In re INVESCO ADVISERS

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6770 / November 8, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22306 
  
 
In the Matter of 
 
 INVESCO ADVISERS, INC., 
 
Respondent. 
 
 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS PURSUANT 
TO SECTIONS 203(e) AND 203(k) OF 
THE INVESTMENT ADVISERS ACT 
OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS 
AND A CEASE-AND-DESIST ORDER 
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against Invesco Advisers, Inc. (“Invesco” or the “Respondent”). 
 
II. 
 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the 
Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 
Cease-and-Desist Order (“Order”), as set forth below. 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that: 
 
Summary 
 
1. Between approximately April 2020 and July 2022 (the “Relevant Period”), Invesco 
made misleading statements concerning the company-wide percentage of assets under management 

 
 
(“AUM”) by it and its affiliates that was “ESG integrated,” a term that Invesco used to indicate the 
incorporation of environmental, social, and governance (“ESG”) considerations into investment 
decision making processes.  Invesco made these statements in presentations to the boards of 
directors of funds it advised, in proposals to prospective clients, and in certain marketing materials.   
 
2. By the fall of 2019, Invesco believed that incorporating ESG considerations into its 
portfolio management activities globally was of commercial importance.  An internal analysis 
completed by senior ESG team members indicated that, company-wide, at least $370 billion in 
AUM were “at risk” of clients moving the assets to another firm, prompting Invesco to accelerate 
its “ESG integration” effort.  Consistent with its effort to market its ESG capabilities, Invesco made 
claims to certain clients and potential clients about the percentage of firmwide AUM at Invesco that 
was “ESG integrated.”  Invesco also included the percentage of company-wide ESG-integrated 
AUM in its publicly available ESG Investment Stewardship Reports, which described “ESG 
integration” as including “ESG considerations as an influence in investment decision making,” 
“[b]road and systematic ESG integration taking place at a strategy level and across the process,” 
and “[c]onsideration of financially material ESG aspects.”  The claimed percentage of AUM that 
was ESG integrated varied from 70% to 94% during the Relevant Period. 
 
3. These percentages counted Invesco’s passive ETFs, which contained a substantial 
portion of Invesco’s AUM, as ESG integrated, which was misleading as many of the ETFs could 
not consider ESG factors in making investment decisions because they were passive strategies that 
did not follow an ESG-related index.  This included Invesco’s largest ETF, the Invesco QQQ 
Trust—an index product designed to track the 100 largest non-financial companies traded on the 
Nasdaq exchange.   
 
4. Moreover, Invesco had no comprehensive set of written policies and procedures 
concerning how Invesco would determine the percentage of firmwide AUM that was ESG 
integrated.  For a period of time during the Relevant Period, the percentage of firmwide AUM that 
was determined by the ESG team to be ESG integrated was based on analysis assessing investment 
teams’ general ESG integration approach rather than analysis at a fund or strategy level.  Further, 
with respect to passive ETFs following a non-ESG index, ESG considerations could not be “an 
influence in investment decision making.” 
Respondent 
5. Invesco Advisers, Inc. is a Delaware corporation with its principal place of 
business in Atlanta, Georgia.  Invesco has been registered with the Commission as an investment 
adviser since December 30, 1988.  In its Form ADV filed on April 24, 2024, Invesco reported that 
it had over 37,000 clients and approximately $746 billion in regulatory AUM, including managing 
over 450 pooled investment vehicles that collectively hold over $580 billion in regulatory AUM.  
Invesco Group Services, Inc. is the sole owner of Invesco Advisers, Inc., and Invesco Ltd. is the 
ultimate parent of the company.  Invesco Ltd. is publicly traded, with its shares listed on the New 
York Stock Exchange under the symbol “IVZ.” 

