How sustainability and fair trade are changing the gold market

By: HMB Gold

Sustainability measures and fair-trade practices are increasingly becoming important topics across all sectors of industries. Large corporations are conscious of their carbon footprint and are keen to be seen meeting their ESG targets. The gold mining industry has long posed concerns and faced criticism over the extraction of the precious material.

In recent years, promoting responsible gold mining that targets sustainable and fair-trade practices has become a priority for all key players along the gold supply chain.

Policies heralding change

There have been incredible strides in global policy-making and developmental goals that have made gold extraction more sustainable and equitable. Some of these include:

• - The United Nations' Sustainable Development Goals (SDGs)
• - The Extractive Industries Transparency Initiative (EITI), which seeks to improve transparency and accountability in the extractive industries, including the gold mining sector.
• - The International Cyanide Management Code (ICMC), which establishes best practices for the use of cyanide in gold mining.
• - And the Fairmined Standard, which aims to improve the social and environmental performance of small-scale and artisanal gold mining operations.

These global policy-making institutions seek to promote sustainability across the supply chain because, increasingly, gold owners and investors have become conscious of how the gold gets to them. The environmental, social, and ethical costs of the material have become important.

Changes across the supply chain

This sense of accountability has encouraged a healthier and more conscientious culture around gold extraction, processing, and trading. Today, before the extracted gold even takes the shape of a bullion, it goes through multiple safeguards to meet quality and sustainability standards. A region must qualify with enough reserves to justify long-term extraction and development of mining infrastructure. Similarly, the development of roads, electrical and water supply, and transportation is needed to maintain smooth extraction. Moreover, with technological advancements mining has become safer, more beneficial, and more supportive of host communities and their ecosystems.

Companies operating in the extraction, purchase, and sale of gold must meet Responsible Gold Mining Principles (RGMPs) and international quality control certifications at every touch point across the supply chain.

In addition to creating a sustainable infrastructure for host communities, operators must also ensure increased employment opportunities for locals. In the past decade alone, the number of local workers on mining sites has risen to 95% of the total workforce, bringing economic prosperity and prestige to host communities. Today, mining companies have to abide by international laws and policies to ensure maximum empowerment and compensation for the local workforce, including women.

Moving forward

Quality, sustainability, and fair-trade standards for gold are governed and enforced by the World Gold Council. The organisation ensures a transparent chain of acquisition for gold assets, where accountability and transparency, from exploration to post-extraction rehabilitation of the mining region are audited on a government level. As gold owners and investors demand more transparency and accountability at every point in the gold supply chain, more emphasis continues to be placed on human rights and global development goals.

Email us at info@hmbgold.com to find out how we can help corporations and individuals’ source ethically mined and fair-traded gold investments.