Many investors want to invest their money sustainably. Recently, however, suspicions of so-called ‘greenwashing’ in various investments have led to negative headlines.
According to the wishes of many investors, capital investments should not only yield returns but 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 included such sustainable investments in their portfolios. However, now various providers are suspected that their offered products are not as sustainable as they claim them to be. This is about so-called ‘greenwashing’. The investments are thus presented as more sustainable and environmentally friendly than they actually are, explains the business law firm MTR Legal.
This often involves the three ESG criteria Environment, Social, and Governance and the extravagant promises of the fund providers regarding these aspects. Recently, DWS, a fund subsidiary of Deutsche Bank, made 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 reported by the General Prosecutor’s Office in Frankfurt, allegations of investment fraud are being investigated.
Specifically, it concerns accusations of ‘greenwashing’ at DWS. It is alleged that the sustainability criteria of the investments, regarding aspects such as the environment and climate protection, were portrayed overly positively in the sales prospectuses. According to prosecutors, sufficient factual indications have arisen that – contrary to what is stated in the prospectuses – ESG factors were actually considered in only a few DWS funds. In a large number of funds, these criteria were not considered.
DWS does not appear 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 charge of greenwashing is being raised.
If incomplete, false, or even misleading information was made in the issuance prospectuses, those responsible are liable, and investors can assert claims for damages.
Lawyers experienced in capital market law can advise investors on their options.
