Industry Updates

DWS prepares €21m as greenwashing scandal nears settlement

SEC probe nears conclusion

Theo Andrew

DWS building

DWS has set aside €21m which could be used to settle its ongoing greenwashing investigations by global regulators.

According to its latest half-year report, the German asset manager said it was involved in “advanced resolution discussions” with the Securities and Exchange Commissions (SEC) to resolve its probe with the outcome yet to be concluded.

It comes as the Frankfurt-based manager looks to move on from the scandal that came to light in 2021 and which led to former CEO Asoka Woehrmann stepping down.

Current CEO Stefan Hoops said investigations in Germany were still ongoing and could not rule out an outcome involving financial penalties.

“The group has not disclosed whether it has established a provision or contingent liability for any matter individually because it has concluded that such individual disclosure can be expected to prejudice seriously the outcome,” it said in a statement.

DWS, which is majority owned by Deutsche Bank, has been under investigation by the SEC, the German regulator BaFin and criminal prosecutors in Germany since the allegations were made by former employee Desirée Fixler.

The group has been attempting to rebuild its reputation in the ESG space and sees it as a key growth driver of its business, particularly its Xtrackers ETF arm.

In February, Hoops said the asset manager had been made a “public guinea pig” by the investigations with other asset managers likely also guilty of overestimating their ESG credentials.

Net inflows into its passive asset management division hit €6.2bn in Q2, according to ETFGI, driven by its exchange-traded product (ETP) and exchange-traded commodities (ETC) ranking it second in terms of flows in Europe over the quarter.

Hoops said it will continue to target its 12% compound annual growth rate (CAGR) by 2025 as it bids to overtake Amundi as Europe’s second-largest issuer.

DWS currently has a 10.1% ETP market share in Europe with $163bn assets under management, according to ETFbook, behind Amundi’s $214bn and BlackRock’s $720m.


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