Led by the Rose Foundation for Communities and the Environment, foundations with more than $3 billion in aggregate invested assets petitioned the SEC on 8/21/02 to improve requirements for accurate and consistent disclosure of environmental risks.
To clarify the intent of the SEC’s material disclosure requirements and help ensure compliance with existing material financial disclosure requirements, the foundations urge the Commission to adopt the standards for estimation and disclosure of environmental liabilities developed by the American Society for Testing and Materials International (ASTM).
"These standards, which were developed by a consensus process conducted by one of our nation's leading engineering organizations, provide guidance to companies for the accurate estimation of environmental liabilities and explicitly require reporting companies to aggregate environmental liabilities to determine whether they exceed the SEC's materiality threshold. The ASTM's development of these standards has been backed by the insurance industry, in response to the current paucity of information about the financial significance of environmental liabilities.
Disclosure consistent with the ASTM standards would provide investors with standardized information critical to their evaluation of the financial risk associated with a company's environmental liabilities. Complete and accurate disclosure of financially material environmental risk furthers the Commission's mission of protecting investors and the public and protecting and restoring public confidence in our markets and in publicly traded companies."
The petition was signed by the following:
- Alaska Conservation Foundation
- As You Sow Foundation
- Beldon Fund
- Bullitt Foundation
- Columbia Foundation
- Compton Foundation
- Conservation Land Trust
- Deep Ecology Foundation
- Educational Foundation of America
- French American Charitable Trust
- Gaia Fund
- Richard & Rhoda Goldman Fund
- Gordon Lovejoy Foundation
- First Nations Foundation
- Needmor Fund
- Andrew Norman Foundation
- Jessie Smith Noyes Foundation
- Rockefeller Family Fund
- Rose Foundation for Communities & the Environment
- San Francisco Foundation
- The Seventh Generation Fund for Indian Development, Inc
- Surdna Foundation
- The Tides Foundation
- Wallace Global Fund
- Weedon Foundation
- William B. Wiener, Jr. Foundation
- Wilburforce Foundation
This is an important step forward for activism among foundations and, if enacted, will do a great deal to ensure environmental liabilities are reflected in share price. When that happens, we expect corporations will be much better environmental stewards and there will be a stronger correlation between environmentally responsible business practices and corporate profits. According to a 1998 study by the Environmental Protection agency, nearly three-quarters of companies who were fined more than $100,000 for environmental violations failed to tell the SEC in their annual filings.
We urge readers to support this petition by writing to Mr. Jonathan G. Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549 or e-mail Mr. Katz at rule-comments@sec.gov, indicating that you support the petition to improve requirements for accurate and consistent disclosure of environmental risks submitted by the Rose Foundation for Communities and the Environment and others.
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