Invesco Advisers fined $17.5 million by SEC over ESG claims

(Bloomberg) — Invesco Advisers Inc. will pay a $17.5 million fine to settle U.S. Securities and Exchange Commission charges that it misled clients about the share of the firm’s assets under management that incorporated environmental, social and governance factors into investment decisions.

From 2020 to 2022, it told clients that between 70% and 94% of parent company Invesco Ltd.’s AUM was “ESG-integrated,” the agency said in a press release on Friday. In a 2020 speech to a large wealth management firm, Invesco Advisers touted “our commitment to ESG” and called itself a “trusted partner for responsible investing,” according to the SEC order.

But regulators claim that “significant amounts” of assets are held in passive exchange-traded funds that do not take ESG factors into account. Additionally, the SEC claimed that Invesco Advisers lacked any written policy on the implications of ESG integration.

“Firms should be candid with customers and investors rather than seeking to capitalize on investment trends and buzzwords,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in a statement.

Invesco Advisors did not admit or deny the SEC’s allegations.

Andrea Raphael, a spokesperson for Invesco, said in a statement, “Invesco Advisors is fully cooperating with the investigation and will continue to take a client-led approach to provide advice tailored to clients’ specific investment objectives.” Customized investment strategies.”

Raphael said the agency’s order “does not raise any allegations or findings related to disclosures of 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 $4 million to settle SEC charges that it failed to live up to its promises to create exchange-traded funds and avoid investments in fossil fuels or tobacco.

——With the help of Silla Brush.

(Update order details, background begins in second paragraph.)

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