Sustainability Trends of 2022: An open letter to business leaders in the jewellery industry.
If 2021 felt like a year of transition, 2022 is starting to feel like a year of new beginnings. Like many of us, the start of a year is ripe with symbolism and hope for me. A time when I like to offer deep gratitude – first and foremost, for the people around me – loved ones, colleagues and collaborators, and the countless others whose lives, directly or indirectly, intertwine with mine. Also, gratitude for being amongst those who have the immense privilege and the responsibility to effect change, and to leave this world better than we found it.
It seems self-evident to me that we can, and we must, do more good. We must accelerate the pace of change and renew our faith in the goals we have collectively set for ourselves. We all know that there is so much at stake – for us all, for this planet we call home!
Our paths towards these goals aren’t always easy. On days when the challenges seem somewhat insurmountable, I remind myself of this quote by the late Archbishop Desmond Tutu: “Do your little bit of good where you are; it’s those little bits of good put together that overwhelm the world.” I have to frequently remind myself that change takes time and it needs collective action.
I am extremely proud of the work that our teams here at the RJC and our over 1550 member companies in 71 countries have undertaken in the past year. I thank so many inspiring organizations, like BJOP, CIBJO, Diamonds Do Good, GIT, IAC, JVC, NDC, WJA, for their passion and commitment to lead the way forward to protect consumer confidence. I find it remarkable how they have pushed the envelope while working together to change the countless lives that our industry touches. How they have embraced groundbreaking innovation, accountability, transparency, inclusion and empowerment to unite towards that central goal – Dignity for All by 2030. As an industry of trust and emotions, I strongly believe we have an even bigger responsibility to accelerate positive impact towards the 17 Sustainable Development Goals. It is this belief that has led to the release of the ‘Roadmap to 2030 and Beyond’, which supplies corporations with a robust framework to embed the priority SDGs into their business strategies. A special warm hearted thank you to Feriel Zerouki –Senior Vice President Corporate Affairs, De Beers and Matthew Kilgarriff – Director Corporate Social Responsibility, Richemont, for leading this work.
I look towards 2022 with great hope and aspiration, and as I reflect on the work we do here at RJC, I am excited to share with you six key themes which I have been reading about and contemplating. I consider these pivotal in this particular moment in our sustainability journey. I do not claim that these are mutually exclusive, nor are they collectively exhaustive! However, they have sparked my curiosity and piqued my interest. I find them very relevant in the pursuit of our shared commitments and I hope they do something similar for you.
I. GROWTH ANDSUSTAINABILITY ANDINCLUSION: HOW TO BUILD A HARMONIOUS FUTURE?
One of the key challenges that changemakers across business, government and society have been grappling with is how to conceptualize and deliver a future where these three goals – growth, sustainability, and inclusion – do not act as counteracting forces but as self-reinforcing and accumulative engines for change. The pandemic, if anything, has shown us in stark and clear ways that these three elements are deeply connected and cannot be viewed as trade-offs.
As this McKinsey and Company report articulates what these three terms can (and should) encompass:
- In growth, we include the ambition of increased prosperity and well-being, including economic-profit growth for companies, GDP growth for nations—as well as measures such as life satisfaction for citizens—derived in part from dignity of work (while recognizing that measurable definitions of well-being are still evolving).
- In inclusion, we consider equality of opportunity and broad-based progress of outcomes for all—especially sufficiency of living standards—and the narrowing of inequalities among genders, ages, ethnicities, family backgrounds, and places of residence.
- In sustainability, we aim for environmental resilience, which starts with reducing climate risk but also includes much broader preservation of natural capital as well as intergenerational fairness, all considered in terms of economic and societal costs and benefits. Read the Summary of COP26 outcomes here.
The goals are ambitious, and often daunting, the investments required for sustainability and inclusion often high, and with growth comes the challenge of persistent rise in inequality. However, there is good news lurking once we decide to meet these challenges head-on. Our frameworks to achieve each of these goals need to be created in a way that makes these forces buttress and reinforce one another and are not act as trade-offs.
