ETF provider and asset manager WisdomTree announced today the launch of WisdomTree Recycling Decarbonisation UCITS ETF (WRCY), aiming to offer exposure to the global decarbonization megatrend by tracking companies involved in waste-to-energy and recycling technologies.
The new ETF tracks the performance of the Tortoise Recycling Decarbonization UCITS Index, which includes companies across a global list of exchanges that derive revenue, operating profit, or own assets in decarbonizing waste-to-energy and recycling-related businesses.
Waste-to-energy is the process of energy generation from waste such as garbage, animal manure, agriculture products, and/or animal fats. This, in turn, generates renewable natural gas and diesel used to produce electricity or as a transportation fuel for compressed natural gas cars (RNG) or diesel (RND) to fuel trucks. RND produces 50-80% less greenhouse gas (GHG) emissions than conventional diesel and RNG can produce negative emissions.
Alexis Marinof, Head of Europe, WisdomTree, said:
“WRCY is the world’s first ETF focused solely on recycling and decarbonisation, representing a big step forward for the industry as thematic ETFs continue to attract the interest of European investors looking for long-term growth opportunities. Our approach to launching thematic ETFs is focused on leveraging the in-depth market intelligence that only specialist sector experts like TortoiseEcofin can provide. Investors want purity of exposure when investing in themes underpinning structural megatrends and that’s what we deliver in our suite of thematic ETFs.”
The ETF is classified as an Article 9 Fund under the Sustainable Finance Disclosure Regulation (SFDR). Index constituents are selected and weighted based on their revenue exposure to the themes and carbon emission reporting status. For example, companies reporting negative carbon emissions having 2x higher weights than the positive carbon or non-reporting ones.
Christopher Gannatti, Global Head of Research, WisdomTree, said:
“Reducing the speed and effects of climate change is one of the greatest challenges facing humanity today. Moving to renewable and sustainable sources of energy is fundamental to our ability to limit greenhouse gas emissions and keep global warming below 2 degrees Celsius above pre-industrial levels. Current methods of decarbonisation require further investment to make the desired impact but innovative solutions like waste-to-energy and carbon recycling represent new investable themes that can make a difference today.”