A precious transition

Demanding more transparency and responsibility
in the watch and jewellery sector
Environmental rating and industry report 2018

Publisher
WWF Switzerland
Date
December 2018
Lead author
Dario Grünenfelder(WWF Switzerland)
Contributing authors
Mark Starmanns (BSD Consulting),
Tania Manríquez Roa (freelancer)
Graphic/Layout
Curdin Sommerau(WWF Switzerland),Image credits ©
Cover page: Jeremy Beadle - unsplash.com; p.1: Kyle Frederick - unsplash.com; p.3: Bradley Ziffer unsplash.com; p.4: Alex Chambers - unsplash.com; p.6: Priscilla Du Preez - unsplash.com; p.8: Michel
Gunther - WWF; p.13 Martin Harvey, Sylvia Jane Yorath, James Morgan, Edward Parker - WWF; p.15: Zig
Koch & Todd Pusser - WWF; p.16: André Bärtschi - WWF; p.18: Heather Zabriskie - unsplash.com; p.21:
Turner 83 - stock.adobe.com; p.23: Giulio Fornasar - stock.adobe.com; p.28: Allef Vinicius - unsplash.com;
p.33: Eleni Koureas - unsplash.com.

Contact
WWF Switzerland,
Dario Grünenfelder,dario.gruenenfelder@wwf.ch
The authors would like to thank the following persons, who have provided input on the conception, writing,design and promotion of this report: Thomas Streiff, Andrea Gäumann (BHP – Brugger and Partner),
Cleophea Michelsen (BSD Consulting), Gianina Viglino-Caviezel (Input Consulting), Damian Oettli, Leo
Caprez, Valerie Passardi, Sylvia Meyer, Corina Gyssler, Christoph Rytz, Curdin Sommerau (WWFSwitzerland), Tobias Kind (WWF Germany) and Jordi Surkin (WWF Bolivia).

Disclaimer
Any decision (e.g. purchase or investment decisions) should not be made on the basis of the statements
made in this publication. Even though every effort has been made to ensure that the information contained inthis publication is correct, WWF Switzerland, BHP, and other entities involved in compiling this report, as wellas their representatives, do not warrant that the information presented in this report is complete, accurate or
up to date, and accept no liability for any claims or loss or damage relating to the information contained in thisdocument, including (but not limited to) for lost earnings, exemplary damages, consequential damage orclaims based on negligence. With some of the rated companies WWF has long-standing relationships throughdonations. However, WWF Switzerland and BHP ensured the objectively transparent assessment of allcompanies assessed through the use of a stringent and clear methodology and the application of monitoringprocesses.

Table of Contents
Foreword
Executive Summary .....................................................................................................................................................1
Introduction – Increasing responsibility in the watch and jewellery sector ...............................................................................4
A risky black-box ..................................................................................................................................................5
Risk of entanglement, non-compliance and need for due diligence .....................................................................5
A call for transparency and ownership .................................................................................................................6
WWF vision .......................................................................................................................................................... 6
This report ............................................................................................................................................................ 7I.

The story of the watch and jewellery sector ...............................................................................................................8

Made in Switzerland dominates the luxury watch industry ...................................................................................9
The supply chain of watches: a long and complex black box ............................................................................. 10
The gold supply chain as an exemplary illustration of the industry’s environmental issues ................................ 11
Box 1: Human rights challenges of mining ..................................................................................................... 13
Mining, milling, concentrating and smelting ................................................................................................... 13
Box 2: Large- and Small-Scale Mining ........................................................................................................... 14
Box 3: Mercury endangering Amazon’s wildlife ............................................................................................. 15
Trade ............................................................................................................................................................ 14
Box 4: The problem of mercury, chemical pollution and deforestation ........................................................... 14
Refining – Switzerland is the global leader in refining.................................................................................... 17
Recycling gold: an environmentally friendlier alternative .................................................................................... 17

II.

Environmental benchmark of 15 brands .................................................................................................................. 18

Results of the environmental rating .................................................................................................................... 21
III. Changing towards forward-thinking practices .......................................................................................................... 23
The need for transparency and responsibility ..................................................................................................... 24
Box 5: Recommendations for a more sustainable watch and jewellery sector ................................................... 26
Good practice stories within the sector............................................................................................................... 27
Box 6: Fast-fashion jewellery / watches and smart watches: a currently unsustainable business model ........... 28
IV. The power of consumers ...................................................................................................................................... 30
How consumers can drive sustainability ............................................................................................................. 31
Box 7: Summary of what consumers can do ...................................................................................................... 32

Appendix ..................................................................................................................................................................... 33
References .................................................................................................................................................................. 49

Foreword
Sustainability is no longer a niche topic - on the contrary. As one of the megatrends of ourtime, it is increasingly finding its way into businesses, and studies show that the majorityof CEOs place a high importance on sustainable development. They are convinced that it
will have a growing impact on their business model and they recognise the necessity ofintegrating sustainability into their companies. However, despite these increasing commitments to sustainable business practices, the initiatives are not yet sufficiently effective toaddress current and future sustainability challenges. One of the main reasons is the lackof effectiveness in corporate commitment and thus the missing holistic integration. Toooften, sustainability is only seen as an add-on topic or communication initiative. The absence of impact is the logical consequence.

Dr. Gianina Viglino-Caviezel
University Lecturer HSG;
Dr. in Sustainability Management;
CEO Input Consulting

In its role as one of Switzerland’s flagship industries, the position of the Swiss watch andjewellery sector is one of great responsibility, which provides those within the sector theopportunity to consciously generate a positive impact on society, nature and the economy– something that is essential if broader development objectives (i.e. the UN Sustainable
Development Goals) are to be achieved. The watch and jewellery sector has made a significant contribution to social prosperity and economic growth in Switzerland and is an important representative of the country’s culture and history; with its pioneering spirit, precision and long-lasting tradition. Thus, taking the importance of the industry and its
responsibility into account, dealing with the topic of sustainability should change fundamentally. Not only in favour of ecologically and socially responsible development, but also
out of strategic considerations for the companies themselves. In other words, effective
sustainability is equivalent to "future security", an aspect that every CEO should be seriously interested in.
Climate change, for instance, affects every company that causes high CO 2 emissions
along its value chain. If the objectives of the Paris Agreement (2015) are to be reached,regulations to curb current CO2 levels must be defined in accordance with the targets set.
In the wake of such possible future governmental requirements, the consequences forcompanies can include major financial and competitive risks, as currently exemplified by
the diesel scandal in the automotive industry. Early consideration of the internalisation of
caused externalities is therefore not only a contribution to positive ecological development
but can also be of great strategic relevance for each company. Sustainability risks andopportunities are further influenced by changing social expectations and technological developments. Digitisation, for instance, enables the development of new approaches totransform sustainability challenges into business opportunities. At the same time, it increases the risk of detecting unsustainable practices through increased transparency,
which in turn negatively impacts society's growing demand for more sustainability.
To ensure a sustainable development, the key lies in the strategic integration of sustainability. Companies should focus on using their core competencies to develop effective solutions for key economic, environmental and social challenges within the framework of theircore business. By focusing on “material” topics, sustainability becomes a key element of
the business model and thus of profit making, which leads to the required holistic integration of sustainability. The right combination of core competencies and sustainability challenges has a positive impact on business success in terms of increasing sales, reducing
costs or enhancing reputation.
I hope that CEOs will recognize the opportunity for their companies and set out on the path
to holistically effective sustainability. Strategies, methods and expertise for this path areavailable and must be used. Space for innovation always exists when there is opportunity
to proactively move forward, and the development of a business is generally much moredifficult by retrospectively adapting to market changes. The Swiss watch and jewellery industry has proven its innovative and forward-looking approach multiple times in its history
and the time is now, to actively deal with sustainability and its role in securing the sector's
future.

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Executive Summary
The watch and jewellery industry offers the highest aspirations regarding craftsmanship and tradition. However, the sector also generates ecological and social
impacts and does not meet good environmental
standards. Switzerland plays a more important role
than many might think. The country hosts world-renowned luxury watch and jewellery companies and is
the global leader in the gold refining market. Aroundhalf of the largest luxury watch brands are Swiss andbetween 60% and 70% of the globally mined gold
physically travels through Switzerland to be refined(~2,400t in 20171).
Due to these aspects and the important role the industry plays, WWF Switzerland asks how the watch
and jewellery brands will present solutions toalign luxury goods with a contribution to the wellbeing of society and the environment.
This report and industry rating aims to improve thesustainability performance of Swiss watch and jewellery brands by focusing on their global value chain,
particularly on the sourcing of critical raw materials
such as gold. It will show how more ambitious companies are improving the current state and perception of
the sector, how others still lag behind what is considered a sustainable and responsible business and what
is generally needed to reduce the sector’s impact on
the environment.

Taking responsibility for ecological andsocial impacts
The ecological and social impact of the watch
and jeweller industry is bigger than might be apparent at first glance, mainly through its sourcingof raw materials. The demand for vast amounts ofprecious raw materials and the lack of transparency among most companies is of great concern.
The sourcing of raw materials, such as gold, isaccountable for large environmental footprints,
including the pollution of air and water, soil
degradation, landmass movements and deforestation. Enormous inputs of toxic substances and land transformation are responsible for the fragmentation and destruction of
ecosystems and have immense negative effects
on fresh water, forests and wildlife.
Increasing transparency and more ambitious sustainability approaches need to be higher on thepriority list of companies in the watch and jewellery sector. The industry uses over 50% of annual
gold production (>2’000t), for instance, and in
most cases the companies are not able todemonstrate where their raw materials comesfrom and that they were not responsible for dramatic environmental degradation and humanrights violations.

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Figure 1: Results of environmental rating

Environmental Rating of the 15 biggest Swiss watch companies
Together with the sustainability consulting agency
BHP - Brugger and Partner, WWF Switzerland has analysed the environmental stewardship of the 15 biggest watch companies2 based in Switzerland. The rating questionnaire reflects a comprehensive set ofsustainability issues, such as sustainability strategy
and targets, due diligence, sustainable supply chain
management, greenhouse gas emissions and stakeholder engagement. The rating focuses on environmental topics only, since this is WWF’s area of expertise.
Among the 15 assessed companies, six took the opportunity to comment on and complement WWF’s preassessment while the remaining nine companies did
not complement the initial rating and therefore needed
to be evaluated based only on publicly available data.
The results show that none of the surveyed companies was ranked as a frontrunner, illustrating the rather low level of ambition in the sector overall. Amongthe evaluated companies, the brands from theRichemont Group (Cartier, IWC, Jaeger-LeCoultre,
Piaget and Vacheron Constantin) are the only ones
that managed to achieve a better score (“Upper Midfield” or above). Most brands were ranked either in the“Lower Midfield” or as “Latecomers / Non-transparent”
since almost no information could be found on how
they consider relevant social and environmental issues and challenges in their business practices.
The more detailed results illustrate that most of thecompanies have not taken any appropriate steps toaddress and counter climate change. There are significant gaps regarding the sourcing and use of sustainable raw materials, the setting of forward-thinking
strategies and targets, and the provision of moretransparency in this highly secretive industry. The results also show that few companies recognise their responsibility and that action and more transparency towards sounder environmental management areneeded. Moreover, the overall findings are highly worrying, and prove that it is time for change. WWF therefore calls upon companies to make improvements inthe following material areas: (1) devising strategies tooperate within the planet’s ecological boundaries; (2)exercising due diligence in sourcing; (3) managing
supply chains responsibly and sustainably; (4) providing transparency and communication; (5) exercising
joint environmental management within the industry;and (6) encouraging stakeholder engagement.

Changing towards sustainable practices
Numerous current developments underpin the needfor action in the sector, and upcoming political requirements and mandatory obligations (e.g. the Responsible Business Referendum) might soon bring the watch
and jewellery brands into the spotlight of media, governments and consumers regarding their environmental and social impact along the supply chain. At thispoint, improving efficiencies will neither be enough tooperate within planetary boundaries nor to achieve theSustainable Development Goals by 20303.

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This report shows examples of how some actors in theindustry are driving more sustainable processes, setting new directions in transparency and addressing
social responsibility in the watch and jewellery sector.
Seeking and promoting ambitious, sustainable solutions to transform this secretive and tradition-conscious industry are essential. A few determinedbrands and start-ups have set out to rethink current
norms and practices and are striving to do businesswithin our planet’s ecological boundaries. These firstmovers hold the potential for pulling the industry awayfrom its harmful, opaque standards and are leading
the way towards more sustainable watch and jewellery making. This report further draws attention to sustainable sourcing, transparent reporting and environmental target setting, as well as to innovative businessmodels, products and processes.

Gold as an illustration of the industry’s sustainability issues
Gold represents the focus of this report when it comesto the issues in sourcing raw materials. However, it
must be stressed that gold will simply serve as anillustration of the lack of transparency, the ecological issues along the value chain and the generalsustainability challenges the watch and jewellery
industry is facing. Neither does gold sourcing affectall companies nor is it considered the only environmental challenge. The use of leather, gemstones,
plastic and many other metals and materials often
poses similar threats to the environment, but a moredetailed analysis of all relevant raw materials would
have gone well beyond the scope of this report andgold represents a great and highly relevant example
for the Swiss market.

