From Mine to Market Navigating the Traceability of Diamond and Gold
This article explores the growing demand for traceability in the gold and diamond industry, highlighting the ethical and environmental concerns driving consumer preferences.
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What is Traceability?
Traceability in diamonds and gold refers to the ability to track these materials from their source (mines) through the entire supply chain, ensuring they are ethically sourced and not linked to conflict or illegal practices. It involves verifying their origin, processing, and sale to promote transparency, sustainability, and responsible mining. This helps consumers and businesses ensure their purchases align with ethical and environmental standards.
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The Rising Demand for Traceability
In recent years, consumer preferences have undergone a significant transformation, marked by a strong shift toward conscious consumerism. This emerging trend reflects a growing awareness of the social, environmental, and economic impacts of purchasing decisions. According to PWC's Global Consumer Insights Pulse Survey in February 2023, over 70% of respondents expressed a willingness to pay more for sustainably produced products, either to some extent or to a great degree. Similarly, the Capgemini Research Institute reported that 79% of Indian consumers have altered their buying habits based on factors such as environmental impact, social responsibility, and inclusivity.
This shift in consumer behavior is making its way into the jewelry industry as well. Today’s customers are not just looking for beautifully crafted pieces but are also seeking brands that uphold ethical values and commit to a sustainable future. There is a rising demand for transparency and accountability, with consumers expecting more than just assurances of purity—they want confirmation that their jewelry has been sourced responsibly. As a result, sustainability, responsible use of natural resources, traceability, human rights, and strong corporate governance are now key factors driving purchase decisions. This growing emphasis on ethical practices signals a new era where consumers value not only the aesthetic appeal of their jewelry but also the story behind it, as they increasingly prioritize brands that align with their values.
Traceability of Diamonds
Diamonds have always been a popular choice amongst the masses. The sparkle of this precious gemstone is both aesthetically pleasing and a sign of societal status.
However, the allure of diamonds is now accompanied by a sense of responsibility. Before being adorned in diamond jewellery, they are keen to know the narrative behind the diamond. They want answers to questions such as - Where was the diamond mined? How was its cut planned? How many miles has the diamond traveled?, etc. This rising consciousness is due to ethical and moral reasons. Traceability ensures diamonds are ethically sourced, free from associations with conflicts or human rights abuses. By tracking a diamond’s origin, consumers can make informed choices and support responsible mining practices. It also promotes transparency and accountability within the diamond industry, building trust among consumers, retailers, and suppliers. Additionally, traceability helps combat the trade of illegal or counterfeit diamonds, preserving market integrity and fostering sustainability in the industry.
Did you Know?
Due to the Russia-Ukraine war, the G7 nations, along with the European Union, have banned Russian diamonds, including both natural and lab-grown varieties, as well as jewellery and watches containing diamonds. This ban was rolled out in phases. It’s a significant move in the global diamond trade, impacting both supply and ethical sourcing practices.
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Diamond traceability is made possible through various technological innovations and industry initiatives, including:
Blockchain Technology: In the digital age, blockchain is transforming diamond traceability by creating an immutable, transparent ledger that records every transaction throughout the supply chain. Each diamond is assigned a unique identifier, and as it moves from mining to retail, all transactions are securely added as blocks to the chain, ensuring full transparency and traceability.
Serial Numbers and Laser Inscriptions: Many diamonds are laser-inscribed with a unique serial number, typically on the girdle (outer edge).This serial number can be cross-referenced with records to trace the diamond back to its source.
Certifications and Standards: Diamonds often come with certificates from trusted gemological labs like the Gemological Institute of America (GIA) or the International Gemological Institute (IGI). These certificates detail the diamond’s characteristics and serve as tools for traceability.
Supply Chain Initiatives: Several industry initiatives, such as Everledger, Tracr, and iTraceiT, focus on promoting ethical practices and traceability. These initiatives implement measures to track the movement of diamonds and verify their ethical origins.
Traceability of Gold
Mined for centuries, Gold is an invaluable metal from the past and its importance and utility has withstood the test of time.
But Gold mining has increasingly come under scrutiny due to its links to mercury pollution and human rights abuses, prompting a global shift toward sourcing more traceable, fair-mined gold. Concerns about the environmental and ethical impact of gold mining have driven initiatives from global policymakers, local governments, and communities to promote responsible practices in the industry. For luxury brands, especially jewelry producers, the importance of sourcing gold that is both responsible and legally produced is more critical than ever.
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Bulgari s Serpenti Viper collection was the first to feature unique certificates confirming the use of ethical gold.
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Organizations like the Alliance for Responsible Mining and Fairtrade International have established programs that enable brands to source gold traceable from the mine to finished jewelry. These initiatives ensure that the gold has been produced in ways that protect the people involved in the mining process, safeguard human rights, and minimize environmental harm. Such efforts have garnered the attention of prominent luxury brands, including Cartier and Bulgari, both of which have committed to improving traceability across their gold supply chains. Bulgari reports that 99% of its gold comes from refiners certified according to the Responsible Jewellery Council (RJC) Code of Practices and Chain of Custody standards. Meanwhile, Cartier has implemented a chain of custody for some of its gold, although full traceability has yet to be achieved . Their parent company, Richemont, has expressed long-term ambitions to enhance traceability across all their gold sources.
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Individuals panning for gold in the Dagua River located in Zaragoza, Colombia (2009).
A Responsible Future Ahead
The pursuit of full gold traceability is challenging, but progress is being made. Scientific researchers and companies are exploring innovative technologies that can trace gold’s journey to within meters of its origin, ensuring that products like rings and necklaces come from ethical sources. While blockchain solutions are gaining popularity for tracking gold, they currently do not cover the entirety of the gold supply chain. Achieving comprehensive traceability, from rudimentary artisanal mines to large industrial operations, remains the ultimate goal for the industry. By ensuring gold is ethically sourced and traceable, companies can meet rising consumer demand for sustainability and transparency in the luxury sector.
The traceability of gold and diamonds is essential for fostering ethical practices within the industry. As consumers become more aware of the implications of their purchases, it is crucial for them to remain vigilant and voice their expectations for transparency. By supporting brands that prioritize responsible sourcing, consumers can drive meaningful change. Companies, in turn, must adapt to these demands, ensuring their supply chains reflect a commitment to sustainability and integrity. Together, informed consumers and responsible companies can pave the way for a more ethical and transparent future in the precious metals and gemstones market.
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