The order charges the company with willfully violating the Investment Advisers Act of 1940. Credit: Summit Art Creations/Shutterstock.

Invesco Advisers has agreed to pay civil penalty of $17.5m to resolve allegations from the US Securities and Exchange Commission (SEC) that it misled statements related to supposed investment considerations.

The regulator claims that Invesco Advisers misled clients about portion of company-wide assets under management (AUM) incorporating environmental, social, and governance (ESG) factors in investment decisions.

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From 2020 to 2022, Invesco claimed in client communications and marketing materials that 70% to 94% of its parent company’s assets were “ESG integrated”.

However, these numbers included many assets held in passive ETFs that did not consider ESG factors. Additionally, the SEC found that Invesco had no written policy defining ESG integration.

SEC Division of Enforcement acting director Sanjay Wadhwa 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 capitalise on investing trends and buzzwords.”

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The order charges Invesco with willfully violating the Investment Advisers Act of 1940.

Invesco spokeswoman Andrea Raphael was cited by Bloomberg News as saying: “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.

Raphael said the agency’s order “makes no allegations or findings related to disclosures about specific funds or investment strategies”.

Last month, WisdomTree Asset Management agreed to pay $4m to resolve SEC allegations that it failed to deliver on its promise to create exchange-traded funds that avoided investments in fossil fuels or tobacco.