WisdomTree:
your partner for
responsible investments
WisdomTree launched in 2006 with a simple premise: to create a better investment experience. We seek to fulfil this mission by offering more transparent investment vehicles, providing exposure to hard-to-access asset classes, and designing methodologies that focus on the future growth and sustainability of the underlying companies.
We strongly believe that Environmental, Social and Governance (ESG) principles need be addressed holistically and not simply applied to a subset of impact investments only. WisdomTree recognises that successful ESG engagement goes beyond financial returns and contributes to long-term value creation for all stakeholders. Investors need ESG partners and as a signatory to the UN Principles for Responsible Investment (UNPRI), we are committed to building a business focused on delivering the best solutions to investors while considering ESG factors.
Responsible investing is not solely about impact investing, it’s about ensuring that investments offered have also considered non-financial factors such as environmental and societal impacts.
As one of the largest specialist ETF and ETP issuers in Europe offering a comprehensive range of products, WisdomTree needs a tailored approach to each exposure. While there is no single ESG investing solution that works for every investor, there is a strong business case for a solid ESG framework.
By focusing on transparency, communication, and analysis of ESG data, we can uncover opportunities that would have gone unnoticed and bring hidden risks to the surface.
In addition to risk mitigation, the integration of ESG factors when designing an investment strategy is receiving growing recognition that responsible investing can positively impact returns.
Our commitment to responsible investing:
+ Respond to our clients’ demands with a robust ESG framework, while keeping the investment proposition intact.
+ Reduce ESG risk and promote ESG characteristics by excluding companies significantly involved in the high greenhouse gas emitting sector of thermal coal and unconventional oil and gas exploration/production and companies significantly involved in the tobacco and small arms sectors, companies involved in controversial weapons as well as companies having severe or high controversy ratings and which do not adhere to internationally accepted human rights, labour standards or anti-corruption principles. Further information in relation to exclusion criteria is set out in detail below.
+ Work towards responsible investing by developing strategies that exclude companies with strong negative externalities and provide a clear and transparent framework for strategies that commit to making sustainable investments. For further information on WisdomTree's approach to sustainable investments, please refer to our Corporate Social Sustainability Report.
+ Offer a ‘best-in-class’ ESG approach to gold investing by allocating to 100% responsibly sourced LBMA Good Delivery bars with a commitment to transition to those with higher ESG credentials as the market and guidelines evolve.
+ Be at the forefront of responsible investing in commodities and their role in promoting progress towards climate change. This includes partnering with specialists to educate investors and help develop industry standards.
+ Continue to monitor developments in ESG demand and available data, adapting our frameworks to best serve our clients’ needs and requirements.
WisdomTree definitions for responsible investments
WisdomTree’s approach to responsible investing
We offer a variety of ESG approaches enabling clients to select the investment that best meets their needs. We will continue to monitor our investment propositions alongside evolving ESG practices and adapt to changing market landscapes and investor demands.
Our growing line-up of strategies may align with several of these approaches:
The products under these themes give investors multiple ways to express their ESG views, providing exposure to the companies, sectors and raw materials making meaningful changes to our world, both now, and in the future.
ESG screened
We have enhanced our proprietary and third-party equity and fixed income indices with ESG screens using carefully constructed exclusion criteria1. The following core principles define the exclusions applied to the possible selection universe for the equity and fixed income indices we use for our UCITS ETF range. The full list of WisdomTree’s ETFs that incorporate ESG screens can be found here.
Activity-based exclusions |
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Controversial Weapons: Companies with any involvement in controversial weapons or with significant ownership in such companies. Tobacco: Companies involved in the production of tobacco products or supplying tobacco-related products/services. Companies deriving more than 5% of their revenues from the distribution of tobacco products. Thermal Coal: Companies deriving more than 5% of their revenue from thermal coal extraction or having more than 5% of their revenue from thermal coal-based power generation or having more than 5% of their revenue from providing tailor-made products and services to support thermal coal extraction. Unconventional oil & gas exploration/production: Companies deriving more than 5% of their revenue from unconventional oil & gas exploration and/or production such as oil sands, Arctic oil and has or shale energy. Small Arms: Companies deriving more than 5% of their revenue from activities connected to small arms. Such activities include the manufacturing and selling of small arms, or the manufacturing and selling of key components involved in small arms manufacture, or being involved in the distribution of small arms. |
ESG integration
Alongside ESG screening, sustainability-themed investing and ESG integration are key pillars in our approach to incorporating ESG considerations into investment processes for equity strategies.
WisdomTree has developed a range of ETFs that consider ESG factors in the risk and return analysis by aligning certain revenue streams with sustainable business activities. The following ETFs invest in assets that are intentionally supportive of the energy transition: Battery Solutions, Recycling for Decarbonisation and Renewable Energy.
Energy transition themes
In addition to ESG integration, we have developed products focused on direct and indirect exposure to commodities associated with the energy transition, such as energy transition metals, battery metals, and carbon allowances. WisdomTree has also launched an ETF focused on the energy transition metals value chain which includes the exploration and processing of metals (including rare earths) used in technologies associated with energy transition themes. For more information, please visit our Energy Transition Metals and Rare Earths Miners page.
Sustainability-themed investing
As outlined above, WisdomTree has developed products having themes and/or assets that are intentionally supportive of sustainability goals such as the energy transition.
WisdomTree intends to develop new strategies having approaches required to deliver additional sustainability goals such as the UN’s Sustainable Development Goals.
Responsible gold
In 2012, the London Bullion Market Association (LBMA) implemented their Responsible Gold Guidance (RGG) to ensure gold sourced from LBMA Good Delivery refiners is free from threat financing. The RGG is part of the LBMA’s wider Responsible Sourcing programme which aims to combat money laundering, terrorist financing and human rights abuses around the world.
In 2019 the LBMA added ESG assessments to the RGG, encouraging Good Delivery refiners to strengthen corporate engagement with miners and recyclers, and to review the environmental impacts of their supply chain. In January 2022, the LBMA implemented its latest guidance which requires refiners to provide further detail on ESG risk assessments compared to earlier iterations.
WisdomTree physical gold exchange traded commodities (ETCs) are backed by 100% responsible gold bars (at least by post-2012 gold bars), and we’re working closely with custodians to increase our exposure to post-2019 and 2022 bullion across all our ETCs. Discover the evolution of responsible gold through the supply chain and WisdomTree’s commitment to sustainable gold in our Physical Gold ETCs.