Viewing these three elements as harmonious and not counteracting requires a change in mindset, policy and executive action but the returns for us all are huge and they will accrue over time.
II. FUTURE PROOFING YOUR ORGANISATION: PEOPLE AND PURPOSE FIRST: HOW LEADERS CAN CEMENT A SAFE CULTURE OF TRUST AND INCLUSION
As this Harvard Business Review article states – we need to figure Out What Tomorrow’s Stars Want from You. Even without the pandemic, tomorrow’s managers would have been looking for a workplace value proposition very different from what enticed workers ten or even five years ago. By 2030, Millennials will make up 75% of the workforce, according to the U.S. Bureau of Labor Statistics. This generation wants it all: flexible schedules, diversity in the workplace, engagement, autonomy, and a meaningful connection with their employers. Covid-19 has taught us the importance of relationships and meaningful connection, we have all rediscovered the importance of conscious leaders, purposeful jobs, supportive and kind colleagues, and flexible employers.
For an idea of what Jewellery companies will need to do to attract and retain talent in the future, take a look at ServiceNow, a $3.5 billion enterprise software and services company based in Santa Clara, California. Unlike many of its Silicon Valley rivals, ServiceNow does not rely on workplace trappings such as fancy offices and a gourmet cafeteria offering free lunches and bottomless lattes. Instead, the company focuses on the factors that are most critical to retaining and inspiring employees: a culture of inclusion, a workplace that makes getting things done fast and easy, and top-notch rewards for people who “stay hungry and humble.”
The traditional management concepts that the org chart visualizes—coordination, hierarchy, a matrixed organization will not work anymore. We shouldn’t expect these old models to be fit for purpose in today’s environment. They are mechanistic by design, built to solve for uniformity, bureaucracy, and control—goals that undercut what companies now prioritize: creativity, speed, and accountability. This article by McKinsey highlights nine keys to becoming a future-ready company.
The answer isn’t to modify the old models but to replace them with something radically better. Now more than ever, it is incumbent on business leaders at all levels to create and nurture a culture by design, rather than a culture by default. Organizational culture has long been known to be one of the most powerful sources of competitive advantage. Precisely because a culture created by design is unique to an organization, it is hard for competitors to replicate. Also, culture attracts talent, and influences employee perception and engagement and drives high performance. And business leaders have a very significant influence in shaping and evolving company culture. The war for talent is on and talent will win the war. In our industry that is a people centered industry we will need to step up.
With the privilege of the unique vantage point that we have at the RJC, I am very lucky to witness leaders from so many of our member companies who display meaningful purpose-driven leadership and are able to reinforce values, norms and behaviours that in turn become a company’s culture. And it comes as no surprise that this kind of conscious leadership is also what puts companies ahead of the curve on the ESG roadmap, with an important focus on the S- SOCIAL. In that S, mental well-being will need to be at the forefront of your HR strategy. Not so long ago, mental health was a topic discussed behind closed doors (if it was discussed at all).
Today, at long last, mental health discussions are part of the new normal. Celebrities—from Stromae to Lady Gaga openly discuss their struggles with anxiety and depression and urge others to reach out for help. As organizations we will have to shape strong policies to create safe spaces for our people to thrive. I invite you to read the article from Garen Staglin ‘Its ok not to be ok : addressing workplace mental health’ in Forbes. The single biggest influencer to the success of a company’s mental health programme is the level of engagement from the CEO and other top executives. Without that top leadership commitment, programs lose momentum, stigma persists and company cultures remain indifferent to the mental health struggles of their people. The time is now for leaders to step up and promote the health and wellness of their entire teams -a challenge that will persist long after we feel safe enough to put away our masks.
III. GENDER EQUALITY NEEDS TO BE CENTRALISED IN ORDER TO PROGRESS TOWARDS THE OTHER GOALS – HUMAN RIGHTS NEEDS TO BE ON TOP OF OUR SUSTAINABILITY AGENDA
We have ample evidence now to know that all collective goals we have set for ourselves, be it climate action or sustainable growth, need to have a gender focus.
