DWS Group was fined €25 million ($27 million) by German prosecutors for a “negligent infringement” related to its ESG statements and control processes, concluding a three-year investigation into greenwashing.
The fine was issued by Frankfurt Public Prosecutor’s office, a statement by the prosecutor said. It follows a $19 million penalty issued by the U.S. Securities and Exchange Commission for misstatements made in DWS’s environmental, social and governance processes.
The German prosecutor’s conclusion related to “deficits in the past regarding certain ESG-related documentation and control processes, procedures and marketing statements,” DWS said in a separate statement on April 2.
The €1 trillion asset manager “advertised products with certain ecological and social characteristics (ESG) between mid-2020 and the end of January 2023,” a translation of the prosecutor’s statement said. “The impression created in the capital market of DWS Group’s supposed market leadership in sustainable financial products was not, or not fully, fulfilled by the business organization itself. ... Statements in external communications such as being a ‘leader’ in the ESG field or ‘ESG is an integral part of our DNA’ did not correspond to reality,” the statement added. The size of the fine was determined based on parent company Deutsche Bank’s revenue, it said.
DWS said in its statement that it accepted the fine and that, in recent years, “we have already publicly acknowledged that in the past our marketing was sometimes exuberant. We have already improved our internal documentation and control processes, and we continue to do so.” The manager also cooperated fully throughout the investigation, the statement added.
The settlement has no impact on the manager’s financial results for the first quarter of 2025, since it had “already made appropriate provisions,” DWS said.
The European investigation kicked off in 2022 and was followed by a search in May that year of DWS Group’s Frankfurt offices. Further searches were conducted by the prosecutor’s office in January and February 2024.
The investigations were triggered by allegations made by former Group Sustainability Officer Desiree Fixler in 2021, who joined the firm in June 2020.
DWS made a number of moves in relation to the investigations, including the setting up of an “ad hoc committee” by the supervisory board to handle the ESG issue related to the Frankfurt and U.S. investigations, and changes to senior leadership. On June 1, 2022 — the day after Frankfurt’s prosecutors first searched the office in relation to the greenwashing allegations — CEO Asoka Woehrmann resigned and was replaced by Stefan Hoops. A statement at the time said that “the allegations made against DWS and myself in past months have become a burden for the company, as well as for my family and me.”
