German asset manager DWS has decided to avoid using the term ‘impact’ for its investment products, because it is not clear what the term means, Stefan Junglen, DWS’s head of platform sustainability, said.

DWS will continue to consider ’engagement’ as an important tool when discussing sustainability and ESG issues, but the firm is unsure about what can be called ’impact”, Junglen said speaking at the event “Investing sustainably - from greenwashing to real impact” organised by the Green Party in the German Parliament (Bundestag) yesterday. 

Junglen also pointed at the product breakdown and “great variability” contained in article 8 of the SFRD, to explain the approach the asset manager uses to label its ESG products. 

“There are certain article 8 (SFDR) products that don’t have that many exclusions at all. Article 8 is intended to disclose exclusions…and that is valid if you have many or very few exclusions, [and] disclosing does not mean that [you have] an impact product or a product where [the label] sustainability is written on it,” Junglen added. 

DWS is still grappling with the challenges posed by the EU rules following accusations of greenwashing in past. 

The asset manager has in its portfolio article 8 SFDR products largely excluding fossil fuel companies, and other article 8 products with individual exclusions, but not in all fossil fuels sectors, Junglen explained. 

“We have a lot of article 8 (SFDR) products [in our portfolio], but with a great variability, we want and must clarify this variability and this is a great challenge [for us],” he said. 

A further challenge for asset managers is to describe products concisely, including the right amount of details, but keeping in mind that products should not become incomprehensible for investors, he said. 

“We need a bit more [regulatory] guidance for our products. As long as is not entirely clear what to include in an article 8, or ESG product, we have to describe a lot. Clearer guidance will reduce the risks of misunderstanding,” he added. 

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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