The Securities and Exchange Commission (SEC) revealed Friday that it has slapped Invesco Advisers, Inc. with a $17.5 million fine for making misleading statements about the extent to which it integrated environmental, social, and governance (ESG) factors into its investment decisions.
Invesco Fined $17.5 Million By SEC for Misleading ESG Claims
According to the SEC’s order, Invesco falsely claimed that a significant portion of its assets under management were “ESG integrated.”
However, the reality was that many of these assets were held in passive exchange-traded funds (ETFs) that did not consider ESG factors in their investment processes.
“Invesco told clients and stated in marketing materials that between 70 and 94 percent of its parent company’s assets under management were “ESG integrated,’” the SEC stated. “However, in reality, these percentages included a substantial amount of assets that were held in passive ETFs that did not consider ESG factors in investment decisions.”
The SEC alleges that Invesco’s misleading statements were intentional and designed to capitalise on the growing interest in ESG investing. The firm failed to maintain a clear and consistent definition of ESG integration, leading to confusion and potential misrepresentation.
“Saying it doesn’t make it so,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords.”
Invesco has agreed to pay the $17.5 million penalty without admitting or denying the SEC’s findings.