The power of consumers
The report has also gathered suggestions on how
consumers can contribute to reducing the industry’s
environmental impact. How each person can have apositive impact is listed below:• Ask for recycled and always recycle: Metals andmany other materials are a reusable resource. By
recycling and buying recycled metals, for example,
we avoid the need for mining and therefore the useof additional natural resources.
• Ask for certifications and transparency: Whether
the materials are recycled or newly extracted, weshould always ask about their origin and sustainability certification.
• Reuse and repair: Whenever possible, we should
maintain, repair and reuse products. When certain
goods are no longer needed or wanted, we might beable to redesign, reuse, or return the raw materials
for recycling.
• Consume sufficiently: Before each purchase, we
as consumers should consider whether we reallyneed this product. We should also apply a more
conscious, considered shopping routine with astronger focus on high quality and durability.
This report – together with follow-up reports for the
tracking of progress – should be regarded as anencouraging and constructive contribution to thesector’s transformation towards more transparency
and responsibility. WWF plans to repeat this rating in
two to three years to track the industry’s progress.

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Introduction –Increasing responsibility in the watch
and jewellery sector
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A risky black-box

Brands in the watch and jewellery sector offer luxury, individuality and status
symbols. They sell the highest aspirations regarding craftsmanship and tradition. The sector has been growing steadily in recent years and generates
annual revenues of more than US$ 300 billion4 worldwide. Switzerland is an
important global player in the sector, as it hosts around half of the largest
luxury watch companies. It is also the global leader in gold refining: around
two-thirds of globally mined gold physically travels through Switzerland forthis purpose.
Every year, the watch and jewellery sector uses more than 50% of global
gold demand (>2,000 tonnes)5 and 67% of the newly mined rough diamonds
produced globally (90 million carats)6.
The sourcing of these precious raw materials is accountable for large environmental footprints, including air and water pollution, soil degradation,
landmass movements and deforestation. Enormous chemical inputs
and land transformation are responsible for the fragmentation and destruction of ecosystems and have vast negative effects on fresh water,
forests and wildlife. These footprints of the operations are often neglected
when buying jewellery or a timepiece.
Like most industries, the watch and jewellery sector will face big challenges
due to climate change, the increasing scarcity of resources and a rapidly
growing world population. To overcome these challenges, new forwardthinking strategies must play a central role in the transformation of the watch
and jewellery sector. WWF asks how the watch and jewellery brands will
present solutions to align luxury goods with a contribution to the wellbeing of society and the environment.

Risk of entanglement, noncompliance and need for due
diligence

The results of the rating show that most of the analysed brands are unable to demonstrate where their raw materials come from, or that they
are unwilling to communicate on the matter. Not being able to trace raw
materials further back than to a tier 1 supplier, or not being able to demonstrate that the brand’s gold providers are not involved in cutting down forests, polluting rivers or destroying wildlife, entails huge business risks andruns counter to the OECD’s recommendations on exercising due diligenceand on identifying, preventing, mitigating and accounting for adverse impacts in companies’ operations, supply chains and other business relationships7.
It is beyond dispute that purely compliance-driven and risk-minimising approaches alone are no longer sufficient to meet the expectations of various
stakeholder groups like the public, consumers, investors, employees, etc.
with respect to environmentally responsible business practices. If a company only acts once its own products or business practices are being criticised or directly affected, it can no longer create trust. Today, companies
are expected to take a pro-active approach to combatting environmental risks through science-based strategies and relevant sector-specificreduction and development targets.

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A call for transparency andresponsibility

Vision: Stop the degradation of
the planet's natural environment and build a future inwhich people live in harmony
with nature

Advancing in transparency and traceability as well as taking responsibility
for preventing negative impacts of a business are key factors in improving
a company’s performance in the sector. Yet they pose big challenges as
they require physically tracking raw materials throughout the supply chain
and collecting information on where, how and under what conditions the raw
material in question is sourced. Brands have it in their hands to actively get
involved and influence how large the negative environmental and social impacts in their supply chain will be. If a company does not know where its
raw materials are coming from, it might be (unintentionally) supporting
tropical deforestation, violent conflicts, illegal trade, child labour, immense health hazards and numerous other adverse effects. Consequently, companies in the watch and jewellery sector face huge challenges
regarding due diligence and Swiss watch brands have environmental, socialand human rights risks that they need to address and manage.

WWF seeks to commit stakeholders from the watch and jewellery industry(e.g. manufacturers, retailers, consumers, refiners and the government) tofinding innovative solutions to protect the environment, in particular forests,
fresh water and wildlife that are currently threatened in several points of thesector’s supply chain. Together, we will transform international markets byproducing goods and services sustainably and we will encourage others tobe sustainable consumers.
There is a long way to go to make this vision come true, but WWF believes
it to be possible if the industry and related stakeholders take bold, ambitious
steps towards transformation.

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We call on Swiss companies to
act responsibly as role models

This report and industry rating aims to improve the sustainability performance of Swiss watch and jewellery brands by focusing on their sustainability strategies and supply chain management, particularly for the sourcingof critical raw materials, such as gold. Hence, the content is primarily directed towards watch and jewellery companies but, since consumers haveobvious market power through their purchasing decisions, WWF has also
included recommendations for consumers to have a positive impact on the
sector’s sustainability performance.
The structure of the report is as follows: The first chapter provides an overall
picture of the watch and jewellery industry and the role that Switzerland
plays. It explores the sector’s value chain and key raw materials and illustrates the sector’s main environmental impacts, with a special focus on gold
extraction. The next chapter describes the results of the environmental performance benchmark of the 15 biggest Swiss watch brands. The third chapter explores how the sector can drive sustainable practices and what companies must do to work towards positive change. Finally, the last chapter
offers recommendations for more sustainable consumer behaviour.
The focus in the report is on environmental issues. Social aspects and labour rights are not analysed in much detail. While WWF acknowledges theimportance of social matters and the devastating and unacceptable conditions endured by many workers, especially in the mining industry, our expertise lies in improving the sector’s environmental footprint. Organisations
like Human Rights Watch, Society for Threatened People and Public Eyeare dedicated to improving working conditions and supporting workers’ empowerment. WWF strongly endorses their efforts.

The story of the watch
and jewellery industry

Changing
towards
responsible
practices

Environmental
benchmarkof brands

The power ofconsumers

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I. The story of thewatch andjewellery sector

A precious transition towards transparency and responsibility

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Made in Switzerland
dominates the luxury
watch industry

Switzerland is famous for its long-standing tradition and expertise in watchmaking. Since the 18th century it has been a major producer and exporterof some of the most sophisticated watches in the world. While this reportaddresses brands and issues in the watch and jewellery sector generally,
the focus in this chapter is on the example of the Swiss watch industry. There are three reasons for this. First, the largest luxury watch companies in the world are Swiss and watchmaking is one of Switzerland’s flagshipindustries. Secondly, the business and the sustainability challenges are very
similar for watches and jewellery. Finally, many companies that produce andsell watches also make jewellery and vice versa.
Of the 20 largest companies globally active in the watch sector, around half
are headquartered in Switzerland and 17 have production centres there(see Figure 2)8. The market is manly dominated by three companies –Swatch Group, Richemont Group and Rolex – all three of which have theirhead office in Switzerland.9 Together they account for around 50% of the
global watch market (base on turnover).10 Watchmaking is Switzerland’s
second-largest manufacturing industry and the third-largest export sector
behind pharmaceuticals-chemicals and mechanical engineering. Even
though the watchmakers’ golden age came before the 1970s, in 2015 thesector still employed around 60,000 people in 500 companies in Switzerlandand contributed around 1.5% of Swiss GDP.11 On a revenue basis, Switzerland is the largest exporter of watches in the world, with international salesof watches and components totalling some CHF 20 billion.12

Figure 2: The 10 biggest global watchmakers

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For most luxury watch companies, ‘Swiss Made’ is a mandatory quality label
because part of their reputation is built on the fact that their components areassembled in a traditional Swiss workshop (see Appendix for additional information). However, the supply chain of a brand that produces and sells
watches holds out various challenges that can easily damage a brand’s reputation – for instance, if consumers connect a watch brand to child labour,the destruction of large areas of rainforest or other negative impacts.

The supply chain ofwatches: a long andcomplex black box
Brand

Behind the polished face of a luxury watch, a potentially immense ecologicalfootprint is hidden. Yet, the long and complex supply chain of watchmaking is often a black box, severely lacking transparency and comprehension of the origin of the raw materials and the processes andpeople involved. This chapter dives into the supply chain of a typical watch
brand and describes the most important stages of production, including theaccompanying environmental impacts. While the extraction phase usually
has the strongest social and environmental effects, the impacts vary greatly,
depending on the materials and processes used, the location of operations
and how well the processes are managed.
The brand is generally the company that designs a watch. It also usuallyorganises and possibly controls the supply chain (at least up to the manufacturing stage). Finally, it is generally responsible for marketing, distributing
and ensuring the product’s promised quality.13.
Since typical watch brands use various critical raw materials (e.g. gold, titanium, silver, steel, ceramic, tungsten carbide, leather, etc.), they have complex supply chains with multi-faceted impacts. Figure 3 provides an illustration of a watch and its most important materials, underlining the complexityof their supply chain.

Watch manufacturing andinputs production

The manufacturing of watches either takes place in the premises of thebrand itself or is outsourced to contractors. In Switzerland, watch producers
are mainly based in the cantons of Neuchâtel, Bern, Geneva, Solothurn,
Jura, Vaud and Ticino. There the numerous parts of watches are assembled, i.e. the cases, dials, movement, straps, glass, etc. The various input
parts are usually produced in other factories, quite often abroad.

Figure 3: Exemplary illustration of most relevant raw materials in a watch

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These manufacturers have their own raw material sourcing practices, whichmakes it even more difficult for a brand to trace a material’s origin. Manybrands in the sector therefore do not know where their intermediate manufacturer is sourcing the input parts.

Raw materials: extraction andrefining

The gold supply
chain as an exemplary illustration of
the industry’s environmental issues

The extraction and production phase of raw materials usually has numerous
environmental and social impacts. From mining the required metals totanning the leather or producing the plastics, the raw materials usedin watches can seldom be considered sustainable and pose numerous
environmental challenges. Since discussing the issues related to all these
raw materials would certainly go well beyond the scope of this report, theimpacts are elaborated by using the supply chain of gold as an illustration.

There are several important reasons why this report focuses on gold: Firstly,mining and beneficiation of gold has huge negative environmental effects because immense amounts of earth need to be moved for tiny volumes of gold. Secondly, over half of global gold demand is used for jewellery and watches and most Swiss brands in the sector use gold in theirproducts. Thirdly, the most important gold refineries are situated in Switzerland (i.e. Switzerland represents one of the most important gold hubs
in the world). Lastly, the mining and beneficiation of other metals has very
similar ecological and social impacts, and within the scope of this report it
would not be feasible to include all relevant metals and materials.
Gold is a precious metal with many characteristics: it is easily malleable,
corrosion-resistant and has a high emotional value in addition to its material
price. Annual gold demand is approximately 4,400 tonnes, including around2,500 to 3.000 tonnes of newly mined gold from over 100 different countries
around the world14. Between 25 and 30% of the annual gold supply is covered by recycled material.15

Figure 4: Global gold demand 2017 by industry

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Figure 5: Impact hotspots along the gold supply chain (WWF compilation)

The watch and jewellery sector uses the lion’s share of gold (53%), followedby financial industry investments (30%), central bank purchases and thetechnology sector (see Figure 4).16 Gold is the largest metal market by dollar
value and generated $170 billion in 2015, more than all other metals including iron, aluminium and copper. Gold is also the most precious metal in theworld17, even though the gold price has rollercoastered in the past 20 years.
For example, in 2000 an ounce (31.10 grams) of gold sold at $300; the priceshot up to $1,900 in 2011 and has dropped to between $1,200 and $1,300
in 2018.18
The next sections follow the different processes from mining to refining goldand explain the main impacts. The focal environmental and social impacts
of a watch and jewellery brand’s supply chain are upstream in the sourcing,processing and production of raw materials (compare Figure 5). Downstream (production of inputs, design and manufacturing, brand administration), energy use, business travel and logistics are the most relevant impacts.
As WWF is an environmental NGO, this report focusses on the ecologicalissues involved. The social and human rights issues related to gold mining
have recently been analysed thoroughly by NGOs like Human Rights
Watch, Public Eye and the Society for Threatened Peoples19. WWF strongly
supports their efforts and it is important not to neglect the often negativesocial and human rights impacts of mining (compare Box 1).