 
 
Facts 
 
The Relevance of “ESG Integration” to Invesco’s Business 
 
6. By November 2019, Invesco believed that identifying the use of ESG 
considerations across its global investment platform was a commercial imperative.  Invesco’s 
internal analysis concluded that interest in ESG integration had grown at an unprecedented rate.  
The Europe, Middle East, and Africa (“EMEA”) market was most affected, as revisions to the 
European regulatory framework would require enhanced sustainability-related disclosures for 
products and mandatory integration of sustainability risks in financial market participants’ 
investment decision-making processes.  Invesco was also receiving requests for proposal (“RFP”) 
inquiries asking about ESG integration.  For example, an August 2019 due diligence questionnaire 
from a client based in the United States included an inquiry concerning Invesco’s “integration of 
ESG criteria into your investment philosophy and/or your product suite.”  An internal analysis 
from 2019 completed by senior ESG team members stated that 30% of Invesco’s AUM worth 
$370 billion was “at risk” given increased interest in ESG integration.   
Statements to Clients and Potential Clients in Presentations, RFP Responses, and 
Advertisements 
 
7. Between approximately April 2020 and July 2022, Invesco made statements in 
documents that were not specific to any of its funds or investment strategies concerning Invesco’s 
firmwide ESG integration and the percentage of its AUM that was ESG integrated based on its 
evolving internal framework and approach. 
 
8. In an April 2020 presentation to representatives of the U.S. registered funds it 
advised, Invesco described its “[c]ommitment to ESG,” noting that it had an “[e]volving and 
committed approach to ESG integration with over 94% of AUM currently integrating ESG at 
minimum levels with a scale of approaches depending on asset class.”  In that same presentation, 
Invesco represented that 87% of Invesco’s assets had “minimal but systematic” ESG integration, 
with another 6% of assets that were “systematic and fully integrated.”   
 
9. Invesco also made representations regarding the percentage of firmwide AUM that 
was ESG integrated to prospective clients.  For example, in a presentation titled “Invesco ESG 
approach and capabilities” provided to a large U.S. wealth management firm on June 9, 2020, 
Invesco touted “Our Commitment to ESG,” calling itself “A Trusted Partner in Responsible 
Investment” and noting “90% of AUM integrating minimum ESG levels.”  Invesco made similar 
representations to other prospective clients in June, July, and August 2020. 
 
10. In addition to making representations regarding the percentage of firmwide AUM 
that was ESG integrated to specific clients and prospective clients, Invesco made similar 
representations to a broader audience.  In its 2020 ESG Investment Stewardship Report, published 
in April 2021, Invesco represented: “Currently we are at 75% Invesco aspires to 100% ESG 
integration across all investment capabilities by 2023.”  A footnote stated that “Invesco uses an 
internal framework to measure the level of ESG considerations as an influence in investment 
decision making” and that “approximately 75% of Invesco’s investment teams have attained the 
ESG integration level defined as minimal but systematic integration.”  The 2020 ESG Investment 

 
 
Stewardship Report stated that “ESG integration” included “ESG considerations as an influence in 
investment decision making” and further describes “ESG integration” to be “[b]road and 
systematic ESG integration taking place at a strategy level and across the process.” 
 
11. In its 2021 ESG Investment Stewardship Report, published in July 2022, Invesco 
further described ESG integration as including “[c]onsideration of financially material ESG 
aspects.”  The 2021 ESG Investment Stewardship Report further stated, under the heading “ESG 
integration,” “[w]e integrate financially material ESG considerations across our investment 
platform, taking into account critical factors that help deliver strong outcomes for clients.”  Invesco 
noted that “investment teams responsible for managing approximately 85% of Invesco’s AUM 
have attained the ESG integration level defined as minimal but systematic integration.” 
 
12. Both the 2020 and 2021 ESG Investment Stewardship Reports fit within the 
definition of “advertisements” under the then-applicable Advertising Rule.  Both reports were 
communicated to more than one person, as they were available on Invesco’s website, and the two 
reports offered Invesco’s investment advisory services with regard to securities. 
 
13. The statements to clients and prospective clients described above and in the ESG 
Investment Stewardship Reports did not specifically relate to any funds or investment strategies. 
 
The Stated Percentage of ESG-Integrated AUM Was Overstated 
 
14. The aforementioned representations Invesco made concerning the percentage of 
AUM that was ESG integrated were overstated. 
 
15. First, a substantial portion of the investment strategies that Invesco counted as ESG 
integrated could not consider ESG factors in making investment decisions because they were 
passive strategies that did not follow an ESG index.  While Invesco publicly stated ESG integration 
meant “ESG considerations as an influence in investment decision making,” Invesco counted all of 
its ETFs—including passive ETFs that followed a non-ESG index—as ESG integrated.  For 
example, Invesco’s QQQ ETF—an index product that tracks the 100 largest non-financial 
companies traded on the Nasdaq exchange, which, at the time Invesco was making the 
representations described above included approximately $180 billion in AUM—was included in 
the calculation.  Between 2020 and 2022, passive ETFs represented approximately one-third of 
Invesco’s AUM.  Invesco overstated the percentage of AUM that was ESG integrated because the 
percentage included all ETFs, irrespective of whether the ETF followed an ESG strategy. 
 
16. Invesco employees, including certain senior members of the ETFs and Index 
Strategies group, recognized the potential issue arising from counting all ETFs as ESG integrated.  
Until mid-2021, certain senior members of the ETFs and Index Strategies group were unaware that 
Invesco’s ESG team had classified all ETFs, including passive ETFs that did not follow an ESG 
strategy, as ESG integrated.  Those individuals raised questions and concerns regarding the 
classification of all ETFs as ESG integrated, noting that identifying passive ETFs as ESG 
integrated presents potential commercial challenges.  Writing in July 2021, one member of the 
ETF and Index Strategies team noted that for passive strategies, which constituted over one-third 
of Invesco’s AUM, Invesco had “not been hired in these products to express an ESG tilt.”  Certain 

 
 
employees proposed refining Invesco’s previously announced goal of having 100% of its AUM 
ESG integrated so that the goal would only pertain to actively managed strategies or ESG-specific 
ETFs, but that change was not made. 
 
17. Second, even though Invesco stated that its ESG-integrated investment strategies 
had a “minimal but systematic” level of ESG integration, it had an evolving internal framework 
and did not have written policies and procedures governing what should be considered ESG 
integrated.  As a result, Invesco’s approach to classifying strategies as ESG integrated changed 
throughout the Relevant Period.  For a portion of the Relevant Period, Invesco’s representations 
regarding the percentage of its AUM that was ESG integrated were based on one employee’s 
“heatmap,” which assessed various investment teams’ ESG-related practices.  Based on the 
investment teams’ responses to a set of questions, discussions with the investment teams, and the 
employee’s understanding of the teams’ practices, the employee then categorized all of the AUM 
managed by that team as ESG integrated or not ESG integrated, without conducting any strategy-
by-strategy analysis as to whether the investment team used ESG factors in investment decision-
making.  Later during the Relevant Period, the basis for Invesco’s representations changed to a 
survey in which assets under management were evaluated at a strategy level.  As a result of those 
changes to its internal framework, the percentage of ESG integrated AUM varied, with figures in 
excess of 90% reported during the earliest part of the Relevant Period followed by percentages in 
the range of 70% to 85%. 
 
18. Third, Invesco’s justification for the integration of its passive ETFs is at odds with 
the public statements Invesco made in the ESG Investment Stewardship Reports.  Invesco justified 
its classification of passive ETFs as ESG integrated solely on the basis of two factors: its index 
oversight practice and its proxy voting policy.  Invesco had an index oversight process that applied 
to these passive ETFs, to evaluate the index provider’s technological capabilities and operational 
resilience, including issues related to cyber security risk, key man risk, the ESG attributes and 
practices of the index provider, and whether the index rebalanced in a manner in-line with 
investors’ expectations.  Invesco’s approach focused on the operations of the index provider and 
not how it selected the underlying securities in the index in which clients’ funds were being 
invested.  The ESG team also considered Invesco’s proxy voting policy, which applied to all of its 
strategies that held equity securities and governed how securities held in passive ETFs would be 
voted.  Specifically, equity securities held in passive ETFs would, if the same securities were also 
held in an actively managed strategy, follow the voting of the active strategy.  The active manager 
generally would apply ESG factors in voting the shares to the extent those ESG factors were 
financially material and would also participate in ESG-related engagements as relevant.  When a 
given equity security was not held by an active strategy, the passively held shares were voted 
following Invesco’s default proxy voting policy, pursuant to which there was no active 
consideration on a vote-by-vote basis as to whether ESG factors were financially material to the 
investment.  This approach for the non-overlap situations was inconsistent with Invesco’s 
disclosure in the 2021 ESG Investment Stewardship Report stating that ESG integration included 
“consideration of financially material ESG aspects.” 
Invesco Failed to Adopt and Implement Reasonably Designed Policies and Procedures 
 
19. Invesco failed to adopt and implement written policies and procedures reasonably 
designed to prevent violations of the Advisers Act and the rules thereunder.  Specifically, 

 
 
notwithstanding Invesco making representations to clients and prospective clients regarding the 
percentage of firmwide AUM that was ESG integrated, Invesco never adopted a written policy that 
defined “ESG integration,” even though that was a term it used in public facing documents.  As 
such, Invesco lacked policies and procedures to ensure AUM was appropriately classified on an 
aggregated level as ESG integrated and to confirm that the basis for including AUM within the 
bucket of ESG integrated assets, including the AUM held in passive ETFs, was correct.  As a 
result, Invesco overstated the percentage of firmwide AUM that was ESG integrated to clients and 
prospective clients.  
Violations 
20. As a result of the conduct described above, Invesco willfully
1
 violated Section 
206(2) of the Advisers Act, which prohibits an investment adviser from “engag[ing] in any 
transaction, practice, or course of business which operates as a fraud or deceit upon any client or 
prospective client.”  A violation of Section 206(2) may rest on a finding of simple negligence; 
scienter is not required.  SEC v. Steadman, 967 F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. 
Capital Gains Research Bureau, Inc., 375 U.S. 180, 194-95 (1963)). 
 
21. As a result of the conduct described above, Invesco willfully violated Section 
206(4) of the Advisers Act and Rule 206(4)-1(a)(5) thereunder, which makes it a fraudulent, 
deceptive, or manipulative act, practice, or course of business within the meaning of Section 
206(4) of the Advisers Act to, among other things, directly or indirectly publish, circulate or 
distribute an advertisement which contains any untrue statement of material fact, or which is 
otherwise false or misleading.  The rule was replaced by the Marketing Rule with an effective 
date of May 4, 2021 and a compliance date of November 4, 2022.  The ESG Stewardship 
Reports at issue pre-dated the Marketing Rule’s November 4, 2022 compliance date. 
 
22. As a result of the conduct described above, Invesco willfully violated Section 
206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment 
adviser to adopt and implement written compliance policies and procedures reasonably designed to 
prevent violations of the Advisers Act and the rules thereunder. 
 
23. As a result of the conduct described above, Invesco willfully violated Section 
206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which make it unlawful for any 
investment adviser to a pooled investment vehicle to “make any untrue statement of a material fact 
or to omit to state a material fact necessary to make the statements made, in light of the 
circumstances under which they were made, not misleading, to any investor or prospective investor 
 
1
 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, “means 
no more than that the person charged with the duty knows what he is doing.” See Wonsover v. 
SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)).  There is no requirement that the actor “also be aware that he is violating one of the 
Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 
Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 
statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 
forth the showing required to establish that a person has “willfully omit[ted]” material from a 
required disclosure in violation of Section 207 of the Advisers Act).  

 
 
in the pooled investment vehicle; or [o]therwise engage in any act, practice, or course of business 
that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in 
the pooled investment vehicle.”  A showing of negligence is sufficient to establish a violation of 
Section 206(4) of the Advisers Act or Rule 206(4)-8 thereunder; proof of scienter is not required.  
Steadman, 967 F.2d at 647. 
 
Cooperation 
24. In determining to accept the Offer, the Commission considered cooperation 
afforded the Commission staff.  Throughout the investigation, Invesco voluntarily met with the 
Commission staff on multiple occasions and cooperated to provide factual summaries of relevant 
information. 
IV. 
In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 
Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 
ORDERED that: 
 
 A. Invesco shall cease and desist from committing or causing any violations and any 
future violations of Sections 206(2) and 206(4) of the Advisers Act and Rules 206(4)-1, 206(4)-7 
and 206(4)-8 thereunder. 
 B. Invesco is censured. 
 
 C. Invesco shall, within 10 days of the entry of this Order, pay a civil money penalty in 
the amount of $17.5 million to the Commission for transfer to the general fund of the United States 
Treasury, subject to Section 21F(g)(3) of the Securities Exchange Act of 1934.  If timely payment 
is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made 
in one of the following ways: 
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request. 
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to: 
 

 
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK  73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Invesco Advisers, Inc. as Respondent in these proceedings, and the file number of the proceedings; 
a copy of the cover letter and check or money order must be sent to Stephen E. Donahue, Assistant 
Director, Asset Management Unit, Securities and Exchange Commission, Suite 900, 950 East Paces 
Ferry Road NE, Atlanta, GA 30326, or such other address as the Commission staff may provide.  
 
D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
By the Commission. 
 
 
 
     
     Vanessa A. Countryman 
     Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6770 / November 8, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22306 

  

 

In the Matter of 

 

 INVESCO ADVISERS, INC., 

 

Respondent. 

 

 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-AND-

DESIST PROCEEDINGS PURSUANT 

TO SECTIONS 203(e) AND 203(k) OF 

THE INVESTMENT ADVISERS ACT 

OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS 

AND A CEASE-AND-DESIST ORDER 

  

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against Invesco Advisers, Inc. (“Invesco” or the “Respondent”). 

 

II. 

 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the 

Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below. 

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds that: 

 

Summary 

 

1. Between approximately April 2020 and July 2022 (the “Relevant Period”), Invesco 

made misleading statements concerning the company-wide percentage of assets under management 



 

 

(“AUM”) by it and its affiliates that was “ESG integrated,” a term that Invesco used to indicate the 

incorporation of environmental, social, and governance (“ESG”) considerations into investment 

decision making processes.  Invesco made these statements in presentations to the boards of 

directors of funds it advised, in proposals to prospective clients, and in certain marketing materials.   

 

2. By the fall of 2019, Invesco believed that incorporating ESG considerations into its 

portfolio management activities globally was of commercial importance.  An internal analysis 

completed by senior ESG team members indicated that, company-wide, at least $370 billion in 

AUM were “at risk” of clients moving the assets to another firm, prompting Invesco to accelerate 

its “ESG integration” effort.  Consistent with its effort to market its ESG capabilities, Invesco made 

claims to certain clients and potential clients about the percentage of firmwide AUM at Invesco that 

was “ESG integrated.”  Invesco also included the percentage of company-wide ESG-integrated 

AUM in its publicly available ESG Investment Stewardship Reports, which described “ESG 

integration” as including “ESG considerations as an influence in investment decision making,” 

“[b]road and systematic ESG integration taking place at a strategy level and across the process,” 

and “[c]onsideration of financially material ESG aspects.”  The claimed percentage of AUM that 

was ESG integrated varied from 70% to 94% during the Relevant Period. 

 

3. These percentages counted Invesco’s passive ETFs, which contained a substantial 

portion of Invesco’s AUM, as ESG integrated, which was misleading as many of the ETFs could 

not consider ESG factors in making investment decisions because they were passive strategies that 

did not follow an ESG-related index.  This included Invesco’s largest ETF, the Invesco QQQ 

Trust—an index product designed to track the 100 largest non-financial companies traded on the 

Nasdaq exchange.   

 

4. Moreover, Invesco had no comprehensive set of written policies and procedures 

concerning how Invesco would determine the percentage of firmwide AUM that was ESG 

integrated.  For a period of time during the Relevant Period, the percentage of firmwide AUM that 

was determined by the ESG team to be ESG integrated was based on analysis assessing investment 

teams’ general ESG integration approach rather than analysis at a fund or strategy level.  Further, 

with respect to passive ETFs following a non-ESG index, ESG considerations could not be “an 

influence in investment decision making.” 

Respondent 

5. Invesco Advisers, Inc. is a Delaware corporation with its principal place of 

business in Atlanta, Georgia.  Invesco has been registered with the Commission as an investment 

adviser since December 30, 1988.  In its Form ADV filed on April 24, 2024, Invesco reported that 

it had over 37,000 clients and approximately $746 billion in regulatory AUM, including managing 

over 450 pooled investment vehicles that collectively hold over $580 billion in regulatory AUM.  

Invesco Group Services, Inc. is the sole owner of Invesco Advisers, Inc., and Invesco Ltd. is the 

ultimate parent of the company.  Invesco Ltd. is publicly traded, with its shares listed on the New 

York Stock Exchange under the symbol “IVZ.” 



 

 

Facts 

 

The Relevance of “ESG Integration” to Invesco’s Business 

 

6. By November 2019, Invesco believed that identifying the use of ESG 

considerations across its global investment platform was a commercial imperative.  Invesco’s 

internal analysis concluded that interest in ESG integration had grown at an unprecedented rate.  

The Europe, Middle East, and Africa (“EMEA”) market was most affected, as revisions to the 

European regulatory framework would require enhanced sustainability-related disclosures for 

products and mandatory integration of sustainability risks in financial market participants’ 

investment decision-making processes.  Invesco was also receiving requests for proposal (“RFP”) 

inquiries asking about ESG integration.  For example, an August 2019 due diligence questionnaire 

from a client based in the United States included an inquiry concerning Invesco’s “integration of 

ESG criteria into your investment philosophy and/or your product suite.”  An internal analysis 

from 2019 completed by senior ESG team members stated that 30% of Invesco’s AUM worth 

$370 billion was “at risk” given increased interest in ESG integration.   

Statements to Clients and Potential Clients in Presentations, RFP Responses, and 

Advertisements 

 

7. Between approximately April 2020 and July 2022, Invesco made statements in 

documents that were not specific to any of its funds or investment strategies concerning Invesco’s 

firmwide ESG integration and the percentage of its AUM that was ESG integrated based on its 

evolving internal framework and approach. 

 

8. In an April 2020 presentation to representatives of the U.S. registered funds it 

advised, Invesco described its “[c]ommitment to ESG,” noting that it had an “[e]volving and 

committed approach to ESG integration with over 94% of AUM currently integrating ESG at 

minimum levels with a scale of approaches depending on asset class.”  In that same presentation, 

Invesco represented that 87% of Invesco’s assets had “minimal but systematic” ESG integration, 

with another 6% of assets that were “systematic and fully integrated.”   

 

9. Invesco also made representations regarding the percentage of firmwide AUM that 

was ESG integrated to prospective clients.  For example, in a presentation titled “Invesco ESG 

approach and capabilities” provided to a large U.S. wealth management firm on June 9, 2020, 

Invesco touted “Our Commitment to ESG,” calling itself “A Trusted Partner in Responsible 

Investment” and noting “90% of AUM integrating minimum ESG levels.”  Invesco made similar 

representations to other prospective clients in June, July, and August 2020. 

 

10. In addition to making representations regarding the percentage of firmwide AUM 

that was ESG integrated to specific clients and prospective clients, Invesco made similar 

representations to a broader audience.  In its 2020 ESG Investment Stewardship Report, published 

in April 2021, Invesco represented: “Currently we are at 75% Invesco aspires to 100% ESG 

integration across all investment capabilities by 2023.”  A footnote stated that “Invesco uses an 

internal framework to measure the level of ESG considerations as an influence in investment 

decision making” and that “approximately 75% of Invesco’s investment teams have attained the 

ESG integration level defined as minimal but systematic integration.”  The 2020 ESG Investment 



 

 

Stewardship Report stated that “ESG integration” included “ESG considerations as an influence in 

investment decision making” and further describes “ESG integration” to be “[b]road and 

systematic ESG integration taking place at a strategy level and across the process.” 

 

11. In its 2021 ESG Investment Stewardship Report, published in July 2022, Invesco 

further described ESG integration as including “[c]onsideration of financially material ESG 

aspects.”  The 2021 ESG Investment Stewardship Report further stated, under the heading “ESG 

integration,” “[w]e integrate financially material ESG considerations across our investment 

platform, taking into account critical factors that help deliver strong outcomes for clients.”  Invesco 

noted that “investment teams responsible for managing approximately 85% of Invesco’s AUM 

have attained the ESG integration level defined as minimal but systematic integration.” 

 

12. Both the 2020 and 2021 ESG Investment Stewardship Reports fit within the 

definition of “advertisements” under the then-applicable Advertising Rule.  Both reports were 

communicated to more than one person, as they were available on Invesco’s website, and the two 

reports offered Invesco’s investment advisory services with regard to securities. 

 

13. The statements to clients and prospective clients described above and in the ESG 

Investment Stewardship Reports did not specifically relate to any funds or investment strategies. 

 

The Stated Percentage of ESG-Integrated AUM Was Overstated 

 

14. The aforementioned representations Invesco made concerning the percentage of 

AUM that was ESG integrated were overstated. 

 

15. First, a substantial portion of the investment strategies that Invesco counted as ESG 

integrated could not consider ESG factors in making investment decisions because they were 

passive strategies that did not follow an ESG index.  While Invesco publicly stated ESG integration 

meant “ESG considerations as an influence in investment decision making,” Invesco counted all of 

its ETFs—including passive ETFs that followed a non-ESG index—as ESG integrated.  For 

example, Invesco’s QQQ ETF—an index product that tracks the 100 largest non-financial 

companies traded on the Nasdaq exchange, which, at the time Invesco was making the 

representations described above included approximately $180 billion in AUM—was included in 

the calculation.  Between 2020 and 2022, passive ETFs represented approximately one-third of 

Invesco’s AUM.  Invesco overstated the percentage of AUM that was ESG integrated because the 

percentage included all ETFs, irrespective of whether the ETF followed an ESG strategy. 

