Jewellers social responsibilty

Jewellers’ Social Responsibility A Framework for Your Jewellery Business Copyright: Simon Rainer

Index 1

Preface....................................................................................page 3 Introduction..............................................................................page 6 Putting JSR into Pactice................................................................page 9 Components of the JSR Framework.................................................page 10 Your Company...........................................................................page 11 UN Global Compact.....................................................................page 12 Expectations of Duties.................................................................page 13 External Considerations – Regulation...............................................page14 External Considerations – Community..............................................page 25 External Considerations – Resources................................................page29 External Considerations – Customers...............................................page 34 External Considerations – Suppliers.................................................page 38 Internal Considerations – Internal Structure.......................................page 40 Internal Considerations – Internal Processes.......................................page 41 Internal Considerations – People......................................................page 44 Summary...................................................................................page 46 Case Study.................................................................................page 47

Preface This document has been produced in close collaboration with key players in the UK jewellery industry to help jewellery businesses working at all levels in the supply chain – from designers, manufacturers, stone and bullion dealers through to bricks and mortar and on-line retailers - to embrace the principles of ‘Corporate Social Responsibility (CSR)’.

So what exactly does this mean?

CSR is defined as: “ A process with the aim to embrace responsibility for a company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered stakeholders.”

Jewellers’ Social Responsibility (JSR), as detailed here, is an adaption of the basic CSR concepts translated for the specific needs of the UK jewellery industry.

If you are looking to introduce JSR to your business but are not sure where to begin, this document will help you understand the components required and will assist you in creating your business’s own social responsibility programme.

This is for you to adapt and personalise for your own needs and with participation from your stakeholders.

It is for then for you to implement and manage.

The effort will be well worth it.

As demonstrated in the following pages, the rewards will be enormous.

Simon Rainer Revised February 2016

3

Before we get into the practical stuff, let us consider for one minute the industry in which we work.

In the UK there are over 2500 jewellery businesses supplying 6,800 jewellery retail stores, and in total, employing over 55,000 people.

The UK jewellery industry has combined revenue of ÂŁ8.5bn and produces profits of ÂŁ710million.

Somewhere in these figures is you and your company.

Your jewellery business is a key element in this valuable market.

By implementing even a very basic JSR framework you will be making a major contribution to raising the standards in our industry and will be helping to create a wealthier and more responsible place in which to work.

The success of JSR will in part lie in your hands.

By advocating that the people in the trade that you sell to and buy from take up the framework, you will be helping to create a common standard for us all to work towards.

5

CIBJO President Dr Gaetano Cavalieri speaking at the 3rd International Gem and Jewellery Conference in Bangkok, Thailand, December 12, 2012........... “When we talk about Corporate Social Responsibility it is essential to qualify exactly those to whom we are responsible.

I would define three main groups: (1) Our business community which includes all the executives and employees along the entire length of the chain of distribution, from the mine through to the jewellery retailer.

(2) Our consumers who buy jewellery for its beauty, heritage and its ability to express human emotion, and who rely on us to protect its value and reputation.

(3) Our stakeholders who include the millions of individuals living in the countries and regions around the world in which the trade is active, and for whom we represent a resource for sustainable economic and social development.

To be responsible corporate citizens in the modern jewellery business, we must follow three basic rules of practice: (1) To defend the industry from the various challenges that could threaten our reputation and integrity; (2) To function as a positive influence, serving as a means for sustainable economic and social development in the communities and countries in which we are active; and (3) To be fully transparent in the way we operate our businesses and in what we sell.�

Introduction I make no apologies for modifying the term ‘Corporate Social Responsibility’ to that of ‘Jewellers’ Social Responsibility’.

This framework has been written with the UK jewellery industry as they, almost without exception, fit within the EU definition of small and medium sized enterprises or SMEs. SMEs have fewer than 250 employees and a turnover below €50m and are therefore well removed from the term ‘corporate’.

The major players or ‘corporates’ in our industry are predominantly mine owners, refiners, larger retailer chains and manufacturers who are already subject to a myriad of local and international regulations that do not always translate to smaller jewellery organisations facing everyday realities. Many of these larger enterprises (as responsibly managed limited companies and plc’s) already employ their own CSR frameworks.

The challenge therefore is how fundamental, socially-responsible, jewellery practices can be translated for adoption by the majority of SMEs operating in the jewellery sector and this is where the JSR framework comes into play.

It is long overdue that our industry established a simple framework such as this.

What the JSR framework seeks to achieve is a uniform approach that all can understand, adapt and adopt to suit their own business needs.

For those companies that are well advanced in their own social responsibility programmes or for those that aspire to achieve an internationally recognized formal programme once they have put the JSR framework in place, I suggest they should examine the work of the global jewellery organisation ‘Responsible Jewellery Council’ (RJC) at http://www.responsiblejewellery.com/ Here you will find a very detailed CSR process that will ultimately result in independently audited accreditation.

Also take a look at the CIBJO endorsed ‘Branded Trust’ programme. http://www.cibjo.org/ http://brandedtrust.org/ 7

Mention also needs to be made of the ISO 2600 standard. This provides guidance rather than requirements, so it cannot be certified unlike some other well-known ISO standards. Instead, it helps clarify what social responsibility is, helps businesses and organizations translate principles into effective actions and shares best practices relating to social responsibility, globally. It is aimed at all types of organisations regardless of their activity, size or location.

There are an increasing number of companies who have already put socially responsible business structures into practice and have also gone through the RJC accreditation process. These are the true ‘early adopters’ who have future proofed their businesses and should be widely applauded for their initiative.

THE BENEFITS OF JSR So before we proceed any further let’s deal with the big question: how will your company benefit?

What’s in it for me?

Here are just a few good reasons for implementing your own JSR framework: • An increased ability to attract and retain employees, leading to reduced staff turnover, recruitment and training costs.

•

Employees will be more involved and therefore more productive.

•

Firms adopting socially responsible business practices have greater product differentiation and can appeal to a wider network of consumers such as those seeking ‘ethically sourced’ or ‘fair trade’ products.

•

More favourable trading partnerships with suppliers.

•

Stronger links with your customers.

•

Lower operating costs through the more responsible and efficient use of utilities.

•

Stronger relationship with your local community - many consumers prefer to buy from an ethical business.

•

Improved reputation and branding.

•

Building a reputation as a responsible business sets a company apart from others.

•

Better opportunities for access to capital.

•

A stronger framework to comply with regulatory requirements.

•

A greater understanding of business responsibilities will aid the thought process in identifying new products and services.

•

Future proofed for change.

As you read the rest of this document, you will hopefully spot further benefits applicable to your particular business.

What follows next are notes on the components of JSR and the areas to which you will need to give some consideration. So you have an idea of the steps involved, the following flow chart provides a suggested thought process and action plan. The second chart identifies the components of JSR.

Putting JSR into Practice 9

Identify where you are now

Engage with stakeholders

Identify JSR components and prioritise

Plan your own framework with realistic targets

Implement

Promote and Engage

Manage and Advocate

Components of the JSR Framework

Your Company

UN Global Compact

Expectations of Duties

External Considerations

Internal Considerations

Regulation

Internal Structure

Your Company Community

Resources

Customers

Suppliers

Internal Processes

The first step in the JSR framework process is to review your current operations.

Just write down as honestly and fully as you can answers to the following People questions.

• What jewellery specific regulations are you aware of and which of them does your company uphold?

• What policies do you employ to engage with your local community?

• How do you manage the utilities and resources needed to run your business?

• Do you have a recycling policy?

• Do you operate a process of due diligence with your supply chain providers?

• How would you gauge your relationships with your customers?

• How would you gauge your relationships with your suppliers?

11

•

Does your current business structure lend itself to adopting a JSR framework?

• How effective are in you in managing your business?

• Is your staff fully engaged with your business objectives and strategies?

• Do you invite your staff to contribute suggestion to improve the running of your business?

Possibly, some of these points may be areas that you have not previously considered. By answering the questions honestly you may perhaps discover that you do some things well and some not so well. Reading the UN Global Compact (see over) which is the overarching socially responsible framework and may help you in formulating your answers and in understanding where you may currently fall short of global standards.

UN Global Compact The basic tenet for all business frameworks Global Compact. This reads as follows:

socially responsible is the ten-point UN

Human Rights Businesses should: 1. Support and respect the protection of internationally proclaimed human rights.

2. Make sure that are not complicit in human rights abuses.

Labour Standards Businesses should uphold: 3. The freedom of association and the effective recognition of the right to collective bargaining.

4. The elimination of all forms of forced and compulsory labour.

5. The effective abolition of child labour.

6. The elimination of discrimination in employment and recognition.

Environment Businesses should: 7. Support a precautionary approach to environmental challenges.

8. Undertake initiatives to promote environmental responsibilities.

9. Encourage the development of diffusion of environmentally friendly technologies.

Anti Corruption 10. Businesses should work against corruption in all its forms including extortion and bribery.

It is important to realise that the above can be translated to smaller jewellery businesses. As an example, it is your responsibility to ensure that the materials you buy for the manufacturing of your jewellery have not come from areas of conflict or where the work force has been subjugated to work in appalling conditions. This

can easily be achieved by instigating an audit trail and processes of due diligence and getting your suppliers to provide the necessary proof. Just asking and receiving vague assurances is no longer acceptable.

Expectations of Duties These are defined as follows: 1 Providing a framework (code of conduct) in which your business practices are directed and controlled to achieve a specific goal. For example, the promotion of ethical conduct or stricter guidelines for the control of your supply chain.

2 Providing all parties involved in your business, your staff and your suppliers, with the feedback they require to ensure that they are functioning properly.

3 Enhancing your company’s organisational performance and moral behaviour.

When we break this down, JSR provides the discipline for participating companies to act in a structured and responsible manner in their dealings with their suppliers, customers, local/wider environment and perhaps most importantly their staff in order to achieve these goals.

Consequently, an effective JSR policy should quantify your firm’s expectations of duties: 1 Not to harm people.

2 Not to engage in environmentally unsustainable activities.

3 Not to lie or misrepresent the activities of the firm.

4 Not to engage in socially undesirable activities.

In its very broadest sense, the following key areas need to be addressed and these will be explored in greater detail further on in the document.

•

Your Environmental Responsibility

•

Human Rights

•

Community Involvement

•

How your activities impact upon society

•

Equal opportunities

•

Ethics and Ethical Trading

•

Sustainability 13

•

Corporate Governance

External Considerations Regulation Every company has to conduct itself in a responsible manner by adhering to local laws and EU regulations.

These rules and regulations can be onerous to those running small businesses but they are here and will not go away. In many cases these laws are designed to help you, to aid your relationships with local/national government and to protect your employees.

Here is a quick checklist of some of those that may be relevant to your business: Generic SME Regulations and Legislation Companies Act 2006 Insurance HSE - Health and Safety Law Intellectual Property Data Protection Act Employers Liability Insurance Employment Law Consumer credit – FCA regulations Workplace Pension Schemes HMRC – VAT, Income/Corporation Tax Trading Standards Disability Discrimination Policy Equal Opportunity Policy For the purposes of this paper, we will take it as read that that you are aware of the above, undertake the necessary procedures and have a system in place that allows you to monitor any changes and additions to them which may affect your particular business.

In addition to these responsibilities, the UK jewellery industry has its own set of laws, rules, guidelines and regulations. It is your responsibility to understand what these are and how they are relevant to you and the environment in which you trade.

What follows next is a list of those regulations of which you need to be aware and it is your obligation to ensure that all the jewellery you make and sell is in compliance with them. More importantly and as part of your JSR framework, your staff also need to be aware of these in order that trade and consumer questions can be answered competently and professionally. The more you know and act upon these regulations the greater the benefit to your business.

NOTE: As part of your JSR framework, you must set up an auditable record of ‘due diligence’ to monitor your suppliers’ and your own processes in order to ensure that your jewellery meets all of the following requirements.

I make no apology for repeating this advice throughout the rest of this framework document!

Jewellery Industry Specific Regulations and Legislation Kimberley Process (Mandatory) In December 2000, the United Nations General Assembly adopted a landmark resolution supporting the creation of an international certification scheme for rough diamonds. By November 2002, negotiations between governments, the international diamond industry and civil society organisations resulted in the creation of the Kimberley Process Certification Scheme (KPCS). The KPCS document sets out the requirements for controlling rough diamond production and trade. The KPCS came into force in 2003, when participating countries started to implement its rules.

The KPCS is open to all countries that are willing and able to implement its requirements and has 54 participants, representing 81 countries The European Union and its Member States count as a single participant. KPCS members account for approximately 99.8% of the global production of rough diamonds. http://www.kimberleyprocess.com/ World Diamond Council (Voluntary) To provide industry support for the KPCS and additional assurance to endconsumers, the World Diamond Council (WDC) created a voluntary program of selfregulation, entitled the System of Warranties (SoW). This requires that all consignments of diamonds, whether rough, polished, or set in jewellery, are accompanied by a written warranty which appears on all invoices throughout the supply chain. This applies each time the diamonds change hands and extends down as far as retail jewellers when they are buying are selling diamonds within the trade..

The official WDC warranty statement reads: “The diamonds herein invoiced have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions.

The seller hereby guarantees that these diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of these diamonds�

Note, that the WDC SoW is not included on invoices to the final consumer. For retailers, all invoices relating to the purchase diamonds and for sales to other businesses have to contain the statement above.

Records must be kept of the warranty invoices received and issued, and these must be auditable and reconciled on an annual basis. If asked for by a duly authorised government agency, these records must be able to prove compliance with the Kimberley Process for rough diamonds.

In order to check that the polished diamonds you use are KPCS compliant you can refer to the World Diamond Council www.worlddiamondcouncil.com

15

Whereas diamonds are internationally governed by the KPCS, no such mandatory regulation exists (yet) for gold in the UK. However, you do need to be aware of the International laws and UK guidelines that affect the gold supply chain.

Primary Gold – out of the ground Secondary Gold – recycled Everything you need to know about the UK gold supply chain can be found here: http://bit.ly/1BVXQlb

Dodd Frank Act (Mandatory in the USA)

Dodd Frank Act (Mandatory in the USA) Created as a response to the financial crisis of 2008, the Dodd Frank Act which is part of UK Federal Law, was designed to regulate the American financial sector and imposes significant restrictions and new legislation upon it. The Act could have consequences on those trading with the US as precious metal trading was included in the reform, and there are rules that affect the trade of gold as well as the ‘3T” metals of tin, tantalum and tungsten.

Gold from designated conflict sources (Democratic Republic of Congo and all surrounding countries) is scrutinised and companies must demonstrate that they have observed due diligence in ensuring they do not source from conflict zones by submission of annual reports. Where necessary, companies must produce 3rd party verification of this information. http://www.jvclegal.org/JVC_Conflict_Materials.pdf European Directive (Voluntary) The EU, following the lead of their transatlantic colleagues is currently attempting to introduce new legislation to mirror the US Dodd Frank Act. Owing to the negative jewellery trade feedback these new guidelines are currently being worked on with the aim of launching a voluntary code in 2015. Note, that the voluntary aspect is subject to EU ratification and there is a possibility of mandatory compliance. As this currently only applies to minerals and not finished products, the effect on the UK industry should be minimal. http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152227.pdf

London Bullion Market Association (LBMA) – Responsible Gold Guidance (Voluntary) The LBMA has developed the ‘Responsible Gold Guidance’ to avoid contributing to conflict, human rights abuses and the financing of terrorism and in order to comply with the highest standards for the prevention of money laundering.

The Guidance is based on the OECD Due Diligence Guidance as well as Swiss and US KYC, Anti-Money Laundering and Combating Terrorist Financing regulations. http://www.lbma.org.uk/responsible-gold http://www.lbma.org.uk/assets/Speeches/SA_1_Tyler%20Gillard.pdf Responsible Jewellery Council (Voluntary) See also page 6 The Responsible Jewellery Council is a not- for -profit standards setting certification organization that has over 500 member companies spanning the jewellery supply chain from mine to retail.

RJC members commit to and are independently audited against the RJC Code of Practices – an international standard on responsible business practices for diamonds, gold and platinum group metals. The Code of Practices addresses human rights, labour rights, environmental impact, mining practices, product disclosure and many more important topics in the jewellery supply chain.

RJC also works with multi-stakeholder initiatives on responsible sourcing and supply chain due diligence. The RJC’s Chain of Custody certification for precious metals supports these initiatives and can be used as a tool to deliver broader member and stakeholder benefits. http://www.responsiblejewellery.com/rjc-certification/code-of-practicescertification13/ CIBJO (Voluntary) CIBJO is an international confederation of national jewellery trade organizations also known as the World Jewellery Confederation CIBJO's purpose is to encourage harmonisation, promote international cooperation in the jewellery industry, and to consider issues which concern the trade worldwide. Foremost among these is to protect consumer confidence in the industry.

The CIBJO Blue Books are renowned throughout the worldwide jewellery industry for setting definitive grading standards for diamonds, coloured gemstones, pearls, precious metals and gemmological laboratories and are regularly updated. http://www.cibjo.org/ Diamond Blue Book: http://www.cibjo.org/download/13-10-28%20Official%20Diamond%20Book.pdf 17

Gemstone Blue Book http://www.cibjo.org/download/13-10-26%20Official%20CIBJO%20Gemstone %20Book.pdf Gemmological Laboratories Blue Book: http://www.cibjo.org/download/12-06-19%20Official%20Gemmological %20Laboratory%20Book.pdf Pearl Blue Book: http://www.cibjo.org/download/13-10-27%20Official%20Pearl%20Book.pdf

Precious Metals Blue Book: http://www.cibjo.org/download/CIBJO%20Precious%20Metals%20Blue%20Book %20Issue%205%20-%20270912.pdf Fairtrade and Fairmined Gold (Voluntary) Fairtrade and Fairmined gold is the world’s first, independent, ethical certification system for gold and associated precious metals from artisanal and small-scale miners. The Standard is owned by Fairtrade International and the Alliance for Responsible Mining and covers: •

Social and economic development.

•

Environmental development - for example management of toxic substances and restoration.

•

Labour conditions - such as health and safety and the elimination of child labour.

•

Traceability and transparency in the supply chain.

Only businesses registered within the Fairtrade system can buy and sell certified gold and become eligible to apply the Fairtrade and Fairmined dual label to finished products.

At present, the primary bullion suppliers of FTFM gold in the UK are Cookson Precious Metals and Cred Sources. www.fairtrade.org.uk http://www.fairgold.org/ http://www.fairmined.org/

Solidaridad (Voluntary) The Responsible Jewellery Council and non-profit organisation Solidaridad have officially joined forces to ensure better, more transparent and accountable practices throughout the gold supply chain while encouraging larger European branded jewellery companies to make their gold supply traceable.

The project will encourage broader participation in the RJC while a key focus will be Solidaridad’s new pilot project that uses RJC’s Code of Practices and Chain-ofCustody standard as tools for improving practices at industrial gold mines. http://www.solidaridadnetwork.org/supply-chains/gold OECD (Voluntary) OECD (Organisation for Economic Co-operation and Development) is a forum for international governments to work collectively to solve problems relating to economic, social, environment and trade issues.

The power of OECD guidelines is such that all major jewellery institutions (such as RJC) and regulatory bodies embed OECD principles into their own frameworks.

There are 34 member countries from Europe, North and South America, Canada and Asia Pacific.

The OECD’s ‘Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’ was created to provide recommendations for companies which source minerals and to help them avoid involvement in supply chains which may further conflict and damage human rights.

