Frankfurt Greenpeace claims to have discovered a piquant connection between the Deutsche Bank fund subsidiary DWS and the allegations of greenwashing, i.e. an exaggerated orientation of DWS towards sustainability. To this end, the environmentalists examined the remuneration reports for 2020 and 2021. DWS considers the accusation to be untenable. Greenpeace is calling on the fund house to adopt a more appropriate remuneration structure that takes relevant environmental goals into account. The organization is calling on the parent company to remedy the situation quickly.
Sustainability goals have had a relevant impact on the remuneration of top management at DWS since 2020, as Greenpeace concedes. However, environmentalists complain that the design of the bonus-relevant sustainability goals proves to be extremely problematic if they offer space for false incentives.
According to Greenpeace, DWS increased its assets classified as “dedicated”, i.e. particularly sustainable, the most in 2020 among the major fund providers in the country – by around a third to twelve percent of the managed assets at the time. At the time when ESG issues, i.e. the criteria of environment, social issues and good corporate governance, were becoming increasingly popular in investments, many providers courageously classified their funds as sustainable. Later, with stricter EU requirements and after the first greenwashing allegations against DWS in 2021, people acted more cautiously again.
DWS has been confronted with allegations of greenwashing for a good year and a half. The former head of the sustainability division, Desiree Fixler, had accused the company of presenting itself as more sustainable than it was. The manager, who left DWS after just a few months, initially revealed herself to the US Securities and Exchange Commission and the FBI as a “whistleblower” in 2021. Since then, German and US authorities have been investigating the fund house. DWS rejects all greenwashing allegations.
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The grouping of sustainable funds in 2020 enabled former CEO Asoka Wöhrmann to receive higher bonus payments, Greenpeace claims. Half of the assets reported as sustainable flowed into the short-term target achievement of top management as one of seven ESG targets. There were also ESG components in long-term and personal goals.
DWS rejects the accusation: “The absolute amount of the assets under management reported as sustainably invested was for the year 2020 and is currently … not a significant remuneration-related target figure for the management.” In informed circles it is said that a few percent of Wöhrmann’s remuneration in the related to DWS’ ESG assets.
Too weak sustainability components in the performance targets
For 2021, DWS changed its compensation structure. ESG wealth was no longer part of the board’s performance targets.
Among the numerous sustainability components, however, Greenpeace misses the fact that top management “is not committed to effective sustainability goals, for example climate protection, and that instead the new remuneration system for the DWS boss is now based on pseudo-sustainability goals”, as Greenpeace finance expert Mauricio Vargas says. Planting and rubbish collection campaigns by employees, for example, count towards the boss’s bonus.
DWS is also concentrating on reducing its in-house CO2 footprint, which is irrelevant in its case, i.e. the amount of greenhouse gases released. On the other hand, so-called “financed emissions”, which are related to their investments and make up 99 percent of the total carbon footprint, are left out.
DWS has long been confronted with allegations about climate protection.
(Photo: dpa)
DWS does not comment on this; she participates in the initiative of fund providers to manage their assets with “net-zero emissions” by 2050.
The Deutsche Bank subsidiary is one of the fund providers that is repeatedly accused of not banning climate sinners such as oil and coal producers from their portfolios consistently enough. These asset managers counter that they don’t want to get such “dirty” companies to be more sustainable by excluding them, but by interfering.
Greenpeace criticizes the high salaries of DWS CEOs
As a further point of criticism, Greenpeace considers a high salary such as that of the DWS bosses to be incompatible with the principles of a sustainable remuneration system. According to the annual report, Wöhrmann earned a total of 6.94 million euros in 2021. The total remuneration of the head of the company from the SDax was more than five times as high as the average salary of a CEO in the index.
The current DWS boss Stefan Hoops reportedly receives a target salary of a good seven million euros: the exact amount will be published on Friday in the annual report for 2022. With responsibility for almost 3,000 employees, Hoops earns a similar amount to Allianz CEO Oliver Bäte with over 155,000 employees, Greenpeace complains. “Hoops’ bonuses urgently need to be linked to credible sustainability goals,” says Vargas.
DWS says that the market standard of the remuneration is regularly assessed by an independent remuneration consultant. This uses internationally active companies as a benchmark that are comparable in terms of fund assets and number of employees. Because 57 percent of the assets of DWS are outside of Germany.
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