Many investors may not have considered it, but gold is playing a growing role in responsible investment portfolios as investors respond to both the surging value of gold and improved recycling, certification and traceability of the precious metal.
This is the conclusion reached in a new whitepaper entitled: The Role of Gold in Responsible Investment Portfolios, from Greenbank, the sustainable investment arm within asset manager Rathbones.
The report explores how gold’s dual status as a safe-haven asset and a critical industrial material is driving demand, even as its complex supply chain continues to present significant environmental and social risks.
With gold prices spiking amid global economic uncertainty, responsible investors are under increasing pressure to ensure their exposure aligns with sustainability goals.
While groups such as the London Bullion Market Association’s Responsible Gold Guidance and similar frameworks have contributed in raising the bar for ethical sourcing, Greenbank’s report finds that only a minority of gold investment vehicles currently meet the most stringent ESG criteria.
Full mine-to-market traceability remains a challenge, and the sector continues to grapple with issues such as habitat destruction, pollution, and labour rights abuses, particularly in regions where mining is poorly regulated or linked to conflict.
The report, however, highlights that innovations in certification and recycling are raising the bar for responsible gold and making it a viable option for some responsible investment portfolios.
“Gold’s appeal as a store of value is stronger than ever, but so is the ability to scrutinise its origins,” said Charlie Young, ethical, sustainable and impact researcher at Greenbank, who authored the report. “Our research shows that while responsible gold is gaining ground, thanks, in part to advances in certification, recycling, and supply chain transparency, there is still work to be done before gold can be considered a truly sustainable asset class.”
The report notes that responsible investors are increasingly prioritising supply-chain transparency, third-party audits, and support for circular economy initiatives.
But that the complexity of gold’s global supply chain makes it difficult to guarantee it is sourced and processed in line with best practice standards.
The whitepaper spotlights positive developments, including The Royal Mint’s Responsibly Sourced Physical Gold ETC, which is leading the market with a mandate for 100% recycled gold by 2030 and transparent supply-chain audits.
The opening of The Royal Mint’s e-waste recycling plant in Wales is cited as a significant step forward, with a tonne of e-waste now yielding up to 20 times more gold than a tonne of ore.
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