Sec. 2. Alignment of financed emissions with science-based targets
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The Bank Holding Company Act of 1956 ( 12 U.S.C. 1841 et seq. ) is amended by adding at the end the following: In this section: The term covered bank holding company means a bank holding company with total consolidated assets equal to or greater than $50,000,000,000. The term deforestation risk commodities means globally traded goods and raw materials— that originate from natural forest ecosystems, either— directly from within forest areas; or from areas previously under forest cover; and the extraction or production of which contributes significantly to the conversion of natural forest to agriculture, tree plantation, or other non-forest land use.
The term financed emissions means, with respect to a covered bank holding company, and any nonbank financial company, the share of the emissions of such company attributable to investment in, or the providing of financial services to, a company or project of a company, including— investments in a debt or equity investment in such another company or the assets of such another company; project finance investment; underwriting; syndication or securitization of loans or asset-backed securities; derivative transactions related to financing or hedging; and market making.
The term fossil fuel financing means, with respect to a covered bank holding company, investment in— a company that derives 15 percent or more of revenue from exploration, extraction, processing, exporting, transporting, and any other significant action with respect to oil, natural gas, coal, or any byproduct thereof; or a fossil fuel project. The term fossil fuel project means a project intended to— facilitate or expand exploration, extraction, processing, exporting, transporting, or any other significant action with respect to oil, natural gas, coal; or construct any infrastructure related to the activities in subparagraph (A), such as wells, pipelines, terminals, refineries, or utility-sale generation facility.
The term natural forest means a natural arboreal ecosystem that— has a species composition a significant percentage of which is native species; and contains a tree canopy cover of more than 10 percent over an area of not less than 0.5 hectares. The term new or expanded fossil fuel project means a fossil fuel project that would increase the— level of proven or developable oil, natural gas or coal reserves; midstream throughput of pipelines, terminals or refineries; or combustion of oil, natural gas or coal for utility-scale electricity generation.
Not later than 210 days after the date of the enactment of this subsection, and not less than once every 2 years thereafter, a covered bank holding company shall— submit to the Board an emission reduction plan for reducing emissions in accordance with this section; and if the plan is accepted under subsection (d), implement such plan. Each plan required under subsection (b)(1)— shall include— a plan for the covered bank holding company to reach zero financed emissions by January 1, 2050; a plan to reduce the financed emissions of the bank holding company by 50 percent by January 1, 2030; a plan to discontinue new or expanded fossil fuel projects not later than January 1, 2023; a plan for the covered bank holding company to discontinue thermal coal financing by January 1, 2025; a plan for the covered bank holding company to discontinue fossil fuel financing by January 1, 2030; and a plan for the covered bank holding company to eliminate financing of deforestation risk commodities;“ such other requirements as the Board determines is necessary to protect the financial stability of the United States; may not include carbon offsets; may include proven negative carbon emission technologies to meet the requirements under paragraph (1)(A) alone, provided that these projects do not negatively impact low-income, minority, or indigenous communities; shall prioritize— the covered bank holding company withdrawing funding from companies and projects that have a disproportionately negative impact on health and well-being of low-income and minority communities; and lending to companies for purposes of carrying out severance, retraining, and other benefits to workers impacted by the transition to zero financed emissions.
Not later than 6 months after receiving a plan under subsection (b)(1), the Board shall— accept the plan; or reject the plan if it does not align with science-based targets without the use of offsets or unproven carbon emission reduction technologies and require the covered bank holding company to revise such plan in accordance with the suggestions of the Board. In the case of a covered bank holding company that does not submit a plan in accordance with this section or meet the requirements set out in such a plan— the Board shall— apply the penalties under section 8, through procedures prescribed by the Board by rule; require divestiture of assets in order to bring the financed emissions of a covered bank holding company into compliance with the requirements set out in such a plan; and notify the Board of Directors of the Federal Deposit Insurance Corporation of the noncompliance of such covered bank holding company; and the Board of Directors of the Federal Deposit Insurance Corporation may, with respect to any covered bank holding company described in paragraph (2)(B) or a subsidiary of such bank holding company that contributes to the failure of such covered bank holding company to comply with this section— terminate insurance under section 8(a)(2) of the Federal Deposit Insurance Act ( 12 U.S.C. 1818(a)(2) ); and carry out any other corrective action available under section 38 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831o ).
Not later than 180 days after the date of the enactment of this section, the Board shall issue regulations establishing the format and timing for submission of the plans required under this section. .
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Sec. 2
Alignment of financed emissions with science-based targets
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