Keeping an eye on environmental disclosures…

Although we’re all watching the ghastly oil spill in the Gulf, other companies have been dealing with their own environmental issues. Thankfully, they’re on a smaller scale, but they may still interest the companies— shareholders.

First, The Pep Boys — Manny, Moe & Jack (PBY) disclosed in yesterday’s 10-Q that it signed a formal settlement agreement with the Environmental Protection Agency on May 10, 2010. The EPA previously charged Pep Boys with a violation of the Clean Air Act because some of its merchandise didn—t conform to their —EPA Certificates of Conformity. The company agreed to pay a penalty of $5 million, take corrective actions, implement a compliance program, and —participate in certain non-monetary emission offset activities. Following a 30-day window for public comments, the U. S. District Court for the District of Columbia will decide whether to approve the settlement.

In its 10-Q, Toll Brothers, Inc. (TOL) gave an update on a dispute involving how the company handles storm water when it builds homes. It stated:

—The U.S. Department of Justice (DOJ) has now assumed responsibility for the oversight of this matter and has alleged that the Company has violated regulatory requirements applicable to storm water discharges and that it may seek injunctive relief and/or civil penalties. The Company is now engaged in settlement discussions with representatives from the DOJ and the EPA.

Wal-Mart Stores, Inc. (WMT) filed a 10-Q on June 4 that disclosed:

—The U.S. Environmental Protection Agency— approached a grocery industry group to resolve issues relating to refrigerant-handling practices and to reduce the use of ozone-depleting refrigerants in refrigeration equipment. The Company then approached the EPA independently to address these issues, and proposed a plan for removing ozone-depleting refrigerants from certain types of refrigeration equipment. The parties are currently negotiating a resolution of this matter.

Wal-Mart doesn’t think the resolution will have a material effect on the Company. (Also, Wal-Mart recently paid the State of California $27.6 million to settle a case of improperly dumping hazardous substances; you can read more about that here.)

The Green Century Equity Fund filed a PX14A6G (Notice of Exempt Solicitation) to express concern that Chesapeake Energy Corp.’s (CHK) use of the hydraulic fracturing method —poses substantial business risks salient to investors. Its filing states:

—Hydraulic fracturing is a process that injects high volumes of water, chemicals and particles underground to create fractures through which gas can flow for collection. Fracturing operations require significant land use modification, disruptive new roads, the trucking of toxic chemicals through established communities, and heavy water use—.”

The filing states that although Chesapeake provides some information about the practice on its website, it doesn—t provide enough for shareholders to decide whether the company is managing its risks appropriately. It adds that it’s not asking Chesapeake to stop hydraulic fracturing, but rather to do it ——in a way that both minimizes its impact on drinking water and surrounding communities while also protecting the Company’s bottom line.

Finally, Donaldson Co., Inc.’s (DCI) 10-Q, filed June 7, disclosed that California’s Air Resources Board (“ARB”) revoked its verification of the company’s DFM Diesel Multi-State Filter Systems. That means the company may not sell or install a DMF system and bill it as an “ARB verified system.”

Donaldson disclosed that it had submitted another proposal to ARB; however, ARB determined that Donaldson’s product modifications constitute a new design requiring a new verification. ARB also advised the company that it may seek fines and penalties from it. Donaldson denies that it sold any unverified systems in California, says that it’s working with ARB and the EPA to get the required approvals, and that it doesn—t expect the dispute to have a material adverse impact on the company’s operations or finances.

We—ll watch for developments on these and other environmental matters as they’re reported.

Image source: via Flickr

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