German prosecutors raided Deutsche Bank’s Frankfurt offices on Tuesday as part of an investigation into allegations that the financial institution was marketing investment products as “greener” than they actually were.
Investigators conducted raids “on suspicion of investment fraud” at the offices of the bank and its asset management subsidiary DWS, the Frankfurt prosectors said in a statement.
The searches related to “greenwashing allegations” at DWS, Deutsche Bank said in a statement.
DWS said it would “cooperate with all relevant regulators and authorities,” the statement said.
The allegations were based on “statements from a former DWS employee” who became a whistleblower for U.S. securities regulators in 2021, prosecutors said.
Researchers had found “enough evidence” that environmental, social and governance (ESG) standards were considered only “in a minority of investments”, contrary to information in DWS’s “sales prospectus”.
The probe was aimed at “yet unknown” employees at DWS, prosecutors said.
The asset manager is already under investigation by federal prosecutors in the US on suspicion of lying about the size of their green investments.
ESG products have become an important asset class as financial institutions seek to align their portfolios with global climate targets.
US securities regulators last week made proposals to tighten disclosure requirements for the rising number of ESG investments.
To address the issue of “greenwashing,” the Securities and Exchange Commission said the measure was intended to prevent instances where a fund “could exaggerate its actual consideration of ESG factors.”
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