Lab-grown diamonds have gained increasing popularity in recent years, providing a competitive alternative to natural diamonds due to their environmental and cost advantages. As of 2023, the global lab-grown diamond market reached $5 billion, with about 10 billion yuan in the Chinese market. The rapid growth of lab-grown diamonds has brought competition to the traditional diamond market, and their sustainable development is crucial for the industry.
To ensure their sustainable future, the lab-grown diamond industry must focus on and adhere to two main standards: SCS 007 and ESG certification.
SCS 007 Standard
The SCS 007 standard is the first comprehensive sustainability standard for the diamond industry. Introduced by the Responsible Jewellery Council in 2020, the SCS 007 standard aims to meet the growing consumer demand for ethical and environmental responsibility. It covers the entire diamond supply chain, from mining to retail, ensuring traceability, ethical management, climate neutrality, and sustainable production.
The five pillars of the SCS 007 standard include:
- Traceability: Ensuring each diamond's source can be verified to guarantee transparency and accuracy of origin information.
- 12 Principles of ESG: Including fair labor practices, environmental protection, and social welfare.
- Climate Neutrality: Requiring companies to achieve climate neutrality through emission reduction and compensation measures.
- Sustainable Production Practices: Reducing the negative impact on the environment and human health during production.
- Community Investment: Encouraging investment in community development and environmental protection projects to create greater social benefits, particularly for vulnerable groups and endangered ecosystems.
The importance of the SCS 007 standard lies in its role in meeting consumer demand for ethical and environmentally responsible products, promoting industry leadership, supporting fair trade and social responsibility, and contributing to the United Nations Sustainable Development Goals (SDGs). It also helps enhance brand image and consumer trust, encouraging technological innovation and industry advancement.
ESG Standards
ESG (Environmental, Social, Governance) standards are used to evaluate an organization's performance in terms of sustainability and social responsibility. The Environmental component assesses a company's impact on the natural environment, including efforts to reduce carbon emissions, adopt renewable energy, and manage resources sustainably. The Social component considers the company's relationship with employees, customers, suppliers, and the community, including labor conditions, diversity, and community engagement. The Governance component evaluates management structures, transparency, and ethical practices.
The importance of ESG standards lies in:
- Environmental Protection: Promoting resource sustainability, reducing carbon footprints, and protecting ecosystems.
- Social Responsibility: Enhancing employee well-being, promoting community development, and ensuring supply chain fairness.
- Good Governance: Strengthening investor and public trust by ensuring transparency and effective risk management.
- Brand Value: Improving brand image and market competitiveness, attracting consumer support and investor interest.
- Investment Decisions: Many investors incorporate ESG factors into their decision-making, believing that good ESG performance reduces risk and yields long-term returns.
To achieve ESG goals, the lab-grown diamond industry should adopt sustainable practices such as using clean energy, optimizing production processes, promoting circular economies, and ensuring responsible sourcing. Social responsibility efforts should include fair trade, supporting community development, and enhancing industry transparency and sustainable certifications.
Commitment to Sustainability
The lab-grown diamond industry must prioritize ESG and SCS 007 standards, focus on transparent supply chains, and achieve sustainable certifications. Strengthening industry collaboration, sharing best practices, and building transparent supply chains can further promote the sustainable development of the entire jewelry industry. By adhering to these standards, the industry can reduce its environmental impact, promote social well-being, and gain consumer trust while contributing to global sustainability goals.