But when it comes to environmental, social and governance — what politically correct executives and activists call ESG — it is hard to think of another industry with a dirtier name than the diamond trade.
Ever since Leonardo DiCaprio starred in the 2006 movie “Blood Diamond,” the industry has struggled with an image of human and environmental degradation mixed with warlordism and financial corruption.
The Hollywood actor subsequently became an activist against the trade in real diamonds — and a financial backer of the synthetic variety that promised the same amount of bling, but with far less blood.
That campaign obviously struck a chord with a new generation of jewelry buyers, as the Dubai Diamond Conference heard in no uncertain terms yesterday. Prices of polished gems are at their lowest since 2010; sales of finished diamonds have fallen for five consecutive years; diamond traders are going bankrupt; financial institutions are pulling their backing for the industry at an accelerating rate.
So that looks like a victory for the good guys then? Well, not if you happen to live in one of the big African producing countries where large parts of the economy are dependent on diamonds; not if you are involved in the diamond business in Canada, Russia or Australia; and certainly not if you are a diamond trader in Mumbai, Antwerp or Dubai, the three biggest diamond trading centers in the world.
Dubai has come from nothing 15 years ago to be the number three hub of diamond trading, with the value of the business put at $26 billion last year. It has brought the UAE international kudos, as last year when the country was chairman of the Kimberley Process, the self-regulatory system for diamond trading.
And it has helped the Dubai Multi-Commodities Center (DMCC) to be named the world’s best free zone for three consecutive years in an authoritative global survey. The high rise Almas Tower, the DMCC hub for gems trading, is the leading “vertical” diamond district in the world.
It is not just the campaign by some activists against diamonds that has affected the global business, however. The rise of synthetic gems has had an effect, especially when they are so perfect that they can be passed off as the real thing (as they increasingly are).
But perhaps most significant is that demand among young people has apparently fallen off a cliff. Millennials, the conference heard, are buying diamonds in significantly falling numbers. The romantic mystique of a young couple breathlessly window-shopping for that perfect gem as an expression of their undying love is simply not there in the age of online shopping.
The industry is grappling with an image problem and needs to listen to the grievances of communities and employees if it hopes to overcome the forces ranging against it and emerge stronger.
How do you turn around the image of an industry so apparently sullied? You call for Sir Mark Moody Stuart, for a start.
Moody Stuart is as close as you can get to corporate aristocracy. A former chairman of Royal Dutch Shell and Anglo-American, as well as HSBC and Accenture, he is currently a director of the Saudi Arabian Oil Company and — vitally for the diamond trade — chairman of the Foundation for the Global Compact, a 17-year -old initiative of the UN to encourage businesses worldwide to adopt sustainable and socially responsible policies. Some 10,000 companies worldwide are members of the compact.
Yesterday, the DMCC signed up too, and made clear that its efforts were focused on improving the image of the diamond industry. Moody Stuart was under no illusions as to the challenge ahead. “Blood Diamond” had been a “dagger to the heart” of the gems trade, he said. Artisanal mining was an “awful” occupation, even when not under the control of mercenaries or drug barons.
But there were things that could be done, he believed, and he has the gravitas to make some of those things happen quickly. The diamond industry has to admit it has a problem, and has to listen to the grievances of communities and employees, even when they are represented by civil society organizations that are intrinsically and philosophically against the diamond business.
The diamond industry must aim to hit the goals of the UN’s sustainability program, which would involve adherence to principles of transparency, responsibility and accountability in vital areas of work and business practice. Above all, the diamond industry must seek to build strong governance practices that can be applied across the industry.
The diamond business has made a good start in the Kimberley Process, Moody Stuart said, but it must go further to strengthen its own governance systems. It will be a big challenge to change the image and the practices of the diamond trade, but the momentum is on the side of sustainability.
• Frank Kane is an award-winning business journalist based in Dubai. He can be reached on Twitter @frankkanedubai