Eric de Tessières
Group Chief Sustainability Officer
Gold is a safe haven asset par excellence and has regained a central place in investment portfolios. But behind its glitter, gold is now subject to social, environmental and ethical controversies that make it an asset with a high reputational risk. From illegal extraction to mercury pollution and opaque supply chains, the question now is can we still invest in gold sustainably?
A key safe haven asset once again
In a world of financial volatility, geopolitical tensions and persistent inflation, gold is once again becoming a pillar of wealth management. It is a sought-after diversification instrument owing to its low correlation with the equity and bond markets as well as its universal liquidity.
All of which make the precious metal hard to neglect for investors mindful of the resilience of their portfolio. The “barbarous relic”, in the words of Keynes, has never been as fashionable as it is today.
But this economic relevance comes with a caveat: gold is central to a number of major social and environmental challenges.
Behind the shimmer, the shadow of illegal practices
A detailed investigation by the Financial Times (“The illegal gold rush sweeping the world”, August 2025) reveals the scale of today’s illicit global gold rush. From the Amazon basin to the savannas of southern Africa, criminal networks are exploiting underground sites, often at the cost of deforestation, mercury pollution and undignified working conditions.
These practices are particularly widespread in some gold-producing regions, including Latin America. According to the Financial Times, more than 40% of Peru’s gold exports come from illegal or informal channels. These activities do not just fuel smuggling; they sometimes finance armed groups and money laundering channels (Global Initiative Against Transnational Organized Crime, 2024).
The human and environmental consequences are considerable. Another survey by the Financial Times (“The Amazonians poisoned by the illicit gold trade”, October 2025) documents the mercury contamination of Amazonian populations, permanently affecting the health of local communities and regional biodiversity. Various studies estimate that up to 25% of the world’s gold production could come from artisanal or informal industries beyond control.
As such, investing in gold indiscriminately entails exposure to compliance, reputational and sustainability risks. These issues go beyond the realm of sustainability: they directly affect the quality of the assets held and the credibility of the financial institutions that support them.
Making gold more responsible and traceable
Giving up on gold is not the solution, as the diversification and protection it provides remain strategic. But it has become necessary to distinguish between sustainable, traceable sectors and questionable ones. Several international initiatives are contributing to this drive.
The London Bullion Market Association (LBMA) imposes strict due diligence obligations on all accredited refineries through its Responsible Gold Guidance (Version 9, 2023). Refineries are required to ensure the full traceability of their supply and verify that the gold does not come from conflict zones or illegal practices.
The World Gold Council has updated its Responsible Gold Mining Principles (2022), a comprehensive framework covering human rights, biodiversity protection, governance and anti-corruption. These principles serve as a reference for many industrial mining companies, enabling them to align their practices with internationally recognised ESG standards.
Supplementing these frameworks are several independent labels, such as Fairmined, Fairtrade Gold and Swiss Better Gold, which certify artisanal farms that respect local communities and the environment. The development of recycled gold, from the reprocessing of jewellery or electronic components, is also a promising way forward. Recycled gold accounted for around 30% of global supply in 2024, i.e. 1,370 tonnes (+11% year-on-year, according to the World Gold Council in 2025).
Traceability has become a major issue for the gold industry. Behind the shimmer of the precious metal, investors are now looking for certainty as to the origin of the gold they hold.
Short distribution networks are based on a more direct, transparent and fair model. They consist in connecting artisanal mining cooperatives, refineries and end buyers without unnecessary intermediaries. By reducing the number of middlemen, these channels limit the risk of mixing legal and illegal gold while improving the remuneration of local communities. Swiss NGO SwissAid, a pioneer in this field, has supported the structuring of these sectors in Peru, Bolivia and Burkina Faso for more than a decade. By helping miners formalise their activity, adopt better environmental practices and market their production through certified partners, SwissAid is contributing to the construction of a supply chain that is short, traceable and socially responsible. Similar programmes, supported by the Swiss Better Gold Association, directly connect artisanal producers and Swiss refineries, thus ensuring field traceability based on trust and transparency.
Our conviction: select rather than exclude
At Edmond de Rothschild, we are convinced that sustainable finance is not just about exclusion. It is about distinguishing virtuous flows from destructive ones and directing capital towards the former.
Applied to gold, this approach results in a rigorous selection process favouring certified producers and refiners, audited traceability circuits, and investment vehicles backed by recycled or responsible gold.
Investing in sustainable gold is not entirely free of controversy, but it does strike a balance between the safe haven of gold and contemporary sustainability requirements. It is also a way of exerting a positive influence, as each gramme of gold invested in a responsible sector helps to strengthen the transparency and resilience of a fast-changing sector.
Favour more ethical gold
Gold continues to play a vital role in building robust portfolios. But as sustainability becomes a strategic imperative, the question is no longer whether to invest in gold, but which gold to invest in.
By favouring traceable, audited and certified channels, investors contribute not only to securing their assets but also to transforming an industry in which transparency is becoming vital.
We believe it is possible to strike a balance between tradition and responsibility, making gold not an asset to be excluded, but one to be selected with discernment. Because in a world in search of meaning, every gramme of gold invested sends a signal on the type of future we want to build.
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40%
of Peru’s gold exports are allegedly derived from illegal or undeclared circuits (Financial Times, “The illegal gold rush sweeping the world”, August 2025)
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50%
of world gold imports transit through Switzerland (SwissAid)
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According to United Nations estimates, the illegal gold mining industry generates tens of billions of dollars each year
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According to estimates by the Swiss NGO SwissAid, “At least 435 tonnes of gold were smuggled from the African continent in 2022, which represents more than one tonne per day.”
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Illegal mining is responsible for the destruction of 100,000 hectares of Amazon rainforest per year, according to World Resources Institute and OECD cross-estimates (2023)
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The WWF believes that 150 tonnes of mercury is released annually into the Amazon Basin region by small-scale illegal miners to separate gold from sediments