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The Fix

The Fix


Desiree Fixler was a high-flyer in the world of finance until she raised questions about whether sustainable investing is living up to its promise. Her decision to speak out had huge consequences

Date commissioned
6 June 2022

Date published
5 September 2022

Why this story?

The promise of sustainable investing is that you can make money while making the world a better place. But claims about the misselling of supposedly green finance are sending shockwaves through the financial sector. We spoke to Desiree Fixler, a high-flyer in the asset management industry who has turned into an activist exposing alleged wrongdoing. What does her story tell us about the idea that capitalism can help save the planet? Jeevan Vasagar, Editor


Jeevan Vasagar, narrating: One day in March 2021 Desiree Fixler heads towards what she thinks is a routine meeting with her boss about her goals for next year.

Desiree Fixler: So I walk in there and I sit down and he just looks at me and… and pushes the paper away and said, you know: bad news.

Jeevan, narrating: Thoughts race through her mind. What could the bad news be? 

Desiree Fixler: It was the most bizarre thing. I mean, first of all, we were in the back chamber of his office in a windowless room.

And, he starts ranting. ‘Everyone hates you. Nobody likes you. Nobody likes you.’

I’m just sitting there.. not reacting. and he just keeps ranting this stuff. Nobody like you, everybody hates you, you communicate bad. And now like, I’m, I just remember sitting there like: Wait, are you kidding?

And I asked, are you firing me? And he said, no.

And he said, but… you should leave

And I just walk out shell-shocked.

Jeevan, narrating: This scene takes place in the Frankfurt offices of DWS, a company that manages investments – billions of dollars of investments, and Desiree Fixler is the company’s chief sustainability officer. It’s a really senior role.

And in the weeks leading up to this meeting with her boss, the chief executive Asoka Wöhrmann, she had highlighted major problems at the company.

Basically, some of the claims they’d been making about how sustainable their investments were… just didn’t seem to add up.

This is Desiree’s story. It’s the story of how that meeting with her boss set off a chain of events that put a question mark against the way a multi-billion dollar industry operates.

An industry that’s been claiming for years that it can help save the planet.

The idea, in a nutshell, was about showing investors where their money goes. And more than that, it could even protect the environment from the worst impacts of businesses.

In the end, you might have a sense that Desiree did change the world, but maybe not in the way she imagined.

I’m Jeevan Vasagar, you’re listening to the Slow Newscast from Tortoise. Today, The Fix: black ops in green finance.


Desiree Fixler: so my name is Desiree Fixler and I suppose these days I’m considered an activist

So I focus on reforming the ESG investing market. So by background, I was originally an investment banker, working in London and Frankfurt.

Jeevan: Is this something you wanted to do when you were a kid? Something you had heard of as a career?

Desiree: No I did not want to go into investment banking.

Desiree: I wanted to be a spy. I wanted to join the CIA. I studied international relations at the London School of Economics. but by the time I graduated, the Cold War was over.

Jeevan: Why did you want to be a spy?

Desiree: I don’t know. Oh, I don’t know. It just seemed exciting and mission driven, purpose driven, power driven, you know, growing up in the seventies and eighties, during this mad cold war, it seemed the exciting place to be, to fight the good fight.

So, um, I was a bit idealistic and also like a little bit power-hungry and wanting to see everything.

Jeevan, narrating: And was environment, something that was there as an interest from early on. Is this something that you wanted to do as a kid?

Desiree: Not at all. 

Jeevan, narrating; she held onto her dream of being a spy until she got an internship at an investment bank after university. 

Desiree: I think it was like day two. I knew this was meant for me. I was on the trading floor and all the adrenaline, the crazy, very mathematical… and I just knew this is like hand and glove, this is me.

This is me.

I started in 1994 and even though it was really tough and stressful, and, you know, especially when you’re young, you get yelled at a lot constantly being yelled at… you learn.

So I had a good 10 years. Very linear career, Merill Lynch, Deutsche Bank, JP Morgan

I absolutely loved it, but I also got caught up into it. Right.

