The dominoes are falling. The SEC issued their latest enforcement action against an investment advisor for not living up to its marketing and explicit commitments to ESG investment strategies. Last week, the SEC charged Atlanta-based charged Invesco Advisers, Inc. with
“… making misleading statements about the percentage of company-wide assets under management that integrated environmental, social, and governance (ESG) factors in investment decisions. The Atlanta-based registered investment adviser agreed to pay a $17.5 million civil penalty to settle the SEC’s charges.
According to the SEC’s order, from 2020 to 2022, Invesco told clients and stated in marketing materials that between 70 and 94 percent of its parent company’s assets under management were ‘ESG integrated.’ However, in reality, these percentages included a substantial amount of assets that were held in passive ETFs that did not consider ESG factors in investment decisions. Furthermore, the SEC’s order found that Invesco lacked any written policy defining ESG integration.”
It is interesting that the order specifically calls out what I wrote about last month – claims about ESG/sustainability strategies that are in reality veiled index funds. Does Vegas have odds on when the next enforcement action like this will be filed?
Members can learn more about ESG/sustainability enforcement here.
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