Dive Brief:
- Deutsche Bank’s asset management arm DWS Group was charged 25 million euros ($27 million) for greenwashing and “negligent infringement” related to its ESG-related marketing statements, documentation and control processes.
- The Frankfurt Public Prosecutor’s office issued the fine Wednesday, marking the conclusion of a three-year investigation into the group’s alleged failure to incorporate ESG factors in its investments. The German prosecutor said statements made by DWS about being an “ESG leader” or ESG being an “integral part of [its] DNA” did not paint a true picture, according to a translation of the April 2 release announcing the fine.
- The fine comes nearly two years after DWS was charged $19 million by the U.S. Securities and Exchange Commission for making misleading statements about how it incorporated ESG factors into its research and investment recommendations.
Dive Insight:
The Frankfurt Public Prosecutor’s office said it conducted the investigation in conjunction with the Federal Criminal Police Office in Wiesbaden, Germany. The size of the fine was calculated based on the total revenue generated by DWS’ parent company Deutsche Bank, the prosecutor’s office said.
“The impression created on the Capital Market of DWS Group’s supposed market-leading position in sustainable financial products was not, or not completely, fulfilled by the business organization itself,” the German prosecutor added in its Wednesday statement.
DWS agreed to pay the fine the same day and said the settlement would have no impact on the financial results of its first quarter of 2025, as it has already made provisions.
“In recent years, we have already publicly acknowledged that in the past our marketing was sometimes exuberant,” DWS said in an April 2 statement. “We have already improved our internal documentation and control processes, and we continue to do so. We have cooperated fully throughout the entire investigation.”
The statement from the German prosecutor’s office mirrors the enforcement action issued by the SEC in 2023, when DWS was charged a hefty fine for alleged greenwashing. At the time, the U.S. regulatory agency said DWS Investment Management Americas had “failed to adequately implement certain provisions of its global ESG integration policy as it had led clients and investors to believe it would.” The SEC also said that DWS had fallen short on following the ESG investment processes it had marketed, despite advertising that “ESG was in its ‘DNA.’”
Investigations into DSW’s greenwashing practices on either side of the Atlantic were triggered by former Group Sustainability Officer Desiree Fixler going public in 2021 with claims that DWS had overstated its ESG credentials and fired her for raising concerns internally.
