Deutsche Bank’s DWS sued for alleged greenwashing

A German consumer group has sued Deutsche Bank’s asset management unit, DWS, for allegedly failing to correctly report a fund’s environmental protection incentive features in its promotional material.

The lawsuit comes as German and US officials investigate reports and allegations by a whistleblower that DWS exaggerated the sustainability attributes of the investments it sold – a practice known as “greenwashing”.

DWS, which has repeatedly denied misleading investors, rejects claims by the group, which represents consumers in the German state of Baden-Wuerttemberg.

The group said it filed a lawsuit against DWS on September 26 in a Frankfurt court, which has set a hearing for March 10.

The lawsuit filed by the group, with the DWS Invest ESG Climate Tech fund, claims the asset manager told investors in marketing material that it does not invest in controversial sectors such as the coal industry.

The group says the answer is “confusing” for consumers because the material also states that fund holdings could include companies with up to 15% of the industry’s revenue.

“The question is whether this is clear to everyone,” said Niels Nauhauser, who oversees the group’s financial topics.

DWS rejects the allegations, saying it takes great care in preparing marketing material.

“We have examined the documents in focus in detail and remain convinced that the DWS advertising communications… meet legal requirements,” the company said.

The lawsuit against DWS is one of several brought by the consumer group against financial companies for allegedly overestimating the “green” credentials of the investments it promotes.

Asoka Woehrmann resigned as chief executive of DWS in June after German prosecutors raided the company’s and Deutsche Bank’s Frankfurt offices over allegations of greenwashing and misleading investments.