X

This is not a paywall.

Register for free to continue reading.

The news sucks. But your reading experience doesn't have to. Help us improve that for you by registering for free.



Please create a password or click to receive a login link.


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

A South African Hero: You

There’s a 99.7% chance that this isn’t for you. Only 0.3% of our readers have responded to this call for action.

Those 0.3% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

We need so many more of our readers to join them. The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country. We are inundated with tip-offs; we know where to look and what to do with the information when we have it – we just need the means to help us keep doing this work.

Be part of that 0.3%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options

DWS replaces CEO hours after police raid in greenwashin...

Business Maverick

Business Maverick

DWS replaces CEO hours after police raid in greenwashing probe

Stefan Hoops Photographer: Andrey Rudakov/Bloomberg
By Bloomberg
01 Jun 2022 0

DWS Group said CEO Asoka Woehrmann has resigned and will be replaced by Stefan Hoops just hours after a police raid on the asset management unit of Deutsche Bank AG.

DWS Group replaced its embattled CEO Asoka Woehrmann just hours after a police raid in a probe of alleged greenwashing at the asset management unit of Deutsche Bank AG.

Law enforcement officials on Tuesday morning entered the twin towers in Frankfurt where Germany’s largest lender is headquartered, as well as the nearby premises of DWS, according to a statement from the prosecutor that confirmed an earlier Bloomberg News report.

The police probe of potential greenwashing underscores the growing scrutiny of money managers as global demand for ESG investments soars. Assets tied to environmental, social and governance issues are expected to surge to more than $50 trillion by 2025, according to estimates from Bloomberg Intelligence.

DWS has faced regulatory probes in the US and Germany after its former chief sustainability officer, Desiree Fixler, alleged last year that the company inflated its ESG credentials. As well as adding to the list of regulatory issues for Deutsche Bank, the raid is a high-profile example of lenders facing legal consequences for alleged greenwashing.

Stefan Hoops, the head of the German lender’s corporate bank, will assume the top role at DWS from June 10, according to a statement Wednesday. His previous responsibility for the corporate bank will be assumed by David Lynne, currently head of the corporate bank in Asia-Pacific based in Singapore.

Growing chorus

The ESG industry has recently faced attacks from a growing chorus of detractors, and even insiders are starting to air their doubts around aspects of the booming investing form.

Jim Whittington, head of responsible investment at Dimensional Fund Advisors with about $660 billion of assets under management, said the industry is struggling both in terms of real-world impact and returns. Any “promise that you can outperform the market by your insight and evaluating ESG risks probably isn’t going to stack up,” he said in a recent interview.

HSBC Holdings Plc’s asset management unit recently suspended its head of responsible investment after he questioned the sense of focusing on climate change. In the US meanwhile, Republicans have identified ESG as a target in their culture wars, while Tesla Inc.’s Elon Musk has called ESG a “scam.”

The US Securities and Exchange Commission floated tighter rules Wednesday to ensure a product’s name is squarely focused on its actual strategy, with most observers fixating on what the restrictions mean for socially responsible investing. The proposals could hit thousands more funds trading everything from value and growth stocks to bonds and emerging markets.

For Woehrmann, the raid was another blow after he faced scrutiny over his use of personal email for business purposes and the role his relationship with a German businessman played in deals.

While Woehrmann has been a trusted lieutenant of Deutsche Bank CEO Christian Sewing, the negative news flow around DWS has annoyed the bank’s top brass, Bloomberg reported late last year. Still, Sewing had said earlier this year that Woehrmann has “done an outstanding job,” and in Wednesday’s statement thanked him for his “impressive work and performance for DWS and Deutsche Bank.”

He took over the DWS job in 2018, soon after the asset manager’s poorly received initial public offering. Investors had yanked billions of euros from its funds and Sewing asked Woehrmann to turn the asset manager around after he’d impressed him running the bank’s German retail operations. He managed to stem the outflows and morale improved. BM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted