The sustainability phenomenon has burrowed its way into today’s increasingly innovative jewellery sector. Major industry stakeholders say that the journey towards socially responsible and ethical practices has begun, and is fast progressing.
Artisanal gold miner
A worker at KGK’s manufacturing facility
Jewelmer’s pearl farm in Palawan, Philippines
Polished emerald from Muzo Companies
Muzo Companies’ community project for the elderly
This article first appeared in the JNA March/ April 2021 issue.
A 30-minute educational video on artisanal mining posted on YouTube by the United Nations Educational, Scientific and Cultural Organization takes a grim turn when a woman, submerged waist-deep in the earth, is shown digging for ore.
The footage then cuts to a man descending into a crude pit whose shoddy opening is precariously held together by a log wedged between the dirt. Another worker – a young woman – is seen mixing brown, murky water in a basin. She is about to separate the gold from the ore with mercury – using her bare hands.
This is a common sight in the artisanal gold mining (AGM) sector – a thriving economy most prevalent in Africa, Asia and Latin America that provides a critical source of income for impoverished families.
Delve, a global data platform for artisanal mining, reported that 44.75 million people around the world are artisanal and small-scale miners – 70 per cent of whom are men and 30 per cent are women.
According to Fairtrade International, these miners produce between 200 and 300 tonnes of gold each year, approximately 70 per cent of which is used in jewellery making.
This informal industry attracts workers who toil in poorly constructed mines that lack proper tools and machinery, and safety protocols. Without labour protection and access to formal trade channels, artisanal and small-scale miners are more vulnerable to accidents, violence and other forms of abuse.
AGM is one aspect of a larger, rapidly expanding movement where jewellery industry leaders are called upon to ensure that every gemstone and jewellery piece sold to a customer was responsibly manufactured and that no one in the supply chain, including Mother Nature, was harmed during its production.
In recent years, the jewellery sector, in collaboration with multilateral and non-profit organisations, has been taking a more active stance in incorporating socially responsible practices in their business strategies and operations to meet consumers' rising demand for ethically sourced goods.
According to the Responsible Jewellery Council (RJC), an international standard-setting organisation, interest in environmentalism and sustainability in the jewellery industry stemmed from consumers’ need for stronger trust and confidence in the products that they buy. Iris Van der Veken, executive director of RJC, said this has become even more relevant during the Covid-19 pandemic, which resulted in temporary shop closures, shrinking revenues and loss of jobs.
Consumers are concerned about how companies are dealing with the crisis to protect people and communities. “Businesses will need to rethink how to shorten supply chains and make those more transparent, socially conscious and environmentally friendly,” noted Van der Veken. “Companies that embrace sustainability and transparency as part of their recovery strategy will be resilient for the long-term.”
The sustainability movement obtained further traction in the digital realm, bolstered by millennial and Gen Z consumers’ growing predilection for a sustainable industry that protects people and communities.
Van der Veken stated that young consumers will keep this fire burning through relentless conversations and jewellers are responding.
The industry’s sustainability goal is predominantly guided by RJC’s Code of Practices (CoP), which outlines standards and requirements on how to responsibly conduct business from mine to retail based on a set of objectives. The code applies to gold, silver, platinum group metal, diamond and coloured gemstone supply chains. The CoP certification – a must for RJC members – serves as a badge of credibility, ensuring customers and partners that they are dealing with an ethical and socially responsible company.
Founded by 14 influential jewellery trade organisations and companies in 2005, RJC has 1,300 members today – 60 per cent of which are small enterprises spanning over 70 countries. Van der Veken raised the importance of fostering a global community of sustainability leaders who, by virtue of their brand and product integrity, and impact on communities, leads by example and creates a ripple effect on the broader industry.
“Our focus this year will be on SMEs and supporting them to join the RJC journey,” she added.