And I became part of this whole… everything’s about money and the bonus. And, you know, I started losing myself, becoming that quintessential like ‘wanker banker’ just money obsessed and, you know, status obsessed and, drifting off into that like 1% bubble.

Just becoming too materialistic. 

So in the mid 2000s, my best friend sent me a book called ‘Banker to the Poor’ by Dr. Muhammad Yunus and, Yunus writes about, how he developed, a microfinance initiative in Bangladesh. And when I read this book I mean, that changed my world.

Because he makes a business case, that you could combine investment finance and positive social impact. So that was my moment where I understood I could use my traditional financial skills for good, hopefully.

Jeevan, narrating; After that lightbulb moment, her career took a turn to social investing: that’s finance with a social purpose.

Desiree: Now I’m starting to meet folks that are investing in clean energy, clean technology. I’m learning about climate change.

I always call myself like chief translation officer between the development world, the academic world, the social do gooder world, the eco warrior world and like hardcore for profit, capital markets, people.

I could, I could bring these worlds together.

Jeevan, narrating; She thought she could. But her old colleagues didn’t.

Desiree: Yeah. Like, the first reaction was like, Desiree, social good and banking don’t go together.

They’re two separate worlds, right. There’s for-profit business. Right.

And then there’s philanthropy. Right. And don’t confuse the two.

Jeevan, narrating: But Desiree was part of a small community that believed capitalism could be harnessed for good.

The idea caught on… a bit. Enough to be given its own acronym: E..S..G. Environment, social and governance – the idea was to think about more than just profit when you’re investing, but also the way companies are run.

Desiree: In banking, in the mid two thousands, I mean, I, I’ll be honest, this stuff impact investing, ESG was fringe, right. It was a niche market.

It was, gradually, up until probably about 2016, 17, and then it went suddenly…

And… here’s where it starts going mainstream.

Jeevan, narrating: Desiree says two things were going on around this time. The ESG world was changing, and the rest of the world was – finally – beginning to wake up to climate change.

On the ESG side, people like Desiree were focusing more on getting investors to put their money into positive initiatives… impact investing as it’s called.. Like funding clean energy initiatives.

But the world is undeniably changing – especially in terms of climate breakdown.

More and more governments and citizens are waking up to these urgent environmental and social issues.

And it changes people’s risk calculations too. Investors started to understand that the old model of investing – putting money into companies which weren’t run in a sustainable way…well, there were risks in that, too.

Desiree: The focus now, for Wall Street is on what’s called financial materiality.

And that’s the idea that in order to optimize your returns and your profits, you need to navigate and adapt and flourish in this changing world.

There are new risk factors here, right? Climate change is real,you know, You – energy company – might be sitting on stranded assets.You can’t extract all that coal. Right?

You, plastic company, you are subject to consumption changes, right. Folks don’t wanna use a plastic straw, right. Or styrofoam cup.

And then you have, of course the regulator, right.

So we need to enhance and adapt and expand, and so that’s really the start of when ESG starts to mainstream.

Jeevan: So ESG and sustainable investing is already getting big.

Desiree: And then of course, you have, the pandemic in 2020, and that’s where it goes like hyperbolic.

First up was, you know, the social issues and outrage, right.

And again, wow. This is what happens with macroeconomic shocks. This can happen with, with climate change. And so, it drew everyone’s attention.

And, that just takes this whole ESG concept, totally mainstreams it in 2020 to the point where you feel that every executive is just speaking about some aspect of ESG or sustainability.

We’re gonna be a, you know, eco-warrior and we’re gonna fight climate change. Um, we’re pledging to go net zero. We’re all about diversity and inclusion. And these statements were very warmly received. The same time the finance sector understood this was one of the biggest growth markets out there. So a hell of a lot of ESG products and services were accelerated on a conveyor belt, right, in 2020, 2021.

Jeevan: Desiree, just to come back into the timeline of, your career at that point, when you were working with companies, did you ever question a company’s motives for wanting to, bring in someone like you, in that ESG advisory role, did you ever sort of have suspicions about why they would want to?

