ESG roundup — when blockchain meets a gold mine

 

Gold: you are indestructible, said ‘80s band Spandau Ballet, but mining it isn’t so good for the environment. If you want the gold to make jewellery or as a component in electronics, you have no choice but to mine it. But a more common usage of gold is as an investment asset — and these days, in an era of inflation, gold is many investors’ favourite hedge against inflation.

Here is the problem — if you are an ESG investor but are worried about inflation eroding the value of your portfolio and think investing in a gold mine is a good option, how do you square that investment with your ESG aspirations?

Answer: buy the gold mine, but leave the gold in the ground!

And that is precisely what Nature’s Vault has done. 

“It’s a novel approach to mining,” says the company. Well, there is no denying that. Have you ever heard of a mine that isn’t mined before? You have to admit; it’s clean.

The company says it’s “creating a platform built on the blockchain to tokenise projects focused on preserving Natural Capital – the planet’s natural resources.

“Its initial project avoids the environmental impact and carbon emissions related to gold mining by utilising tokenisation to monetise the value of in-ground gold deposits by preserving quantified proven gold reserves in a secured mine. The world’s first zero-carbon gold preservation linked investment.” 

So there you have it, blockchain representing physical gold, still lurking in the ground.

Okay, it feels a bit bizarre, but why not? The gold is there; investors don’t actually need it?

Maybe this is the future of cryptocurrencies. After all, critics of blockchain say it isn’t backed by anything solid. Instead, blockchain hinges on belief — a kind of faith — reinforced by finite supply in which new Bitcoins are ‘mined’. Of course, Bitcoin mining eats up energy and is not so good for the environment.

If instead, the supply of a cryptocurrency is limited by the amount of gold in an actual mine and doesn’t have to be mined by solving puzzles by energy-intensive algorithm, then maybe we have a blockchain-based currency that is kind to the environment and backed by something tangible.

Sleep sound, knowing you are not damaging the environment

Meanwhile, bed company Silentnight has vowed to become net-zero by 2040.

Angela Moran, ESG Director at Silentnight, said: “We have been working extremely hard to reduce the impact of our business activities on our environment as well as pledging to always source from sustainable and responsible suppliers. We are proud to become signatories to the Climate Pledge and set a clear target to be net-zero carbon by 2040.”

Apparently, it sells mattresses comprised of eco-friendly eco comfort fibres made from recycled plastic waste.

So there you have it, if you are tossing and turning at night time worrying about the damage the manufacturing of your bed did to the environment, you don’t need to fret any longer. 

Or at least, so suggests the gist of the press release. 

Companies that fail to respond to ESG, Covid and geopolitical change will face disruption, finds GlobalData survey

Meanwhile, a survey from GlobalData finds that companies that can balance ESG, COVID-19, and geopolitical priorities instead of episodically focussing on one form of disruption stand to gain the most.

Among respondents to a GlobalData survey, 69 per cent indicated that Covid would have a high impact on their business in the next 12 months. However, 67 per cent said, “COVID-19 had been a catalyst for an increased focus on ESG.”

But the report warned that “ESG…slipping down companies’ agendas due to the ongoing Ukrainian crisis remains a significant issue.”

Francesca Gregory, Associate Analyst at GlobalData, said: “While many lessons can be learned from COVID-19, the pandemic revealed our struggle as a society to cope with more than one emergency. Companies are encountering the same problem. In GlobalData’s recent thematic report, ESG Strategy Survey 2021, COVID-19 was singled out as the most disruptive threat, with 69 per cent of respondents saying it would have a high impact on their businesses over the next 12 months.”

She added, “Companies that can detach from episodically focussing on one disruptive threat and instead balance ESG, geopolitics, and pandemic priorities will be the most resilient. Flexibility is no longer just nice to have; it will be a necessity for withstanding the current uncertainty. A combination of geopolitical tensions, rising ESG scrutiny, and the potential for viral resurgences will demand a rapid reconfiguration of supply chains. Companies that fail to respond to change will face disruption in their operation as well as a potential backlash from consumers.”

Techs try to dilute ESG

Meanwhile, in tech land, leading techs including Microsoft and Alphabet have argued that ESG should not be included in 10K filings — an annual report US public companies must send to shareholders.

The companies argue that ESG disclosures are subject to greater uncertainty.

Instead, they say that ESG disclosures should be subject to separate filings with the SEC (Securities Exchange Commission.) 

A letter sent by Alphabet, Amazon, Autodesk, eBay, Facebook, Intel and Salesforce stated: “Given that climate disclosures rely on estimates and assumptions that involve inherent uncertainty, it is important not to subject companies to undue liability, including from private parties. Also, reporting deadlines should allow sufficient time for companies to gather and validate information obtained from third-party providers.”