Invesco fined by SEC Over Misleading ESG Investment Claim

Overview:

The U.S. Securities and Exchange Commission (SEC) has fined Invesco $17.5 million for misleading claims about its ESG investments. This penalty highlights the importance of transparency and accuracy in ESG-related disclosures.

Invesco’s Misleading ESG Claims

From 2020 to 2022, Invesco claimed that 70% to 94% of its assets under management were “ESG integrated.” However, the SEC found that these figures included assets in passive ETFs that did not consider ESG factors. This discrepancy led to the SEC’s investigation and subsequent fine.

The SEC’s Findings

The SEC’s order revealed that Invesco lacked a written policy defining ESG integration. Despite marketing materials suggesting a high level of ESG integration, the reality was different. The SEC emphasized that companies must be honest with their clients and investors, rather than capitalizing on popular trends without substance.

Invesco’s Response

Invesco has agreed to pay the $17.5 million fine without admitting or denying the SEC’s findings. The company stated that it has not reported firmwide ESG integration levels since late 2022 and will continue to offer investment strategies tailored to clients’ specific objectives.

Implications for the Industry

This case underscores the growing scrutiny of ESG claims by regulatory bodies. It serves as a reminder for asset managers to ensure their ESG disclosures are accurate and backed by concrete policies. The SEC’s action against Invesco is part of a broader effort to enforce transparency and accountability in ESG investing.

Source:

https://www.esgtoday.com/sec-fines-invesco-17-5-million-for-misleading-esg-investing-claims/

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