Desiree: Uh, no, now I do. but back then, no, I was also very idealistic, I guess, and maybe naive.

Jeevan, narrating: Desiree’s career had been going through the roof with the explosion in ESG. 

But here’s where we get back to that row with her boss in a windowless office in Frankfurt. 

She’d got a very big offer. DWS, a company that manages investments… the biggest company of its kind in Germany…, was looking for a chief sustainability officer and this job was a huge opportunity.

Desiree: I was, I was really excited. I mean, almost a trillion dollars of assets under management in every asset class.

And so, you know, the impact that could be had was enormous.

Jeevan, narrating: So would be the paycheck. 

But there was just one thing. DWS had a parent company – Deutsche Bank – which had made a habit of being in the headlines for all the wrong reasons.

Fox News: Today, Deutsche Bank was fined $150 million for their associations with Jeffrey Epstein… for essentially enabling him while he was making all these payments to co-conspirators and other women.

Reuters: The State’s Department of Financial Services said Tuesday that Deutsche failed to monitor Epstein properly despite ample public evidence of his misconduct. It says the bank processed hundreds of transactions that should have had more scrutiny.

DW News: The explosive New York Times report on the tax situation of U.S. president Donald Trump is raising some uncomfortable questions for Germany’s largest lender Deutsche Bank, namely why did Deutsche Bank loan Mr Trump $2 billion at the same time other banks including all U.S. lenders were not willing to do so.

Desiree: You know, the other thing is that my eyes were open.

So Deutsche Bank had a lot of problems. I mean, everyone’s aware, right. It sometimes features on the front page of the Wall Street Journal, the FT, that, you know, yet another scandal yet another regulatory violation, right.

 It was a company that was considered one of the most scandal-prone banks over the last 20 years.

The company was being investigated because they ignored suspicious activity reports on Jeffrey Epstein. It was a company that was being threatened to be shut down because of financial control violations in the U.S.

Jeevan: And you knew all this?

Desiree: Yes.

Jeevan: So what did you, what did you hope to do? You went in with your eyes open, but you hoped to bring about change.

Desiree: Yeah. So, you know, I’m known for being outspoken. They know who I am.

When they sent through the role, they wrote that, that my job was to be a change maker. And so, and like, this is something I can do… and it’s CEO is relatively new, both at Deutsche Bank group and at DWS.

And, they were intent on restructuring , and changing the firm’s culture.

And, putting Deutsche Bank, the group on, on the right foot, and, and like, I was ready for this, for this adventure, but my eyes were open, Yes.

Jeevan: Okay. Let’s talk about the people side. So your first week, what sense do you get from people around you about how they relate to you?

Desiree: They embraced me. I mean, they were so excited. It was really overwhelming how many people reached out to meet me, to work with me, to support me.

So the first part of my job is to do, kind of a gap assessment, like figure out, where we’re good, let that be. And my job right now is to focus on the areas where, there are holes in investment, deficiencies, bad practice, and fix it. Right.

Jeevan, narrating: So Desiree joined DWS on a wave of optimism and enthusiasm. Ready to fix the company and help fix the world…

Jeevan, narrating: The way things worked inside DWS was that they had an internal system that looked at how good companies were on a bunch of environmental, social and governance measures, and it gave them a score. And based on that score, portfolio managers were meant to make their decisions about where to invest. 

This rating platform was key to everything. So, understandably, it was the first thing Desiree looked at. And… it became the first moment that she didn’t like what she saw.

When Desiree started at DWS back in 2020, a German company called Wirecard was in the headlines. Wirecard was a popular payment processor, a bit like PayPal.

But in spring of that year, the company was collapsing after it emerged that executives were allegedly involved in wide scale fraud and corruption. Its former chief executive and a number of other executives have since been arrested.

So Desiree decides to look up Wirecard’s ESG rating.

And remember – ESG isn’t just about the environment. The E is environment, the S is social and the G is for governance – how a company is run. The rating is supposed to consider all of those. And just to bear in mind… massive fraud allegations do NOT equal good governance.

