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SEC Proposes Increase to Environmental Liability Reporting Threshold

Posted on October 07, 2019 by Roger Marks and Lauren Scott

In late August 2019, the Securities and Exchange Commission (SEC) proposed an increase to the threshold for public companies to report environmental obligations under regulation S-K. 

Regulation S-K, item 103 (17 CFR 229.103) requires publicly traded companies to detail material legal proceedings to which they or their subsidiaries are party, including those related to environmental protection laws.

SEC’s proposal would raise the threshold for reporting environmental obligations under item 103 from $100,000 to $300,000. The proposed rule also aims to expand and clarify other aspects of the Regulation S-K disclosure requirements for item 101(c), item 103, and item 105. Before the August 2019 increase, the threshold had not been updated since 1977.

The SEC reporting requirement for environmental obligations underscores the tremendous value of the work EH&S professionals do to achieve and maintain compliance with EPA’s myriad of air, water, chemical, and hazardous waste programs. Exposure to environmental and worker safety risks, civil penalties, costs for remediation, and more are all part of the overall picture of an organizations’ health—and can meaningfully impact shareholder decisions and stock price.  
 

Rising Environmental Penalties 

SEC's decision to increase the threshold for reporting environmental liabilities will keep pace with inflation, but also reflects US EPA civil penalties that rise on an annual basis. 

Earlier this year US EPA finalized its annual increase to civil penalties for violations of environmental programs. The new penalty figures apply to all violations that occur(ed) after November 2, 2015, for which penalties are assessed on or after February 6, 2019.

Fines for EPA violations may be assessed on a per day, per violation basis.

EPA Program

Before 02/06/19     

After 02/06/19

Resource Conservation and Recovery Act (RCRA)  

$72,718  

$74,552  

Clean Air Act (CAA)

$97,229

$99,681

Clean Water Act (CWA)

$53,484

$54,833

Emergency Planning/ Right-to-Know Act (EPCRA)

$55,907

$57,317

Comp. Environmental Response... Act (CERCLA)

$55,907

$57,317

Safe Drinking Water Act (SDWA) 

$55,907

$57,317

Toxic Substances Control Act (TSCA) 

$38,892

$39,873

Fed Insecticide, Fungicide/Rodenticide Act (FIFRA)

$19,446

$19,936

 

Prepare for 2020: Complete Environmental Training Returns This Fall

On Oct. 23–24, join us in Orlando, FL for the final Complete Environmental Regulations Workshop of 2019. This two-day workshop prepares EHS professionals to identify and apply the key environmental programs that affect industrial facilities, including the Clean Air Act, Clean Water Act, Safe Drinking Water Act, TSCA, EPCRA, CERCLA, and more.

Can’t leave the facility? Take this course online to start, pause, and complete your training at your own pace. The course is equipped with retention-boosting knowledge checks, real-world examples, and comprehensive resources so you return to work ready to apply what you’ve learned.