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In-Depth
Moving to the Next Level
Sustainability is the Buzzword
By Marc Goldstein
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| Iris Van der Veken
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A four-person panel and the networking discussion at the second session of the Antwerp Diamond Academy, held January 30 in Antwerp, focused on sustainability. The conference was organized by the Antwerp Chamber of Commerce, Global Compact Network Belgium and the Antwerp World Diamond Centre (AWDC). “This seminar does not exclusively focus on the diamond sector, although diamond companies are welcome to learn how sustainability also can lead to saving money and better allocating resources,” Karla Basselier, AWDC’s head of public affairs, explained. Basselier further described the day’s discussions as “a new approach to sustainability. We don’t want to highlight corporate social responsibility (CSR) from a purely philanthropic point of view. This seminar wants to move the business to a higher level, where the focus is on sustainable business models contributing to society and, more importantly, adding value to the business.” The Antwerp Diamond Academy was conceived in 2012 as a broad-based educational program in which members of the diamond industry would meet with representatives of other industries to exchange practical tools and information to enhance their competitive strengths and increase their professionalism. Iris Van der Veken, manager of Corporate Affairs Global for Rosy Blue and chair of Global Compact Network Belgium, introduced the session. She also elaborated on her views on sustainability and how they relate to diamantaires in a wide-ranging interview with Rapaport Magazine.
Rapaport Magazine: How do you define sustainability?
Iris Van der Veken: I like to refer to the revised definition of the European Commission (EC): “the responsibility of enterprises for their impact on society.” Respect for the law is, of course, a prerequisite. Personally, I like to add that sustainability is a process that is value driven by the top of the company. If the top of a company is not interested and does not have a long-term vision, you can forget it. To put it bluntly, the key question is: How would you manage your company if no rules or regulations existed in the world?
RM: What is the Global Compact and why was it established?
IV: The Global Compact goes back to a January 1999 speech by former United Nations (UN) Secretary-General Kofi Annan before the World Economic Forum in Davos. In his speech, Annan urged chief executive officers (CEOs) around the world to “initiate a global compact of shared values and principles, which will give a human face to the global market.” This call was made against the backdrop of numerous corporate scandals in the 1990s and an increasingly heated debate between critics and supporters of globalization. At the same time, it became clear that the great challenges of our time — such as human rights and labor rights protection, widespread poverty, armed conflicts and climate change — could only be addressed with the involvement of the business sector. So the Global Compact was created as a platform for gearing entrepreneurial action toward universal values and for developing solutions to global problems through constant dialog with other social forces. Today, the Global Compact counts 10,000 signatories, of which more than 7,000 are businesses operating in more than 145 countries under current UN Secretary-General Ban Ki-moon.
RM: You chair the Global Compact Network Belgium. How did Rosy Blue get involved in this initiative?
IV: In 2008, Rosy Blue NV became a member of the Global Compact. It was a natural step in our evolving process toward sustainability in our operations. Amit Bhansali, chief operating officer (CEO) of Rosy Blue NV, is very committed to moving forward in this challenging journey. In 2012, he was at the LEAD (Leadership in Energy & Environmental Design) meeting at Davos with Secretary-General Ban Ki-moon and CEOs from other industries to share his vision and enhance efforts on sustainability. We believe businesses have a choice: They can either accept existing low standards or set higher standards within their own operations. Through the Global Compact, we can create public-private partnerships that make business sense. I was, of course, very honored to be asked and to be voted across different industries to take the role of the chair. It has been a great learning curve to learn from other industries and to share experiences within Rosy Blue and across borders. The commitment of our top management has been instrumental in this process.
RM: Do you really believe sustainability is an investment? Most people believe it’s about spending money for things that are not profitable. Do you share this opinion?
