FRANKFURT, July 5 (Reuters) - Germany's top bank regulator on Wednesday said it would rein in so-called greenwashing, or exaggerated and misleading claims in climate investing, saying that it was one of the biggest risks facing the financing of the transformation to a greener world.

Mark Branson, president of the financial regulator BaFin, said that only products that are sustainable should be labelled so.

"Greenwashing destroys trust. It is one of the biggest risks of transformation financing. We at BaFin are taking decisive action against it," he said at a banking conference.

Regulators the world over have been stepping up their focus on green financing, and BaFin has been among the authorities investigating one prominent case of alleged greeenwashing in Germany.

DWS, an asset manager controlled by Deutsche Bank, has faced accusations that it may have misled investors about "green" investments.

DWS and its former chief executive have rejected the allegations, and DWS has said it is cooperating with authorities.

Branson said that BaFin was "taking great care" to make sure that only German fund products that deserved the sustainable label got it.

"In practice, we are not yet far enough along here," he said.

Investors get too much information that is too complex, but what they need is less information that is easier to understand.

Investors must be able to easily recognise whether or not a product contains nuclear or gas, or whether a product invests in companies that are already green or in companies that are in the process of becoming green.

"It is not enough if this is only hidden in the appendix," he said. (Reporting by Tom Sims Editing by Miranda Murray)