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Box 1: Human rights challenges of mining
The International Labour Organisation (ILO) sums up the human rights challenges of mining as follows:“Mineworkers face a constantly changing combination of workplace circumstances. Some work in an atmosphere without natural light or ventilation, creating voids in the earth by removing material and trying to ensurethat there will be no immediate reaction from the surrounding strata. Despite the efforts in many countries,
the toll of death, injury and disease among the world’s mineworkers means that, in most countries, mining
remains the most hazardous occupation when the number of people exposed to risk is taken into
account. Although only accounting for one percent of the global workforce, it is responsible forabout eight percent of fatal accidents at work. No reliable data exist on injuries, but they are significant,as is the number of workers affected by disabling occupational diseases such as pneumoconiosis, hearing
loss and the effects of vibration.” 20

Top left to bottom right:
Large-scale mine, small-scale mine in rainforest, clear-cut and destroyed forest, ASM miners

Mining, milling, concentrating
and smelting

The first process of mining is extracting ore from hard rock. Ore is basicallyrock that contains particles of metal (in this case gold). To extract ore fromthe ground, mining usually involves heavy drilling and blasting. Additionally,
it uses numerous other mechanical and/or chemical processes to separate
gold and bedrock from the ore. Gold is extremely rare: one tonne of rockusually only holds between 1 and 6 grams of gold21. This results in enormous amounts of earth being moved, holes being dug, and huge areas ofland and forest being destroyed.

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The process of purifying ore, called beneficiation, results in so-called dorébars, a semi-pure alloy of gold and silver, usually created at the mine site.
These steps involve various mechanical and chemical processes (e.g.
crushing, grinding, screening, milling, flotation, cyanidation, amalgamationand smelting). The chemical treatment usually consists of cyanidation or
amalgamation. Cyanidation uses cyanide and carbon for leaching. In theamalgamation process, mercury is used to dissolve gold and silver in therock. Finally, gold-rich sludge is recovered, melted and poured into dorébars, which contain between 60% and 90% gold and silver. These bars arethen transported to a refinery.

Main environmental impacts
Mining of mineral resources is intrinsically unsustainable because thereserves are non-renewable and finite22. It further results in various environmental impacts, which vary largely depending on the processes used,
the machinery, the location of the mines, etc. The following list of negativeenvironmental effects is not exhaustive but provides a better understandingof the issues and challenges at stake:Land use change: Probably the largest and most evident environmental
impact of the mining sector is the use and transformation of land including
deforestation with impacts on soils, biodiversity and wildlife. 23 These impacts depend very much on the kind of mining and the location of operations. A large-scale mine (LSM) in the desert in Australia transforms a different kind of land and has different impacts than a large-scale mine in the
Amazon rainforest. Surface artisanal and small-scale mining (ASM) in a
tropical rainforest will have other impacts on deforestation than an underground LSM in the same area. In addition, mining has indirect land use impacts stemming from the need to build infrastructure (e.g. roads, houses,etc.) for logistics and transportation. New settlers and miners pose an additional threat by interfering with and hunting wildlife, cutting trees for building
materials and fuel and triggering erosion by clearing hillsides and detonating
explosives.
Use and pollution of water: Mining is among the top users of water as it
requires enormous amounts of water to separate the metal from the ore 24.
The waste water is often mixed with minerals (e.g. sulphidic minerals or
uranium), which negatively influence the soil or aquatic systems. In waterscarce regions, mining additionally increases water stress. Since many
mines are located in regions where water is already a very scarce resource(e.g. in Africa, Asia and parts of Latin America), the intensive use of water
and water pollution create significant problems for the local environment,
ecosystems, wildlife and people25.

Box 2: Large- and Small-Scale Mining
There are important differences between Large-Scale Mining (LSM) and Artisanal and Small-Scale Mining(ASM).26 Usually, LSM is performed by large companies with heavy equipment, while ASM is done bysmaller groups with often very simple equipment. While LSM is responsible for 80-90% of annually mined
gold, ASM only accounts for 10-20% (IGF estimates that 330 tons of gold are extracted by ASM 27). In contrast, the latter is less capital intensive but involves a multiple of LSM’s workforce. In 2017 around 40 million
operators existed worldwide in all ASM mines, among which roughly 15 million28 workers were mining gold.29
An estimated 75 million people are additionally dependent on this industry, due to their businesses or family
members being involved in ASM. Especially in very remote areas, ASM can contribute to a large share ofincome for the local population, regardless of potentially poor working conditions. ASM can be further subdivided into ‘formal’ and ‘informal’ mining operations – of which the latter often operate illegally and without
modern equipment. Informal mining is often connected to greater negative environmental and social impacts.
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Greenhouse gas emissions: Due to energy-intensive activities from mining to beneficiation, the industry contributes substantially to the emission ofgreenhouse gases. Life-cycle studies estimate that the GHG emission intensity of one tonne of gold is between 11,500 and 55,000 tonnes of CO2equivalents30. Putting this figure into perspective, the CO2-equivalents for
producing 1 kg of gold correspond to between 8 and 46 flights from
Zurich to New York.

Box 3: Mercury endangering Amazon’s wildlife
The freshwater dolphin, also called pink river dolphin, is a very distinctive denizen of the Amazon rainforest andis currently among the most endangered mammals. The Amazon and Orinoco river basins in South America are
the habitat of three known species of freshwater dolphins that are now severely threatened by mercury released
to the environment by artisanal gold mining. These dolphins mainly eat catfish, a bottom feeder that can containa poisoning amount of mercury and which is renowned for making the longest freshwater fish migration in theworld, travelling more than 11,600 km and therefore contributing to the spread of mercury across the entirety of
the Amazon region. Mercury in the Amazon also highly affects humans: A study in Madre de Dios revealed that
mercury levels in nine out of the fifteen most consumed fish species for sale in local markets exceed the safe limit
set by the United States’ Environmental Protection Agency (EPA).
Mercury emissions into the environment are irreversible and difficult to contain and artisanal and small-scale gold
mining is the leading source of mercury pollution in the Amazon. To learn more about the mercury crisis in the
Amazon, consult the “Healthy Rivers, Healthy People” report by WWF.

Southern Amazon conservation corridor

Trade

Amazon River Dolphin

Trade connects the mines with the refineries and is similar for all mining
activities: high grade gold ore and/or gold doré is transported by ship, truck,train, plane or helicopter – often via bigger trading hubs – to the intermediaries and finally the refineries. While the gold won in LSM is often sold directly by the mining company or through traders, ASM usually involves
many more stakeholders. Regarding sustainability risks, the difficulty inthis part of the supply chain lies in maintaining traceability, especially
if transparency is unwanted due to illicit business or human rights violations. Since gold itself does not reveal its origin, an adequate system forensuring transparency is required. Besides these aspects, the main environmental impact posed by trade is greenhouse gas emissions due totransport.

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Box 4: The problem of mercury, chemical pollution and deforestation
The Amazonian rainforest exemplifies critical environmental damage due to increasing mining activities. From 2005
to 2015, mining and related activities were responsible for causing 11,670 km2 of rainforest to disappear, accounting
for nearly 10% of the entire Amazon region of Brazil31. In Madre de Dios, an Amazonian region of Peru, artisanaland small-scale gold mining has profoundly degraded the ecosystems due to deforestation and the movement anddeposition of large amounts of waste rock, promoting soil erosion and landslides 32. According to a new analysis byscientists at Wake Forest University's Center for Amazonian Scientific Innovation (CINCIA), small-scale gold mining
has destroyed more than 170,000 acres (~ 890km2 or roughly 125,000 football fields) of primary rainforest in the
Peruvian Amazon from 2013 to 201833. Moreover, the discharge of oil, lubricants and turbid materials in rivers has
highly contaminated the rainforest’s waterways.
A critical threat to wildlife and fresh water in the Amazon is the application of cyanide and mercury. The latter
especially is a highly toxic substance that is used extensively in artisanal and small-scale gold mining34. The intended or accidental release of mercury into the environment contaminates land, rivers, animals, plants and soils.
Large parts of the mercury used in mining bond with the gold but a considerable portion remains as liquid metal,
which is often disposed of into soils, sediments, rivers and lakes. In aquatic systems, inorganic mercury is converted
into more toxic methylmercury, which accumulates in fish and other animals. ASM is responsible for most waterand air mercury pollution worldwide35 and releases 1,400 tonnes of mercury to the environment each year36.
In the Madre de Dios area of Peru, it is estimated that between 30 and 40 tons of atmospheric mercury is released
into the environment annually37. To put this into perspective, over time just one gram of mercury per year cancontaminate a lake with a surface area of 80,000m2.38
Uncertainty surrounds the future of ecosystems in the Amazon Basin. Mercury releases from gold mining have put
many living organisms such as the freshwater dolphin at risk (see Box 3), and the magnitude of the negative impacts
mercury has on wildlife and fresh water are still unknown. The Minamata Convention on Mercury39 was developed
to stop the use of mercury but, until it is fully implemented, mercury will continue being responsible for contaminating
immense areas of precious ecosystems.
Other materials used in mining that have drastic environmental impacts are cadmium, lead, zinc, copper, arsenic
and selenium.40 In addition, whether intentionally or accidentally, many mining sites dump toxic production waste
directly into natural bodies of water. Earthworks and Mining Watch Canada estimate that about 180 million tonnesof toxic waste are being dumped annually into bodies of water by mining operations41.
Even when large-scale mines construct dams to avoid direct contamination through waste materials, toxic leftovers
and particles can still get into the environment. It is estimated that among the roughly 3,500 tailing dams built
globally to hold mine waste, one or two spills occur each year with devastating consequences for the environment.
An infamous example was the cyanide spill in Romania in 2000, described as the worst river pollution Europe hasever witnessed. It has taken 10-20 years for most river life to make a comeback.42

Gold dealers packing highly poisonous mercury into bags for sale to gold miners
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Switzerland is the global leader
in refining

Before the gold can be used in watches or jewellery, it needs to be refinedand purified. Refineries transform doré gold (with 60-90% gold content) into
pure gold (99.5% or 99.99% = 24 karat). In ASM, gold is sometimes alreadyrefined at the mining site by burning amalgam-containing mercury in the
open air.
Refiners link gold buyers and miners. Thus, they are important players whenit comes to ensuring gold’s traceability. Switzerland plays the central role in
the process of gold refining, since around 60-70% of global gold production is refined in Switzerland by four of the world’s largest gold refiners:
Valcambi, PAMP, Argor-Heraeus and Metalor.

Environmental impacts
The main environmental impact of refining is due to energy use and mainly
depends on the refining methods, the quality of the gold and the energy
source. When gold is refined on ASM sites by burning mercury, this createsstrong health risks to the workers and contaminates the air.

Recycling gold:
an environmentallyfriendlier alternative

When a watch or piece of jewellery containing gold reaches the end of its
life, the gold is usually reused. Around 25-30% of the yellow metal consumed each year comes from recycled sources.43 Jewellery, gold bars andcoins account for the bulk of recycling (approximately 90% of post-consumer recycled gold), while much less comes from industrial recycled materials or household electronics.44 Some brands in the analysed sector allegedly rely on recycled content, yet they do not communicate this. A
possible reason for not doing so could be fear of reputational risks due tothe negative connotation that recycled content is of lower quality. In the caseof gold, as well as many other materials, these concerns are unfoundedsince recycling has no effect on quality.

Environmental impacts
Recycled gold from old jewellery or watches, fillings and electronic scrap is
a very valuable alternative to newly mined gold, and its use has absolutely
no effect on quality. It produces fewer environmental impacts over its lifecycle, since the environmental footprint from the initial mining operations is
distributed across all its users. Basically, the more often gold is recycled thelighter the footprint of each use becomes. In addition, recycled gold can help
avoid the human rights risks and social issues associated with newly-mined
gold.
Nevertheless, the environmental impacts from collecting, sorting and particularly refining old gold still persist. Since refining is an energy-intensive process, the environmental impacts of recycled gold mainly depend on the primary energy source. Moreover, recycled gold is not necessarily risk-freesince it can be used for money laundering or to hide its unfavourable origin.
Hence, recycled gold can only present a valuable alternative when theorigin can be proved and the material is transparently certified.

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II. Environmental
benchmark ofbrandsA precious transition towards transparency and responsibility

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Benchmark of 15
brandsIn order to pinpoint and highlight the most pressing sustainability issues andincentivise the sector towards a stronger sustainability performance, WWF
Switzerland has assessed and compared the environmental stewardship of
15 major watch and jewellery brands. The questionnaire developed together
with BHP - Brugger and Partner, reflects a comprehensive set of sustainability topics such as sustainability strategy and targets, due diligence, reporting and monitoring, sustainable supply chain management, greenhousegas (GHG) emissions and stakeholder engagement.
As the results below show quite clearly, the Richemont Group brands (Cartier, IWC, Jaeger-LeCoultre, Piaget and Vacheron Constantin) are the only
ones among the surveyed companies that managed a score in the “Upper
Midfield” or above. Moreover, together with TAG Heuer, it was the only one
that actively took part in the evaluation process by complementing and commenting on the WWF rating questionnaire. The remaining companies(Audemars Piguet, Breguet, Chopard, Longines, Omega, Patek Philippe,
Rolex, Swatch and Tissot) chose not to complement the pre-assessment.
Since most of these companies do not publish any detailed information about their sustainability efforts, a substantial part had to be classified as non-transparent. There is simply no publicly available data about
the evaluated topics and criteria to be found for most of the companies,
which is why an evaluation of actual sustainability performance is rather difficult. Nevertheless, the first and most important issue for the watch andjewellery industry is therefore the apparent lack of transparency andcommunication regarding material environmental concerns.

