Deutsche Bank’s DWS Pays $27 Million in German Greenwashing Case

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Deutsche Bank AG’s investment arm DWS agreed to pay €25 million ($27 million) to end a long-running German investigation into alleged greenwashing, in a similar settlement to the one it struck with US regulators in 2023.

DWS gave a false impression to the markets in its communications about sustainable finance, Frankfurt prosecutors said on Wednesday. The case looked into the same behavior that led to a $19 million penalty agreed with the US Securities and Exchange Commission, they added.

“The impression given to the capital market that DWS Group was supposedly the market leader in sustainable financial products was not, or not completely, fulfilled by the business’s organization itself,” the prosecutors said. DWS didn’t monitor the situation carefully enough and instead used statements in external communications such as being a “leader” in the ESG field or “ESG is an integral part of our DNA.” They didn’t correspond to reality, according to prosecutors.

The investigation came after ex-Chief Sustainability Officer Desiree Fixler went public in 2021 with claims that the asset manager had inflated its ESG credentials. Frankfurt prosecutors raided DWS in 2022 and 2024. The allegations and ensuing probes hit the firm’s share price as investors sought to assess the financial impact.

DWS has accepted the fine and said that it won’t appeal.

“We have already publicly stated in recent years that our marketing was sometimes exuberant in the past,” the unit said in a statement. “We have already improved our internal documentation and control processes and will continue to work on making further progress in this area.”

The settlement with Frankfurt Prosecutors will have no impact on DWS’s financial result in the first quarter of 2025 as it was reflected in the provisions, the unit said. DWS in 2024 increased its “other provisions” which include those for litigation to €27 million from €21 million in 2024, according to its annual report.

Since the scandal emerged, the company has replaced then-Chief Executive Officer Asoka Woehrmann with Stefan Hoops. In the US case, DWS agreed to pay its penalty for “materially misleading statements” about how it incorporates environmental, social, and governance factors into research and investment recommendations. The unit didn’t admit or deny the SEC’s findings.

Fixler said in 2021 that DWS’s claims that hundreds of billions of its assets under management were “ESG integrated” were misleading because the label didn’t translate into meaningful action by relevant fund managers. DWS has since stopped using the label.

Frankfurt prosecutors started their investigation in early 2022, triggered by reports on Fixler’s claims. The probe also targeted then-CEO Woehrmann. They first raided the unit in May that year.

Photograph: The DWS Group logo; photo credit: Alex Kraus/Bloomberg

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