
Deutsche Bank's DWS Fined $27 Million for Greenwashing Allegations
German prosecutors impose fine on DWS for misleading ESG investment claims, highlighting growing legal scrutiny over greenwashing practices

Deutsche Bank's asset management arm, DWS Group, has been fined €25 million (approximately $27 million) by German prosecutors for greenwashing—misleading investors about its environmental, social, and governance (ESG) investment practices.
Background of the Case
The investigation into DWS began in 2021 following allegations from former sustainability officer Desiree Fixler, who claimed that the firm overstated its ESG credentials. She asserted that DWS misrepresented the extent to which ESG factors were integrated into its investment decisions, leading to probes by both U.S. and German authorities.
Details of the Fine
The Frankfurt Public Prosecutor's Office determined that between mid-2020 and January 2023, DWS made public statements positioning itself as a leader in ESG investing, claiming that ESG was an integral part of its corporate identity. However, these assertions "did not correspond to reality," according to the prosecutors. The €25 million fine was imposed for breaches of German financial investment laws.
DWS's Response
In response to the fine, DWS acknowledged past shortcomings, stating, "In recent years, we have already publicly acknowledged that... our marketing was sometimes exuberant." The firm emphasized that it has since improved internal documentation and control processes and fully cooperated with the investigation. DWS also noted that provisions had been made for the fine, ensuring no impact on its first-quarter financial results.
Previous Settlements and Ongoing Scrutiny
This is not the first time DWS has faced penalties over ESG-related misstatements. In 2023, the firm agreed to pay $25 million to the U.S. Securities and Exchange Commission (SEC) to settle charges concerning misstatements linked to ESG investing and failures in anti-money laundering policies.
The recent fine underscores the increasing scrutiny asset managers face regarding their sustainability claims. Regulators globally are intensifying efforts to combat greenwashing, aiming to ensure that companies' assertions about ESG investments are accurate and transparent.
Conclusion
The €25 million fine imposed on DWS highlights the critical importance of transparency and accuracy in ESG-related communications within the financial industry. As regulatory bodies continue to clamp down on greenwashing practices, lawyers and asset managers are urged to substantiate their sustainability claims with concrete actions and verifiable data to maintain investor trust and comply with evolving legal standards
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