The Objective Of The Research Study Was To Assess The Impact Of The Environmental Disclosure Negative News On Company’s Returns, Such As Violation Of Permits, Oil Spills, And Environmental Pollution Waste Water Pollution Air And Noise Pollution, Allegation Under Sections (2,4,5 & 16) On The Company’s Profitability (Abnormal Returns). Different Techniques Are Suitable To Measure The Impact Of The Event On The Company’s Profitability For Instance Regression Analysis, Simultaneous Equation, Wilcoxon Test, And Event Methodology. But We Applied Event Methodology, Due To Certain Advantages And Aptness. As It Is For Short Run Analysis. The Data Was Collected From The Cluster Industry Of Faisalabad City. Data Was Collected From The Different Resources Including Violation List Got From The Punjab Environmental Protection Agency And Stock Daily Prices Data Got From The Pakistan Stock Exchange And From Different Channels. Data From Daily Stock Prices Of Companies Was Used. Overall 30 Companies Were Used From The Secondary Source. The Data I Used From The Year 2003 To 2015. Panel Data Was Used In Which Two Categories Created Consisting Of “companies Data” Fall Under Cross Sectional Sections And “daily Stock Prices Data” Fall Under Section Time Series Section. As A Concluded Remarks Companies Gives The Mixed Results However Most Of The Companies Has Experienced The Declining Trend In Its Returns When The Company Violated The Environment Laws. As A Policy Recommendation Government Should Make Strong Enforcement Of Environmental Rules And Regulation. Make Awareness Of Environment At Community Level. Programs Like Ecowatch And Prokash Which Supported By Indian And Philippines Governments. Larger Companies Like (Multinational) That Violates The Environmental Laws Should Be Heavily Fined As Well As Taxed. Supervisor:- Dr. Aneel Salman