Paris Climate Agreement Disclosure Act

I 117TH CONGRESS 1ST SESSION H. R. 1780 To amend the Securities Exchange Act of 1934 to require disclosures related to the Paris Climate Agreement, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 10, 2021 Ms. VELA´ZQUEZ introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Securities Exchange Act of 1934 to require disclosures related to the Paris Climate Agreement, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Paris Climate Agree- 4 ment Disclosure Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) 197 parties, including the United States, 8 are parties to the United Nations Framework Con- 9 vention on Climate Change (UNFCCC), the prin- 10 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 1780 IH cipal framework to stabilize greenhouse gas con- 1 centrations at a level that would prevent dangerous 2 human-induced interference with the climate system. 3 (2) On December 12, 2015, parties of the 4 UNFCCC adopted the Paris Agreement, the first 5 comprehensive agreement among all nations to keep 6 global warming below 2 degrees Celsius. 7 (3) The Paris Agreement aims to strengthen 8 the global response to the threat of climate change 9 by holding the increase in the global average tem- 10 perature to well below 2 degrees Celsius above pre- 11 industrial levels and to pursue efforts to limit the 12 temperature increase to 1.5 degrees Celsius above 13 pre-industrial levels, recognizing that this would sig- 14 nificantly reduce the risks and impacts of climate 15 change. 16 (4) The ‘‘Special Report on Global Warming of 17 1.5 °C’’ by the Intergovernmental Panel on Climate 18 Change found that at 1.5 degrees Celsius warming, 19 climate-related risks to human health, livelihoods, 20 food security, human security, water supply, and 21 economic growth will all increase, and will increase 22 even more at 2 degrees Celsius warming. 23 (5) In 2017, the World Economic Forum issued 24 the Compact for Responsive and Responsible Lead- 25 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 1780 IH ership with 140 CEOs pledging to align their cor- 1 porate values and strategies with the United Na- 2 tion’s Sustainable Development Goals. 3 (6) In September 2020, the World Economic 4 Forum and its International Business Council re- 5 leased Stakeholder Capitalism Metrics—a set of en- 6 vironmental, social and governance metrics and dis- 7 closures which measure the long-term enterprise 8 value creation for all stakeholders. 9 (7) The September 2020 World Economic 10 Forum report recognizes that there is an emerging 11 consensus among companies that long-term value is 12 most effectively created by serving the interests of 13 all stakeholders. 14 (8) On January 26, 2021, 61 CEOs of some of 15 the world’s largest companies publicly endorsed the 16 Stakeholder Capitalism Metrics. 17 (9) One of the core metrics and disclosures de- 18 fined in the Stakeholder Capitalism Metrics is for 19 companies to disclose whether they have set, or have 20 committed to set, greenhouse gas emissions targets 21 that are in line with the goals of the Paris Agree- 22 ment. 23 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 1780 IH SEC. 3. DISCLOSURES RELATED TO GREENHOUSE GAS 1 EMISSIONS. 2 (a) IN GENERAL.—Section 13 of the Securities Ex- 3 change Act of 1934 (15 U.S.C. 78m) is amended by add- 4 ing at the end the following: 5 ‘‘(s) DISCLOSURES RELATED TO THE PARIS CLI- 6 MATE AGREEMENT.— 7 ‘‘(1) IN GENERAL.—Each issuer required to file 8 an annual report under subsection (a) shall include 9 in such report the following: 10 ‘‘(A) Whether the issuer has set, or has 11 committed to achieve, targets that are a balance 12 between greenhouse gas emissions and remov- 13 als, at a pace consistent with limiting global 14 warming to well below 2 degrees Celsius and 15 pursuing efforts to limit it to 1.5 degrees Cel- 16 sius. 17 ‘‘(B) If the issuer is committed to setting 18 such greenhouse gas emission targets in the fu- 19 ture, but not at the present— 20 ‘‘(i) by which year the issuer plans to 21 commit to such greenhouse gas emission 22 targets; and 23 ‘‘(ii) a detailed explanation for such 24 position. 25 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 1780 IH ‘‘(C) Actions and steps the issuer has 1 taken over the preceding year to achieve such 2 greenhouse gas emission targets. 3 ‘‘(D) Actions and steps the issuer plans to 4 pursue in the forthcoming year to achieve such 5 greenhouse gas emission targets. 6 ‘‘(E) If the issuer has not set, and does 7 not plan on committing to set, such greenhouse 8 gas emission targets— 9 ‘‘(i) a statement to that effect; and 10 ‘‘(ii) a detailed explanation of— 11 ‘‘(I) why the issuer is not plan- 12 ning on pursuing such greenhouse gas 13 emission targets; and 14 ‘‘(II) whether the issuer supports 15 the temperature goals outlined in sub- 16 paragraph (A) of this section. 17 ‘‘(2) DEFINITIONS.—In this subsection: 18 ‘‘(A) GREENHOUSE GAS.—The term 19 ‘greenhouse gas’ means carbon dioxide, 20 hydrofluorocarbons, methane, nitrous oxide, 21 perfluorocarbons, sulfur hexafluoride, nitrogen, 22 triflouride, and chlorofluorocarbons. 23 ‘‘(B) GREENHOUSE GAS EMISSIONS.—The 24 term ‘greenhouse gas emissions’ means the 25 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 1780 IH emissions of greenhouse gases expressed in 1 terms of metric tons of carbon dioxide equiva- 2 lent. 3 ‘‘(C) PARIS CLIMATE AGREEMENT.—The 4 term ‘Paris Climate Agreement’ means the 5 international agreement adopted by 196 parties, 6 including the United States, at the 21st Con- 7 ference of Parties to the United Nations 8 Framework Convention on Climate Change in 9 Paris, France on December 12, 2015. 10 ‘‘(D) TEMPERATURE GOALS OF THE PARIS 11 CLIMATE AGREEMENT.—The term ‘temperature 12 goals of the Paris Climate Agreement’ means— 13 ‘‘(i) a collective, long-term objective to 14 hold the greenhouse gas emissions-induced 15 increase in temperature to well below 2 de- 16 gree Celsius; 17 ‘‘(ii) a goal to pursue efforts to limit 18 the temperature increase to 1.5 degrees 19 Celsius above the pre-industrial level; 20 ‘‘(iii) a goal to achieve net-zero emis- 21 sions before 2050. 22 ‘‘(E) REMOVALS.—The term ‘removals’ 23 means anthropogenic removals from the atmos- 24 phere by any process, activity or mechanism of 25 VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 1780 IH greenhouse gas, an aerosol or a precursor of a 1 greenhouse gas from the atmosphere.’’. 2 (b) RULEMAKING.—Not later than the end of the 1- 3 year period beginning on the date of enactment of this 4 Act, the Securities and Exchange Commission shall issue 5 final rules to carry out the amendment made by subsection 6 (a). 7 (c) EFFECTIVE DATE.—Section 13(s) of the Securi- 8 ties Exchange Act of 1934, as added by subsection (a), 9 shall take effect on the effective date of the rules issued 10 pursuant to subsection (b). 11 Æ VerDate Sep 11 2014 19:46 May 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H1780.IH H1780 pamtmann on DSKBC07HB2PROD with BILLS