Publicly listed companies have been required to disclose "material" environmental information to investors for over 30 years. Environmental costs can be material when associated with air, groundwater, and waste site remediation, regulatory fines, and litigation that result in losses of millions of dollars, decreased shareholder value, and diminished corporate reputation. Such factors must be disclosed in a company's annual and quarterly reports that are filed with the U.S. Securities and Exchange Commission (SEC). More recently, however, myriad corporate accounting scandals, which have shaken financial markets and caused a decline in investor confidence, have prompted more focus on reporting requirements geared toward establishing increased transparency and accountability. While the new regulations clearly state stiff penalties for failure to disclose, they also create uncertainty as to what, and how, management must now report. Moreover, companies engaging in multinational business must interpret an unfamiliar set of international disclosure regulations.

This Article discusses the new light shed on current environmental disclosure requirements by the passage of the U.S. Sarbanes-Oxley Act of 2002, the European Union (EU) Accounts Modernisation Directive (EU Directive), effective January 1, 2005, and the United Kingdom (U.K.) Companies Act and its accompanying Operating and Financial Review (OFR) requirement, effective April 1, 2005. These regulations expand the role of auditors, and require executive certification of internal controls for timely and accurate reporting of all information, including known environmental liabilities, risks, trends, and uncertainties. The aim is to reinstate investor confidence, and strengthen shareholder rights and third-party protection in public companies.