Deutsche Bank’s DWS to Drop ESG System Slammed by Whistleblower

Deutsche Bank AG’s investment arm, DWS Group, is phasing out a classification system that has been criticized by a whistleblower for allegedly inflating the scale of the firm’s ESG business.

DWS’s so-called Smart Integration approach “will cease to exist during 2022,” it said on Friday in its annual report.

The decision means DWS will impose stricter limits on the kinds of financial products deemed to meet environmental, social or governance standards, in accordance with guidelines laid out under Europe’s Sustainable Finance Disclosure Regulation. The move comes amid ongoing investigations of the firm’s ESG business by the U.S. Department of Justice, ...