Friday, May 15, 2015

A More Ethical Engagement Ring

I am engaged! When I proposed to my wonderful girlfriend (now fiancée), Jessica Hawkinson, I had so many things I wanted to say, I almost forgot to get down on one knee to ask “will you marry me?” I didn’t forget; she graciously said yes; we kissed; we cried; we kissed again, and then she put on the ring – a diamond engagement ring.

If you believe the commercials, women like diamonds; lots of big diamonds. When discussing what type of ring she might want, my fiancée had a different request: she wanted the ring to be as ETHICAL as possible in the sourcing of the materials and the use of labor. Engagement rings are usually composed of primarily diamonds and gold[1] so when thinking about sourcing materials ethically, we are thinking primarily about ethically sourcing diamonds and gold.

For both of us, the meaning behind the ring is the most important thing, and having a ring that means people are exploited or slaughtered to mine precious resources, the environment is freely damaged, or extractive institutions remain in power is not appealing.  

However, going more ethical is much trickier than just going bigger. What makes one purchase decision more ethical than another? For me, the goal was to make a purchase decision that measurably improves lives, the environment, or the world more than walking into a mall store and buying a diamond ring would.

Alternatives

We could choose not to buy a ring, but 1) She wanted a ring 2) I wanted to buy a ring and 3) Choosing a different item doesn’t necessarily resolve ethical issues.

How about a ring with an alternative stone? Alternative stones that don’t have the “bloody” reputation of diamonds are an option, though they share a lot of the same problems as diamonds because they are mined valuables mined in countries with weak, extractive institutions. Some jewelers are able to work with individual suppliers of alternative stones to ensure that those stones are mined under the highest ethical standards. But, you better be really confident in your jeweler because a lot of this is on scout’s honor.

Another potential concern is that alternative stones are softer than diamonds. A diamond is a 10 on the Mohs scale of mineral hardness. Sapphires and rubies are a 9. Emeralds are about a 7.5. So, sapphires and rubies will do better than emeralds standing up to use and abuse, but how could I give my perfect 10 anything less than a perfect 10?

Vintage Rings

Guilt-inducing slogans non-withstanding, I have nothing against buying nice pieces of jewelry in the future, but at this time for better or for worse, diamonds rings still say “engagement” best. One alternative option to the mall store is to go with vintage jewelry or a family heirloom. Bluntly, this is the “used” option.

Maybe great-grandma had a perfectly nice ring which might give the engagement ring extra meaning. Or, buy a vintage ring. Vintage jewelry has the appeal of being eco-friendly (no reprocessing of the raw materials to form a new ring) and that is reflected in the price – vintage is usually cheaper than new. 

For my fiancée and me, we did not have workable family heirlooms or see vintage jewelry that we particularly liked. Hey, the search doesn’t stop when you find the first ethical option; style matters, too!

The Market for Gold

Well, if reusing a ring is not a great option, what about one that uses recycled gold? Gold can be recycled from out-of-style jewelry, broken smartphones, or other electronics. In fact, recycled gold is a source that has already been tapped: approximately a third of the gold on the market is recycled. Buying a 100 percent recycled gold ring seems better than buying one that is not 100 percent recycled, but there is a problem: gold is a fungible commodity[2].

It doesn’t matter where gold comes from. Whether it is used in electronics, rings, or as money, whether it comes from South Africa, Alaska, or recycled electronics, gold is gold is gold. All that matters for the gold market is the total supply and total demand of gold. If I switch to demanding a ring’s worth of recycled gold from a ring’s worth of mined gold, total gold demand (i.e. demand for mined gold plus demand for recycled gold) isn’t reduced. Thus, the incentives facing gold suppliers to supply gold (recycled, mined, or otherwise) stay the same, so their behavior doesn’t change, either.
Buying recycled gold makes you feel better and gives a great story for your ring, but it doesn’t actually change the gold market. It’s hard to see how paying for that great story is more ethical if the criteria for a purchase decision being more ethical is for the purchase to make a measurable difference.

