Editor’s Note
This article highlights European refineries as a key source for sustainable gold, emphasizing the recycling of precious metals from electronics and other sources to produce high-purity gold with reduced environmental impact.
A well-certifiable source for sustainable gold is European refineries. In refineries, among other things, old jewelry and dental gold are broken down into their original components. Inside old electronic devices, such as computers or smartphones, there are also components containing tiny amounts of gold, which are recycled in refineries and processed into fine gold bars (99.99% gold content). Recycled gold has the same value as newly mined gold but burdens the environment far less.
Among the savings banks, Sparkasse Pforzheim-Calw is one of the pioneers for sustainable gold. Its offering comes almost exclusively from recycling.
This ensures a sustainable and clean supply chain that only considers certified manufacturers and suppliers.
Whether for jewelry or as an investment – gold is popular. In 2020, global demand was about 3,760 tons. However, when it comes to sustainability and fairness, it shines rather dimly. Why is that and is there fair gold as an alternative? We clarify.
The market value of gold is high. Yet not everything about gold shines. It is sometimes subject to strong fluctuations and yields no interest. Investors achieve returns when the gold price rises. And regarding sustainability and fairness, there are several things to consider.
The new extraction of gold and gold-bearing minerals often comes with extremely adverse social and environmental consequences.
Only with gold from certified sustainable and fair sources can buyers assume they are not promoting environmental destruction, conflicts, unfair trade practices, or child labor.
About one percent of the traded precious metal comes from verifiably sustainable sources, such as European refineries.
Gold extraction in mines and rivers can have serious disadvantages for the environment and people. Organizations like Greenpeace and Fairtrade lament that numerous gold mines do not sufficiently consider the protection of workers and the environment, poisoning people, animals, and plants. The main problem areas are:
Gold is almost always found firmly bound with other rock types. To separate it from other minerals, highly toxic chemicals such as cyanide (hydrocyanic acid) or mercury are often used. Improperly used, they poison rivers or lakes and endanger the drinking water supply of entire regions. Estimates suggest that around 100 tons of mercury from gold and other raw material extraction enter the Amazon alone each year.
In many places, exploitation and child labor prevail in connection with gold extraction. According to the environmental organization “Rettet den Regenwald,” thousands of children work in gold mines in some Latin American countries – under harsh conditions. Accidents occur repeatedly.
Reports indicate that indigenous populations, small farmers, and fishermen have been displaced from their land by mining companies or illegal gold prospectors.
Some gold deposits are located in politically unstable areas. There is a risk that proceeds from gold mines – similar to the notorious “blood diamonds” – contribute to financing criminal organizations and weapons used in civil wars.
Understandably, more and more buyers want to ensure their gold comes from a sustainable source. However, providers and buyers of the precious metal face a challenge: Sustainable gold is even rarer than gold itself. Currently, only about one percent of the globally traded precious metal comes from verifiably sustainable sources. Many buyers therefore ask: How do I recognize sustainably produced gold and where do I get it?
Europe’s largest precious metals trading venue, the London Bullion Market (LBMA), has also established a kind of minimum standard for ethically correct trade. According to the “LBMA Responsible Gold Guidance,” all refineries approved for trading there must ensure that the gold delivered to them comes from sources not associated with money laundering, terrorist financing, or disregard for human rights. In other words: Anyone offering their gold in London must be able to prove that applicable international law was observed during extraction – no less, but also no more. Compliance with environmental protection standards is not required.
As a registered member of the LBMA, BayernLB in Germany, for example, has committed to adhering to LBMA standards group-wide.
Only gold bars with conflict-free origin are admitted for trading.