Social Responsibility Archives - Rapaport Information that Means Business Sun, 28 May 2023 14:39:58 +0000 en-US hourly 1 https://wordpress.org/?v=6.2.1 https://rapaport.com/wp-content/uploads/2022/10/RIS.png Social Responsibility Archives - Rapaport 32 32 De Beers Denies It Violated Sanctions on Russian Diamonds https://rapaport.com/news/de-beers-denies-it-violated-sanctions-on-russian-diamonds/?utm_source=rss&utm_medium=rss&utm_campaign=de-beers-denies-it-violated-sanctions-on-russian-diamonds https://rapaport.com/news/de-beers-denies-it-violated-sanctions-on-russian-diamonds/#respond Sun, 28 May 2023 14:39:19 +0000 https://rapaport.com/?p=49877 Allegations could harm negotiations with Botswana, media report claims.

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De Beers has rebuffed allegations in the media that it sold Russian diamonds in breach of US sanctions.

On Thursday, luxury publication Glitz.Paris reported that De Beers had “sold stones of Russian origin in the US” last year. It also claimed the company “bought diamonds in 2022 from the Russian firm Alrosa via an Israeli company.” Over the weekend, Botswana newspaper Sunday Standard cited the allegations in a front-page story.

“Let us be clear — this allegation is not true,” De Beers said in a statement Sunday. “De Beers only sources diamonds discovered in Botswana, Canada, Namibia and South Africa, or from select companies that adhere to our strict and third-party audited sourcing policy. Following the start of the war, we removed Russia from our third-party sourcing list. We do not source diamonds from Russia.”

The “shady deals” threaten to “taint Botswana diamonds” and might affect ongoing negotiations between De Beers and the Botswana government, Sunday Standard asserted.

De Beers’ Forevermark consumer brand “conducted at least 120 transactions of Russian diamonds with customers in which the stones were destined for the US market,” Sunday Standard reported, citing the paywalled Glitz.Paris article. These stones ranged from 0.19 to 0.27 carats, had VS1 clarity, and carried insurance valuations of $227,000 to $366,000, the newspaper continued.

De Beers signed “several contracts” with Alrosa, Russia’s partially state-owned diamond miner, in recent years, with three of them dated February 21, 22 and 23, 2022, according to the same report. Russia invaded Ukraine on February 24, 2022 — the same day the US sanctions went into effect. It’s unclear if the reports were alleging any deals took place after this date.

Some of the alleged purchases were via Israel-based diamond manufacturer and De Beers sightholder Dalumi Group, the report claimed — a fact that Dalumi also denied.

“Dalumi Group ceased buying Russian diamonds from Alrosa on February 22, 2022,” Dalumi managing director Rafi Yerushalmi said in a statement to Rapaport News on Sunday. “Furthermore, Dalumi Group confirms that it has never sold Russian polished to the De Beers Group.”

The claims raise the stakes in the De Beers-Botswana negotiations, according to Sunday Standard, since the government has demanded that the country’s diamonds be marketed separately from De Beers aggregated goods as “Botswana diamonds.” At present, the bulk of rough coming from De Beers’ mines in Africa and Canada goes through aggregation before reaching the market.

“It is no secret that we have been the subject of a number of headlines in Botswana over the past several months,” De Beers said in its statement on Sunday. “While those stories were distortions, this particular story is dangerous. Beyond De Beers, it suggests to consumers that the natural diamonds they buy, a significant percentage of which come from Botswana, are tainted. This is not true, but in an attempt to discredit De Beers, the article risks damaging much more.”

On March 11, 2022, following the US’s ban on imports of Russian diamonds, De Beers released a statement saying that “every diamond that De Beers Group sells is discovered at one of our mines in Botswana, Canada, Namibia or South Africa.”

The current version of that statement on the De Beers website reads: “Every diamond discovered by De Beers Group comes from one of our mines in Botswana, Canada, Namibia or South Africa.” A note accompanying it says that the wording was “amended for accuracy” on March 23, 2022.

While De Beers only sells rough from its own mines, it sources diamonds from third parties for Forevermark and De Beers Jewellers, its consumer brands.

This is not the first time De Beers has moved to refute reports about it in Botswana. In November 2022, it denied a Sunday Standard article saying the government might “ditch” the mining company. 

Image: A diamond engagement ring at a De Beers Forevermark store in Gaborone, Botswana. (Ben Perry/Armoury Films/De Beers)

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Podcast: Diamond Provenance at Scale https://rapaport.com/podcasts/podcast-diamond-provenance-at-scale/?utm_source=rss&utm_medium=rss&utm_campaign=podcast-diamond-provenance-at-scale https://rapaport.com/podcasts/podcast-diamond-provenance-at-scale/#respond Wed, 24 May 2023 12:03:25 +0000 https://rapaport.com/?p=49721 De Beers’ acting VP of strategy and innovation discusses the Tracr-GIA partnership.

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Rapaport’s Avi Krawitz chats with Ryan Perry, acting vice president of strategy and innovation at De Beers, about the company’s partnership with the Gemological Institute of America (GIA) on its Tracr blockchain platform.

Following their recent collaboration, Perry notes the importance of expanding the industry’s provenance capabilities and highlights how technology can enable better storytelling. He outlines some of the benefits from the De Beers-GIA cooperation, which taps both organizations’ resources to inspire trust among consumers.

Listen to the podcast here:

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AGTA Calls for Ban on Term ‘Recycled’ https://rapaport.com/news/agta-calls-for-ban-on-term-recycled/?utm_source=rss&utm_medium=rss&utm_campaign=agta-calls-for-ban-on-term-recycled https://rapaport.com/news/agta-calls-for-ban-on-term-recycled/#respond Sun, 07 May 2023 11:16:38 +0000 https://rapaport.com/?p=47705 Association submits recommendations to Federal Trade Commission for “Green Guides.”

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The American Gem Trade Association (AGTA) has urged the Federal Trade Commission (FTC) to outlaw the terms “recycled” and “mining-free” in recommendations it has submitted for the “Green Guides.”

The guidelines govern eco-friendly advertising claims and terminology. The FTC is undergoing a statutory review and has requested public comment on proposed changes.

The AGTA committee was announced in January during AGTA GemFair Tucson. Committee members say its goal is to standardize terms surrounding sustainability and ethics. Developing recommendations for proposed revisions to the Green Guides was among its first tasks.

“The Green Guides aren’t specific to jewelry, so we need to be realistic that many of the things we noted may not apply to other industries and may be most appropriate to address in the FTC’s Jewelry Guides revisions,” said committee member Jenna White, researcher, and PhD student in Earth Resources Science & Engineering at the Colorado School of Mines. White was recently hired as a consultant to AGTA.

Recommendations to the FTC include the following:

  • Use the generally accepted definition of “sustainable” as developed by the United Nations’ Brundtland Commission in 1987: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
  • Define the terms “ethical,” “responsible,” and “conflict-free” for the benefit of the consumer and for the integrity of the supply chain.
  • Issue guidance to prevent companies from making unsubstantiated environmental claims.
  • Ban the use of the term “recycled” from being applied to all gem materials as well as gold, platinum, palladium, and silver, and outline the use of the term “recovered from electronic or e-waste” for recovered metals exclusively.
  • Do not permit the use of the terms “never-mined” or “mining-free” regarding gemstones and precious metals.
  • Use the term “carbon-neutral” with substantiation and do not permit the use of “carbon free,” as the former more accurately reflects the carbon offsets being used by some companies.

“This is the first time that gem dealers have sat down and worked together to produce guidelines like this,” said committee member Jaimeen Shah of Prima Gems USA. “It was the industry representing itself to create pure cohesive recommendations — which were produced with about 12 contemporary terms definitions in mind. The committee will unveil these after the Las Vegas shows.”

Committee members said they issued these recommendations based on of “a lack of existing legal definitions, which has created an environment ripe for greenwashing.” The overuse of terms such as “ethical” and “responsible” often “intentionally connote both environmental and social benefits without providing any specifics,” they explained.

“The committee was all in agreement to define terms like ‘sustainability’ and ‘ethics,’” said committee member John Bradshaw, a gemstone cutter and gemologist. “Who defines what these are right now? I have a friend who exhibited at a trade show in Canada, and another exhibitor had the words ‘ethical’ and ‘certified dealer’ plastered all over his booth. Who is certifying anything or anyone?”

The term “recycled” is problematic because it is being used to describe previously owned or estate gems that are being reused, the committee argued.

“There is no evidence that diamonds or colored stones are being thrown into landfills in an amount that is meaningful,” it wrote. “There is no evidence that colored stones result in environmental damage when landfilled.”

The term “recycled” as it pertains to noble metals is leading to “instances of ‘upcharging’ consumers” for gold already in the supply chain without any additional environmental benefit, the committee added. “The core issue is that recycled gold is not traceable,” it continued

The committee also wishes to define “sustainable” to include non-renewable materials such as colored gems, diamonds and precious metals.

“The word ‘sustainable’ is a buzzword that gets used in the wrong way,” Bradshaw said. “Plus, the FTC doesn’t list any time frame for anything to be sustainable. People can also bend definitions to try to make their actions appear greener than they really are.”

The committee also wants to redefine the terms “locally sourced” and “certificates.” The first, its members said, “implies a lower carbon footprint but does not guarantee that gemstones have not left the US for cutting or processing,” while the latter is a word wrongly used by many in the industry to refer to lab reports. Gemstone reports from labs — often a mix of gemstone facts and lab opinions — are sometimes mistakenly called certificates, it pointed out.

Image: A woman holding diamond jewelry. (Shutterstock)

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The Dirt on Greenwashing https://rapaport.com/magazine-article/the-dirt-on-greenwashing/?utm_source=rss&utm_medium=rss&utm_campaign=the-dirt-on-greenwashing Tue, 02 May 2023 06:43:00 +0000 https://rapaport.com/?post_type=magazine-article&p=38306 Hiding unethical practices behind a veneer of sustainability is a serious issue in the luxury sector.

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Touting your company’s efficient energy use while failing to address complaints from the local community. Claiming to be “sustainable” because your business donates to charities, but neglecting your own staff’s labor rights. These are examples of “greenwashing” — misleading marketing messages that falsely claim to make a positive impact on society or the environment.

The term has become a buzzword in recent years as companies seek to boost their environmental, social and governance (ESG) credentials. Related terms include “greenlabeling” — marking a product as “responsibly sourced” without evidence of how its supply chain differs from any other — and “greenlighting” or virtue signaling, in which businesses use a single positive to distract from other negatives.

When the targets for improving ESG constantly shift, this is called “greenrinsing.” In January 2021, the European Commission and consumer authorities in the EU completed a sweep of websites that were making green claims. Half proved to be unfounded, while 42% were exaggerated, false or deceptive and could qualify as unfair commercial practices under EU rule, according to the report. In 2022, the UK’s Competition and Markets Authority announced an investigation into three major high-street fashion retailers for greenwashing.

This year, the US Federal Trade Commission (FTC) is reviewing its 2012 Green Guides for the Use of Environmental Claims, which aim to prevent this kind of misleading marketing.

The golden rule

The point of transparent marketing is that buyers should be able to make an informed choice, which means companies should provide evidence to support their claims — no matter what they are.
In the jewelry industry, for instance, there has been disagreement for the past decade over the ESG merits of “recycled” gold. Proponents assert that reusing gold from discarded products reduces waste.

Clean Business: Do’s and Don’ts

Do’s

• Report and measure. Free tools are available for ESG impact assessments.

• Take time to learn about the problems identified in supply chains.

• Take the online Green Claims Quiz to check your knowledge at greenclaims.campaign.gov.uk.

• Bring others in. Join initiatives or trade associations, or collaborate.

• Plan how to address the issues. Create policies, goals and a strategy.

• Commit to improvements. Create procedures everyone can get behind.

• Take it one step at a time. It’s about progress, not perfection.

Don’ts

• Only measure and report the positive impacts; commit to acknowledging and reducing negative impacts, too.

• Mudsling about competitors or other sectors within the industry; focus on your own backyard.

However, others say it’s more responsible to get gold from traceable, certified sources that support the local mining communities; they argue that gold has never been a “waste” product to begin with — that people have always reclaimed it, so it wouldn’t have been thrown out — and as such, recycling it doesn’t actually cut down on existing waste.

Both of these are potentially valid positions to take — as long as the firms espousing them can show evidence that they’re true. When buying a diamond, it’s reasonable to request a lab certificate to verify its quality, as this affects its value. There is no reason the public shouldn’t ask for similar proof from companies that make ESG claims, since these affect people’s purchasing choices.

Taking the high road

Greenwashing can be a deliberate effort to mislead consumers, or it may result from a failure to understand the seriousness of certain issues and how to address them. As in any industry, there will be both good- and bad-faith actors. Opportunists will see people paying a premium for certification, and engage in greenwashing to boost their business’s value. In contrast, jewelers who value integrity and having an ethical reputation will put more emphasis on ensuring accurate disclosure and fair pricing.

Underplaying the serious issues that exist in the supply chain leaves the whole industry open to negative scrutiny and a public perception of opaque business practices, all of which erodes consumer trust. Being transparent is essential. It’s wrong for a seller to conceal a diamond’s flaws from the buyer. It’s no less wrong to make deceptive ESG declarations.

While problems exist in all supply chains, luxury goods attract a significant amount of media and consumer attention. Valuable mineral sales can have far-reaching effects. Doing our best to make sure they’re positive ones will benefit both people and the planet.

The author is the founder of consulting firm Johnston Resources and an expert in the responsible sourcing of precious metals, diamonds and gems.

This article is from the March-April 2023 issue of Rapaport Magazine. View other articles here.

Image: (Shutterstock)

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WJI 2030 Adds Seven Members to Its Board https://rapaport.com/news/wji-2030-adds-seven-members-to-its-board/?utm_source=rss&utm_medium=rss&utm_campaign=wji-2030-adds-seven-members-to-its-board https://rapaport.com/news/wji-2030-adds-seven-members-to-its-board/#respond Mon, 01 May 2023 11:08:22 +0000 https://rapaport.com/?p=41011 The new recruits come from a cross-section of the jewelry, diamond and fashion industries, as well as from civil society organizations.

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The Watch & Jewellery Initiative 2030 (WJI 2030) has added seven members to its board of directors.

The new recruits come from a cross-section of the jewelry, diamond and fashion industries, as well as from civil society organizations, the WJI said last week.

They include:

  • Anino Emuwa, managing director, Avandis Consulting, and founder of 100 Women @ Davos
  • Georg Kell, chairman, Arabesque and founder, United Nations Global Compact
  • Raj Mehta, director, Rosy Blue NV 
  • Licia Mattioli, CEO, Mattioli SpA 
  • Frédéric Grangié, president, CHANEL Watches & Fine Jewellery 
  • Bernadette Pinet-Cuoq, executive president, UFBJOP 
  • Gaetano Cavalieri, president, CIBJO 

“The diverse make-up of our board reflects the importance of its work,” said WJI executive director and secretary general Iris Van der Veken. “Its members have extensive industry expertise, policy track record, ESG global leadership, change and governance experience and knowledge of the current state of the industry.”

“All of them bring a legacy of integrity and commitment to deliver measurable impact to the 2030 agenda,” she added.

The new members join co-chairs, Cyrille Vigneron, president and CEO of Cartier, and Marie-Claire Daveu, chief sustainability and institutional affairs officer of Kering, and Van Der Veken. The organization says it plans to add another board member representing civil society.

WJI 2030 was founded by luxury group, Kering, and luxury brand, Cartier, on April 1, 2022. Since then, the organization says it has been working on a governance framework by consulting members, non-members, civil society, the academic world, financial institutions, policy makers and various industry and non-industry stakeholders.

The organization is guided by the 10 principles of the United Nations Global Compact and its 17 Sustainable Development Goals.

Image: The new WJI board members. (Watch and Jewellery Initiative 2030)

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The Industry’s Russia Crisis: Formulating Sanctions https://rapaport.com/analysis/the-industrys-russia-crisis-formulating-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=the-industrys-russia-crisis-formulating-sanctions Thu, 16 Mar 2023 10:41:54 +0000 https://rapaport.com/?p=36449 The recent pledge by the G7 nations to develop new measures
on Russian diamonds will have a lasting effect on the industry.

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The Russia crisis is forcing the diamond trade to take responsible sourcing to the next level. Considering the industry’s long history of dealing with reputational challenges, the ongoing war in Ukraine adds a new dimension.

On February 24, 2023, the first anniversary of Russia’s invasion of Ukraine, leaders of the Group of Seven (G7) nations reaffirmed their commitment to “strengthening the unprecedented and coordinated sanctions and other economic measures… to further counter Russia’s capacity to wage its illegal aggression.”

Among the steps outlined, the G7 — Canada, France, Germany, Italy, Japan, the UK and the US — will work collectively on further measures relating to Russian diamonds, both rough and polished, given the “significant revenue that Russia extracts from the export of diamonds,” the group said in a statement.

Those are broad and non-definitive declarations; an expression of intent to work toward new measures relating to diamonds rather than enacting them immediately. The process to create and implement regulations is expected to take a few months, stressed the Jewelers Vigilance Committee (JVC), which will advise the US Department of State on industry matters relating to the sanctions.

For now, the G7 announcement triggered discussions within the trade about the nature of such additional measures. The sanctions would likely target Alrosa, the world’s largest rough producer by volume, which is 33% owned by the Russian Federation.  

Substantial transformation

To be specific, the new bans would address the issue of “substantial transformation” — a pathway through which the current US sanctions still allow Russian-origin diamonds to enter the US if they are cut and polished in a third country, as explained by the JVC.

Some argue that such imports are not legal even under the current US sanctions. But that’s a simplistic approach, argues a former US Department of Treasury official who requested anonymity. The key question, he stresses, is whether Alrosa still has an interest in the goods. “Just because they came from Alrosa doesn’t mean they’re still subject to sanctions if there is a legitimate arm’s-length sale that breaks their interest,” he explains.

Alrosa rough
diamond sorting. (Alrosa)

For example, if Alrosa sold its rough on consignment to a third-party manufacturer, such polished would be subject to the current sanctions. Or if the Russian miner sold its rough through partnerships to gain a share of the profit from the resulting polished — as some miners are doing — that polished product, too, would be ineligible for import to the US.

However, Alrosa typically sells its rough and moves on. Therefore, as it stands, if a manufacturer buys rough from Alrosa and manufactures it elsewhere, those goods can technically be brought into the US. The stones might be cut, for example, in Belgium, India, Israel or the United Arab Emirates (UAE), countries that haven’t implemented sanctions on Russian diamonds.

Regulating traceability

That has led the major jewelry chains, brands, and conscious independents to apply their own chain-of-custody standards to ensure their supply was not sourced in Russia. Now, the State Department wants to regulate the trade so that such guidelines are applied across the industry and in key international markets spreading to the G7 countries. They would likely extend to the European Union, and notably Belgium, by association.

It is still too early to say exactly what such regulations would encompass, but they will likely include some aspect of traceability, says Sara Yood, legal adviser to the JVC. But the State Department, along with its G7 colleagues, still needs to iron out what that might entail.

Would it require companies to adopt one of the numerous source-verification programs that have been developed within the industry? In such a case, technology such as blockchain or QR codes will play an even more important role in the trade. Or perhaps a statement on the invoice declaring where the goods come from would suffice. Some might suggest the World Diamond Council’s (WDC) System of Warranties (SoW) would be an appropriate tool. However, the WDC’s self-regulation plan hinges supply to Kimberley Process (KP) compliance — a scheme for which Russia is still a member.

There are numerous variations and combinations of these programs that might be considered for the new blueprint. It’s little wonder that it will take months, rather than weeks, to formulate and implement.

This time it’s different

There is also the question of whether such measures will apply only to Russian-origin diamonds or to the full spectrum of supply.

It is not the first time that the issue of substantial transformation has — or should have — challenged the industry. The US implemented sanctions on Zimbabwean diamond entities and rough supply from the country as far back as 2011, and those are still in place today.

They were enacted after the Zimbabwe government seized the Marange mine fields in a 2007 operation that resulted in more than 200 deaths of artisanal miners working the fields, according to Human Rights Watch (HRW).

If the US government considered substantial transformation relating to the Marange goods, it did so on the quiet. Besides, it barely occurred to the trade, or its media outlets, to question it in a meaningful way. That was likely because Zimbabwe accounts for a small percentage of global rough supply. It could also have been because traceability systems weren’t available to monitor Zimbabwe’s resulting polished back then. Manufacturers at the time maintained it was nearly impossible to separate supply from their various rough sources in the production process.

Today’s challenge regarding Russian goods is different because Alrosa accounts for such a large proportion of global supply — 27% by volume, according to Rapaport estimates based on 2021 KP data. In addition, the industry has gradually been working on source-verification and traceability programs that make it possible. The Russia crisis has fast-tracked those efforts, while enacting traceability systems into regulation is a new element that might not have been considered before.

Filling the gaps

Indeed, the diamond industry’s road toward responsible sourcing has been a long one. And it is one that probably doesn’t have an end since there will always be fresh challenges, new elements to consider and improvements to be made.

