Many investors want to invest their money sustainably. Recently, however, the suspicion of so-called ‘greenwashing’ in various capital investments has caused negative headlines.
According to the wishes of many investors, capital investments should not only yield returns, but the money should also be invested sustainably. They are therefore looking for green investments that contribute to environmental protection and climate neutrality.
A number of fund providers have added such sustainable investments to their portfolio. But now various providers are suspected that their offered products are not as sustainable as they would have people believe. It’s about so-called ‘greenwashing’. The investments are thus portrayed as more sustainable and environmentally friendly than they actually are, explains the law firm MTR Rechtsanwälte.
Often, it involves the three ESG criteria Environment, Social, and Governance and the grand promises of fund providers regarding these aspects. Recently, DWS, a fund subsidiary of Deutsche Bank, has been in the headlines. In connection with greenwashing allegations, prosecutors, police, and financial regulators have investigated the offices of Deutsche Bank and its subsidiary DWS in Frankfurt. As the General Prosecutor’s Office in Frankfurt announced, they are investigating the accusation of investment fraud.
More specifically, it’s about allegations of ‘greenwashing’ at DWS. They are said to have exaggerated the descriptions of the sustainability criteria of the investments, things like environment and climate protection, in the sales prospectuses. As reported by the prosecution, sufficient actual indications have arisen that – contrary to what was stated in the prospectuses – only a few DWS funds actually considered the ESG factors. In a number of funds, these criteria were not taken into account.
DWS does not seem to be an isolated case. As reported by tagesschau.de on June 13, 2022, sustainability funds of the investment bank Goldman Sachs have come under scrutiny by the US Securities and Exchange Commission. Here, too, the accusation of greenwashing is in the room.
If incomplete, false, or even misleading information was provided in the issuing prospectuses, those responsible are liable and investors can claim damages.
Lawyers experienced in capital market law can advise investors on their options.
