German prosecutors have fined DWS, a Deutsche Bank-owned asset manager, €25m ($27m) for falsely claiming environmental, social, and governance (ESG) credentials, a practice known as greenwashing.
The Frankfurt state prosecutor’s office announced the fine, stating that DWS’s claims of being an ESG “leader” and that ESG was an integral part of its DNA did not match reality.
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This occurred from around mid-2020 to the end of January 2023.
The investigation into DWS started in 2021 after a whistleblower’s allegations prompted regulatory scrutiny in both the US and Europe, reported Reuters.
The firm was accused of exaggerating the green credentials of its investment funds.
In a statement, DWS said: “We welcome the conclusion of the investigation into DWS by the Frankfurt Public Prosecutor’s office.
“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.”
This penalty follows a separate $25m settlement DWS agreed to pay in the US in 2023 over related misstatements linked to ESG investing and lapses in anti-money laundering policies.
Last month, DWS Group and Deutsche Bank partnered to expand private credit origination and investment opportunities for DWS clients.
