>SHOP

keep my inbox inspiring

Sign up to our monthly newsletter for exclusive news and trends

Follow us on all channels

Start following us for more content, inspiration, news, trends and more

© 2020 - Copyright Fondation de la Haute Horlogerie Tous droits réservés

Is “clean” tomorrow’s gold standard?
Economy

Is “clean” tomorrow’s gold standard?

Monday, 26 October 2020
close
Editor Image
Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

Read More

CLOSE
5 min read

Reports confirm that younger generations are the most sensitive to sustainable development, which includes issues surrounding gold mining. What impact does this have in the field? The recent Basel Gold Day workshop, led by Mark Pieth, put the question on the table, starting with the role of the consumer.

Clean gold, dirty gold: the distinction, which regrettably isn’t purely rhetorical, is impossible to ascertain from finished products. The crux of the matter lies in the field, in an industry that is as much a blessing as it is a curse. “It’s no secret that in many cases the origin of gold poses considerable problems,” declared Mark Pieth, a professor of criminal law at the University of Basel and author of Gold Laundering (published in 2019), in his introduction to Basel Gold Day. “Human rights are frequently violated in the mining industry. While industry standards exist, there can be no certainty as to whether and how they are implemented. Refineries and entities further downstream are often unable to trace the origin of gold, particularly when sourced from multiple small-scale mines. Industrial mining has its problems, too. These range from corruption when awarding licences to conflict with local communities, damage to the environment and land grabbing.”

Listen to millennials

Mounting pressure from consumers who are increasingly concerned with corporate social and environmental responsibility suggests that the power to influence luxury giants, and move the needle towards a responsible gold industry, lies with the end customer. Consumer expectations was one of the topics under discussion earlier this month at the Basel Gold Day workshop (which took place online for reasons that need no explaining). “More and more customers want clean gold,” says Mark Pieth. “They don’t want to run the risk that their wedding band is made from gold that was mined by children. After so many years of discussion, how can we finally secure a ‘clean’ supply chain and how can we manage the insufficient supply of responsibly mined gold?”

57% of consumers buy or boycott a brand based on its position on a social or political issue.

Recent studies of consumer behaviour confirm Mark Pieth’s view. According to a report by Jefferies Financial Group, three-quarters of millennials surveyed said they were prepared to change their buying habits because of environmental concerns, compared with 34% of baby boomers. Knowing that millennials, alongside Gen Z, will drive 80% of the luxury industry’s growth in the coming years, brands should be pricking up their ears. Similarly, 57% of respondents in the 2017 Edelman Earned Brand study declared they were buying or boycotting a brand based on its position on a social or political issue. Environmental concerns surrounding gold mining therefore cannot be overlooked: a gold watch represents 150 metric tons of toxic waste, much of which ends up polluting the environment, while each metric ton of gold extracted produces 30,000 metric tons of carbon dioxide emissions, the same as 12,000 return flights between Paris and New York, according to data gathered by Ethiwork.

Consumer convictions

So much for the reports; what is the sentiment among professionals in the industry? Andreas Schuler, who deals with precious metals at Basler Kantonalbank, says his customers are increasingly concerned with the traceability of gold. “We’re talking about pension funds that were admittedly slow to respond to matters relating to clean gold but, once convinced, have made considerable progress for the products we propose. In Switzerland, the Max Havelaar Foundation [which has supplied fairtrade gold since 2014] paved much of the way.” Guya Merkle is the founder of sustainable jewellery brand Vieri Fine Jewellery and of the Earthbeat Foundation, as well as the initiator of World Gold Day. She comments that “when we set up the foundation in 2012, the industry didn’t take us seriously. When in 2015 we launched a range of ethical gold jewellery, we were the first to do so. Since then, consumers have become significantly more aware.”

We need to increase pressure through initiatives such as the responsible business referendum in Switzerland.
Andreas Missbach

“Adopting responsible practices is no longer optional,” insists Iris Van der Veken, executive director for the Responsible Jewellery Council. “In an industry such as luxury that sells dreams and emotion, remaining on the sidelines of sustainable policies would be too great a risk. Transparency breeds trust, in particular among millennials, which is why companies must promote these practices.” Nonetheless, the fact the workshop in Basel even exists is proof that many issues remain unresolved. Andreas Missbach is head of commodities at Public Eye, a non-governmental organisation, based in Switzerland. He advocates a “realistic” approach: “Fairtrade remains a niche market for consumers who have strong convictions but are still very much the minority. On the other side of the fence are the central banks, for example, who don’t ask this type of question. Hence the need to increase pressure.” Pressure meaning initiatives such as the Responsible Business Initiative that will be put to the vote in Switzerland at end November. If accepted, it would oblige companies headquartered in Switzerland to respect human rights and environmental standards, and would hold them accountable for breaches by their overseas subsidiaries. The result of the referendum should be an indication of how much power the consumer really has.

Related Content
Gold Essentials
Gold Essentials* is one of the training programmes developed by FHH Sustainability, whose courses are designed to support the watch and jewellery industry in a continuous improvement process, based on the belief that knowledge is the key to competency.

*1st session of Gold Essentials in French: 3, 8, 10 December 2020 on Zoom. English session in 2021.
Registrations: https://www.eventbrite.fr/e/billets-gold-essentials-formation-zoom-124100226117?aff=ebdssbeac
Information: isabelle.hildebrand@hautehorlogerie.org

Back to Top