From Diamonds to Dust

I have to be honest: When I find out I’ve been invited to go on a diamond sustainability trip by Tiffany & Co., I am sceptical. The relationship between diamonds and sustainability has always been a question mark in my mind. All the movies I’ve seen about blood diamonds and how we are damaging our world beg one question: How can excavating so many tonnes of earth to find shiny pieces of a really hard mineral be ethical, let alone sustainable? I read the work itinerary, which includes: A flight to Paris; a private car transfer to Antwerp, where we will stay for a few days and visit a diamond workshop; a train back to Paris; a flight to Mauritius; numerous sun/sea/surf activities; a day at a diamond workshop; walking with lions; a flight back to Paris. All this, over a 10-day period. And yes, it’s work. Not to mention, the spa appointments, lunches, dinners and drinks by the beach. Am I being bribed? Lulled into a such a cosy, luxurious experience that one can’t help but write great things?

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I hesitate, but accept the trip and make the trek to Antwerp. A 13-hour flight and five-hour car ride isn’t exactly an ardous journey, but it’s long enough. Antwerp is a quaint little city that has the glamorous claim of being the diamond capital of the world. All suppliers of rough diamonds sell their goods here, with over $30 billion worth of diamond deals struck annually within the three blocks that make up the diamond district. The headquarters of Laurelton, a subsidiary of Tiffany & Co., employs over 90 diamond experts to source rough diamonds, prepare them for cutting, sort them to be exported, and polish the larger stones in the Belgian workshops. As Andy Hart, CEO of Laurelton and Senior Vice President, Diamond & Jewelry Supply, Tiffany & Co., points out, “This is the central hub in our network. This is the place where we first put our hands on stones that aspire to become Tiffany diamonds, to be mounted in a solitaire diamond ring, worn on a woman’s finger and looked at over a million times in her lifetime. This is the greatest aspiration a diamond can have and achieve.”

I get my hands dirty and do some sorting, marking, sawing and polishing of diamonds, including working out how to manually sort and grade stones according to their colour. It’s a lot harder than it looks and incredibly taxing, especially when you know that any mistake costs clarity, cut and carats.

The next day, I make my way to Paris by train to catch the midnight flight to Mauritius—it’s a long 13-hour journey, but arriving on this beautiful paradise is well worth the trip. We are transported to our hotel via an incredible helicopter ride—accompanied by perfect sunny weather, brilliant blue oceans and a glorious breeze. The next day-and-a-half are spent on the ocean, relaxing in this tropical paradise and enjoying the warm turquoise waters. But amidst all that beauty, it is the trip to the Laurelton factory that is truly eye-opening. Within a nondescript grey building in the middle of nowhere are over 270 skilled staff, many of whom have generations of family working here. Hart prides himself on his ability to sniff out clothing manufacturing hubs that have since moved to countries with cheaper production costs, but have left behind skilled workers who are used to working in factory settings. We chat to the staff, eat chicken nasi briyani with them, and sit at their work stations. I try polishing and grading, and am guided through the entire process by very passionate workers. This hasn’t been staged by anyone-the Mauritian workers are happy to explain their trade to us and how they have climbed the career ladder. Mauritius prides itself as a nation of tourism and sugar cane harvesting, so this trade and career path that Laurelton has created is certainly new; and it’s here to stay.

The facilities, while basic, are safe and modern. Everyone is clad in the signature red uniform, and they work regular hours with weekends off. It’s very real, and I sense a contentment in their work. Reality to them is not the perfect blue box with the white ribbon that sits at the mecca on Fifth Avenue in NYC. It’s their children and families who get employment benefits and education, and have prospered under Laurelton. It’s a different reality to mine but it’s no less engaging. I speak at length to Andy Hart about how this whole exercise came about.

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So Andy, did you start the whole responsibility and sustainability course?

I wouldn’t say that I started it myself personally. Michael J Kowalski, our CEO, was the brains behind it. He really wanted to bring the focus to sustainability and corporate, social responsibility. For our gold, silver and platinum materials, we do all the mining where possible, or we buy from mines in the USA that we know have a responsibly sourced process.

With so many factors to look into—from excavation, preservation and sustainability—what is the greatest challenge you face in your role?

I think we are good, we are better than most, but I don’t think anybody is perfect. We are constantly trying to improve, we are constantly trying to get better, to get closer to sources and understand how they operate, and where they come from. We are pretty good when it comes to precious metals and diamonds, but we have work to do on coloured gemstones, which are particularly challenging. It’s about living up to the customer’s trust and expectation that Tiffany is going to have all this taken care of, so that’s what I think about.

