Lots of factors have helped boost the price of gold more than 25% this year to a record high of over $1,400 an ounce in recent weeks. Among them: fears of deflation and inflation (yep, it works both ways), economic unrest, and mounting European debt. Although this figure is somewhat deceptive--a New York Times article pointed out that the actual record was set 30 years ago when gold, in today's dollars, hit $2,387--there's no dispute gold fever is raging.

Gold mining companies are accelerating new projects and looking around the world for opportunities to take advantage of soaring gold prices, the Wall Street Journal reported in September. Investors seeking lofty returns have flocked to gold mutual funds and gold exchange-traded funds (ETFs) this year. More people are also cashing in their unwanted gold jewelry.

Finding "green" gold investments is tricky. Much commodities trading, not just gold, doesn't provide a way to trace the sources for specific lumps of that commodity, says David Wood, director of the Initiative for Responsible Investment at the Harvard Kennedy School. So an analysis of extraction industry labor and environmental issues is unavailable for investors. In the future, though, "I think we may see a growing interest in sustainability produced commodities as an integration of responsible investing into the asset class," he says.

Additionally, "Responsible Investment, to the extent that it is a long-term strategy, may weigh against short-term bets on price movements in gold," says Wood.

Trillium Asset Management typically doesn't invest directly in commodities and gold mining stocks don't fit its SRI model either. "We stay away, mostly because of environmental issues and some human rights issues too," says Stephanie Leighton, a portfolio manager and Trillium's chief investment officer. Much cyanide and mercury is released during gold mining, she notes.

Instead of gold, Trillium is interested in other companies with ties to commodity industries that can do well in an increasingly inflationary environment, says Leighton.

Sims Metal Management (NYSE: SMS), the global leader in metals and electronics recycling, should have a very strong pick up as global economic growth strengthens, says Leighton. She expects its sizable operations in Australia to benefit from rising demand for metals in Asia, where the most growth is expected.

Leighton also likes Minerals Technologies (NYSE: MTX), a producer of synthetic mineral products including precipitated calcium carbonate (PCC). This non-toxic filler is used by many industries-including paper, building materials, paint and glass-that are expected to see increased demand in an economic recovery, she says.

Trillium continues to hold jewelry manufacturer and retailer Tiffany & Co. (NYSE: TIF) in its managed accounts although Leighton says the stock has "gotten a little ahead of itself" with a 20% rise this year. The company is trying to be a leader in mining reform and responsible purchasing practices. It gets about half its gold from a Utah mine that doesn't use cyanide, and it's trying to push its suppliers to improve their environmental impact, she says. Tiffany is also a member of Earthworks' No Dirty Gold campaign (www.nodirtygold.org).

Christian Brothers Investment Services (CBIS), another leader in socially responsible investing, owns several gold mining companies. "Behind the gold lies lots of things problematic in the environment and human rights," but holding these companies lets us file resolutions to try to help them become more socially responsible, says Julie Tanner, assistant director of SRI.

CBIS has led shareholder advocacy efforts at Newmont Mining (NYSE: NEM), one of its long-term holdings. Newmont has posted an interim sustainability report on its Web site, and CBIS continues to press the company to report more specifics about its efforts to strengthen community relations near its mining sites in Peru, Indonesia and Ghana.

CBIS also owns Freeport-McMoRan Copper & Gold (NYSE: FCX), which engages with SRI investors and publishes corporate sustainability reports on its Web site.
SRI community engagement efforts contributed to positive developments last month at two other large gold mining companies. Goldcorp released a Human Rights Policy and Corporate Social Responsibility (CSR) Policy. Barrick Gold Corp. joined the Voluntary Principles on Security and Human Rights, appointed an independent director with CSR experience to its board of directors, and will establish an external CSR advisory board.

More industry initiatives can be found on the Web site of the International Council on Mining and Metals (www.ICCM.com). ICCM brings together 18 mining and metals companies, along with 30 national and regional mining associations and global commodity associations, to address sustainable development challenges faced by the industry.

Tanner is also encouraged by Special Disclosures Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It requires all companies to disclose their potential exposure to "conflict minerals" sourced from the Democratic Republic of Congo. The provision, unusual in this kind of bill, "has a lot of teeth to it and can be stringent for companies," she says.

Members of the Interfaith Center on Corporate Responsibility (ICCR) and the Social Investment Forum (SIF) submitted a sign-on letter last month to the Securities and Exchange Commission with specific Section 1502 recommendations they'd like to see included in the SEC bill. "We want to make sure that what's in there remains in there," says Tanner. This includes disclosure of steps companies are taking to trace minerals, do due diligence, and perform independent verification. Sanctions are expected for companies that fail to report their involvement with conflict minerals.