Skip to main content
SpringerLink
Log in

Environmental Disclosure and the U.S. Securities Laws

  • Chapter
Clean Production

Abstract

In many areas, government is moving towards self-regulation or marketplace regulation of corporate environmental activity. One such opportunity, under the US securities laws, is quite promising but has not been developed to its potential. The paper explores the requirements for corporate disclosure of environmental liabilities, compliance costs and related matters. It examines the extent of authority which the Securities and Exchange Commission (SEC) has under the US securities laws and the policy choices faced by the SEC in exercising that authority. The paper concludes that the implementation of disclosure requirements is not serving a valuable informational function for investors. Changes are recommended to make the requirements more responsive to investor needs, consistent with the SEC’s view of the statutory framework.

This chapter is based on an earlier article by Robert H. Feller entitled “Securities and Exchange Commission and Environmental Disclosure” published in the Journal of Cleaner Production, Vol. 1, No. 2, pp. 107–117, 1993.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Baram, M., Dillon, P. and Ruffle, B., Managing Chemical Risks: Corporate Response to SARA Title III; The Center for Environmental Management, Tufts University, 1990.

    Google Scholar 

  2. Code of Federal Regulations (CFR) Part 229.

    Google Scholar 

  3. CFR §240.10b-5.

    Google Scholar 

  4. CFR §240.12b-2.

    Google Scholar 

  5. CFR §229.101(c)(1)(xii).

    Google Scholar 

  6. Remarks of Richard Y. Roberts, Commissioner SEC, Dun & Bradstreet Corporation, D.C. Briefing on Environmental Due Diligence, April 5, 1994.

    Google Scholar 

  7. CFR §229.103, Instruction 5.

    Google Scholar 

  8. Financial Accounting Standards Board Statement No. 5. See also Dominy, Accounting for Environmental Contingencies and Losses, Understanding Environmental Accounting and Disclosure Today, Executive Enterprise Publications Co. Inc., New York 1992.

    Google Scholar 

  9. For a thorough review of this problem, see Caron, SEC Disclosure Requirements for Contingent Liability,Boston College Env. Affairs Law Review (1987, Vol. 14 #4).

    Google Scholar 

  10. Securities Act Release No. 6835, May 23, 1989.

    Google Scholar 

  11. This interpretation appears in the so-called Cole letter issued by the SEC (January 17, 1989); see also Securities Act Release No. 6835, footnote 30 (May 23, 1989).

    Google Scholar 

  12. Securities Act Release No. 6711, April 24, 1987.

    Google Scholar 

  13. See e.g. Gellman, Disclosure of Contingent Environmental Liabilities by Public Companies Under the Federal Securities Law,The Harvard Environmental Law Review, Vol. 16, No. 1,1992.

    Google Scholar 

  14. See Fishman, Wall and Homsy, Environmental Reporting Required by the SEC, Environmental Reporter, Current Development (August 16, 1991 ); Archer, McMahon and Crough, SEC Reporting of Environmental Liabilities, Environmental Law Reporter, News and Analysis (March 1990 ).

    Google Scholar 

  15. Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies.”

    Google Scholar 

  16. See Remarks by Richard Y. Roberts, Commissioner SEC, Law Education Institute and the Bureau of National Affairs, National CLE Conference, Orlando Florida, March 6, 1994.

    Google Scholar 

  17. See e.g. Financial Accounting Standards Board (FASB) Interpretation No. 14, “Reasonable Estimation of the Amount of the Loss”; FASB Interpretation No. 39, “Offsetting Amounts Relating to Certain Contracts”; Accounting Principles Board Opinion No. 20, “Accounting Changes.”

    Google Scholar 

  18. Staff Accounting Bulletin No. 92, 58 FR 32843, June 14, 1993.

    Google Scholar 

  19. FR 32845, June 14, 1993.

    Google Scholar 

  20. Remarks of Richard Y. Roberts, The 1994 Quinn, Ward & Kershaw Environmental Law Symposium, The University of Maryland School of Law, April 8, 1994.

