Pandora jewelry. Shutterstock.
Pandora A / S, which makes more jewelry than any other company in the world, is discontinuing the use of mined diamonds as part of a broader strategy to drop raw materials related to unethical production methods.
Despite decades of reform, the global jewelry market remains tainted by reports of human rights violations in mines and factories. To address such concerns, Tiffany & Co. last year, provide customers with details of newly mined, individually registered diamonds that follow a stone’s path all the way back to the mine.
Copenhagen-based Pandora said on Tuesday that it will now only use diamonds manufactured in labs. The company will release its first collection of lab-made stones in the UK and will move to other markets in 2022.
While diamonds represent a small portion of Pandora’s sales, the movement reflects greater demand for sustainability in the broader market and is because jewelry faces fierce competition from other luxury goods such as travel and iPhones, especially from younger consumers. In recent years, a large number of lab-grown diamond makers and retailers have emerged, eager to target customers with more affordable stones that are not marred by the same ethical and environmental concerns as mined diamonds.
Global diamond sales fell 15 percent in 2020 due to lockdowns, travel restrictions and economic uncertainty, according to a research report from the Antwerp World Diamond Center and Bain & Co. Rough diamond production fell 20 percent in 2020 and prices fell 11 percent.
Diamond sales – and prices – are up this year, with De Beers selling more than $ 1.6 billion in rough diamonds, the highest number since 2018. Younger people stay loyal, according to De Beers, the world’s largest diamond company mined stones and are responsible for about two-thirds of global demand.
Pandora’s lab-made diamonds are grown from carbon with an average of more than 60 percent renewable energy, a ratio that will rise to 100 percent next year. The decision to avoid mined diamonds comes less than a year after Pandora promised to no longer rely on newly mined gold and silver in its jewelry. By 2025, all production will use only recycled precious metals as part of a plan to ensure operations are carbon neutral within four years.
The Bain report shows that the market for lab-made bricks is experiencing double-digit growth, with younger customers in particular eager to seek sustainable producers. It also noted that sustainability, transparency and social well-being are “issues of priority” for consumers and investors.
Pandora is taking a stance on its commodities as investors increasingly turn to sustainability. Nordea’s asset management unit recently said it plans to only hold securities in all its portfolios that meet environmental, social and governance standards.
The Danish company, which has billed itself as a maker of affordable jewelry, used just 50,000 pieces of mined diamonds out of a total of about 85 million last year.
Pandora also highlighted price as a consideration behind his decision. Lab-made stones cost about a third of the mined, and the switch will make diamond jewelry accessible to more consumers, he said.
The lab-made diamonds will have the same physical characteristics as mined stones, Pandora said. The new collection will include rings, bracelets, necklaces and earrings, he said.
Pandora’s focus on sustainable production methods coincided with significant growth in market value. In the past year alone, the company’s shareholders have seen the value of their investment more than triple. And this week, Pandora raised its earnings forecast to reflect faster-than-expected revenue growth.
Shares in the Danish company rose by no less than 7 percent on Tuesday.
By Christian Wienberg