The Federal Trade Commission recently sent warnings to eight lab-grown and simulated diamond companies. They describe restrictions that change the conversation about lab-grown diamonds. Such diamonds must be described with the words “lab-grown” as a complete term. This asks the question what exactly an eco-friendly diamond or sustainable diamond is.

Eco-Friendly Diamond | Sustainable Diamond | K. Rosengart

A Widening Difference

There's an obvious difference between real diamonds and a lab-grown diamonds. The first occur naturally in the world and take a billion or more years to form deep in the earth's crust and return to the surface. The latter are grown in a lab in a matter of weeks. Retailers and customers alike have valued the two very differently, with diamonds that are mined from the earth retaining a much higher value than those created in a lab.

Despite being physically and chemically extremely similar, experts can still easily tell the difference, and the two types of diamonds essentially remain valued and considered in two very different ways. The strongest argument for lab-grown diamonds seems to be that they cause less impact to the environment. Is this true? The most straightforward answer is that we don't have enough information yet.

Environmental Footprints

Many lab-grown diamond companies position their factory-made products as eco-friendly and sustainable. But verbiage like "environmentally friendly" exists in a grey area, and such statements are rarely fact-checked. That seems to be the sticking point with lab-grown diamonds at the moment. Do labs really create environmentally friendly diamonds? We don't know.

In a March 2019 editorial article, Rob Bates seeks to answer the question of whether lab-grown diamonds affect the environment less than mined stones. He thoroughly investigates the issue from the perspectives of energy usage and environmental damage, but ultimately concludes that there simply is no easy answer. As he so eloquently puts it, "For now, saying a diamond is lab-grown is like saying it has a Kimberley Process certificate. It tells you some info, but not all. Even if lab-growns are more eco-friendly than mined, that’s an arguably inappropriate label to put on an item produced with large amounts of nonrenewable energy. If a cookie contains 30 percent less sugar, that doesn’t make it a health food."

What we do know is that consumers, industry suppliers, and retailers need to be better educated. There is a place for new and innovative products in the diamond industry, but when selling to consumers, one needs to be open minded, fair, and clear about the facts. (Tip: Our FREE Diamond Education Guide for Consumers can help.)

Diamond Education Guide for Consumers | FREE PDF Download | K. Rosengart

Transparency and Responsibility

Couple this with mining companies catching up on more eco-friendly diamond mining practices, and the comparison of environmental footprints gets much closer. In recent years, mining companies have both cut overall water usage and found ways to use recycled water as a higher percentage of their total use. They've also started working with local governments to ensure better environmental responsibility and to invest in local communities.

It's sometimes overlooked that mining creates jobs and drives local economies. Across all of history, this clearly hasn't offset the environmental and colonial impact of mining companies. In terms of more recent history, there's been significant investment in becoming more responsible.

From Kimberley to Blockchain

First off, the Kimberley Process did a great deal to make diamond mining more transparent. The sourcing of a diamond is easy to determine for retailers and customers alike. It's not a perfect process, but it was a significant step forward.

Blockchain tracking takes advantage of digital technology to take a step that goes beyond this, and in the future will be ensuring tremendous accuracy and redundancy in the process that makes diamond sourcing transparency even more accurate. You'll be able to know what mine the diamond came from, when it was mined, and be able to track its journey back step by step through every owner and exchange.

Mining vs. Lab-Grown

Secondly, improvements in environmental responsibility have been well documented. Mines have been reporting elements like water and resource usage, as well as environmental impact in a transparent way.

It's important to consider this in reflecting what lab-grown companies are doing. The FTC specifically forbade the lab-grown industry from using terms such as “eco-friendly,” “sustainable,” or “eco-conscious.”

Part of the reason for this is that using terms like “sustainable” in advertising require the company using it to have a reasonable basis for making that claim. Lab-grown diamond companies have not yet proven they have this reasonable basis. This means they are not necessarily making sustainable diamonds as they claim.

The lab-grown industry does use up resources in creating diamonds. Do they create more or less of a footprint than diamond mining? They sometimes claim less, but they have yet to evidence it. It doesn't help their argument that they're being forbidden by the FTC from using terms that are based on this claim. If they're not supposed to be using these terms, that indicates they may not have a reasonable basis for using them. That they haven't offered full disclosure isn't a great look.

Jobs and Community Investment

Take the next step beyond this. If all else is equal, which side of the industry is creating jobs around the planet? Which side of the industry is building roads and helping communities access clean water? Which side of the industry has made a significant effort to improve transparency and accountability? Which side of the industry reports its resource use? Which side of the industry is working to offer retailers and consumers even more tools to make disclosure transparent?

At this point, the natural diamond mining industry is doing all these things. The lab-grown industry isn't, despite having ample opportunity. They offer an alternative at a lesser price, and there's certainly a place for that in diamond sales. Yet they claim a certain level of impact that they have chosen not to disclose in a transparent manner or evidence in a fully accountable way. That's a problem, and it means that claims of an eco-friendly diamond go too far. As the FTC suggests, such claims don't necessarily have a reasonable basis.

The Danger to Retailers

Retailers need to be careful about making such claims, too. Transparency helps build value, and buzzwords that aren't backed by evidence risk making customers wary of an industry they've only recently come back to and begun trusting again.

Lab-grown diamonds have their role, but they shouldn't claim (or make retailers risk customer trust by claiming) that their diamonds are sustainable or eco-friendly. They simply haven't shown that, and the FTC's warnings that lab-grown diamond companies shouldn't use these descriptions throw into question whether they're really true.

2020 Jewelry Industry Trends Report | Free Download | K, Rosengart