Figure 6: Results of environmental rating
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Because so far the sector has not been called upon by its stakeholders tocommunicate about its business practices, having the brands of only one
group in the upper part of the rating scale does not come as a complete
surprise due to the secrecy of the entire industry. Only IWC was able toshow more serious commitment towards a sustainable transformation, butwith substantial potential for improvement. Most brands were ranked either
in the midfield or as non-transparent (when no relevant data was found, andthe companies did not answer the questionnaire). These findings are mostly
in line with other studies, illustrating that the sector is just beyond the starting point in terms of its sustainability performance. A recent study by Human
Rights Watch45, for example, indicates that the majority of companies in
the watch and jewellery industry do not yet take responsibility for theiractions and have shown little effort so far to be more transparent.

Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

X
X
X

X

X
X

Membership in business initiatives for sustainability

Customer awareness on sustainability impacts

Engagement with employees

Capacity building of suppliers

Sourcing & environmental projects for raw materials

Environmental certification and % coverage ofcertified raw materials

Transparency and certification of raw materials

Environmental impact of products

Traceability & emissions of transportation

Sustainable procurement

Waste management and product packaging

GHG emissions (inventories, reduction targets, etc.)

Monitoring & reporting

Materiality analysis & target setting

Overall scoreenvironmental rating

Due Diligence

Company

Governance structure & policies

visionary
frontrunner
ambitious
upper midfield
lower midfieldlatecomers /non-transparent

Active Participation in Rating Process

Figure 7 shows the 15 selected companies and an overview of the 18 rating criteria that seek to get a comprehensive picture of the companies’ environmental management.

non-transparent
intransparent
non-transparent
intransparent
upper midfield
lower midfield
ambitious
upper midfield
non-transparent
intransparent
non-transparent
intransparent
non-transparent
intransparent
upper midfield
non-transparent
intransparent
non-transparent
intransparent
lower midfield
non-transparent
intransparent
upper midfield

Figure 7: Results for 18 rating criteria
To sum up the rating, this section contains the key observations that can be
drawn from the detailed analysis by BHP and WWF on the surveyed brands.
The detailed criteria and rating results can be found in the appendix, together with a more elaborate explanation of the rating approach.
For the detailed analysis per category in figure 7, no distinction was madebetween Lower and Upper Midfield, which is why no orange colour is shownfor the ratings in the individual questions. Also, a company was rated “nontransparent” only when no relevant data could be found, and the companies
did not actively participate. Hence, these companies disclosed no relevant
information and chose not to complement the questionnaire. Others whichmight also have published only limited information were able to improvetheir score by providing additional relevant information to the analysts.
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As the figure shows hardly any green in the rated categories, the following
general conclusion can be drawn: except for a few first movers, most companies in the watch and jewellery sector are either non-transparent orshow no serious ambitions to become more sustainable.

Results of theenvironmental rating

Overall environmental management. In general, the watch and jewellery industry has a long way to go regarding its environmental management performance. The rating shows rather substantial gaps between thebrands in terms of their approach to environmental sustainability, the way
they communicate and the way they set sustainability targets. Only one of
the surveyed leading brands (IWC) has taken noticeable first steps by becoming more active and implementing certain sustainability measures. In
general, some of the assessed brands are taking first actions (mainly Cartier, IWC, Jaeger-LeCoultre, Piaget and Vacheron Constantin), whereas
most others are showing no or very little effort towards serious environmental management and related communication.

Sourcing of raw materials. When sourcing raw materials such as gold,

6 companies actively filled in
the questionnaire, showing
first important steps towards
more transparency

the most important sustainability issues are deforestation, soil degradation,water contamination, the use of hazardous substances and social injustices.
This is the reason why the supply chain was given a greater weighting in
the overall rating. In general, the performance of the assessed companies
in this section is rather weak and transparency must be drastically improved to advance towards more sustainable sourcing practices. IWC
is the only company that publishes the amounts of their main raw materials(steel, gold, diamonds, etc.), while all other brands are still very secretive
regarding their use of raw materials.
Many of the evaluated brands rely on the Responsible Jewellery Council
when it comes to promoting raw materials such as gold. However, this certification does not allow a third party to assess whether a company is sourcing responsibly, and more proactive, transparent communication should
therefore be implemented. Cartier, IWC, Chopard and Piaget have more
ambitious approaches to certification, including more specific information onwhat materials certain certificates apply to. Chopard, for example, is committed to using only gold from ASM mines that participate in the Swiss Better
Gold Association (SBGA), Fairmined and Fairtrade schemes or from Responsible Jewellery Council (RJC) Chain of Custody certified entities46.
To conclude, most companies still conceal where they are sourcing
their gold, leather, gemstones and other critical raw materials and inwhat conditions these resources are extracted or produced.

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Climate change. Most of the surveyed companies have taken no or very

None of the companies
managed a finalclassification as a”frontrunner” or “visionary”

limited steps to actively counter climate change. The problem of climatechange itself and the global challenges associated with it have notbeen appropriately addressed, no ambitious targets have been set andno notable measures have been taken by the industry. Most measures
which have been applied in the sector concern efficiency (e.g. more energyefficient production facilities, reduced packaging, etc.) or philanthropic social and environmental projects, which often have no clear relation to thesector’s real impact. While such projects and advancements are praiseworthy, they are not tackling the core environmental issues facing the sector
and thus do not have a sufficiently relevant impact. In view of the industry’s
effect on climate change, especially through its raw materials, WWF considers this finding very worrisome.

Scientific tools and eco-efficiency measurement. The uptake ofscientific tools and eco-efficiency data collection in the industry is slow.
While some companies are making efforts in this regard, most do not seemto be applying environmental assessment tools of any type (e.g. in productdesign). Some first-moving companies monitor and manage the eco-efficiency of their own operations (mainly manufacturing sites or retail stores)
as well as parts of the downstream supply chain. None of the companies
implement measures in their extended supply chain or collect relevant
eco-data from suppliers, especially beyond tier 1.

Transparency and reporting. There is a lack or even non-existenceof reporting and transparency among the evaluated brands, and an
apparent absence of commitment to determined action, particularly withthe companies in the bottom of the rating sample (the ‘non-transparent/latecomers’ category). This is highly undesirable for the environment, but also
for consumers, investors, communities, political bodies and other stakeholders. Furthermore, it is a major economic and reputational risk for the industry
itself.

Dialogue and collaboration with stakeholders. Some traction is evident in the sector when it comes to participation in national and international
business initiatives. Cartier, Chopard, IWC and Vacheron Constantin all report on their participation in several industry initiatives aimed at sustainable
development. Most other brands either do not participate actively in suchinitiatives or do not communicate publicly about it. There is substantial
room for improvement for most assessed companies regarding theircommitment with employees, the capacity building of suppliers and,especially, efforts to raise customer awareness of environmental issues within the industry.

Call to action
In summary, the rating revealed that among the assessed companies, only a few are taking first steps towards reducing the industry’s environmental footprint. None of the companies assessed in this rating was classified as a ‘frontrunner’ or a‘visionary’. From the perspective of WWF this is simply not goodenough. WWF calls upon companies in the watch and jewellery industry to take more determined action towards better
environmental management, increase transparency andalign their business models with the ecological boundaries
of our planet.

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III. Changing towards
forward-thinking
practices

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The need fortransparency andresponsibility

The industry is far behind other sectors regarding its supply chain and sustainability management, which is why WWF has gathered recommendations
on the most important steps towards more responsible watch and jewellery
making and is calling for action.
Numerous current developments underline the need for action in the sector,
and new political requirements and mandatory obligations may soon bring
the watch and jewellery brands into the spotlight of media, governments andconsumers regarding their environmental and social impact along the supply chain. Political moves such as The Responsible Business Referendum(“Konzernverantwortungsinitiative”) in Switzerland, for instance, may soonrequire Swiss-based companies to take responsibility for their impacts along
the value chain. Also, consumers are increasingly addressing sustainability
topics and becoming progressively aware of the issues, demanding transparency and responsibility from the companies.
Each company can contribute significantly to making the industry more sustainable, be it on a national or global level, on a highly specific issue or in
the general discussion, as well as alone or in conjunction with its customers,
suppliers and competitors. Based on the results of this rating, WWF Switzerland makes general relevant recommendations to the Swiss watch andjewellery industry regarding six issues.

1. Increase value chain transparency

2. Use responsible materials

Transparency poses a challenge in the highly fragmented supply chain, but it is a necessity if the sector
wants to improve in supply chain management andenvironmental performance. WWF recommends increasing transparency regarding raw materials
and upstream manufacturing and taking broad responsibility for all tiers of the supply chain withineach company. Consumers and investors are becoming increasingly aware of products, production facilities, raw materials and the associated environmental and social risks. Intergovernmental organisations47(e.g. the OECD and the UN) have increasingly
stressed the importance of due diligence in the relationship between business, the environment and human rights (see Appendix for additional information).
Only by increasing transparency, and by addressing
and better understanding its own issues and processes, will the industry be able to substantially improve.

The production of raw materials for watches and jewellery always has an impact on the environment,
whether the materials are newly extracted, produced
or recycled. However, companies should better understand their supply chain and adopt measures
to reduce risks, which can differ substantially depending on the nature of the raw materials, the location of production and the manufacturing processes
involved. Careful choice, design, as well as ambitious
sustainability standards and certificates, can reduce
the environmental impacts of raw materials (see Appendix for selection of certifications).
WWF advises companies to switch to 100 per centresponsible materials with the lowest possible
ecological footprint and to apply eco-design
measures to all products, including the possibility
for full reusability and recyclability. Equally important is the absolute reduction of newly sourced raw
materials, for example, through repairing and recycling processes, improved product durability and longevity and reduced consumption.

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3. Integrate sustainability into business practices
Following the footsteps of other industries, companies
in the watch and jewellery sector are slowly adopting
more integrated sustainability strategies but are still
only in the early stages of this process. As a consequence, business initiatives such as science-basedtarget setting48 are becoming more and more important and scientifically based business objectives
for sustainability need to be adopted. Besides the absolute necessity to change from current mere efficiency targets to science-based target setting, there
are also numerous, more general business benefits ofsetting science-based targets.49 Sustainability
needs to be a fundamental part of business practices and be embraced and embedded in a company’s culture and strategy to achieve considerable transformational change.

4. Report publicly on relevant sustainability topics
Even though public reporting on environmental topics
is not yet mandatory for many players in the sector,
companies should implement regular (at least biannual) systematic internal quantitative monitoring and reporting on environmental issues, challenges, targets and achievements. Also, a systematic public sustainability report (e.g. according to GRIStandards50) and quantitative reporting on all targets
should be standard procedure. Relevant publicly reported information needs to be further assured by athird party to increase credibility. Due to the sector’s
relevance and impact, companies should apply sucha course of action regardless of any legal requirements.

value chain) to tackle transparency and responsibility challenges in the industry. A true multi-stakeholder approach offers the most effective platform forcreating and sustaining a responsible and inclusive
sector.

6. Innovate for circularity
Basing decision-making on insights of life-cycle analysis and constantly aiming for product longevity andcircularity is an important step towards the Circular
Economy. Thus, besides business model innovation for sustainability, which goes far beyond reducing negative impacts in operations and supply
chains, WWF advises companies to become partof the Circular Economy.
WWF sees the Circular Economy as a regenerative
system built on the continued use of high-quality materials, which respects planetary boundaries and minimises resource input and waste by slowing and closing material and energy loops. A circular economy
creates positive environmental and societal benefits,
supported by an alternative growth and consumption
narrative, while waste and negative impacts are designed out of the system.
Business model innovation can go from rethinking abusiness case to challenging the entire system (market) in which the business operates. The objective of
business model innovation from a sustainability perspective is to drastically reduce resources and material input and bring a sector’s environmental impacts
into line with planetary boundaries and the SDGs.
For more information on business model innovation,
we recommend the White Paper by WWF and Impact Hub on Business Model Innovation for Sustainability.

