Deutsche Bank Unit CEO Resigns Over Greenwashing Raid

The CEO of a Deutsche Bank subsidiary resigned Wednesday, just a day after German authorities launched a heavy-handed raid on the company’s offices in Frankfurt over allegations of “greenwashing”. 

A whistleblower claimed that DWS, a Deutsche Bank subsidiary managing some $900 billion in assets, misled investors in its 2020 annual report by claiming that more than $450 billion in its assets met environmental, social and governance (ESG) criteria. Deutsche Bank holds an 80% stake in DWS.  

On Wednesday, DWS CEO Asoka Woehrmann said he would step down “in order to protect the institution [...] and to clear the way for a fresh start”, Euronews reported. 

On Tuesday, DWS offices in Frankfurt were raided by a team of some 50 investigators, following claims by a former executive that the company was exaggerating its funds’ environmental credentials, the news outlet said. 

In an interview with Fortune, a spokesman for the German public prosecutor said that in the course of the investigation since January, “we’ve found evidence that could support allegations of prospectus fraud”. 

“The allegations are that DWS has been advertising so-called ESG financial products for sale as being particularly green and sustainable when they actually weren't," the spokesman said. 

DWS has denied misleading investors. 

The raid and the resignation of the DWS CEO suggests that ‘greenwashing’, defined as the dissemination of disinformation to present an environmentally responsible public image, is starting to be treated as fraud. 

Last week, the U.S. Securities and Exchange Commission (SEC) released its plan to root out greenwashing, targeting funds that are benefiting financially from marketing themselves as major ESG players, while misleading investors. The SEC’s plan, which has been met with derision on Wall Street, is to push through regulations that would require 80% of assets to meet ESG criteria in order to claim ESG credentials. The SEC is also considering additional reporting requirements and disclosures. According to Bloomberg, Wall Street says the SEC’s efforts here are vague and premature at a time when ESG criteria have not been defined by anyone. 

By Charles Kennedy for Oilprice.com

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