Desiree: And I’m sitting there and I’m looking at the reports being generated from this ESG engine and you’ve got Wirecard in the spring of 2020.

So it’s out there, that, there are severe fraud allegations against this company

This ESG engine is giving Wirecard the second highest rating and citing great business ethics, corporate governance, right?

So it’s a system that has ratings from A to F and Wirecard is during this tumultuous time, is given a B the second highest rating saying that this company is really well run.

So, what I very quickly see is that this ESG system that’s being touted as world class sophisticated, using artificial intelligenceI very quickly see the system is crap.

This ESG engine is broken.

We need to trash it. It’s crap.

Jeevan, narrating: The rating system was telling investment managers to buy into a company whose bosses were facing arrest for running it so badly.

And if the governance part of ESG was off in the system, it was likely that the E and the S were, too…

We asked DWS for an interview, but they declined. They told us they’re taking the allegations very seriously and co-operating with the authorities – and it’s difficult for them to say much while the investigation is going on.

Jeevan: It’s a really extraordinary thing. But, I just wanna come back to the climate question, cause that’s maybe one of the big questions we’re trying to ask in the course of this and was there a company that was just unsustainable being sold as green or a company that was just really environmentally damaging or was there the prospect of that when you were looking through, these examples, did you come across anything that kind of rang an alarm bell on that front?

Desiree: Yes. I worked with risk management, and we were assessing fossil fuel exposure and alarm bells went off because… investments that have severe climate risk, right… so these severe risk investments should be getting an F rating.

And what I picked up on is that the system is being more gentle with it and giving it, given these severe risk, these climate severe risk investments, better ratings.

Jeevan: What kinds of climate risk Desiree?

Desiree: Coal coal investments. Fracking, um, oil sands.

Jeevan, narrating: This is something that Desiree has never said publicly. That the DWS system seemed to be giving gentler ratings to companies that posed big climate risks – that’s huge.

Desiree: The system is not supposed to be there to rationalise, right, a dirty investment.

The system is supposed to be there to flag the risk. Right. That’s what ESG is about.

And so something was, was off and it gets very, very complicated but just in summary, I believe that their risk assessment system was rigged a bit.

That’s the best way to put it.

Jeevan, narrating: So Desiree raised these concerns, but no one seemed to be taking this seriously. She started to feel more and more frustrated. There was a lot of talk – emails flying back and forth – but nothing was being done to address this massive issue – that they were, according to Desiree, misleading investors about ESG ratings.

In the end, though, this conversation couldn’t just rattle around internally. Like all big public companies, DWS had to say something to its investors. It had to publish its annual report…

Desiree: So you start going, it becomes almost Kafkaesque where there are like internal meetings and committees and workshops, and just constantly talking about it and another report is commissioned and we’re just all bumping into each other and we’re gearing up to issue the annual report.

Jeevan, narrating: This is a key moment. Because, in this report, DWS doesn’t just have to disclose their finances. They also have to report on how they are doing in terms of ESG. If their system is broken, they can’t claim it works.

Desiree Fixler: We’re gonna get in trouble.

Jeevan, narrating: Desiree was terrified that the financial regulator was going to call them out. But the report was written. And when Desiree saw it, it was full of claims about how well the company was doing with ESG.

Desiree: I’m editing the annual report. I have a draft copy and I’ve red-lined it and I’ve just said not true, not true, not true, not true. Right.

I’m not gonna be the fall guy. I’m not signing off on this stuff. Right. These are misstatements.

Jeevan: Give us an example of a statement that isn’t true?

Desiree: So the number I’d been given was that roughly 450 billion euros of assets under management complied with the firm’s stated ESG integration policy. 

Jeevan, narrating; But if the system is broken… then, Desiree said, none of those assets can actually be counted as ESG.

By this point, Desiree wasn’t the only person concerned. We’ve seen internal emails and other documents suggesting other executives had a similarly sceptical assessment of what DWS was claiming in public. 

In February 2021, a group of senior people from within the company put together a presentation about their concerns. Desiree delivered it. 

