December 9, 2004
Consumers Say Corporate Social Issues Count; JA Moves Forward on its Initiatives
An overwhelming 90% of Americans responding to a recent study say they would consider switching to another company's products or services if they felt the company had behaved illegally or unethically. The 2004 Cone Corporate Citizenship Study was commissioned by Cone, a Boston-based strategy and communications agency. A full 81% say they would speak out against the "offending" company among family and friends, while 73% say they would boycott that company's products or services. The news is significant as the jewelry industry continues to grapple with corporate responsibility problems concerning thorny environmental, health, social and ethical issues (such as conflict diamonds and questionable mining and labor practices).
Jewelers of America's President and CEO Matthew Runci announced at the Antwerp Diamond Conference in November that JA had started an international corporate responsibility group called the Early Adopters Initiative, to explore the feasibility of promoting responsible business practices within all areas of the industry and throughout the supply chain. JA, which released its own Supplier Code of Conduct earlier this year, is spearheading the effort in order to protect retailers who have "face-to-face accountability to consumers," says Runci.
Among the industry's large retailers who have signed on to the Early Adopters Initiative are Tiffany & Co., Cartier, Signet (parent of Sterling Jewelers) and Zale Corp. Three top diamond miners also joined the effort, including De Beers' Diamond Trading Co., Rio Tinto and BHP. Most of these companies have existing best practices and corporate responsibility codes. The group says "a coordinated approach will provide increased clarity to all our business partners about what standards are expected within the diamond and gold jewelry sectors [as well as] reduce duplication of efforts that would otherwise be created."
JA is also designing an internal monitoring service for its retailer members as a benefit they could tout to consumers. The service, still in its planning stages, might include a diagnostic self-assessment tool, mystery shoppers, training for sales associates and store management, and reviews of store procedures and policies. It is expected to launch sometime in 2005.
Will the jewelry industry gain benefits, beyond not losing customers, from corporate social responsibility efforts? According to the Cone study, the answer is yes. Its data show consumers will reward companies that play a more active role in meeting society's needs. The study shows 86% would switch from one brand to another, if the latter brand was associated with a cause. A full 85% say they assess a company's commitment to social issues when choosing it, while 74% say they use such information in deciding whether to recommend a company to other people.
But the study also shows that companies need to do a better job in publicizing their corporate social responsibility efforts. A clear majority of Americans, 86%, want companies to talk about their efforts, but only four in 10 say companies are doing that well. "For senior executives, [these facts] are a mandate for action on social issues," says Carol Cone, CEO of Cone. "For marketing executives, they are license to communicate the company's commitment and efforts."
Such efforts will also benefit companies and industries interested in building relationships with the upcoming Gen Y generation. The Cone study showed young Americans ages 18-25, are significantly more likely than older people to consider a company's citizenship practices when making purchasing decisions.
by Peggy Jo Donahue