WASHINGTON: Invesco Advisers Inc will pay a US$17.5mil fine to settle US Securities and Exchange Commission (SEC) allegations that it misled clients about the share of company-wide assets under management (AUM) that integrated environmental, social and governance (ESG) factors into investment decisions.
From 2020 to 2022, the firm told clients that between 70% and 94% of parent company Invesco Ltd’s AUM were “ESG integrated,” the agency said in a statement last Friday.
In a 2020 presentation to a large wealth management firm, Invesco Advisers touted “Our Commitment to ESG” and called itself a “Trusted Partner in Responsible Investment,” according to the US regulator’s order.
But the SEC alleged that a “substantial” amount of assets were held in passive exchange-traded funds that didn’t consider ESG factors.
In addition, the SEC claimed Invesco Advisers lacked any written policy on what ESG integration meant.
“Companies should be straightforward with their clients and investors rather than seeking to capitalise on investing trends and buzzwords,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in a statement.
Invesco Advisers didn’t admit to or deny the SEC’s allegations.
“Invesco Advisers Inc cooperated fully with the investigation and will continue to take a client-led approach of offering investment strategies tailored to the specific investment objectives of its clients,” Andrea Raphael, a spokeswoman for Invesco, said.
Raphael said the agency’s order “makes no allegations or findings related to disclosures about specific funds or investment strategies.”
The SEC’s order against Invesco is the agency’s latest crackdown on so-called greenwashing.
In October, WisdomTree Asset Management Inc agreed to pay US$4mil to settle SEC allegations that it failed to deliver on its promise to create exchange-traded funds that eschewed investments in fossil fuels or tobacco. — Bloomberg
