SEC Charges Invesco with Misleading Claims Regarding ESG
The U.S. Securities and Exchange Commission (SEC) recently charged Invesco Advisers Inc. with making misleading claims about the extent of its environmental, social, and governance (ESG) integration across its assets under management, according to a press release.
Invesco reportedly stated that between 70% and 94% of its parent company’s assets were “ESG-integrated” from 2020 to 2022, but this figure allegedly included assets in passive ETFs—such as the Invesco QQQ Trust—that did not actually incorporate ESG factors in investment decisions.
Additionally, the SEC found that Invesco lacked a formal ESG integration policy.
Invesco allegedly began emphasizing ESG integration in response to client concerns in 2019, as an internal analysis showed $370 billion in assets were “at risk” of moving to other firms. The company subsequently promoted its ESG capabilities, including in public reports that claimed a substantial portion of its assets were ESG-integrated.
Invesco reportedly agreed to a $17.5 million civil penalty to settle these charges and accepted a cease-and-desist order, as well as censure, without admitting or denying the findings.
ESG Rules Adopted in March 2024
The SEC, earlier this year, adopted new rules to enhance and standardize climate-related disclosures for public companies, aiming to provide investors with reliable, comparable, and consistent information on climate risks impacting businesses.
Key requirements include disclosures on material climate-related risks affecting a company’s strategy, operations, or financial condition; actions taken to mitigate or adapt to these risks; and board or management oversight of climate risks.
Large companies must also disclose material Scope 1 and Scope 2 greenhouse gas emissions, with certain emissions subject to assurance reporting. Additional requirements cover expenditures related to climate impacts, such as severe weather events and use of carbon offsets or renewable energy credits. The rules become effective 60 days after publication in the Federal Register, with phased compliance based on company size. The SEC considered over 24,000 comments on the rules prior to adoption.
Free Consultation with Securities Attorneys
This information is all publicly available and provided by The White Law Group. If you have suffered investment losses with Invesco, the securities attorneys at The White Law Group may be able to help you. For a free consultation to learn about your options, please call The White Law Group at 888-637-5510.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.
Last modified: November 12, 2024
