ESG & Investing

Deutsche Bank Unit Says New ESG Rules to Trigger Divestments

EU markets watchdog is set to roll out new fund-naming rules
Fund managers are preparing to adjust portfolios in response

A logo on the exterior of the Deutsche Bank AG headquarters in the financial district of Frankfurt, Germany, on Thursday, Feb. 1, 2024. Deutsche Bank plans to cut 3,500 jobs over the coming years as Chief Executive Officer Christian Sewing seeks to make good on a pledge to lift profitability and return more money to shareholders.Photographer: Alex Kraus/Bloomberg

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By Frances Schwartzkopff

February 5, 2024 at 11:30 AM UTC

Updated on

February 5, 2024 at 4:05 PM UTC

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The investment unit of Deutsche Bank AG will have to divest more than 5% of holdings in some ESG funds in response to new European Union rules set to be implemented this year.

The European Securities and Markets Authority will start enforcing new requirements in the coming months, targeting funds that reference ESG, sustainability, transition and impact in their names to ensure those terms really reflect what the portfolio holds. Though not yet finalized, the rules are already forcing asset managers to review portfolio holdings and make any necessary adjustments.