Deutsche Bank Raided Over Alleged Greenwashing

German prosecutors raided the offices of asset manager DWS and its controlling shareholder Deutsche Bank over allegations of greenwashing, according to media reports.

Deutsche Bank and its around 80 percent-owned asset manager DWS were raided over allegations DWS misled investors about how green the investments marketed as green or greener really were, the reports said.

The move may send shivers down the spine of investors globally as green investments, or investments marketed as using environmental, social and governance (ESG), indicators have surged in popularity. In early 2021, global ESG assets were projected to top US$53 trillion by 2025, or more than a third of the projected total of assets under management of US$140.5 trillion in that timeframe.

The German authorities said they were responding to news reports and a whistle-blower’s allegations about DWS’ marketing tactics greenwashing its offerings, adding sufficient factual evidence has emerged» about how little ESG factors were allegedly used to determine investments.

In a statement, DWS said it has fully cooperated with authorities in the matter and will continue to do so. DWS has previously denied the allegations.

We understand a variety of actions are required to ensure a thorough and complete investigative process. We remain committed to working with any authorized bodies to clarify any and all queries they may have, DWS said.

Deutsche Bank has previously said they would cooperate with authorities. Deutsche Bank said the raid was directed at «unknown people» in connection with the DWS allegations.

DWS has stopped using the label ESG integrated, in a move that came after DWS’ former sustainability head, Desiree Fixler, alleged the label didn’t result in meaningful moves by fund managers. Fixler was fired last year, and lost her unfair dismissal case in Frankfurt in January.

Both U.S. and German regulators had begun investigations in 2021 into allegations from Fixler over potential greenwashing, noting both U.S. and EU regulators are working to create rules to define greenwashing.