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How can a Gold ETC be green?

How can a Gold ETC be green?

A company incurs ESG risk because of what it makes, how it operates and how it behaves but gold is not a company and does not make these decisions. If gold has no moral agency, how can it be ESG?

A new concept has been developed - responsible sourcing - which focuses on the main ESG risks in the gold supply chain -how the gold was extracted, who profited, the treatment of miners and supply chain labourers and whether there is a risk that the gold has been used for money laundering, terrorist financing or supporting war.

This process is complex as once a bar is produced it can stay in the gold ecosystem for good and by definition, there are gold bars in circulation that were mined and smelted in ways that would be unacceptable today. But as a sign of progress, the two main gold industry trade bodies, The World Gold Council and London Bullion Market Association have both established guidelines for responsible gold sourcing.

A New Standard in Responsible Gold

In February 2020, HANetf made history by launching The Royal Mint Physical Gold ETC (RMAU).  Uniquely, gold in RMAU is held in the vaults of The Royal Mint as opposed to a commercial bank and explicitly holds gold bars that are sourced from the LBMA’s Responsible Gold Sourcing Programme on a best endeavor basis. Since launch, the ETC has provided 100% coverage of gold bars that meet this rigorous standard.

In contrast, older  gold ETFs and ETCs are more likely to hold physical gold that was not responsibly sourced, but we believe that over time, this will become the standard for a physical gold ETC.

RMAU provides a full list of bars it holds on the HANetf website, which includes everything you need to identify the bar and its provenance. The bars are also audited regularly by a third-party firm.

Therefore, investors who seek to enhance the ESG profile of their portfolio can consider RMAU as an alternative to their existing gold allocation.

As with all physical gold ETCs and ETCs, when you invest, your capital is at risk.

Find out more about RMAU, the physical gold ETC from The Royal Mint. 

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