German asset manager DWS has hit back at allegations of greenwashing as reports swirl about regulators investigating the firm.
According to the Wall Street Journal, DWS’s former global head of sustainability has highlighted problems with the asset manager’s 2020 annual report, which claimed that more than half of its $900bn in assets were subject to ESG integration.
The employee said this claim was misleading, prompting investigations from BaFin, the German regulator, and the Securities and Exchange Commission in the US.
In a statement released today (August 27), DWS said it does not comment on questions relating to regulatory matters but wants to address the "unfounded allegations" on its ESG disclosures.
It said it “stands by its annual report disclosures” and remains a “steadfast proponent” of ESG investing as part of its fiduciary role on behalf of clients.
"DWS has a long tradition of sustainable and responsible investing going back well over 20 years.
"More recently, we defined ESG as a cornerstone of our corporate strategy to develop into a leading ESG asset manager, as we expected the consideration of ESG criteria to become a license to operate for the entire asset management industry.
"DWS strives to always be transparent to the market, our clients and stakeholders in our message that the road to a sustainable future is long and hurdled; for the entire industry and also for DWS."
The firm explained it had differentiated between 'ESG Integrated AuM' and 'ESG AuM' (which it referred to as 'ESG Dedicated') when presenting the assets under management in its annual report 2020 and reported both classifications.
DWS labeled strategies as 'ESG Integrated' if they were actively managed and included coverage of ESG data on more than 90 per cent of the portfolio.
These assets were not counted towards the firm’s 'ESG AuM'.
Desiree Fixler was sacked from her role as global head of sustainability earlier this year, which is being investigated by an employment tribunal in Germany.
DWS's shares slid 13.6 per cent yesterday as the news unfolded.