Desiree: I deliver it and the CEO stops me in the middle and just says, you know, well, you know, I hear what you’re saying, but the market thinks we’re doing a good job.

Jeevan, narrating: The chief executive sends people on the team an internal marketing slide featuring quotes from analysts calling DWS a leader in ESG.

Desiree: I just, of course I immediately responded.

Yeah, the market is… the sell side analysts are saying that, because you’re telling them that we, the company are self-reporting this stuff.

They’re just regurgitating what we’re saying, but I’m telling you that’s not true that we have to stop that, that’s called propaganda. Here’s the reality check.

Jeevan: Did you understand from the CEO’s reaction that this was kind of fatal?

Desiree: No, I didn’t, I didn’t know it was fatal. I knew he wasn’t gonna be happy with me.

It never occurred to me that he would fire the sustainability officer.

Jeevan, narrating: But that is what happened. 

As you’ve heard, Desiree was called in for a meeting at the offices of Asoka Wöhrmann – the one where he yelled and told her no one liked her. 

Desiree: It was the most bizarre thing. 

He starts ranting. Everyone hates you. Nobody likes you. Nobody likes you.

I’m just sitting there and I’m not reacting. and he just keeps ranting this stuff. Nobody like you, everybody hates you, you communicate bad. And now like, I’m, I just remember sitting there like, Wait, are you kidding?

Jeevan, narrating: Soon after, Desiree’s world fell apart. 

Desiree: I get fired. And the next day the annual report comes out. Of course, I look at the key sections that have to do with ESG. And of course, my edits weren’t, weren’t accepted. They went out with the misstatements and that’s when the penny drops like, okay, now I think I got what’s going on here.

Jeevan, narrating: We asked DWS about their annual report and I’ll paraphrase their response. They told us the worries about it were misplaced. They said that some of their traditional funds could also take sustainability risks into account but that doesn’t mean those funds are part of the company’s specific ESG portfolio. And they say they’ve always labelled very clearly those funds which are part of the ESG portfolio, and the other ones which only factor-in ESG considerations.

After she was fired, Desiree wrote to officials at Deutsche Bank and DWS. 

Desiree: I attach a five page dossier with all the evidence. And I say I think I just got fired because I told the board that there’s greenwashing.

Jeevan, narrating: In other words, the company’s environmental claims were marketing spin rather than substance.

Desiree: And the executives at Deutsche Bank, don’t write back to me. And then the next thing I know, they send Bloomberg something and they go out into the press that I was this terrible sustainability officer.

I didn’t know what to do because at this point I’m fired, my reputation’s now ruined in the public. I can’t get another job.

And then they also throw me out of the country. So they immediately revoke my work permit and I have to leave Germany. So I’m homeless.

And I really believe that the CEO and his little buddies, they sought to just like crush her. I heard that they called me roadkill – little girl roadkill. Right. Just annihilate her. Right. And we’ll continue doing what we’re doing. The market believes in us. Right. And we’ve gotten away with it.

Jeevan, narrating: So Desiree makes a choice.

Jeevan: I mean, you must have known that when you weren’t public, I know that you said that they, they went public first in a way with the press release, but you must have known that when you spoke up about what happened there, it would make it hard for you to get another job.

Why did you do it anyway?

Desiree: You know, really two reasons. I mean, one honestly, to clear my name, I mean, just to tell the truth, I wanted to set the record straight, but you know, what the other trigger was is that I was also reading the enormous amount of propaganda coming out of DWS after they fired me all this blah, blah, blah. ESG is at the heart of everything we do.

DWS promotional material: At DWS, we have been systematically integrating ESG criteria into our investment process. ESG, we believe, will remain high on investors’ agendas since 2019.

DWS promotional material: Most notably we have developed a highly sophisticated ESG analyst tool, the ESG engine.

DWS promotional material: The integration of ESG information is an integral part of our investment process… DWS offers the full spectrum of ESG from active, passive to alternatives.

