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Deutsche Bank’s DWS not handling ESG concerns says fired executive

By Shubhangi on Aug 03, 2021 | 05:33 AM IST

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DWS Group, the asset management arm of Deutsche Bank, says that environmental, social and governance concerns are the most important for the company.

In 2020, DWS said in its annual report that more than half of its assets under management—€459 billion, equivalent to $540 billion—have run through a process called ESG integration.

Yet, many other evidences paint another picture. The Wall Street Journal reported that according to an internal assessment of the company’s ESG capabilities a month earlier, “only a small fraction of the investment platform applies ESG integration,” adding there is no quantifiable or verifiable ESG-integration for key asset classes at DWS.

“As we are already quite late to the game, we need to set our ambition now and start the transformational process,” said Oliver Plein, head of ESG products at DWS.

Desiree Fixler, sustainability chief of DWS, had also pointed that the firm had no clear ambition or strategy, lacked policies on coal and other topics and that ESG teams were seen as specialists rather than being an integral part of the decision-making, reported WSJ.

Fixler was later fired on March 11, a day after the release of the annual report on which she said the step was taken as she was too vocal about problems.

“As chief sustainability officer, as a proponent of ESG, how could I not speak up on wrongdoing,” she said, reported WSJ. “Posturing with big statements on climate action and inclusion without the goods to back it up is really quite harmful as it prevents money and action from flowing to the right place.”

According to Morningstar, ESG funds surpassed $2 trillion globally in the second quarter.

ESG funds accounted for 40% of DWS’s €21 billion in net inflows in the first half of this year, the company said.

Fixler, during her time in DWS, was curious about how Wirecard AG, a German payments-service provider, was an actively managed ESG fund even after going bankrupt in an alleged fraud and money-laundering case.

Other problem Fixler found included failure of ESG integration to identify companies drawing revenue from coal and fracking.

DWS, while announcing Fixler’s departure, said “while progress has been made, the executive board has taken the position that the firm needs to gain even more traction in this space.”

(With inputs from WSJ)

Picture Credits: WSJ

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