Sustainability and Responsible Sourcing Strategy (SRS Strategy): Our Rationale

Sakhila Mirza

By Sakhila Mirza
LBMA General Counsel

Responsible Sourcing has been front and centre in LBMA’s efforts to ensure integrity, robust governance and meaningful transparency in the global gold supply chain.

LBMA’s focus is now expanding beyond Responsible Sourcing with the launch of the three-year sustainability strategy.

2024 will mark 10 years of Good Delivery List (GDL) Refiners undergoing an independent third-party audit against LBMA’s Responsible Gold Guidance – the document that underpins GDL Refiners’ commitment to stringent ethical business practices. It will also be the first year of implementation of the three-year SRS Strategy (not to mention my decade in precious metals!)

A lot has happened, and many key milestones have been hit in the intervening years. I know just how much work has been involved in leading the Responsible Sourcing strategy, from establishing new processes for implementation and enforcement, to engaging with industry experts, civil society and national authorities, to working on improving transparency and communications.

Yet, when developing this three-year SRS Strategy, and in the spirit of continuous improvement, I feel there is still so much more to do.

LBMA’s commitment to ensure that there is a credible assurance programme for the global industry has resulted in no fewer than nine versions of the Responsible Gold Guidance, each one pushing the agenda for ethical sourcing further than the one before it. Supporting the implementation of each guidance requires extensive collaboration across the value chain, and a thorough review process by LBMA.

All this work will not stop, nor will it slow down.

Supporting the implementation of each guidance requires extensive collaboration across the value chain, and a thorough review process by LBMA.

Five Focus Areas

The SRS Strategy has followed an extensive public consultation and sets out five areas of focus for LBMA. These define what we mean by ‘sustainability’ and support the need to be transparent about our priorities for the next three years. It should come as no surprise, therefore, that LBMA’s Responsible Sourcing Programme – the fundamental pillar for all GDL refiners – has been identified as focus area one. The scope of the programme will continue to grow, as will LBMA’s insistence that better and higher standards are adapted in response to new sourcing challenges and the evolving demands and concerns of consumers, investors and regulators.

LBMA’s engagement with the Artisanal and Small-scale Mining (ASM) sector is outlined in focus area two. One of the unintended consequences of regulatory and legislative changes has been the impact on direct sourcing of ASM material by GDL Refiners, which currently accounts for approximately 1% of combined throughput. LBMA started work in this area last year through a feasibility study which led to clear priorities, and a plan of action. This was communicated in October 2022 and, through the formation of the Task Force, is progressing well.

Focus area three addresses trust and integrity across the full value chain. The objective is to strengthen relationships with bullion banks, miners, recyclers and traders in order to ensure a sustainable supply chain. LBMA is also committed to continuing engagement with two other important groups to achieve this: the International Bullion Centres (IBC) and Central Banks. Collaboration with the IBCs is essential in reinforcing sustainable supply chains through policy development and law enforcement. Additionally, with the Central Banks keen to pursue a sustainable investment agenda, LBMA recognises the opportunity to engage with them to support their prioritisation, which includes global decarbonisation. Overall, we have committed to several deliverables, but the underlying focus is to improve transparency. LBMA is not working alone on this focus area, and will be developing strategic partnerships to help with progress.

Focus area four is to demonstrate how we, at LBMA, ensure that we are running a sustainable organisation that is aligned with industry colleagues and best

Finally, focus area five covers climate change and GHG emissions, UN Sustainable Development Goals, biodiversity and human rights issues. Our commitment
here is high level, at this stage, as we navigate several challenging issues and identify partnerships with other organisations with whom we can collaborate. Eventually,
we will implement defined targets to help determine success and check our direction of travel. To do this, we will work with subject matter experts over the next three years to provide LBMA with specific recommendations to action. A detailed plan will be established to ensure we can meet all that we have highlighted under this focus area, and will be shared for market-wide consultation in the first half of 2024.

Our SRS Strategy is undoubtedly ambitions, but it is – without question – necessary to support the future of sustainable supply chains.

Sakhila Mirza

By Sakhila Mirza
LBMA General Counsel

Sakhila Mirza, LBMA General Counsel and Executive Director of the LBMA Board works very closely with the CEO on the strategic development of the association, leading on a range of market development initiatives. She also takes responsibility for all the legal work affecting the Association, lobbying on matters affecting the market and building key relationships with governmental officials and regulators around the world.

She previously worked in the energy and commodities industry on compliance, legal and regulatory matters. She read law at the LSE and is a qualified solicitor.