The shadow of “eco-laundering” hangs over Deutsche Bank

One year. It is the time that the German authorities have taken to react with a search at the headquarters of the German bank Deutsche Bank in Frankfurt (west) since the American newspaper The Wall Street Journal published the first information questioning part of the DWS Group's business .

This is a Deutsche Bank investment firm that is suspected of having engaged in what has been called "eco-laundering." Otherwise, fifty investigators, including officials from the German police, prosecutor's office and financial authority, would not have appeared this week at the headquarters of Deutsche Bank and DWS. They did it to gather information in a case of "investment fraud" through "eco-laundering".

“The greenwashing [o eco-blanqueo] It is a phenomenon that we have been observing for some time in the financial markets. There is a 'boom' of this type of financial products”, he tells Magdalena Senn, an expert at the Finanzwende financial crime organization. “In reality, there is still no clear, standard rule on what can be called a 'sustainable' or 'green' financial product. That is why we criticize, as in the case of Deutsche Bank, that there is too much greenwashing'”, Senn abounds.

The sale of products to invest in (such as shares of companies involved in sustainable or ecological activities that, in reality, do not carry them out) would be the dark side of a sector of finance that Senn describes as “expanding”. Hence, for example, that DWS recorded a profit record last year, when it pocketed just over 1,000 million euros, as recalled in its economic pages this week by the Frankfurter Allgemeine Zeitung, the general newspaper of the German financial capital.

According to that newspaper, some 19,000 million euros net entered DWS for the Deutsche Bank firm to direct them to the sector of "sustainable" or "ecological" products. These products are also called ESG. These acronyms correspond to the English words 'Environmental', 'Social' and 'Corporate Governance'. They refer, mostly, to supposedly positive activities for the environment and social movements that the companies in which they invest through firms such as DWS would have.

It is seen, however, that at least part of this business in DWS is in question. As explained by the German prosecutor's office on account of the registry of the offices of Deutsche Bank and DWS, the investigation focused on accusations against the subsidiary for having offered and sold "green financial products" that were not so green or so sustainable.

As a result of the registration, Asoka Wöhrmann, CEO of DWS, has ended up resigning. “The accusations made against DWS and me in recent months, including personal attacks and threats, however unfounded, have left their mark. They have been a burden both for the company and for me and especially for my relatives, ”said the former CEO of the Deutsche Bank subsidiary in an email to the company's employees collected by the Frankfurter Allgemeine Zeitung.

Deutsche Bank has defended Wöhrmann. His resignation has been lamented in the offices of that bank in Frankfurt because he was "largely" responsible for the success of asset management of what is the largest financial institution in Germany. Of course, last Wednesday, Wörhman already had a substitute: Stefan Hoops, a manager who comes directly from the offices of Deutsche Bank, which holds control of 80% of the DWS Group.

According to what has transpired, since last January the activities of the ESG sector of the DWS Group have been in the crosshairs of the German authorities. In the United States, authorities have been investigating for longer.

The first person to speak about the alleged irregularities that were being committed at the German firm was Desiree Fixler, precisely the former head of the sustainability branch at DWS and who, at the end of 2020, alerted management to the shortcomings of their "products". sustainable financials. Fixler was fired a few months after she became aware of those problems.

Now, this 50-year-old woman acts as a "revealer of secrets" about the operation of the sector of sustainable financial products. In a recent interview with the business daily Handelsblatt, Fixler pointed out that "problems in the corporate culture" of Deutsche Bank and the DWS Group are at the root of the "eco-money laundering" problems that both companies now have to deal with. Both companies deny Fixler's accusations.

In any case, the problem of "eco-laundering" in the financial sector is bigger than Deutsche Bank and its subsidiaries. This is what they highlight in Finanzwende. “In Germany alone, this sector where promising financial products are financed has doubled in size in the last two years. Your products are selling well. But, at the same time, against those products, there is a real economy that is not becoming more sustainable at the same rate. There is a conflict there”, concludes Magdalena Senn from Finanzwende.

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