Is ‘ethical’ worth the extra money?

Last Wednesday, I attended a panel discussion on “ethical” diamonds organized by the Women’s Jewelry Association and held here in New York.

Inevitably, the discussion, moderated by jewelry industry writer and editor Peggy Jo Donahue, came around to the question of money: How much are people willing to pay for a diamond that lays claims to being responsibly mined?

It’s not unlike the questions Americans face in a myriad of other shopping situations.

You’re at the grocery store and the free-range, organic eggs, presumably produced by chickens with a (somewhat) better life than their factory-farmed counterparts, are lined up alongside regular, non-organic options. The organic eggs are double or even triple the price of the non-organic variety. Are you willing to pay more? Which will you choose? 

Two of the panelists, Rebecca Foerster, the U.S. vice president of Rio Tinto Diamonds, and Forevermark U.S. Inc. President Charles Stanley, said their companies charge a premium for their products because they believe there are people who are willing to pay for the assurance of owning an ethically sourced diamond.

Stanley noted that there will come a “tipping point” when the origin of products will become an issue across the board.

But Andrea Hansen, CEO of Ivanka Trump Fine Jewelry, said from their viewpoint, the consumer hasn’t reached that point yet. Rather than attach a premium to their ethically sourced merchandise, the company takes a lower margin. “I don’t see on the retail level yet that the consumer is willing to pay that much more for the product,” she said.

As one of those people who definitely goes for the organic food in the grocery store, I’m all for knowing where my food, clothing, etc. comes from and knowing that the people on the producing end were treated fairly.

But I am a single woman living in New York City with no one to support but myself. Might I feel differently if I had four other mouths to feed or lived in a part of the country where there was less emphasis on origin?

During the discussion, the subject of how to distinguish ethically sourced inventory while not disparaging other stock arose. Foerster said what Rio Tinto tells retailers is to call their diamonds “Canadian” or “Australian,” not label them as “non-conflict.”

“It’s never setting it up as bad inventory vs. good inventory,” she said, comparing it to (as I have above)