FRANKFURT (dpa-AFX) - Deutsche Bank's asset management division, DWS, has been fined €25 million by German prosecutors after a prolonged investigation into allegations of greenwashing.
Authorities determined that the firm misrepresented its environmental, social, and governance credentials through overly aggressive marketing that misled investors. Prosecutors pointed to claims that ESG was 'part of our DNA' and that DWS was an industry 'leader' as examples of statements that did not reflect reality between mid-2020 and early 2023.
The inquiry was triggered by a whistleblower complaint from former ESG head Desiree Fixler, who accused DWS of inflating the size of its ESG assets in its 2020 annual report. The firm's stock plunged in 2021 when the U.S. Securities and Exchange Commission launched its own investigation, wiping out €1 billion in market value in a single day.
In 2023, DWS agreed to pay $19 million to settle SEC charges, marking the regulator's largest-ever ESG-related fine against an investment adviser at the time.
DWS acknowledged the German penalty and stated that it had strengthened internal controls. The firm confirmed that the fine would not impact its first-quarter earnings, as provisions had already been set aside. Shares in DWS, which recently reached an all-time high, fell 1.2 percent on Wednesday.
Meanwhile, investigations by Germany's financial regulator BaFin and ongoing criminal inquiries into certain individuals remain unresolved.
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