The journey arguably began with the establishment of the KP in 2003. The scheme was created to monitor the cross-border flow of rough diamonds to give assurance they didn’t fund rebel groups engaged in civil war. However, the conflict-diamond definition limited (and still restricts) the KP’s scope, allowing diamonds mined in violation of human rights — or through violence, that fund terror, or result from other atrocities — to fall through the cracks.

Such loopholes came to light with the Zimbabwe incident, since it was a government entity, not a rebel group, that was the perpetrator and benefited from diamond profits through its rogue actions. In addition, that government was part of the KP and managed to lobby its way not only to remain one but to serve as its chair for 2023.

The industry was therefore forced to look elsewhere to provide ethical assurances to consumers, who were becoming increasingly sensitive about responsible-sourcing issues. The Responsible Jewellery Council (RJC) was founded in 2005 to tackle the broader range of issues that were already missing in the KP back then. In the same year De Beers launched its Best Practice Principles (BPP) to steer its stakeholders to apply best practices in other areas of the industry not covered by the KP to ensure an ethical diamond supply, the company explains on its website.

Both the RJC and De Beers’ BPP relied on companies to meet their respective standards and encouraged members — at least within the RJC structure — to do business with each other to ensure a responsible supply chain.

Signet Jewelers, which was heavily involved in the RJC’s establishment and still serves as its chair, announced its Responsible Sourcing Protocols for gold, tin, tungsten, and tantalum in 2011, and its protocol for diamonds in 2017. These were standards that suppliers to Signet — the largest jeweler in the US — had to meet, and they strongly encouraged membership in the RJC.

Through these programs and others, the industry was able to tackle a broader range of issues relating to responsible sourcing. These focused not only on the industry’s distribution channels, but also touched on other pressing matters such as the environment and equality, which were becoming more important to consumers. The trade also addressed governance and compliance, updating its standards according to the requirements of banks and regulators after the 2008 financial downturn.

Diamonds with provenance

However, while these initiatives relied on commitments by members to meet a set of standards, they didn’t zoom in on individual diamonds. It was always questioned whether traceability chain-of-custody programs could be enacted for diamonds, considering they change hands many times before reaching the consumer.

In the past five years, technology has changed that perception and reality. Blockchain enabled companies to create a digital footprint and track a diamond’s transactions as it changed ownership. It empowered companies to know their suppliers, and their suppliers’ supplier, so that the retail jeweler can sell with confidence.   

Programs by De Beers, Sarine Technologies, the Gemological Institute of America (GIA), Everledger, iTraceiT, and others, have been in the works in the past few years, even if the industry has been slow to adopt them. We will examine these tools in greater detail in the next installment of our three-part series on the industry’s Russia crisis.

Image: Shutterstock

Through them, companies can tell the story of their diamond supply from mine recovery, through cutting and polishing and jewelry wholesale, to retail, giving assurance they not only did no harm but they made a positive contribution to society along the way.

Stones with such provenance are expected to sell at a premium, even if they currently may not. They demonstrate that the piece of jewelry adds value through its values in the same way that the 4Cs differentiate qualities of a diamond. Indeed, De Beers’ 2021 Diamond Insight Report highlighted that sustainability considerations rank on par with price and design for global consumers when purchasing diamonds.

A majority were willing to pay more for natural diamond brands that could demonstrate they operated in an environmentally and socially responsible way, the report revealed.

Brand values

Ultimately, it is the luxury brands that are pushing and leading this agenda, because it makes economic sense. In addition, they, more than others, face reputation risk if their supply does not meet the appropriate ethical standards. These brands are built on the stories they tell, and their values are a core element of that story.

That, along with the know-your-supplier initiatives already outlined, is forcing the rest of the industry to adopt a more brand-like mentality. This will ultimately result in a major shift within the diamond market toward stronger branding moving forward.

Regulating such requirements will accelerate the industry’s adoption of chain-of-custody programs, regardless of the final nature of the sanctions. The new measures will highlight the value in differentiating diamonds with desirable provenance from those without.

Rubber-stamping solutions

That the announcement came from the G7 and not just the US is significant. It forces other centers to follow the lead set by the US in the past year. It puts pressure on the EU — notably Belgium, traditionally the largest destination for Russian diamonds — to apply sanctions that it has been hesitant to enact until now. The Antwerp trade has contended that these goods would enter the market anyway. And they have in the past year, as outlined in the February Rapaport Research Report. From the outside, it appears Antwerp also fears losing market share to other centers that would continue to trade freely in Russian goods — notably India and Dubai.

Antwerp welcomed the G7 announcement, pointing to its broader and more effective reach than had the EU operated alone.  

“With controlled access to 70% of the market, the G7 has the power to create a fully traceable and waterproof system that has real impact on the market,” notes a spokesperson for the Antwerp World Diamond Centre (AWDC). “AWDC believes this is a step in the right direction, and we will support the ongoing efforts to complete this mission.”

The spokesperson adds: “It speaks for itself that the success of such a solution lies in India, where 95% of diamonds get polished. We will always resist against a simple rubber-stamping solution.”

Premium opportunity

Perhaps a broader view is required. Segments of the trade and companies in these markets should view the prospective sanctions as an opportunity to differentiate themselves in the responsibly sourced stream of the market. While the new measures considered by the G7 will target Russian diamonds, they need to address the issue of substantial transformation regardless of the diamonds’ origin.

