ESG has been the hottest investment subculture of the last 5 years, and greenwashing was largely concerned with investors being skittish, but greenwashing has now metastasized and regulators are watching. Deutsche Bank AG’s asset management team DWS rode the wave as hard as any investment firm but now the U.S. The Department of Justice, the SEC, and Germany's BaFin are looking into the company's ESG claims. Whistleblowers have spurred the investigation and now Asoka Woehermann, the leader of the operation, is coming under pressure. This marks a new and more uncertain future for ESG, one that could have regulators holding a tighter leash over financial firms moving forward. DWS has reiterated they have done nothing wrong or steered investors in the wrong direction.

FINSUM: This is a major test for financial firms and forward-looking tools could be a difference-maker to keep regulators from targeting the next financial firm.