Join our community of smart investors

UK greenwashers could face crackdown following US and German actions

Lawyer says UK regulators will "almost certainly" take an interest in 'greenwashing' by financial institutions, although civil penalties likelier than criminal prosecutions
UK greenwashers could face crackdown following US and German actions
  • German and US investigations into 'greenwashing' put companies on notice
  • Lawyer says similar action against financial institutions likely in the UK

The raid of German asset manager DWS by 50 police officers last month ushered in a new type of corporate scandal. Financial institutions are typically raided because of suspected money laundering or tax fraud. In this case, however, it was allegations of so-called 'greenwashing' that prompted the criminal probe – and lawyers believe that UK companies could soon face similar action. 

Greenwashing refers to groundless environmental claims made by businesses in a bid to improve their image. In the case of DWS, the funds arm of Deutsche Bank (DE:DBK), it was targeted after claiming a significant proportion of its funds under management were chosen using strict sustainability criteria. This turned out to be stretching the definition of environmental, social and governance (ESG) investing. 

To continue reading...
Join our Community of Smart Investors
  • Independent full-length company analysis
  • Actionable investment ideas and recommendations
  • Expert investment tools and data
  • Stock screens from Algy Hall
Have an account? Sign in