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Sustainability and gem tracking have arrived in force

This year, businesses have begun to take action towards consumer concerns about sustainability and the origins of the products they buy.

Key points

• Sustainability, fair practices and provenance have become key concerns for consumers

• The natural diamond industry has taken great strides in ensuring supply chain transparency in 2019

• The challenge for diamond companies and retailers is to counteract lingering negative sentiment

Many sectors, including the diamond and jewellery industries, have created initiatives to support sustainability standards. Even the world’s major financial markets are developing indices that address investor concerns about environmental, social and governance (ESG) issues, and are integrating them into fund trading.

A Financial Times report, published in October 2019, noted that ESG issues have taken their place alongside important financial performance indicators, such as yield and return, for investors looking at new investment opportunities. This marks a profound shift from just a few years ago.

The reason? Investors, especially younger ones, demand it.

All businesses along the diamond and jewellery supply chain – from mine to market – have embraced this movement as consumers become more concerned about sustainability, including sound environmental and fair labour practices, fair returns to communities, and women’s empowerment.

Along with sustainability, consumers also want to know where their gems, and even their gold, come from.

The industry perspective

The strength of industry sentiment toward these topics was evident by the standing-room only crowds at two seminars on the subjects at the JCK Las Vegas show in June.

One was sponsored by GIA (Gemological Institute of America) and the other by the Responsible Jewellery Council (RJC).The messages were clear in both seminars: consumers are increasingly demanding that their gems, diamonds and precious metals be ethically sourced.

In the consumer’s view, the responsibility for this extends through the entire value chain.

At the GIA panel, ‘Embracing Sustainability Amid New Consumer Expectations’, moderator Susan Jacques, GIA president and CEO, acknowledged that, despite significant efforts – including the Kimberley Process and the establishment of the RJC – consumers have harboured negative impressions of the industry for years.

The five panellists – Dr Saleem Ali, of the University of Delaware; Marcus ter Haar, CEO of Okavango Diamond Company, Botswana; Lisa Bridge, CEO of US retailer Ben Bridge Jeweler, which operates more than 80 stores; Swarovski executive Nadja Swarovski; and Claire Piroddi, the sustainability manager for watches and jewellery at French luxury group Kering – detailed the efforts of their organisations to adopt sustainability programs and counter the lingering negativity.

Ali, a professor of energy and environment, said, “Jewellery may be a luxury product that not everyone needs, but it does sustain a standard of living for many people who work in the gem and jewellery supply chain. These workers can create wealth and economic growth from the elements of the Earth.”

He added that the conditions must be there to enable them to do so.

"Consumers are increasingly demanding that their diamonds be ethically sourced"

Ter Haar cited the benefits diamonds have brought to Botswana, “It’s the circles of sustainability: people, planet, profit. In Botswana, we’ve seen our capital [Gaborone] grow from a small town to a progressive, modern city, [with] a great increase in life expectancy, [and] free health care – all from diamonds, which account for 50 per cent of government revenue and 30 per cent of GNP. Every diamond purchased represents food on the table.”

Swarovski told the audience, “Today, companies must think of others as well as themselves.”

Her business focuses on three basic principles: positive production, women’s empowerment and fair partnerships.

Meanwhile Piroddi stressed that “95 per cent of luxury products come from nature, so we must take care of our environment.”

She also revealed that in a company survey done for its fashion brands – including Gucci, Yves Saint Laurent and Alexander McQueen – “75 per cent of people care where their products come from [and] they are more informed than ever.”

Finally, Bridge told the audience, “Sustainability begins at home.” She noted that her company supports community organisations in each town where it has stores.

At the RJC panel, ethically sourced products occupied much of the discussion. The moderator, RJC executive director Iris van der Veken, stressed that sustainability is a shared responsibility across the entire value chain.

“Trust and transparency are the new equity,” van der Veken noted. “People want to have confidence that their purchases do some good.”

One of the most difficult areas for the incorporation of sustainable sourcing practices is artisanal mining, as panel member Shekar Shah of Real Gems, New York, explained: “These miners are the backbone of the coloured gemstone industry, so they must be well taken care of.”

Mine to market tracking

Given the consumer and industry concerns, mine to market tracking has become a necessity. The diamond industry has developed tracking initiatives that make it possible for consumers to know their diamond was produced, cut and traded by ethical and sustainable standards. Notably, most of them debuted this year.

GIA’s Diamond Origin Report requires a diamond be received and examined in rough form directly from the mine. GIA lab staff then collect data on the rough and assign a unique identification number.

After the diamond is cut and polished, the manufacturer re-submits the polished diamond, along with the assigned identification number from the rough; GIA then analyses the data to determine if they match. The report includes the country of origin with an assessment of the diamond’s ‘4Cs’.

De Beers and Alrosa have recently introduced their own mine-to-market diamond tracking, while GGTL Laboratories Liechtenstein launched the Cullinan Diamond Report identification system – named for the Cullinan Diamond and the Cullinan family – to track high-value, previously mined diamonds.

In Israel, Sarine Technologies began offering a service charting a diamond’s progress through the cutting process, while in 2018, GIA worked with Hong Kong-based jewellery group Chow Tai Fook to introduce the first consumer-facing application of blockchain technology in the gem and jewellery industry.

Customers who buy Chow Tai Fook’s T MARK diamonds can choose to receive a blockchain-secured digital diamond grading report from GIA through the dedicated T MARK app on their phones. This gives them instant access to information about their diamond.

These are just some of the initiatives being developed to address consumers’ demand for environmental and social transparency so they can feel good about their gem and jewellery purchases.

As Jacques noted at the GIA panel, “There are so many positive stories to be told.”  It is now up to the industry to work hard to change the lingering negative perceptions.


'The Great Diamond Debate' Contents » 

The natural diamond industry is facing disruption in every aspect
Sergey Ivanov, CEO of Alrosa
Don’t blame synthetic diamonds for the natural industry’s woes
Garry Holloway, founder of Melbourne’s Holloway Diamonds
Both sides of the diamond debate should verify their claims
Danielle Max, editor in chief IDEX Online



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Russell Shor

Russell Shor is senior industry analyst at the Gemological Institute of America (GIA). He worked with the diamond industry for more than 30 years and is a former editor of JCK.


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