Without a Trace: We Investigate the Demand for Traceability in the Jewellery Industry Today

Lindsay Judge   |   06-10-2022

Why transparency and legitimacy of diamonds and gemstones is the industry’s trend that won’t go away.

 

Traceability has become one of the most talked about topics in the jewellery industry today. More than just a trend, customers are demanding to have full transparency on the origin and journey of the stones in their jewellery pieces, and for the industry’s key players, it is a win or lose situation, with many consumers already beginning to shun brands that do not offer the openness they are looking for around gemstones and diamonds.

 

For years the ethical (or not so ethical) sourcing of rare stones has been a huge topic of debate around the world. With many brands unable to share the full journey of gemstones and diamonds from the source to the finished piece for many years. Historically it has been difficult to trace the source of stones due to a corrupt industry in many areas of the world, as well as it being logistically a very complicated process. Today, customers are savvier and more demanding than ever which puts pressure on brands to go the extra mile to please them. This combined with new legislation in many countries requiring companies to reveal where their gems have come from has been a game-changer in the industry. As in many other areas of their lives, customers want to understand where their purchases come from and to know that they are not investing in something that has negative implications on the planet or human beings.

 

Tiffany & Co.

 

The journey of a stone or diamond is far from a simple one. Often stones will pass through many countries and owners before reaching their final destination. This creates a long chain of events that, especially in war tone countries, is not always easy to track. Over the past few decades, we have begun to see much more clarity around the origins of diamonds and gemstones used by global jewellers in the hope to keep up with the demands of customers and wish to make the world a safer place for all.

 

Diamond source initiative caseline display

 

Much of this has been thanks to newly developed advanced technology that has allowed the big players to offer a fully-automated and verifiable tracking of stones throughout the process. One of those is Tiffany & Co. who in 2020 became the first global luxury jeweller to disclose all of the countries where their sourced, individually registered diamonds of .18 carats and larger are crafted. The Diamond Craft Journey is one of the most advanced systems in the world and allows the stones to be tracked from the moment they are unearthed it to the moment they land on your finger. “All of our rough diamonds are sourced either directly from a known mine or from a supplier with a limited number of known mines. We encourage high standards in the mining industry to protect human rights and ecologically sensitive lands.” The brand explains on its website. Tiffany is also dedicated to giving back to those communities where the diamonds are found and improving their local economies with multi-million dollar investments in the local infrastructure. Not only does the Diamond Craft Journey ensure transparency it guarantees the quality of the stones. “We carefully check each diamond to make sure it meets Tiffany’s high standards of cut, clarity, carat and colour. If anything takes away from the beauty of the stone, we won’t accept it.” Explains Hanna Jee, Diamond Grader, Tiffany & Co.

 

Tiffany & Co. Rare Fancy Color Diamonds.

 

And the same applies to jewellers specialising in gemstones, which can often be even more difficult to track than diamonds due to their multiple locations and conditions around the world. At Bulgari, this is something that is continually being focused on and improved. The Italian jeweller is a certified member of the Responsible Jewellery Council; the world’s leading sustainability standard-setting organisation for the jewellery and watch industry. By following the standards set out by the council Bulgari is able to provide clients with the necessary information on the journey of their stones from mining to the store, and guarantee that it is managed responsibly. Bulgari is also a member of the Colored Gemstones Working Group which is facilitated by The Dragonfly Initiative, and brings together major brands in the jewellery industry with the common goal to develop tools and methods to enable a transparent and responsible supply chain for coloured gemstones. The brand is working with new technologies and practices to continuously develop its responsible sourcing methods and guarantee customer’s peace of mind when purchasing jewellery items.

