The CEO of German asset manager DWS has resigned after the firm’s offices in Frankfurt were raided amid an investigation into greenwashing.
Federal police and officers from German financial regulator BaFin raided the premises and held meetings with staff yesterday, Handeslblatt reported, following an investigation launched by the regulator last summer into allegations of breaches of ESG requirements.
Asoka Woehrmann will stay on as CEO until the company’s annual general meeting on 9 June. The position will then be filled by Stefan Hoops, head of the Corporate Bank at Deutsche Bank – which holds an 80% stake in DWS. Hoops’ role will, in turn, be filled by David Lynne who is currently head of Deutsche Bank’s corporate business in Asia-Pacific.
Woehrmann said allegations against himself and DWS in the past months “have become a burden for the company, as well as for my family and me. In order to protect the institution and those closest to me, I would like to clear the way for a fresh start.”
Commenting on Tuesday’s raid, a DWS statement seen by ESG Clarity said: “We have continuously cooperated fully with all relevant regulators and authorities on this matter and will continue to do so.”
In a statement, the German prosecutors said “sufficient factual evidence has emerged” ESG factors were taken into account in a minority of investments “but were not taken into account at all in a large number of investments”, which would be contrary to statements in DWS fund sales prospectuses.
Tuesday’s raid is reported to have come unannounced, but follows other forms of contact by the prosecutors.
“We understand a variety of actions are required to ensure a thorough and complete investigative process. We remain committed to working with any authorised bodies to clarify any and all queries they may have,” DWS said.
See also: – DWS issues statement amid greenwashing reports
BaFin’s investigation follows a similar one launched by the US regulator, the Securities and Exchange Commission, after DWS’s former head of sustainability, Desiree Fixler, told the Wall Street Journal the firm overstated its use of sustainable investing criteria in its investments.
Fixler, who was fired from her role in March last year, is reported to have flagged concerns with the firm’s ESG risk management system to the DWS management board in November 2020, and claims misleading statements were made in DWS’s 2020 annual report, published in March 2021, which said more than half of its $900bn assets were invested using ESG criteria.
In a statement on 26 August 2021, DWS said: “As we disclosed in our Annual Report 2020 on page 90, DWS labelled strategies as ‘ESG Integrated’ if they were actively managed and included coverage of ESG data (the overall SynRating) on more than 90% of the portfolio. ‘ESG Integrated AuM’ were not counted towards the firm’s ‘ESG AuM’ (‘ESG Dedicated’). The absolute numbers are transparently listed on page 92 and 93 of our Annual Report 2020.
“In our more recent half-year report published in July 2021, we reported €70.1bn of ESG AuM (‘ESG Dedicated’) after applying our revised ESG product classification approach in accordance with the new SFDR guidelines. In addition, we reported €16.4bn of illiquid green-labelled single assets in non-ESG classified products.”
Tuesday’s statement from DWS said: “We continue to fully stand behind our company statement of 26 August 2021, standing by our disclosures.”