The ‘Gold Supplement’ is among the supplements developed by OECD for specific minerals and recognises the particular challenges in conducting due diligence to mitigate risks during gold sourcing, processing and various end uses. OECD includes a recommendation for supplier capacity building measures, which goes beyond risk awareness.

The recommendations are not legally binding, but are described as reflecting ‘the common position and political commitment of adhering countries’.

OECD makes provision for ‘Grandfathered’ stocks; investment gold held in vaults, exchanges or refineries with a ‘verifiable’ date earlier than January 1st 2013 as an exclusion to the conditions of known provenance.

The Gold Supplement takes special account of ASM gold production and makes a clear distinction between expectations of small scale enterprises and informal gold mining by individuals, communities or groups.

19

OECD majors on due diligence, accountability and transparency issues, including ‘early warning system’ recommendations for risks, reportage of ‘unusual activity’ (where production from a region may make a sudden unexplained increase) and advice to install independent on-the-ground assessment teams.

For further information look at the Gold Supplement: http://www.oecd.org/industry/inv/mne/GoldSupplement.pdf http://www.oecd.org/investment/mne/GuidanceEdition2.pdf World Gold Council (WGC) (Voluntary) WGC has recently announced a Conflict-Free Gold Standard for global use. This seeks to avoid harm and to prevent fuelling armed conflicts or negatively impacting on human rights within conflicts.

The World Gold Council consulted with industry, government and civil society in developing and reviewing this standard. Further information can be found at: http://www.gold.org/sites/default/files/documents/Conflict_Free_Gold_Standard _English.pdf Signet Group (Voluntary) The Signet Group who own the H. Samuel, Ernest Jones and Leslie Davis retail brands in the UK offer the industry free access to their sourcing protocols, working closely within the RJC and OECD processes and guidelines. They constantly liaise with their 400 worldwide suppliers to ensure manageable compliance.

Gold:

Signet Responsible Sourcing Protocol for Gold revised September 2013.pdf

http://www.signetjewelers.com/files/doc_downloads/Signet-ResponsibleSourcing-Protocol-for-Gold-revised-September-2013.pdf Hallmarking Act 1973 (Mandatory) All jewellery sold in the UK must be hallmarked to determine the fineness of the metal used – this applies to gold, silver, platinum and palladium.

Items made of dual metals must also be hallmarked.

Jewellery produced outside of the UK which has been manufactured in country that is part of the International Hallmarking Convention does not have to be rehallmarked for sale in the UK. The Hallmarking Act is under the authority of the Trading Standards Authority which has the power to prosecute for non compliance. http://www.theassayoffice.co.uk/current_legislation.html Hallmarking is undertaken in the UK by 4 Assay offices: Edinburgh http://www.edinburghassayoffice.co.uk/ http://www.assayassured.co.uk/ Sheffield http://www.assayoffice.co.uk/ Birmingham http://www.theassayoffice.co.uk/ London http://www.thegoldsmiths.co.uk/welcome-to-the-assay-office/ REACH -Registration, Evaluation and Authorization of Chemicals (Mandatory) REACH Enforcement Regulations 2008 regulate the use of nickel, lead and cadmium.

Anyone who supplies products intended to come into direct and prolonged contact with the skin will be affected by these regulations.

REACH is under the authority of the Trading Standards Authority which has the power to prosecute for non compliance. http://www.hse.gov.uk/reach/ RoHS2 – Restriction of Hazardous Substances (Mandatory) This directive regulates the use of Lead, Mercury, Cadmium, Hexavalent Chromium, Polybrominated Biphenyl, and Polybrominated Diphenyl Ether. It has also been extended to include all electronic and electrical equipment including all quartz timepieces.

All components of a watch fall under RoHS2, including internal parts such as straps, lenses, buckles and so on. Conformity to the standard must be indicated by a CE mark on the product, instruction leaflets or packaging.

All participants in the supply chain (manufacturers, importers, distributors and retailers) are responsible for abiding by RoHS2 and in particular preparing and retaining documentation proving compliance. http://www.ce-mark.com/RoHS2.pdf WEEE (Mandatory)

21

Currently outside the scope of RoHS2 and again applying to quartz watches is the Waste Electronic and Electronic Equipment Directive – WEEE (Directive2002/96/EC) RoHS regulates the hazardous substances used in electrical and electronic equipment, whilst WEEE regulates the disposal of this same equipment.

Manufacturers, importers and distributors of affected products are required to register with an approved agency and obtain a unique registration number.

Additionally, a quarterly audit of units sold has to be provided for which a charge towards battery disposal is made. All WEEE companies are required to use the WEEE logo (Wheelie Bin) on packaging. http://www.hse.gov.uk/waste/waste-electrical.htm GPSD (Mandatory) The General Product Safety Directive (2001/95/CE) makes it compulsory to provide users and consumers with any information on the risks associated with the product which are incompatible with the general duty of care.

In other words, to ensure that only safe products are sold in the EU. http://ec.europa.eu/consumers/archive/cons_safe/prod_safe/gpsd/currentGPSD_ en.htm Product Liability Directive (Mandatory) Directive 85/374/EEC establishes the principle that the producer of a product is liable for damages caused by a defect in that product should it cause damage to a consumer.

The ‘producer’ is taken to mean: •

the producer of a raw material

•

the manufacturer of a finished product or of a component part,

•

the importer of the product,

•

any person putting their name trade mark or other distinguishing feature on the product,

•

or any person supplying a product whose producer or importer cannot be identified. http://europa.eu/legislation_summaries/consumers/consumer_safety/l32012_en.h tm Consumer Protection from Unfair Trading Regulations (Mandatory) This Directive (2005/29/EC) provides consumer protection from unfair or misleading trading practices. http://www.legislation.gov.uk/ukdsi/2008/9780110811574/contents

And finally......

BS EN71 (Mandatory) The British Standard EN 71 comprises 11 sections which regulate the safety of toys.

In the absence of any other legislation specific to certain products such as jewellery, this standard is also applied by other sectors to ensure that products comply with the General Product Safety regulations.

Directive 2009/48/EC applies to toys defined as "products designed or intended, whether or not exclusively, for use in play by children under 14 years of age".

The main difficulty of the definition of a toy is the concept of "use in play" or "playing value". Virtually, everything has play value for a child, but this does not make every object fall under the definition of ‘toy’. To be considered as a toy for the purpose of the Directive, the playing value has to be introduced in a deliberate manner by the manufacturer.

Perhaps a remote and tenuous link to jewellery but one that needs to be followed if you are supplying the under 14 market. http://www.bsigroup.com/LocalFiles/en-GB/consumer-guides/resources/BSIConsumer-Brochure-Playing-Safe-UK-EN.pdf

External Considerations Community A key priority for a socially responsible business is to develop and maintain strong and mutually beneficial relationships with its community. Businesses that take an active interest in community wellbeing can generate community support, loyalty and good will, as well as enhancing business performance, their profitability and their reputation. This is often referred to as building your ‘social license to operate’, and is an important business objective for any commercial concern.

