Our responsibility as a fiduciary is paramount to every decision we make as an Exchange Traded Product (ETP) issuer. We aim for transparency across all that we do.
To that end, we outline some of our principles of investment governance below.
For more information about WisdomTree’s ESG approach, not only at the governance level but also at the product level and corporate level, please visit our ESG Hub.
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (also known as SFDR) requires certain sustainability disclosures to be made in respect of WisdomTree Management Limited as a UCITS management company (Manager) and WisdomTree Issuer ICAV (ICAV) and its ETFs as UCITS financial products. The SFDR forms part of the EU’s Sustainable Finance Action plan which aims to promote sustainable investment across the EU. Level 1 of the SFDR took effect on 10 March 2021 and required WisdomTree’s ETFs be classified in accordance with Article 6, 8 or 9 of the SFDR. Level 2 of the SFDR will be introduced from 1 January 2023 with the main change being stricter interpretation of what constitutes a sustainable investment. Pre-contractual and website disclosures are required to be made for each WisdomTree ETF as part of the Level 2 SFDR update as mandated by the regulatory technical standards underpinning SFDR (RTS). Further information on the categorisation of each ETF as well as the pre-contractual and website disclosures is detailed in the relevant ETF supplement and product page.
In accordance with the Level 1 SFDR requirements, the impact of sustainability risks on returns of the WisdomTree Funds was assessed by the Manager. A sustainability risk means an environmental, social or governance (ESG) event, that if it occurs would cause a negative material impact on the value of investments. The Manager, taking due account of the portfolios of the WisdomTree funds which aim to replicate or track the performance of an index, decided that the impact of such sustainability risks is materially relevant to the returns of the ETFs. Details of the Manager’s policies on the integration of sustainability risks in its investment decision making can be found in the Prospectus of the ICAV.
The remuneration policies and practices of WisdomTree have been designed to (i) be consistent with and promote sound and effective risk management and (ii) neither encourage risk taking which is inconsistent with the risk profiles or articles of association of the WisdomTree entities and any funds they manage nor impair compliance with the WisdomTree entities’ duty to act in the best interests of those funds. The details of WisdomTree’s Remuneration Policy is available on www.wisdomtree.eu.
Please note, we aim to ensure that the companies that form part of our products follow good governance practices. You can find more details about WisdomTree’s ESG approach at a product level (especially governance screening) in the following link. In addition to the governance screening, through our investment manager, WisdomTree adopts an active ownership policy to develop good governance practices in those companies. This active ownership policy is described in greater detail below.
The Manager considers principal adverse impacts (PAIs) for certain Funds and includes appropriate disclosures in each Supplement as to whether or not PAIs are considered. Where PAIs are considered, the Manager evaluates a range of PAI indicators in accordance with RTS. The Manager does not currently consider PAIs of investment decisions on sustainability factors at the entity level. This is primarily because investment decision making has been delegated to the Investment Managers and PAIs are not considered for all Funds. For these reasons, it is not possible for the Manager to conduct a PAI assessment at the Manager level or to provide a timeline for when it will be possible. Further information relating to PAIs on sustainability factors will be made available in the annual report and audited financial statements of the ICAV.
WisdomTree, Inc. became a proud Signatory of the United Nations Principles for Responsible Investment (“UNPRI”) on February 15, 2019. Founded in 2005, the UNPRI is a United Nations-supported network that encourages asset managers and other institutional investors to engage with corporations on environmental, social and governance (ESG) issues to create a more sustainable global financial system and support long-term investment value.
For more information view the WisdomTree RI Transparency report.
As a responsible investor, WisdomTree adopts an active ownership approach to promote better corporate behaviour in investee companies in terms of sustainability and management of Environmental, Social and Governance risks. WisdomTree exercises voting rights and constructively engages with investee companies through its investment managers, to whom portfolio management activities are outsourced. In selecting and monitoring investment managers, WisdomTree ensures that voting and engagement policies of the Investment Managers match the standards defined by WisdomTree.
WisdomTree has adopted a proxy voting and engagement policy which sets out WisdomTree’s approach to the integration of voting and engagement into its investment strategy and applies to Funds manufactured by WisdomTree UK Limited. For more information, please consult WisdomTree’s proxy voting and engagement policy available here.
In addition, WisdomTree publishes information of votes taken for relevant funds on its proxy voting dashboard including the vote exercised, meeting type and by market / sector, votes cast by category and alignment with management. Please visit the proxy voting dashboard for further information relating to proxy voting.
For more info about WisdomTree products with proxy voting visit our Proxy Voting Dashboard.