5. Collaborate with peers in the industry
Sustainability in the supply chain could be easier toimplement and transparency could be provided morecredibly if companies collaborated. WWF highly recommends that companies seek collaboration (precompetitive as well as up- and downstream theEnvironmental benchmark and industry report for the watch and jewellery sector

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Box 5: Summary of recommendations for transitioning towards a more sustainable watch and jewellery sector
Increase transparency across the value chain•
Identify brand’s own supply chain and develop traceability measures•
Require suppliers (incl. gold refiners, diamond suppliers, etc.) to ensure traceability and to provide
detailed information on the whole supply chain•
Demand segregated processing of raw materials (e.g. gold) to ensure traceability in the supply chain•
Assess all environmental and human rights risks throughout the supply chain, including evidence ofdue diligence by upstream suppliers•
Implement follow-up procedures and remediation of all critical issues identified

Use responsible materials•
Implement a chain of custody over precious metals and stones (e.g. gold, diamonds etc.), including
efforts to trace these minerals to their origin•
Preferably rely on certified and traceable recycled raw materials instead of newly mined resources•
Support organisations and initiatives that work to improve environmental and social conditions in artisanal and small-scale mines

Integrate sustainability into business practices•
Integrate sustainability into the core business•
Identify own major environmental and social challenges/impacts and formulate ambitious objectives
and measures for coping with them•
Adopt and implement a robust, detailed sourcing policy with suppliers to provide detailed evidence of
chain of custody and due diligence undertaken throughout the supply chain•
Build a sustainability governance structure within the company (incl. top management responsibility)•
Set science-based environmental targets

Report publicly on relevant sustainability topics•
Report publicly (preferably annually) on environmental management and due diligence, including
steps to manage and mitigate risks•
Communicate on total amounts of annually purchased critical raw materials (e.g. precious metals,
leather, gemstones, etc.), including information about main suppliers•
Follow international reporting standards•
Implement third-party verification for relevant sustainability information (incl. responsible sourcing)

Collaborate with peers in the industry•
Support and actively participate in business initiatives for sustainability and responsible businesspractices•
Foster the development of true multi-stakeholder initiatives to assure the inclusion of non-industry
partners - in particular civil society organizations - at all levels of the governance structure

Innovate for circularity•
Base decision-making on insights of life-cycle analysis and constantly aim for the products’ longevity
and circularity•
Make eco-design a substantial part of product design and close material and energy loops to work
towards a circular approach and respect planetary boundaries•
Reconsider the current business model, if necessary, to drastically reduce resources, material input
and waste production

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Good practice stories
within the sector

The good practice examples listed below were selected based on their levelof ambition in terms of reach, relevance, feasibility and scalability. Due tothe variety and diversity of existing approaches, it is important to note that
this is not to be regarded as a conclusive list but rather a glimpse of possible
pathways that companies are taking to improve their sustainability performance.
We describe concepts that are relevant for the sector’s environmental impacts, that have been tested and already exist, and that could be brought toscale in the near future. Also, the following sections include recommended
ways forward by WWF that might not be seen yet in the market or broughtto scale but could hold the potential for transformational change.
Drawing a clear line when categorising these examples is often quite difficult, which is why the following section is divided into four main categories:
responsible raw materials, reducing & repairing, more transparent reporting, sharing & second hand.

Responsible raw materials
There are several good examples for using more sustainable, responsible raw materials but we would like to highlight some exemplary cases. First of all, smaller jewellers are increasingly offering the possibility to only incorporate
certified raw materials in their collections, whether they are newly mined (e.g. Fairtrade, Fairmined etc.) or recycled,
but the availability of such certified materials is still limited and the adaptation in the market therefore slow. Secondly,
some global watch and jewellery brands are increasingly trying to make their sourcing more transparent by only
buying and offering certified raw materials. Below are two examples of global companies that are taking first steps
towards more responsible and transparent sourcing as well as another case of more responsible raw material
sourcing, representing various kinds of alternative raw materials.
Chopard: The company committed in spring 2018 to only use 100% “Ethical Gold” in its jewellery and watch creations. Chopard defines “Ethical Gold” as gold acquired from responsible sources, verified as having met international
best-practice environmental and social standards. The gold comes only from two different sources: artisanal newly
mined gold from small-scale mines participating in the Swiss Better Gold Association (SBGA), Fairmined andFairtrade schemes as well as RJC Chain of Custody gold (through Chopard’s partnership with RJC-certified refineries). Even though it is difficult to learn about the gold’s actual origin, especially the RJC certified gold, this is an
important step for the industry.51
Tiffany & Co.: The firm sources the majority of its rough diamonds and precious metals directly from mines, taking
responsibility for the supply chain, as well as from recycled sources. For instance, Tiffany established its own chainof-custody controls for diamonds (in addition to Kimberley Process compliance) and if non-recycled gold is used, itcomes from one specific mine, which is disclosed in the company’s sustainability report. The latter is also an aspect
where Tiffany & Co. sets a good example, since its sustainability reporting is well ahead within the sector in termsof its scope and level of transparency.52
Alternative raw materials: There are several types of watches and jewellery made of alternative, eco-friendly
materials (e.g. recycled, renewable, reused, etc.) in the market. One specific example, which will be representative
for these kinds of materials is wooden watches. Yet, when deciding to buy a wooden watch it is highly recommended
to have a closer look at the origin of the wood: for example, reclaimed, recycled and certified woods (e.g. FSC). As
with all such products it is important to focus on high quality and durability since an eco-friendly main raw material
has few environmental advantages when the product has a short lifetime.

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Reducing and repairing
From an environmental perspective, reducing the production of new raw materials (e.g. newly extracted metals,
newly produced plastics, etc.) is to be favoured. It is important to mention at this point that jewellers have always
recycled a substantial part of their material such as precious metals and numerous jewellers offer remodelling, upcycling and recycling of old jewellery. Recycling and repurposing valuable raw materials is therefore
no new phenomenon in the industry and often has simple economic reasons behind it. Nevertheless, reusing resources is very important and the following companies present some of many good examples for reducing, recycling
and upcycling in the market:
Bayou with Love: Bayou with Love has created the “Circular Collection” and the “One Earth Collection” using only
recycled gold from used technology. The company collaborated with Dell, the tech solutions provider, to use goldthat had been recovered by Dell’s US recycling programmes.53
Triwa: The brand manufactures its watches in small batches and puts great emphasis on quality. One of its latest
lines of watches is made out of recycled destructed illegal firearms. This product was made in collaboration with IM
Swedish Development Partner and was created to transform guns into something useful. The watch sales generate
financial resources to rebuild conflict-torn societies and support victims of armed violence.54
Baume: the company was launched in 2018 by offering fully customisable watches. Baume developed a businessmodel that exploits recycled materials, avoids precious metals and applies a made-to-order approach. The brandhas committed to not use animal-based or precious materials in its products and, by making customised products,
it is hoping that customers will keep and use the products longer. It offers recycled and re-used components andthe watchstraps are made from cotton, cork, linen and recycled PET. 55
Generally speaking, the reparability and reusability of a watch or piece of jewellery, like its longevity, are very
important aspects when it comes to reducing the consumption of newly manufactured products. Thus, quality plays
a very critical role and many companies in the sector are already putting considerable emphasis on this aspect. In
particular, the companies in our rating mostly manufacture products that are made to last for decades and aredesigned to be repaired or reused. This is a praiseworthy characteristic of the watch and jewellery sector (mainly inthe luxury segment – see Box 6), where it is generally ahead of many other industries. 56

Box 6: Fast-fashion jewellery / watches and smart watches: a currently unsustainable business model
Fast fashion is establishing itself in the jewellery and watch market and smart watches are becoming more andmore popular, overtaking many traditional watch-makers in volumes and sales.56 Jewellery and watches havetraditionally been a durable, long-lasting purchase, but technological changes and fashions are changing thisparadigm, making jewellery and watches less durable, short-lived and therefore an additional contribution to
overconsumption and waste production. From an environmental perspective, WWF is critical of the fast-fashion
jewellery and watches movement as well as the rise of smart-watches, if low life-expectancies of products should
become common practice.
Fast-fashion jewellery and watches: Fine jewellery and high-end watches have so far mostly been unaffectedby fast fashion, but this cannot be said of the fashion-jewellery market. More and more players are entering thefray, coming for example from the apparel or other fast-paced industries. These providers are adding hundredsof new items and constantly changing their assortment — an unheard-of pace in an industry where the standard
is two collections a year56. Without sensible sustainable business models, eco-design considerations and responsible raw materials, the fast-fashion trend can therefore worsen the industry’s environmental impact manytimes over.
Smart watches: Even though smart watches tend to be way more expensive than regular fashion watches,
they often have similarly low life expectancies due to rapid technological advances that make hardware andsoftware obsolete after a few years. Since most smart watches rely on precious metals for their electronics, theyoften have comparable impacts as general high-end watches but with obvious shorter lifespans.

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More transparent reporting
A major issue where the jewellery and watch industry has immense room for improvement, is regarding non-financial reporting and the transparency of its business practices. While regular and extensive sustainability reportinghas been established in most larger industries, promising examples among watch and jewellery makers are stillquite rare. Since listing all brands with various types of approaches towards non-financial reporting would be very
difficult and could hardly be exhaustive, we make a rather general observation about good-practice examples. If
companies report according to internationally recognised reporting standards (e.g. GRI Standards, EU’s Non-Financial Reporting Directive etc.) at the brand level (i.e. Maison), this can be viewed as current best practice in the
sector. Companies that are trying to be ahead of the game in this regard are IWC, Swarovski, Tiffany & Co and anumber of others.

Renting and second-handRenting, co-owning and sharing watches and jewellery instead of owning them is another phenomenon which
seems to be gaining traction in the market. While this might not be the most feasible option when it comes to a
watch for everyday wear, it can have apparent sustainability advantages for specific items used on rare occasions.

Haute Vault, Clerkenwell and Axess Chronos: These three brands will stand for an illustrative selection of manysuch providers. They offer wide ranges of watches for rent, allowing the customer to wear a watch for a specified
period of time at a fraction of the total cost. Axess Chronos offers watch renting for days, weeks or months andprovides advice on selecting the perfect watch for each type of occasion (e.g. weddings, black-tie events, job interviews, business presentations.)57. Clerkenwell allows customers to rent an item for a month or long-term58. Haute
Vault offers both watches and fashion jewellery for rent from a week to a month. This company has acquired an
exclusive collection of watch and jewellery that can be rented through any of their memberships for different lifestyles.59
Even though such services might not be based on a sustainable rationale, by indirectly reducing the need to buy
several new items and promoting a sharing economy, they hold the potential to positively impact the sector’s ecological footprint.

The second-hand market for watch and jewellery is a booming billion-dollar segment and is mostly dominated byindependent third-party vendors without the active involvement of the brands themselves.60 Unlike car manufacturers, which maintain networks of certified pre-owned dealers, watch-makers have long neglected the second-handmarket, often fearing both its strategic and logistical challenges.61 WWF is in favour of selling and buying secondhand, mainly since it avoids producing new items and therefore does not have an additional negative environmental
impact. There are several watch-makers, also among the featured brands in the rating, that have allegedly announced the introduction or consideration of certified pre-owned watches. So far, we have not been able to findthese offerings on their websites, but we would strongly support such endeavours.

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IV. The power ofconsumers

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How consumers candrive sustainability

Sustainability has become a key factor for consumers. There is an evident
trend for a transition towards more sustainable patterns of production andconsumption. According to several studies, customers generally believethat consumption is a means to shift the direction of the world, enhance
livelihoods and community well-being62. In fact, 81% of global consumers
expect more from their expenditure than the sole acquisition of goods, according to a consumer study by Accenture63. Customers are now demanding leadership from brands to succeed in dealing with planetary challenges:
they expect more responsible stewardship of natural resources and the environment and more transparency. Despite these expectations, 72% of consumers believe that business is failing to take care of our planet and society64.
Global consultancy firms and market research organisations agree on thefact that the current economy is largely influenced by the millennial generation, the cohort born between the early 1980s and the early 1990s65. Millennials expect to have a meaningful relationship with brands 66 and 84% ofthem believe that it is their generation’s responsibility to change the world
through their actions67. A Forbes publication shows that one of the key purchasing patterns of millennials is to do business with brands engaged insustainable manufacturing, ethical business standards and pro-social messages68. All these aspects are reason enough to stress the importance andthe power of consumer behaviour, which is why the following section lists
possibilities for consumers to improve and influence sustainability regarding
watches and jewellery.

Consume sufficiently. First and foremost, we as
consumers should try to reduce the consumption of
resource-intensive products and services according to
the sufficiency strategy. Sufficiency is a sustainability
strategy which acts as a complementary component
to efficiency and consistency, it aims for an absolute
reduction of resource consumption and covers reductionist strategies such as consuming less and slowing
down. Thus, before each purchase, we should consider whether we really need this product and apply amore conscious, considered shopping routine. With
regard to watches and jewellery, this should feature astronger focus on high quality and longevity.

Ask for certifications and examine the certifications carefully. Whether it is diamonds sourced under the Kimberley Process or precious metals comingfrom an RJC-certified entity, Fairmined or Fairtrade,you should always ask about the origin of the raw material. If it is not possible to prove where a raw material
has come from (e.g. mine of origin) and what players
were involved (e.g. mining company, mining communities), or if a certified segregation is not guaranteed,
there is no assurance its sourcing was not responsible
for ecosystem destruction, forced and child labour involvement, dangerous working conditions or corruption.

Ask for recycled materials and always recycle. Remember that precious metals are a (often infinitely) reusable resource: they can be recycled numerous
times without losing their original quality. By recycling
and buying recycled metals you avoid the need formining and therefore the use of additional natural resources. Among others, sources of recycled metals
range from existing jewellery, metals that had an industrial use, metals from electronic devices or productmanufacturing, to metals from in-house recycling, investment gold, etc.