Desiree: We’re noting that climate change is worsening and yet the rhetoric and the propaganda is just ratcheting up outta control, where everyone’s patting themselves on the back for aspirational statements. Just making statements and feeling good about it. And there’s this disconnect with, between the aspirations and the propaganda and pledges and actual action and outcomes. Right.

And we just needed to call bullshit on it.

Jeevan, narrating: Desiree’s decision to speak out would spark something massive.

Bloomberg: We’re just getting some breaking news out of DWS. Deutsche Bank’s DWS unit, we understand has been raided, and this is amid allegations of greenwashing. The company DWS has been facing the allegations since its former chief sustainability officer Desiree Fixler went public with them in August and that’s been prompting regulatory probes in the U.S. and Germany and we understand that this morning… some of the units have been raided amidst these allegations of greenwashing.

Bloomberg: We don’t have the full picture yet of sort of what exactly prosecutors are probing or the federal police, what we do know at this stage is that multiple police officers or authorities have entered the DWS buildings and the Deutsche Bank buildings here in Frankfurt. 

Bloomberg: We know that DWS has actually denied the claims but of course the raids just add to a list of regulatory and legal issues for Deutsche Bank.

Jeevan, narrating: In May of this year, the German police raided DWS as part of an investigation into allegations that they made misleading ESG claims.

Asoka Woehrmann resigned as CEO in June. We approached him for comment, but we didn’t get a reply.

The investigation is ongoing.

Meike Schreiber: It was quite funny because I was in a press conference and I was really surprised and shocked and I couldn’t concentrate on the press conference anymore and I started to send emails to all my contacts.

Jeevan, narrating: That’s journalist Meike Schreiber, describing the moment when she found out about the raids on DWS.

Meike: I’m working for Süddeutsche Zeitung, the biggest German daily newspaper, and I’m doing this for quite a while now, almost 20 years, and I started covering Deutsche Bank in 2015 and as it was part of Deutsche Bank, I also covered DWS.

Jeevan, narrating: Meike had covered a lot of shenanigans at Deutsche Bank in her time as a journalist.

Meike: What I feel is that there is a deep culture of cover up.

So every time they have a problem, they try to throw it under the carpet and to not really tackle the problems. And I think this was also the case for the greenwashing issue, that made it even worse because they didn’t tackle the problem when it, when it came, came on the table. 

Jeevan, narrating: But this was something new.

We asked Deutsche Bank about Meike’s comments and they said they “strongly reject the allegation” about how they handle misconduct reports. Deutsche Bank said they investigate all allegations of possible misconduct comprehensively.

She started reporting on the greenwashing allegations. And one of the funds she decided to look at was the DWS fund Top Dividende. 

It is the largest mutual fund in Germany and worth 20 billion euros. 

It was also supposed to be “ESG integrated”. This means that DWS fund managers said they were carefully considering risks that could arise from climate change, for example, and excluding particularly controversial companies.

But it’s hard to square that promise with the companies in the fund.

Meike: For example, DWS explicitly mentioned tobacco as a business area. whose influence on society is rated negatively.

So, and then we found out that Top Dividende invested more than 1800 millions, so a lot in such tobacco companies like British American Tobacco, Philip Morris, and Imperial brands.

Jeevan, narrating: So DWS itself says on its own website that tobacco companies are bad for society and yet this ESG fund is full of them.

They’ve since ditched the tobacco companies from the fund but you could say the new line-up isn’t much better. The top company is TC Energy, a Canadian business that operates natural gas and oil pipelines. The top ten holdings include BHP, the world’s biggest mining company, Shell and Total.

And when Meike read the small print about this fund, it said something startling. 

Even though the entire fund is marketed as “ESG integrated”, DWS says only 60% of the companies in this fund meet ESG standards. A full 40% of the companies included in this ESG fund don’t meet any ESG standards at all.

Meike: So 40% are dirty or whatever. So this is quite amazing given the greenwashing allegations from last year. 

Jeevan, narrating: This isn’t just a story about one company. What happened at DWS has sent ripples through the whole industry. 

