German asset management firm DWS has been fined €25 million by prosecutors following a lengthy investigation that concluded the company misled investors about the environmental and social credentials of its investments, in what has been described as a case of “greenwashing.”
The probe, led by the Frankfurt state prosecutor’s office, found that DWS — majority-owned by Deutsche Bank — made public claims about being a “leader” in environmental, social, and governance (ESG) investing and asserted that ESG considerations were central to its corporate identity. However, investigators concluded that such statements “did not correspond to reality” and that investors were misled between mid-2020 and the end of January 2023.
The fine, levied under German financial investment laws, adds to DWS’s previous settlement with U.S. authorities. In 2023, the company agreed to pay $25 million in the United States to resolve charges related to similar misstatements on ESG matters and shortcomings in its anti-money laundering controls.
DWS confirmed on Wednesday that it would not contest the German fine, stating it had already made provisions for the amount and that it would not impact its first-quarter financial results. “In recent years, we have already publicly acknowledged that our marketing was at times exuberant. We have since strengthened our internal documentation and control procedures,” the company said.
The investigation stems from allegations initially raised by former sustainability officer Desiree Fixler, who joined DWS in 2020. Fixler later reported to regulators and the media that the firm had overstated how environmentally sustainable its investment products were. She left the company in 2021.
The controversy culminated in 2022 when German prosecutors raided the Frankfurt offices of both DWS and Deutsche Bank. At the time, then-Chief Executive Asoka Woehrmann, who has denied any wrongdoing, stepped down shortly after the raids.
Authorities in Europe and beyond have increased scrutiny of corporate claims related to ESG, amid growing concerns over transparency and the risk of misleading investors about the sustainability of financial products.
DWS, which manages approximately €1 trillion in assets, remains 80% owned by Deutsche Bank.
