The CEO of Deutsche Bank’s asset management subsidiary DWS has resigned and the company’s management is “shaken” after about 50 government investigators raided the companies’ offices searching for evidence of greenwashing, Clean Energy Wire reports.
“Financial supervisory authority BaFin said DWS had been investigated over greenwashing allegations since the beginning of the year to clarify whether the asset management company had tricked customers into buying financial products that were irregularly labelled as sustainable investments,” the Berlin-based newswire writes.
“Contrary to what was said in customer information leaflets, only a minority of DWS funds are managed along ESG [environmental, social, governance] criteria,” the authority said, and many investment decisions were made with no reference at all to ESG factors.
“Greenwashing is not a petty crime,” said sustainable financial markets specialist Magdalena Senn of the NGO Finanzwende, adding that the raid and the resignation pointed to a long-standing problem in sustainable finance. “Providers offering investments labelled as sustainable will now examine more closely whether their own criteria match their promises.”
Last year, Clean Energy Wire cited Finanzewende’s finding that most of Germany’s sustainable funds amounted to little more than greenwashing. “The result is a devastating evaluation of the green investment boom,” the group said at the time.
Investors subsequently began pouring hundreds of millions of dollars into ESG funds in the wake of Russia’s invasion of Ukraine. But not before Bloomberg News declared a “Great Climate Backslide”, with major banks lavishing more than a trillion dollars on oil, gas, and coal projects in the three months after last year’s COP 26 climate summit in Glasgow.