When it comes to choosing a source of ethical gold, there are various options worth considering. In the past few years, different alternatives have been promoted as best practices to build a responsible and sustainable gold sourcing strategy. With the right sourcing mix, you can address different problems related to gold sourcing and construct a sourcing policy coherent with your ethics and vision. In this article, we will examine the pros and cons of recycled and Fairmined gold to help you decide the best fit for you.
• The promise of a lower carbon footprint
According to a study by the World Gold Council, more than 99% of the gold carbon footprint is associated with activities outside of the direct control of the brands, and that is related to the mining sector. Therefore, if your goal is to cut down your carbon footprint, choosing recycled gold might be the best option to reduce your upstream emissions.
• An easy-to-market and straightforward sourcing solution
Recycled gold benefits from the instantaneous positive aura of the “recycling” concept, which is one of the strongest consumer trends these days. Therefore, recycled gold is an easy concept for the consumer to understand.
• A widely available option
Recycled gold represents 33% of the annual gold supply, according to the World Gold Council. Although recycled gold can’t cover the global jewelry demand for gold, it is easy to access and available through nearly any supplier worldwide.
• An inexpensive option
Last but not least, recycled gold is an attractive option as there is little to no price difference between recycled and conventional gold.
• Recycled gold might not be what you think
In general, recycled gold can be understood as gold that has been previously refined. Main industry standards consider that gold recovered from consumer products, as well as gold recovered as a byproduct of manufacturing, can be refined again and labeled as recycled. Therefore, it is possible for “recycled gold” to be made with material that has had a very short journey from the mine to becoming recycled stock. So it doesn’t mean that recycled gold is old gold, but it can be newly mined gold that has been transformed into recycled gold very quickly.
• No impact on mining
You might think that choosing recycled gold will help curb the demand for newly mined gold. However, mining won’t stop because the demand for recycled gold rises. Over the last decade, despite the increased use of recycled gold, the production of newly mined gold has also increased. Why? Because gold is not mined for any specific sector, but to generate money. Only the price of gold (which depends more on global security than on jewelry demand) and mining reserves impact mining intensity.
As mining won’t stop, it is crucial to promote positive change and decrease negative impacts. Gold mining can be associated with irresponsible practices such as human rights abuses, environmental destructions, conflict financing, child labor, etc. If you decide not to support the transformation of the sector, you might end up using dirty gold anyways. Therefore you might want to make sure that your gold was mined under responsible conditions.
Finally, given the millions of people who depend on artisanal and small-scale mining, if you choose to source only recycled gold, you will disengage from their urgent needs and miss the opportunity to make a positive impact in their lives and communities.
• No guarantee about the origin of the gold
With recycled gold, you have no guarantee about its origin.
The recycled gold providers argue that the origins of their gold are backed by serious verification processes. However, as the NGO Global Witness highlighted in a recent report, it is reasonable to fear that materials extracted illegally or linked to human rights abuses, conflict, corruption, or environmental damages have found their way into global supply chains, and could be “cleaned up” through the recycled gold loophole, that only looks back as far as the point in which the gold was returned for second refining. Several investigations have demonstrated the use of recycled gold supply chains as a way to clean dirty gold.
Photo: Altinbas Australia
•A contribution to the transformation of the mining sector
By buying Fairmined gold, you incentivize and reward responsible mining practices and contribute to the positive transformation of the artisanal and small-scale mining (ASM) sector. Thanks to the fair price and the additional premium you pay, you provide the certified organizations with crucial resources to invest in improving their productivity, mining site, working conditions, environmental management and promoting community development. However, this change won’t happen on its own. Continuous support and market incentives are needed to achieve a positive transformation in the long term.
•Assurance for you and your customers
Fairmined certified mining organizations comply with the strictest legal, organizational, labor, technical, social and environmental requirements. This means that they are formal and legal organizations that treat their workers well, have all the necessary safety measures and protocols in place. These organizations also adopt better environmental practices to reduce their impact and protect their people by reducing their use of chemicals and protecting water supplies. These organizations are free from child labor and promote gender equality. Finally, Fairmined certified mines are recognized, internationally and in their home countries, as model mines, such as the mine of Iquira.
•Fairmined gold is traceable
With Fairmined, your gold can be traced back from the end user to its origin: the certified mining organizations. You thus have clarity about where your gold comes from and under which conditions it was mined.
•A label backed by an independent and rigorous third-party certification system
Independent auditors visit the mines every year to check their compliance with the Fairmined Standard and continuous improvement. In addition, the team of the Alliance for Responsible Mining also visits the mines regularly to promote and monitor the implementation of continuous improvement processes.
•Add emotional value to your products
By knowing where your gold comes from, you can establish a direct human and emotional connection to the miners who extracted your gold and be directly linked to the story of the mining communities. You can also educate your clients about the importance of their choices and make them aware that they can give back to others with every purchase.
Traceability, responsible mining, fairer trade conditions and support to the communities come at an additional price: Fairmined gold is more expensive than conventional and recycled gold. On average, it costs between 10 – 20% more than conventional gold.
•Limited availability and access:
Due to the small number of certified mines and their limited production compared to large-scale mines, the Fairmined gold represents less than 1% of the global gold production.
Furthermore, Fairmined gold can only be sourced from a limited number of suppliers worldwide. In addition, the selection of mill products and findings available in Fairmined gold is still quite restricted compared to the offer of conventional and recycled gold.
Recycled gold and Fairmined gold can be considered as two possible options of an ethical gold sourcing mix. Each sourcing option has its pros and cons that need to be balanced.
It will depend on your CSR strategy and personal conviction on what kind of gold you will choose.
If you want to contribute to the transformation of mining communities and decrease greenhouse emissions, you could adopt a balanced approach where you use as much responsible and fairly mined gold as possible and complete your sourcing mix with recycled gold – ideally with some that belonged to your customers.
If you want to know how to start working with Fairmined, read this blog entry.
To become a Fairmined licensed brand, contact our team here.