 

16. Invesco employees, including certain senior members of the ETFs and Index 

Strategies group, recognized the potential issue arising from counting all ETFs as ESG integrated.  

Until mid-2021, certain senior members of the ETFs and Index Strategies group were unaware that 

Invesco’s ESG team had classified all ETFs, including passive ETFs that did not follow an ESG 

strategy, as ESG integrated.  Those individuals raised questions and concerns regarding the 

classification of all ETFs as ESG integrated, noting that identifying passive ETFs as ESG 

integrated presents potential commercial challenges.  Writing in July 2021, one member of the 

ETF and Index Strategies team noted that for passive strategies, which constituted over one-third 

of Invesco’s AUM, Invesco had “not been hired in these products to express an ESG tilt.”  Certain 



 

 

employees proposed refining Invesco’s previously announced goal of having 100% of its AUM 

ESG integrated so that the goal would only pertain to actively managed strategies or ESG-specific 

ETFs, but that change was not made. 

 

17. Second, even though Invesco stated that its ESG-integrated investment strategies 

had a “minimal but systematic” level of ESG integration, it had an evolving internal framework 

and did not have written policies and procedures governing what should be considered ESG 

integrated.  As a result, Invesco’s approach to classifying strategies as ESG integrated changed 

throughout the Relevant Period.  For a portion of the Relevant Period, Invesco’s representations 

regarding the percentage of its AUM that was ESG integrated were based on one employee’s 

“heatmap,” which assessed various investment teams’ ESG-related practices.  Based on the 

investment teams’ responses to a set of questions, discussions with the investment teams, and the 

employee’s understanding of the teams’ practices, the employee then categorized all of the AUM 

managed by that team as ESG integrated or not ESG integrated, without conducting any strategy-

by-strategy analysis as to whether the investment team used ESG factors in investment decision-

making.  Later during the Relevant Period, the basis for Invesco’s representations changed to a 

survey in which assets under management were evaluated at a strategy level.  As a result of those 

changes to its internal framework, the percentage of ESG integrated AUM varied, with figures in 

excess of 90% reported during the earliest part of the Relevant Period followed by percentages in 

the range of 70% to 85%. 

 

18. Third, Invesco’s justification for the integration of its passive ETFs is at odds with 

the public statements Invesco made in the ESG Investment Stewardship Reports.  Invesco justified 

its classification of passive ETFs as ESG integrated solely on the basis of two factors: its index 

oversight practice and its proxy voting policy.  Invesco had an index oversight process that applied 

to these passive ETFs, to evaluate the index provider’s technological capabilities and operational 

resilience, including issues related to cyber security risk, key man risk, the ESG attributes and 

practices of the index provider, and whether the index rebalanced in a manner in-line with 

investors’ expectations.  Invesco’s approach focused on the operations of the index provider and 

not how it selected the underlying securities in the index in which clients’ funds were being 

invested.  The ESG team also considered Invesco’s proxy voting policy, which applied to all of its 

strategies that held equity securities and governed how securities held in passive ETFs would be 

voted.  Specifically, equity securities held in passive ETFs would, if the same securities were also 

held in an actively managed strategy, follow the voting of the active strategy.  The active manager 

generally would apply ESG factors in voting the shares to the extent those ESG factors were 

financially material and would also participate in ESG-related engagements as relevant.  When a 

given equity security was not held by an active strategy, the passively held shares were voted 

following Invesco’s default proxy voting policy, pursuant to which there was no active 

consideration on a vote-by-vote basis as to whether ESG factors were financially material to the 

investment.  This approach for the non-overlap situations was inconsistent with Invesco’s 

disclosure in the 2021 ESG Investment Stewardship Report stating that ESG integration included 

“consideration of financially material ESG aspects.” 

