A unit of global asset manager Invesco has agreed to pay US$17.5 million to settle charges brought the US Securities and Exchange Commission (SEC) for exaggerating the extent of its ESG integration. The SEC charged Atlanta-based Invesco Advisers for making misleading statements about the percentage of company-wide assets under management (AUM) that integrated ESG factors in investment decisions. According to the SEC’s order, from 2020 to 2022, Invesco told clients and stated in marketing materials that between 70-94% of its parent company’s AUM were “ESG integrated”. However, these percentages were found to include a substantial amount of assets that were held in passive exchange-traded funds that did not consider ESG factors in investment decisions. The SEC said Invesco lacked any written policy defining ESG integration. “As stated in the order, Invesco saw commercial value in claiming that a high percentage of company-wide assets were ESG integrated. But 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 capitalise on investing trends and buzzwords.” The order charges Invesco with willfully violating the Investment Advisers Act of 1940. Without admitting or denying the order’s findings, Invesco agreed to cease and desist from violations of the charged provisions, be censured, and pay the civil penalty.
