Clear Conscience Jewelry

1. Clear Conscience Jewelry Jennifer Malkin Wiam Hasanain Apr 25th, 2007 Bill Gallagher Lori Bonn Gallagher 1

2. Overview • Lori Bonn • Charge/Scope • Methodology • Jewelry Market • Consumer • CSR & The Jewelry Industry • Industry Recommendations • Lori Bonn Recommendations

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

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

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

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

7. Jewelry Anatomy Metal Diamond Colored Gem

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

9. Consumer

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

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

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

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

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

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

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

17. Clear Conscience Jewelry Jennifer Malkin Wiam Hasanain Apr 25th, 2007 Bill Gallagher Lori Bonn Gallagher 17