Reuse and repurpose. Whenever possible, weshould maintain, repair and reuse products. Whencertain products are no longer needed or wanted, wemight be able to redesign, reuse, or return the raw materials for recycling. The principle includes reselling,
reusing or further using items that are no longer required, providing a longer life for precious raw materials such as gold or diamonds.
Moreover, a lot of jewellery and watches are often
passed down in the family as heirlooms. Since designs and taste change over time, many such heirlooms end up forgotten or unnoticed in family safes

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and boxes. Redesigning and modernising such pieces
is a conscious decision for eco-friendly jewellery thatcan simultaneously help revive memories and personal connections to the dearly departed.

Use instead of own. Our jewellery can be shared, exchanged or borrowed for a special occasion instead ofbeing bought new each time. As described in the previous chapter, in addition to sharing among family andfriends, there are numerous service providers available that offer the possibility of renting jewellery andwatches.

Box 7: Summary of what consumers can do
Think twice about whether you really need new jewellery or a new watch

Always try to repair defective items to extend their lifetime or have old jewellery reworked or recycled
by local jewellers or your preferred brand
Avoid purchasing industrially manufactured mass-produced watches or jewellery whose raw materials come from uncertain sources, and focus on high quality
For products with precious metals or gemstones, choose certified recycled and re-refined metals
and recycled or synthetic gemstones
With newly mined materials, prefer certified eco-friendly conflict-free and fair-trade products andalways ask about the origin and story of the raw materials
Recycle old and unused jewellery, watches and electronic devices (e.g. mobile phones)

Choose jewellers and watch-makers that comply with international environmental and social standards and can prove the origin of their critical raw materials
Prefer watch and jewellery companies that apply a holistic sustainability approach and communicate
on their practices and efforts (e.g. in sustainability reports)
If you need jewellery for special occasions, you can rent or borrow it instead of buying new

Ask the brands how they tackle the environmental issues of their sector, and discuss this with colleagues, friends and family

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A precious transition towards transparency and responsibility

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Swiss Made
Swiss-made watches have a high reputation as Swiss brands sell rather expensive, high-quality and prestigious
watches and invest a lot into supporting and framing this image. Amongst the larger Swiss brands, Patek Philippesells the most expensive watches, retailing at CHF 45,000 on average, while the regular Swiss-branded watch
retails at around CHF 800.69
What does ‘Swiss Made’ mean?70
Since 2017, a watch can only get the label “Swiss Made” or “Swiss” if at least 60 per cent of manufacturing costs
for the finished watch were generated in Switzerland. Additionally, the technical development of a “Swiss Made”
watch or movement must also take place in Switzerland itself. This also includes smart watches. Various studies
have shown that consumers pay up to 20 per cent more for a Swiss watch and up to 50 per cent more for special
mechanical timepieces.

Selection of certifications and guidelines
The following section about certifications and standards, applicable for the watch and jewellery industry, does notraise any claim to completeness but is rather intended to give an illustrative overview of some of the currently
most relevant standards. WWF does not provide direct recommendations regarding current certifications and labels, yet the following aspects need to be considered when relying on industry standards: Using only certified raw
materials is an important step towards more responsible and sustainable sourcing, but the certification scheme
should be transparent enough to disclose who was involved, where the material has come from and what criteria
were applied in the certification assessment.
Given the topic at hand, we decided to focus on the following 6 initiatives for a more detailed analysis: Responsible Jewellery Council, Fairmined, Fairtrade Gold, IRMA, the Kimberley Process and the OECD Guidance on Due
Diligence. As previously mentioned in the report, the main focus was placed on critical raw materials such as
gold, which is why this section mainly covers gold certifications as well.

Responsible Jewellery Council (RJC)
The Responsible Jewellery Council71 (RJC) was set up in 2005 by companies and trade associations from the goldand diamond industry with the aim of promoting an ethical, socially and environmentally compatible and humanrights-compliant corporate policy along the entire supply chain. To this end, two standards were created: the Codeof Practices (CoP), which must be implemented by all members of the RJC; and the Chain of Custody (CoC) standard, which can be implemented voluntarily. By ensuring that many companies in the gold, diamond and platinum
industries comply with the standards, it also aims to improve the reputation of the sector as a whole and consumer
confidence in its products.
Membership of the initiative has grown rapidly in recent years and, with it, the number of companies implementing
the initiative's Code of Practices (CoP). The RJC is an ISEAL 72 member (global association for sustainability standards), which provides insights into the state of implementation of the standard through monitoring and evaluation
reports.
In the Declaration of Commitment for Entrepreneurial Practice, the Code of Practice (RJC CoP), the members
commit themselves to a number of standard principles in four fields:
Business ethics: prohibition of corruption, smuggling, blackmail, fraud and bribery, money laundering and terrorist
financing on the basis of existing UN and OECD conventions, certification according to the criteria of the Kimberley
Process Certification Scheme to ban conflict and war diamonds, product safety and product integrity
Respect for human rights and social responsibility
Environmental responsibility: environmental protection, the handling of hazardous substances, waste and emissions and the use of energy and natural resources
Management systems: Binding to existing legal bases, company policy and business relations
Companies must have their business practices certified in accordance with RJC two years after becoming a member, otherwise sanctions or exclusion are imposed. Moreover, external audits are carried out.

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Critical reflection
A particular advantage of the CoP is its wide distribution and high dynamic within the selected industrial sectors.
Since 2005, the Council’s membership has grown from 14 to more than 1,100 organisations committed to advancing responsible jewellery practices. Many relevant international standards, such as EITI73 and the International
Cyanide Management Code, are integrated into and harmonised with CoP and CoC. The standards comply withthe requirements of the ISEAL Alliance and are regularly reviewed and revised accordingly. The standards thus
remain adaptable to new challenges (cf. the current review of the RJC COP standard). Implementation, monitoring and evaluation reports present and address both successes and existing challenges.
The RJC is an industrial initiative. As of now, the decision-making bodies of the RJC do not include consumer
groups, representatives of mining or locally affected communities, trade unions, miners’ associations or a broader
spectrum of NGOs. Chain of Custody is not compulsory for sourced materials (e.g. gold). The RJC does not makeits audits public and external stakeholders only receive very basic data about member entities. There is no information about the findings and corrective actions of the audits, making it simply impossible to assess a company
as an external stakeholder. This lack of transparency undermines confidence in the certification system andmakes it difficult for any party to credibly evaluate a company’s performance.
Thus, membership of the RJC does not automatically guarantee responsible sourcing by a company and RJC’s
governance, standards and audit system are not transparent enough to give such a recommendation. WWF currently considers the RJC as an industry body that provides civil society and other stakeholders (e.g. NGOs) onlywith an advisory role and no direct influence on the decision-making process of the initiative. While the handling of
implementation challenges can be assessed positively, the auditing and assessment process is seen as lesstransparent and comprehensible.

Fairmined
The Fairmined Initiative74 was created in 2004 by the Alliance for Responsible Mining (ARM) 75, a global non-profit
organisation for responsible artisanal and small-scale mining. The goal of the initiative is to enhance equity andwell-being in artisanal and small-scale mining communities through improved social, environmental and labour
practices, good governance and the implementation of ecosystem restoration practices.
ARM wants to set standards for responsible ASM, support producers and enable them to deliver "Fairmined" certified metals and minerals to the markets through economically fair supply chains. The aim is, to contribute towards
the transformation of ASM into a socially and environmentally responsible activity, and to the improvement of thequality of life of marginalised artisanal miners, their families and communities. In this way, ASM will become aformalised, organised and profitable activity that uses efficient technologies, and is socially and environmentally
responsible.
There are two different certifications that can be obtained: Fairmined Gold and Fairmined Eco Gold. The latterincludes stricter and more extensive ecological criteria (see below).

Fairmined Gold

Fairmined Eco Gold

Environmentally friendly

Ecological

Responsible use of toxic substances

No use of toxic substances

Gradual reduction in the use of toxic substances

Rehabilitation of native ecosystems (e.g. restoration of forests in highly biodiverse areas)

Premium: 4000 USD per kg

Additional requirements for minimization of
ecological disruption
Ecological Premium: 4000 USD (regularpremium) + 2000 USD per kg

Critical reflection
Depending on the customer’s licence with Fairmined, the gold may be fully traceable to the mine of origin or mixed
with other gold. Certified Fairmined gold is still only available in very limited amounts with approximately 500 kilograms of gold output per year76. This quantity represents a marginal fraction of the gold bought and used each yearby the assessed companies in this report. At the time of writing this report, eight mines in four countries (Bolivia,
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Colombia, Mongolia, and Peru) were certified, with an additional 20 mining organisations working towards certification. Although the standard might not have a reach similar to that of the RJC, for example, it does show a bestpractice example of how to cover a very broad spectrum of issues and goes well beyond the narrow focus of conflictfinancing prevention. In the environmental field, for example, it additionally includes requirements on water consumption and renaturation in its Fairmined Eco standard. The initiative also aims to reduce and eliminate the useof toxic substances (e.g. mercury) in small-scale mining and to improve the handling of chemicals in general.

Fairtrade
Fairtrade and Fairmined dual certification for gold was launched in 2011, a joint scheme between The Fairtrade
Foundation and The Association for Responsible Mining, with a separation of the two in 2013. Since then,Fairtrade Gold77 has been solely administered under the umbrella of Fairtrade International. This is a standardsetting and global consumer certification system that works with small producers in developing countries with thegoal to improve livelihoods and create sustainable development opportunities through trade. The Fairtrade Goldand Precious Metals programme extends these goals to the artisanal and small-scale mining sector. The institution works directly with artisanal and small-scale mining organisations to achieve compliance with its standard,
independent third-party verification, chain of custody audits, minimum price guarantees, Fairtrade premium payments and the marketing of certified products in international Fairtrade markets.
Critical reflection
The Fairtrade Foundation is working closely with NGOs on a programme to trai and support artisanal and smallscale gold miners. As with the Fairmined standard, the certified quantity represents a marginal fraction of globally
mined gold, but it is an important first step and a signal to the industry. Miners can earn an additional ecologicalpremium when they recover gold without the use of mercury or cyanide.78 In addition, they must ensure minimum
ecological disruption and forest restoration from the outset of new operations. Generally speaking, the reach ofthis standard might not be similar to the other examined examples, but it shows a well-established case of how tocover a very broad spectrum of issues that goes well beyond the narrow focus of conflict-financing prevention.

Initiative for Responsible Mining Assurance (IRMA)
The Initiative for Responsible Mining Assurance79 (IRMA) is a certification scheme that offers watch and jewellery
companies another source of responsibly-sourced precious minerals and gemstones. IRMA was launched in 2006
to develop an independent standard for responsible mining, offering certification to individual mine sites rather thanmining companies. The focus of IRMA is on industrial, rather than small-scale or artisanal, mining.
According to the responsible mining website, the IRMA Standard is designed to support the achievement of four
overarching principles: business integrity, social responsibility, environmental responsibility, and planning and managing for positive legacies. It was developed by a broad stakeholder group that includes mining companies, jewellers and other “downstream users,” non-governmental organisations, affected communities and labour unions.
IRMA will be testing the metrics and global applicability of this standard in 2018 and 2019. During its launch phase,
IRMA will be seeking input to improve the standard to assure its relevance across geographic regions, mining
methods, types of mined materials, social and political environments, diverse landscapes and mining company
sizes. A revision of the IRMA Standard is planned for 2019 based on learning from the launch phase. According tocurrent information, an official certification of mines will not be available before late 2019.
Critical reflection
The Standard for Responsible Mining is the result of more than ten years of collaboration between groups from themining industry, organised labour, non-governmental organisations, impacted communities, and businesses. This
multi-stakeholder approach, offering shared value for mining industry participants, while addressing purchaser demand for greater options in sourcing responsibly mined materials and civil society’s desire for transparency andindependent verification, is considered a definite step forward.
Standard for Responsible Mining’s best practice requirements for mining go far beyond current industrial norms andinclude aspects such as health and safety for workers, human rights, community engagement, pollution control,
mining in conflict-affected areas, rights of indigenous peoples, transparency in revenue payments from companies
to governments and land reclamation. The standard focuses on transparency, where different levels of performanceare recognised, and continuous improvement is encouraged but where certification is still available for those industrial-scale mine sites that meet all major best-practice requirements.

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IRMA has a somewhat negative connotation due to its long development and implementation phase and there isincreasing concern that the initiative will lose relevance the longer this certification is postponed.

Kimberley Process
The Kimberley Process is an international certification that was established by the United Nations in 2003 to safeguard the legitimate diamond trade by preventing rough diamonds from entering the mainstream market 80. It has
been acknowledged that the process contributes to international security, development and human rights. Before
the Kimberley process, watch and jewellery customers had little information on where the diamonds that they werebuying came from. Even in the early 21st century, diamonds were still mined in armed-conflict zones and financed
insurgencies and rebel groups in several countries81.
The Kimberley Process relies on the contributions of its participants - governments and regional organisations (e.g.
the European Community) – to remove conflict diamonds from the global supply chain82. To become a participant,parties must meet the minimum requirements of the Kimberley Process Certification Scheme (KPCS), which entitles
them to trade in rough diamonds with one another. The KPCS aims to safeguard the shipment of rough diamonds
and certifies them as conflict-free83. The requirements are:1.

