An exhaustive four-year research study conducted by the World Gold Council has confirmed another reason to add gold to your portfolio, over and above its value as a stable, safe haven and portfolio diversification tool. The World Gold Council was able to conclude that holding gold as an asset class can reduce a typical portfolio’s carbon footprint by a quantifiable percentage, making it an attractive diversifier for the growing number of investors aware of their environmental and social responsibilities.
Climate change lead John Mulligan explained, “If you can’t measure an asset’s impact on climate change, then investors are not going to hold it. We can now show that gold can have a positive impact on the carbon profile of your portfolio. If you think about gold’s traditional role as a risk mitigation asset, well, the risk spectrum is now expanded.”
The World Gold Council report says that holding as little as 20% of your portfolio in gold can reduce emission intensity by 17%. This further increases dependent on the percentage of your portfolio is in gold.
Furthermore, incorporating greater amounts of gold was also found to reduce a portfolio’s overall temperature rating, something which we haven’t heard about too much to date but is expected to be a long-term trend and investment factor according to the World Gold Council. It expects that as more attention is paid to rising global temperatures and environmental concerns, and gold producers increasingly move to greener energy, gold as an environmental statement will become more in demand.