Is Gold an ESG Investment ?


Is Gold an ESG Investment ?

I- Gold is an ESG investment because it is a valuable asset

During economic crises, the price of gold tends to rise. However, ESG investments can provide a safe haven in turbulent times by keeping prices stable.

In addition, their price does not fluctuate when the economy returns to normal.

This makes ESG investing a safer investment than gold.

Gold is an investable asset that can be a « safe haven » in times of stock market volatility.

It is also unique because it can act as a low yield hedge against bonds and inflation. Recently, several investors added gold to their socially responsible portfolio.

With ESG concerns inherent in the mining nature of the resource, it also carries environmental, social and governance risks.

Regulating and controlling a place of exploitation or conflict has little effect.

British disruptor Nutmeg owns 2.2% of the weight of Invesco Physical Gold ETC, or SGLD, one of its fund's investments.

Some of Nutmeg's portfolios also include investments in other precious metals.

To avoid accusations of greenwashing, the portfolio manager has written extensively about the reasoning behind including gold in his ESG portfolios.

II- Gold is an ESG investment because of its environmentally friendly properties

Companies are becoming more conscientious about the environment thanks to improved resource efficiency, higher investor demand for ethical practices and higher profits.

Gold mines in the United States, China and South Africa account for about 66% of the gold supply. Another third of gold comes from recycled materials.

During the mining process, ESG problems in the gold supply chain often emerge.

The World Gold Council recently reported that the carbon footprint of gold production is significantly smaller than other major mining products such as coal, aluminum and steel.

Gold is scarce and typically lesser produced than other minerals. This is because of the limited deposits of the metal.

Gold has the lowest GHG emissions per dollar compared to other mined products.

This is because it has a high retention rate and low carbon footprint per dollar. Additionally, gold has a low carbon footprint per dollar due to its high GHG emissions per dollar.

Gold IRAs don't require electricity or fossil fuels to maintain their value. This makes them a green investment.

In order to keep them secure, all you need to do is invest in Gold « IRA » companies.

Alternatively, consider storing your assets with a company that offers both storage and security services.

In investing, it's vital to choose a trusted company that offers gold « IRA » investment protection when the economy changes.

Before investing in any gold-based investment program, you should read « Advantage Gold » IRA reviews to see if the investment is legal.

III- Gold is an ESG investment because it is rare

Because of its value and lack of distinction, gold is considered an environmental, societal and governance grade.

Another point against it being ESG is its historical replaceability. At least in the price sense, the gold market remains largely interchangeable.

It's hard to know if it's worth it to own a 2000-year-old refined gold bar when trading bars with the same price.

This can be done with either a 2018 mined and refined gold bar or one that was mined and refined in the past.

It’s not that gold can never recover from past challenges from an environmental standpoint.

Instead, the commodity market as a whole should improve transparency and increase expectations for responsible gold sourcing moving forward.

Investors in ESG funds typically have to research the physical gold themselves and purchase individual stocks.

Some may want to do this, while many ESG experts remain skeptical of the gold industry's financial performance.

Currently, the gold industry struggles to provide their investors with higher returns.

Gold mining is high risk and speculative, making it a poor investment. Even if an economic collapse doesn’t occur, buying gold isn’t a wise choice.

Instead, investing in basic resources such as renewable fuels and agricultural products is a much wiser choice and socially responsible.

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