Artisanal gold: The true cost
Over the years, jewellery brands have shown more interest in gold from artisanal and small-scale miners, specifically traceable gold that was fairly mined, according to the Alliance for Responsible Mining or ARM.
This is in response to consumers increasingly demanding that human rights and environmental protection be essential components of any commercial enterprise – a trend mainly instituted by millennials and Gen Z buyers.
With rising demand for sustainable goods comes the need for greater protection of the industry’s most vulnerable. ARM, established in 2004, is an independent organisation working to transform the artisanal and small-scale mining sector into a responsible endeavour – one that protects, nurtures and enriches its workers – through its Fairmined initiative.
According to Carolina Escobar, communications officer at ARM, artisanal and small-scale miners face a slew of challenges including child labour, exposure to dangerous chemicals such as mercury and cyanide; unfair wages and working hours; hazardous conditions and unregulated practices.
The Fairmined Standard aims to improve the working conditions of informal mining communities in Asia, Africa and Latin America. Gold miners certified with the Fairmined Standard receive a fair price for their goods and an additional monetary incentive that they can re-invest in their communities. Each certified mining organisation gets US$4,000 for every kilogram of responsibly mined gold sold in the market and US$6,000 for “ecological gold” or gold extracted and processed without the use of any chemicals. Companies who want to source Fairmined gold can become licensed brands or authorised suppliers, allowing them to buy precious metals from certified organisations.
With this in place, the challenge now lies in creating demand for ethically produced artisanal gold, stated Escobar. The urgency of including these products in jewellery supply chains rings with greater resonance, with Covid-19 impacting the livelihood of marginalised miners. The need to build more transparent mine-to-market operations is stronger than ever, she noted.
With the prices of gold increasing, artisanal gold mining could also attract more informal players. WGC data showed gold prices reached US$1,794.25 per ounce as of February 16, 2021, up 13 per cent from 2020. Prices peaked in August last year at US$2,048.15 per oz.
Jewellers’ sustainability commitment should transcend corporate social responsibility initiatives, according to Sanjay Kothari, vice chairman of KGK Group.
The conglomerate, with over 100 years of expertise in the trade, attaches equal importance to ethical and environment-responsive business practices. An RJC member, KGK’s sustainability programme is aligned with the United Nations’ Sustainable Development Goals (SDGs). Among the company's major projects are carbon footprint reduction and wastage tracking to ensure recycling of materials.
Kothari commented, “KGK belongs to a select group of preferred buyers by major diamantaires De Beers, Alrosa and Rio Tinto. To ensure complete supply chain control, KGK only carries natural diamonds and gems, and tracks each stone from rough to finished product.”
Faced with consumers who are judicious and vigilant in their purchases, KGK said its products are RJC-certified – an additional layer of assurance that responsible business practices govern its jewellery supply chain.
Consumers want companies to be more specific about their sustainability efforts, added the KGK official. Discerning buyers dutifully research products, study labels and openly criticise questionable practices.
Their desire to be environment-conscious is reflected in their buying behaviours, taking into account price, design and a company’s sustainability approach. “Millennials have a different perception of jewellery; they view it as a form of self-expression,” remarked Kothari. “This quest for individuality has likewise inspired older generations of buyers. In response, KGK is focusing more on updated product designs, manufacturing quality and craftsmanship.”
By understanding ever-evolving preferences, companies can then refine their marketing plans and business strategies to better resonate with modern consumers, he continued.
The pearl sector offers a multifaceted sustainability narrative, which encompasses marine preservation, environmental restoration and livelihood improvement for coastal communities.
“Our philosophy is that we cannot make the perfect pearl; we can only nurture the environment that will create it,” revealed Jacques Christophe Branellec, executive vice president and deputy CEO of South Sea pearl specialist Jewelmer.
The company’s pearl farm concessions in Palawan, Philippines are protected zones that house some of the richest marine biodiversity in the world.
