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Climate activism: Why a fund provider wants to take on the penalties of climate stickers

The listed public limited company Ökoworld, also known as a provider of equity funds, recently caused an uproar: In a press release and an advertisement in the daily newspaper “taz”, it announced that it wanted to take on the fines that climate activists were sentenced to pay. They are increasingly having to pay for police operations themselves pay if they get stuck on roads or bridges.

The wave of protests followed quickly. And it was apparently more violent than Ökoworld had expected. His company is being “massively publicly attacked,” Platow wrote in a new statement on Thursday evening. “I had expected criticism, but not to this emotional extent.” In terms of content, he continues to stand for climate protection and “from my perspective, courageous climate activists”. He now wants to implement his support differently. Instead of accepting the penalties that can be proven, the Ökoworld boss now wants to donate 20,000 euros to the environmental trust fund founded in 2021. This finances legal assistance for climate activists. “This money comes exclusively from private sources of like-minded people and companions,” emphasizes Platow.

The original announcement actually fitted into the picture. The financial service provider from Hilden near Düsseldorf had already financially supported the protest action in the Lützerath opencast lignite mine. But the costs for the climate adhesive campaign could have been significantly higher. With the announced takeover of the penalties, Ökoworld could have even encouraged the activists to further protests with a penalty. After all, the bill could have been considered paid.

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Would the blank check have been covered?

As an investment expert, Platov should have known that if he makes a commitment to pay the price of future speeding tickets without knowing the exact amounts, he is becoming the writer in a deal that can be expensive for the company.

The matter is now off the table, but criticism of Platov should remain. His first statement was at least ill-considered. Some of his fund investors apparently understood the announcement that they would accept the penalties for climate glue. that the money should have been taken from their funds. That was not planned. Instead, however, the shareholders of Ökoworld AG would have had to take responsibility for it indirectly.

A heart for activists

Platow has long been active in the eco-movement. Once a squatter and anti-nuclear activist, he founded a financial sales company with the mathematician Klaus Odenthal in 1974, from which the fund provider Ökoworld emerged. The mid-seventies sees himself as a representative of a capitalism “that does not lose sight of being human”. In Germany he is regarded as a pioneer of ethical and ecological investments.

Platow’s career path did not lead, as is usual, via a bank apprenticeship and a business administration degree to a fund company. He initially worked in social professions and studied social work in Düsseldorf. The willingness to demonstrate has remained: the Ökoworld workforce has also taken part in the climate strikes of Fridays for Future. The aim was to send clear signals for a climate change.

However, the actions of the climate stickers are much more controversial, even among people who campaign for climate protection. Because the streets are closed, the activists sometimes obstruct rescue transports and fire brigades, disrupt supply chains and interfere with the daily routine of many people. Critics say the group’s actions are excessive and unhelpful.

Image damage or good PR?

Was Platow’s announcement more of a PR coup or more of a disaster? In any case, the preference share of Ökoworld AG has lost value in the past few days, while the Dax remained almost unchanged. Due to the departure of the prominent fund manager Alexander Mozer last year and the poor performance of many Ökoworld funds in 2022, the company is currently in difficult waters.

Financial salespeople who have recommended Ökoworld funds to their customers may have received critical questions in the past few days. Because the performance has left a lot to be desired for a long time. The Stadtsparkasse Düsseldorf, among others, advertised for the Ökoworld Klima fund at the end of 2021. At the time, it was still performing well. Ökoworld therefore received a high performance bonus in 2021 in addition to the management fee. But the following year, the fund plummeted by 30 percent.

Because Ökoworld had previously made a lot of money from it, the company was still able to pay a record dividend to its shareholders. The fund assets were charged 2.25 percent in costs in the past financial year, part of which is collected by the sellers in banks and fund distributors. WirtschaftsWoche had advised against the fund in October 2021 because of the high costs and the success fee.

Danger of massive fund sales

Investors who are not behind the climate-glue protests could now get out of the company’s equity or mixed funds in protest – despite Platow’s partial retreat. Ökoworld has to take back fund shares every day, and they can also be traded on the stock exchange at any time. This could threaten the fund with huge outflows of funds, which in turn would reduce the income of Ökoworld AG. Because Ökoworld earns, for example, from the management fees that the company is allowed to withdraw annually from the funds offered. And the more volume these funds have and the more money investors deposit, the more money the fund provider earns.

Individual investors recently announced on social media that they would sell shares in Ökoworld funds because they did not approve of the support for the activists. If the funds do not have enough liquidity to pay out fleeing investors, the funds would have to sell shares. In such a case, the transaction costs also burden the fund assets.

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With the marketing campaign, which may bring him applause in the ecological niche, Platow must have alienated many people. Such poorly thought-out actions are dangerous for a trustee of assets worth billions. Things seem to be amiss in Hilden when nobody can stop the CEO. The board of directors and shareholders will now probably have to issue further explanations. However, many fund investors may have lost confidence in the company after this action.

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