Pandora A/S, which makes more pieces of jewellery than any other company in the world, will stop using mined diamonds as part of a broader strategy to drop raw materials associated with unethical production methods.
Despite decades of reform, the global jewellery market remains tainted by reports of human rights abuses at mines and factories. To address such concerns, Tiffany & Co. last year started providing customers with details of newly sourced, individually registered diamonds that trace a stone’s path all the way back to the mine.
Pandora, which is based in Copenhagen, said on Tuesday it will now only use diamonds manufactured in laboratories. The company is set to release its first collection using lab-made stones in the U.K., and will turn to other markets in 2022.
While diamonds represent a small fraction of Pandora’s sales, the move reflects greater demand for sustainability in the broader market and comes as jewellery faces stiff competition from other luxury goods, such as travel and iPhones, especially with younger consumers. A host of lab-grown-diamond makers and retailers have sprung up in recent years, keen to target customers with more affordable stones that aren’t marred by the same ethical and environmental issues as mined diamonds.
Global diamond sales fell 15% in 2020 due to lockdowns, travel restrictions and economic uncertainty, according to a research report by the Antwerp World Diamond Centre and Bain & Co. Production of rough diamonds fell 20% in 2020 and prices declined by 11%.
Diamond sales -- and prices -- have rebounded this year, with De Beers selling more than $1.6 billion in rough diamonds, the most since 2018. According to De Beers, the world’s biggest diamond company, younger people remain loyal to the mined stones and account for about two-thirds of global demand.
Pandora’s lab-made diamonds are grown from carbon with more than 60% renewable energy on average, a ratio that’s set to rise to 100% next year. The decision to shun mined diamonds comes less than a year after Pandora pledged to stop relying on newly mined gold and silver in its jewellery. By 2025, its entire production will use only recycled precious metals as part of a plan to ensure its operations are carbon neutral within four years.
The Bain report shows that the market for lab-created stones is seeing double-digit growth, with younger customers in particular keen to identify sustainable producers. It also found that sustainability, transparency and social welfare “are priority issues” for consumers and investors.
Pandora is taking a stand on its raw materials as investors increasingly focus on sustainability. Nordea’s asset management unit recently said it plans only to hold securities that live up to environmental, social and governance standards across all its portfolios.
The Danish company, which has branded itself a maker of affordable jewellery, used mined diamonds in just 50,000 pieces last year out of a total of roughly 85 million.
Pandora also emphasized price as a consideration behind its decision. Lab-made stones cost about a third of mined ones and the switch will make diamond jewelleryaccessible to more consumers, it said.
The lab-made diamonds will have the same physical characteristics as mined stones, Pandora said. The new collection will include rings, bangles, necklaces and earrings, it said.
Pandora’s focus on sustainable production methods has coincided with considerable growth in its market value. In the last year alone, the company’s shareholders saw the value of their investment rise more than threefold. And this week, Pandora raised its profit guidance to reflect faster-than-expected sales growth.