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As Investors Become More Eco-Conscious, Gold Miners Go Green – ETF Trends

With investors increasingly putting their resources in companies that focus on ESG, the mining industry has been undergoing a shift to more environmentally friendly practices, according to a new report from the Wall Street Journal.

Gold mining companies hope to learn the lessons from the failures of fossil fuel producers, who face steep capital loss and diminished access to capital as investors demand climate- and emissions-driven action.

Read: Gold’s Future Is Green

Plans are already in motion for the gold mining industry to meet a net zero carbon emission footprint by 2050, though some companies have been ahead of the curve on the environmental front.

Newmont Mining (NEM), currently the largest holding in the Sprott Gold Miners ETF (SGDM), is just such a company. The company has been touted for its commitment to worker safety and best ESG practices.

In a blog celebrating the company’s recent 100-year anniversary, CEO Tom Palmer wrote: “Throughout our history, Newmont has been a catalyst for change. With a vibrant history, we have transformed; embracing new jurisdictions and innovative technologies.”

Though there are new technologies and cleaner mining processes being iterated on every year, there are still challenges for the industry as it seeks to diminish its carbon footprint and take advantage of new economic incentives.

For example, local political situations might play a huge part in what is feasible in a given region, and gold’s surging value might cause some companies to delay installing more ESG-friendly technologies.

Despite the challenges, the World Gold Council sees a 35% drop in emissions by 2030. 57% of all electrical output in mines comes from grid-based energy solutions, and many of those grids are pivoting to renewable energy sources. This alone will cut emissions by 20%.

Additionally, as recently reported, some of the most emissions-heavy mines are likely to close in the coming decade and be replaced with mines that are set up to be more environmentally sound.

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