European exchange-traded fund provider Tabula Investment Management has launched an environmental, social and governance- (ESG-) focused physical gold exchange-traded commodity (ETC), the single mine origin (SMO) physical gold ETC called BARS.

Tabula says the BARS is the first exchange-traded physical gold product to offer full traceability of gold bars from mine to vault, using a small number of named mines adhering to high ESG standards.

It notes that the BARS is the only physical gold ETC in the market where every ounce of gold can be traced to a carefully selected mine, accredited with the highest responsibility standards; and where each gold mine used has been independently audited and has data to demonstrate they provide vital social, environmental and cultural support to local communities.

Tabula also notes that the BARS is the only physical gold ETC in the market where no gold is of Russian origin, no gold is recycled gold of unknown provenance and no mercury is used in the extraction of the gold.

The BARS will only use gold from a small number of named mines, will provide full traceability across the supply chain, and is designed to provide the same level of liquidity, efficiency and security as existing physical gold ETCs, says Tabula.

The company notes that Single Mine Origin (SMO) Limited, an independent company set up in 2017, conducts extensive due diligence and ongoing monitoring of the participating mining companies, mines and refiners, and oversees and documents every step of the supply chain.

“The result is a transparent and trusted standard for responsibly sourced gold,” Tabula notes.

“Gold production is highly fragmented with multiple countries, companies and mines producing the precious metal. Quality control has historically focused on ensuring purity of the metal in the bars.

“However, with only 4% of gold being traceable, there are serious ESG risks in the gold supply chain from potential human rights abuses, environmental degradation, possible financing of conflict and terrorism, money laundering and sanctions evasion. Some of the world’s largest major gold producers fail basic ESG screens, and existing standards in the gold industry are not sufficient,” says Tabula CEO Michael John Lytle.

“The only way to properly assess the social and environmental impacts of gold is to have full traceability across the supply chain. Proper accountability is not possible without this degree of transparency.

“The launch of the SMO Physical Gold ETC addresses the shortcomings of many existing gold investment options, by only sourcing gold from mines adhering to international best practice and openly sharing their ESG data,” adds SMO co-founder Charlie Betts.

The SMO Physical Gold ETC (Bloomberg: BARS LN) lists on the London Stock Exchange on April 22.