Jewelmer’s path to sustainability was forged decades ago, with environmental conservation and community building deeply embedded in the company’s mission and vision since 1979, noted Branellec.
Producing the exceptional golden South Sea pearl requires a symbiotic partnership with nature. By implementing techniques and strategies that protect natural resources and empower communities, Jewelmer is able to create the golden pearl – the quintessential responsibly sourced, environment-friendly gem.
The business has also generated diverse jobs for the Palawan community. According to the company official, 377 precise steps are taken over a period of five years from the birth of the Pinctada maxima to see if the mother oyster produces a golden pearl. This meticulous process involves and benefits communities that depend on the sea to survive.
With soaring interest in responsibly manufactured gems and jewellery, the company’s time-honoured practices anchored on sustainability are taking centre stage. Branellec views these emerging consumer trends as encouraging indicators of consumer education. “We will continue to drive the Jewelmer brand forward with the message of sustainable luxury as we promote environmental awareness and conservation,” the company official explained.
Transparency and traceability
De Beers Group operates on the principle of creating positive impact that will endure beyond the discovery of its last diamond, according to David Johnson, head of corporate communications at De Beers Group.
Aptly named Building Forever, its sustainability framework guides the group’s mining operations and retail businesses. Building Forever is hinged upon four core pillars – protecting the natural world, partnering for thriving communities, accelerating equal opportunity, and leading ethical practices across the industry. Most recently, De Beers announced 12 goals aligned with each of these pillars, which it hopes to achieve by 2030.
Challenges in the mining sector call for more sustainable solutions. According to Johnson, the group is minimising its impact on the environment by cutting energy and water use while implementing conservation and socioeconomic development programmes.
To achieve carbon neutrality by 2030, De Beers is aiming to reduce energy intensity and improve mining efficiency; replace fossil fuels with green alternatives; and recover remaining emissions with nature-based carbon storage solutions. Social issues including safe and fair labour practices also take precedence in the diamond trade. Johnson said consumer expectations around transparency and sustainability will continue to advance, buoyed by climate change, the rise in younger buyers’ purchasing power and greater access to information.
“For a meaningful and emotional purchase such as a diamond, consumers increasingly – and rightly – want to know that their diamond is not only beautiful but was responsibly sourced and is a force for good in the world,” he continued.
In recent years, De Beers also refined its consumer-facing communications, which resulted in enhanced customer engagement. De Beers is also bringing the Building Forever framework to its stores and marketing campaigns. A case in point is De Beers Jewellers’ latest high jewellery campaign, Reflections of Nature, which comprises five jewellery sets inspired by natural wonders in the countries where De Beers operates.
The Muzo Companies Colombia, a major producer of the coveted Muzo emeralds, is leading sustainability efforts in the coloured gemstone trade.
According to Charles Burgess, president and CEO of Muzo Companies, traceability is at the heart of the company’s mine-to-market business model. Its socially responsible programme likewise promotes employment, human rights protection, women empowerment and safe working environment.
The company also provides certification that tracks the emerald’s journey throughout the production chain. Its Certificate of Origin and Traceability includes pertinent information about the gemstone, safeguarding its transparency and traceability.
Burgess said Muzo Companies' customers are increasingly looking for ethically produced and mined gemstones. These include top clients in international luxury markets and jewellery designers. “Our customers always ask for certificates. They are also familiar with our corporate social responsibility projects and how we have changed the lives of thousands of informal miners. The work we have done for more than 10 years helped build this reputation,” he noted.
RJC’s Van der Veken said efforts to drive the sustainability programme forward will have lasting effects. The coronavirus’ impact on employment, mental health and other socioeconomic issues will eventually be felt by businesses, particularly those that operate with global supply chains. With the jewellery sector poised to becoming a global sustainability leader, it is up to industry stakeholders to manage and mitigate existing challenges.
