Responsible Sourcing – Not Just An Expression But A Way Of Working

If there's one phrase that was bounced at me scores of times last month, it was "responsible sourcing". In fact, I can't even estimate the number of times it was mentioned in speeches and panel discussions.

From Mumbai last week where I attended the World Diamond Congress, to the annual congress of CIBJO before that and the World Emerald Symposium which preceded it in Bogota, Colombia, the phrase seemed to be built into many speeches.

As World Federation of Diamond Bourses (WFDB) President Ernie Blom said, responsible sourcing has become an industry standard which diamond companies across its membership would do well to adopt as soon as possible.

Similar comments were made by CIBJO President Gaetano Cavalieri, while it seems to me that at least 50 percent of the very many speakers at the World Emerald Symposium also mentioned it.

As one or two more cynical people – who shall go unnamed – pointed out, it's the kind of expression that you can't go wrong by mentioning. Who could possibly oppose it? Of course it's the right thing to do.

Cynicism aside, however, it's nevertheless absolutely the correct way of operating morally, ethically and ultimately – as a large number of speakers pointed out – financially, as well.

Consumers – particularly Millennials and younger – are increasingly demanding proof that the goods they are buying are doing good for the people producing them, and they certainly better not be causing harm. Whether it's the environmental impact or the way in which raw materials are extracted and the price being paid for them, buyers want to be assured that their purchases are ultimately made from goods that are enabling people to live a decent life.

As Tyler Gillard, Head of the OECD's Responsible Mineral Supply Chain Project, says, companies are not expected to prove they have become 100 percent compliant overnight. It's a process that will take some time, depending on the size and scale of a company's operations. The main point is that firms begin the process and can show that they are taking it seriously with achievable targets that are being met. Firms must show that they are acting in good faith, Gillard says.

You don't have to be a cynic, of course, to understand that it will inevitably be easier for some companies than others to create and implement a policy of responsible sourcing . Since around 75 percent of companies in the diamond industry are small or medium sized firms, and often family owned, appointing someone to be in charge of responsible sourcing work – as Mr Gillard suggested is done – is clearly unlikely to happen.

Large companies with extensive operations will, of course, find it easier to not just appoint an employee, but perhaps a whole unit, to take care of their responsible sourcing operations. And that is how it should be since they are sourcing not just diamonds, but a whole range of raw materials.

As I have heard repeatedly, the larger firms have a responsibility due to their size to show they are operating correctly and to lead the way. However, they should not therefore feel that they can impose such overarching systems on smaller enterprises which simply don't have the resources to create and manage them.

As mentioned, the diamond trade is overwhelmingly composed of smaller firms. They are going to need assistance in creating a responsible sourcing policy that can be realistically implemented – and Gillard says such help is available. Firms may feel that there is already too much regulation, but in a rapidly changing world where lawmakers and consumers are watching them with an eagle eye, keeping ahead of the curve will keep them on the right side of the ethical divide and prove to parliamentarians that there is no need for legislation to enforce something they should already be doing anyway.