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Endangered Green Reports:"Cumulative Materiality" in Corporate Environmental Disclosure After Sarbanes-Oxley

August 2005

Citation: 35 ELR 10666

Issue: 10

Author: Mitchell F. Crusto

Editor's Summary: This Article describes the current state of the U.S. Securities and Exchange Commission's financial reporting requirements of corporate environmental liabilities and risks. The difficulty in quantifying these liabilities to meet the "materiality" standard under the Sarbanes-Oxley Act has led to a proposal by the American Society of Testing and Materials (ASTM) to cumulatively assess the financial impact of a company's environmental liabilities. The author advocates adoption of the ASTM's cumulative materiality standard as a more uniform, consistent benchmark instead of the current use of voluntarily published green reports. This Article is reprinted from the Harvard Journal on Legislation.

Mitchell F. Crusto is Professor of Law, Loyola University School of Law. He is also a Visiting Professor of Law at Vermont Law School. He holds a B.A. from Yale University, 1975; a B.A. from Oxford University, 1980; a J.D. from Yale Law School, 1981; and an M.A. from Oxford University, 1985. Special thanks go to those who have contributed to this Article, including the faculty, research assistants, administrative assistants, students, and staff at the Loyola University School of Law and Vermont Law School. Professor Crusto gratefully thanks the research assistance provided through the generosity of the Alfred T. Bonomo Sr. Family and the Rosario Sarah LaNasa Memorial Fund. This Article resulted from a Vermont Law School lecture entitled "Corporate Environmental Disclosure After Enron: Green Reports Under Fire," June 24, 2002.

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