House Sets Votes on ESG, Climate, Disclosure Bills
This month, the House is scheduled to vote on a slate of financial services bills related to corporate governance, including political activities, climate risks, and employee pay disclosure. Below is a summary of the legislation, which we expect will pass. However, the future of these bills in the Senate is much less certain.
H.R. 1187 – ESG Disclosure Simplification Act
- This bill would establish new disclosure requirements for Environment, Social, and Governance (ESG) metrics and create a Sustainable Finance Advisory Committee within the Securities and Exchange Commission (SEC).
H.R. 1087 – Shareholder Political Transparency Act
- This bill would require public companies to submit quarterly reports to both the SEC and investors detailing the amount, date, and nature of the company’s expenditures for political activities and other related information.
H.R. 1188 – Greater Accountability in Pay Act
- This bill would require public companies to disclose the pay raise percentage of its executives and the pay raise percentage of its median employee over the past year, compare each to the rate of inflation, and require public companies to disclose the ratio between the two percentages.
H.R. 2570 – Climate Risk Disclosure Act
- This bill would require public companies to disclose in their annual reports information relating to the financial and business risks associated with climate change. The bill would also require the SEC to establish, in consultation with other relevant federal agencies, climate-related risk disclosure metrics and guidance, which would be industry-specific, and would require companies to make both quantitative and qualitative disclosures.
H.R. 3007 – Disclosure of Tax Havens and Offshoring Act
- This bill would require public companies to disclose (in their 10-Qs and 10-Ks) their total pre-tax profits, and total amounts paid in state, federal, and foreign taxes. The bill would also require companies to disclose a number of specific tax-related items for each of its subsidiaries, as well as on a consolidated basis, such as total accrued tax expenses, stated capital, and total accumulated earnings.
AFSA will continue to monitor these bills and update its membership.
June 9th, 2021 by Dan Bucherer