Deutsche Bank’s asset management subsidiary, DWS, has been fined €25 million by German prosecutors over allegations of greenwashing.
The penalty follows a broader investigation into claims that the company misrepresented its environmental, social, and governance (ESG) credentials to investors.
The Frankfurt Public Prosecutor’s Office determined that DWS engaged in misleading advertising, overstating its commitment to ESG principles in marketing materials between mid-2020 and January 2023. Statements such as ESG being “part of our DNA” and positioning DWS as a “leader” in sustainable investing were cited as examples of claims that “did not reflect reality.”
The investigation was launched following allegations made by former DWS executive Desiree Fixler, who claimed the firm had misrepresented the size of its ESG assets in its 2020 annual report. The controversy led to a sharp decline in DWS’s stock value in 2021, wiping out approximately €1 billion in market capitalization.
This latest fine comes after DWS reached a $19 million settlement with the US Securities and Exchange Commission (SEC) in 2023 over similar ESG-related claims and anti-money laundering deficiencies. The SEC’s investigation focused on the period between 2018 and 2021, while German prosecutors found that misleading marketing continued into 2023, even after CEO Stefan Hoops took over in mid-2022.
DWS has been raided by authorities three times since 2022 as part of the investigation. The company’s former CEO, Asoka Wöhrmann, resigned in 2022 in the wake of the scandal, receiving a €13.7 million severance package, though the company noted a “clawback” provision was in place.
In a statement, DWS said it welcomed the conclusion of the investigation and had “fully cooperated” with authorities. The firm acknowledged that its past marketing had been “sometimes exuberant” and stated that it had improved internal documentation and control processes. The fine will not impact its quarterly results, as provisions had already been set aside.
Despite the resolution of this case, investigations into individual executives remain ongoing, and Germany’s financial regulator, BaFin, is conducting a separate probe into DWS’s conduct.
DWS shares, which had recently hit an all-time high, dropped 1.2% following the news.
With input from the Financial Times, the Wall Street Journal, and Bloomberg.
