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By definition, an aphorism is as overgeneralized observation that still contains a kernel of truth. “If you lie down with dogs, you’ll wake up with fleas,” is a good, albeit cynical one. “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime,” is another, but with more lofty pretentions.
Closer to home in the jewelry and diamond business are aphorisms that generalize about the characteristics of generational consumer groups, assuming that age alone is a predictor of buying inclination and behavior. A popular axiom is that when it comes to luxury purchases members of the Millennial and Generation Z generations demand that the products they buy have social as well as monetary value.
It was the Baby Boom Generation, born between 1946 and 1964, which elevated luxury product sales into the stratosphere. Although its members spent their formative years as barefoot free-love radicals, fueling the anti-establishment movement of the 1960s, upon reaching adulthood they seemingly transformed themselves into the most spendthrift and hedonistic consumer group history had ever produced.
But their children and grandchildren, as we popularly are led to believe, the Millennials and Gen Zs, are altogether different. Although growing up in at atmosphere of conspicuous consumerism, they are more grounded, socially aware and concerned about the impact that their lifestyles have on society and the environment.
According to De Beers 2021 Diamond Insight Report, in 2020, 86 percent of consumers across 17 countries worldwide were interested in learning how companies were trying to be more environmentally and socially responsible, up from 67 percent in 2010.
“Armed with stronger convictions and more knowledge, consumers are now willing to act,” the report continued. “In 2020, 69 percent of people across 16 countries told us that they have already or are considering going out of their way to reward companies that are socially responsible, against just 46 percent in 1999.”
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LITTLE EVIDENCE OF ‘DOLLAR VOTING’
By most accounts, Millennials and members of Generation Z are more inclined to be ethical consumers. And, for them, it’s more than just a question of product choice. It’s also got to do with shaping the ethos of the business sector. This is because true ethical consumers believe that, through what they purchase and what they do not, they are able the influence the business community to align with their values.
This, in the words of Business Insider Magazine, is “dollar voting.” When one buys products that are ethical, a company is led to understand that the ethical integrity of those products is what its customers care about. Conversely, if one avoids products or companies that do not conform with your values, those vendors will adjust their practices and their inventory, so as to encourage you to change your mind and select what they sell.
That’s the theory, but does ethical consumerism exist in the real word – empirically proven rather than being anecdotally present?
The truth is that, for that has been said and written on the subject, little reliable research has been done, particularly in the luxury product sector, and what evidence exists is far from conclusive.
One of the few academic studies was conducted by Meike Schulte, Sreejith Balasubramanian and Cody Morris Paris, and published in the Sustainability journal in 2021. Entitled “Blood Diamonds and Ethical Consumerism: An Empirical Investigation,” it sought to find evidence whether consumers were to pay more for ethically sourced luxury goods, and more specifically diamonds.
What they discovered was that while there was a correlation between ethical concerns about a country of origin and more of a readiness to buy diamonds from sources untainted by conflict, there was no evident correlation between ethical concerns and a willingness to pay more for such goods.
The researchers had hypothesized that the strength of the relationship between ethically-minded consumer behavior and ethical concerns regarding the country of origin of diamonds would be greater for high-income groups, followed by middle and lower-income groups. But the difference between income groups was not statistically significant, and in fact hinted that the strength of the relationship was higher for lower and middle-income groups.
POLICY MAKERS TAKE THE SAFER ROUTE
But while the jury may be out about the grass-roots effect of ethical consumerism, the belief or apprehension that it could be a potent force certainly has caught hold at the policy-making level. This definitely is the case in the diamond and jewelry sectors, where the leadership is acutely conscious that, as purveyors of non-essential luxury products, the industries they represent are potentially vulnerable to consumer backlashes.
The Kimberley Process Certification Scheme and the World Diamond Council’s System of Warranties, which both came into force in 2003, and the Responsible Jewellery Council’s Code of Practices, first adopted 2008, are all systems designed to assure consumers that ethical standards are being upheld in the diamond and jewelry industry. In the case of the KPCS, they ensconced in law, while the others are voluntarily applied.
Photo courtesy of Markus Spiske on Unsplash.com.
The development of these systems has been lengthy and costly, and their implementation has transformed the way in which the industry operates. Their acceptance has been largely predicated on the belief that ethical consumerism is a dominant force, despite the fact that there is little concrete evidence to support that contention.
The current crisis in the Ukraine, and the industry associations’ efforts to create daylight between themselves and Russian entities is in part driven by legal considerations, such as the sanction imposed by the U.S. and U.K. governments, but also out concern that consumers may avoid purchasing diamond jewelry so as not to inadvertently fund Russia’s invasion of its neighbor in the west.
The reasoning in the industry is self-evident. While there be scant evident of ethical consumerism when it comes to diamonds, it is not worth waiting for such evidence to be supplied before acting, because when that happens the damage may be irreversible.