How Do We Talk About Ethical Sourcing?

Why the industry has mixed feelings about eco-friendly messaging

Suzanne Miglucci, the new president and CEO of moissanite manufacturer Charles & Colvard, seemed an energetic, forceful presence on her first conference call. Discussing her company’s new strategy, she talked up the growing importance of millennials in the market and how they favor responsibly sourced products. Which makes them, she concluded, the perfect market for “ethically sourced” ForeverOne brand.

To drive her point home, she took several shots at gem mining. “It’s also astounding how little people know about the mining of gemstones in general and what that does to the environment,” she said at one point. At another, she said, moissanite is “untainted by human rights abuses, environmental degradation, or wartime conflicts.”

From what I hear, ForeverOne is an indeed an impressive product. But there are two problems with this message. First, the substantive: From the comments on the conference call, Miglucci is calling moissanite ethical only in comparison to natural diamonds. Yet, even if you grant that producing moissanite in a factory does less environmental harm than extracting a diamond from a ground—and, while this makes a certain intuitive sense, I haven’t seen any hard data on this—that doesn’t mean you can call moissanite an ethical product, any more than you can call a lower-fat doughnut health food. I have not seen any proof that moissanite should be considered more ethical than any other factory-produced product. (More on this here.)

But there is also business problem here: This strategy is inherently negative.

A while ago, an executive from Charles & Colvard said some retailers didn’t want to stock moissanite because “they are afraid that [moissanite] will cannibalize sales from their diamonds, and they have already made the investment in their diamonds.” It’s hard to see how talking about the problems in gem mining—which could actively hurt sales of natural diamonds—will decrease this resistance. 

This isn’t limited to moissanite; I have also heard similar reservations about the marketing from lab-grown diamond companies, which now regularly invoke “cartel-like pricing” and conflict-related issues. Last month, an official of the new lab-grown diamond association stressed to me the two categories of diamonds can coexist.  I believe that. Yet, when those companies criticize the rest of the trade, it seems like they are not trying to compliment the natural industry but damage it.  (And yes, the natural industry takes potshots at the lab-grown business, too.)

A while ago, I attended a meeting on fair trade diamonds. Some retailers objected to the idea of fair trade–branded gemstones; they thought it would make the rest of their inventory look bad. Given that you can find fair trade coffee in every grocery store in America, I didn’t agree. Yet the fact that this was an issue shows that many retailers—and the rest of the industry—are still quite sensitive about these topics. So if they are worried about a product badmouthing the rest of their inventory implicitly, how will they be expected to react to a company that does so explicitly?

Some even object to Forevermark calling itself “responsibly sourced.” Yet at least that brand is providing a positive message—see, for example, the pitch it’s testing with the Diamond Cellar in Ohio.

Granted, this is not an easy line to walk: If you believe it’s important to show proof of provenance, you may also want to say why that matters, which means bringing up some of these issues. And, yes, the diamond industry still has real problems—from both on-the-ground and public relations standpoints—which is why it finds itself vulnerable to these kinds of appeals. Part of me hopes these campaigns do spur more progress on those fronts.

Still, a negative message carries with it certain perils. In her conference call, Miglucci invoked “disruptive” businesses such as Uber and Airbnb. But those companies have attracted ceaseless hostility, and sometimes even legal challenges, from the industries they have unsettled. Being B2C brands, they can withstand that. But if moissanite and lab-grown diamonds want to sell their product wholesale, they will need to win over the rest of the industry.

When I write blogs that are even remotely critical of the lab-grown diamond industry, I sometimes get accused of being “scared.” But all this isn’t just my opinion; I have heard these comments from many in the industry, including from these products’ own customers. In any case, this isn’t about fear, it’s about how the two industries—natural and lab-grown (which includes moissanite)—work with each other going forward. It is clear that lab-grown gems are not going away. The question is: How does the traditional trade coexist with them? And how does the lab-grown sector learn to coexist with the rest of the industry?

JCK News Director