Invesco Failed to Adopt and Implement Reasonably Designed Policies and Procedures 

 

19. Invesco failed to adopt and implement written policies and procedures reasonably 

designed to prevent violations of the Advisers Act and the rules thereunder.  Specifically, 



 

 

notwithstanding Invesco making representations to clients and prospective clients regarding the 

percentage of firmwide AUM that was ESG integrated, Invesco never adopted a written policy that 

defined “ESG integration,” even though that was a term it used in public facing documents.  As 

such, Invesco lacked policies and procedures to ensure AUM was appropriately classified on an 

aggregated level as ESG integrated and to confirm that the basis for including AUM within the 

bucket of ESG integrated assets, including the AUM held in passive ETFs, was correct.  As a 

result, Invesco overstated the percentage of firmwide AUM that was ESG integrated to clients and 

prospective clients.  

Violations 

20. As a result of the conduct described above, Invesco willfully1 violated Section 

206(2) of the Advisers Act, which prohibits an investment adviser from “engag[ing] in any 

transaction, practice, or course of business which operates as a fraud or deceit upon any client or 

prospective client.”  A violation of Section 206(2) may rest on a finding of simple negligence; 

scienter is not required.  SEC v. Steadman, 967 F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. 

Capital Gains Research Bureau, Inc., 375 U.S. 180, 194-95 (1963)). 

 

21. As a result of the conduct described above, Invesco willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-1(a)(5) thereunder, which makes it a fraudulent, 

deceptive, or manipulative act, practice, or course of business within the meaning of Section 

206(4) of the Advisers Act to, among other things, directly or indirectly publish, circulate or 

distribute an advertisement which contains any untrue statement of material fact, or which is 

otherwise false or misleading.  The rule was replaced by the Marketing Rule with an effective 

date of May 4, 2021 and a compliance date of November 4, 2022.  The ESG Stewardship 

Reports at issue pre-dated the Marketing Rule’s November 4, 2022 compliance date. 

 

22. As a result of the conduct described above, Invesco willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment 

adviser to adopt and implement written compliance policies and procedures reasonably designed to 

prevent violations of the Advisers Act and the rules thereunder. 

 

23. As a result of the conduct described above, Invesco willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which make it unlawful for any 

investment adviser to a pooled investment vehicle to “make any untrue statement of a material fact 

or to omit to state a material fact necessary to make the statements made, in light of the 

circumstances under which they were made, not misleading, to any investor or prospective investor 

 
1 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act, “means 

no more than that the person charged with the duty knows what he is doing.” See Wonsover v. 

SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 

1949)).  There is no requirement that the actor “also be aware that he is violating one of the 

Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 

Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 

statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 

forth the showing required to establish that a person has “willfully omit[ted]” material from a 

required disclosure in violation of Section 207 of the Advisers Act).  



 

 

in the pooled investment vehicle; or [o]therwise engage in any act, practice, or course of business 

that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in 

the pooled investment vehicle.”  A showing of negligence is sufficient to establish a violation of 

Section 206(4) of the Advisers Act or Rule 206(4)-8 thereunder; proof of scienter is not required.  

Steadman, 967 F.2d at 647. 

 

Cooperation 

24. In determining to accept the Offer, the Commission considered cooperation 

afforded the Commission staff.  Throughout the investigation, Invesco voluntarily met with the 

Commission staff on multiple occasions and cooperated to provide factual summaries of relevant 

information. 

IV. 

In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent’s Offer. 

 

Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 

ORDERED that: 

 

 A. Invesco shall cease and desist from committing or causing any violations and any 

future violations of Sections 206(2) and 206(4) of the Advisers Act and Rules 206(4)-1, 206(4)-7 

and 206(4)-8 thereunder. 

 B. Invesco is censured. 

 

 C. Invesco shall, within 10 days of the entry of this Order, pay a civil money penalty in 

the amount of $17.5 million to the Commission for transfer to the general fund of the United States 

Treasury, subject to Section 21F(g)(3) of the Securities Exchange Act of 1934.  If timely payment 

is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made 

in one of the following ways: 

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request. 

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

 

http://www.sec.gov/about/offices/ofm.htm


 

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK  73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Invesco Advisers, Inc. as Respondent in these proceedings, and the file number of the proceedings; 

a copy of the cover letter and check or money order must be sent to Stephen E. Donahue, Assistant 

Director, Asset Management Unit, Securities and Exchange Commission, Suite 900, 950 East Paces 

Ferry Road NE, Atlanta, GA 30326, or such other address as the Commission staff may provide.  

 

D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

By the Commission. 

 

 

 

     

     Vanessa A. Countryman 

     Secretary