Image: Diamonds
from Alrosa’s
polishing
division. (Alrosa)

Furthermore, injecting traceability programs into regulation provides an opportunity to encompass a wider range of issues, such as environmental, social and governance (ESG), into the discussion. These may be less immediate challenges, but they will likely have longer-term relevance, well after the war in Ukraine is resolved.

The Russia crisis demands urgent action by government and the trade. The sanctions that are in the works will compel companies in those countries imposing them to be a force for good.

The hope is that they will steer the industry toward building value around provenance. That would ultimately result in a premium for the values those diamonds represent.

This article first appeared in the March edition of the Rapaport Research Report. Subscribe here.

Image: David Polak/shutterstock

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The Man Helping Open Doors for Jewelers of Color https://rapaport.com/magazine-article/the-art-of-inclusion/?utm_source=rss&utm_medium=rss&utm_campaign=the-art-of-inclusion Sun, 05 Mar 2023 14:29:34 +0000 https://rapaport.com/?post_type=magazine-article&p=32298 Elliot Carlyle is on a mission to give underrepresented creators the resources they need to succeed.

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The art of inclusion: Elliot Carlyle of Here We Are is on a mission to give underrepresented creators the resources they need to succeed.

Elliot Carlyle’s cell is constantly ringing, and these days it’s not just fashion professionals who want his advice; it’s jewelers, too.

“They’ll hit me up: ‘Elliot, can we talk? I’m stressed,’” says the former executive assistant to Fern Mallis. In 1993, Mallis founded New York Fashion Week as we know it today while serving as executive director for the Council of Fashion Designers of America.

“Sometimes they just need encouragement; it’s not always complaining. Sometimes it’s really personal, you know, ‘I’m really doubting myself on this, I really don’t feel the confidence to do this,’” he relates.
The reason a select group of jewelers has Carlyle on speed dial is that he is the director of cultural diversity and inclusion at Here We Are (HWA), a program that New York City Jewelry Week (NYCJW) launched in 2019 to “address widespread inequity and a lack of representation in the jewelry industry through action and impact.” It does this by championing “diversity, inclusion, equity, representation, and allyship.”

It was a role that Carlyle somewhat fell into. “I’m an emerging jewelry professional,” he laughs. “I’m a C-suite executive with the people, but I’m still on the floor when it comes to the jewelry.”

Carlyle was working with Mallis when NYCJW founders Bella Neyman and JB Jones dropped by the office in 2018 to seek Mallis’s advice on strengthening their platform. He was intrigued by their plans, and they all started to follow one another on social media. A post Carlyle made the following January — while he was in Atlanta, Georgia, hosting a brunch to celebrate the launch of his book The Influence Workbook: Trajectify Your Life — would bring them closer.

“I remember sitting at the head of the table, and there were so many different people there from all different walks of life — and I mean all different races, genders, sexualities, ages,” he recalls. “It was just beautiful, and we were having the most powerful conversation and exchange. Just about life and everything we’d been through and an exchange of, ‘This is how I’ve dealt with this’ or ‘This is my vision for this.’ I took a picture of the table, and I posted it, and I said, ‘This is what diversity is for me. It’s a way of life. It’s not a checkbox. It’s not an initiative; it’s the way we live in the world.’ A couple of days later, I got an email from JB, and she said, ‘Bella and I would like to meet with you.’”

People person

The NYCJW founders shared their frustration at a lack of diversity in the jewelry industry, particularly among the sort of creatives and designers the event was set up to promote. They told him they wanted to fix it but needed his help. Initially, knowing little about jewelry, he balked — but as they pointed out, he did know people. Carlyle was sold on the vision, and the resulting collaboration would lay the groundwork for HWA.

The starting point was an informal meeting of jewelers of color in New York’s The Jewelry Library, a space on Broadway dedicated to hosting a rotation of jewelry events. “[It was] just to hear from them: what were their pain points; what they felt were strengths but also weaknesses; what were some obstacles or challenges that they haven’t been really able to overcome yet,” says Carlyle. “It was a really immense dialogue.”

What he took home from that first meeting was a real need for visibility. There were designers of color out there, but who were they? And why were the majority of them still flying under the radar?
“[At the time], as a Black man, I couldn’t think of a Black jewelry designer that I knew,” he admits.

Worth a thousand words

To address this, one of the first projects under the HWA banner was a photo shoot to create a campaign that would project portraits of featured designers on a Times Square billboard during NYCJW 2019. The bright lights of the billboards were the stuff of dreams for designers who had felt underrepresented and unseen, but the shoot itself, which took place at shared jewelry workshop Brooklyn Metal Works, also proved beneficial in ways nobody had anticipated.

“We had scheduled all the designers to come by appointment so we could move all of them in and out,” recalls Carlyle. “Of course, you never know how it’s going to flow, and I’ve done a million of these kinds of shoots in fashion, so I was prepared for whatever. But one thing that was very interesting to me [was] the interaction [between] designers,” who hung around after their shoots to see who would come in next. “I started noticing that everyone was thrilled to meet each other.”

Many had followed each other online, but until that moment, there hadn’t been a space for them to meet.
Lorraine West, a Brooklyn-based jeweler and Fashion Institute of Technology (FIT) alumna, was one of the designers involved in the shoot. She credits HWA with not only increasing her visibility — which has led to press coverage and sales — but also with establishing a much-needed community for jewelers of color.

