Connect with us

Investment

Gold Is a Green Investment. Owning it Can Be Tricky. – Barron's

Published

 on


Gold bullion bars


David Gray/AFP via Getty Images

Most investors don’t think of gold as a sustainable investment. Historically, it has required large amounts of water, energy and toxic chemicals to mine and refine. Mining companies have been accused of exploiting developing countries and their workers.

Yet gold bullion—as opposed to miners—is surprisingly green. Once fashioned into bars, it just sits in vaults, having virtually no carbon footprint. According to the World Gold Council, there are 201,296 metric tons of previously mined gold in storage. https://www.gold.org/goldhub/data/above-ground-stocks Gold miners increase that stock by just 1.5% a year—3,000 tons.

Two money managers,




Franklin Templeton

and Sprott Asset Management, recently filed with regulators to launch the Franklin Responsibly Sourced Gold https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/rule-filings/filings/2021/SR-NYSEArca-2021-73%20Pdf.pdf and the Sprott ESG Gold https://www.sec.gov/rules/sro/nysearca/2021/34-92506.pdf exchange-traded funds. 

According to its filing, the Franklin ETF will seek “to predominantly hold responsibly sourced gold bullion, defined as London Good Delivery gold bullion bars produced after January 2012 in accordance with London Bullion Market Association’s Responsible Gold Guidance.” https://www.lbma.org.uk/responsible-sourcing/guidance-documents The Sprott one seeks to buy gold from miners that meet its proprietary environmental, social and governance criteria in addition to market association approval. 

Neither Sprott nor Franklin Templeton were available to speak while seeking regulatory approval. 

The London bullion association’s 2012 Responsible Gold Guidance required gold to be sourced from refiners not linked to human rights abuses or armed groups, i.e., “conflict gold.” The association’s standards have evolved since then to include environmental criteria. Still, gold sourced after 2012 before those criteria were added could come from dirtier sources.

A 2021 open-letter https://www.globalwitness.org/en/press-releases/open-letter-lbma-concerns-responsible-sourcing-programme-fails-curtail-human-rights-abuse-and-illicit-gold-supply-chain/signed by five human rights groups said “downstream customers cannot have confidence that the LBMA’s Good Delivery gold is free of human rights abuses and not linked to conflict.”

The association responded to these accusations with its own open letter,  https://www.lbma.org.uk/articles/lbma-responds-to-ngo-open-letter-on-responsible-sourcing stating that it “recognizes the challenges that all audit programs face, and whilst no program is perfect, we remain committed to continuous improvements, and ongoing engagement with stakeholders in addressing the supply-chain risks.”

The new Sprott ETF should have a higher standard for sourcing gold because of its unique ESG criteria.  But its regulatory filing acknowledges that it may not be able to find enough ESG-approved gold, so that the trust expects to hold some amount of unallocated [i.e., non-ESG approved] gold at any given point in time.”   

All of which is to say these new ETFs may not be much greener than traditional bullion ones. 

Yet gold’s carbon advantages are real. According to one study https://www.gold.org/goldhub/research/gold-and-climate-change-decarbonising-investment-portfolios by climate-risk analysis firm Urgentem, for a portfolio of 70% equities and 30% bonds, introducing a 10% allocation to gold (and reducing the other asset holdings by equal amounts) reduced portfolio carbon emissions intensity by 7%, while a 20% gold allocation lowered it by 17%.

“The emissions associated with holding gold are frankly a lot less than holding equities,” says Terry Heymann, CFO of gold trade-group World Gold Council.

While bullion as a low-carbon investment makes sense, Heymann posits that the mining industry is also becoming ESG-friendly, pointing to the World Gold Council’s 2019 publishing of its Responsible Gold Mining Principles https://www.gold.org/about-gold/gold-supply/responsible-gold/responsible-gold-mining-principles, which the Council’s 33 member companies—including the world’s largest miners—have all committed to following. The principles support the Paris Climate Accord’s goal of producing zero carbon emissions by 2050. 

“You’re going to see a lot more use of renewables [at mines]— solar, hydro, or wind,” Heymann says. “Secondly, you’re going to see a move towards electric vehicles.” He points to miner Newmont’s (NEM) “all-electric mine” in Northern Ontario, https://mining.ca/mining-stories/goldcorp-electric/ which has a fleet of battery-powered trucks as an example of the industry’s future.

Yet miners have a long way to go to convince ESG experts. The differences between bullion and mining stocks are “night and day,” says Adam Strauss, co-manager of Appleseed (APPLX), an ESG-focused fund which has 7% of its portfolio in the




Sprott Physical Gold Trust

(PHYS).  “Gold mining is a very dirty business.”

