DWS Group is a subsidiary of Deutsche Bank. In addition to Germany, the company is also under investigation in the US and is facing greenwashing allegations. And it was evidence of misleading claims about investments in ESG that the police were looking for.
For the environmental, social, and corporate governance (ESG) sector, which has bubbled to $40 trillion this year and is set to see billions more flow in for years to come, the departure of its chief is a breaking point.
What is greenwashing?
Greenwashing is the process of creating false information or impressions about your product. In this case, a company tries to convince consumers that its products are environmentally friendly when in many cases they are not.
The developments around DWS are the biggest signal yet that European regulators are not going to tolerate claims about environmental, social, and corporate governance sustainability, the aspects for which the acronym ESG stands for.
DWS logo in building in Frankfurt
Read also: The competition to switch to electric vehicles continues
The company has been under pressure since its former sustainability director Desiree Fixler came forward with claims that the firm was simply exaggerating its ESG claims. Ex-CEO Asoka Wöhrmann will be replaced on the DWS board by Stefan Hoops, head of corporate banking at Deutsche Bank.
The environmental sector has weak regulations for asset management companies
Assets tied to environmental, social, and corporate governance issues are expected to grow to more than $50 trillion by 2025. But finding support for their sustainability pledges increasingly smacks of deception for many asset managers and their investments.
The environment is somewhat conducive. Indeed, the regulations they have to comply with are of dubious quality, according to some European regulators. Gaps in the European Union’s ESG rulebook almost encourage greenwashing.
Comments
Post has no comment yet.