    Google Scholar 

  21. See 17 USC §§77xx and 78ff.

    Google Scholar 

  22. Wall Street Journal, SEC Rule Forces More Disclosure, December 13, 1993.

    Google Scholar 

  23. See Engelgau, D., Truth and Consequences, Resources (May 1991), pg 3–5 ).

    Google Scholar 

  24. See e.g. 15 USC §78n which contains requirements made in connection with a tender offer.

    Google Scholar 

  25. Biersach, Inside the 10K, Investor’s Environmental Report, Winter 1991.

    Google Scholar 

  26. See e.g. George Campbell Painting Corp. v Reid,392 U.S. 286 (1968) and 17 CFR §229.103, Instruction 5.

    Google Scholar 

  27. USC §§4321–4370a.

    Google Scholar 

  28. USC §4332.

    Google Scholar 

  29. Mandelker, NEPA Law and Litigation §1.02, Environmental Law Series.

    Google Scholar 

  30. Natural Resources Defense Counsel, Inc. v. Securities and Exchange Commission,606 F.2d 1031 (D.C. Cir. 1979).

    Google Scholar 

  31. See Securities Act Release Nos. 5569 (February 11, 1975), 5627 (October 14, 1975) and 5704 (May 6, 1976).

    Google Scholar 

  32. Securities Act Release No. 5627 (October 14, 1975).

    Google Scholar 

  33. Environmental Investments: The Cost of a Clean Environment (1990).

    Google Scholar 

  34. Opheim, Environmental Costs Reduce Credit Ratings, Investor’s Environmental Report, Summer 1991.

    Google Scholar 

  35. Simpson, The Greening of Global Investment, The Economist, Special Report No. 2108.

    Google Scholar 

  36. McKenzie, Environmental Investment: A Proposal for State Legislation,Columbia Journal of Environmental Law (Volume 16, 1991).

    Google Scholar 

  37. Section 18 of the Securities and Exchange Act of 1933.

    Google Scholar 

  38. New York State’s enactment, also referred to as the Martin Act, is codified in Title 23-A of the General Business Law.

    Google Scholar 

  39. See Halpern, R., Introduction to State Securities Regulations, PLI Corporate Law and Practice Course Handbook Series 698 - Blue Sky Law, 1990.

    Google Scholar 

  40. U.S.C. §§77K, 771, 77n; Securities Act Release No. 5704 (May 6, 1976 ); See e.g. Grossman x Waste Management, Inc., 589 F. Supp 395 ( N.D. Ill. 1984 ).

    Google Scholar 

  41. See e.g. Church Proxy Resolutions, Interfaith Center on Corporate Responsibility (January 1991). There has been some success with placing shareholder resolutions on the annual meeting agenda that are intended to change corporate environmental policy - Roosevelt v DuPont,958 F.2d 416 (D.C. Cir. 1992) [Proposal to accelerate the phase out of ozone depleting chlorofluorocarbons (CFCs)].

    Google Scholar 

  42. United Paperworkers International Union v. International Paper Co.,985 F. Ed 1190 (2nd Cir. 1993).

    Google Scholar 

  43. Exchange Act Rule 14a-8(d).

    Google Scholar 

  44. New York City Employees’ Retirement System v. Securities and Exchange Commission,93 Civ. 1233 (S.D.N.Y.)

    Google Scholar 

Download references

Authors
  1. Robert H. Feller
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Bruce W. Piasecki
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. North Eastern Regional Institute of Science and Technology (NERIST), Nirjuli - 791 109 (Itanagar), Arunachal Pradesh, India

    K. B. Misra (Director) (Director)

Rights and permissions

Reprints and permissions

Copyright information

© 1996 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Feller, R.H., Piasecki, B.W. (1996). Environmental Disclosure and the U.S. Securities Laws. In: Misra, K.B. (eds) Clean Production. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-79940-2_12

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-79940-2_12

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-79942-6

  • Online ISBN: 978-3-642-79940-2

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation