DWS fined $43m for greenwashing

DWS will pay $43 million (US$27m) to settle a long-running greenwashing case brought by Frankfurt prosecutors.

In 2021, a whistleblower - former DWS group sustainability officer Desiree Fixler - came forward with claims the asset manager was making misleading public statements about its commitment to environmental, social and governance (ESG) investing.

In a statement to FS Sustainability at the time, DWS called the allegations "unfounded" and said it "firmly rejects" them.

At the same time, both regulators in Europe and the Securities and Exchange Commission (SEC) in the US turned their attention to DWS.

The asset manager settled a case brought by the SEC in 2023, paying $39.8 million (US$25m) over allegations of greenwashing and weak anti-money laundering processes.

However, the case brought by the Frankfurt Public Prosecutor's Office lasted longer.

First lodged in 2021, the case accused DWS of greenwashing over a period of close to three years, with prosecutors saying that investors were misled between mid-2020 to the end of January 2023 by claims that ESG was integral to the investment approach of DWS.

DWS also claimed to be a "leader" in ESG investing, but German prosecutors said such statements "did not correspond to reality."

DWS has agreed to pay the $43 million fine and said that it would not impact its first quarter results.

"We welcome the conclusion of the investigation into DWS by the Frankfurt Public Prosecutor's office," the firm said.

"The Frankfurt Public Prosecutor's Office has identified a negligent infringement and issued a fine to DWS in relation to deficits in the past regarding certain ESG-related documentation and control processes, procedures and marketing statements.

"We accept the fine issued by the Frankfurt Public Prosecutor's Office. In recent years, we have already publicly acknowledged that in the past our marketing was sometimes exuberant. We have already improved our internal documentation and control processes, and we continue to do so. We have cooperated fully throughout the entire investigation."