Businesses engaging in community relations or community involvement typically conduct outreach to the community aiming to prevent or solve problems, foster social partnerships, and generally contribute to the community’s quality of life.

They also participate in community relations to help improve their business by getting valuable community and other stakeholder input.

23

Businesses frequently share common interests with their community and it is useful to spend some time considering how you can leverage these to your mutual advantage.

Your community relations priorities will depend on local circumstances and your business strategy, competencies and assets. You will want to consult others, including your employees and representative community groups, to help you determine where to invest time and resources in your community relations programme.

A few key areas which any business might wish to consider include: • Accessibility • Social

Hiring

• Stakeholder • Community

Engagement Goodwill

Accessibility An important community involvement objective is to ensure your premises, products, services, and communications are free of barriers and that people can use them independently, regardless of ability, gender, age, or ethnic background.

Businesses can show their commitment to accessibility by welcoming everyone so that all community members feel included, have a sense of belonging and can be recognized as having something to contribute.

The UK Employers’ Forum on Disability suggests that to achieve accessibility a company should: • Understand how disability affects all aspects of its business - people, markets, competitors, suppliers, communities and key stakeholders.

• Create

a culture of inclusion and remove barriers for groups of people.

• Make

adjustments which enable specific individuals to contribute as employees, customers and partners.

Given technological advances and population demographics, people with disabilities are living longer and becoming a greater presence in the marketplace.

Companies which can capitalize on this trend by making their premises, products and communications more accessible will be able to secure future market opportunities and grow their business.

Social Hiring Companies seeking to make a direct and meaningful contribution to economic and social inclusion may be interested in looking at hiring people who face labour

market barriers due to a physical, mental or developmental disability, lack of work experience and/or skills, long-term unemployment, age, culture or language.

When looking at ‘social hiring’ it may be advisable to investigate the benefits of apprenticeship programmes for your business. There are many training providers in the UK now offering accredited frameworks for young people, from a range of backgrounds, to learn jewellery-specific and administrative skills.

Stakeholder Engagement This is the process of listening and talking to your stakeholders. Stakeholders are defined as those who have a direct or indirect stake in your business, its decisions and actions.

In addition to the every-day stakeholders - employees, customers, and your local community - stakeholders include (amongst others) suppliers, local/national authorities, regulators, NGOs (non-governmental organizations), investors, industry associations and the media.

Consulting with your stakeholders will help you to meet their needs more fully and will help you to develop more robust and lasting business outcomes. More and more successful businesses now realise the importance of listening to their key audiences to determine market opportunities, manage risk and help add value to their products and services.

Stakeholder engagement can help you improve communication, facilitate buy-in on projects, generate community support, and tap into additional information, data and ideas. Listening to your stakeholders’ concerns and desires can help you to take into account their different priorities and perspectives and will help secure that all important ‘social license to operate’.

Stakeholder engagement works best when a business genuinely seeks input; it does not work if the process is used to manage issues or influence groups.

Community Goodwill Community goodwill is an opportunity to demonstrate your environmental and social commitment to the broader community. It can include: • Donation of sales • Donation of products • Employee volunteerism • Collection of customer donations • Charity Events Donating to worthy causes, is not only good for the beneficiaries, it also provides an opportunity to market your business in a positive light. Contributing to local community causes can have great impact when it is consistent with your goals and values. You may also wish to support wider social or environmental causes.

In a retail jewellery environment supporting local charities will ensure that your shop name becomes a brand and that customers will develop positive associations with and a trust of your brand. Ultimately the retail outlet will become known not simply for selling jewellery but also for adding value to the community.

25

The values you practice and promote will inspire trust and confidence in your business and research shows that businesses that demonstrate strong community values are more often chosen by the local consumer as their first point of call when buying an item of jewellery.

Another way to contribute to community is to encourage your employees to volunteer for a local charity or non-profit organisation during work time. The organisation will benefit from the donated talents of your employees, while your business will benefit by creating a better image and a happier, more engaged workforce. Not only that, volunteering can help build skill sets for employees and can supplement your employee training program.

Since large businesses are more likely than small ones to support such initiatives, finding ways of engendering community good will is an excellent way for jewellery businesses to distinguish themselves from their competitors in the SME sector.

External Considerations Resources Consideration to the resources your company uses is vital to the JSR process and operates on several levels – the natural resources you use to run your business,

your commitment to recycling and the provenance and sustainability of the materials used in the manufacturing process.

Natural Resources We are all responsible for using natural resources in the most effective way possible and should advocate that our suppliers do likewise.

In the first instance, examine the resources you employ and make an honest assessment as to whether or not your use of them can be made more efficient.

You should consider the following: •

Electricity

•

Natural Gas

•

LPG

•

Vehicles

•

Water

•

Freight – road, sea and air

•

Air travel

•

Paper use

•

Packaging

• Public transport There are many on line sites that will help you compare your current usage to industry norms and the DEFRA web site is a valuable information resource to access. You may even look at reviewing your carbon foot print. http://www.ukconversionfactorscarbonsmart.co.uk/ Practical points that you should consider include: •

Installation of water meters.

•

Installation of smart electricity meters.

•

Limiting the amount of documents you photocopy

•

Installation of lighting motion sensors.

•

Replacing fluorescent tubes and light bulbs with more efficient products.

•

Turning off lights and machinery when not in use.

•

Using transport/distribution companies with strong environmental credentials It is of particular importance that national and EU law are understood, in particular the ‘Environmental Regulatory Framework’, which, in part, focuses on pollution emission targets, increasing the use of renewable energy and increasing energy efficiency. http://www.ukela.org/ Recycling

27

As is increasingly the norm for domestic waste, it is important to review how your business waste can be recycled to divert as much of this as possible away from landfill sites.

Internally, go through all of your business activities and understand how materials and equipment can be recycled and reused – this can include paper, manufacturing components/metals, toner cartridges and even office equipment.

A West Midlands based jewellery factory made an exhaustive study in how it could be more effective in recycling.

As part of this study, it found that manufacturing operatives over the course of a day naturally had fine gold residue on their hands.

Consequently, all linen roller towels were replaced with paper towels. Filters were placed in wash basin plumbing.

All used towels were kept for a year and then burnt by a metals recovery company.

This yielded over £30,000 worth of recoverable gold.

Materials When it comes to thinking about the materials your business uses think ‘KYS’ or ‘Know Your Supplier’.

