Request for Rulemaking for
Clarification of Material Disclosures With Respect to Financially Significant Environmental Liabilities and Compliance with Existing Material Financial Disclosures
File No. 4-463
The following information on Type Letter B, or variation thereof, was submitted various individuals.
Subject: Disclosure in corporate SEC filings
Form Type Letter B:
I am writing to urge the Securities and Exchange Commission to convene a rule-making process to increase the level of environmental and social disclosure in corporate SEC filings.
The Enron scandal has heightened public demand for greater transparency and social responsibility from publicly traded companies, and the Securities and Exchange Commission has a unique role to play in responding to this demand. Providing more instruction to companies to disclose their materially important effects on the environment, workers and communities is an ideal way for the Commission to help restore public confidence in Corporate America and Wall Street.
Currently, SEC corporate social and environmental disclosure rules are vague and insufficient, as evidenced by the fact that the American Society for Testing and Materials recently released an environmental cost estimation and disclosure protocol designed to supplement current accounting regulations which do not provide financiers and insurers with adequate information on companies' environmental liabilities. Similarly, corporate disclosure rules around labor issues are so vague that often companies do not disclose the existence of poor labor-management relations until a strike is imminent or has been called.
In addition to providing more instruction to companies regarding environmental and social reporting, the SEC should also endeavor to more adequately enforce rules governing nonfinancial disclosure. A survey of corporate annual SEC filings by the Environmental Protection Agency found that 74% of companies did not report government-initiated environmental legal proceedings as required by the SEC.
The time is ripe for the Commission to take action on this issue. Not only are policy makers and the public keenly aware of corporate disclosure issues at this time, but investors large and small are increasingly looking for the "whole story" behind companies, and seeking to identify those that deal with the environment, their workers and communities with responsibility and decency. I hope that the SEC will answer this call and play an active role in responding to the changing needs of investors and the public.