Invest in gold with a clean conscience?
How conscientious investors can engage with this hot commodity.
Advocates for the world's poor see a golden opportunity for investors to make money and champion social justice at the same time by raising their voices as shareholders in gold-mining companies.Skip to next paragraph
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But encouraging best mining practices through investing is apt to require an uncommon level of creativity. The reason: America's socially responsible (SR) mutual funds aren't joining the effort, which means US investors eager to make a difference may need to find other avenues.
At issue are massive earth-moving enterprises to extract the precious metal from deposits in some of the world's most remote places. The chemical-intensive process has left some ugly marks in recent years, such as cyanide-contaminated rivers in Ghana, pollution resulting in criminal charges in Indonesia, and throngs of angry protesters in Peru.
Now high gold prices, which topped $1,000 per troy ounce for the first time this month, are rewarding investors – and providing an economic rationale for new mining initiatives in lands never before touched by heavy equipment.
"Because the price of gold and other metals is so high," says Keith Slack, extractive industries program manager at Oxfam America, an antipoverty group, "and there's such a demand for those products, mining companies are going into more and more developing areas in Latin America, Africa and Asia.
"Investors can play an important role [by saying] they want to see these operations done more responsibly," Mr. Slack continues, "by taking into account the environment and concerns of the local community."
Some institutional investors are being proactive. Administrators of New York City pension funds have called on gold giant Freeport McMoRan to improve its policies in the wake of reports of bribery and other misdeeds involving its security forces in Indonesia.
Christian Brothers Investment Services, which invests funds for Roman Catholic institutions, last year won support from 92 percent of Newmont Mining shareholders for a resolution urging an investigation of the causes of rifts with multiple indigenous communities. (A report is expected later this year.)