Rep. Vargas' Legislation Encourages Corporate Environmental and Social Responsibility
Washington, D.C. (February 26, 2021) –Representative Juan Vargas (CA-51) released the following statement after the U.S. House of Representatives Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets held a virtual hearing entitled, “Climate Change and Social Responsibility: Helping Corporate Boards and Investors Make Decisions for a Sustainable World," where Rep. Vargas’ bill, the ESG Disclosure Simplification Act was heard.
Last week, Rep. Vargas introduced the ESG Disclosure Simplification Act which will require public companies to disclose certain environmental, social, and governance (ESG) matters in annual filings with the Securities and Exchange Commission (SEC).
"The Financial Services Committee held a hearing to ensure that companies— and their boards— are socially responsible and transparent on possible climate change risks, as well as other environmental, social, and governance disclosures. The public and investors have increasingly demanded that public companies disclose ESG information. My legislation, the ESG Simplification Act, will make it possible for a company's commitment to sustainability to be easily compared and evaluated by investors and shareholders.
“ESG matters generally include issues relating to environmental sustainability, such as climate change; social issues, such as human rights and labor practices; and governance issues, such as gender, racial, and ethnic diversity at both executive and board levels. This information is important, not just for mitigating reputational risk, but for evaluating companies’ financial performance.
"Investors and shareholders have the right to know if the companies they are investing in are being socially responsible and fair to their employees. I believe that my legislation will incentivize companies and investors to help protect our environment, economy, and public health."
Earlier this month, the Federal Reserve Bank of San Francisco published an economic letter finding that “the ongoing trend of climate change—including higher temperatures and more extreme weather—will result in economic and financial losses for many businesses, households, and governments” and that “such climate-related financial risk may threaten the safety and soundness of individual financial institutions and the stability of the overall financial system.”
Vargas represents California’s 51st Congressional District which includes the southern portion of San Diego County, all of Imperial County, and California’s entire U.S.-Mexico border. Vargas was first elected to the U.S. House of Representatives in 2012 and is currently serving his fifth term in Congress. He serves on the House Financial Services Committee.