ESG Disclosure Simplification Act of 2021

Floor Speech

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Mr. ROSE. Mr. Speaker, I rise in opposition to H.R. 1187. This legislation is just the latest attempt by my colleagues on the other side of the aisle to implement a far-left social agenda, this time through our securities laws.

Contrary to the principles-based disclosure standard that is typical of most material risk disclosures, President Biden and the Democrat-led Securities and Exchange Commission have advocated for a separate standardized set of disclosure requirements related to climate risk and environmental, social, and governance or ESG, concerns. This legislation would impose disclosure mandates that focus on costly one- size-fits-all metrics rather than material, decision-useful information for investors.

During the markup process, several of my colleagues submitted commonsense amendments that would have added an important materiality standard. These amendments would have required disclosure of ESG, climate change, or compensation metrics where there is a substantial likelihood that a reasonable shareholder would consider such a disclosure important with respect to making an investment decision. However, my colleagues on the other side of the aisle refuse to support them, including this simple standard.

By adding these additional disclosure requirements to the already substantial list of mandatory disclosures for public companies, H.R. 1187 would also increase the cost of compliance for public companies, thereby discouraging private companies from going public.

Further, I think it is important to point out that this legislation misses an opportunity to address China and its daily human rights atrocities. If we were serious about disclosure, not just a political agenda, we would be looking at security and democracy threats like those that the Chinese Communist Party and their state-owned enterprises pose.

Bottom line, this legislation would add even more costly and confusing disclosure requirements, hurting everyday investors, and discouraging initial public offerings, all while failing to include important national security protections.

Mr. Speaker, I urge a ``no'' vote on the legislation.

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