Keurig and Its K-Cups: Recyclability Claims and an SEC Investigation

Lucas Harrison, a (fictional) junior attorney at the U.S. Securities and Exchange Commission (SEC), is investigating whether Keurig Dr Pepper (KDP) is rightfully claiming that its K-Cups are 100% recyclable. If this claim is misleading investors, the SEC could initiate a case with huge implications for KDP, a company with a $41.6-billion market capitalization, and its investors. Harrison must analyze KDP’s sustainability claims and the SEC’s role in cases of alleged greenwashing.

He delves into the complexity of the U.S. recycling infrastructure, characterized by fragmented policies and limited processing capabilities for small plastic items. The central question is whether the SEC could prove that KDP was aware of an actual lower recycling rate for K-Cups but went on misleading potential investors. The case highlights the strategic, financial, ethical, and reputational challenges associated with potentially misleading sustainability advertising. Case users will gain an understanding about the implications of greenwashing on corporate accountability, consumer trust, and the environment.

• Identify and evaluate the business and sustainability challenges KDP faced and recommend effective next steps.
• Understand the roles of regulatory frameworks, such as the SEC rules and the FTC Green Guides, in addressing greenwashing.
• Assess the financial and reputational risks posed by misleading environmental claims.
• Summarize the challenges that come with nonstandard recycling practices and lack of individual buy-in.
• Recommend methods and frameworks for how companies can avoid greenwashing and produce a more sustainable product.