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entitled 'Environmental Disclosure: Briefing on GAO's Findings and 
Recommendations' which was released on August 04, 2004.

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August 4, 2004:

The Honorable Jon S. Corzine:

United States Senate:

Subject: Environmental Disclosure: Briefing on GAO's Findings and 
Recommendations:

Dear Senator Corzine:

The Securities and Exchange Commission's (SEC) primary mission is to 
protect investors and the integrity of securities markets. Among other 
things, SEC regulations require companies to file reports with SEC 
disclosing information that would be considered "material" to a 
reasonable investor. A matter is material if there is a substantial 
likelihood that a reasonable person would consider it important. 
Environmental risks and liabilities are among the conditions that, if 
undisclosed, could impair the public's ability to make sound investment 
decisions. For example, the discovery of extensive hazardous waste 
contamination at company-owned facilities could expose a company to 
hundreds of millions of dollars in cleanup costs, while impending 
environmental regulations could affect a company's future financial 
position if the company were required to shut down plants or invest in 
expensive new technology. To monitor companies' disclosures, SEC 
reviews their filings and issues comment letters requesting revisions 
or additional information, if needed. Although the Environmental 
Protection Agency (EPA) does not have a direct role in monitoring 
environmental disclosures, the agency notifies companies of potential 
disclosure obligations and periodically shares relevant information 
with SEC.

This letter formally transmits to you the slides we used to provide a 
briefing on issues related to the disclosure of environmental 
information in SEC filings at a symposium on July 15, 2004, sponsored 
by you; Senators Lautenberg, Lieberman, McCain, and Nelson; and 
Representatives Blumenauer, Doggett, Markey, Michaud, Olver, Pallone, 
Payne, and Solis. (See enclosure I.) The briefing was based on our 
recent report, Environmental Disclosure: SEC Should Explore Ways to 
Improve Tracking and Transparency of Information (GAO-04-808, July 14, 
2004). The report addresses (1) key stakeholders' views on how well SEC 
has defined the requirements for environmental disclosure, (2) the 
extent to which companies are disclosing such information in their SEC 
filings, (3) the adequacy of SEC's efforts to monitor and enforce 
compliance with the disclosure requirements, and (4) experts' 
suggestions for increasing and improving environmental disclosure. Our 
review of these issues was conducted in accordance with generally 
accepted government auditing standards.

We are sending copies of this letter to the Chairman of SEC; the 
Administrator, EPA; and to other interested parties. The letter will 
also be available at no charge on GAO's Web site at http://www.gao.gov.

Please call me at (202) 512-3841 if you or your staff have any 
questions. Major contributors are listed in enclosure II.

Sincerely yours,

Signed by: 

John B. Stephenson:

Director, Natural Resources and Environment:

Enclosures - 2:

Enclosure I:

[See PDF for images]

[End of slide presentation]

Enclosure II: GAO Contacts and Staff Acknowledgments:

GAO ContactsJohn B. Stephenson, (202) 512-3841:

Ellen Crocker, (617) 788-0580:

Staff AcknowledgmentsIn addition to the individuals named above,

Kate Bittinger, Mark Braza, Stephen Cleary, Evan Gilman, Kevin Jackson, 
Rich Johnson, Les Mahagan, Tom Melito, Lynn Musser, Cynthia Norris, and 
Judy Pagano made key contributions to this report.

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