Satisfy ‘minimum requirements’ and establish national legislation, institutions and import/export controls

2.

Commit to transparent practices and to the exchange of critical statistical data3.

Trade only with fellow members that also satisfy the fundamentals of the agreement

4.

Certify shipments as conflict-free and provide the supporting certification84

Implementation of the KPCS is monitored through annual reports, review visits, regular exchanges of data andstatistical analysis.85 In addition, participants, observers and representatives from the industry meet twice every
year and conduct monthly teleconferences86.
On 7 March 2018, the General Assembly of the United Nations adopted a consensus resolution to intensify the
Kimberley Process Certification Scheme (KPCS), to continue breaking links between illicit rough diamonds trade
and armed conflict, and to align the KPCS with the 2030 Agenda for Sustainable Development87.
Critical reflection
The Kimberley Process Certification Scheme (KPCS) is the most prominent international standard with regard to
diamonds. Despite being the most internationally applied standard, it has not escaped criticism and two main
flaws have been condemned: narrowness and traceability. Firstly, critiques aim at the fact that the certification by
the Kimberley Process is too narrow, leaving aside serious issues such as more specific human rights abuse issues or environmental impact. Diamonds certified by the Kimberley Process can still carry tragic histories, including land degradation, destruction of ecosystems, populations evicted from their ancestral lands, forced labour,
abuses and corruption. Secondly, the Kimberley Process certificate does not apply to individual stones, but tobatches of rough diamonds that are cut and distributed around the world with no comprehensive tracking system.
This means that in most cases consumers of watches and jewellery will not know in which mine or even whichcountry the diamonds they are buying were sourced, even if they are certified by the KP88.

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OECD guidance on due diligence
The OECD has defined due diligence as an ongoing process “through which enterprises can identify, prevent,mitigate and account for how they address their actual and potential adverse impacts as an integral part of businessdecision-making and risk management systems”89. Due diligence goes beyond identifying and managing risks to acompany itself, also addressing the impacts and risks caused to other parties.
The OECD proposes a five-step framework to operationalise due diligence:
Step 1: Establish strong company management systems
Step 2: Identify and assess risk in the supply chain
Step 3: Design and implement a strategy to respond to identified risks
Step 4: Carry out independent third-party audit of due diligence at identified points in the supply chain
Step 5: Report on supply chain due diligenceDue diligence goes beyond identifying and managing material risks to the enterprise itself; it considers addressing
potential impacts through prevention or mitigation and actual impacts through remediation 90. The OECD Guidelines
focus on adverse impacts that are “either caused or contributed to by the enterprise, or are directly linked to theiroperations, products or services by a business relationship”91.
Concerning the need to protect the environment and to advance in sustainable development, the OECD Guidelines
suggest that enterprises should92:•

Establish a system of environmental management•

Assess and address possible environmental impacts involved in the processes, goods and services of theenterprise to avoid them or mitigate them if unavoidable•

If the proposed activities might have significant environmental impacts, elaborate an environmental impact
assessment•

If there are threats of serious damage to the environment, do not postpone measures to prevent or minimize the damage•

Keep contingency plans to prevent, mitigate and control serious environmental damage from operations•

Establish mechanisms for immediate reporting of serious environmental damage•

Constantly improve corporate environmental performance, at the enterprise and supply chain level•

Provide training to workers in environmental health and safety issues, such as handling hazardous materials, preventing environmental accidents, or learning about environmental impact assessment procedures
and environmental technologies•

Contribute to environmentally meaningful and economically efficient public policy (e.g. establishing partnerships to promote environmental awareness and protection).

Critical reflection
The OECD Due Diligence Guidance elaborates a detailed mineral supply chain due diligence framework for companies operating in or sourcing from conflict-affected or high-risk areas. The Guidance offers a broad definition of“high-risk areas” that focuses largely on the prevalence of serious human rights abuses or violations of internationallaw. Under this framework, where companies cannot trace their material all the way back to the mine, they should
require upstream suppliers such as gold refiners to provide them with detailed evidence that they have conducted
due diligence in their supply chain. Even though, the OECD guidelines address the responsibility by multinational
enterprises and represent a new, comprehensive and significant process relative to earlier approaches to due diligence1, they have been criticized for being a non-binding code of conduct, which suffers from a lack of monitoringand implementation.

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Discussion of the rating results
About the rating
In the selection of the brands, various aspects were taken into account: (1) focusing entirely on Switzerland andSwiss-based companies to show the role and positioning of Switzerland in the industry; (2) looking at consumerfacing brands and not at often less-known conglomerates and holding companies; and (3) including the most relevant players in the industry, based on an external evaluation of brand value 46. Together, these brands represent
the 15 biggest Swiss watch and jewellery companies.
The objective of WWF Switzerland’s first rating of the watch and jewellery sector is to serve as a baseline study toadvance in WWF’s vision of a more sustainable industry. WWF wishes to see significant improvements within thecompanies towards operating inside the planetary boundaries and is keen to encourage and collaborate with companies to foster such progress. The aim is to include more watch and jewellery brands in the future and repeat thisrating at regular intervals. By applying this approach, WWF intends to identify areas for improvement, enable monitoring of future developments and track overall progress.
The evaluation is based on criteria co-developed by WWF and the renowned sustainability experts at BHP - Brugger
and Partners. BHP worked with specialist analysists and their well-proven rating methodology to assess the 15
companies in the study’s scope.
To build a comprehensive picture of the evaluated companies, BHP’s analysts collected and analysed available
corporate information (reports of the company, corporate website, policy documents, etc). It is important to note,that the assessment’s focus was on the level of the individual brands (maisons) and not on group information.
At the time of the initial compilation of the rating, all companies were given the opportunity to comment on andcomplement the findings of the pre-assessment. Cartier, Piaget, Jaeger-LeCoultre, Vacheron Constantin and IWC(all members of the Richemont Group) and TAG Heuer provided feedback during these review rounds and supplemented the draft rating with additional internal company information and other valuable inputs.
The specific rating criteria were developed based on WWF’s broad experience with ratings in other sectors such as
banking, retail, food and textiles. In addition, BHP’s expertise in company evaluations played a significant part instructuring and finalising the questionnaire. The data used for this report were compiled and updated between May
and early September 2018. WWF attributed a weighting to the different criteria, applying a standardised, formalised
approach, and did not overbalance any of the three main areas (Strategy & Governance, Environmental Management and Company Engagement).

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Audemars Piguet

non-transparent

Breguetnon-transparent

CartierX

Chopardambitious

Jaeger-LeCoultreX

upper midfieldLongines

non-transparent

Omega

non-transparent

Patek Philippe

non-transparent
X

Membership in business initiatives for sustainability

Customer awareness on sustainability impacts

Engagement with employees

Capacity building of suppliers

Sourcing & environmental projects for raw materials

Environmental certification and % coverage ofcertified raw materials

Transparency and certification of raw materials

Environmental impact of products

Traceability & emissions of transportation

Sustainable procurement

Waste management and product packaging

GHG emissions (inventories, reduction targets, etc.)

upper midfieldRolex

non-transparent

Swatchnon-transparent
X

TissotVacheron Constantin

Monitoring & reporting

lower midfieldX

TAG Heuer

Materiality analysis & target setting

upper midfield

IWC

PiagetDue Diligence

Overall scoreenvironmental rating

Governance structure & policies

Company

Active Participation in Rating Process

The findings of the rating are discussed and elaborated in more detail below.

lower midfield
non-transparent

X

upper midfield

Governance & policies
This section evaluates whether companies have adopted a comprehensive governance structure and an
environmental policy. The aim is to get a better understanding of how environmental management is being
implemented and enforced through structures and responsibilities as well as its integration into top management.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

Discussion: The results show that IWC and Cartier clearly outperform the othercompanies in respect of governance structure and policies. IWC, for example, hasa formal commitment that covers the relevant parts of their operations and there isa clear management structure as well as a sustainability board. Jaeger-LeCoultre,
Piaget and Vacheron Constantin show only an informal, anecdotal governancestructure, yet there is some integration of sustainability aspects in decision-making
processes. These companies do have reasonable policies and systems in place
but have received a lower grade, for instance, due to the lack of information on
management structures and responsibilities. Five out of twelve analysedcompanies do not have a formal and transparent approach to environmental
management policies and systems. These companies provide no or very limited
information on their commitment to environmental issues and apparently lack themeans to measure and manage their environmental impacts. For a higher score inthis section, companies should have a dedicated position responsible forenvironmental sustainability which repors directly to the executive board.
Furthermore, sustainability aspects need to be fully integrated in all decisionmaking processes.

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Due diligenceThis part in the questionnaire is mainly concerned with the company’s due-diligence process when choosing
suppliers and working with partners. For instance, it is assessed how business’ reputational and sustainability risks
are included as decision criteria. In particular, it was evaluated how environmental criteria were included when doing
due diligence and to what extent it covers the company’s suppliers and partners.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer

Discussion: Only IWC was able to achieve a more ambitious result, followed byother Richemont brands: Cartier, Piaget and Vacheron Constantin. The main reason for IWC’s better performance is the implementation of its own supplier code of
conduct. Overall, the Richemont group publicly communicates that its maisons conduct third-party external audits of key suppliers’ compliance with the Code of Conduct (publicly available) as part of their internal risk management processes. Maisons are required to follow up with remedial action plans as part of the on-goingsupplier relationship. Richemont established a coordinated approach across theGroup, where maisons help each other audit their suppliers.
The remaining companies either do not communicate on their due-diligence process or do not have such processes in place. Thus, most of the evaluated companies were rated as Non-transparent or Lower Midfield because there is little or noevidence of due diligence, especially regarding environmental criteria.

TissotVacheron Constantin

Materiality analysis & target settingThis section looks at how companies are incorporating environmental aspects in their decision-making and planning. Particularly, it was assessed whether a materiality analysis was performed and if it was based on scientifically
relevant data (e.g. LCA, environmental risk assessments or comparable methods) and how the stakeholders wereinvolved in the process. Furthermore, this part evaluates if and how performance figures and targets regarding
environmental aspects were defined (e.g. greenhouse gas emissions and renewable energy/green electricity, biodiversity conservation in the value chain and sustainable chemical and water management).
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotDiscussion: Jaeger-LeCoultre and IWC performed best in this category. While
IWC conducted its own materiality assessment and set goals regarding greenhouse gas emissions and packaging, Jaeger-LeCoultre based its decision on thegroup materiality analysis by Richemont and set specific targets for itself to reduceenergy use and the impact on climate change.
The remaining companies either do not mention any environmental performance
figures / targets or are not considering environmental aspects in their decisionmaking and planning. Due to the lack of disclosure by most brands, this is very
difficult to define and assess.
In general, companies should not only conduct a materiality analysis and set ambitious targets (qualitative/quantitative) and performance figures for all relevant environmental aspects but should also base these processes on scientifically provenconcepts (e.g. towards one-planet living, the 1.5°C target, etc.) and all relevant
stakeholders should be consulted or included in the process.

Vacheron Constantin

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Monitoring & reporting
This section analyses the collection, monitoring and verification of relevant performance figures. Also, it assesses
what channels for reporting and communicating environmental information are used (e.g. publicly available environmental or sustainability report, information on website) and what standards were applied (e.g. GRI, G4). The
verification of the data is another critical evaluation criterion since relevant sustainability data should be assured by
an external party to increase credibility for stakeholders.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

Discussion: IWC is the only company that publishes its own sustainability report,
which is done on a bi-annual basis. The report is written in accordance with the
GRI G4 standard and includes many relevant environmental aspects. Cartier andJaeger-LeCoultre are rated as Upper Midfield due to internal monitoring efforts regarding key environmental figures (i.e. energy, water, fuel), but still without comprehensive monitoring and reporting activities. The remaining companies have noor only qualitative / anecdotal monitoring and reporting on environmental sustainability.
There are various brands that conduct consolidated monitoring and reporting at thegroup level, but it is often not evident whether the individual companies (maisons)are applying these measures at their level with the same structured approach.
Companies should implement regular (at least bi-annual) and systematic internal
quantitative monitoring and reporting (including follow-up activities) for all environmental targets. Furthermore, a systematic public sustainability report with quantitative reporting on all targets, according to e.g. GRI standards should be standard
procedure and relevant publicly reported information needs to be assured by a third
party to increase credibility.

