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London
CNN Business
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Investors have been increasingly eager in recent years to deploy their money in a way that supports sustainability and aligns with their values — a trend that, in theory, could leverage capitalism to help combat climate change and fight society’s ills.
But has the rapid rise of funds that prioritize environmental, social and governance — or “ESG” — issues actually helped achieve these goals? Or has it mostly amounted to a sleight of hand, as banks and investment managers repackage old products and append a “green” label so they look more desirable?
A crackdown by regulators is forcing the investment community to grapple with these questions, generating uncertainty about the future of Wall Street’s ESG fervor.
What’s happening: German prosecutors raided the asset manager DWS and the headquarters of Deutsche Bank, its majority owner, on Tuesday over allegations of “greenwashing.” DWS faces probes on both sides of the Atlantic after a whistleblower claimed it had overstated its green credentials and misled investors.
“The measures taken by the public prosecutor’s office are…
