantly, treating the U.S. terri- that U.S. territories are not treated as duced by our colleague, SHEILA JACK-
tories as separate tax jurisdictions dis- SON LEE from Texas. This bill would
tax havens but that we are, in fact, in-
tinct from the sovereign United States make Juneteenth a Federal holiday.
dividuals who intend and continue to
We are happy and not a little sur-
would also be inconsistent with efforts intend, through our governments, to prised to see that the Senate was able
that U.S. territories have been making pay our taxes to the Internal Revenue to quickly pass this bill with unani-
for relief from tax increases intended Service and continue to be treated eq- mous consent. It is not every day that
for foreign tax jurisdictions that were uitably as part of the United States, at one sees the Senate move more quickly
unfairly imposed on U.S. territories by this time, I yield back the balance of than the House, and it is my hope that
the Tax Cuts and Jobs Act. my time and I withdraw my amend- today the House of Representatives
Lastly, I have concerns about the ment. would be able to act with similar swift-
language at issue categorizing U.S. ter- The SPEAKER pro tempore. The ness.
ritories as fiscally autonomous. They amendment is withdrawn. Juneteenth, a portmanteau of June
are, in fact, legally possessions of the Pursuant to clause 1(c) of rule XIX, 19th, celebrates a seminal moment in
United States under the tax code to further consideration of H.R. 1187 is Black American history, and it is well
this day. One of the U.S. territories is postponed. past time that our country recognizes
currently in a state of bankruptcy. The f the importance of this day by making
U.S. Virgin Islands has no control over it a Federal holiday.
its income taxes and cannot sever itself PROVIDING FOR CONSIDERATION
While the Emancipation Proclama-
from the mirror code tax system of the OF S. 475, JUNETEENTH NA-
tion outlawed slavery in the South,
United States, and has extensive and TIONAL INDEPENDENCE DAY
and the Civil War effectively ended
longstanding written agreements in ACT
with the surrender of the Confederacy
place with the IRS requiring exchange Ms. SCANLON. Mr. Speaker, by di- in April of 1865 at Appomattox, slavery
of tax information. rection of the Committee on Rules, I did not immediately end throughout
Thus, all I have requested with this call up House Resolution 479 and ask the United States.
technical amendment is that the bill for its immediate consideration. During the Civil War, many
language be slightly adjusted to re- The Clerk read the resolution, as fol- slaveholders migrated to Texas to
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move words explicitly referencing U.S. lows: avoid conflict and continued to hold
territories as tax jurisdictions distinct H. RES. 479 Black Americans in bondage after the
from the sovereign United States. I be- Resolved, That upon adoption of this reso- formal end of the Civil War.
lieve this would be more fair to the lution it shall be in order to consider in the On June 19, 1865, Union troops finally
sponsors of this measure because it House the bill (S. 475) to amend title 5, arrived in Galveston Bay, Texas, to en-
would in no way impede the effect of United States Code, to designate Juneteenth sure that slaves were freed, a full 21⁄2
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