Greenhouse gas emissions (inventories, reduction targets, etc.)
This part of the rating focuses on the scope and activities covered by greenhouse gas inventories, the disclosureof calculation methods and publicly communicated reduction targets. It is therefore assessed whether the surveyed
companies measure greenhouse gas emissions of their operations and business activities, how these emissions
have developed over the years and what targets the companies have set to achieve substantial emission reductionsin the future.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotDiscussion: The results in this section show that measuring and actively reducing greenhouse gas emissions is fairly new to the industry and many of the companies are still in the development phase. Even though several companies show
comprehensive measurement of GHG emissions (at least for scope 1 & 2), andsome efforts to reduce emissions are evident, the reason for the poor performance is also due to no or only anecdotal reduction targets and a lack of historical data gathering.
Overall, it needs to be highlighted that almost 2/3 of the evaluated companies haveadopted no or non-comprehensive measures for GHG emissions or do not communicate publicly about it.
To increase their performance, companies should have comprehensive measurement of GHG emissions (scope 1, 2 & 3) and ambitious objectives for the near andremote future should be published and in line with science-based climate approaches (e.g. the 1.5°C scenario or one-planet living).

Vacheron Constantin

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Waste management and product packaging
This section analyses whether companies have adopted strategies and processes for waste management andhandling and for materials optimisation (e.g. regarding recycling, downcycling, durability of products, closed material
cycles). It further asks about specific strategies and targets to reduce waste and optimise waste management ingeneral. A particular focus is also placed on companies’ strategies and guidelines for minimising the environmental
impact of their packaging.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer

Discussion: Waste management and product packaging is another category
where the evaluated companies seem to be far from sustainable practices. Most
have general recycling and waste handling structures in place, but none were convincing with their waste management strategies and processes, since mostachievements are concerned with mere optimisation rather than substantial improvements and innovation.
Achieving a higher score means that numerous relevant optimisations or documented reductions of the environmental impact of packaging and waste (based on
environmental impact data) are needed. Ambitious guidelines and targets and comprehensive processes should be in place for substantial packaging and waste reduction and optimisation (regarding environmental compatibility, reusability, recyclability, closed material cycles, etc.). Also, companies should work towards a
circular economy approach.

TissotVacheron Constantin

Sustainable procurement / Supplier requirements
Regarding sustainable procurement and environmental management in the supply chain, here the requirements
and coverage of environmental supplier standards and guidelines are assessed. This section also looks at procedures to ensure compliance with environmental supplier standards and guidelines, how they are implemented andwhat companies do if suppliers are non-compliant with the requirements.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

Discussion: Again, IWC is the only company that achieves a satisfactory score inthis section. IWC provides information on how environmental standards are enforced in the supply chain. The company requires the application of several industry
standards (RJC, the Kimberly Process, etc.) and communicates about it accordingly. For the majority of the companies, however, no relevant procurement requirements, monitoring & follow-up procedures are evidenced. Cartier, TAG Heuer,
Chopard, Piaget and Vacheron Constantin show the application of some generalenvironmental requirements, compliance monitoring and follow-up activities, but noeffective systematic approach is apparent.
It is recommended that companies integrate relevant mandatory norms like ISO
14000 or other environmental management systems, as along with quantitative reduction targets in sourcing guidelines and procurement policies for all relevant suppliers/supply chains. Furthermore, they should establish systematic compliancemonitoring & follow-up activities, including an effective and transparent corrective
action process, and it should be common practice to make the supplier code of
conduct publicly available.

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Traceability & emissions of transportation
This section analyses efficient transport logistics and asks whether companies have access to an estimate/surveyof transport (i.e. weight, distance and means of transport) for its products and soft commodities over all or parts ofthe value chain. It further assesses if and how companies model their GHG emissions of the transport of goods andwhether they set targets to reduce GHG emissions in transport.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
Piaget
Rolex

Discussion: TAG Heuer, IWC, Jaeger-LeCoultre, Piaget and Vacheron Constantin
have access to transport data/estimates, at least for their own, internal logistics
operations and/or tier-1 inbound/outbound. These companies moreover show endeavours to estimate emissions but have no significant GHG-reduction targets.
For the rest of the evaluated companies, there are no significant transport andemission data/estimates and no relevant targets are indicated.
To improve in this area, companies must implement measures to estimate or calculate transport emissions from origin to point of sale. Furthermore, they shouldhave reduction targets for distance and GHG intensity based on a 1.5°C or similarscience-based target concept. Finally, the implementation of these measures
should be monitored and systematically tracked.

SwatchTAG Heuer
TissotVacheron Constantin

Environmental impact of products (data collection / research)
This part of the questionnaire focuses on the measures taken by the companies to use environmental assessment
tools, life cycle assessments and similar procedures (eco-audits or climate footprints, risk assessments, pathway
to 1.5°C, etc.) in product design to minimise the environmental impact of products throughout their life-cycle. It
analyses the approach and eco-design considerations, as well as the specific product group and the percentage ofthe total product portfolio which this applies to.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchDiscussion: None of the companies was able to achieve a satisfactory result inthis section, yet some of the rated brands have started to look into the topic. The
brands of the Richemont group mention several approaches where, for example,
an eco-conception guide was developed or the company had selective applicationsof life cycle assessments. Since none of the companies were able to demonstratea systematic eco-design approach based on a thorough eco-assessment, the room
for improvement is huge.
To receive a higher score in this section, companies should apply a strategic andsystematic application of specific life-cycle assessments or similar approach. The
method should be described accordingly or commonly acknowledged. Eco-design
aspects moreover need to form an integral part of products and the companies
should report on results in this area.

TAG Heuer
TissotVacheron Constantin

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Promotion of transparency and certification of origin for critical raw materials (metals, gemstones, leather etc.)
This section looks at companies’ actions concerning critical raw materials (e.g. precious metals, gemstones, leatheretc.). The focus is on the amounts of such materials, their countries of origin and the certifications / labels they
have. With regard to precious metals, special attention was given to gold, so it was relevant to find out whether
companies’ policies and strategies could ensure the sourcing of gold from certified and responsible sources. Further, it was assessed whether the amounts of critical raw materials are published, and companies were asked about
the traceability of critical raw materials and transparency efforts along the supply chain.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer

Discussion: IWC is the only company that publishes the amounts of their main
raw materials (steel, gold, diamonds etc.), which is an important step towards moretransparency in the industry. Unfortunately, the rest of the sector is still very secretive when it comes to the use of its raw materials. Furthermore, there are only a
few examples, e.g. Cartier and Chopard, where it is possible to follow some raw
materials to their origin. In the case of gold, the companies either buy directly from
Fairmined or Fairtrade certified entities, where an independent third-party can lookup the mines and sources of origin, or they actively obtai their gold through the
Swiss Better Gold Association, which publishes all the mines / suppliers it sourcesfrom.
Overall, the performance of the assessed companies in this section is rather weak
and transparency must be drastically improved to advance towards more sustainable and responsible sourcing practices.

TissotVacheron Constantin

Environmental certification and % coverage of certified raw materials (metals, gemstones, leather etc.)
In this section, the percentage of certified raw materials (e.g. gold, precious metals, gemstones, leather) that isused in manufacturing the companies’ products is evaluated. Specifically, the questionnaire asks about the percentage of certified raw materials in relation to the company’s total purchasing volume. An exemplary list is providedof possible certifications for raw materials (e.g. RCJ Code of Practice, RCJ Chain of Custody, Fairmined / Fairmined
eco, Fairtraide, Kimberley Process, Responsible Luxury Initiative's Animal Sourcing Principles). Another issue included in this section is the amount of recycled and newly mined materials sourced.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

Discussion: Many of the assessed companies rely on the Responsible Jewellery
Council when it comes to promoting raw materials such as gold, and this is considered more common than best practice. Some more ambitious examples can beseen especially from Cartier, IWC and Piaget, which apply more advanced standards regarding certifications with more specific information on what materials they
apply to. Cartier, for instance, obtains some of its gold through certified ASM mines
and is a member of the Swiss Better Gold Association. Another example worth
mentioning is Chopard. The company is committed to only use 100% gold comingfrom either ASM mines participating in the Swiss Better Gold Association (SBGA),
Fairmined and Fairtrade schemes or from RJC Chain of Custody certified entities.
Generally, it can be said that the industry still has a very long way to go regardingtransparency and certification of its raw materials. As long as certification schemes
such as RJC or the Kimberley Process fail to increase transparency and provide
civil society and industry representatives with equal decision-making power, enabling companies to widen the scope of their environmental assessment criteria to
include a broader spectrum of stakeholders and relevant industry players (e.g.
mines and mining companies), it is very difficult to assess their effectiveness andrelevance.

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Sourcing & other environmental projects/measures for raw materials
This part of the questionnaire addresses whether companies support procurement and/or research projects to promote ecological and sustainable production of raw materials. Examples of this are lowering the amount of chemicals
used in the sourcing of materials or taking measures towards energy efficiency. Companies were asked to list the
projects implemented over the last three years for their most important raw materials. Moreover, they were requested to list any actions concerning sustainable water management and the encouragement of biodiversity inprocurement.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre

Discussion: As the results clearly show, this topic is rather new to the industry andthe companies are only slowly trying to better understand their procurement and its
environmental impacts. Some of the better-rated brands at least mentioned a few
projects with some impact on their supply chain. Overall, it is desirable that companies actively take responsibility for their procurement to reduce the environmental impact along the supply chain.

Longines
Omega
Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

Capacity building of suppliersThis section focuses on companies’ implementation of environmental capacity building for their suppliers. Examplesof this are the use of environmental management systems or the implementation of best practices for the reductionof environmental impacts in the supply chain. If companies implement capacity building, it is further evaluated how
the suppliers were selected for the initiative, what percentage of the companies required training (weighted according to their purchasing volume in CHF) and how many have been trained to date.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetDiscussion: Only three out of 15 companies were able to achieve a rating above
the “Non-transparent / Latecomer” category. IWC, for example, has its own IWC
Supplier Operational Excellence Programme, where five strategic suppliers are involved. Cartier participates in the capacity building of small-scale mines towards
the implementation of responsible practices through the Swiss Better Gold Association, and Piaget received a better scoring due to some basic information on supporting suppliers in the pre-audit assessment phase of RJC as well as training on
the use of chemicals. Nevertheless, the results are generally quite worrisome andimprovements along the supply chain will only be possible if the companies adopt
a more cooperative and collaborative approach with suppliers.

Rolex
SwatchTAG Heuer
TissotVacheron Constantin

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Engagement with employees
This part of the questionnaire tackles how companies inform and motivate their employees on environmental issues.
It is relevant to know the content, scope, methodology, target groups and frequency of projects and programmes
concerning environmental topics. In particular, the focus is on work-related training, the provision of general information on environmental issues (both related and unrelated to the industry), the encouragement of volunteeringand the implementation of innovation programmes to identify suggestions from employees on ecological improvements.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetDiscussion: Few of the evaluated companies engage their employees in sustainability-related matters, establish work-related training or generally provide information on environmental issues. IWC mentioned that it engages its employees onsustainability through volunteering with the Forest Stewardship Council (FSC),
sharing sustainability related surveys, publishing a dedicated CSR newsletter andholding “Lunch and Learn” sessions on sustainability topics and other climatechange-related incentives. The rest of the companies have either only few general events, training sessions, etc. to inform or motivate employees on environmental issues, or there is no mention of projects and programmes to sensitise or
motivate employees about environmental issues.

Rolex
SwatchTAG Heuer
TissotVacheron Constantin

Customer awareness on sustainability impacts of productsThis section focuses on the presence of ecological sustainability campaigns or other measures carried out by companies to raise awareness of environmental issues among customers and consumers. In this context, it was also
examined whether companies inform their consumers on the environmental impact of their products or encouragecustomers to become involved in achieving ambitious environmental goals like the 1.5°C target.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega
Patek Philippe
PiagetDiscussion: Customer awareness on sustainability impacts of products does notseem to be high on the priority list of watch and jewellery companies. Most assessed companies did not show any efforts for awareness raising among customers and only a few have adopted some very basic measures (e.g. limited engagement at points of sale or through social media about general sustainability topics,
training sessions for employees on how to communicate on sustainability to theconsumer s).
None of the companies showed an ambitious approach to proactively communicate
the impacts of their products (e.g. via LCAs) to customers and or systematicallyand effectively engage customers for their own impact reduction.

Rolex
SwatchTAG Heuer
TissotVacheron Constantin

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Membership of (inter)national business initiatives for sustainability
This last section is aimed at finding out whether companies are members of national or international sustainabilityor environmental business or any related initiatives. Companies were also asked to indicate in what environmental
or sustainability projects of these initiatives they have actively taken part over the past three years.
Audemars Piguet
BreguetCartier
ChopardIWC
Jaeger-LeCoultre
Longines
Omega

Discussion: This is the section where many of the assessed companies achieved
their highest scores. According to the evaluation, Cartier is the most actively involved company, with memberships and active participation in several relevant industry initiatives. Many other brands such as IWC, Chopard and Vacheron Constantin were also able to show a more ambitious commitment to collaboration within
their industry. Unfortunately, over a third of the assessed brands still do not show
any evidence of being members of sustainability or environmental business initiatives.

Patek Philippe
PiagetRolex
SwatchTAG Heuer
TissotVacheron Constantin

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46
For additional information on certificates and standards, please see the detailed information in the appendix
47
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