On September 10, the SEC charged Keurig with making inaccurate statements regarding the recyclability of K-Cups.

According to the SEC’s order, in annual reports for fiscal years 2019 and 2020, Keurig stated that its testing with recycling facilities “validate[d] that [K-Cup pods] can be effectively recycled.”

The company failed to disclose that two of the largest U.S. recycling companies had expressed significant concerns about the commercial feasibility of recycling of K-Cups at that time and indicated that they would not accept them for recycling. The SEC notes that environmental concerns were a significant factor for consumers considering Keurig products. To settle the SEC's charges, Keurig agreed to pay a $1.5 million civil penalty.  

As a reminder, the SEC continues to focus on greenwashing. Companies should carefully any environmental disclosure in their public filings for accuracy.   

This article is part of a Fenwick "Securities Law Update" authored by David A. Bell, Ran Ben-Tzur, Amanda Rose, and Merritt Steele.