Before the current backlash in the political environment, many investors were very focused on making investment that took into account positive environmental, social, and governance factors. Invesco wanted to meet the needs of its investors by saying that it had “over 94% of AUM currently integrating ESG.”
That’s a great goal. If it was true.
It wasn’t.
A third of Invesco’s AUM was management of the QQQ Trust ETF that tracks the 100 largest non-financial companies traded on the Nasdaq exchange. As a passive index, it’s not taking ESG into account. Invesco could have excluded that amount from its calculation and only include actively managed. But it didn’t.
Invesco stated that its ESG-integrated investment strategies had a “minimal but systematic” level of ESG integration. Invesco could have defined what that meant when it did its internal surveys to determine compliance. But it didn’t.
The result is a $17.5 million fine.
Sources: