For the diamond industry, transparency is a two-way street. Information flows upstream, providing information to the next link in the supply chain about the origin and characteristics of the diamond or gemstone. Eventually, the customer at the head of the chain can make their purchase based on increased knowledge and a more thorough understanding of the value of the piece. Modern customers want to be comfortable in the knowledge that everyone throughout the value chain was treated fairly, from the miners in Africa to the manufacturing workers in India, and they are now willing to pay a premium for this.
Previously there where limited ways to verify the providence of diamonds, leaving consumers only able to trust or hope that their expensive investment was an ethical one. But now emerging technologies such as blockchain can contribute greater clarity and confidence in marketplaces such as this where increased transparency is essential. Customers are more uncomfortable than ever about the lack of transparency within the diamond industry, particularly younger millennial and female audiences, and the industry needs to step up to fulfil these increased expectations. But just acting sustainably is not enough to reap the rewards of it from a commercial perspective. The onus is now on producers and retailers to prove to consumers beyond a shadow of a doubt that they are doing it. With information out in the open, we believe the value of the diamond industry will be shared by all stakeholders throughout the supply chain.
How a symphony of technologies can drive provenance
A full symphony of technologies can help those in the diamond industry to drive sustainability. By combining blockchain technology with artificial intelligence, the Internet of Things and nanotechnology, you can create a digital twin of every diamond, enabling traceability in a secure, unalterable and private platform.
Though combining a collection of different technologies is critical, transparency can only be achieved if this technology is implemented in close partnership with the industry. Of course, while blockchain alone will not guarantee transparency, it is a fundamental building block in creating a proactive response to growing consumer expectations. By providing an immutable ledger for securing verifiable data, owners can transfer their assets with full security. The advantages of this transparency are clear. Brands find it easier to stay compliant, to drive efficiencies and to create unique value propositions in an increasingly competitive market.
How the industry can come together to help
The industry as whole is now making moves to that show their appreciation of the value of transparency in the diamond industry. Key stakeholders all across the supply chain including retailers, brands, manufacturers, top mining companies, and gemmological institutes are now providing examples about how positive change can be implemented by working together to foster transparency across the entire supply chain.
For example, several large retailers have implemented such technology to show the whole journey of their diamonds, from mine to purchase. Customers can now access an immutable, permanent blockchain record of their diamond’s GIA grading information, assuring them of the legitimacy of the diamonds grading. This industry breakthrough adds a new dimension to their customers’ experience of owning a diamond and may allow retailers at the end of the chain to help drive their own sales and profitability.
Fourth industrial revolution technologies are also being implemented to aid environmental concerns, for example, offsetting carbon emissions. The United Nations estimates that annual carbon dioxide emissions need to be reduced by 29-32 gigatonnes by 2030 to meet the goals of the Paris agreement. Companies and individuals can mitigate or neutralise their carbon emissions by buying and selling carbon credits, offsetting their emissions with contributions to official third-party projects, such as planting C02 reducing trees, protecting forests or investing in renewable energy.
The future of the diamond world
Blockchain solutions can help form a bridge towards a better future for the industry. But the diamond value chain should see the journey towards transparency and sustainability as a collective project, requiring a firm buy-in from all parties. Miners, traders, and manufacturers with irresponsible practices should be given clear guidance about how they should improve. This includes clarity in terms of reporting formats and clear milestones on the improvements that are expected of them. The power of immutable ledgers for securing verifiable data, and the transparency this provides will almost certainly be a key part of enabling this transition.