Pandora A / S, which produces more jewelry than any other company in the world, will stop using diamonds as part of a broader strategy to dispose of raw materials related to unethical production methods.
Despite decades of reforms, the global jewelry market remains tainted by reports of human rights abuses in mines and factories. To address such concerns, Tiffany & Co. last year began providing customers with details of newly minted, individually registered diamonds that trace the path of the stone all the way to the mine.
Pandora, which is based in Copenhagen, said on Tuesday that it would now use only laboratory-produced diamonds. The company will launch its first collection of laboratory stones in the UK and will target other markets in 2022.
While diamonds account for a small share of Pandora̵
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Global diamond sales fell 15% in 2020 due to blockages, travel restrictions and economic uncertainty, according to a research report of the World Diamond Center in Antwerp and Bain & Co. Production of rough diamonds fell by 20% in 2020, and prices fell by 11%.
Diamond sales – and prices – have recovered 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 largest diamond company, younger people remain true to the mined stones and account for about two-thirds of world demand.
Pandora’s laboratory diamonds are grown from carbon with more than 60% renewable energy on average, a ratio that should rise to 100% next year. The decision to avoid mined diamonds comes less than a year after Pandora undertakes to stop relying on newly minted gold and silver in its jewelry. By 2025, its entire production will use only recycled precious metals as part of the plan to ensure that its operations are carbon neutral within four years.
Bain’s report shows that the market for laboratory-made stones is growing at a double-digit level, with younger customers looking to identify sustainable producers. He also found that sustainability, transparency and social well-being are “priority issues” for consumers and investors.
Pandora is taking a stand on its raw materials as investors focus more and more on sustainability. Nordea’s asset management department said so recently plans only to own securities that live to environmental, social and management standards in all its portfolios.
The Danish company, which has become an affordable jewelry maker, used only 50,000 diamonds last year out of a total of about 85 million.
Pandora also highlighted the price as a consideration behind its decision. Laboratory-made stones cost about a third of those mined, and the switch will make diamond jewelry available to more users, the statement said.
Laboratory-made diamonds will have the same physical characteristics as mined stones, Pandora said. The new collection will include rings, bracelets, necklaces and earrings, it says.
Pandora’s focus on sustainable production methods coincided with a significant increase in its market value. In the last year alone, the company’s shareholders have seen that the value of their investments has more than tripled. And this week, Pandora raised its profit guidelines to reflect faster-than-expected sales growth.
The shares of the Danish company jumped to 7% on Tuesday.
– With the assistance of Kim Bhasin and Thomas Biesheuvel
(Adds details about the diamond industry, Pandora results)