Prosecutors in Germany raided Deutsche Bank’s asset management unit DWS and the bank’s headquarters yesterday over allegations the unit misled investors about how green its investments were.
The prosecutors reportedly said “sufficient factual evidence has emerged” that environmental, social and governance (ESG) factors were taken into account in a minority of investments “but were not taken into account at all in a large number of investments,” contrary to statements in DWS fund sales prospectuses.
According to Reuters, prosecutors said that they were following up on press reports and a whistleblower who claimed that DWS sold investments as “greener” or “more sustainable” than they actually were.
Germany’s financial regulator, known as BaFin, and the US Securities and Exchange Commission are also reportedly investigating DWS for allegedly overstating how it used its sustainable investing criteria.
A spokesman for Deutsche Bank told City A.M. that DWS was cooperating with all of the relevant regulators and authorities investigating the greenwashing allegations.
Deutsche Bank owns 79 per cent of DWS.