German prosecutors raided the Frankfurt offices of Deutsche Bank and its asset management subsidiary DWS as part of a probe into the “greenwashing” of investments, a month after the German lender was raided in an investigation into money laundering.

Investigators were carrying out raids on suspicion of “fraud” where investments proposed by DWS may have been presented as “greener” than they actually were, Frankfurt prosecutors said in a statement.

Deutsche Bank said the searches related to “greenwashing accusations” at DWS.

“We have continuously cooperated fully with all relevant regulators and authorities on this matter and will continue to do so,” DWS said in a statement.

The asset manager has come under close scrutiny from regulators since its former chief sustainability officer, Desiree Fixler, brought forward accusations last year.

Frankfurt prosecutors launched their investigation in “mid January 2022” following the whistleblower reports.

Investigators had found “sufficient indications” that “contrary to the statements in the sales prospectuses of DWS funds, ESG (environmental, social and governance) factors were actually only taken into account in a minority of investments,” they said.

The probe was targeting “as yet unknown” employees at DWS, prosecutors said.

The asset manager was also facing investigations in the United States over similar allegations.

ESG products have become a major asset class as financial institutions seek to bring their portfolios in line with global climate targets.

U.S. securities regulators last week put forward proposals to tighten disclosure requirements on the rising number of ESG investments.

Seeking to address the problem of “greenwashing,” the Securities and Exchange Commission said the measure was meant to avoid cases where a fund “could exaggerate its actual consideration of ESG factors.”

This content was originally published here.


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