The Greenwashing Giants
Invesco Ltd. – a name that rolls off the tongue like a well-practiced sales pitch. They want you to believe they’re the epitome of responsible investing, the champions of ESG (Environmental, Social, and Governance) principles. But peel open the brochure, and what do you find? A murky swamp of misleading claims and regulatory fines.
In November 2024, the U.S. Securities and Exchange Commission (SEC) slapped Invesco with a $17.5 million fine for misleading investors about the extent of ESG integration in their funds. From April 2020 to July 2022, Invesco claimed that between 70% and 94% of their assets under management were “ESG integrated.” In reality, much of this included passive ETFs that didn’t consider ESG factors at all. To make matters worse, Invesco didn’t even have a written policy defining what “ESG integration” meant. This wasn’t a simple misunderstanding; it was a deliberate attempt to cash in on the ESG boom without actually walking the talk.
The Market Timing Scandal
But the greenwashing isn’t where Invesco’s ethical lapses end. Let’s rewind to the early 2000s. Invesco was caught up in a massive market timing scandal. They allowed select investors to engage in rapid trading of mutual fund shares, exploiting pricing inefficiencies to their advantage. This practice, known as “market timing,” is illegal because it harms long-term investors by diluting the value of their holdings. Invesco’s senior management not only knew about this but institutionalised it through a secretive program called “Special Situations.” They even went as far as to prohibit documentation of these arrangements to keep them under wraps. In the end, Invesco had to settle with the SEC and several state attorneys general, agreeing to a cease and desist order.
Indian Regulatory Breaches
Invesco’s ethical shortcomings aren’t confined to the U.S. In 2024, their Indian arm, Invesco Asset Management India, settled charges with the Securities and Exchange Board of India (SEBI) for mutual fund regulation breaches. SEBI found that Invesco failed to maintain a clear separation between its portfolio management services and mutual fund operations. Worse still, there were transactions between the two that violated regulations. Invesco and five individuals, including the CEO, agreed to pay 49.8 million rupees (approximately $598,000) to settle the charges without admitting any wrongdoing.
The Cummins Connection
And now, the cherry on top. Invesco is a significant shareholder in Cummins Inc. (NYSE: CMI), the engine giant that was fined a record $1.675 billion in 2024 for using defeat devices to cheat emissions tests. Invesco owns approximately 1.2 million shares of Cummins, valued at around $381 million. So, while Invesco touts its commitment to responsible investing, it’s happily pocketing dividends from a company caught red-handed in environmental misconduct.
The Bottom Line
Invesco wants you to believe they’re the good guys in the finance world. They want you to think they’re leading the charge on ESG investing. But the reality is far different. They’re a company that has been fined for misleading investors, caught in illegal trading practices, and involved in regulatory breaches across multiple countries. And yet, they continue to profit from investments in companies with questionable ethical standards.
So, the next time you hear Invesco touting their ESG credentials, remember: it’s all smoke and mirrors. They’re not the guardians of responsible investing; they’re just another player in the game, willing to bend the rules when it suits them.
Lee Thompson – Founder, The Cummins Accountability Project