Gold has long held a special place in the world’s imagination, prized for its beauty, rarity and enduring value. In the modern world, its significance goes far beyond ornamentation and wealth preservation – it plays a vital role in financial systems, technology and, increasingly, sustainable investment. Yet, beneath its lustrous surface lies a complex and often troubling reality.
As responsible investors, we must consider not only gold’s economic and technological importance but also the environmental, social and governance (ESG) implications of its production and trade. From destructive mining practices and human rights violations to supply chain transparency and sustainability efforts, the gold industry presents a multifaceted challenge for ethical investment.
At Epworth, we are committed to navigating this complexity with discernment and integrity. This report explores the ESG issues associated with gold and outlines our approach to investing in this precious resource responsibly. We believe that with careful due diligence and active engagement, it is possible to uphold our ethical values while recognising gold’s place in a diversified and resilient investment strategy.
Gold mining remains one of the most environmentally damaging forms of extraction. Open-pit mines often lead to deforestation, habitat destruction and the release of toxic substances like cyanide and mercury into ecosystems and water sources. Artisanal and small-scale gold mining (ASGM), while providing livelihoods for millions, is frequently unregulated, leading to dangerous working conditions, pollution and informal economies that lack labour protections.
Social concerns are equally pressing. Reports of child labour, exploitative working conditions and conflicts financed through illegal gold trade continue to surface. The lack of supply chain transparency makes it difficult to ensure that gold sourced by refiners and retailers is free from human rights abuses. As investors, we must be vigilant in scrutinising company disclosures and third-party certifications to identify best practices and avoid complicity in harmful operations.
On the governance front, gold mining companies are often situated in jurisdictions with weak regulatory frameworks, where bribery, corruption and land rights violations may occur. These risks can translate into financial and reputational damage for companies and investors alike. Encouraging robust corporate governance, ethical conduct and community engagement is essential to improving outcomes.
Despite these challenges, the gold industry is not without its reformers. Initiatives such as the Responsible Gold Mining Principles (RGMPs), the World Gold Council’s Conflict-Free Gold Standard and the London Bullion Market Association’s (LBMA) Responsible Sourcing Programme provide frameworks for responsible sourcing and production. Investors can support these efforts by engaging with companies, pushing for improved practices and favouring those who demonstrate leadership on ESG issues.
Epworth’s investment in gold is guided by our ethical principles and a commitment to positive change. We favour companies that prioritise environmental stewardship, respect human rights and demonstrate transparency. Through shareholder advocacy and collaboration with industry initiatives, we aim to raise standards and influence systemic improvements in the gold supply chain.
As gold continues to serve as a hedge against economic uncertainty and a key component in technological innovation, its ethical footprint must not be overlooked. By combining financial insight with moral responsibility, we strive to make investments in gold that reflect our mission to serve the common good and protect the planet.
The opinions expressed in this document are not intended as investment advice and are based upon Epworth’s views and projections at the time of writing. They may change at any time. If you are considering investing in any market, please consult an independent financial adviser or other professional adviser before making an investment decision. The value of investments and the income generated by them can fall at any time. The investment services and products offered by Epworth Investment Management Limited are not suitable for an investor if the possibility of capital losses or reduced income cannot be accepted. The past is no guarantee of future performance.
