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Deutsche Bank’s asset manager DWS has been fined €25mn by German prosecutors over a greenwashing scandal, following long-running investigations by authorities in the US and Germany.
DWS, which is 80 per cent owned by the German lender, misled investors about its green credentials, Frankfurt prosecutors said on Wednesday.
Prosecutors concluded that the asset manager used “aggressive” advertising that “did not reflect reality”, citing the claim that environmental, social and governance was “part of our DNA” and that the firm was a “leader” in the field as examples.
The investigation was launched after a whistleblower complaint from Desiree Fixler, DWS’s former head of environmental, social and governance. Fixler alleged that DWS made misleading statements in its 2020 annual report about the size of its ESG assets.
Shares in DWS tumbled in 2021 after the US Securities and Exchange Commission launched its investigation, with €1bn in stock market value wiped out in a day.
DWS agreed to pay $19mn to settle the charges brought by the US securities regulator in 2023, which at that time was the watchdog’s highest-ever penalty related to ESG criteria against an investment adviser.
While the SEC’s settlement referred to a period between 2018 and 2021, the German prosecutors’ investigation found the misconduct continued until 2023, after the appointment of current chief executive Stefan Hoops in June 2022.
Former chief executive Asoka Wöhrmann left in the wake of the scandal in 2022. He received a €13.7mn payout, including €8.15mn in severance pay. At the time, DWS highlighted that the severance package was subject to the “possibility of clawback”.
Frankfurt prosecutors told the Financial Times that criminal investigations against certain individuals were still ongoing, but declined to name those involved.
A separate investigation into DWS’s conduct at German financial watchdog BaFin is ongoing. A BaFin spokesperson declined to comment.
DWS, which has been raided three times since 2022, said it welcomed the conclusion of the prosecutors’ investigation and accepted the fine, having “co-operated fully throughout the entire investigation”.
The asset manager said on Wednesday that it had already acknowledged that “our marketing was sometimes exuberant” in the past, and said it had improved its internal documentation and control processes.
The company said the fine would not affect its quarterly results because it had made provisions. Shares in DWS, which had risen to an all-time high last month, lost 1.2 per cent in Wednesday trading.