Tariq Fancy: So my name is Tariq Fancy. I used to be BlackRock’s Chief Investment Officer for Sustainable Investing. 

Jeevan, narrating: Tariq has been watching what happened at DWS closely.

Tariq: The fact that regulators on both sides of the Atlantic are stepping up finally to hold companies to their word is a useful thing. I also worry though, it’s a bit of a distraction, right?

Because they’re effectively going to these companies and saying, Hey, this stuff you’re saying you’re doing, you should at least be doing it.

The fundamental bigger problem that I have, this stuff doesn’t even work, even if they did it well. 

Jeevan, narrating: Tariq’s journey was remarkably similar to Desiree’s. He was once the chief sustainability officer at the asset manager BlackRock, before becoming disillusioned with ESG.

Tariq: You know, the biggest thing for me was that I realised it’s actually harmful so the original conception I had was that this is giving wheatgrass to a cancer patient, right? There’s no reason to believe wheatgrass juice is not gonna harm the cancer patient, but it’s not gonna help.

And then I started wondering if it was something worse because I left the industry and then I would go and talk people and they were getting really excited about sustainable investing, because they were seeing all this marketing coming out of Wall Street saying these magical new green products that you could buy footnote with higher fees, footnote two that have no impact. Right. But you can buy these things and feel good about yourself.

So I knew it didn’t work, but nobody else knew that it didn’t work in the same way I did. And they were eating up all the marketing that was coming out of Wall Street.

And that made me worry, this is is well after I left [BlackRock], wait a second, it could be much worse than I think, because if people all believe that it works when it doesn’t, you know, the fact that I’ve left and I’ve said,this  is useless. I’m not gonna spend my time on.

It doesn’t change the fact that if everybody else spends years figuring out the same thing that I figured out, we’re gonna burn valuable time, or we’re going to kick the can down the road and actually not make changes we need today because we’re all, you know, engaged in what I call a convenient fantasy and not addressing an inconvenient truth.

And so my decision to go public hinged on one thing, I worked on a study with a university in Canada. I knew the president of the university, I said, listen, there’s something I’m really interested in around sustainable investing and sustainable capitalism. And, I worked with them, we created a study where we tried to see if, the messages coming outta Wall Street, around sustainability and this green stuff they were saying that I had started to realise was largely PR, if that was actually misleading the public and delaying government reforms. Right? And the idea being if that’s the case, you realise we’re not just giving wheatgrass juice to cancer patient, we’re giving wheatgrass juice to a cancer patient and we’re marketing it so aggressively and overselling that the patient’s delaying chemo.

And we study and  that’s actually true… take groups of people in the US  and Canada and you show them all these wonderful messages of business we’re gonna lead the way, all these messages, all these messages which are PR stuff that I knew was just generally behind the scenes, idn’t make sense…. it was actually damaging because it was creating a delay.

Jeevan, narrating: We just can’t trust businesses to save the environment – Tariq says that’s a fantasy.

Tariq: It’d be like, if Martin Luther King said in the, you know, sixties, he said like, we need to fight racism we should use our 401ks to like, not own companies that are discriminating against black people. It’s nonsensical. He said, we live in a democracy. We’re gonna march on Washington. We’re going to tell them to change the rules because it’s in the public interest.

That’s what we should be doing right now. We should be demanding the governments follow expert recommendations they’ve known about for decades.

Sometimes they’re politically unpopular, but that’s why we have to have this political conversation.

Jeevan: So for Tariq, we need to stop thinking about ESG – leaving the environment in the hands of businesses – and focus on government.

Tariq: In the next few years, we’re either gonna have this debate and put in place policies by the middle of the decade, could have a chance of getting vaguely close to where we need be, by the end the decade, or we won’t do if we don’t it, we’re not only gonna endanger the planet right. By kicking the can down the road I’m also we’re endangering the political foundations of capitalism.

Jeevan, narrating: From what you’ve heard, you might be thinking that endangering the foundations of capitalism is a good thing. That, maybe, what we need is a revolution. But that doesn’t seem very likely. 

