The approach can also easily be adapted for use by company managers as an internal strategic planning tool. Repetto and Austin applied this method to 13 leading U.S. pulp and paper companies. Environmental issues will markedly influence input costs, revenues, asset values and, hence, shareholder values. Financial exposures vary considerably among companies. One company is likely to see shareholder value enhanced by pending environmental issues, while three other companies face a probable loss in market value of at least ten percent.
Environmental issues create winners and losers even within the same industry.
Undisclosed information about companies environmental performance and exposure could be of significant value for investors. The WRI study raises important policy issues concerning the availability of company-specific information. Currently, such information is hard to obtain. To this end, the SEC should ensure that current disclosure rules are being met with regard to financially material environmental issues. The Environmental Protection Agency should take further steps to provide accurate, timely and easily accessible information on company performance and facility exposure to environmental issues.