Pandora, which makes more pieces of jewellery than any other company in the world, will no longer use mined diamonds, dropping another raw material tainted by ethical concerns.
The maker of affordable trinkets will now use diamonds manufactured in laboratories, after it last year said it will stop using newly mined gold and silver. While mined diamonds only went into about 50,000 Pandora pieces last year - out of a total of roughly 85 million items - the move reflects greater demand for sustainability.
Copenhagen-based Pandora said Tuesday it will release its first collection using lab-made stones in the UK, and turn to other markets in 2022.
"For millennials in particular, the awareness of what a lab-created diamond is, is significantly higher than with the older generation, so it's a matter of education as well," Pandora CEO Alexander Lacik said in a phone interview. "They are more concerned about sustainability aspects."
Despite decades of reform, the jewellery market continues to be dogged by reports of human rights abuses at mines and factories. To address such concerns, Tiffany & Co. last year started providing customers with details of newly sourced, individually registered diamonds that trace a stone's path all the way back to the mine. Retailers and makers of lab-grown diamonds have proliferated in recent years, offering sustainable stones that are also more affordable than the mined kind.
Global diamond sales fell 15% in 2020 due to lockdowns, travel restrictions and economic uncertainty, according to a research report by the Antwerp World Diamond Centre and Bain & Co. Production of rough diamonds fell 20% in 2020 and prices declined by 11%.
Diamond sales - and prices - have rebounded 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 biggest diamond company, younger people remain loyal to the mined stones and account for about two-thirds of global demand.
Pandora's lab-made diamonds are grown from carbon with more than 60% renewable energy on average, a ratio that's set to rise to 100% next year.
Growing bling segment
Pandora's pledge last year to stop relying on newly mined gold and silver in its jewellery means its entire production will use only recycled precious metals by 2025, part of a plan to make operations carbon neutral within four years.
The Bain report shows the market for lab-created stones is seeing double-digit growth, with younger customers in particular keen to identify sustainable producers. It also found that sustainability, transparency and social welfare "are priority issues" for consumers and investors.
It's not just customers who increasingly focus on sustainability. Nordea's asset management unit recently said it plans only to hold securities that live up to environmental, social and governance standards across all its portfolios.
Pandora also emphasized price as a consideration behind its decision. Lab-made stones cost about a third of mined ones and the switch will make diamond jewellery accessible to more consumers, it said. "We have done a lot of research across the globe to ensure sure that this proposition can actually land with our existing customer base," Lacik said. "They really love the fact that we make diamonds accessible to them."
The lab-made diamonds will have the same physical characteristics as mined stones, Pandora said. The new collection will include rings, bangles, necklaces and earrings, it said.
Pandora's focus on sustainable production methods has coincided with considerable growth in its market value. In the last year alone, the company's shareholders saw the value of their investment rise more than threefold. And this week, Pandora raised its profit guidance to reflect faster-than-expected sales growth.