The bank is again targeted by US overseers.
(Photo: dpa)
new York Deutsche Bank has to grapple with the US Department of Justice again. The agency has informed the Frankfurt financial institution that it may have violated a deferred indictment agreement. It is about the greenwashing allegations at the subsidiary DWS. There, the former sustainability boss Desiree Fixler made serious allegations immediately after her resignation.
She had summarized this in an email to DWS supervisory board chairman Karl von Rohr in a five-page document and emailed it to him on March 17th. Rohr is also a member of the board of directors at Deutsche Bank. The press and sustainability head of the bank, Jörg Eigendorf, was also in a copy of the mail, which the Handelsblatt could see.
Deutsche Bank listed DWS, its asset management division, three years ago, but still holds the majority of the shares. The bank has had trouble with US regulators over the years. In January she paid a $ 130 million fine and entered into a deferred indictment agreement. With these agreements, known as the Deferred Prosecution Agreement (DPA), companies agree to forego further misconduct and to report possible compliance problems to the supervisors immediately. In return, an indictment is waived.
The Ministry of Justice is now checking whether the Deutsche Bank should have informed the authorities immediately via this email from a high-ranking manager and has informed the bank of this. The “Wall Street Journal” reported on it first. Fixler had given the newspaper an interview in August and made her allegations public for the first time.
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This is how the Justice Department learned about the incident. A little later, both the Department of Justice and the US Securities and Exchange Commission opened investigations. This caused the DWS share price to collapse by 14 percent at times. The paper still hasn’t recovered from it. Deutsche Bank and the Justice Department did not want to comment on the current considerations.
If the agency concludes that Deutsche Bank has broken the DPA, it could either face charges or pay additional fines. DWS had always denied Fixler’s allegations and hired the renowned US law firm Sullivan & Cromwell to represent them.
DWS was a leader in ESG investments
DWS boss Asoka Wöhrmann said at the presentation of the latest quarterly figures that the incident had no “substantial consequences” for his house. Long-term business relationships exist with all institutional customers, he explained. They are familiar with the activities, the investment process and the products of DWS. DWS has repeatedly publicly presented itself as a leader in ESG investments. Wöhrmann had repeatedly emphasized that “sustainability is at the core of DWS’s actions”.
ESG stands for investment decisions that are made according to ecological, social and ethical criteria. The area is booming, but for a long time it was poorly regulated, which left scope for aggressive marketing. Former Blackrock manager Tariq Fancy also accuses the industry of systematic greenwashing.
Internal documents that the Handelsblatt was able to inspect show that there were large discrepancies at DWS between the melodious slogans and internal perception. DWS stated in its annual report that $ 459 billion, more than half of the assets under management, would be managed with the so-called ESG integration approach. Fixler thinks this is problematic. On the one hand, the term is misleading. On the other hand, the DWS had no system at all to measure this, she said in an interview with the Handelsblatt in September.
Industry experts assume that there will be more greenwashing cases in the future. The SEC has launched a large-scale initiative to track down such cases. The Justice Department, meanwhile, wants to be more stringent against violations of deferred indictment agreements. “In the coming days and weeks we will have a greater focus on ensuring that companies adhere to their agreements,” said Deputy Justice Minister Lisa Monaco at a conference earlier this week.
More: The asset manager presents good quarterly figures. But the greenwashing allegations are still in the room. A whole team is currently working on a solution.