As sustainability becomes a global priority, the Chinese jewelry industry is embracing Environmental, Social, and Governance (ESG) practices to meet evolving consumer expectations. With leading companies paving the way, ESG management is poised to redefine the future of the jewelry sector in China.
The Rise of ESG in Jewelry: A Global Perspective
Founded in 2005, the Responsible Jewellery Council (RJC) set the foundation for ethical and sustainable practices in the jewelry supply chain. De Beers’ 2021 Diamond Insight Report highlighted that the jewelry industry ranks third in consumer sensitivity to ESG, following food and apparel. Among 8,400 global consumers surveyed:
- 60% prefer natural diamond brands that align with ESG principles.
- 85% are willing to pay a premium of up to 15% for sustainable products.
In China, younger, educated, and affluent consumers are increasingly prioritizing ESG factors in their purchasing decisions. Reports show that 36% of women and 39% of Gen Z buyers evaluate a brand’s ethical credentials when purchasing diamond jewelry.
ESG Practices Among Leading Chinese Companies
A-Share Market Leaders
- China National Gold Group: As a pioneer in ESG, the company balances long supply chains with sustainable practices, including gold recycling and refining, to reduce high energy consumption.
- Yuyuan Shares: Implements ESG performance evaluations linked to employee compensation. The company pledges to achieve carbon neutrality for all subsidiaries by 2050.
Hong Kong-Listed Companies
- Hong Kong Stock Exchange’s early ESG disclosure requirements have fostered advanced practices among jewelers like Chow Tai Fook, Chow Sang Sang, and Luk Fook. These firms provide comprehensive ESG reports detailing environmental measures, energy consumption data, and governance initiatives.
Green Governance: A Push for Sustainability
In December 2022, the China Gold Association, Shanghai Gold Exchange, and World Gold Council released the 2022 China Gold Industry Social Contribution Report, emphasizing green initiatives across the supply chain. Key highlights include:
- Gold production companies reducing industrial wastewater and air emissions.
- Jewelry retailers like Shanghai Lao Feng Xiang investing ¥1.6 million in eco-friendly production processes.
- Companies such as China National Gold adopting advanced waste recycling and emissions monitoring technologies.
Women’s Role in Sustainable Jewelry
The rise of women as key consumers has reshaped the jewelry market, with 97% of women in China acting as primary household purchasers. Leading brands are integrating gender diversity into their ESG strategies:
- De Beers aims for gender parity by 2030, having increased female executives from 22% to 40%.
- Yuyuan Shares supports female employees with dedicated amenities, health screenings, and additional insurance benefits.
- Chow Tai Fook boasts 79% female employees, emphasizing diversity in senior leadership roles.
Challenges and Opportunities Ahead
While ESG practices are gaining traction, China’s jewelry sector faces obstacles, including immature standards and a lack of mandatory disclosures for A-share companies. However, as global trends emphasize sustainability, ESG will remain a critical driver for long-term success.
To achieve true “timelessness,” China’s jewelry industry must continue to enhance ESG practices, merging sustainable values with traditional craftsmanship to meet the demands of future generations.