Frankfurt The environmental organizations Greenpeace, Urgewald and Reclaim Finance accuse large German fund companies of hypocrisy when it comes to climate protection. Specifically, the climate protectors criticize that the asset managers invest billions in companies that want to further expand the mining of coal, natural gas and oil. The four German asset managers DWS, Union Investment, AGI and Deka have invested a total of 13 billion euros in such companies, a study by the three organizations has revealed.
With a volume of 7.8 billion euros, the commitment of the Deutsche Bank subsidiary DWS is by far the largest. It is followed by Union Investment with two billion euros, the Allianz subsidiary AGI with 1.7 billion euros and Deka, the fund provider of the savings banks, with 1.5 billion euros. These values were calculated using data from Urgewald’s “Global Coal Exit List” and the “Global Oil and Gas Exit List”.
DWS also stands out negatively when looking at the investment guidelines: “While AGI, Deka Investment and Union Investment have given themselves moderate general restrictions on investments in coal companies, there are no generally applicable requirements at DWS,” says the study. None of the four asset managers have a strategy to restrict investments in the expanding oil and gas business.
“In view of the recent greenwashing scandal at DWS, it is particularly serious that the Deutsche Bank subsidiary also brings up the rear in the industry when it comes to climate protection. This is another case of greenwashing that DWS should urgently rectify,” said Mauricio Vargas, Greenpeace’s finance expert. Vargas, who worked for a mutual fund company for years, is one of the study’s authors.
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DWS at the bottom vowed improvement
The poor performance of DWS is spicy: the former head of sustainability at the fund company has accused her ex-employer of exaggerating when presenting her own commitment to sustainability. The US Securities and Exchange Commission (SEC) and German authorities are now examining whether DWS has presented itself as “greener” than it is.
The Deutsche Bank subsidiary now wants to change at least the missing coal strategy: “DWS is currently working on a coal policy in accordance with the requirements and the time frame of the “Science Based Targets” initiative and on the integration of further information on coal developers in our DWS ESG evaluation system,” said the fund house. ESG stands for the sustainability aspects environment (environment), social (social) and good corporate governance (governance).
DWS also announced that it would be releasing a first annual progress report “soon” that would address the fund company’s net-zero actions.
>> Read here: These scandals weigh on DWS
Even if DWS does particularly poorly in the study, the authors of the study are not really satisfied with any of the four fund providers. “In fact, for all four asset managers examined, there is a significant discrepancy between the postulated commitment to climate protection and the actual handling of particularly climate-damaging companies,” write the authors.
Greenpeace and Co. call for an investment stop
Your accusation: The four fund houses, which manage securities assets totaling 2.3 trillion euros, have joined associations such as the “Net Zero Asset Managers” initiative, which have made a binding commitment to support the 1.5 degree target , which aims to limit global warming to 1.5 degrees. According to analyzes by organizations such as the International Energy Agency, the UN and the Intergovernmental Panel on Climate Change (IPCC), however, there should be no further investments in the development and production of new coal, oil and gas deposits.
>> Read here: Between visionaries and laggards: This is how 15 German banks perform in terms of sustainability
From the point of view of the environmental organizations, the fund houses should immediately stop investing in shares and bonds of companies that are expanding their activities in the coal, gas and oil sectors and sell all securities of the companies that want to expand in this field – in coal directly, in gas and Oil after a timely deadline. The fund houses should demand a clear strategy for reducing their CO2 emissions from the energy companies that are shutting down the fossil fuel business.
For the fund company AGI, these demands go too far. “As an active investor, we support the Paris climate agreement and the efforts of companies to achieve climate goals,” said a spokesman. AGI actively influences the fact that they define climate protection goals and implement them in their strategies.
“If we — and any other investor taking a similar approach to ours — simply sold our stocks, nothing would be gained and the role of active money managers in bringing about real change would be limited. Instead, these companies might be in the hands of investors who show little interest in climate protection,” a spokesman said. DWS argues similarly.
Union Investment: Separation of problem companies from 2025
The cooperative fund house Union Investment, on the other hand, emphasized that it had already set itself relatively strict goals. “In 2020, Union Investment was the first major German asset manager to decide to completely phase out the financing of coal production and coal-fired power generation,” said a spokesman. The exclusion limit for coal production is currently five percent and should drop to zero by 2025. For coal-fired power generation, the exclusion limit is currently 25 percent and should drop to zero by 2035.
Union Investment also emphasized the approach of supporting companies in their transformation, i.e. their conversion towards more sustainability and climate protection. The climate protection goals set as part of the “Net Zero Asset Managers” initiative would ensure that the fund company regularly checks all major sources of greenhouse gas emissions to see whether they are actually implementing their climate protection goals and the necessary investments. From 2025, the fund company wants to separate from the companies that do not credibly meet the requirements.
The fund company Deka Investment announced that it takes the goals of the “Net Zero Asset Managers” initiative seriously and that the initiative will present further goals at the COP27 climate protection conference in the Egyptian capital Cairo.
More: Study: Sustainable funds – who is serious?