Lab-Grown Diamonds Get Ready for Their Eco Close-Up

Six lab-grown diamond companiesand retailers have signed up for a pilot program thatwill audit their environmental, social, and governance performance againstpre-set criteria.  

If theypass, their diamonds will be certified by SCS Global Services as sustainablygrown, though it’s possible that label will change.                        

Onlyindividual diamonds will bear the certification, after they have been trackedand traced from grower to the retailer. So, for example, it’s possible a ring’scentre stone will carry the SCS certification, while its side stoneswon’t. (Just like a centre stone sometimes carries a GIA report, while its sidestones don’t.)

Thepilot, commissioned by the newlyformed Lab-Grown Diamond Council, will involve four growers—GreenRocks, Goldiam USA, Lusix, and WD Lab Grown—as well as two retailers, HelzbergDiamonds and Swarovski.

The newscomes after the Federal Trade Commission (FTC) in April warned eight lab-grown diamond sellers against using generalenvironmental benefit claims, like eco-friendly and sustainable, which areprohibited by the the agency’s GreenGuides.

Interestingly,none of the lab-grown diamond sellers that werecautioned by the FTC are participating in the pilot program. In fact, most ofthe participating companies have shied away frommaking eco claims in the past.

“Theseare companies that want to do the right thing,” says Stanley Mathuram, vicepresident for SCS, which has also worked with Brilliant Earth and theResponsible Jewellery Council. “The message they are giving now is, ‘We supportsustainability, and here are our practices to prove it.’ This won’t be justabout how these companies compare to mined diamonds. It’s about each company’sown practices and how they measure up to a transparent standard.”

DiamondFoundry has been certified carbon-neutral by Natural Capital Partners. This newstandard goes beyond that toward “climate neutrality,” Mathuram says.

“It’s notjust that we measure your electrical footprint and then you buy offsets,” saysMathuram. “It may be looking at ways to reduce electricity use. This is goingbeyond carbon-neutral and looking at a multitude of issues. We will also belooking at black carbon, ozone, and methane, and other pollutants that arehot-button topics for climate. We are talking about water, we are talking aboutsolvents, we are talking about chemicals.”

It willalso monitor the companies that cut the diamonds and make sure they adhere toexisting labor and safety standards.

Anotherkey component: good governance. In this era of anti-money-laundering rules that mandate buyers knowtheir customers, retailers increasingly want information about who ownslab-grown diamond companies, Mathuram says. Yet many growers are non-transparent,and some have had been linked to fugitive economic offenders, offshoreentities, or the Chinese military.

“We wantthe standards aligned with OECD [Organisation for Economic Co-operation andDevelopment] anti-bribery, anti-corruption standards, so we know who ownsthem,” Mathuram says. “We can ask, ‘What is their history? Could there be moneylaundering involved? Do they pay fair wages?’ ”

Astandards committee has been formed to develop criteria for certification.Among the members will be Dr. Saleem Ali, who has written about the ecological impact ofboth mined and lab-grown diamonds. (Both Mathuram and Ali are also involved inefforts to monitor and certify mining operations, including diamond producers,such as the Initiative for Responsible MiningAssurance.)

Mathuramhopes to have the first standards developed in about five months. He wants themto be “strict” and subject to annual revision, in the spirit of continualimprovement. He admits that it’s possible that the companies will have to spendmoney to bring their practices up to code, especially since lab-grown diamondsuse a considerable amount of energy togrow.

“Theylikely will,” he says. “But otherwise it will be misleading for people to justcall themselves sustainable without any changes in their practices.”

Thecurrent plans call for the certification to be called “sustainablygrown”—even though sustainable isone of the words the FTC objected to, since itmeans different things to different people. Mathuram says itwill work with the FTC to make sure the wording passes muster and says itcould change.

He admitsthat it’s also possible that competing growers will continue to call themselves“eco-friendly,” despite the FTC warning and lack of independent backup.

“They cantry,” he says. “But you will have companies like Helzberg and Swarovski wantingthese certifications. We have seen this in other industries we certify. No oneis going to touch companies that can’t say who owns them, what their social andenvironmental standards are.”

One ofthe early participants in the program, Goldiam USA, hopes getting the certificationwill set it apart.

“Everyonesays they have their own [growing] lab, but in a lot of cases it’s not true,”says Devang Jhaveri, chief executive officer of the company, which sells bothnatural and lab-grown stones. “This will show that we grow the productourselves and have confidence in our process.”

He alsohopes that it will give consumers more confidence.

Arecent survey from MVI Marketing foundthat more than 85% of jewelry purchasers say it’s important to haveindependent, third-party verification of a diamond’s social and environmentalimpact before they purchase it.

“[When]asked how much confidence they would have if a company created its ownstandards for claims of social and environmental responsibility and thenself-report[ed], consumers were not impressed,” said a release from MVI.

(In thespirit of transparency, we should note that MVI has done work for SCS, aswell as lab-grown companies and organizations.)

“Theconsumer is getting more sophisticated,” says Elizabeth Chatelain, MVIpresident. “We are starting to see consumer pushback, asking, ‘Who is reallyconfirming and verifying what it is you’re telling me?’ ”

Or as Mathuramputs it: “You can’t talk about sustainability if no one knows what yourpractices are.”