Do you know where the gold, silver, platinum, palladium, diamonds and gemstones used in your jewellery come from?

How can you ensure that these have not been sourced using processes that result in environmental damage?

How do you know they have not helped perpetuate human rights issues? Or that they have not contributed to money laundering processes?

If you are a retailer and a customer asks you a question regarding materials provenance; what is your answer?

If you are a designer or manufacturer and a retailer asks you a question regarding materials provenance; how do you answer?

If you are a stone or metals supplier and a designer or manufacturer asks a question regarding materials provenance; how do you answer?

Such are the vagaries of the UK and international jewellery markets, access to information relating to supply chain transparency and materials traceability is limited.

So, what can you do?

Firstly you should ensure that the materials you sell, buy, or use, are part of an accredited supply chain audit.

With diamonds you need to understand the Kimberley Process and the World Diamond Council’s System of Warranties. You should also obtain guarantees/reports that specify whether the diamonds you are buying are natural or manmade. You must also ensure that they meet your 4C buying criteria and are of the cut, clarity, colour and carat size that you have specified.

A note of caution from the US......

If a retailer sells a lab-grown diamond without disclosing its origin, the retailer will bear legal responsibility for that transaction, even if that fact was not disclosed to them by their supplier.

A retailer can take the position that they didn’t know, but ignorance is no defence in court.

The retailer is fully liable for the representations that they make at the point With gold, you need to understand the OECD and LBMA guidelines (see External Considerations, Regulations).The Gold Paper (see External Considerations, Regulations) produced by the and UK Jewellery Ethics Committee goes into the gold supply chain in greater detail. Companies that are members of the RJC have had their supply chain audited to confirm compliance with regulatory requirements.

In the case of finished products, you need to obtain proof that the products comply with relevant national and EU regulations, such as REACH (see earlier section) One of the unappreciated consequences of the high gold price was that jewellers started buying ‘scrap’ gold to supplement the lower volume of jewellery sales.

Once smelted and refined, this recycled gold added to the existing stocks used to supply the UK jewellery industry.

It is estimated that over 80% of gold used in UK jewellery manufacturing is recycled.

29

Secondly, you could use suppliers that can prove fully the provenance of their materials. Here you may look to Fairtrade gold and silver and single source (mining, cutting and polishing) diamond/ gemstone suppliers. This approach will allow you to indentify conclusively from where the materials have come.

Due Diligence A key requirement of JSR is that you put into place your own ‘Due Diligence Programme’ (KYS) – an approach which applies whatever your place in the supply chain.

Essentially it is your responsibility to: 1. Set the standards for materials/product compliance – and this must include all relevant legislation.

2. Introduce and manage a process that keeps up to date records of every supplier and every product collection that you buy, make or sell.

This need not be an arduous task: For example a retailer using the due diligence process will easily be able to confirm that a diamond ring supplier has used Fairtrade Fairmined gold and is able to supply a System of Warranties and invoices confirming the diamonds they use conform to the Kimberley Process protocol.

What you must be able to do is understand the answers you are given and then be able to make an informed assessment of as to whether or not these meet the required standards you have set.

Furthermore, one of the major benefits in knowing more about the products you make, or buy, is that the information received places you in a better position to put forward an even stronger sales proposition to your customer. You now have the tools to really reinforce the sale!

External Considerations Customers At this stage of the JSR framework you are hopefully already thinking of how you can incorporate new policies into your business.

Whether you are a b2b or b2c jewellery company, the importance of the customer cannot be underestimated for customers can provide far more than simply sales revenue to your business.

We all have our own buying preferences. Just consider for a moment what criteria you follow when you buy food, clothes or even jewellery. What makes you pick one brand or company over another?

In the main our purchasing preferences are determined subliminally by the advertising and PR messages we receive and by the values we impose upon our daily lives. We prefer to do business with people and organisations that match our own standards and share the values to which we aspire.

Adopting a robust JSR policy with customer involvement will help you with: • Improved reputation • Brand image • Word-of-mouth loyalty • Customers’ willingness to pay a premium • Protecting your reputation in times of crisis A JSR policy also creates a ‘halo effect’. You feel good about what you are doing by adopting socially responsible practices, your workforce feels good working for a socially responsible company and your customers feel good dealing with an ‘exceptional’ supplier.

What we will explore in this section is what practices customers respond to best and how you can use these to your benefit when developing your own JSR framework.

However, before we get to this, I suggest you conduct your own audit on how you currently interact with your customers. Have you ever asked them how your company could possibly improve its products or services or even gain greater prominence in your sector?

Such an audit might include questions on how you can improve your stock offering; how you can demonstrate product provenance and how you can improve delivery times, customer service, pricing and store layout. You may also wish to ask your customers how you could enhance your standing in the local community or in the industry as a whole.

When you get your customers’ responses you can use these to help you shape more positive attitudes to your company in the future.

There are main three areas for you to investigate: • Community Goodwill – previously covered on page 26 • Business practices • Product related features

31

Research shows that customers invariably associate a company with just one key socially responsible protocol. Your challenge is to decide which of the three areas you can do best – this should then be your keystone communication and activity focus.

Business Practices Like philanthropy, socially responsible activities in the form of business practices carry the potential to add extrinsic value for customers.

As an example, customers may decide to support a business because of its recycling or ethical practices. Buying from such a company makes the customer feel by that by association they too are contributing to good community responsibility. In essence, the ‘halo’ effect has now transferred to the customer.

Areas of activity you may do well to consider include: • Ethical conduct • Local sourcing – including adoption and practice of British designed, British made jewellery • Adherence to jewellery industry voluntary standards and guidelines • Recycling • Employee relations • Competing fairly and ethically • A publicised JSR statement Product Related Activities This area, relates principally to the type of jewellery you make, buy or sell and in the UK, this has the potential to provide the broadest spectrum of value to customers and other stakeholders. There is a growing movement of those who identify themselves as ‘ethical’ jewellers where, in particular, great attention has Consumer’s view of socially responsible business practices: (Ipsos Mori Poll 2014) • • •

83% say the ethical standards of retailers matter to them.

39% say that shopping decisions have been influenced by this.

38% are willing to spend more money on products if the company acts ethically.

•

•

63% say that retailers stating ethical practices need to prove the same.

62% say that it is important that companies are clear on where they source their materials.

•

33% say lack of information about ethical standards is a barrier to buying.

been paid to their jewellery materials’ provenance, including packaging.

As these figures demonstrate, customers are becoming increasingly aware of their responsibilities to source correctly. At present, the question is whether demand exceeds supply or supply exceeds demand. Either way, adopting strict productsourcing criteria, could well give you the USP you have been looking for. Finally, do not forget the added-value that customers associate with product quality.

