H.R. 2570 would require publicly traded companies to annually disclose certain climate-related information to the public. Under the bill, such companies would need to describe physical and financial risks they would face under different climate change scenarios, explain strategies and corporate governance processes in place to manage those risks, and analyze the social cost associated with the company’s greenhouse gas emissions. The Securities and Exchange Commission (SEC) would be required to establish and periodically update rules to implement the climate disclosure requirements. The SEC also would be required to annually assess and report to the Congress on the compliance of these public companies with those rules. The Government Accountability Office would be required to periodically evaluate the SEC’s effectiveness in carrying out and enforcing the new climate disclosures.
Using information from the SEC, CBO estimates that implementing H.R. 2570 would have a gross cost of $10 million over the 2021-2026 period. CBO expects that the SEC would need the services of approximately 20 employees for different periods of time at an average annual rate of $270,000 per employee to issue and update rules, compile disclosures, and assess compliance. However, the SEC is authorized to collect fees sufficient to offset its annual appropriation; therefore, CBO estimates that the net effect on discretionary spending would be insignificant, assuming appropriation actions consistent with that authority.
