SEC Targets Keurig Dr . Pepper for Greenwashing in …

SEC Targets Keurig Dr . Pepper for Greenwashing in Pod Disclosure

The U.S. Securities and Exchange Commission (SEC) recently settled an enforcement case against Keurig Dr. Pepper, focusing on the company s disclosure about the recyclability of its K-Cup pods in its annual reports. The SEC alleged that Keurig failed to adequately disclose the commercial viability of recycling K-Cup pods, despite receiving negative feedback from two significant recycling companies. The SEC s action underscores the importance of complete and accurate ESG (Environmental, Social, and Governance) disclosures, especially as the SEC s enforcement staff shifts its attention to public companies amidst ongoing legal challenges to new climate change disclosure rules. The case is significant as it may signal a broader focus on ESG disclosure by the SEC, despite recent reports of the SEC s Enforcement Division disbanding its ESG enforcement task force. Companies are advised to pay special attention to their disclosures on climate change and other ESG subjects, ensuring that they are materially complete and not misleading in light of undisclosed information. The SEC s action also highlights the importance of having robust disclosure controls and procedures to demonstrate that a company s disclosures are timely, accurate, and complete. The SEC has been reviewing companies sustainability reports and other non-filed disclosures to gain insights into filed reports. The new climate change rules, which were due to take effect for some companies in their 2025 fiscal years, have been temporarily stayed due to ongoing legal challenges. It is likely that the SEC will delay the effectiveness of these rules for at least one year. In conclusion, the SEC s action against Keurig Dr. Pepper serves as a reminder for companies to exercise care in preparing public disclosures, particularly on ESG matters. Ensuring that disclosures are materially complete and not misleading, and demonstrating adequate disclosure controls and procedures, will be crucial in navigating the evolving regulatory landscape.

Source: natlawreview.com
Published on 2024-09-17

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