From: SuMaJor@aol.com Sent: Wednesday, October 22, 2003 12:21 PM To: rule-comments@sec.gov Subject: SEC File #4-463 comment Mr. Jonathan G. Katz, Secretary U.S. Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 RE: SEC File # 4-463 Dear Secretary Katz: I coordinate the efforts of the Midwest Coalition for Responsible Investment, a membership organization of faith-based institutional investors. I am writing to call the Commission's attention to the rulemaking petition (SEC File # 4-463) submitted by the Rose Foundation for Communities and the Environment and supported by numerous mutual funds, labor, and charitable organizations. That petition recommends the adoption of standards developed by the respected professional engineering association, the American Society of Testing and Materials, for evaluating and disclosing environmental liabilities, and comes on the heels of extensive requests to the Commission from many investors urging attention to environmental and social disclosure. Improved disclosure practices are a key part of restoring investor confidence in America's capital markets. As a necessary part of restoring that trust, and to help implement the recent Congressional mandate for accounting reform represented by the Sarbanes-Oxley Act, I write to urge the Commission to clarify and tighten standards for reporting environmental liabilities. Commission action to guide the reporting of financially material environmental liabilities is needed because these liabilities are regularly under-reported by SEC registrants. For example, in March 2001, the United States Environmental Protection Agency released a report that demonstrated that 74% of companies facing environmentally-related legal actions by a governmental agency seeking $100,000 or more do not adequately disclose these liabilities to shareholders as mandated by SEC Regulation S-K, Item 303. The same report showed that 96% of publicly traded companies facing Resource Conservation & Recovery Act corrective actions failed to accurately disclose these liabilities. Companies failing to report environmental liabilities often justify their conduct by maintaining that such liabilities are difficult or impossible to quantify. Many companies also currently hide environmental liabilities from investors by practicing piecemeal accounting -- where each environmental liability is evaluated in isolation and deemed immaterial, even if the sum of all environmental liabilities is large. The new reporting guidelines developed by the ASTM would close these loopholes. By incorporating these consensus-based, industry-generated standards, the Commission would enhance investor confidence by helping to ensure that material environmental liabilities are accurately and consistently reported. I urge the Commission to initiate a rulemaking to define "environmental materiality" based on these guidelines as soon as possible. Sincerely, Susan Jordan, SSND Coordinator, Midwest Coalition for Responsible Investment 336 East Ripa Avenue St. Louis, Mo 63125-2800