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Preserving The (Retail) Environment
The chairman and CEO of Tiffany & Co. explains why sustainability is good for the jewelry business.


There is today an enormous and growing concern among consumers, especially luxury consumers, about the impact their consumption decisions have upon the environment, about sustainable practices more broadly, and perhaps most importantly, simply about respecting the planet.

Tiffany & Co. believes wholeheartedly in this movement. And to the extent a public company can be, we are committed to being a part of it. No, we’re not about to tell our customers that we have painted the blue box green, but issues of sustainability are central to our planning for a growing, more profitable future. For us, exercising leadership on those issues of environmental and social responsibility that are particularly relevant for the jewelry industry is both the right thing and the smart thing to do.

Our first step toward sustainability took place in 1995, when Tiffany began a long—at times contentious—relationship with the mining industry by opposing the development of the New World Gold Mine outside of Yellowstone National Park. Although attracting little or no customer attention, we asked the government to stop development and expressed our concern to the mine developer that a gold mine that placed this iconic national park at risk was a reputational disaster in waiting for the entire jewelry industry. We made clear our opposition was driven by a strategic, reputational risk assessment and that from a public relations perspective, of all the places to put a mine in the continental U.S., you couldn’t do much worse in the event of a mining disaster. It was an argument that resonated powerfully with our stakeholders.

However instructive that experience was, nothing could have prepared us—or the jewelry industry—for the horrors of conflict diamonds. But to the industry’s immense credit, there was quick mobilization for action. Working together with NGOs, governments, and civil society, a program to eliminate conflict diamonds from the supply chain was developed. We became strong and vocal advocates of the Kimberley Process. The result of our collective efforts has been a control system that has worked quite well, although still not perfectly, and requires of course continuing diligence.

The success of the Kimberley Process notwithstanding, we also decided to take direct control of as much of our supply chain as we could. And so in 2003, we created Laurelton Diamonds, a wholly owned subsidiary that procures rough diamonds directly from mine sources and manages the worldwide supply chain that cuts, polishes, and supplies finished stones to our Tiffany workshops. Our objective is to identify the mine source of all Tiffany diamonds (we are about halfway there), to satisfy ourselves that those mines are operated responsibly, and to process rough diamonds in our own facilities or those of our carefully vetted manufacturing partners.

Today we operate diamond cutting and polishing facilities around the world, including operations in South Africa, Botswana, and Namibia. Beyond sound business logic, these efforts also reflect our support of producing countries’ desire to participate in the downstream profits created by the diamond industry. Diamond mining and the processing of rough has been, and should be to an even greater degree, an engine for national development and represents an important way to think about sustainability. Any mine operation is, if narrowly defined, inherently unsustainable. However, if mines and associated economic activities are used—as they have been by enlightened governments like that of Botswana—to build economic and social infrastructure, then diamond mining can continue to benefit host communities long after the last diamonds have been removed.

BEYOND DIAMONDS

Our failure to anticipate the conflict diamond crisis also led us in 2001 to initiate a systematic program to monitor emerging environmental and social issues surrounding all precious metal and gemstone mining. We quickly focused on gold mining, and were surprised to learn that broadly accepted standards for responsible mining—broad in the sense of being embraced by the mining industry and communities, social and environmental NGOs, and governments—did not exist. We couldn’t wait and selected one of the most responsibly operated mines in the U.S. as our primary gold and silver supplier. We also closed the remaining gap in our supply chain, making a substantial investment in a metals fabricating facility. By 2003 we had the most comprehensive and secure precious metals supply chain of any jeweler of scale.

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Michael Kowalski
Michael Kowalski
brooch in platinum, black lacquer, diamonds, and spessartite garnets
Tiffany & Co. Emperor Penguin brooch in platinum, black lacquer, diamonds, and spessartite garnets.
Photo by Carlton Davis.


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