German asset manager DWS fined €25 million over greenwashing claims

A German asset management company has been fined €25 million ($27 million) over allegations of greenwashing.

The Frankfurt public prosecutor's office imposed the fine on DWS - which is majority owned by Deutsche Bank - over improper marketing of its financial products based on environmental, social and governance (ESG) factors.

"We welcome the conclusion of the investigations by the Frankfurt public prosecutor's office against DWS," the company stated on Wednesday. "We have already publicly acknowledged in recent years that our marketing in the past was, at times, overly enthusiastic."

"We have improved our internal documentation and control processes and will continue to work on making further progress in this area," the company added.

In recent years, demand for sustainable financial products has increased, with large investors placing greater emphasis on clean investments, partly due to pressure from the European Union.

The fund industry has launched a wide range of ESG products. However, it is often unclear to outsiders what exactly qualifies as sustainable investments.

Between 2020 and early 2023, DWS heavily promoted its ESG offerings, making marketing claims that green products were at the core of its business. These were found by prosecutors to be inaccurate.

The DWS offices in Frankfurt were searched on several occasions in connection with the investigation.

The latest development comes 18 months after the US Securities and Exchange Commission imposed a $25-million fine on DWS for violating money laundering regulations and making false statements about ESG investments.