Gold funds will lose investors over lack of ESG focus; research shows

  • Nearly two out of five[1] professional investors predict a dramatic rise in gold fund switching over ESG credentials
  • Four out of five professional investors[2] expect an increased focus on the responsible sourcing and mining of gold by institutional investors over the next two years

December 2022 London

New research[3] shows professional investors believe gold investment vehicles which do not have strong ESG credentials will lose funds to rivals focused on responsible and sustainable sourcing over the next two years as the sector develops.

The study[4] by HANetf Europe’s first independent white-label ETF and ETC platform and leading provider of thematic ETFs and crypto and commodity ETCs found nearly two out of five (36%) professional investors predict a dramatic increase in transfers to funds with strong ESG credentials while 54% expect a slight increase in switching.

The research[5] with institutional investors and wealth managers responsible for $67.1 billion assets under management in Germany Switzerland Italy and the UK found the focus placed by institutional investors on how gold is sourced and mined is changing rapidly with more investors looking for responsible and sustainable funds and companies.

Some 80%[6] of the institutional investors and wealth managers questioned say they expect an increase in focus on responsible and sustainable mining of gold underlining the need for gold investment vehicles to improve their ESG credentials.

HANetf’s The Royal Mint Responsibly Sourced Physical Gold ETC (RMAU) backed 100% by responsibly sourced physical gold was the first financial listed product to be sponsored by The Royal Mint and the first gold ETC to be launched in partnership with a European sovereign mint. [7]

It gives investors the opportunity to access gold that aligns with their values. The Royal Mint’s unique control over the bullion in their custody means that the ETC is backed in part by LBMA Good Delivery bars that are cast from 100% recycled gold which is sourced from scraps in the manufacturing process

In addition to this the gold ETC is 100% backed by London Bullion Market Association (LBMA) Post 2019 responsibly sourced Good Delivery bars meaning that the gold adheres to the highest responsible sourcing standard within the industry.

HANetf also distributes the AuAg ESG Gold Mining UCITS ETF (ESGO) the first ESG gold mining ETF in Europe which focuses on the 25 best-in-class ESG rated companies in the gold mining sector. ESGO has been classified as an Article 8 investment under the EU Sustainable Finance Disclosure Regulation (SFDR).

The fund uses Sustainalytics to screen the mining universe for their ESG credentials attributing a risk score based on their findings. Only the top 25 lowest ESG Risk companies are included within the index.

Hector McNeil co-CEO and co-Founder of HANetf comments:

“It is significant that gold investment vehicles which do not have strong ESG credentials face losing funds to those which are focused on ensuring gold is responsibly and sustainably mined.

“Professional investors increasingly recognise the need to focus on ESG in gold investments and can also see the business case for doing so. At HANetf we have been at the forefront of creating more sustainable solutions for gold investors and the ETC that HANetf we manage created in partnership with The Royal Mint was the first ETC to introduce recycled gold bars.

“Recycled gold is around 90% less carbon intensive than mined gold and our ESG-screened gold mining ETF helps encourage a dirty industry to become greener. We look forward to seeing gold and gold investing continue to be brought in line with the values and ESG requirements of investors.”

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