JOHANNESBURG (miningweekly.com) – After nearly two years of being in the pipeline, the World Gold Council (WGC) on Thursday launched its Responsible Gold Mining Principles framework, which recognises the increasing importance of gold mining companies’ adherence to good environmental, social and governance (ESG) requirements.

The principles are a framework that sets out clear expectations for consumers, investors and the downstream gold supply chain as to what constitutes responsible gold mining, and sets out principles that the WGC believes address key ESG issues for the gold mining sector.

Although the council’s framework can be applied to the international gold mining industry, in particular, the principles are generally applicable to a variety of industries, the council says.

The framework, which is available to the entire industry and not just WGC members, was developed in response to a landscape where the gold mining industry, and its related requirements, are seen as “a little fragmented and confused,” WGC CFO Terry Heymann tells Mining Weekly Online.

The framework, he elaborates, while a WGC initiative, “represents the pinnacle of responsible gold mining” and encourages all gold mining companies to use it as a framework to not only explain but guide the way in which ESG performances are managed.

In addition to the Responsible Gold Mining Principles themselves, the council has also set out an Assurance Framework, which Heymann explains “speaks to how the assurance process will work”, while simultaneously further clarifying and elaborating on the role of independent assurance providers.

Mining companies need to obtain independent assurance for their ESG requirements in much the same way that companies get independent assurance for financial reports, he points out.

Companies implementing the Responsible Gold Mining Principles will be required to obtain external assurance from a third-party, independent assurance provider, which, in turn, will provide further confidence to gold buyers that that gold is responsibly mined and sourced.

The Assurance Framework is being launched alongside the Responsible Gold Mining Principles framework on Thursday, and, while it is packaged as a separate document, Heymann avers that it remains a “significant piece of work” that provides guidance on how the Responsible Gold Mining Principles should be implemented and assured.

Both documents, he tells Mining Weekly Online, were formulated based on consultations with various entities from across the world.

In South Africa, in particular, the WGC held many consultation sessions with a range of gold mining companies, including non-WGC members, as well as a roundtable conversation in Johannesburg, which was independently facilitated by the South African Institute of International Affairs.

Commenting on the country’s input, Heymann notes that the WGC “recognises the important role that South Africa continues to play”, adding that the council is hopeful the South African gold mining community will be a part of the effort to improve global ESG efforts.

“We know there is a very strong commitment towards responsible mining from the South African mining community and we hope that they will be taking up the Responsible Gold Mining Principles, in line with global peers, to ensure that South Africa continues to be at the forefront of responsible mining,” he notes.

It is the council’s aim that the Responsible Gold Mining Principles will become a credible and widely recognised framework through which gold mining companies can provide confidence that their gold has been produced responsibly.

The WGC also recognises that ESG considerations are becoming increasingly important to consumers, which is why the Responsible Gold Mining Principles are intended to recognise and consolidate existing standards and instruments under a single framework.

Additionally, Heymann says the principles are intended to have an “overarching approach”, and that guidelines therein should be applied alongside local legislation and regulations.

In a statement on Thursday, Newmont Goldcorp CEO Gary Goldberg, who oversaw the initiative on behalf of the WGC’s board, commented that the “adherence to strong ESG principles should be a key part of any responsible gold mining business and, as such, the WGC members collaborated, along with key industry stakeholders, to develop the Responsible Gold Mining Principles”.

Meanwhile, Heymann notes that the framework is intended to reinforce trust in gold and the gold mining industry.

“Consumers, investors and the downstream gold supply chain will be able to know, with confidence, that their gold has been responsibly sourced,” he says.

This, Heymann tells Mining Weekly Online is owing to increasing scrutiny across industries, where society has increasing expectations of what businesses do and how they operate.

“There is a need for trust, and I think that what we are doing, more broadly, at the WGC is looking at areas where perhaps there is a need to reinforce and to provide further confidence and trust in the gold sector,” he elaborates.

UNIQUE ROLE TO PLAY
According to the framework, gold plays a unique role in the global economy and in protecting the financial security of nations, communities and families, and in enabling advances in medical, environmental and communication technologies.

This, Heymann explains to Mining Weekly Online, derives from how central banks have a mandate to think about their countries’ financial security, and recently, are showing an increased confidence in gold.

Gold is generally considered a safe haven investment amid times of global economic and political uncertainty.

This is further substantiated by central banks having bought a record amount of gold over the last 18 months, he adds, which “speaks to the fundamental importance that they place on gold as being part of their national reserves and the role that gold plays”.

Broadly, however, because gold does play a globally important role in the financial world, Heymann cites the commodity as “the ultimate financial product”.

“Understanding gold and the role it plays in protecting individuals’ financial security is felt really deeply around many countries in the world, particularly in Asia.”

The recognition, he adds, is that through owning gold, an individual – or establishment – has an asset that doesn’t have a credit risk, and which is internationally tradable.

“Gold has a very long record and continues to show its relevance as a globally important asset that promotes and protects financial security.”