Invesco subsidiary Invesco Advisers Inc. has agreed to pay a $17.5 million fine to settle Securities and Exchange Commission charges that it violated the Investment Advisers Act of 1940 by making misleading statements about the how many of its assets were invested according to environmental, social and governance guidelines.

According to the SEC’s cease-and-desist order, Invesco Advisers told clients and stated in marketing materials between 2020 and 2022 that 70% to 94% of its parent company’s assets under management were “ESG integrated.” However, according to the SEC, those figures included a “substantial amount” of assets held in passive ETFs that did not take ESG factors into consideration in investment decisions. The SEC also stated Invesco did not have a written policy defining ESG integration.

“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,” Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said in a statement. “Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords.”

Without admitting or denying the charges, Invesco agreed to the fine, to being censured and to accurately represent its ESG investments in the future.

“The SEC Order makes no allegations or findings related to disclosures about specific funds or investment strategies,” a company spokesperson said in a statement. “Invesco has not issued public reports of firmwide ESG integration levels since late 2022.”

ESG-related fines like the one assessed against Invesco and other firms, such as last month’s $4 million fine levied against Wisdom Tree Asset Management, could be a thing of the past under the administration of President-elect Donald Trump, according to some industry watchers.

“Donald Trump has always been the pro-business, pro-fossil fuel, and anti-regulation candidate, so it should be no surprise that he has a solidly negative view of ESG and wishes to work against it during his presidency,” think tank Corporate Governance Institute stated. “There should be no doubt that the issue will eventually land on his desk, and he will take decisive action in line with his personal beliefs.”

Law firm Seyfarth Shaw LLP expects a “rollback of climate related regulations at the federal level,” particularly by the SEC and the Environmental Protection Agency. The firm also noted that the SEC’s mandatory climate-related financial risk disclosure rules for public companies “are unlikely to survive a Trump administration.” It noted that, prior to the election, the SEC suspended the Climate Disclosure Rules due to legal challenges.

“Even if the Climate Disclosure Rules survive that litigation, the Trump administration under a new SEC Chair may rescind the rules,” the firm stated, adding that “whoever succeeds SEC Chair Gary Gensler will certainly take a hands-off approach to climate-related financial risk disclosures.”

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Tags: and governance ESG, Corporate Governance Institute, Donald Trump, environmental, Fine, Gary Gensler, Greenwashing, Invesco, Investment Advisers Act, Sanjay Wadhwa, SEC, Settlement, Seyfarth Shaw, social