Strategic CSR - Diamonds

The article in the url below suggests that the producers of lab-grown diamonds are overcoming one of the main criticisms levelled at their products – that they consume large amounts of energy to manufacturer, so are not nearly as green as they are marketed:

"A decade ago, they were relatively unknown in the jewelry industry, but now make up a fifth of diamond sales by value. … Made largely in China and India, lab-grown diamonds are produced using heat and pressure but without any mining. The lab-growing process, however, does require huge amounts of energy, so stones' green credentials depend on where the power comes from."

Having solved the issue of having to dig these things out of the ground (often under appalling conditions), the next step was to remove the emissions associated with the vast amounts of energy required to produce lab-grown diamonds:

"Danish jeweler Pandora's diamonds are made using renewable energy and set in recycled gold and silver rings. It said a cut and polished one carat diamond has a carbon footprint of roughly 9.2 kilograms, less than a tenth of the carbon emissions for a natural diamond—106.9kg CO2 based on research from the Natural Diamond Council."

Similarly:

"In 2019, Laura Lambert launched Fenton, an ethical jewelry brand based in London. Three years later the former retail executive started selling lab-grown diamonds produced in a solar-powered factory in Gujarat, India. … She says her own market research indicates currently only about 5% of all lab-grown diamonds are made using renewable energy, but it has been something her customers have been asking for."

As a result of the growing market share of lab-grown diamonds:

"Miners' revenues have dropped sharply. De Beers, the world's largest diamond miner, sells its rough diamonds in ten selling cycles during the year. The volume and quality can vary but is a good barometer of appetite for natural diamonds, as well as prices. In the last cycle of 2023, De Beers sold $130 million worth of diamonds compared with $417 million a year prior."

In spite of this progress, lobbyists for real diamonds are still able to question the sustainability of lab-grown diamonds (see Strategic CSR – Diamonds):

"'Consumers are being told that lab-grown diamonds are sustainable and that couldn't be further from the truth,' says David Kellie, CEO of the Natural Diamond Council, a diamond mining trade group. The group began airing videos on social media in April as part of what it calls a 'myth-busting' campaign. According to a new report by the group, more than 60% of lab-grown diamonds are made in China and India, where climate-polluting coal is the major power source. The report also touts efforts by the mining industry to cut carbon emissions and boost the economies of countries with major diamond mines such as Botswana and Namibia."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

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Lab-Grown Diamonds Go Green

By Yusuf Khan

January 11, 2024

The Wall Street Journal

Late Edition – Final

B6

https://www.wsj.com/articles/diamonds-made-with-solar-power-are-offering-fiancees-ethical-fashion-475d1c7b

 

Strategic CSR - De Beers

The article in the url below presents a case study of the positive impact that De Beers has had in Africa, in general, and Botswana, in particular:

“There is also no question, though, that Botswana was greatly aided by something else: De Beers's own sense of -- to use the current term of art -- corporate social responsibility.”

The author argues that, unlike many other firms that have extracted Africa’s resources (and continue to do so today), De Beers sought to build sustainable operations by building the local infrastructure that would also ensure the country’s development:

“Practically from the start, it entered into a 50-50 joint venture with the government; about a decade ago, it also sold the government a 15 percent stake in the company. … It has also built roads, hospitals and schools in Botswana; worked to help the country deal with H.I.V. and AIDS; and been involved in and paid for a hundred other things that have helped make Botswana an African success story.”

The author is quick to point out that this was not a charitable act by De Beers, but helped ensure the firm also continued to succeed:

“Botswana's citizens need roads -- but so does De Beers, to transport its diamonds. De Beers needs a healthy work force, so its emphasis on H.I.V. awareness and treatment is clearly in its self interest. Indeed, a more prosperous Botswana helps De Beers in every way imaginable, not least by providing a stable environment in which it can do business.”

The remainder of the article tracks the firm’s evolution in relation to the development of the diamonds industry and the role of the current CEO (appointed in 2006) in shaping the firm’s CSR profile:

“In the two years he's been the chief executive, Mr. Penny has become a proselytizer for what he likes to call ''beneficiation'' -- which is a fancy word for doing well while doing good. … He went on to say that every company doing business in Africa needed to practice this kind of enlightened stewardship if it hoped to succeed over the long haul.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Diamonds Are Forever In Botswana
By JOE NOCERA
1769 words
9 August 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/08/09/business/worldbusiness/09nocera.html

Strategic CSR - De Beers

The article in the url below is an interview with Gareth Penny, CEO of De Beers. Penny took over as CEO of the diamond company in 2006 in the middle of the ‘conflict diamonds’ crisis (Issues: Country of Origin, p223):

“Rapper Kanye West's "Diamonds From Sierra Leone" in 2005 and the movie "Blood Diamond" in 2006 were triggering a wave of negative publicity about buying "conflict diamonds," which were sold in the 1990s by African rebels to help pay for their wars.”

The interview asks Penny about what he has done to steer De Beers through this (“One hundred percent of De Beers diamonds today are conflict free. … It is estimated that 99.8% of all diamonds in the world flow through the Kimberley Process, which is extraordinary”) and other CSR-related issues. It also delves into his perspective on De Beers’ role as a leader in the diamonds industry today:

“Today, De Beers is "in transition," says Mr. Penny, 45 years old. The company, whose sales slipped 2.8% last year to $6.84 billion, has a new business model and is trying to polish its image. And Mr. Penny now casts himself as an unofficial ambassador for Africa who can help bring businesses and jobs to the continent.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

Boss Talk: De Beers Polishes Its Image --- CEO Penny Refashions Business Model to Tackle Diamond Giant's Flaws
By Vanessa O'Connell
1255 words
7 July 2008
The Wall Street Journal
B1
http://online.wsj.com/public/article/SB121538963806131221.html