The U.S. Securities and Exchange Commission (SEC) announced that it has charged global asset manager Invesco for making misleading claims regarding its ESG-related investments, including overstating the proportion of assets under management that integrated ESG considerations.

Invesco has agreed to pay a $17.5 million civil penalty to settle the SEC’s charges, while not admitting or denying the Commission’s allegations.

According to the SEC’s order, while Invesco claimed in its marketing materials from 2020 to 2022 that between 70% – 94% of its parent company’s assets under management were “ESG integrated,” these amounts included a significant proportion of assets held in passive ETFs, that did not consider ESG factors in investment decisions.

The SEC added that despite making its ESG integration claims, “Invesco lacked any written policy defining ESG integration.”

The case marks the latest ESG investment-related action for the SEC, following the Commission’s announcement last month that it had charged ETF provider WisdomTree after finding that funds marketed by the firm as incorporating ESG factors failed to comply with their own criteria, by 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, said:

“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. Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords.”

In a statement provided to ESG Today, Invesco said:

“We are pleased to resolve this matter related to historical statements made about the percentage of firmwide assets under management that were ESG-integrated. The SEC Order makes no allegations or findings related to disclosures about specific funds or investment strategies. Invesco has not issued public reports of firmwide ESG integration levels since late 2022. 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.”