1

Jennifer MalkinWiam Hasanain

Apr 25th, 20071

Clear Conscience JewelryClear Conscience Jewelry

Bill GallagherLori Bonn Gallagher

2

Overview1. Lori Bonn

2. Charge/Scope

3. Methodology

4. Jewelry Market

5. Consumer

6. CSR & The Jewelry Industry

7. Industry Recommendations

8. Lori Bonn Recommendations

3

Lori Bonn Design, Inc.

• Founded in 1991

• Northern California based designer, manufacturer and distributor of jewelry.

• Distribution: specialty retailers, department stores and catalogs.

• Growth goal: tripling revenue in next 5 years

• Clear Conscience Jewelry 2004

4

ScopeExplore social, environmental & ethical issues facing the entire jewelry

industry from mine to retail and efforts currently underway to address them.

Evaluatecurrent efforts and recommend a process for Lori Bonn and the

industry toenhance social responsibility.

5

Methodology

Lori BonnDesigns

Primary: - Company visit - Interviews with

principals and staff

Secondary: - Review of

company literature

Consumer Demand

Primary: - Designed online

survey

Secondary: - Reviewed LOHAS

and Jewelry consumer study

Jewelry Industry and CSR Issues

Primary: Interviews with 25+ stakeholders- 1 Mining company- 3 Stone dealers- 3 Manufacturers- 3 Jewelry design companies- 4 Retailers- 1 Industry Association- 2 Fair Trade Certifiers

Secondary: - Industry websites - Analyst reports,- Current standards- Research publications

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Executive SummaryIssues

• Growth in consumer demand, NGO pressure

• Mining concerns drive the agenda (and research), but entire value chain is of concern

• Retailers feeling pressure, but value chain is murky.

• Fractured efforts by segment, size

• Social responsibility vs. Fair Trade

• Scarcity of responsible sources.

Industry Recommendations

• Lay the Groundwork

• Address Gaps

• Deep collaboration

• Transformation

Lori Bonn Recommendations

• Compliance and Involvement

• Extend Reach

• Company Transformation

• Beacon for Others

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Jewelry Anatomy

Diamond

Colored Gem

Metal

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Journey Behind the Jewelry

• Environment

• Indigenous Issues

Mine

• Forced Labor

• Child Labor

• Environment

• Health & Safety

• Wages

• Resettlement, Dependency

Sort Distribute,

& Trade

• Working conditions

• Child labor

• Wages

• Lack Accountability

• No common definitions

Leach With

Cyanide

Cut& Polish

Manufacture Retail

• Smuggling

• Pricing

• Stone Mixing

• Working conditions

• Child labor

• Wages

Met

als

• Environment • Energy

Consumption

• Air Pollution

Explore

Smelt& Refine

9

Consumer

10

Consumer

There is a growing demand for Socially Responsible Jewelry.

Fair Trade Products

0%

10%

20%

30%

40%

50%

60%

70%

80%

Y N Y N Y N Y N

Consumer Types

167M Consumers

77%

50M Consumers

23%

LOHAS Regular

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Broad Overview of CSR & Jewelry industry

• Growth in consumer demand, NGO pressure

• Mining concerns drive the agenda (and research), but entire value chain is of concern

• Retailers feeling pressure, but value chain is murky.

• Fractured efforts by segment, size

• Social responsibility vs. Fair Trade

• Scarcity of responsible sources.

12

Efforts Underway - Standards

Standards

Mining - Industry Standard Initiatives: Extractives- Industries Transparency Initiative (EITI)- Initiative for Responsible Mining

Assurance (IRMA)- International codes of note: Framework

for Responsible Mining

Diamonds - Kimberly Process Certification Scheme. - Council for Responsible Jewelry

Practices (CRJP)

Gold - No Dirty Gold, CRJP (gold)

Fair Trade Efforts

Artisanal Mining Development oriented:- PartnershipAfrica Canada- Diamond Development Initiative (DDI)- ARM (metals)– relationships with

producers and others…

Gold- Zero Standard

Colored Gems- Columbia Gem House Fair Trade

Protocol

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Industry Recommendations

Lay Groundwork

0-1 year

Deep Collaboration

3-5 years

Transformation

5-10 years

•Research supply chain gaps•Retailer analysis and education •Quantify and stimulate demand •Build up credibility•Shore up supply

•Maximize industry participation•Increase accountability •Reframe discussion•Communicate and coordinate efforts•Share sources and create a network

•Relationships between companies and communities •Industry standards for all segments

•Standards Fair Trade•Monitoring system

Address Gaps

1-3 years

14

Lori Bonn Recommendations

Compliance

& Involvement

0-1 year

Company Transformation

3-5 years

Beacon for Others

5-10 years

• Implement code of practices• Support (not lead) development of

network • Philanthropy

• Determine CSR Strategy• Develop code of practices• Comply with Kimberly Agreement • Source from responsible companies • Increase involvement through formal

partnerships

• Develop fair trade jewelry line • Communicate story to consumer

• Fair Trade Jewelry Company• Recognized leader

Extend Reach

1-3 years

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Next Steps

Compliance Involvement

Review existing standards

Establish code of practices

Interview gem suppliers

Assess No Dirty Gold signing

Explore responsible sourcing options

Establish baseline and track

back

Review implementation guidelines for Kimberly Process

Attend June meeting in Las Vegas

Attend Fall meeting in DC

Rapaport Fair Trade Diamond and Jewelry Association

Ethical Metals

Converse with industry leaders

CRJP

Dene Design

Lucina Designs

Ethical Metals

Columbia Gem House

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Thanks!

Value to us:• First hand how information can impact

decision of consumer• Difficult for one player to make a difference• Appreciation of complexity of Jewelry

market and knowing all the pieces and players.

Value to firm:• Raised profile through interviewing process• Deliverable to field on behalf of Clear

Conscience• Sustainable sourcing and partnership

options

17

Clear Conscience Jewelry

Jennifer MalkinWiam Hasanain

Apr 25th, 200717

Bill GallagherLori Bonn Gallagher