Gold mining has gained increasing attention recently as the value of gold has begun to rise. There’s a demand for better standards, and it brings us to question: what exactly defines sustainable gold?

Environmental, social and governance problems in gold mining

Last week, the World Gold Council released their ESG (Environmental, Social and Governance) standards on ethical and sustainable standards in gold. External auditing will ensure that the standards are met and correct. The standards will provide gold miners, investors and downhill sourcing companies with measureable standards.

These are named the Responsible Gold Mining Principles (RGMPs) and they form the foundation of future gold mining to ensure that it is a sustainable, responsible one. The principles largely focus on human rights, supply chain management, as well as environmental governance and biodiversity.

Where is the need?

The creation of these mining standards meets a growing demand for responsible mining. Unfortunately, there is a prevalent need in the gold sector for better ESG standards. Many companies have no desire to source unethical or unsustainable gold; however, in most cases, these ESG issues hide deep in the supply chain.

Corrupt bodies force communities to engage in unethical and unsafe labour to mine gold. This labour is unpaid, unethical and often involves child labour. This labour is prevalent in countries where conflict minerals, the 3TGs – Tin, Tungsten, Tantalum and Gold – are predominantly mined, such as the Democratic Republic of Congo, a country plagued by significant strife and war.

Clean gold may be mixed with ‘dirty gold’ or gold that has not been responsibly mined. Gold is forged or imitated and sold on into the clean gold supply chain. This includes fake gold, but is more often dirty gold that forgers market as clean, responsible gold.

The solution goes further than just standards

Standards are a step in the right direction. However, these standards need to be enforced. Companies, and miners, can’t do this alone – and it will involve technology, such as artificial intelligence and blockchain, to ensure that the implementation goes smoothly.

While AI can allow us to intelligently track data and supply chain movements, Blockchain has the ability to not only track sustainable gold, but also tokenize it. This could allow for global companies to confirm that gold is clean, sustainable and free of conflict labour, and ideally abolish the majority of unclean gold that is circulating in supply chains.

At Blockhead, we’re using blockchain technology to bring security and transparency into supply chains – no matter the commodity. To find out more, click here.