DWS Group is close to resolving an investigation by the U.S. Securities and Exchange Commission that it misrepresented its ESG investing credentials, the manager said in its interim report.
Published Wednesday, the report said the money manager is "engaged in advanced resolution discussions" over the investigation, "although the final outcome is yet to be concluded."
The report also cited a search of the firm's Frankfurt office in May 2022, after the public prosecutor launched an investigation into greenwashing. "We continue to fully cooperate with this investigation," the report said.
The investigations by various regulators stem from allegations made by DWS' former head of sustainability that it misrepresented its ESG investing. The situation led to then-CEO Asoka Woehrmann's resignation in June 2022 amid the greenwashing allegations, to relieve the burden on the company and his family. He was replaced by Stefan Hoops.
Any proceedings related to the investigations are not expected to have a significant financial impact, the report said.
DWS disclosed a total €27 million ($30 million) provision for reasons listed as "other" in its report — that is, "for regulatory enforcement and several specific items arising from a variety of different circumstances."
DWS said it had received requests for information from various regulatory and law enforcement agencies regarding certain ESG matters, and continues to provide information and cooperate.
"We cannot exclude that the outcomes may be adverse and could involve financial penalties. The group has not disclosed whether it has established a provision or contingent liability for any matter individually because it has concluded that such individual disclosure can be expected to prejudice seriously the outcome," the report added.
A statement from DWS, provided by a spokeswoman, reiterated the advanced resolution discussions with the SEC to resolve their ESG investigation and that a final outcome had yet to be concluded.
DWS also on Wednesday reported a 2.1% increase for the quarter and a 4.6% jump for the year in assets under management, to €859 billion as of June 30.
Net inflows excluding cash were €10.4 billion in the second quarter, with ESG strategies attracting €1.9 billion.