Faced with a choice, customers favour socially-responsible, product-related activities over philanthropy and ethical business practices. This self-orientated value imposed by the customer will allow a potential premium price to be commanded over competitors that rely solely on other forms of customer value.

You will become recognized for making, buying or selling products that meet/exceed customer expectations which in turn leads to developing the all important business commodity of trust.

Ultimately, the choice is yours as only you know to what stimulus your customers will respond. As mentioned earlier, engage with your customers and ask them their views – they, after all, are the ones placing the orders, buying your products and generating the cash and profits needed to run your business.

33

External Considerations Suppliers

In the earlier section of ‘Resources’ the term ‘KYS’ or ‘Know Your Supplier’ was introduced. And the question must be: ‘Wouldn’t you prefer to do business with suppliers operating to standards to which you aspire and will put into practice?’

One of the great advantages of JSR is that once you start to put the programme into practice your suppliers will also be reading this documentation and developing their own framework.

However, as a purchaser of goods and services there are some additional responsibilities that you need to consider. Adopting the JSR framework is a two way process and the future lies in developing good working partnerships.

Here are some pointers for you to consider: • Your suppliers are a step behind you in the supply chain. The legal and voluntary obligations of your business must be matched by those your suppliers, for ultimately it is you that is responsible for the necessary compliances. Here, refer back to the earlier ‘Resources’ section and introduce your own due diligence checklist against each supplier.

• You are more than likely to be both buyer and seller. Ensure that you are prepared to share your own due diligence protocols with both your suppliers and your customers. This is a sure way to strengthen the traceability and transparency of the jewellery supply chain.

• When was the last time you visited your suppliers and satisfied yourself regarding their working conditions, processes and ethical conduct?

• Suppliers operate their businesses to meet your needs and will often go that extra mile to supply you with what you want, when you want it. It is only correct that within ‘the partnership’ you reciprocate by paying them within the agreed terms.

• Fairness and equitable behaviour are essential for good buyer/seller relationships. Understand when buying and trying to get the best deal the implications this may have upon your supplier. Every company needs to make a workable profit and it essential for the longevity of the trading relationship that both parties understand this point. Price is not everything and both parties need to investigate other value-added benefits in the negotiation process. Sharp practice is bad practice and has no place within the JSR framework.

• Promote your adoption of the JSR framework to your suppliers in the jewellery industry.

Internal Considerations Internal Structure The adoption and maintenance of a workable JSR framework in your company is not your responsibility alone and you should embrace the input of your stakeholders – most notably your staff and trusted advisors – in its creation and management.

In order to implement your JSR framework you will need to consider the type of decision-making structure best suited for your business.

Although every jewellery business is different, each needs a decision-making structure in place to ensure that it can meet its commitments (see next section: Internal Considerations – Internal Processes) and its customers’ needs.

The key consideration for your business is: what is the most effective and efficient JSR decision making structure to put in place bearing in mind your existing mission, operations, risk areas, size, commitment to socially responsible trading, culture and way of organizing your affairs?

Given that JSR is fundamentally concerned with transparency, accountability and performance, it is important that the decision-making structure should be an integral component of your company’s governance activities and should operate, supported by relevant staff expertise, throughout the organization from top to bottom.

A senior member of your team (if not you) needs to be responsible for overall JSR implementation and should be provided with the resources to get on with the job.

Whoever is in charge will need (providing you have the staff capacity to do so) to assign individuals with the responsibility of managing the tasks presented by the various sections of the JSR framework – regulation, community relationships, customer relations, supplier relations and so on. It is also worth considering that those taking on JSR responsibilities should have these built into revised job descriptions.

Internal Considerations 35

Internal Processes

With your decision-making structure in place the next stage is to arrive at the internal processes that you will need to introduce your JSR framework. These will include: Preparing and implementing a JSR plan.

Setting measurable targets and identifying performance measures.

Engaging with employees and others to whom JSR commitments apply.

Designing and implementing JSR training.

Creating internal and external communications plan.

Preparing and Implementing a JSR plan The major benefit of adopting JSR is that it provides workable and practical guidelines with which to work. The components and emphasis that you give to each of the sections within the framework is entirely up to you, but it is important that you formalise your social responsibility objectives with a clear and decisive plan.

As a starting point, work through each of the framework sections and decide on your priorities and objectives.

You might for example decide to do the following: Become more conversant with UK jewellery industry statutory and voluntary regulations.

Implement a supplier due diligence protocol.

Think of ways of how to engage with the local community.

Look at ways to make more effective use of utilities.

Smaller firms can create problems for themselves if they identify too many elements of a socially responsible framework at the beginning.

Take small steps, deliver and then move onto the next objective.

Implement a recycling policy.

Set measurable targets and identify performance measures As with any plan, timelines and targets need to be discussed and agreed. So, using one of the points above as an example, the desire to make more efficient use of utilities could well be translated into setting a target for energy reduction usage by x% in the next 12 months. It is appreciated that not every objective can be translated into a quantitative target, so do not be unduly concerned about setting these.

As with all priorities and objectives the targets you set need to be monitored and regularly evaluated. You might find for example that your initiative to engage with the local community through charitable work has not succeeded, leading you to approach the objective from a different perspective such as employee volunteerism which might prove more effective and productive.

Engage with employees and others to whom JSR commitments apply

Ultimately, successful JSR implementation rests largely in the hands of employees and in some cases suppliers. In a sense, these groups are your company’s front of house’ and they need to be capable of acting as ambassadors, advocates and sources of new ideas.

If employees, in particular, are not properly engaged they can be a source of problems. Employees need to see that you and the senior management of your company are fully engaged with the process and that your actions reflect the spirit of the objectives you have set.

Be prepared to act if an employee performs actions that lead to non-compliance of your JSR framework.

Design and construct JSR training When first implementing, or planning, a JSR programme you need to consider an on-going programme of development and training for staff.

Whilst your existing staff will contribute to the setting up of the JSR process, you must give consideration to how new employees will receive training in the process and how they can be encouraged to contribute to its upkeep. Successful JSR training requires the learner to have an input into the development of the learning process.

Create internal and external communications plans Here we come to the crux of the JSR framework – letting stakeholders know of the work you are undertaking so that you can start to reap some of the benefits mentioned earlier.

Quite simply, you need to develop a communication plan that not only identifies the individuals and groups that need to be aware of a particular JSR initiative, but also the appropriate communication channels – be these print, one-to-one meetings, social media, trade media, your website and so on – that you intend to use to spread the word.

37

Internal Considerations People The most valuable asset of any business is the people it employs and the final component of the JSR framework centres on the needs of your employees.

