Deutsche Bank owned DWS has rejected claims that it misled clients by overstating its sustainable investing activities, after news emerged that US and German regulators were launching probes into the allegations.
The €859bn asset manager has been in the headlines after reports allege that German regulator BaFin and US Securities and Exchange Commission were investigating the firm after its former global head of sustainability claimed it was misreporting its ESG efforts.
DWS issued a statement, that denied the reports, saying “We firmly reject the allegations being made by a former employee.”
It added that the allegations were unfounded and that it “stands by” its annual report disclosures.
DWS has previously told investors that ESG concerns are at the heart of everything it does and that its ESG standards are above the industry average.
Earlier this month the Wall Street Journal published an article in which Desiree Fixler, who was chief sustainability officer at DWS, is referred to as saying that she believed DWS misrepresented its ESG capabilities. The article contrasted statements from an internal document with statements in the asset manager’s 2020 annual report released in March.
The annual report said that that more than half of its $900bn in assets at the time were invested using a system where companies are graded based on ESG criteria.
Fixler, who according to her LinkedIn profile joined DWS in June 2020 from alternative credit manager ZAIS, was fired in early March.
She has reportedly filed an unfair dismissal case against DWS in Germany. In the WSJ article a DWS spokesman is referred to as saying the sustainability office led by Fixler did not gain the expected traction on creating or showing an action plan.
Greenwashing is not a new problem but has come into sharper focus as assets into ESG funds have skyrocketed. Figures from Morningstar show Assets in ESG funds have surpassed $2 trillion globally in the second quarter of 2021, almost tripling in size in the last three years.
Fund managers and corporate claims will be more closely scrutinised and views will differ.
For example, a recent report by S&P Global Ratings showing that investors’ concerns about widespread greenwashing, or misleading environmental claims made by portfolio companies and fund managers, may be overstated.
©Markets Media Europe 2021