China oil spill 311 AP.
(photo credit: Associated Press)
Companies will be required to disclose environmental risks of their operations
in prospectuses that they file with the Israel Securities Authority, according
to regulations passed by the Knesset Finance Committee on
“Following the environmental catastrophe in the Gulf of
Mexico, which caused huge losses to investors in British Petroleum, including
losses by pension funds, the approved regulations will help prevent a similar
case happening in Israel,” said Gilad Erdan, Environmental Protection Minister
at the Knesset Finance Committee meeting in Jerusalem on
“Expanding the reporting requirements by corporations is an
important step to include environmental effects of companies’ activities and the
consequent financial exposure. Expanding the transparency will lead to better
management of environmental affairs by companies.”
The new regulations
will require companies to disclose environment risks that could have a material
effect on their financial performance. The details will inform investors and the
public of the effects of the companies’ activities on the environment, how they
are dealing with these risks, and what are the financial risks derived from
Companies will also be required to disclose in prospectuses and
financial reports the costs and investments made, or which are expected to be
borne for dealing with environment matters, such as rehabilitation and repair of
environmental damages, and the procurement of technologies to reduce or prevent
future environmental harm.
In addition, companies will also have to
disclose in prospectuses past and present legal or administrative proceedings
against them, and the financial liabilities related to environmental proceedings
or the authorities.
Other requirements disclosure of environmental
management of companies’ activities, such as supervision and control mechanisms
and measures taken to reduce environmental risks.
The regulations were
jointly formulated by Environmental Protection Ministry and the Israel