Desiree went into ESG investing to change the world. And she’s certainly made waves. What she’s exposed could change the way that finance operates, and the claims that money-men are able to make about investments. But where does she think real change will come from?

Jeevan: I just wanna ask for a couple of reflections on what happened, you were saying like the power of finance to change the world, the Muhammad Yunus book. Do you still think that’s the case, or do you think that you’ve been a bit disillusioned by this experience? I mean, do you think that it is still possible if you have these enormous problems like climate change, is it really the case that that money can be moved to fix this kind of problem?

Desiree: Uh, no. So the answer to your question is yes, I was a bit too idealistic, well intentioned, but a bit clueless before.

And so no, I’m a firm believer that today the capital markets can’t do it by itself, that voluntary actions cannot solve these problems. We need mandatory action. We need the government stepping in, right?

We need legislation, right, to confront climate change, to fight it.

Telling people how to invest never works. Reminding people that if you lie, we will arrest you –  that works

Wall Street couldn’t care less about society.

We need governments coming in, both with financial regulation on more disclosure and then actual legislation, whether it’s a carbon tax or, full working, you know, cap and trade system.

 And then the capital markets will follow. Then there’s a role for the capital markets.

Jeevan: Do you think … is what you’re saying that, there is a role for sustainable investing or is it more the case that once government comes in and like sets the rules at a certain point, all investing becomes sustainable and you know, there isn’t really a role for ESG anymore? It’s just, that’s what all investing is. It’s within this framework.

Desiree: I think, there’ll always be problems in society and the concept of impact investing.

It’s up to everyone to make their own decisions. And as long as companies are honest, and fully disclosing, right, their climate risk.

We’re now in a world where ESG needs to be substantiated with data and evidence. If you say it, you need to back it up and you need to do it.

So I, I do believe we’re making progress. I am optimistic, but we’re going through a very challenging period right now.

Jeevan, narrating: We left our mics running as Desiree packed up at the end of the interview. She was off to her next meeting. She’s still in the ESG world, advising venture capital funds on sustainable investing. 

She’s done well for herself, even in this post-DWS life.

Desiree: It’s not that I left the world of luxury. I’m still desperate to turn left on the plane.

So I call myself out, right. I live in Kensington. Right. It’s my life and I wanna also enjoy it, but at the same time, right. I’m a flawed human being and I’m full of contradictions. But I like to call things out, but yeah. 

Jeevan, narrating: But she wants to do things differently than she did before, back when she worked for DWS.

Desiree: I believe that I was one of the distractors and I have to stop distracting and I need to focus on the government.

I can still help the capital markets. That’s not mutually exclusive. Right. But the government has to act first. Right. And I can’t, I’m no longer gonna be the whitewash for the corporate world, the ESG wash. Right.

Jeevan, narrating; Thanks for listening to this episode of the Slow Newscast from Tortoise. It was reported by me, Jeevan Vasagar, and Brenna Daldorph. The lead producer is Brenna Daldorph, the assistant producer is Imy Harper. Sound design is by Mau Loseto. The executive producers are Matt Russell and Ceri Thomas. 

How we got here

At the UN’s climate talks in Glasgow last year, Cop26, I watched politicians and billionaires making pledges to use the power of finance to help the environment. There was great excitement about the idea that capitalism could be harnessed to change the world for the better… instead of being responsible for runaway emissions that threatened disastrous climate change.

I’d been following the growth of a trend in investing, known by the acronym ESG. At its core, this tries to shape how companies operated. It is part of a broader push to make businesses function in a way that isn’t just about the bottom line but also about reducing the damaging effects companies can have on the world.

I’d noticed plenty of scepticism about this, and not just from critics of capitalism, but from insiders too. Then, in June, police raided the offices of one of Germany’s biggest asset managers, DWS, following allegations made by its former chief sustainability officer Desiree Fixler.

Our reporting started by looking at Desiree’s allegations but leads us to a much bigger story about the relationship between business and politics and what we really need to do if we want to tackle climate change. Jeevan Vasagar, Editor