We all know the famous song – ethically sourced diamonds are a girl’s best friend.
Well, maybe not the “ethical” part. But, ethical sourcing in diamonds has become important enough to young shoppers that Tiffany’s is enacting a multi-step plan to provide more transparency into their sourcing, according to The New York Times.
Consumers who buy a diamond ring from the luxury jeweler can now identify which country their new diamond was mined from thanks to the new program, which is aimed at buyers who expect evidence-based assurance they aren’t inadvertently funding child labor, finance wars, or terrorist organizations with their diamond purchase. The program will eventually expand to include information on where the diamond was cut, polished and set.
The increased transparency is thought to be targeted specifically toward younger consumers who haven’t latched on to the costly, substantial diamond rings with the same enthusiasm of their parents. In 2017, discouraging sales spurred the company’s CEO at the time to resign, and, now under new leadership, Tiffany & Company is taking steps to provide more transparency – for a customer base who often demands it, CEO Alessandro Bogliolo told the Times.
Ethical Sourcing and Sustainability: A Millennial Value
The demand for ethical sourcing and sustainability practices isn’t isolated to the jewelry industry. A commitment to sustainability has been linked to growth, with consumer goods sales up more than 4% globally in brands demonstrating a commitment to sustainability, compared to sub-1% growth in brands that did not display this same commitment, according to the 2015 Nielsen Global Corporate Sustainability Report. And while the majority of consumers say they will pay more for sustainable goods (66% of global respondents in the same survey), this commitment is even stronger among Millennials, with 73% saying they will pay more for sustainable products.
Millennials are a unique group for brands, not only because they are quickly growing into the largest spending demographic, but also because unlike previous generations, Millennials as a group tend to be less loyal to specific brands unless a brand aligns with their value system, according to Janice Neitzel, CEO & Principal of Sustainable Solutions Group. When that value system is met, Neitzel says, Millennials often become “fiercely loyal.” Specifically, Millennials tend to focus on reduced carbon footprints, reduced packaging and eliminating waste.
Ethical sourcing and sustainability aren’t only Millennials values – in some cases, these practices can even change the way they view a brand. 76% of millennials dubbed restaurants pursuing ethical practices “trendy,” and 60% of consumers younger than 35 linked organic food and better taste, according to the Culinary Visions Panel’s Ethics on the Go study. Millennials place this same value on ethics when they consider where they want to work, with nearly half of millennials (49%) reporting they preferred to work for a sustainable company in a 2014 Nielsen survey.
As a key buying demographic, millennials have helped drive a substantial sustainability market. In the UK, this is an £81.3bn market, according to the Financial Times, reporting growth of £40bn since 2008. Consumer pressure to increase ethical sourcing and sustainability is only expected to increase. Ben Gleisner, a startup founder and former New Zealand treasury economist, says Generation Z (coming up behind the millennials) is even more focused on environmental and social sustainability.
Increasing Ethical Sourcing
In an attempt to attract more millennials to their business and bolster that business for the future, a growing number of companies are striving to increase their ethical sourcing in a wide variety of sectors.
Sometimes, this means a complete overhaul, as in the case of Perdue Farms, a U.S.-based poultry company. The company partnered with the Humane Society to revamp its farming approach, slashing the use of antibiotics, offering more natural light, and updating the slaughtering process. While it did increase the company’s costs, Perdue Farms chairman Jim Perdue told NPR he believes increased sales will offset the production costs. In the food sector, this can also mean a focus on organic and vegetarian options, like U.S. turkey producer Butterball launching an organic range or UK chain Pret A Manger establishing three all-vegetarian locations. Cosmetic giant L’Oréal revealed its first line of vegan hair color products in a similar nod to sustainability.
The coffee business is a case study of how these practices can impact the supply chain from end to end. At The Attendant, a cafe located in east London, the coffee begins with green coffee traders who the Attendant intentionally develops partnerships with, allowing the café to select beans from specific farms. From there, The Attendant uses technology that tracks the coffee beans from farm to cup. In exchange for this transparency, the café charges about 18% more than the average cup of coffee in the UK. Coffee giants like Nestle and JAB have begun buying artisan competitors, noting the growth these ethically oriented companies can cultivate.
Cosmetics company LUSH established an Ethical Buying team to travel across the globe, meeting suppliers, growers, and products, and tracing the ingredients that make up LUSH products. The overall goal is to guarantee the environment and workers are well cared for throughout the supply chain.
As Millennials continue to vote for sustainable practices through their purchases, business will need to continue to prioritize ethical practices along the supply chain. This practice will benefit workers, consumers, and businesses alike. Learn more about the specific steps to sustainability sourcing to support building corporate social responsibility in the supply chain.
