Articles and News
How To Protect Your Reputation Before It Gets Damaged | March 25, 2015 (0 comments)
Merrick, NY—It’s no secret that luxury consumers care more about sustainability issues than ever before, and they demand their brands and retailers do business in a way that supports their beliefs in social and environmental responsibility. They’re also not shy about heaping public shame on a company they believe deserves it, even if it’s by mistake—and increasingly, jewelers are a favorite target.
The best defense is to not let it happen in the first place, says Barbara Wheat, CEO of Gemalytics LLC, an expert in sustainability management for the jewelry industry. Wheat holds a Master of Science in Sustainability Management at Columbia University, is an adjunct professor teaching sustainability courses at the State University of New York-Empire State College, and is a GRI Reporting Practitioner (Global Reporting Initiative). Formerly a jewelry trade editor in Asia and the executive director of the International Colored Gemstone Association, she now provides consulting services in sustainability to the jewelry industry.
In an exclusive interview, The Centurion asked Wheat to address sustainability for every jeweler.
The Centurion: There’s so much talk of social responsibility, sustainability, conflict diamonds, and so forth, that jewelers might not understand what each means or what they’re supposed to do about it.
Barbara Wheat: Sustainability for jewelers is concerned with resource extraction, supply chain management, traceability, labor practices, and human rights, just to name a few. In very basic terms, it’s about managing risk. An annual sustainability assessment or report can help companies identify vulnerable areas before they’ve become front-page news because some outside source identified an area of vulnerability that might end up being controversial or damaging to their reputation.
The Centurion: How does this impact retail jewelers or jewelry manufacturers on a practical level?
Wheat: I highly recommend that retail jewelers start working towards preparing their own sustainability reports, which should be updated on a yearly basis. Many companies prepare sustainability reports at the same time they do their taxes. Examples of these reports can be found on the Internet. Using reports from other industries can be helpful, and then work on adding issues that pertain to your company as you develop these reports.
Click here for tips on compiling a sustainability report. Click here and scroll to page 38 in the PDF to see a good case example from Puma, the athletic shoe brand,
Centurion: Are there examples that jewelers can study for best practices?
Wheat: An example of an industry that has been successful is the coffee and tea trade. They managed to get growers, producers, and packaging suppliers in line. Most importantly, they developed their own certification standards.
Centurion: In surveys, consumers say they are willing to spend more for sustainable or responsible product, but what really happens at the cash register?
Wheat: Both jewelers and marketers in the industry have indicated that consumers are willing to pay more for goods that carry a sustainable or responsible label. It’s up to jewelers to get the message out on what they’re doing. If you’re not making it known that you support local communities, such as in providing childcare, support for schools or hospitals in mining areas, then you aren’t doing anything that has the potential to influence consumer behavior. At the same time, it’s been proven in other industries that sustainability practices actually reduce costs for companies. Sustainability management is really just good management, which makes for a stronger company overall.
Centurion: Where are sustainability efforts strongest and weakest in the jewelry industry? At the mining, manufacturing, or retail level?
Wheat: Most of what happens in the gem and jewelry industry at this point in the area of sustainability is done on a company level, not as much on an industry level. Sustainability is not about choosing one item that you feel strongly about and embracing it. It’s about embracing all aspects of your business, which includes the environmental side of where you products are coming from, human rights, labor rights and indigenous rights in those areas, as well as other areas within the business. The colored gemstone trade may face more challenges because about 80% of the gems in the world are mined by artisanal miners and traded between smaller companies. These issues make it harder to set industry standards, such as for a certification process. People trading gems along the Thai-Myanmar border are not going to find it easy to comply with a certification process and their ability to make a living may be harmed by such a process, as it will make them more vulnerable to the few who might be able to do so.
The Centurion: Recycled jewelry is becoming very popular in large part because it doesn’t involve extracting more gold or diamonds from the earth. But the refining process has its own risks. Is there potential for it to come back and bite unsuspecting jewelers?
Wheat: This is indeed a challenge. I’m not an expert on the [refining] process, but it is an area of vulnerability for jewelers. A complete analysis needs to be done to weigh all the costs and benefits of recycling compared to gem and mineral extraction in order to make a clear determination. Cost-Benefit Analysis (CBA) within the sustainability field is different than what most companies are used to seeing because a market price is determined for things like social costs, which don’t have a price tag. All stakeholders along the supply chain must be considered in this type of CBA.
The Centurion: Are consumers in all countries concerned about sustainability or is this more of a First-World trend?
Wheat: The interest in sustainable issues is growing, but I advise not to just look where it seems popular for the moment. Companies like the Gap and other clothing makers have learned the hard way that you don’t just get attention for the good things you do in communities where they work. Bad things can happen that expose lax business practices, and ultimately they do damage to a company’s reputation. Sustainably helps a company prepare for these issues, not just to react when some unfortunate incident has already taken place.
My advice is that it’s always much better to works towards implementing sustainability into your company before you have a reason to react and do damage control.
Top image of Barbara Wheat, by Neil Sresthadatta