Posted on 06/14/2022 9:29:58 AM PDT by SeekAndFind
DWS CEO Asoka Wöhrmann will leave the firm next week, citing the 'burden' placed on him and his family by allegations of greenwashing at the German asset manager.
The chief executive of Deutsche Bank’s asset manager DWS Asoka Wöhrmann has resigned from the firm hours after police raided the companies’ offices over greenwashing allegations.
The raids, which took place yesterday, saw a combined 50 officials from German regulator BaFin, the federal criminal police office and the public prosecutor’s office searching the Frankfurt offices of Deutsche Bank and DWS.
Earlier today, Wöhrmann (pictured) announced that he would resign from the firm, leaving his position at the end of next week at the group’s annual general meeting. He will be replaced by Stefan Hoops, who is currently head of the corporate bank at Deutsche Bank.
'The allegations made against DWS and myself in past months have become a burden for the company, as well as for my family and me. In order to protect the institution and those closest to me, I would like to clear the way for a fresh start,’ Wöhrmann stated.
According to the German prosecutor’s office, this week’s raids were connected to allegations of greenwashing made against DWS by the firm’s former group sustainability officer, Desiree Fixler, who, last August, publicly accused the firm overstating the degree to which its funds integrated sustainability.
This resulted in investigations into the firm’s practices by the Securities and Exchange Commission in the US, and authorities in Germany.
A spokeswoman for the prosecutor’s office in Frankfurt told Citywire that the investigations had been ongoing since the start of the year. The examination so far showed that ESG factors were taken into consideration only for the minority of the firm’s investments, contrary to the information in the sales prospectuses of DWS funds, she said.
In its 2021 annual report, DWS stated that it was overseeing €115bn ($122.4bn) in ESG assets, a significantly lower number compared to the €459bn of ‘ESG integrated’ assets it published a year earlier.
In case you’re not aware, ESG stands for “environmental, social, and governance.” It’s essentially Wall Street’s way of describing “investing for a cause” or “do-gooder investing.”
In September 2018, DWS wrote a report about investing responsibly under this basic ESG framework. The company claimed to be a responsible investor for the previous 20 years.
Apparently, the German authorities disagree.
Now, it might seem like this battle doesn’t involve you. But don’t let the problems in the ivory tower fool you... Individual investors face this problem every day.
Unfortunately, it’s not just about DWS. Many funds aren’t quite what they claim to be. And in the end, these misrepresented ESG funds can chew up investors’ gains for no reason.
For those unfamiliar, ESG investing is a fad in the investing world.
The idea is that investors can choose to only invest in ethical companies. And as I noted earlier, this approach spans three different categories – environmental, social, and governance.
ESG investors intend to invest in socially “responsible” companies. And they want to avoid the “irresponsible” ones.
Question: How do we determine which company is socially “responsible”?
Are the oil and gas producers considered socially responsible? Are Defense companies? Or are only renewable energy and Electric Vehicle companies socially responsible? Who gets to decide?
1 - this is insanity that they’re raiding an office because the investment broker is “overstating” their “green” initiatives.
2 - this is communism and has nothing to do with justice or sound fiscal policy.
‘It’s essentially Wall Street’s way of describing “investing for a cause” or “do-gooder investing.”’
I think they already had a term for that. Oh yeah, it’s “fiduciary negligence”.
RE: this is insanity that they’re raiding an office because the investment broker is “overstating” their “green” initiatives.
Here in New York, Attorney General Letitia James is prosecuting the Trump organization for overstating the value of its real estate holdings.
Shouldn’t the value of one’s real estate be appraised by the Banks and Lending Institutions? How is this the business of the state government and the justice department?
HINT: Ms. James ran on a platform of prosecuting Trump.
Sin stocks, baby.
Altria Group (NYSE: MO)
Anheuser-Busch InBev (NYSE: BUD)
British American Tobacco (NYSE: BTI)
Diageo (NYSE: DEO)
RE: It’s essentially Wall Street’s way of describing “investing for a cause” or “do-gooder investing.”
OK, How does one decide:
A) What a “good cause” is. If a company contibutes to the pro-life cause, does that count?
B) Whether you are over or underestimating your investment in such a cause ( if they even agree that its a good cause ).
RE: Sin stocks, baby.
Strangely, these are the stocks that pay consistent dividends and will probably hold up better than most other stocks during a bear market.
Back in the 1990s...under Clinton/Gore, there was some fiasco where some Mafia folks in Italy got into the ESG stuff early on, and ‘washed’ a ton of money before the audit people figured the whole scheme out.
If you ask me...with the options that now exist, it ought to be fairly easy to wash millions a month.
Find me the man, I’ll find the crime.
- Lavrentiy Beria
From a business standpoint (for a publicly held company at least), the only consideration should be: “can this charitable donation/investment bring us increased profits from the marketing, exposure and good press we can get from it?”
That’s it. If you can’t answer that question with a “yes”, then it’s negligence.
RE: can this charitable donation/investment bring us increased profits from the marketing, exposure and good press we can get from it?”
This criteria is hard to determine today.
EFor instance, if Disney decides to support a gay pride parade in a community, the mainstream press will praise them for their progressivism. However, they get backlash from conservative parents, churches, Muslims and others who disapprove of the LGBT lifestyle. You get good press from one group, but bad press from another.
And what if Chick-Fil-A decides to support a pro-life initiative? The same thing will occur.
You win some customers and lose others.
“This criteria is hard to determine today.”
Hard to determine in advance maybe, but if you try the campaign and it produces no increased profits, then you have the answer. And if you continue to do push further campaigns like that after you have that answer, it’s negligence.
Well DSG is important until some DSI gets you on the wrong track. Then AHBL and you have to scramble to GYFB. BTT profits are NM as you look to liability IMC for TL. IMO, this kind of reporting gets lost in all of the unknown and undescribed initials offered. So IWS that posters UEL as a BW of communicating to others. But WTF it is a CAA.
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