 

But the work doesn’t just come down to the brands themselves. In 2007 Gemfields was founded as a mining company that would specialise in the transparent and legitimate sourcing of gemstones. Specialising in coloured gemstones Gemfields set out to change the industry for the better, working with international jewellers to provide the most ethically sourced rubies and emeralds. Over the years Gemfields has developed with the industry and new technology has been able to offer even more accurate tracing of stones and make the process a much more seamless one. Today, Gemfields oversee the responsible mining and marketing of coloured gemstones from some of the world’s finest gemstone deposits, while ensuring they benefit as many citizens as possible. As the operator of some of the world’s biggest mines, it is involved in many of the most significant findings and selling of stones today. But there is still much to be done. We talk to Elena Basaglia, Gemmologist, at Gemfields to find out more.

 

Elena Basaglia Gemmologist at Gemfields

 

As a gemmologist how do you strive to ensure full transparency of every gem throughout the supply chain? 

At Gemfields, we have always believed coloured gemstones should be mined and marketed with three key values in mind – transparency, legitimacy, and integrity. We see ourselves as custodians of our host nations’ resources and believe it is our duty to get the best prices for Mozambican rubies and Zambian emeralds so that we can funnel back the maximum proceeds to these countries of origin.

We sell our rough gemstones through private auctions, to which we invite the biggest names in the coloured gemstone world. This pioneering auction platform allows transparent and fair trading of coloured gemstones, with the market setting prices and vetted buyers allowed to inspect the gems for themselves before placing their bids. Most importantly, the process provides full transparency to the host countries’ governments, whose representatives attend and observe the entire auction process, viewing sales figures and calculating taxes due to host economies. This platform enables us to follow through on our commitment to offering complete transparency to host nations.

We are also always advocating for improvements to the wider coloured gemstone and jewellery sector. Whether working with international non-profits and industry associations or with brands in the Coloured Gemstones Working Group, we have been tireless in our efforts to help develop pioneering industry standards and initiatives to provide open-access tools, educational materials, and other resources to the industry. We feel this helps to improve supply-chain transparency and good practice.

 

How do you ensure that the partners you work with uphold the same level of commitment? 

We are committed to working with brands and industry partners to standardise strong, transparent practices across the sector. We carry out thorough supplier compliance due diligence process and audit this periodically. We always try to lead by example, by upholding our own high standards. We also take the time to vet every bidder at our closed auctions to ensure they share our values of responsible practice before they are invited to attend.

 

Pits and Surrounding Landscape MRM Mozambique

 

What are some of the new developments you are working on currently? 

In 2017, we pioneered the use of nanoparticles in our higher-quality emeralds, working alongside the Gübelin laboratory of Switzerland. For the first time, buyers in decades to come will be able to know which mine the emerald they purchased originated from.

This nanoparticle technology works together with Gübelin’s ‘Provenance Proof’ blockchain, in which data for each gemstone is checked meticulously, using sophisticated algorithms, and then entered on a network of distributed digital ledgers. This is an efficient and secure alternative to an unreliable paper trail, with access to this information only granted to the gemstone’s current owner.

Suitable for both emeralds and rubies, the blockchain provides peace of mind by enabling traceability and seamless documentation along every stage of the value chain from the mine to the final customer.

 

In your opinion how is the jewellery industry changing and what are customers looking for from their stones and jewels today? 

 

Increased demand for coloured gemstones has mainly been a response to consumers feeling more confident about how our gems are mined and knowing there is a reliable and regular supply of responsibly sourced coloured gemstones.

Jewellery is often bought to reflect a celebration or milestone, and therefore holds great sentiment and pride. The industry is rightly undergoing heightened supply chain scrutiny with consumers increasingly asking for certificates of origin. This has required retailers to step up in terms of their knowledge and the documentation they provide.

At an industry level, traceability is key to ensuring that only like-minded businesses are involved in a transaction. At a consumer level, it helps customers to better understand their gems. Knowing what a gem’s journey has been before it was set in a piece of jewellery gives consumers confidence and adds a rich layer to the storytelling around it, which is useful for marketing.

Gemfields has always been a pioneering company, championing responsible mining and marketing of coloured gemstones. We continually strive to be at the forefront of developments across the industry.

 

Gemfields

 

Which stones are particularly difficult to work with in terms of their traceability? 

