(Frankfurt) German justice raided on Tuesday in Frankfurt the premises of Deutsche Bank and its asset management subsidiary DWS targeted in an investigation for “fraud” on investments “sold as more “green” and “sustainable” than they were not in reality, ”announced the city prosecutor’s office.
Posted at 10:19 a.m.
The searches “are in connection with the charges of greenwashing (greenwashing) that have been brought against DWS”, second European asset manager, a Deutsche Bank spokesperson told AFP.
“We have worked continuously and thoroughly with all relevant regulators and authorities on this issue and will continue to do so,” a DWS spokesperson told AFP.
Justice has, to date, found “evidence that, contrary to what is indicated in the sales prospectuses of the funds” promoted as “sustainable” managed by DWS, the ESG criteria (for environmental, social and governance, editor’s note ) “have not been taken into account in a large number of investments”, explains the prosecution.
ESG-labeled investments have become a major asset class as global warming becomes an unavoidable social issue.
The German procedure targets “employees and persons responsible at this stage unknown” of DWS, a listed company headed by Asoka Wöhrmann, a pure product of Deutsche Bank.
The investigation launched for “prospectus fraud” originated “from press information” referring in particular to the statements of a whistleblower to the American authorities seized of the case, specifies the Frankfurt prosecution.
The alert had been given to the American market police (SEC) and the American federal police (FBI) by the former head of sustainable development within DWS, Desiree Fixler, who accused the asset manager of have inflated the size of its investments meeting ESG criteria.
In its annual report for 2020, DWS said it manages “total portfolios with (an) ESG (criteria) integration approach” worth 459 billion euros.
A European regulation of March 2021 has since reinforced transparency on financial products promoting ESG criteria.
As a result, DWS revised its approach to the matter and displayed in July of the same year a total of 70 billion euros of products complying with the European rule.
The German financial supervisor, Bafin, participated in the searches on Tuesday, the prosecution said.
The authority has played an expert role in assisting the police, but has not yet taken binding measures against DWS or its parent company, AFP learned.
In the United States, Deutsche Bank has been under surveillance since February, for a year by monitors from the Department of Justice (DOJ), for its delay in reporting the allegations of Mme Fixler in relation to the ESG label.
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.