SPOTLIGHT

Deutsche Bank’s investment arm, DWS, reached a $19 million settlement with the SEC to resolve allegations that it overstated its use of ESG factors in its funds. DWS did not admit or deny the charges, but accepted two cease-and-desist orders related to ESG misuse and failure to comply with anti-money-laundering rules. The settlement follows claims from whistleblower Desiree Fixler that DWS often presented an overly positive sustainability image to investors. As one of the first cases that questions ESG claims by money managers, the outcome highlights the increasing scrutiny coming for greenwashing—and it looks like most firms aren’t prepared to deal with more stringent regulations.

NEWS

• Barron’s: Deutsche Bank Unit to Pay $25 Million Over Alleged ESG, Anti-Money-Laundering Failures 
• Business Insider: As the climate crisis makes life more expensive, a financial planner says there are good options to save money 
• Climate Home News: Why Portuguese youth are suing European countries over wildfires 
• Fast Company: Fossil fuels are everywhere. How quickly could we actually phase them out? 
• FinancialPlanning: Deutsche Bank to pay $25M for alleged ESG and money laundering failures 
• Financial Times: Anti-ESG investing | Asset managers turn to ‘green hushing’ on sustainable funds 
• Fortune: 30 CFOs at global companies weigh in on how they are leading the climate charge toward net zero
• Harvard Law School Forum on Corporate Governance: 2023 Corporate Governance developments 
• InvestmentNews: The DOL ESG rule survived in court. Does it matter? 
• The Messenger: Deutsche Bank Subsidiary Fined $25 Million Over ‘Greenwashing,’ Anti-Money Laundering Violations
• National Association of Plan Advisors”: DWS Hit with $19 Million Fine for ESG Misstatements 
• National Catholic Reporter: Catholics ask Biden to deliver debt relief to countries most at risk from climate change 
• NBC News: Richard Branson speaks about new initiative to tackle climate change 
• Newsweek: Deutsche Bank’s DWS Pays $19 Million Fine Over Greenwashing Charges | Joe Biden Gets Unlikely Legal Win From Texas Judge 
• Pensions & Investments: Comparing ESG regulation globally remains elusive – report
• Reuters: DWS to pay $25 mln to end US probe into greenwashing, other issues | US senators pressure Treasury to get more aggressive on climate crisis risks | Three-quarters of firms globally are not ready for new ESG rules, KPMG finds | After U.N. meeting, countries brace for COP28 fossil fuel fight
• Triple Pundit: ESG Concerns Heat Up in Food and Beverage Supply Chains: Can 2D Barcodes Help? 
• The Wall Street Journal: SEC Fines Deutsche Bank Fund Unit for ESG Claims, Money Laundering Allegations | Trillions in Climate Funds Could Sow Turmoil in Poor Nations 
• The Week: How climate change is going to change the insurance industry 
• WPTV: Climate change adding to insurance price hikes, new study says 
• Yahoo Finance: Insurance companies retreat as climate-related disasters rise | Short Sellers Mount Attack on ESG Stocks Bloated From Green Hype 

OPINION

• The Columbian: Be honest about fossil fuels
• The Hechinger Report: Higher education must take the lead on climate change, beginning on our own campuses 
• Reuters:  Why investing in food security is investing in the future  

OPPOSITION

• New York Post: Even Bill Gates is backtracking — the air’s gone out of the climate-crisis balloon 

SOCIAL

• Genevieve Roch-Decter shared a graphic: Good Morning Everyone! What’s the BIG SHORT right now? ESG Stocks. Hedge funds are calling out fake green claims and overblown valuations boosted by stimulus. Blackrock & State Street are shutting down some ESG funds. 2023’s ESG fund closures? Already surpassed the last 3 years combined! Larry Fink even says he’s “ashamed” of the ESG political drama. Is this the end for ESG?
• Eric Balchunas shared an article: Hedge fund managers are now shorting ESG stocks, looking to exploit bogus claims and bloated prices. One of them claims exposing these bad bets is actually good for the environment

DATES 

• September 26: AFREF hosts a virtual conversation on housing displacement and climate change. RSVP here.  
• September 27: Financial Services Committee Hearing: Oversight of the Securities and Exchange Commission. Watch here at 10 am. 
• September 28: Federal Reserve Town Hall with Educators. Deadline to sign on to a letter calling on Federal Reserve Chair Jerome Powell to address climate financial risks and how they impact students and teachers is September 27th. 
• October 2: NY Fed 2023 Environmental Economics and Policy Conference: Measuring and Adapting to Climate Risk. 
• October 3: FHFA Fall Economic Summit in DC at the Constitution Center.