“My wish to connect with a diverse jewelry community was answered,” she says. “Here We Are allows us space to learn and grow in a noncompetitive, supportive environment. I’m proud to be a leader in the space, to inspire, share knowledge and wisdom of the craft and the business of jewelry among fellow peers and the new generation of jewelers.”

Spreading its wings

HWA has evolved rapidly in the four years since its launch and is now a multifaceted year-round program that is constantly seeking new ways to elevate its jewelers. It has its own awards that provide cash grants, which in the past have had the support of major brand David Yurman and component supplier Halstead.

Each year, its residency scheme offers one New York-based jeweler from the Black, Indigenous, and people of color (BIPOC) community a free bench space at NoLo Studio in Brooklyn for 10 months, which includes access to tools and $1,000 credit from sponsor A and C Gem Trading Corp to buy materials. HWA has also collaborated with online retail platform 1stdibs to create a digital pop-up marketplace coinciding with NYCJW, featuring the work of designers such as Dominique Renée and Lisette Scott of Jam & Rico.

Education is also a key focus. The Jewelry Project, led by HWA outreach director Filecellia Sampson, is a virtual teaching series developed in partnership with the New York Board of Education to introduce high school students to career opportunities in the jewelry industry. Previous speakers have included prominent Black jewelry designers Jameel Mohammed of Khiry and Lauren Harwell Godfrey of Harwell Godfrey.

For those already in the trade, NYCJW launched HWA EDU last year in partnership with The Goldsmiths’ Centre in London. Through this collaboration, HWA jewelers can access virtual industry-led workshops originally created for the center’s Getting Started professional-development program.

Emerging gems

The roster of initiatives is broad, and this is a conscious strategy, according to Carlyle. “[When we first started out,] I didn’t realize how segregated the industry was in terms of jewelry type,” he says. “That was an ‘aha’ moment. I was like, oh, so now we need to make sure there’s something in couture, in fine jewelry, in fashion… all of these arenas.”

One of the latest HWA collaborations, which launched during NYCJW in November 2022, was with emerald miner Muzo. Designers Aman Itomi, Ataumbi Metals, Ariana Embirikos, Harlin Jones, L’Enchanteur, Johnny Nelson and Made by Malyia were given free rein to design around the gems for a capsule collection that sold through New York retailer Greenwich St. Jewelers. Jennifer Gandia and Christina Gandia Gambale, the store’s founders, have been staunch supporters of HWA since its beginning.

The capsule is diverse. Nelson wound 189 carats of highly included rough Muzo emeralds in silver to create a four-finger ring that is selling for $4,500. Itomi, meanwhile, set fine oval-cut emeralds into the shell of a scarab on a heavy 14-karat gold cuff with a retail price of $87,000.

“We have been fans of NYCJW since its inception, following along during its growth period and curious about how Muzo could be a part of it,” says Gabbi Harvey, Muzo’s head of business development. “Once we learned about the [HWA] initiative, we knew we wanted to get involved. The HWA program cultivates a diverse and inclusive culture and aligns with our ethos.” Muzo plans to continue the partnership in the coming years, Harvey says.

Carlyle is proud of how far the HWA initiative has come, but “there’s still a lot of work to do,” he emphasizes. He’d like to see HWA act as a more comprehensive incubator for emerging and under-the-radar talent — a program “that moves designers through the process from point A to Z, and also puts some money in their pocket.” This sort of program can be found in abundance in the fashion world, but less so in jewelry.

In the immediate term, Carlyle’s work, as he sees it, is to continue acting as champion and coach for underrepresented talent. His reward is to watch his charges bloom under the stewardship of HWA. One such talent is New York jewelry designer Angely Martinez, who co-authored a well-publicized open letter in 2020 calling to increase opportunities for BIPOC jewelers.

“I’d watched her really embrace insecurities and her doubts and challenge herself to step into arenas that, honestly, she’d never even felt qualified or prepared for,” says Carlyle. “I remember she used to be so shy, and she was afraid to speak up for herself. For her to stand for her values as a woman of color, it’s
incredible to see.”

Image: Elliot Carlyle, director of cultural diversity and inclusion at Here We Are. (Elliot Carlyle)

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Podcast: The Path Toward Sustainability https://rapaport.com/podcasts/podcast-the-path-toward-sustainability/?utm_source=rss&utm_medium=rss&utm_campaign=podcast-the-path-toward-sustainability Thu, 23 Feb 2023 10:23:40 +0000 https://rapaport.com/?p=35060 Rapaport’s Avi Krawitz chats with Iris Van der Veken of the Watch & Jewellery Initiative 2030 about the organization’s immediate and long-term goals.

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Rapaport’s Avi Krawitz chats with Iris Van der Veken of the Watch & Jewellery Initiative 2030 about the organization’s immediate and long-term goals.

Fresh off its second workshop for members, which took place in Geneva, the Watch & Jewellery Initiative 2030 emerged with a clearer focus that will drive the group’s sustainability programs forward, executive director Iris Van der Veken stressed on the Rapaport Diamond Podcast.

The initiative was founded last April based on three pillars that would shape its agenda: building climate resilience, preserving resources and fostering inclusiveness. The February workshops gave members the opportunity to prioritize the organization’s programs within that framework and set immediate and long-term milestones, Van der Veken told Rapaport Senior Analyst Avi Krawitz.

The discussion also explored what sets the initiative apart from other programs that promote the industry’s environmental, social and governance (ESG) agenda and how the luxury brands are approaching sustainability challenges. She also went into greater detail about how the industry could raise the bar when it came to issues such as climate change, gender equality and governance.

