The United States Securities and Exchange Commission (SEC) has imposed a fine of $19 million (€17.6 million) on DWS, the investment arm of Deutsche Bank, for making misleading statements to investors regarding the firm’s ESG processes. This was the highest-ever penalty meted out to a corporation for ‘greenwashing’.
DWG is one of the largest asset managers in Europe.
The penalty concludes a two-year long investigation by the SEC, which was initiated after DWS’ former sustainability chief Desiree Fixler blew the whistle on the fact that the firm misrepresented the extent to which investments were made using ESG integration in the investment process. Fixler was fired from DWS in March 2021 immediately prior to the release of the firm’s annual report.
In June 2022, German authorities raided the Frankfurt offices of Deutsche Bank and DWS after analysing evidence that DWG had engaged in “prospectus fraud.” DWS CEO Asoka Woehrmann resigned the following day.
In a statement, the SEC stated it had found that DWS “made materially misleading statements about its controls for incorporating ESG factors into research and investment recommendations for ESG integrated products.”
The regulator added that DWS failed to implement policies that would have ensured that its public statements about its ESG integrated products were accurate.
Responding to the SEC statement, DWS released its own statement, asserting that the extensive investigation found “no misstatements in relation to our financial disclosures or in the prospectuses of our funds,” and that there was no intent by the firm to defraud, adding that the firm has “already taken steps to address the weaknesses identified by the SEC”.