Keurig made “inaccurate statements” about the recyclability of its single-use coffee pods, according to the Securities and Exchange Commission (SEC). The company agreed to a cease and desist order and to pay a $1.5 million civil penalty to settle the charges.

It’s a helpful reminder that many corporate recycling claims can be misleading. Certain types of plastic are harder to recycle than others. Even if something is supposedly recyclable, it can end up in the trash if the type of plastic is not accepted by a municipal recycling program.

The charges against Keurig Dr Pepper Inc. stem from its 2019 and 2020 annual reports, which said that the company tested and “validate[d] that [K-Cup pods] can be effectively recycled.” But the company failed to disclose information about key challenges with recycling the pods, the SEC said in its announcement this week:

Keurig did not disclose that two of the largest recycling companies in the United States had expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling. In fiscal year 2019, sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system.

The company neither confirms nor denies any wrongdoing by agreeing to pay the settlement, the SEC says. As of Friday morning, Keurig’s website still says its K-Cup pods have been recyclable since the end of 2020. Before 2020, many of the pods were made with No. 7 plastic, considered a “catch-all” designation for difficult-to-recycle materials, according to Consumer Reports.

Now Keurig says the pods are made with No. 5 plastic or polypropylene, which is also commonly used for yogurt containers and straws. It’s still considered more difficult to recycle than Plastic No. 1, or PET, used in water and other beverage bottles.

“We are working with individual municipalities and recycling operators to help increase explicit acceptance of K-Cup pods where they already accept polypropylene,” Laren Marra, director of corporate communications at Keurig Dr Pepper, said in an emailed statement. With regard to the SEC charges, Marren writes, “We are pleased to have reached an agreement that fully resolves this matter.”

Update September 13th: This post has been updated with a response from Keurig Dr. Pepper.