After eight years of dating, 29-year-old Peter Henshall decided it was the right time to pop the question to his partner Tasha. He wanted to be subtle about his proposal. But, as he grappled with picking a ring, he felt he needed to ask her one very important question: “Would you prefer a natural or lab-grown diamond?”
Like many other 20- and 30-somethings, Tasha wanted a lab-grown ring. Her main reasoning? Sustainability.
“She really did not want a natural diamond because of the child labor [concerns],” said Henshall. “She said ‘In an ideal world I’d want a lab-grown diamond that was made with renewable energy’.”
And when Henshall got down on one knee overlooking the sea in Ibiza, that is exactly what Tasha got. A lab-grown diamond made with solar power.
Tasha and Peter aren’t alone—there is a growing movement toward more sustainable jewelry.
Lab-grown diamonds are chemically identical to mined ones, often with fewer impurities, but in the past have been seen as lesser, synthetic substitutes and sold at a discount. While they continue to cost less, lab-grown stones are surging in popularity because they often avoid the human rights issues and many of the emissions of traditionally mined stones.
A decade ago, they were relatively unknown in the jewelry industry, but now make up a fifth of diamond sales by value, according to analysis from Paul Zimnisky, a diamond industry analyst. Made largely in China and India, lab-grown diamonds are produced using heat and pressure but without any mining. The lab-growing process, however, does require huge amounts of energy, so stones’ green credentials depend on where the power comes from.
Danish jeweler Pandora’s diamonds are made using renewable energy and set in recycled gold and silver rings. It said a cut and polished one carat diamond has a carbon footprint of roughly 9.2 kilograms, less than a tenth of the carbon emissions for a natural diamond—106.9kg CO2 based on research from the Natural Diamond Council.
It appears diamonds are no exception to younger consumers’ growing concerns about how products are made. Around 75% of Gen-Z consumers said that sustainability was more important to them than brand when making purchase decisions and 71% were willing to pay more for sustainable products. This is according to a study conducted by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania.
In 2019, Laura Lambert launched Fenton, an ethical jewelry brand based in London. Three years later the former retail executive started selling lab-grown diamonds produced in a solar-powered factory in Gujarat, India.
“It’s been amazing for us. We’ve had seven digit turnover in the first year. It could almost be a stand alone business at this point,” Lambert said.
She says her own market research indicates currently only about 5% of all lab-grown diamonds are made using renewable energy, but it has been something her customers have been asking for. “I just loved the symbolism that a diamond gets its beauty from interpolation of light and it’s grown using sunlight,” she added.
Other brands are also banking on the sustainability of lab-grown diamonds. Brilliant Earth, a U.S. based jeweler, sells lab-grown diamonds produced with renewable energy as well as ones where carbon capture is used to limit emissions in the production process. It has focused on advertising through TikTok and Instagram, aiming at younger consumers. “There’s a lot of Gen Z innovation,” Beth Gerstein, chief executive of Brilliant Earth said.
In addition to their sustainability credentials, lab-grown diamonds are getting cheaper. Five years ago they were only 20% lower than a mined diamond, now they are 80% less, according to David Kellie, chief executive of the Natural Diamond Council.
Prices for mined diamonds are also down. The International Diamond Exchange benchmark price for mined stones is currently near 2010 lows, around half of its March 2022 peak, according to FactSet.
Cheaper lab-grown alternatives is one cause of lower prices for mined diamonds, but there are others. Diamond miners ramped up output during the pandemic, as people purchased more jewelry in lockdown. That trend reversed as consumers emerged from quarantine, instead spending on holidays and cars.
Miners’ revenues have dropped sharply. De Beers, the world’s largest diamond miner, sells its rough diamonds in ten selling cycles during the year. The volume and quality can vary but is a good barometer of appetite for natural diamonds, as well as prices. In the last cycle of 2023, De Beers sold $130 million worth of diamonds compared with $417 million a year prior.
De Beers subsidiary Lightbox has sold lab-grown diamonds since 2018. Late last year it ended its trial of engagement rings after just three months but said it would continue to market its product as loose stones and fashion jewelry. It added that retailers would need to sell double the number of lab-grown carats every two years just to maintain flat gross profit.
Meanwhile, retail brands like Pandora and Swarovski—which previously had no interest in diamonds—are now using lab-grown ones in their pieces. Pandora lab-grown diamond revenues grew 83% during the fourth quarter to 100 million Danish krone ($14.6 million), bringing its 2023 total to 300 million krone.
In contrast, some luxury brands are steering clear, suggesting that mass produced items run against the idea of rarity on which they are built. LVMH said it leaves the decisions to individual fashion houses, while a person familiar with Cartier-owner Richemont said the brand is unsure of the sustainable credentials of lab-grown diamonds.
The newer source of diamonds has split the market in two, with different camps backing either mined or lab grown. Terms like “real” have become loaded, according to jewelers, with those looking to disparage lab-grown diamonds referring to them as “fake.”
But, for some, having a stone made with renewable energy is something to brag about.
“People really respect it,” said Kyle Grant who proposed to his now fiancé in October with a diamond ring made using solar power. He said his friends and family had been asking about its provenance and he has been proud to talk about its green credentials.
“Often people don’t know the environmental impact,” said Grant. “For me, the environmental impact is key and [I] could not get around the fact—if it’s pulled from earth, it needs megatons of CO2 to produce.”
Write to Yusuf Khan at email@example.com
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