A strong ESG (Environmental, Social and Governance) proposition is crucial for investors to ensure they understand precisely what they are investing in.
With over US$15bn in assets under management in physical gold Exchange Traded Products (ETPs), WisdomTree is keen to be part of the dialogue to shape the future of responsible gold.
Most of the institutional investment in physical gold is through the London Bullion Metals Association’s (LBMA’s) Good Delivery Bars. We have worked closely with custodians to ensure our physical gold exposure is sourced in compliance with the LBMA’s Responsible Gold Guidance.
LBMA is the pre-eminent standard-setting body for the global wholesale market for precious metals. Today, LBMA owns and manages the Good Delivery Lists for both gold and silver.
The refiners on the Good Delivery List, must not only demonstrate their adherence to the standards but undertake a due diligence process to make sure that their miners or recycled sources also do. Accredited refiners must also produce bars which meet LBMA Good Delivery Rules. The LBMA has a network of specially trained auditors to oversee these standards.
The LBMA’s good delivery system sets the standard in terms of metal quality, ethical trading and responsible sourcing. Investors buying LBMA good delivery bars are assured that a common standard has been met. Moreover, the organisation is continually pushing for higher standards to be met each year.
Gold bars must have: | Accredited refiners must undergo strict checks on their: | |
|---|---|---|
+ 400 troy ounces | + History in the market | |
+ Minimum fineness of 99.5% | + Financial standing | |
+ Serial number | + Ability to produce bars to LBMA’s exacting specifications | |
+ Refiner’s stamp | ||
+ Specific dimensions | ||
+ Standard physical appearance (including markings and surface quality) |
The Good Delivery list includes the world’s pre-eminent refiners of gold located in 31 countries, accounting for approximately 85% of annual world gold production. The List is widely recognized as the de facto standard for the quality of gold bars and is used by precious metal exchanges around the world to define the refiners whose bars are accepted in their own markets.
The Responsible Gold Guidance is a mandatory framework for all Good Delivery listed refiners wishing to sell into the London Bullion Market. There are 2 key time stamps when investing under their criteria:
1. Through its operations as a refiner;
2. Through its responsible sourcing practices with the upstream supply chain.
Refiners are encouraged to strengthen corporate engagement with gold supplying miners and recyclers, and where possible, should assist gold supplying counterparties in building their own due diligence capacities. Refiners must assess the risk throughout the supply chain including the environmental policies and practices of the miners.
Also, in November 2021, the LBMA released the Version 9 of the Responsible Gold Guidance strengthening even further their standards especially around recycle gold and ESG considerations. This version is applicable since the 1st January 2022
WisdomTree’s entire physically backed gold ETP range is backed by responsibly sourced LBMA good delivery bars produced after 2012. Our custodians achieved this through the standard creation-redemption process and a periodic de-allocation swap process, where they are switching out any bars with a date stamp of pre-2012 and replacing these with bars dated 2012 or later. We are now increasingly shifting to post-2019 bars across our gold ETP range.
Product | Ticker | Responsible Gold | Post-2012 Gold Bars (excluding Post-2019 and 2022) | Post-2019 Gold Bars (excluding Post-2022) | Post-2022 Gold Bars |
|---|---|---|---|---|---|
WisdomTree Physical Gold | PHAU | 100% | 0% | 45.97% | 54.03% |
Gold Bullion Securities | GBS | 100% | 0% | 99.94% | 0.06% |
WisdomTree Physical Swiss Gold | SGBS | 100% | 73.15% | 26.3% | 0.55% |
WisdomTree Physical Gold - GBP Daily Hedged | GBSP | 100% | 20.25% | 76.12% | 3.63% |
WisdomTree Physical Gold - EUR Daily Hedged | GBSE | 100% | 38.16% | 61.52% | 0.32% |
WisdomTree Core Physical Gold | WGLD | 100% | 0% | 0% | 100.00% |
% troy ounces responsibly sourced as of 29th September 2023.
Nitesh Shah is a seasoned financial professional with over 24 years of experience in research and investment strategy. As Head of Commodities & Macroeconomic Research at WisdomTree Europe, he leads market analysis and insights across asset classes, with a focus on commodities and exchange-traded products. Previously, he held roles at Moody’s, HSBC Investment Bank, The Pension Protection Fund, and Decision Economics, building expertise in market analysis and strategy. Nitesh earned a master’s degree in International Economics and Finance from Brandeis University and a bachelor's in Economics from the London School of Economics. His insights are frequently featured in financial media, and he is a sought-after speaker at industry events. He also hosts the ‘Commodity Exchange’ podcast, where he discusses trends shaping global markets. Passionate about guiding investors, Nitesh provides actionable insights to help them navigate complex financial landscapes.
In 2010, the Organisation for Economic Co-operation and Development (OECD) kicked off the process of making gold sustainable by introducing its Guidance for Responsible Supply Chains of Minerals.
Since then, market oversight by institutions such as LBMA continues to develop across increasing swathes of the gold market to ensure that the gold supply chain is responsible and the gold available to consumers and investors adheres to ESG principles.
Click on the timeline below to discover how responsible gold standards continue to evolve and how they intersect to safeguard the entire gold supply chain.
| Year | |
|---|---|
| 2010 | The OECD introduces guidance for Responsible Supply Chains. |
| 2012 | OECD updates its guidance to include gold. The LBMA launches the Responsible Gold Guidance. |
| 2013 | The Responsible Jewellery Council introduces its Code of Practice. |
| 2015 | The CME Group updates delivery policy for gold to meet the LBMA’s Responsible Gold Guidance. |
| 2018 | The LBMA updates its Responsible Gold Guidance to include ESG considerations. |
| 2019 | The World Gold Council published its Responsible Gold Mining Principles. |
| 2022 | The new version of LBMA’s Responsible Gold Guidance will address Recycling. |
To learn more about WisdomTree's Gold range, view the below:
