A message from Mr.Donald Sutherland
Wednesday
December 8, 1999

Dear Hiromichi Furuido,
I am researching international environmental accounting and I would like to submit this letter on environmental accounting in the US and the attached article for your website review.

US publicly traded companies traded on the US stock exchanges are mandated by the US Securities and Exchange Commission to file "significant environmental material expenses" to shareholders on SEC 10-Q and SEC 10-K forms using Generally Accepted Accounting Principals (GAAP) draw up by the Financial Accounting Standards Board (FASB) ( http://www.fasb.org/ ) and enforced under SEC Regulation S-K.

See:
http://www.sec.gov/
enter: Search EDGAR archieves
enter: Quick Forms Look Up
select: 10-K and or 10-Q from Customize Form Selection
enter: company name
Scroll corporate SEC 10-K form for environmental
depreciation, liability, infrastructure, and other costs.

Unfortunately many firms depart from filing these costs using a threshold reporting restriction and the SEC has only enforced the issue once in the last twenty years.

Please see my articles:
http://ens.lycos.com/ens/dec98/1998L-12-01-02.html
http://ens.lycos.com/ens/jan99/1999L-01-13-03.html

State environmental regulatory agencies have adopted Core Performance Measures (CPM) (see: http://www.sso.org/ecos/cpm.htm ) and Government Accounting Standards Board (GASB). (http://www.gasb.org/ ) environmental accounting rules.

Please see my articles:
http://ens.lycos.com/ens/feb99/1999L-02-09-01.html
http://ens.lycos.com/ens/apr99/1999L-04-08-02.html
http://ens.lycos.com/ens/nov99/1999L-11-22-06.html

Publicly traded Insurance companies on the US stock exchanges covering corporate Superfund cleanup and transaction cost liabilities are using insurance statuatory accounting standards enforced by state insurance commissions and not the SEC. These insurance firms don't have a mandate to use GAAP to file significant enivironmental material expenses to shareholders.

Please see my article: Superfund Awakes in State Supreme Courts
http://www.riskworld.com/NEWS/97q4/nw7aa055.htm

I am interested in your website organizations commentary on these issues and please contact me if you needs more information on US codified, government enforced, environmental accounting reports.

Best Wishes,
Donald Sutherland
Member of the Society of Environmental Journalists
[email protected]
phone: 5**-4**-3***


International Green Accounting
By Donald Sutherland

The Asian financial crisis and Kyoto conference treaty have sparked the emergence of international green accounting guidance documents from the World Bank and the United Nations, but multinational corporations traded on the U.S. stock exchanges have endorsed the U.S.Securities & Exchange Commission (SEC) strict green accounting rules as the only worldwide standard.

On January 18, 1998, the World Bank's International Finance Corporation (IFC) issued its' draft "Environmental,Social and Disclosure Policies & Procedures" and on February 13, 1998, the United Nations adopted its' most comprehensive guidance document for international environmental accounting. (see: http://www.ifc.org/enviro%20and%20http://www.unicc.org/unctad/en/special/c2isard2.htm)
The "position paper" drawn up by the United Nations Conference on Trade and Development (UNCTAD) and the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) is entitled "Accounting and Financial Reporting for Environmental Costs and Liabilities". (see: http://www.unicc.org/unctad/en/special/c2isard2.htm )
The document is designed to unify the different environmental accounting practices practiced globally, but fails to establish international accounting and auditing standards.
"There is a need for an authoritative body to interpret the variety of national environmental regulations, and since there is none all UNCTAD/ISAR could do was issue a position paper offering guidance", says David Moore, of the Canadian Institute of Chartered Accountants.
"The only country who has drawn up environmental financial accounting standards is the United States, but the U.S.Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board's (FASB) standards are too specific to U.S. regulations", says Moore. (see:
http://www.law.uc.edu/CCL/regS-K/index.html
http://www.rssm.com/bulletin/bull9702.html
http://www/sec.gov/news/speeches/spch039.txt)

With the U.S. Fortune 1000 companies linked to over seventy percent of international trade, the SEC/FASB environmental accounting standards are creating a discrepancy in corporate environmental accounting for investors.
The Asian financial crisis has investors of multinational corporations with extensive foreign assets demanding stricter international accounting standards and transparency of (environmental) costs and liabilities.

Multinational auto manufacturers listed on the U.S. stock exchanges are using the SEC/FASB environmental accounting rules and procedures as an international standard for all their global operations.
These corporations have set the stage for an international show down with those publicly traded firms on foreign stock exchanges who prefer not to use the transparent and rigorous financial environmental disclosure statements required by the SEC.

General Motors, Chrysler, Ford, Honda, and Daimler Benz are all currently filing their global significant environmental material expenses annually in SEC 10-K and 20-F forms.

"Since 1977 when we were first listed on the New York Stock Exchange (NYSE) we have followed U.S. generally accepted accounting principles (GAAP) and disclosed our environmental expenses using the SEC's accounting principles and standards", said Shigeki Hayashi, spokesman for Honda Investor Relations.

"For Honda's plant sites outside the U.S., the SEC only requires consolidated figures to be reported on the SEC Form 20-F," says Hayashi.

Corporations traded on foreign security exchanges (ie.Toyota) have not yet responded to the challenge to provide investors with a green accounting financial report using national environmental accounting standards.

"Toyota doesn't use U.S.environmental GAAP because we are only traded on Japan's NIKKEI as an American Depository Receipt (ADR)," says Peter Casey, spokesman for Toyota's Industrial Relations, "and the Japanese don't have an environmental accounting model".

Officials at the International Federation of Accountants (IFAC) say there has been a reluctancy by many nations to adopt stricter accounting standards.

"Internationally, people don't want disclosures to be compliance led" says Richard Regal an IFAC spokesman.

"There's no pressure by accounting bodies to act with environmental codified procedures, and before international standards are set there needs to be a common agreement on how the environment is to be assessed by accountants", says Regal.

Multinational corporations however are not waiting for an international standard to be developed.

"There isn't a strong contingency block effort for an international environmental standards, but money for the most part is talking the SEC/FASB talk", says Curtis Wright, Technical Assistant at FASB's Research and Technical Activities.

"The truth is reality is always ahead of theory, and international environmental accounting standards (SEC/FASB) are functionally happening now", says Wright.

(c)Donald Sutherland 1998


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