German police raid DWS and Deutsche Bank over greenwashing allegations

German police raided the offices of DWS and its majority owner Deutsche Bank on Tuesday as part of a probe into allegations of greenwashing at the asset manager.

Approximately 50 officers arrived at the DWS premises and Deutsche Bank’s twin towers in downtown Frankfurt mid-morning and held meetings with staff until lunchtime, according to people with knowledge of the operation.

Neither company was given advance notice of the raid, which involved the public prosecutors from Frankfurt, federal police and officials from the German financial regulato, BaFin.

BaFin launched an investigation into DWS following a similar probe by the US Securities and Exchange Commission, which was prompted by allegations from former DWS executive Desiree Fixler.

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Ms Fixler said the company had made misleading statements in its 2020 annual report over claims that more than half the group’s $900 billion (€838.4bn) assets were invested using environmental, social and governance criteria.

The issue of greenwashing – where companies make misleading statements about their environmental credentials – has become one of the most fiercely debated topics in investment management.

“We have continuously co-operated fully with all relevant regulators and authorities on this matter and will continue to do so,” DWS said in a statement on Tuesday.

Deutsche Bank, which owns just under 80 per cent of DWS, confirmed the raid in a separate statement. Although not accused of greenwashing itself, Deutsche’s premises were raided because it still shared some IT systems and facilities with DWS, according to one person with knowledge of the matter.

Ms Fixler, who had been DWS’s global head of sustainability until she was fired last year, accused the company’s ESG risk management system of being highly flawed, and said she had reported her concerns to the DWS management board in November 2020.

Following Ms Fixler’s complaint, DWS changed its ESG criteria. In its 2021 annual report, published in March 2022, DWS reported only €115 billion in “ESG assets” for 2021 – 75 per cent less than a year earlier when it stated that €459 billion in assets were “ESG integrated”.

It is just a month since Deutsche’s headquarters were raided by federal police, criminal prosecutors and BaFin representatives over separate allegations that unnamed bank employees may have violated anti-money laundering laws. – Copyright The Financial Times Limited 2022