German prosecutors raided Deutsche Bank’s office in Frankfurt on Tuesday as part of an investigation into allegations that the financial institution was in fact marketing investment products as “green”.
Prosecutors in Frankfurt said in a statement that investigators were conducting a search of the office of the bank and its asset management subsidiary, DWS, “on suspicion of investment fraud.”
Investigations into the “green washing allegations” on DWS, Deutsche Bank said in a statement.
DWS said it would “work together with all relevant regulators and authorities”, according to the statement.
The allegations are based on “statements made by a former DWS employee who became a whistleblower for U.S. securities regulators in 2021,” prosecutors say.
Investigators have found “sufficient indications” that ESG (environmental, social and governance) standards have been considered only among “investment minorities” as opposed to information in DWS’s “sales prospectus”.
The investigation targeted DWS “still unknown” staff, prosecutors said.
The asset manager is already under investigation in the United States by federal prosecutors on suspicion of lying about the scale of their green investment.
ESG products have become a major asset class as financial institutions seek to align their portfolios with global climate targets.
U.S. securities regulators last week proposed tightening the requirement to disclose on the growing number of ESG investments.
To address the issue of “greenwashing”, the Securities and Exchange Commission said the measure was intended to avoid incidents where a fund could “exaggerate the actual consideration of ESG factors.”
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)