The U.S. Securities and Exchange Commission (SEC) recently charged global asset manager Invesco for misleading investors with claims about its ESG-related investments. Invesco has agreed to pay a $17.5 million civil penalty to settle the charges without admitting or denying the allegations.
The SEC found that between 2020 and 2022, Invesco claimed that a significant portion of its parent company’s assets under management were “ESG integrated,” ranging from 70% to 94%. However, these claims included assets held in passive ETFs that did not actually consider ESG factors in investment decisions. Additionally, Invesco did not have a written policy defining ESG integration despite making these claims.
This case is part of the SEC’s efforts to crack down on misleading ESG investment practices. In a similar case, ETF provider WisdomTree was charged for marketing funds as incorporating ESG factors while investing in companies involved in fossil fuel and tobacco activities. WisdomTree paid $4 million to settle the charges.
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, emphasized the importance of companies being transparent with clients and investors instead of capitalizing on investing trends. In response to the charges, Invesco stated that they are pleased to resolve the matter related to historical statements about ESG integration levels and highlighted that the SEC Order did not make any allegations regarding specific funds or investment strategies.
Mark, the founder of ESG Today, has a background in investment management and research. He previously worked at Delaney Capital Management in Toronto, where he was responsible for evaluating sustainability factors impacting portfolio companies. Mark’s experience in the finance industry, coupled with his education and certifications, positions him as a knowledgeable source on ESG investing practices.