A whistleblower’s greenwashing allegations, and the impact they’ve had | FT Moral Money

[Music] it's on the record yes i'm right now [Music] just gonna give us guys [Music] desiree can you talk about your time at dws what was it like on the inside in my mind uh and i i thought we were all open about this i was being brought in um to fix the problems right and it was my job as their first sustainability officer to come in and align the entire platform what freaked me out what was really far out about this company was this disregard for accuracy when it came to non-financial reporting in particular their esg assets under management and their esg capabilities and so when it came to nailing down the annual report i dug my heels in and just said you know internally we're making certain statements right we acknowledge we don't have a tracking system we acknowledge that we have you know some holes in our capabilities we can't then contradict that and make external statements in contrast right that's misrepresentation and misrepresentation if material is securities fraud and that's what i pushed up against and that that's really a story this is a story not about how green their investments were it's a story about misrepresentation when you said you dug your heels in what happened at that point it culminates in my last board meeting where i just go in there and more or less pound the table and ask for radical urgent change i expected that day to get answers and unfortunately the answer was my my termination the next thing you know my reputation is being ruined in the market and this is going to be really challenging how am i going to overcome this to get another job it's been a year since you were terminated and you subsequently went public how are you feeling about that now any regrets no i wanted to get the record straight on everything and i wanted the market to hear my side but also just stopping all this propaganda and trying to pop this this the green bubble here the market had successfully mobilized trillions of dollars into esg investments but we're not moving the needle here it's all great to sign up for net zero uh pledges to state that diversity is at the heart of everything you do as a company but i wanted to address that all of these inputs these aspirations these initiatives haven't yet led to outcomes right we need to get back on track i just felt no no like if i'm if i'm blowing the whistle i'm going all the way since you went public dws's offices have been raided by the police the ceo has been replaced and investigations are ongoing do you feel vindicated at all a little bit certainly the first part of this little vindication came when dws published their 2021 annual report this year and they marked down their esg assets under management by 75 as reported by the financial times i do think that this is going to lead to better practice nothing raises the bar on wall street better than an enforcement action i think a very bad event is going to lead to something good i think that this whole saga culminating with this police raid is the wake-up call for the esg market a sustainability officer is not a marketing officer a sustainability officer should be considered as a compliance officer and that is i think and what what and then i hope is happening right now that there is more of a focus to make esg real asset managers and the financial sector broadly are continuing to bank on esg as a source of revenue do you believe anyone else is buying it esg could be as much as 50 percent of net inflows at asset managers this is a sizable business and i do believe sustainable investing is here to stay i'm still a true believer in this today we're you know this market is facing two challenges number one folks are questioning it you know their skepticism about what's real right what's impactful where is my money actually going to and then secondly we've got the macroeconomic challenges right we have inflation running amok and suddenly you know we do have a a chunk of this market you know second guessing esg and kind of saying well hold on a second this was a winning strategy over the last couple of years but actually that was around growth equity and now with the pullback in the market right a number of investors are saying you know what i'm you know happy to to to go back to value investing and it looks like there's good value in energy companies in the mining sector and materials um so i do think that there's going to be a bit of a setback and there's no doubt we're witnessing this esg investing has lost a lot of its luster we needed this correction it was never appropriate to to tell the market that there is guaranteed out performance from investing in an esg portfolio right we did not have the data on that esg was never a guarantee of alpha outperformance desiree what's your advice to people who might be similarly positioned and thinking about coming forward to blow the whistle if someone has real conviction you have to speak up that's part of your job if you're operating in sustainability or esg and with what i've done and others and there are many others right i would say to those folks if you truly believe it you have to speak up and now you have cover you have you know the german you know federal police raid at deutsche bank's headquarters in dws's headquarters i do think especially this last action on the part of authorities is sending shivers down you know many corporate executive spines and they're going to think twice about squashing right descent within the ranks or squashing questioning within the ranks it's a more protective environment today to speak out [Music] you

Channel: Financial Times

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Length: 7min 56sec (476 seconds)

Published: Thu Sep 08 2022