Dhe must have been shocked when the Deutsche Bank fund company commented on the allegations of excessive disclosure of sustainable investments on Thursday evening. Because the price of the DWS share had collapsed by 14 percent and was unable to recover on Friday. The course was in the early afternoon with 35.68 euros by 1.0 percent in the red.
Nevertheless, there were also encouraging words, for example from the analyst at the major Swiss bank UBS: Michael Werner left his buy recommendation, as did the price target of 46 euros. The negative price reaction to press reports that US authorities were investigating the asset manager’s sustainable investment products appeared to be exaggerated, he wrote on Friday. He would be surprised if penalties resulting from these investigations reached the recent loss in market capitalization. The greatest danger for DWS is a possible loss of reputation.
The DWS board with its chairman Asoka Wöhrmann also fears this. The second largest German fund company said on Thursday evening that it was committed to the disclosures in its annual reports. “We firmly reject the allegations of a former employee.” This is the former head of the sustainability department. Desiree Fixler had to leave after her probationary period and accused DWS weeks ago in the Wall Street Journal of overstating her sustainable investments in the 2020 annual report.
This concerns the systems that are classified under the “ESG integration” and “ESG approach” categories. ESG is the symbol used in the financial markets for sustainable investments and stands for the English terms environment, social and governance (good corporate governance). DWS classified almost 460 billion euros under “ESG integration” in its 2020 balance sheet, which is more than half of the total assets under management. However, this category refers to assets that are screened for ESG data but that do not necessarily meet sustainable criteria. DWS reported these assets under the label “ESG Approach” in the 2020 annual report at EUR 76 billion. At the end of June it was 70.1 billion euros, as the DWS now pointed out.
In an earlier reaction to Fixler’s allegations, the company referred to ESG standards that were not yet fully developed on the market. According to its own information, DWS wants to become one of the leading “ESG asset managers”.