Responsible Sourcing Report 2020
1. Responsible Sourcing
WHAT IS RESPONSIBLE SOURCING?
Responsible Sourcing is a commitment to ethical considerations by a company in all aspects of its procurement. By ensuring their suppliers adhere to comprehensive international standards, companies can positively improve their supply chains. Responsible Sourcing requires that firms go beyond financial, logistical and even reputational considerations, to take into account the wider impact of their own actions and those of their suppliers.
The OECD Due Diligence Guidance (OECD Guidance)* provides detailed recommendations to help companies define Responsible Sourcing: by respecting human rights and avoiding contributing to conflicts through their mineral purchasing decisions and practices. This does not mean avoiding all risk: companies can contribute to community growth by sourcing responsibly from conflict-affected and high-risk areas, by creating the enabling conditions for constructive engagement with suppliers. In doing so, companies successfully contribute to sustainable, equitable and effective development. Simply put, Responsible Sourcing means being a Responsible Global Citizen.
For LBMA, this means that the requirement of what goes into all bars produced by its Good Delivery List (GDL) refiners is as important as the standard of the final product. It was for this reason that LBMA established the Responsible Sourcing Programme. By setting standards for refiners’ mineral purchasing decisions and practices, the scope of the Good Delivery List has grown beyond the physical aspects of Good Delivery bars.
*OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas (2010).
VALUE CHAIN FOR PRECIOUS METALS
Graphic modified from original kindly provided by Brink’s Ltd
LBMA AND THE GOOD DELIVERY LIST
LBMA plays a key role on behalf of the global precious metals market to ensure business integrity by advancing standards, acting as a voice and champion for the market, and developing market solutions.
The Loco London Precious Metals Market (also known as ‘Loco London’) is the largest and oldest financial market for gold in the world, dating back to 1671. In terms of liquidity and market size, the average daily volume for the Loco London market is US$60 billion a day, with more than $550 billion stored in London vaults. Key to the efficient functioning of this market is metal moving freely between market participants and London vaults within the clearing system. Systems, processes and controls have been, and continue to be, established to maintain an efficient market, built on integrity and transparency.