According to a report by the “Süddeutsche Zeitung”, the Federal Financial Supervisory Authority (BaFin) has initiated a special audit at DWS.
At the center of the investigation, which is being carried out by the auditing firm Deloitte, is the so-called engagement process of DWS, which is designed to ensure that the fund company engages in a critical dialogue with problematic companies in its portfolio to improve their environmental and social standards.
DWS advertises that it also invests in controversial companies, but promotes a more sustainable orientation of these firms through active influence. The question the BaFin is now trying to clarify: Does DWS keep its promise? Especially explosive: The special audit is reportedly also linked to concerns that a DWS leadership figure may have expressed about the engagement process, the SZ writes.
DWS declined to comment on the matter, neither on its relations with supervisory authorities nor on internal employee concerns. At the same time, the company encourages its employees to report any irregularities. The BaFin rejected a statement.
The BaFin’s intervention is also noteworthy because the German supervisory authority did not play a central role in the so-called Greenwashing scandal surrounding DWS until now. While the US Securities and Exchange Commission (SEC) imposed a multimillion-dollar fine on DWS in the fall of 2023 and the Frankfurt public prosecutor’s office has been investigating for years, the German financial supervisory authority has remained silent until now.
It is also explosive that the current suspicions of the BaFin may indicate deficiencies that only emerged after the SEC settlement or were not addressed, the SZ writes.