Recent allegations about mislabeled sustainable funds from Deutsche Bank fund manager DWS have triggered a domino effect in the financial market. The US Securities and Exchange Commission (SEC) and German market regulator Bafin were the first to react, launching an investigation. This, in turn, caused the German manager to drop 13% on the stock market, which also affected the price of Deutsche Bank. Now, asset managers fear it will snowball into a barrage of industry-wide sales .
Desiree Fixler, former global director of sustainability at DWS, is the one who has sounded the alarm about the dubious requirements of the manager to consider that a financial product is sustainable. Specifically, it notes that the German asset manager made false claims in its 2020 annual report, such as that more than half of its $ 900 billion in assets had been invested following ESG (environmental, social and governance criteria). corporate).
For its part, DWS has defended itself by ensuring that the report clearly differentiates between financial products in which sustainability is part of a broader investment process and ESG assets, focused on sustainable investment .
Given the ambiguity of the term, asset managers fear that investigations into greenwashing (green washing in English) will spread and end up affecting their sustainable financial products , as published by the Financial Times . According to data from Morningstar, sustainable assets reached $ 2.24 trillion at the end of June.
Lack of unified criteria
Something common to all asset managers is the disparity between what they and their clients understand as sustainable . Thus, while some asset managers avoid the values related to the oil industry, others bet on using money to teach certain companies the socially responsible criteria that should guide them. As a result, many of these financial products do not meet the objectives of the Paris Agreement .
As there is no clear criterion on the requirements that a financial product must meet to be classified as sustainable, it is the rating agencies who arbitrarily grant this distinction. This is not a solution either, as it makes it impossible to compare the degree of commitment to sustainability of some managers with others.
Likewise, the integration of ESG criteria in investments does not have a clear definition either , being different for each asset manager and contributing to the doubts about a possible greenwashing .