A 2020 report by the Columbia Center on Sustainable Development and the Responsible Mining Foundation called the mining industry’s efforts to achieve its sustainable development goals so far “cosmetic.”  https://www.responsibleminingfoundation.org/app/uploads/RMF_CCSI_Mining_and_SDGs_EN_Sept2020.pdf Although she acknowledges individual miners differ, Perrine Toledano, the CCSI’s mining analyst, says that some miners “just cherry-pick the [sustainable goal] they want and then communicate on its positive impact.”

Could an ESG ETF tracking just the 33 World Gold Council member companies that have agreed to its principles be sustainable? Sustainalytics, one of the largest ESG ratings services, gives mixed grades to different members, calling the ESG-risk of Chinese miner Zijin Mining Group “Severe,” and rating it one of the worst companies in its entire coverage universe.

That said, those ratings could improve in time. “Every single one of our members is committed to implement the responsible gold mining principles, and I know that work is under way,” says Heymann. “We’ve got four members in China, and they’re all committed to doing this.” This March, Zijin issued a release regarding its “ESG Report to emphasize Sustainable Development,”stating  it continues “to improve our ESG performance in environmental and ecological protection, human rights protection, anticorruption, responsible supply chain and community engagement.” and that it invested 1.92 billion renminbi in 2020, a 51% increase over 2019, on environmental protection.

“Having some sort of [ESG] guidance is very positive,” Sustaianlytics mining analyst Dana Sasarean says about the Council’s principles. “If the world requires gold, I think it’s important to make sure that this gold is produced in the most responsible way. But there are challenges.”

Write to editors@barrons.com

Adblock test (Why?)



Source link

Continue Reading

Investment

Major Value-Added Agriculture Investment Announced in Saskatchewan | News and Media – Government of Saskatchewan

Published

 on


Released on January 17, 2022

FCL To Build Canola Processing Plant And Canada’s Largest Renewable Diesel Facility In Regina

Today, Federated Co-operatives Limited (FCL) announced its plans to develop an Integrated Agriculture Complex (IAC) north of the Co-op Refinery Complex in Regina.  The IAC will include a renewable diesel facility, as well as a new canola crushing plant in partnership with AGT Foods.

The FCL renewable diesel production plant alone represents a nearly $2 billion investment for the province and is expected to create more than 2,500 construction jobs and 150 permanent operating jobs.  The entire IAC is estimated to have direct and indirect economic benefits of approximately $4.5 billion.

“This is a tremendous opportunity for Saskatchewan and for FCL and AGT Foods that will bolster the sustainability and economic goals of these companies and the province,” Premier Scott Moe said.  “Our province has the food, fertilizer, and fuel the world needs, including renewable energy from canola grown and processed here, which speaks to the heart of our plan for economic recovery and growth as we work to build an independent, strong and sustainable Saskatchewan.”

The FCL-AGT canola crushing facility will ensure Saskatchewan exceeds its 2030 Growth Plan goal of processing 75 per cent of the canola grown in the province.  It also supports the Growth Plan goal of increasing agriculture value-added revenue to $10 billion.

The FCL renewable diesel plant will have a production capacity of 15,000 barrels per day, or about 1 billion litres per year. The FCL-AGT canola crush facility will use 1.1 million tonnes of canola seed to produce 450,000 tonnes of oil, supplying approximately 50 per cent of the feedstock required for the renewable diesel plant, with the remainder of the supply being contracted from other canola crush facilities.

“We know the synergies between transportation fuel production and agriculture will play a vital role in Western Canada’s transition to the low carbon economy,” FCL CEO Scott Banda said.  “We believe our Co-op Retailing System is well-positioned to integrate and capture the full agricultural value-chain in the production of fuel and value-added products.  We are excited about our partnership with AGT and ultimately what this announcement means for value-added agriculture in our province.”

With facilities and outlets in 249 communities in Saskatchewan, FCL and local co-ops employ more than 10,000 workers across the province.

-30-

For more information, contact:

Robin Speer
Trade and Export Development
Regina
Phone: 306-519-5006
Email: robin.speer@gov.sk.ca

Adblock test (Why?)



Source link

Continue Reading

Investment

Cross-border investment surged in November – Investment Executive

Published

 on


The cross-border activity was concentrated on debt securities, with foreign investors adding $31.4 billion worth in the month, up from $20.4 billion the previous month.

StatsCan reported that investors targeted federal debt — adding $8.6 billion in bonds and $6.5 billion worth of money market securities — along with $9.8 billion in corporate debt.

Conversely, foreign investors trimmed $1.3 billion worth of Canadian equities in the month.

“The reduction reflected retirements of Canadian portfolio shares resulting from cross-border merger and acquisition activities. Foreign purchases of Canadian shares on the secondary market, led by shares of chartered banks, moderated the overall reduction,” StatsCan said.

At the same time, Canadian investors ramped up their buying of foreign securities in November.

In total, domestic investors added $17.5 billion in foreign securities, StatsCan reported. This was up from $5.4 billion in October.

Canadian investors jumped into U.S. stocks in November, buying $7.4 billion worth of equities, up from just $652 million in October. Large-cap tech stocks and index funds were the primary targets, StatsCan said.

