Environmental Commitments and Liabilities of U.S. Corporations: Disclosures and Implications

Stephen J. Newell (Bowling Green State University)
Jerry G. Kreuze (Western Michigan University)
Gale E. Newell (Western Michigan University)

American Journal of Business

ISSN: 1935-5181

Publication date: 28 October 1994


Liabilities associated with environmental matters have become a major concern worldwide. Clearly, environmental impact must be a major element of a corporation’s decision process and should be timely reported in its financial statements. The SEC intensely reviews the adequacy of the environmental disclosures of its registrants. This review covers both required environmental disclosures and the adequacy of financial disclosures ingeneral. Despite this scrutiny, SEC Commissioner Roberts believes that accruals of environmental liabilities do not appear in financial statements quickly enough.This study reviewed the annual report environmental disclosures of 645 Forbes 500 firms. The study results revealed that the majority of firms provide no disclosure of environmental issues. The environmental disclosures that are included tend to be limited in terms of their informational content. It is also apparent that certain industries are more likely to include environmental disclosures than are other industries. Given the enormous impact of environmental cleanup costs to companies, the authors suggest that certain environmental issues be disclosed by all firms regardless of industry affiliation.



Newell, S., Kreuze, J. and Newell, G. (1994), "Environmental Commitments and Liabilities of U.S. Corporations: Disclosures and Implications", American Journal of Business, Vol. 9 No. 2, pp. 15-22. https://doi.org/10.1108/19355181199400009

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Copyright © 1994, MCB UP Limited

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