German prosecutors raided Deutsche Bank offices in Frankfurt on Tuesday as part of a probe into allegations that the financial institution was marketing investment products as “greener” than they actually were.
Investigators were carrying out raids “on suspicion of investment fraud” at the offices of the bank and its asset management subsidiary DWS, Frankfurt prosectors said in a statement.
The searches related to “greenwashing accusations” at DWS, Deutsche Bank said in a statement.
DWS said it would “work together with all relevant regulators and authorities”, according to the statement.
The accusations were based on “statements made by a former DWS employee” who became a whistleblower for US securities regulators in 2021, the prosecutors said.
Investigators had found “sufficient indications” that ESG (environmental, social and governance) standards were only taken into account “in a minority of investments” contrary to information in DWS’s “sales prospectus”, they said.
The probe was targeting “as yet unknown” employees at DWS, prosecutors said.
The asset manager is already under investigation by federal prosecutors in the US on suspicion of lying about the scale of their green investments.
ESG products have become a major asset class as financial institutions seek to bring their portfolios in line with global climate targets.
US 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.”