Additionally, investors bought $4.0 billion worth of non-U.S. foreign shares in November, reversing a $2.5-billion divestment in October.

Canadian investors also added $6.1 billion in foreign debt, including $2.8 billion in U.S. corporate bonds and $1.6 billion in U.S. government bonds.

In a research note, National Bank Financial Inc. (NBF) said November’s $17.5-billion net investment means Canadian investors acquired $144.4 billion worth of foreign securities during the first 11 months of 2021.

“In dollar terms, you won’t find a prior [year-to-date] tally remotely close,” NBF said, noting that the previous record was $73.3 billion about 15 years ago.

Even with the record flow into foreign securities, net portfolio flows are still positive for Canada, as foreign buying of Canadian securities has been even stronger.

“An improved current account means Canada is less reliant on foreign inflows,” NBF said. “Still, the apparent abandonment of Canada by domestic investors is part of an overall capital bleed that needs redressing.”

Adblock test (Why?)



Source link

Continue Reading

Investment

4 Must-Have TFSA Stocks for Any Investment Goal – Yahoo Canada Finance

Published

 on


Make a choice, path to success, sign

Written by Amy Legate-Wolfe at The Motley Fool Canada

If you have a Tax-Free Savings Account (TFSA), then you hopefully have an investment goal to go along with it. Now, we could drill down into specific savings goals, but, honestly, those goals change! What someone wants at 30 will be different at 50, and so on. First, it’s student debt, then a house, then a child, their education, and, of course, retirement.

Frankly, you shouldn’t have to juggle your investments every time you come up with a new goal. In fact, one of the main points of investing is to buy and hold for as long as you can. Sure, you can take out cash as your goals come in, but you should be able to hold onto them for as long as you want.

With that in mind, here are four TFSA stocks that will help you achieve any investment goal.

Fortis

If you’re going to have long-term TFSA stocks, you need stable companies to get you there. That would definitely include Fortis (TSX:FTS)(NYSE:FTS). The utility company has been growing its dividend each year for almost 50 years. This comes from a stable business plan of growth through acquisition.

Investors have been flocking to Fortis as one of the TFSA stocks they want because of this stability — especially during the market pullback. The company is basically recession proof, providing gas and electric utilities to 3.4 million customers. You need the lights on no matter what, making it a strong choice for any investor.

Fortis shares are up 16% in the last year with a dividend yield of 3.63%.

TD Bank

The Big Six banks may be trading at all-time highs, but there’s a reason. And that reason is why they’re TFSA stocks for any investment goal. The banks managed to get out of the market drop relatively unscathed, and yet they still have so much cash on hand to make up for lost time. And that comes through solid dividend jumps.

But Toronto-Dominion Bank (TSX:TD)(NYSE:TD) has even more to offer. TD stock offers the most growth of the Big Six banks, with the most amount of credit card partnerships, growing online and United States presence, and the most loan options for solid revenue streams. And yet even after all this growth, TD stock still trades at just 13.42 times earnings.

TD stock is up 41% in the last year, with a dividend yield of 3.47%.

Constellation Software

If you have the cash to invest, Constellation Software (TSX:CSU) is one of the few tech stocks that remains a stable investment. The company has been an acquisition powerhouse, identifying the software companies it believes will thrive with incredible expertise.

It’s those experts that have managed to keep the company growing at a stable clip, even as other tech stocks burn around it. Constellation shares have been steady as a rail, growing through venture funds and seeing revenue rise 30% year over year during the last quarter. It’s one of the TFSA stocks any investor should add as soon as possible before it rises even more.

Shares of Constellation are up 34% in the last year, and it recently boosted its dividend to offer a yield of 0.24%.

Nutrien

Finally, Nutrien (TSX:NTR)(NYSE:NTR) may be on the newer side, but don’t count this out among TFSA stocks. People need to eat, and Nutrien is now the world’s largest crop nutrient provider. As arable land decreases and climate change increases, Nutrien will be a necessity for any portfolio.

Nutrien continues to grow through acquisition. In the last few years, it has increased its digital presence at an incredible rate. This kept revenue coming in at an incredibly important time — for the company and farmers. Now, it’s nearing the three-digit mark and isn’t likely to come down.

Shares of Nutrien are up 37% in the last year, with a yield of 2.57% for investors.

The post 4 Must-Have TFSA Stocks for Any Investment Goal appeared first on The Motley Fool Canada.

Should you invest $1,000 in Air Canada right now?

Before you consider Air Canada, you may want to hear this.

Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now… and Air Canada wasn’t one of them.

The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.

Learn More Today!

More reading

Fool contributor Amy Legate-Wolfe owns TORONTO-DOMINION BANK. The Motley Fool recommends Constellation Software, FORTIS INC, and Nutrien Ltd.

2022

Adblock test (Why?)



Source link

Continue Reading

Trending