However, the global gender gap is not expected to close for another 136 years. The COVID-19 pandemic has increased this time from 100 years, according to the World Economic Forum’s Global Gender Gap report.
UN Women’s latest report, together with UN DESA, Progress on the Sustainable Development Goals: The Gender Snapshot 2021 presents the latest data on gender equality across all 17 Sustainable Development Goals. The report highlights the progress made since 2015 but also the continued alarm over the COVID-19 pandemic, its immediate effect on women’s well-being and the threat it poses to future generations. It shows women and girls remain disproportionately affected by the socioeconomic fallout from the COVID-19 pandemic, struggling with disproportionately high job and livelihood losses, education disruptions and increased burdens of unpaid care work and a daunting increase of domestic violence.
Without a bold commitment from our industry to accelerate progress, the global community across all industries will fail to achieve gender equality. Building forward differently and better will require all of us placing women and girls at the centre of all aspects of response and recovery, including through gender-responsive policies that empower women throughout the value chain from mining to retail. From our industry perspective ASM needs our urgent attention. The ASM sector can have many positive impacts: rural employment opportunities, income for women who work as miners or in the surrounding mining communities, as well as mining being an economic activity that supports millions of families. So yes, I strongly believe the time is now to ring alarm bells and to accelerate action on the ground because the progress made to date on gender equality is in danger of not being reached.
Let’s not forget that Women rights are human rights. As Secretary General of the United Nations Antonio Guterres calls for a global reset, “to recover better, guided by human rights”. “Human rights are our bloodline; they connect us to one another, as equals. Human rights are our lifeline; they are the pathway to resolving tensions and forging lasting peace. Human rights are on the frontline; they are the building blocks of a world of dignity and opportunity for all – and they are under fire every day.” How can we as an industry continue to accelerate action to protect human rights across the value chain? Human rights due diligence needs to be a top priority on each business agenda. It is not an easy accomplishment but one that we all need to tackle collectively and passionately because it is our common responsibility to protect people’s lives across the value chain. Watch the space this year as RJC will launch updated tools on human rights due diligence and organise different working sessions to support our members to integrate human rights due diligence at the heart of their business strategy.
IV. INNOVATION AS A DRIVER OF SUSTAINABILITY
As companies plan their exit strategies from the pandemic, it has become amply clear that those who are farther on the digital roadmap are seeing significant benefits. Not surprisingly, the pandemic has accelerated the adoption of digital technologies by companies and consumers alike, by at least a few years.
A significant chunk of the recovery we have observed in the jewellery industry is a result of robust and timely e-commerce strategies. Companies that are leading the pack are seeing greater benefits. In our industry, we know that nearly 21% of 2021’s holiday sales were conducted online, an almost 15% growth from pre-pandemic 2019.
“Technology endowment”, a term referenced in this McKinsey & Company report, is linked to better business outcomes. Digital disruption is happening faster and with more urgency, and companies are looking to technology as a way to strategically differentiate themselves from competitors. And it is not just limited to e-commerce or work from home strategies, it encompasses everything from a move towards a more tech-savvy leadership to viewing tech as an enabler in the ESG roadmap.
If the present state of our planet is partially an outcome of our species’ astounding technological progress, then it is also true that transformational technologies and innovation will be fundamental to reducing our impact on the planet. As this recent report by the European Environment Agency (EEA) states: “Innovation is both a primary source of systemic environmental and sustainability challenges and an essential element in society’s response to such challenges.”
I believe that we are witnessing this already in the rapidly accelerating pace of innovation driving low and no-carbon processes. Transitioning to net zero by 2050 will need us to keep an eye on and actively get behind these innovative solutions, while acknowledging that the pathway remains uncertain and not all of these technologies will work, yet the ones that will are bound to have an exponential impact.
This succinct article from the firm IAM advisory talks about how investments in the ESG innovation field are racing ahead, which can only be a good sign.
