Tag: ESG

The One Where You Really Want to Be 94% ESG

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.

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SEC’s ESG Task Force


The Securities and Exchange Commission announced the creation of a Climate and ESG Task Force in the Division of Enforcement. The Division of Corporate Finance announced an enhanced focus on climate-related disclosures in public filings. The Division of Examinations announced a focus on climate-related risks as part its 2021 examination priorities. Sounds like all of the SEC has turned to ESG and climate issues over the last two weeks.

Or not.

Commissioner Hester M. Peirce and Commissioner Elad L. Roisman issued a joint public statement calling into question these climate/ESG initiatives.

“What does this ‘enhanced focus’ on climate-related matters mean?  The short answer is: it’s not yet clear.  Do these announcements represent a change from current Commission practices or a continuation of the status quo with a new public relations twist?  Time will tell.”

As the two commissioners point out, the Commission has not voted on any new standards or expectations relating to climate-related disclosure. They also point (as I did) although there is a big headline for climate issues in the press release for the 2021 examination priorities, there is little mention of it in the actual publication. As for the Enforcement Task Force, its clear these two commissioners are not on board.

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