1 Jennifer Malkin Wiam Hasanain Apr 25 th, Clear Conscience Jewelry Bill Gallagher Lori Bonn Gallagher

2 Overview 1.Lori Bonn 2.Charge/Scope 3.Methodology 4.Jewelry Market 5.Consumer 6.CSR & The Jewelry Industry 7. Industry Recommendations 8.Lori Bonn Recommendations

3 Lori Bonn Design, Inc. Founded in 1991 Northern California based designer, manufacturer and distributor of jewelry. Distribution: specialty retailers, department stores and catalogs. Growth goal: tripling revenue in next 5 years Clear Conscience Jewelry 2004

4 Scope Explore social, environmental & ethical issues facing the entire jewelry industry from mine to retail and efforts currently underway to address them. Evaluate current efforts and recommend a process for Lori Bonn and the industry to enhance social responsibility.

5 Methodology Lori Bonn Designs Primary: -Company visit -Interviews with principals and staff Secondary: -Review of company literature Consumer Demand Primary: -Designed online survey Secondary: -Reviewed LOHAS and Jewelry consumer study Jewelry Industry and CSR Issues Primary: Interviews with 25+ stakeholders - 1 Mining company - 3 Stone dealers - 3 Manufacturers - 3 Jewelry design companies - 4 Retailers - 1 Industry Association - 2 Fair Trade Certifiers Secondary: - Industry websites - Analyst reports, - Current standards - Research publications

6 Executive Summary Issues Growth in consumer demand, NGO pressure Mining concerns drive the agenda (and research), but entire value chain is of concern Retailers feeling pressure, but value chain is murky. Fractured efforts by segment, size Social responsibility vs. Fair Trade Scarcity of responsible sources. Industry Recommendations Lay the Groundwork Address Gaps Deep collaboration Transformation Lori Bonn Recommendations Compliance and Involvement Extend Reach Company Transformation Beacon for Others

7 Jewelry Anatomy Diamond Colored Gem Metal

8 Journey Behind the Jewelry Environment Indigenous Issues Mine Forced Labor Child Labor Environment Health & Safety Wages Resettlement, Dependency Sort Distribute, & Trade Working conditions Child labor Wages Lack Accountability No common definitions Leach With Cyanide Cut & Polish ManufactureRetail Smuggling Pricing Stone Mixing Working conditions Child labor Wages Metals Environment Energy Consumption Air Pollution Explore Smelt & Refine

9 Consumer

10 Consumer There is a growing demand for Socially Responsible Jewelry.

11 Broad Overview of CSR & Jewelry industry Growth in consumer demand, NGO pressure Mining concerns drive the agenda (and research), but entire value chain is of concern Retailers feeling pressure, but value chain is murky. Fractured efforts by segment, size Social responsibility vs. Fair Trade Scarcity of responsible sources.

12 Efforts Underway - Standards Standards Mining - Industry Standard Initiatives: Extractives - Industries Transparency Initiative (EITI) - Initiative for Responsible Mining Assurance (IRMA) - International codes of note: Framework for Responsible Mining Diamonds - Kimberly Process Certification Scheme. - Council for Responsible Jewelry Practices (CRJP) Gold - No Dirty Gold, CRJP (gold) Fair Trade Efforts Artisanal Mining Development oriented: -PartnershipAfrica Canada -Diamond Development Initiative (DDI) -ARM (metals)– relationships with producers and others… Gold - Zero Standard Colored Gems - Columbia Gem House Fair Trade Protocol

13 Industry Recommendations Lay Groundwork 0-1 year Deep Collaboration 3-5 years Transformation 5-10 years Research supply chain gaps Retailer analysis and education Quantify and stimulate demand Build up credibility Shore up supply Maximize industry participation Increase accountability Reframe discussion Communicate and coordinate efforts Share sources and create a network Relationships between companies and communities Industry standards for all segments Standards  Fair Trade Monitoring system Address Gaps 1-3 years

14 Lori Bonn Recommendations Compliance & Involvement 0-1 year Company Transformation 3-5 years Beacon for Others 5-10 years Implement code of practices Support (not lead) development of network Philanthropy Determine CSR Strategy Develop code of practices Comply with Kimberly Agreement Source from responsible companies Increase involvement through formal partnerships Develop fair trade jewelry line Communicate story to consumer Fair Trade Jewelry Company Recognized leader Extend Reach 1-3 years

15 Next Steps Compliance Involvement Review existing standards Establish code of practices Interview gem suppliers Assess No Dirty Gold signing Explore responsible sourcing options Establish baseline and track back Review implementa tion guidelines for Kimberly Process Attend June meeting in Las Vegas Attend Fall meeting in DC Rapaport Fair Trade Diamond and Jewelry Association Ethical Metals Converse with industry leaders CRJP Dene Design Lucina Designs Ethical Metals Columbia Gem House

16 Thanks! Value to us: First hand how information can impact decision of consumer Difficult for one player to make a difference Appreciation of complexity of Jewelry market and knowing all the pieces and players. Value to firm: Raised profile through interviewing process Deliverable to field on behalf of Clear Conscience Sustainable sourcing and partnership options

17 Clear Conscience Jewelry Jennifer Malkin Wiam Hasanain Apr 25 th, Bill Gallagher Lori Bonn Gallagher