Traceability information is mostly recorded for larger single gemstones and being able to show a customer the piece of rough from which a gem originates brings with it a great sense of pride for a lapidary. The ability to provide such traceability is achievable with the blockchain system that Gemfields uses. It’s worth noting that, when working with a parcel of minute rough gems to produce small-sized pavé-style gems, the challenge becomes quite obvious!

With responsible sourcing receiving ever more attention and becoming increasingly important to consumers, we believe gemstone provenance and Gemfields’ ability to demonstrate its responsible practices will help us to stand out from others when it comes to choosing coloured gemstones.

 

This issue is about innovation and technology – how is technology aiding Gemfields’ ability to be more transparent with consumers? 

Our ruby sort-house in Mozambique and our proprietary coloured gemstone grading systems, which have revolutionised the coloured gemstone trading mechanism, are just two examples of how we, as a pioneering company, seek industry-leading solutions using state-of-the-art technology.

More recently we introduced an alternative gemstone auction format and online bidding platform in response to the restrictions on movement that we saw during the pandemic. We always strive to improve awareness and delivery of responsibly sourced African-coloured gemstones all the way from mine operations through to the end consumer, while having a positive impact on the countries of origin.

Gübelin Gem Lab’s advances in blockchain technology have given a huge boost to this ambition by providing a secure solution for proving the provenance of gemstones – the only way to be sure of exactly how a gemstone changes hands throughout its journey.

We are pleased to have customers who care as passionately as we do about where their gemstones come from, and by adopting Provenance Proof Blockchain, we are able to give them the certainty that they deserve.

 

 

What does sustainability mean at Gemfields? 

At Gemfields, our approach to sustainability can be summed up in two words: responsible sourcing. This lies at the heart of our business and means implementing industry-leading policies and practices across operations, transparency in our auction sales process, playing an active role in working groups to modernise the sector, and creating projects to improve health, education and livelihoods for the communities around our mines and supporting conservation efforts to protect Africa’s wildlife and biodiversity.

We guarantee full transparency throughout the auction sales process and that all taxes and royalties will be repatriated to host countries, with full visibility provided to government representatives, who attend our auctions and receive full disclosure of the revenues and taxes due.

In July 2021, we pioneered the ‘G-Factor for Natural Resources’, a new measure promoting greater transparency about the percentage of a nation’s natural resource wealth that is shared with the host government. We published our full figures and encouraged other mining companies to do the same.

 

What in your opinion is the future of the gemstone industry? 

This year, our ruby and emerald auctions have seen record-breaking results – our auction revenue in the first half of 2022 stands at USD 181 million versus our prior first-half record of USD 93 million, set in 2018. While we would caution that second-half revenues are unlikely to match the remarkable first half, the results underscore the extent of the step-change being experienced in the market.

We expect vibrant consumer interest to continue, fuelling further growth in the sector. As an appreciation of their beauty, rarity and value grows, it is likely that demand for emeralds, rubies and sapphires will too.

Consumers are becoming increasingly interested in the journey a gemstone has taken before reaching their hands, and mining companies are at the beginning of this journey. Our use of blockchain will allow consumers to experience each of these steps virtually, taking in the different locations and workshops the gem has passed through.

 

 

What is your current favourite stone? 

Green is my colour, so it must be an emerald! I get lost for hours when looking inside an emerald, taking in its natural features and the magical world created within it. It’s quite staggering to think it was formed over 500 million years ago by the mesmerising work of Mother Nature!

Colour plays an important role in our lives, and I feel that we are drawn to different colours from day to day, which is refreshing. Gemstones are utterly unique, just like each one of us!

Whichever gemstone you select, it is important to buy from a trusted source in order to have full confidence that it has been sourced responsibly and that it is of the quality described. If it is a significant gemstone that you are purchasing, then you’ll need transparency about any treatments it has received – it should be accompanied by a certificate from a recognised, independent gemmological laboratory.

All major jewellery brands have a dedicated team of gemmologists and quality control departments who will be able to provide you with this peace of mind.