Caution: These ESG Claims May Be Less Accurate Than They Appear

By Hayley Jeannel de Thiersant, Environmental, Social and Governance (ESG) Lead

While recently conducting market research for a client, I came across a customer-facing website. The relatively young jewelry brand appeared to have its sustainability practices and priorities in order — advocating for greater transparency in the diamond industry, a fully traceable supply chain, and using materials with less ecological impact— everything sounded wonderful.

Whether in the diamond, gemstone and jewelry industry, or as a consumer, these are all ethical objectives most of us want to align with, however, upon closer inspection of the website, I discovered sections of the brand’s sustainability claims bracketed with the text [insert data here]/[insert source here].

As the Lead Consultant for ESG projects at Hill & Co., my sensitivity for green washing immediately went into overdrive. Upon examining the site’s claims, it became obvious they lacked hard data and broad generalizations were used to justify the superior nature of their product.

Essentially, they were working backwards, knowing what they want to be able to say, making the claim, and then trying to find a way to substantiate it. I want to give them the benefit of the doubt and assume that they’re well-intentioned; at least they know they NEED to prove what they say, the critical error is in making the claim before that proof can be substantiated.

And they are not alone in this:

In 2020 the European Commission conducted a survey which assessed 150 environmental claims and discovered that 53% of the assertions made by businesses contained “vague, misleading, or unfounded” information. And in November 2020, another survey found that 40% of eco-claims made by E.U. businesses were likely misleading. (Rob Bates, “European Union Vows to Crack Down on Greenwashing”).

The figures above are not industry-specific, but this doesn’t mean we shouldn’t be listening.

A quick google search for “sustainable jewelry” brings millions of results, all with varying levels of accuracy. It’s still not unusual to see very loosely founded, or occasionally completely unfounded, claims made by diamond, gemstone, and jewelry companies online.
This poses a risk, as clients often trust companies’ claims at face value. Even though consumers research products more thoroughly these days, it shouldn’t be their responsibility to verify a statement’s accuracy, intent, or falsehood.

Whether intentional or not, unsupported claims create confusion for customers. Providing evidence for statements builds trust and clarity. This approach fosters long-term loyalty and benefits which surpass any short-term advantages gained from using buzzwords to attract environmentally aware consumers without backing up the claims.

By prioritizing evidence-based claims and regularly reviewing their processes, businesses can better align with ESG standards and improve their credibility in the industry.

Both consumers and B2B clients seek increased transparency in environmental and social responsibility claims . While this issue is not exclusive to the gem and jewelry industry, it’s still common.

Significant progress has been made to educate diamond, gemstone, and jewelry businesses on the proper use of statements. Having government involvement to set clearer guidelines further promotes a level playing field and supports more responsible disclosure of environmental and sustainable actions.

I applaud the European Commission for proposing stricter regulations that, if passed, would mandate evidence-based ESG claims, and eagerly await the European Parliament’s decision.

Meanwhile, in the USA, the Jewelers Vigilance Committee, led by Tiffany Stevens, addresses the jewelry industry’s specific needs while advocating for consumer protection as the Federal Trade Commission (FTC) revises the Green Guides.

As refined, more concise guidelines go into effect requiring evidence of sustainability statements, companies within the jewelry industry will have to substantiate their claims, which will enhance their reputation, and position themselves as industry leaders in sustainable practices. As these policies evolve, Hill & Co. is here to help companies at every level of the jewelry supply chain navigate their sustainability journey.

We know this topic resonates with suppliers and retailers in our industry. After the publication of an earlier article I wrote for our Hill & Co. newsletter, How to Communicate Your Sustainability Efforts without Greenwashing, the International Colored Gemstone Association (ICA) invited our Founder and CEO, Elle Hill, to speak on the topic at their 2023 Congress in Dubai. One eye-opening statistic Elle shared was how 1/3 of consumers are choosing to buy from brands they believe are doing social or environmental good.

You read that correctly, 1/3 of people, especially younger millennials and Gen Z, want to see solid evidence that a company is moving towards sustainability and ESG with their products or business practices. Consumers are consciously seeking out and prioritizing companies to purchase from who openly share their sustainability and ESG efforts.

It isn’t just the people and planet that will benefit from initiating ESG into your competitive strategy, your business will, too.
When you watch Elle’s presentation here, you will learn more about why making a commitment and taking actions to embrace sustainability and ESG in your diamond, gemstone, or jewelry business is rapidly becoming an important driver of business. She also shares what achievable steps to take that your customers, suppliers, and your own team will understand, as well as when and how to measure your movement towards your goals.

At Hill & Co., we continuously strive to stay at the forefront of this rapidly changing landscape. Our expert team has extensive knowledge and experience in ESG practices and analysis of the diamond, gemstone and jewelry industry. This enables us to effectively help our clients communicate their progress toward their chosen sustainable development goals with honesty and authenticity.

We objectively examine your business and provide a roadmap for achieving your goals. As we adapt to the dynamic shifts within the industry, we guide you toward success, ensuring everything is in sharp focus. Because your customers deserve honesty, and you deserve to have confidence in the accuracy of your communications.

If you feel your sustainability communications lack substance or are too “optimistic”, or you simply want to keep up with the fast-paced changes happening within the industry, please direct your email to us at inquiry@hillandco.co and let’s take a look together.