IV: Sustainability is a long-term investment in your organization. It’s about creating trust. It takes a long time to build the brand of a company and create confidence with all stakeholders, but that trust can quickly disappear too. What I see is that many times the process toward sustainability starts with risk management and focuses initially on just getting through the audits. But eventually, people do see that these processes contribute to more efficiency and quality management systems throughout their organization. Of course, there are also stricter legal requirements evolving. I believe that a voluntary commitment from the top really drives change. There are key questions that have to be answered: How do you look after your product in a responsible way? How do you treat your employees? How do you manage your working conditions, especially in countries where there is a weak legal framework? What is your impact on the local community where you operate? What about environmental impact? How can you innovate within your factories and create added value? At Rosy Blue, we have noticed that there is a business case to develop in this process. We should not forget that we are a labor- and capital-intensive industry. Polishers, after all, are the true artists of the diamonds. Healthy and motivating workplaces contribute to employee retention. I do believe there is a big challenge out there, with wages in Thailand — in 2012, the minimum wage there rose by 30 percent to 40 percent — and China evolving very fast. We will have to find the right balance within the supply chain to create shared value. But to recapitulate why we should invest in sustainability: product integrity, reputation, access to capital, risk management, employee retention, innovation of processes and services.
RM: Isn’t it true that the concept of sustainability is more integrated in other industries? Is the diamond industry behind other industries in this movement?
IV: Traditionally, the more environmentally sensitive industries like chemicals, oil and gas and energy, were the ones that started initiatives in relation to CSR. Shell is one example but another one is Umicore, just ranked Number One in the Global 100 Most Sustainable Companies in the World Index. It shows that hard work and continuous innovation in sustainability pays off. Who would have imagined that Umicore, formerly Union Miniére, which had such a negative image, in 2013, would be given such recognition? This is absolutely well deserved. Also in the consumer products market, you see excellent models such as Unilever, IKEA, L’Oreal, Puma, Nike. Again, it’s all about evolving. Today, you see that Nike publishes its progress on suppliers; ten years ago, they were hit hard in the media. Every company can have its Nike moment. Look at what’s happening to Apple, and we all use Apple products. It is so easy to criticize companies. This process of sustainability takes time and engagement with all stakeholders is key to progress. As for the diamond industry, I don’t think it’s about being behind. I believe it’s about an evolving, maturing process. We have come a long way and we are moving forward step by step. We should not forget that many of the businesses in this industry are family businesses that already are working hard to see to it that the next generation can take over. That attitude reflects a long-term vision and contributes to sustainability, but I do believe an extra gear is needed. The establishment of the Responsible Jewellery Council (RJC) is an excellent step, but more cooperation is needed at every level within the industry. We can still avoid duplication in auditing practices. Many of us are using the same subcontractors and together we can encourage our supply chain to move forward. An example in this area is the implementation of the Dodd-Frank Act. More and more customers and suppliers are working intensively together. Our industry is based on trust and we need to protect our reputation at all times. It is my firm conviction that a sustainable diamond industry leads to strengthening our competitive advantage in comparison to other choices consumers can make. Business-driven corporate sustainability can help stimulate consumer demand. We can be proud of the progress we have already made. We should never forget that sustainability is a never-ending exercise in continuous improvement.
RM: What is the role of the government in sustainability? Are you not putting too much responsibility on the private sector?
IV: The boundary between government and businesses remains important today but their interconnection is changing. Where governments fail, there is a need to engage private actors to set good examples or work more closely with governments and nongovernmental organizations (NGOs) to understand the real issues out there and, more importantly, to find balanced, constructive solutions that make sense. Overregulation will not be sustainable but that does not mean companies should have a free ride. Governments can be “enablers” and “promoters” of sustainable growth but a pragmatic approach is needed.
RM: Why did the Antwerp Diamond Academy organize an initiative on sustainability?
IV: I think it’s the role of the industry to sensitize, inform and help all players in the industry understand what sustainability means and how they can start working on specific areas. Clearly, priorities differ depending on the size of the company and its position within the supply chain. Such initiatives as this conference are important because they bring together various stakeholders not only from our industry but also from other industries.
RM: Do you expect sustainability to become an unavoidable issue in the future?
IV: I strongly believe it will only become more important. We are living in a very transparent world. Social media creates a new dynamic. Look at the Vision 2050 developed by the World Business Council on Sustainable Development. When we are living in a world with nine billion people, everyone will have to take responsibility. Look at the outcome of the World Economic Forum in Davos that just ended: Sustainability was the common denominator! Regulations are evolving fast, financial institutions are being put under great pressure to mitigate risks, consumers are finding their way to information, NGOs are better informed than ever… I do not like the word “unavoidable” when it comes to describing sustainability. There is no way back, the world around us has changed and our industry should take leadership.
Article from the Rapaport Magazine - March 2013. To subscribe click here.
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