SEC Settles Charges With Keurig Over ESG …

SEC Settles Charges With Keurig Over ESG Disclosures

Litigation and regulatory enforcement actions related to Environmental, Social, and Governance (ESG) disclosures are increasing, amidst a shifting regulatory landscape. The U.S. Securities and Exchange Commission (SEC) has faced challenges to its climate disclosure rules, leading to a stay on these rules. Additionally, the SEC disbanded the Climate and ESG Task Force within its Division of Enforcement, with its expertise now distributed across the Division. Despite these changes, the SEC continues to pursue enforcement actions for inaccurate ESG disclosures. A recent case involved Keurig Dr Pepper Inc. (Keurig), which faced SEC-initiated cease-and-desist proceedings for incomplete and inaccurate disclosures in its 2019 and 2020 Form 10-Ks. The SEC found that Keurig s claims about the recyclability of its K-Cup pods were misleading, as the company failed to disclose that two large recycling companies involved in the testing would not accept the pods. The SEC and Keurig settled the charges for $1.5 million. However, Commissioner Peirce disagreed with the SEC s position, arguing that Keurig s statements were accurate due to the use of recyclable plastic and the successful recycling of the pods in testing. She also contended that the SEC did not adequately demonstrate the materiality of the recyclability issue to investors in 2019. The SEC s focus on ESG-related disclosures highlights the importance for public companies to ensure the accuracy and completeness of their ESG disclosures. Companies should consider what the SEC deems material to investors when evaluating their ESG disclosures. This article aims to provide a general guide to the subject matter, and specialist advice should be sought for specific circumstances.

Source: marketscreener.com
Published on 2024-09-16

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