“We are on a sustainability journey and our industry is moving fast,” she stated. Now on its 15th year, RJC recently unveiled its Roadmap to 2030, which outlines priority UN SDGs aimed at helping members further integrate responsible and ethical routines in their operations. The council also created the SDG Taskforce whose mandate is to build a strong reporting framework based on existing international best practices.
In 2020, RJC also advanced its agenda on gender equality, a necessary milestone to achieving all SDGs. According to Van der Veken, women drive 90 per cent of global jewellery demand, underscoring their relevance in the sector. Partnerships are crucial to achieving the 2030 agenda, which includes the 17 SDGs. Van der Veken said, “This is a shared responsibility and the right partnerships can create positive impact. We look forward to supporting the industry in knowledge sharing and action on the ground. Education is key and my team is working hard to support our members in this journey.”
At ARM, Escobar said sustainability initiatives were instrumental in improving the lives of Fairmined-certified small-scale miners. Certification helped improve health and security of workers, and streamline gold extraction and processing, with some mining organisations successfully eliminating the use of mercury and/or cyanide. Reforestation was also achieved alongside the miners’ capacity to export their gold to ethical markets.
Since its launch, the Fairmined initiative became mainstream, with more companies promoting certified gold. The number of companies working with Fairmined rose by 12 per cent on average from 43 to 300 as of 2021, according to Escobar.
The sustainable path
Major jewellery companies offer a glimpse into their sustainability agenda. Here are updates on the many ways they promote and help institutionalise better business practices.
Environment Protection Drive
- KGK’s Botswana diamond factory is now carbon-free. An upgrade in laser sawing machines in diamond production meanwhile reduced electricity consumption by 10 per cent.
- All jewellery manufacturing facilities are equipped with power-saving equipment.
- All diamond manufacturing units are fitted with energy-efficient light.
Skills Enhancement Programmes
- KGK partnered with South Africa’s State Diamond Trader for its Entrepreneur Development Programme (EDP) to train and equip people with skills needed in the diamond industry. To date, more than 5,000 have joined the EDP and other training initiatives.
Rejuvenation of Jal Mahal
- KGK was instrumental in restoring the historic Jal Mahal, a Mughal-era royal palace in Jaipur.
Save Palawan Seas Foundation
- The foundation engages 500 families in sustainable livelihood opportunities through projects on virgin coconut oil processing, free-range chicken farming and organic vegetable farming.
- The initiative also supports the welfare and development of 10 coastal communities, impacting around 5,000 households that benefit from annual medical and dental missions and feeding programmes for children in underserved areas.
- Jewelmer's pearl farms protect 40,000 hectares of marine concessions and 15,000 hectares of virgin forest land in Palawan.
DE BEERS GROUP
- Through the Diamond Route initiative, De Beers has reserved 500,000 acres for conservation. For every acre of land used for mining, it sets aside six for conservation. The Diamond Route is one of Africa’s most extensive conservation networks, comprising eight nature reserves in South Africa and Botswana.
- Supporting 10,000 female micro-entrepreneurs to build their businesses. De Beers’ Accelerating Women-Owned Micro-Enterprises programme in Africa, in partnership with UN Women and local governments, provides mentoring, networking, and business and life skills training for women microentrepreneurs. The programme will be scaled up across further regions to reach the goal of supporting 10,000 women by 2030.
- Achieving priority health targets in all De Beers’ producer countries by tackling HIV/ AIDS. The diamantaire aims to continue its approach to preventing, detecting and treating HIV and AIDS. As a result, 2019 marked more than 10 years of no babies being born with HIV to De Beers employees.
- Working with the Muzo Foundation, various education, public health and cultural programmes have been initiated, including providing elderly people with free daily meals.
- Muzo Companies also works with government partners to provide basic medical care to local communities.
- It also started a cacao cooperative for 1,300 families to work with local farmers. This initiative will be expanded further to provide alternative sources of income to mining communities.
- Muzo Companies is also working towards reforestation efforts in the region.