German justice raided, Tuesday, May 31, the premises of Deutsche Bank and its fund management subsidiary DWS in Frankfurt in an investigation for “fraud” on investments “sold as ‘greener and more sustainable’ than they actually were”announced the public prosecutor’s office of the city.
Searches “are in connection with the accusations of “greenwashing” that have been brought against DWS”the second-largest asset manager in Europe, which “reported in the past collaborating with the authorities”said a Deutsche Bank spokesperson.
During his investigation, the justice “found clues” that “contrary to description” in the prospectuses of DWS sustainable funds, “ESG criteria [environnementaux, sociaux et de gouvernance] were only taken into account for a minority of the investments and were not taken into account for a large number of the financial investments”, explains the prosecution. ESG-labeled investments have become a major asset class as global warming becomes an unavoidable social issue.
Multiplying procedures
The German procedure, which targets employees of the bank and DWS for “investment fraud”, was launched following information published in the press and statements by a whistleblower to the American authorities, says a press release.
The alert was given by the former head of sustainable development at DWS, Desiree Fixler, who accused the management company of having inflated the size of its investments meeting ESG criteria.
A US federal investigation is also underway. In many countries around the world, initiatives are multiplying to combat “greenwashing”, or the exaggerated or even misleading promotion by companies of their initiatives in the fight against global warming.
In this context, the American stock market watchdog SEC unveiled an initiative last week to strengthen the transparency obligations of financial advisers and asset managers with regard to investments according to sustainable criteria.