RJC membership allows PANDORA to be recognised for its ethical practices and commitment to sustainability.
Danish affordable jewellery brand PANDORA, founded in 1982, designs, manufactures and sells hand-finished jewellery, and is among the most recognised jewellery brands in the world today.
PANDORA, which has a history in ethical conduct, engaged with the Responsible Jewellery Council (RJC) in 2010 to support its corporate social responsibility commitments, earning its first RJC certification in 2012.
The RJC is a global, standard-setting and certification organisation aimed at improving social, environmental and economic sustainability across the jewellery supply chain, from mine to retail. It’s the independent verification that RJC certification brings that makes a big difference for PANDORA, providing reassurance to stakeholders and validating its responsible practices.
It’s the right thing to do
Strong ethical principles run through the core of PANDORA’s business strategy and the standards that PANDORA adheres to are also required of its gold and diamond suppliers. Claus Teilmann Petersen, Vice President, Group Ethics for PANDORA, feels that managing operations responsibly also makes good business sense.
“We chose RJC certification, one because it is good for business, particularly when you consider what drives value, and two because we have a vision to become the world’s most loved jewellery brand – and, if we want to become the most loved, we need to ensure we can display our ethical aspirations, efforts and results,” said Claus.
“We formally check our suppliers’ ethical policies and not least procedures covering, for example, health and safety, people related issues, and aspects such as environmental and anti-corruption. So, we not only have an effect on our own staff but the employees of others in the supply chain too – and a substantial part of these efforts are inspired by RJC,” he added.
Knowledge sharing and collaboration at a sector level
PANDORA sought RJC certification because they consider it to be the best standard in the sector. Through PANDORA’s relationship with RJC Claus has been able to learn from other responsible players within the jewellery supply chain, which has really helped him to understand best practice for the industry. In addition, there is huge value in the businesses working together to understand and address supply chain issues.
“We wanted to be better at what we do and learn from the best in the industry. RJC has helped us to gain invaluable knowledge, by working with and learning from others in the industry I have been able to tackle challenges and explore new ideas. What I learn through RJC membership I can use in dialogue with my own suppliers. Simultaneously we do hope that we are able to inspire other brands with our commitment and attempts to solve industry problems,” Claus explained.
Strong supplier relationships
Claus insists on having a deep understanding and relationship with all of PANDORA’s suppliers. One advantage Claus points out is that PANDORA’s supply chain is not very complex. Two PANDORA owned and operated crafting facilities in Thailand produce more than 87 per cent of PANDORA’s products, which limits the number of suppliers compared to many other jewellery manufacturers.
External suppliers must have an internal management system that complies with PANDORA’s Supplier Code of Conduct, and 85 per cent of PANDORA’s total sourcing value comes from suppliers who have been audited by PANDORA’s external auditing company or are certified RJC members. All gold and diamond suppliers must be RJC certified.
“You have to get control of your supply chain and keep a tight ship. We have a few specialized suppliers that we partner with but the rest we do ourselves. So, we don’t have lots of subcontractors to manage. I can identify issues along the supply chain that I wouldn’t have if I didn’t have such a good relationship with them,” Claus explained.
According to Claus, RJC certification also serves as a risk management tool, helping PANDORA to manage risks by ensuring internal systems are in place, and it also provides reassurance when they are talking to others about the business.
With certain commodities like diamonds there can be supply chain challenges. Claus, put it simply: “If there is an issue caused by diamonds, for example, it can damage the reputation of the whole supply chain. When we ensure transparency in our requirements and preventive actions, and have oversight of the supply chain using standards such as RJC’s, we are better managing those risks.”
PANDORA also uses its RJC certification in its work with the media and through its social media.
“PANDORA’s RJC certification validates our credibility when we talk with our nine million plus social media followers as well as when we talk with the media about our efforts, our values and our responsible practices,” Claus added.
Increased commitments, increased improvements
RJC’s Code of Practice is seen by PANDORA as the authoritative checklist for operating a responsible jewellery supply chain. Going through the RJC certification process has helped PANDORA to tighten up its practices in a few specific areas, such as raising environmental awareness and managing overtime during the company’s prolonged period of growth.
Claus identified that PANDORA’s environmental efforts could be improved, and challenged his colleagues in PANDORA Thailand to come up with relevant ideas. Today, the business has a number of recycling initiatives in place, such as reusing industrial waste.
In 2012, when PANDORA achieved its first RJC certification, PANDORA recycled eight per cent of its industrial waste, by 2016 the number had increased to 86 per cent. PANDORA found that it was actually cost efficient to do it this way, but what is the biggest gain is the pride that it provides PANDORA’s people in Thailand.
Claus is also co-chair of RJC’s multi-stakeholder Standards Setting Committee, which is currently reviewing the RJC Standards in compliance with ISEAL requirements. “It’s a daunting tasks to match the expectations of member companies from all parts of the jewellery supply chain, industry experts and civil society organisations. But, we all learn a lot as we seek to grind initial differences into operational standards and subsequently more responsible business practices in the industry,” Claus said.
For PANDORA, responsible management is about a culture of caring and fostering a team of passionate people. PANDORA has 12,400 people working in its Thai crafting facilities and the management’s attitude ensures they get the best out of their staff. PANDORA sees the results of its approach in real terms, for example, due to their clear safety protocols, in 2016 PANDORA had only two accidents in the factory, despite staff numbers increasing from 11,250 to 12,400 over the year. In addition, they provide training in technical and personal skills.
“Our approach to management contributes to an extremely loyal workforce. And, it gives us so much. In 2016, the turnover rate for PANDORA production in Thailand was less than four per cent. This means people will stay with us for 25 years on average. In Thailand in general it’s around 15 per cent, so we’re down to one fourth of the general turnover,” Claus said.
“The number of stones set by hand last year was 2.7 billion. If you have a novice doing this it takes a very long time. If you have a capable productive and engaged staff member doing this, then they are significantly more efficient. So, you can see the business sense of looking after your staff in terms of productivity,” said Claus.