ESG funds face a tougher test

Frankfurt In the investment industry, sustainable investing is considered to be the major issue for the future – combined with enormous business prospects. But the allegations against DWS cast a bad light on the implementation of a socially desired change.

According to Magdalena Senn from the NGO Bürgerbewegung Finanzwende, the development at the Deutsche Bank fund house gives the topic a new explosiveness: “The allegations of prospectus or capital investment fraud weigh heavily and show that greenwashing is not a trivial offense.”

The searches of the premises of DWS and Deutsche Bank as well as the resignation of DWS boss Wöhrmann should send out a signal to other asset managers: “Providers of financial products advertised sustainably will now check carefully whether their own investment criteria live up to what they promise,” Senn is convinced.

Basically, it is about the systematic consideration of ecological and social factors as well as criteria for good corporate governance when making investment decisions. The abbreviation ESG for “Environment, Social, Governance” has become common for such approaches.