Securities watchdog, the U.S. Securities and Exchange Commission, delves into probe regarding DWS.

DWS Faces Allegations of Greenwashing and Investigation

In a recent development, German asset manager Deutsche Asset Management (DWS) is under investigation for potential misrepresentation of its sustainable asset management practices. This investigation follows a report by the Wall Street Journal on August 1, which suggested that DWS may have presented a more positive image to investors than the actual state of its Environmental, Social, and Governance (ESG) management.

The report, based on information from sources familiar with the matter and documents, alleged that DWS's ESG strategy may not have been as robust as it was presented to be. The Journal's report did not include a comment from DWS regarding the allegations.

In response to these allegations, DWS issued a statement on August 26, 2021, evening. However, the response did not address the allegations of greenwashing directly. The U.S. Securities and Exchange Commission (SEC) and the federal prosecutor's office are investigating DWS in this regard.

The authorities involved in the investigation have not yet commented on the matter.

Desiree Fixler, the former sustainability chief at DWS, worked at the fund company from August 2020 until her dismissal in April 2021. It is unclear if her departure was related to the ongoing investigation.

The investigation and the allegations of greenwashing seem to have had an impact on DWS's share price. As of August 26, 2021, 2:30 PM, the DWS share has dropped by 12.5 percent, closing at 41.72 euros on August 25 and currently trading around 36.50 euros.

Lars Peter, the former sustainability chief of DWS who leaked information to the Wall Street Journal, has not made any public comments regarding the investigation.

Greenwashing, or the practice of presenting investments and products as greener than they are, has been a growing concern in the financial industry. This practice misleads investors and contributes to environmental harm.

DWS has not yet provided a detailed response to the allegations, and the investigation is ongoing. The authorities involved are yet to comment on the matter. As the investigation progresses, more information is expected to be revealed.

Securities watchdog, the U.S. Securities and Exchange Commission, delves into probe regarding DWS.