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How to invest in gold sustainably?

Manuel Epprecht

Manuel Epprecht, CFA


Financial Markets

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Even in this crisis, gold has shown that it has lost none of its function as crisis protection. The table below lists the six most severe stock market collapses this millennium and the development of the financial markets this year.

Even in this crisis, gold has shown that it has lost none of its function as crisis protection. The table below lists the six most severe stock market collapses this millennium and the development of the financial markets this year.

Source: Equity: S&P 500 Index; Bonds: US Government-Bond-Index; Hedge Funds: HFRI Fund Weighted Composite Index. Gold: XAU Currency (Bloomberg).

Gold shone with a positive performance in each of these market corrections. Also in the current war Russia against Ukraine gold shows its distinctive protective property. While stock and bond markets are experiencing significant price losses due to war actions against international law & inflation concerns, the gold price is rising and once again confirms the benefits of gold in times of crisis. Thanks to the additional diversification benefit, every asset benefits from gold investments, and especially when the other market segments perform negatively.

Increased awareness on the topic of sustainability puts investors and financial market participants in a quandary when it comes to the use of gold in asset management. Reports of pollution, child labor, blood gold and overexploitation of nature discourage many from investing in gold, especially when sustainability (ESG) criteria are incorporated into asset management.

The "Green Gold" innovation, with its commitment to responsible gold mining, resolves the dilemma. "Green Gold" comes from specially selected mines certified by external auditors that practice responsible gold mining. For industrially producing mines, this includes absolute transparency and compliance with the highest international standards. The primary objectives are to minimize the impact on people and the environment during mining operations.

Strict requirements must be met regarding environmental impact, use of chemicals, and training of personnel. Before the mine is put into operation, a plan must already be in place for how the land can be reclaimed after mining operations cease. This requires that systems are in place from the outset to prevent contamination of the soil. In view of the extremely demanding requirements, "Green Gold" certified mines are located exclusively in highly developed countries such as Australia or the USA, where environmental regulations are also legally enforceable.

The entire supply chain of the so-called doré gold raw material used for "Green Gold" is also certified traceable down to the individual mine and is melted, processed and certified in separate production processes in Switzerland to the highest quality of 999.9 degrees of fineness. Our fund Swiss Rock Gold Nachhaltig invests exclusively in "Green Gold". Nothing but fair.

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