Most companies with large environmental sanctions do not disclose that information to the Securities and Exchange Commission, according to recent studies conducted by the University of Arkansas.

Researcher Andrea Romi at the University’s Applied Sustainability Center found that 72 percent of corporations with large environmental sanctions over a 10-year period failed to report to the SEC, which requires corporations to disclose environmental sanctions of $100,000 or more.

Why didn’t the corporations report their sanctions? Quite simply, they wanted to protect their stocks and consumer reputation. Not surprisingly, firms that did report their sanctions suffered financially – which they deserved.

“I found significant stock-market penalties for the proper disclosure of environmental sanctions,” Romi said. “This finding was disturbing not only because it revealed a direct and intentional violation of federal regulations, but also because it provided support for the existence of so-called ‘greenwashing,’ the marketing of good environmental news and the obscuring of bad news.”

The problem is there is no easy solution. Without disclosing this information to the public, writing a check for $100,000 or $200,000 is basically a slap on the wrist for many large corporations. Entities with such large environmental sanctions deserve the public flanking, but if there is little regulatory action and punishment, and no incentive to report, how many businesses will choose to risk negative publicity? Perhaps the best solution is for the government to automatically disclose all corporations that receive environmental sanctions of $100,000 or more, instead of leaving it up to the businesses, because disclosures of corporate social responsibility and environmental records are still voluntary.

Although the findings didn’t mention specific companies, one can’t help but wonder if some of those that chose not to report their sanctions just so happen to be some of the same entities boasting about their corporate social responsibility and environmental programs.