Listen to the podcast here:

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Joint Sustainability Project Puts Focus on Small Businesses https://rapaport.com/news/joint-sustainability-project-puts-focus-on-small-businesses/?utm_source=rss&utm_medium=rss&utm_campaign=joint-sustainability-project-puts-focus-on-small-businesses Sun, 12 Feb 2023 14:49:48 +0000 https://rapaport.com/?p=33691 UN teams up with Watch & Jewellery Initiative 2030 to help improve ethical practices.

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The Watch & Jewellery Initiative (WJI) 2030 is partnering with the UN Global Compact to help small and medium-size businesses become more sustainable.

Using the UN’s 17 Sustainable Development Goals (SDGs) as a baseline, the two groups have formed the Small Medium Enterprise (SME) SDG 2030 Solutions Lab. The program aims to educate the jewelry and watch industry on issues such as sustainable design, proper labor practices, human-rights due diligence, climate action, biodiversity, and inclusiveness.

SMEs constitute an estimated 70%-plus of businesses in the global watch and jewelry sector, WJI 2030 said Thursday in its announcement of the launch. Such companies play a “pivotal role in driving economic development, poverty reduction, job creation, economic emancipation, and overall well-being.”

The Solutions Lab, it continued, is an attempt to “prove that it is possible — and profitable — for small businesses [in the industry] to do the right thing, the right way.”

The UN Global Compact is an effort to get companies to align their operations with 10 principles relating to human rights, labor, the environment and anti-corruption. WJI 2030, meanwhile, is an initiative that Cartier and luxury holdings company Kering founded last year to build climate resilience, preserve resources and foster inclusiveness in the trade.

The two organizations plan to launch a working group next month in collaboration with the World Jewellery Confederation (CIBJO), the French Union of Jewellery (UFBJOP), and the design department at Italy’s Politecnico di Milano university.

“The objective is to develop a replicable and scalable framework to enhance responsible supply-chain practices,” said WJI 2030. This “should lead to a value-creation strategy for all SMEs in the global jewelry and watch industry, increase transparency reporting, and show progress over time.”

In the project’s initial stages, SMEs will receive hands-on, personalized guidance, the trade body added. There will be a formal consultation process where NGOs and industry players can contribute to content development, and best practices will be shared both in the Solutions Lab and with the broader industry. 

Another aspect of the program is innovation and technology, with the aim of bringing more young people into the trade.

“We have an enormous opportunity and duty to attract young talent [and] inspire them to work for our industry,” said WJI 2030 executive director Iris Van der Veken on Thursday. “That will require a new mind-set of design thinking in [terms of] sustainability, and more cooperation than ever.”

Cartier president Cyrille Vigneron affirmed the importance of cooperation “between clients and suppliers through the entire value chain. This implies large corporations as well as small and medium-size companies.”

Image: Marie-Claire Daveu, chief sustainability officer and head of institutional affairs at Kering, with Iris Van der Veken, executive director and secretary general of WJI. (Watch & Jewellery Initiative 2030).

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New Initiative Tackles Colored-Gemstone Traceability https://rapaport.com/news/new-initiative-tackles-colored-gemstone-traceability/?utm_source=rss&utm_medium=rss&utm_campaign=new-initiative-tackles-colored-gemstone-traceability Sun, 12 Feb 2023 11:47:18 +0000 https://rapaport.com/?p=33677 AGTA partners with Colorado School of Mines to bring transparency to African gem operations.

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The American Gem Trade Association (AGTA) has unveiled a new project that aims to improve transparency and traceability, ethics, sustainability, and human rights with regard to colored gemstones mined in Africa.

The project, named the “Transparent and Traceable Gemstone Supply Chains Initiative,” will examine colored-gemstone supply chains in Kenya, Tanzania, Madagascar, Nigeria and Sri Lanka. AGTA partnered with the Colorado School of Mines (Mines) on the initiative.

“AGTA and Mines recognize that guidelines developed for responsible sourcing of diamonds and precious metals do not fit the colored-gemstone supply chain,” John Ford, CEO of AGTA, said in a statement last week. “Both AGTA and Mines share the common goal of improving the transparency and traceability within the international mining community and desire to identify and cement best practices at sites worldwide.”

AGTA plans to expand this program to the South American and Asian supply chains, Ford added.

Nicole Smith, assistant professor of mining engineering at Mines, and PhD student Jenna White will lead the research effort. Research preparation will take place through March followed by site visits to Kenya, Tanzania, Madagascar, Nigeria and Sri Lanka until November, AGTA said. The supervisors will examine several types of mining operations of various sizes in different environmental and social contexts, analyzing colored gemstones at each location. A report is expected in the spring of 2024.

“Consumers want transparency when it comes to the sourcing of all sorts of goods, and colored gemstones are no different,” Smith said. “We’re excited … to examine some of the best practices along colored-gemstone supply chains and how consumers can be sure the stones they’re purchasing are produced in an ethical way.’”

The partnership was made public following the annual AGTA GemFair show in Tucson and amid AGTA’s plans to be involved in the public comment process the Federal Trade Commission (FTC) has launched for its “Green Guides,” which govern eco-friendly advertising claims and terminology.

Image: (From left) Sebnem Duzgun, Nicole Smith, John W. Ford Sr., Kimberly Collins and Jenna White.

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