The Securities and Exchange Commission (SEC) on Tuesday charged Keurig Dr Pepper Inc., which makes single-use coffee pods, with making inaccurate claims about the recyclability of its products.
Keurig settled the charges and agreed to pay a civil penalty of $1.5 million, a relatively modest charge for the massive company.
According to the SEC, Keurig stated in annual reports from fiscal years 2019 and 2020 that the K-Cups’ recyclability had been tested and that the recycling facilities validated that the single-user pods “can be effectively recycled.”
In reality, according to the SEC, two major recycling companies had raised “significant concerns” to Keurig about the feasibility of K-Cup pods’ commercial recycling at the time and “indicated that they did not presently intend to accept them for recycling.”
“Public companies must ensure that the reports they file with the SEC are complete and accurate,” said John Dugan, associate director of the SEC’s Boston Regional Office.
“When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions,” Dugan added.
Keurig has long touted the recyclability of its pods.
In 2019, a Keurig subsidiary conducted research and found that environmental concerns “were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system,” according to the SEC.
Reached for comment, a spokesperson for Keurig did not acknowledge whether the charges were true or not, instead saying, “We are pleased to have reached an agreement that fully resolves this matter.”
The spokesperson said the pods are made from certain plastic “which is widely accepted in curbside recycling systems across North America” but added, “We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in many communities.”
“We remain committed to a better, more standardized U.S. recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions,” the spokesperson added.
