The World Gold Council, launched its new Retail Gold Investment Principles (RGIPs) in August 2020. These Principles are designed to set the bar for product providers across the global retail gold market and further encourage retail investors to place their trust in gold.

The RGIPs will provide high-level, best practice principles for providers of all kinds of retail gold investment products and, through their adoption, ensure the highest levels of fairness, transparency and integrity are instilled across the market. It is envisaged that the adoption of best practices will lead to greater trust, benefiting customers and product providers alike, creating value and driving demand across the industry. The World Gold Council developed the Retail Gold Investment Principles (RGIPs) by consulting 52 industry stakeholders from 16 countries.

What are RGIPs and why are they important?

RGIP is part of the retail gold initiative. We also have the retail gold investment guidance, so we are implementing the two documents in the market in parallel. The RGIPs are a set of principles by which the dealers can adopt them and demonstrate that they are adhering to industry standard best practices. The reason for launching the RGIP is because we carried a survey in 2019 and among 18,000 global investors across seven countries and those retails investors told us that there was a demand for gold investment but they had some barriers in making those investments. The two barriers that they cited were trust in the products and the market and also understanding of the products like what products they should buy, how they should buy it and what behaviour they should expect from the product that they have purchased. We realized we needed to create more trust and understanding amongst the potential investors.

What are the benefits of RGIPs?

What we are doing with RGIP’s is that we are bringing them into various regional markets and we have been working in India for over two years now. We take those principles and work with the industry to operationalize those principles for this market. Here in India, we are looking into how they are best translated into practices. From that we generated a series of codes of conduct which guides best practices for all the dealers in the market, which enabled us to create a model that will allow the dealers to become certified and to be audited independently of the World Gold Council to demonstrate that they are adhering to the best practices. That will come under the auspices of Self-Regulatory Organization (SRO). The SRO will be established in India which will get support from the WGC and that SRO will be the gate-keeper. The real benefit is that they will be able to identify much more easily who the reliable dealers are in the market, those who are certified. So, we are creating a framework which will enable the market to differentiate between the good actors from unfortunately the bad ones.

There is an initiative in India, the Swarna Adarsh Abhiyan and that is the initiative that has been inspired by the global RGIPs but it’s very much an initiative for the Indian market. The code of conduct has been created from the principles, which are available on the website. These will translate into a certification scheme, which will be hosted by the SRO which is a body that we are going to create within the industry. The important part of this is getting the message across to the consumers, that is going downstream and letting the buyers, consumers and the investors know that the SRO and the certification scheme exists. The marketing can be done by the WGC to ensure that the message reaches them.

How are you planning to implement RGIPs in India?

At the moment we are working with the dealers. We have a marketing and a communications campaign to get the message of the principles and codes of conduct along with the potential certification and the SRO to the dealer network. There is an outreach programme to reach out to 25 cities across India. Once that is established, the dealers would have the network, the next step is when the campaign will go further downstream. That is when the message will reach the consumer, that we have created, code of conduct and the SRO.

What has been the response for RGIPs globally?

We are actively working in 6-7 countries at the moment which includes USA, Canada, UK, Germany, China and Singapore. We have received a very positive response. The industry realizes that they need the best practices, the commonality, they need some framework to align, to be able to indicate that they are adhering to the best practices. The important part of the response is that no matter which country we are operating in, no matter what their market structure is we get the same outcome. We may have a different approach, but what we end up with is one scheme that the dealers can certify themselves with while they adhere to the best practices. We can bring this global initiative under one roof. At the moment we are dealing with a range of different countries and how the industry wants to adopt these principles in each market. Once they have adopted and it all maps back to the RGIPs, everything will correlate back to the seven principles and we will be able to bring those markets back together, making it truly a global initiative.  

The Indian jewellery market is also highly fragmented, what challenges do you foresee in implementing this scheme here?

We are very, very conscious with the RGIP’s, that we need to reach all parts of the market. We understand that this where we need to spend the time and investment and get all the jewellers and the dealers to understand what the initiative is all about and where they will be benefitted from it in the long run. We came into this understanding that it is multi-layer project. We have made a commitment from day one that we will do everything to reach the last mile and get to every part of the market. It’s true that there are aspects where we work differently. For e.g. In Germany they have the tier I market and then they have these big dealers, but there are a huge number of small dealers just like here in India. So, we are working on different initiatives for different segments of the market. But we will ensure that all dealers will understand what they want to achieve from this initiative.

How is sustainability a major part of WGC’s ethos?

We at WGC do a huge amount of work when it comes to sustainability. We publish a lot of reports related to gold and the environment. We do a lot of work in value creation that mining brings to some of the remote communities in the world. There is a huge amount of contribution from the environment side and the also focus on the social aspect and the benefits that it brings. We recently published a very extensive report on the ASM Centre and the working alongside the LSM and the challenges that they face and what can be done in that space. It is a hugely important conversation for us and something we are looking at across the entire spectrum, from climate, to environment and the social side of things.