Can you take me back to when customers started to question the origin of their gems and why it is such a big thing for Tiffany & Co.?

We haven’t really had a point where the customers started asking [about it]. I think Mike and the management team in the ’90s started to realise that to make something as beautiful and attractive on the outside, you have to think about what goes into its making. I think we need to earn the customer’s trust because it’s very easy to lose. Mike and the team were ahead of the curve—while our customers are not specifically asking for this from us yet, it’s something that we deliver. And it has to be built into our brand. You know, the Tiffany brand has been inspired by nature and the natural beauty of the environment since 1837. So it was only natural that that evolution went into our sustainability projects.

But for a public listed company, at the end of the day, isn’t it always about profit?

I don’t think so. I think there is a growing understanding that we have shareholders we are responsible to, but there are other constituents that we’re just as responsible to. My view is that we’re just as responsible to our customers, our employees, and the communities in which we operate. You’ve seen the way we treat our people. We want to treat those people well. Each of our facilities has an amount that comes out of our operating budget to support local charities. Each little factory has its own local thing that it supports. And it’s our obligation to take care of the environment where the materials come from in terms of the sustainability of the brand and luxury consumption. So, I don’t think it’s all about returns to shareholders. That’s an important part but it’s not the only part. I think all these other constituencies have to be balanced.

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That’s great, but doesn’t the excavation of the earth go against the whole ethos of sustainability; especially when diamonds can now be produced in a laboratory with just as much brilliance and shine?

I think we have come to the point where humankind has to rely on mining in some way or form. Sure, we can say that the luxury industry shouldn’t exist because of mining, but then we have to go into the next phase. The next phase is, how do we do it in the most responsible way possible? Diamond mining is one of the least disruptive mining methods as compared to other products. It doesn’t leave a huge footprint on land. Most of the pipes are pretty small. There are no chemicals involved. It’s an order separation process, so it’s not inherently bad for the environment. In terms of the sustainability of something like diamonds, I think our view is that synthetic diamonds are not really a luxury. They’re not rare, they’re going to be on a downward sloping cost curve and technology curve, they don’t have the same sort of value retention properties, and they’re not real like natural diamonds. In terms of sustainability, there is also the people aspect. There are millions of people in the world who make a living, and whose lives have been improved, because consumers in wealthy countries want to buy shiny objects that are pretty and wear them, like we do. I feel good about that because in our supply chain I know there are 1,400 employees in Vietnam and 900 in Cambodia who have a better life because of that. We saw 270 today who have a better life because they have a way of supporting themselves and their families. So, for me, I think it’s okay; there is good that comes out of the luxury industry and I think we do it in as sustainable a way as possible. Botswana was one of the poorest countries in Africa but because it has had good governance, and responsibly mined and exploited its natural resources, it’s a middle-income country now. It’s doing pretty well, and it has free healthcare and education; so I think [the luxury industry has] really helped lots of places in the world develop economically.

As an American company, do you feel that this is a form of good colonialism, in the best possible way?

I haven’t thought of that. Not really. In terms of diamonds, when I started in 2002, we bought all of our diamonds as polished. Our buyers would go to Antwerp and go into the offices that you saw in the diamond district and buy all those diamonds, and that was all we really knew. So, I set off on a quest to understand the whole industry behind that and what I found was a lot of operations that weren’t really run to the standards that Tiffany felt good about; that’s what I found in Vietnam and also here in Mauritius. So, we bought these operations over and made them in the way we felt was good and right. We’ve improved the lives of the communities and the people. By converting that whole supply chain, we’ve improved the diamond quality. Our costs have gone down because we’re more efficient, communities have benefited from the charitable outreach that we have and the jobs that we’ve created; and certainly the people that work for us have benefited from stable, good-paying jobs with career potential if they want it. So, I feel good about what we’ve done. I’m proud of the teams that we’ve built. They care about treating the people well. It’s not all about the numbers for them either; it’s about how we get things done. It’s just as important as the final numbers.

What advice would you give someone who wanted to ensure that their piece of jewellery is ethical and sustainable?

I would ask lots of questions. Where did the raw material come from? How was the environment treated? How were the people treated in that environment? Where was the piece crafted? Who crafted it and under what circumstances? How were the people, the community and the environment treated? I would be really careful about that. My advice is to go to a retailer you can trust that will take care of that. That’s why I would recommend that people come to Tiffany: We’ve gotten all that taken care of. When somebody buys an engagement ring, you want it to be special; it’s all about love, commitment and devotion, so it’s a little bit of a downer to stand at the counter and ask, “Was this a conflict item?” We’ve taken that out of the equation, so you can just enjoy the big experience.