Given this, I felt that reducing my demand for gold by choosing a lower carat band option on the ring was a more ethical way to go (lower carat options use more of other metals where mining may have less impact). This is a delicate trade-off. Quality is important, too![3]

More Ethical Diamonds

Luckily, things in the diamond market aren’t so dire. The jewelry industry has been somewhat on top of things. In conjunction with governments and other organizations, the industry abides by the Kimberley Process, a certification program to “ensure that diamond purchases were not financing violence by rebel movements and their trade allies seeking to undermine legitimate governments.” Companies really do want to try to give customers what they want, and what they do not want is to be funding civil wars.

Because Kimberley Process members account for 99.8% of the global production of raw diamonds, one can imagine the standards are not quite as tight as some consumers would like. For instance, can I really believe Russian-mined diamonds are not funding uprisings in Ukraine?

How about just getting a diamond from a nice, quiet, peaceful country with high standards and strict labor laws like Canada? When you buy a random diamond, there is a chance that it could be Canadian. But, if you want a guarantee that a diamond is Canadian, you have to be willing to pay more. You are certainly paying for peace of mind, but there are downsides. The extra money could be spent to make the world a better place in other ways, the mining still causes environmental impacts that may not be priced into the diamond, and Canadian diamonds may be mined by companies that mine elsewhere.

Lab-Created Diamonds

Diamonds are forever, but that doesn’t mean they have to be forever mined.  A great alternative to mined diamonds that has recently come onto the market are lab-created diamonds.

Lab-created diamonds are actual carbon diamonds; not CZ or glass. Some are made in the USA and polished in Canada, so there are no questions about the labor standards. In addition, they are often cheaper than mined diamonds, freeing up money to do more good in the world (or buy a pint or thirty of ice cream).

What’s really appealing about man-made diamonds is that they are a new product competing directly with mined diamonds. Lab-created diamonds allow you to buy a diamond without buying a mined diamond, and they allow you to support new competition in an industry that historically needs it. Never underestimate the power of competition. That’s a direct force that causes change in the industry now. The more people who demand lab-created diamonds instead of mined diamonds, the more lab-created diamonds will be provided, the more companies are incentivized to innovate, and the less profitable mined diamonds will be.

Given these considerations, I purchased a ring that had a lab-created diamond, lower gold content, and employed people fairly throughout the supply chain. I am happy to say that I proposed with a more ethical diamond engagement ring.   




[1] There are other metals, too, since a pure gold band would be too soft for normal wear. White gold, in particular, is mixed with light colored metals like nickel or palladium and is sometimes plated in another metal like rhodium.
[2] When economists think of fungible goods, gold is often #2, right after cash. However, Dogbert might prefer oil as an example: http://dilbert.com/strip/2006-02-19.
[3] Researching this topic has made me aware of the importance of increasing the supply of gold to the market. While I can’t impact the gold market directly now with my ring purchase decision, I can make sure the supply of recycled gold is as high as possible by recycling electronics I have rather than throwing them out. And who knows? Maybe in the future mining asteroids will solve the problem of mining on earth.

2 comments:

  1. Your story is wonderful and it was delightful reading how you proposed your girlfriend. I agree to you that the meaning behind the ring is the most important thing, and having a ring that means people are exploited or slaughtered to mine precious resources, the environment is freely damaged, or extractive institutions remain in power is not appealing but i have a different opinion about buying lab created. I would rather go with GIA certified real diamonds

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  2. I am very happy to know that jewelers are finally aware of all the ethical concerns intrinsic to the trade. Nobody wants to think about children in mines; but it is a fact. If it is a choice between man-made diamonds, vintage jewelry, and recycled gold and presumably, gems as well, I like vintage. But the other options are plausible.

    Ricky Rowe @ Find A Jewelry Expert

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