In the jewellery industry, we know how technology disruption in areas such as blockchain and AI has now become crucial to fostering ethical sourcing practices, sustainable supply chains and transparency. Examples of this abound: the Aura Blockchain Consortium, a collaboration between LVMH, Richemont and the Prada Group, the technology company Everledger, and Tracr being just a few notable ones.
V. TRACKING WHAT MATTERS: MEASUREMENT AS A COMPETITIVE ADVANTAGE TO STRANGTHEN CONSUMER CONFIDENCE
“You can’t manage what you can’t measure”, this famous saying by Peter Drucker has withstood the test of time and only become more relevant in today’s data-powered world where business decisions increasingly rely on Big Data and its myriad applications. Advanced measurement techniques not only allow companies to track and measure impact but also to create a culture of transparency and accountability. And with the lofty goal of measuring our impact on the planet, we need robust and sophisticated frameworks to be able to quantify our ESG impact.
This Harvard Business Review article provides a glimpse into some of the challenges that current ESG measurement frameworks encounter and how to remedy them for greater and clearer insight.
At the RJC, a new framework has been developed to support the implementation of the 2030 Agenda, and to assess progress towards achieving long-term impact. The metrics will provide a holistic view of the members’ commitment to, and management of key ESG risks, and the resulting compliance and performance improvements. These new metrics will enable us to assess progress, promote behaviour change, report performance more comprehensively, and demonstrate meaningful and measurable progress to stakeholders. For more information on member performance methodology and metrics, here is a resource on the RJC website.
The feasibility of the metrics was tested through a pilot project involving 30 RJC members from across the value chain. The members who participated in this research include companies such as Alrosa, Boucheron, Cartier, Chopard, De Beers, Hermes, IWC, Louis Vuitton, and Rio Grande, just to name a few.
The insights derived from the metric data will help inform strategy, drive innovation and deliver continuous improvement.
Our strategic focus for 2022 will be on member training and education. We want to help our members understand the SDG targets most material to their own business model. We endeavour to increase the recognition of the RJC certification as a credible ESG risk management mechanism, and this will only be achieved through effective SDG implementation.
VI. PARTNERSHIPS ARE CRITICAL TO BATTLE THE LOOMING CLIMATE CRISIS
Climate change is the biggest threat to humanity, the impacts of which will affect us all, and indeed the effects are already being recorded around the world. It is clear that we must take action now to prevent catastrophic consequences. COP 26 was a pivotal moment in the fight to keep global warming below 1.5 C, with a record number of delegates gathering to agree on the Glasgow Climate Pact. COP 26 and the resulting Climate Pact has increased ambition to keep the target of 1.5 C but this will only be achieved with collaboration between nations, as well as the combined efforts of individuals and organisations. This is a fight we cannot win alone and will require an unprecedented level of coordination, collaboration and collective effort across nations, corporations and communities.
Net zero carbon was once again a key theme at COP 26, with 153 countries putting forth new emissions targets. Now, over 90% of world’s GDP and 90% of global emissions are covered by net-zero commitments, helping to keep the goals of the Paris Agreement in sight. The time is now to begin the journey to net zero, and we acknowledge that it can be difficult to know where to start, particularly for smaller enterprises. BSR has launched a free training course for SME suppliers, providing the tools and resources necessary to begin taking climate action. This superb educational and reporting tool is available here.
In order to accelerate the sustainability momentum post-pandemic, we need to raise our expectations and aspirations and manage our businesses through the lenses of protecting our people, planet and communities. And as the world resets slowly, we need to double down on and renew our faith in the partnership approach, with the acknowledgement that since our goals are shared, our paths towards those goals must be shared too.
I see this happening around me at an incredible pace. This, itself, is cause for ample hope!
And finally, let me take the opportunity to wish you a happy, healthy and prosperous 2022. May we embrace the new, honour the old, and let the tailwinds of change lead us towards our common goals!
Photo © Gabriel Jimenez on Unsplash.