It may be well worthwhile taking some time out to talk to your staff and to explore their motivation to work. You may be surprised at the results. It is a common misconception that people are solely motivated by money but in fact we all need to feel valued and to know that our contributions are acknowledged.

With respect to adopting a JSR framework it is imperative that you get your employees committed to the process. As a result they will feel good that they are making a contribution to the betterment of your business and perhaps the industry as a whole.

As previously mentioned, employees are your best advocates and ambassadors and these qualities should never be forgotten.

So what do you need to do in return?

Here are just a few pointers: Encourage greater two way internal communication.

Introduce and manage performance reviews and appraisals.

Be aware of training needs – your aim should be to enjoy the full potential. of what each of your employees can offer your company.

Introduce and mange a grievance procedure – the quicker and more effectively that you deal with issues - the better for everyone.

Introduce and mange a promotion and career structure – let your employees know that there is more to your company than the current role they are performing.

Structured responsibilities will encourage employees to take ownership of key tasks.

Ensure that remuneration and bonuses are fair and are commensurate with rewarding success.

Ensure that you have a robust Health and Safety regime in place.

All employees should be treated equally and fairly with consideration to their aspirations and achievements in the workplace.

In return you will find that staff turnover will be lower, new positions will be easier to fill and that your company will be a richer, happier, place to work.

Summary In the day to day running of your company, adopting a socially responsible business framework is probably not high on your list of priorities.

What I hope this paper has demonstrated, is that with managed effort over a short period of time you can make a huge difference to your business – and it is an ongoing process that allows the facility for continual refinement and improvement.

Whilst there are companies who have already adopted and embraced employing socially responsible business practices, the JSR framework provides you with a starting point. You may already be doing a little bit but we can all do more to help ourselves and our industry.

In preparing this paper, I have spent time in researching and discussing how other organizations have managed the process of applying industry focussed frameworks.

The key issue for all of them has been the quality of compliance where there is always a trade off between “form filling” (translated as having to do more work) and desire.

But compliance, whether voluntary or mandatory has to be part of a company’s risk management strategy.

If I don’t do it, what will happen?

Ultimately, the results will become apparent and as a consequence you will have put in place a system of continual improvement – not only for you, but your company, staff, customers and suppliers.

And as a result, the UK jewellery industry becomes a healthier, wealthier and better place to work in.

Case Study 39

One of the motivations to write the JSR framework was the absence of any similar guidelines for the UK jewellery industry to follow. However, the 2012 policy written by Toye Kenning & Spencer of Birmingham’s Jewellery Quarter stands the test of time. I am indebted to Fiona Toye, Chief Executive of TKS for her permission to reproduce the following.

I hope Fiona’s approach to the issue of socially responsible trading and the JSA framework will give you the encouragement you need to produce your very own set of objectives, targets and timelines.

The time really has come for the UK jewellery industry to take the lead in introducing socially responsible business practices, rather than assuming a reactive position.

CSR & Sustainability Policy for Toye Kenning and Spencer Chief Executive’s Introduction APRIL 2012.

Corporate Social responsibility is a form of corporate self-regulation more usually associated with large multi-nationals than small manufacturing companies such as ours, and yet our people and our communities and the responsible use of raw materials have been integral to the Company’s operation for three hundred and twenty-five years.

This is a family company, and the management team plans for the long term and always have. Our craft skills that are so essential both for our textile and metal production only endure if we continue to invest in training and people through the generations. This means we must maintain strong links to the local community (our skill bases are very regional) and to local schools and universities as young people need to know that career opportunities exist for them in our business. We are determined our type of manufacture will continue to flourish in the UK, and this is an important strand of our corporate strategy.

Our staff turnover is very low as there is enormous personal satisfaction for our employees in what they do, and the staff work with the management on the maintenance of a safe and enjoyable working environment.

The very nature of our business with expensive raw material costs, low margins and fierce competition has meant that economic use and recycling of materials has been practiced throughout our existence. All metal clippings, shards, and fillings from manufacture are recycled. In fact all metals used in manufacture, whether base or precious, are essentially re-cycled. Textile by products are either recycled or given to local schools for art and craft use. Our methods of production are directly influenced by the need to keep energy consumption to the minimum.

Statutory factory laws and sheer common sense ensure that our factories and offices are safe and effective work places. We work hard to create friendly environments for our work force and visitors on the inside, and for the community on the outside.

Toye, Kenning & Spencer does source raw materials and products from other UK companies and from companies overseas. In every case we are careful to ascertain the operational integrity of our business partner, and make sure they are aware of

our own ethical policies, and follow very similar policies and procedures of their own. It is pertinent to note that through experience we have found there is a direct correlation between the conditions of manufacture and the quality of the resulting product.

Introduction to our procedures To ensure that our objectives for corporate social responsibility are met it is essential that both the management and all staff know what our objectives are, and work together to achieve them. As our CSR policy is so integral to how the company functions elements from the policy are evident in everything from job specifications to training programmes and factory layout.

Overall responsibility for our CSR policies and procedures belong to the Chief Executive, which clearly indicates how important it is to the company. The Production Director at each factory, and the site Director for London, are responsible for the day-to-day implementation of policy and procedure at each location. There are monthly meetings of the Managers where all issues pertaining to our CSR are attended to. The Main Board of Toye & Company also reviews all decisions and actions concerning our CSR policy and procedures on a regular basis.

For Toye Kenning & Spencer Limited our people are our greatest asset, and for us to progress and flourish as a business it is essential that we work with our local communities, and continue to value our resources and the environment.

Fiona Toye Chief Executive Toye Kenning & Spencer Limited

CSR and sustainability: Our policy Our CSR and sustainability policy is designed to provide long-term benefit to all stakeholders connected to TKS. Broadly, these responsibilities include: Our environment, our employees, and our community.

CSR and sustainability: The environment For over three centuries TKS has led its industry. We appreciate our prolonged success. Furthermore, we appreciate that to ensure its continuity we must match it with a long-term commitment to environmental sustainability. We remain committed, within our financial constraints, to carrying our share of this responsibility. Consequently, TKS is committed to conducting its business in a manner that most effectively minimizes its environmental impact. We aim to successfully integrate global environmental concerns into our business plan. TKS participate in environmental management not simply to fulfil our legal obligations but due to the realisation that sustainability is fundamental to good business.

Aims and objectives TKS aims to consistently take account of environmental issues in our commercial decision-making. This includes: 41

* Operating in a cost efficient and environmentally responsible manner - we have a policy of investing in our production processes to reduce scrap and re-working and this is constantly reviewed Target - Reduction in scrap and re working * Using processes that have no adverse environmental effects. For example, in respect of energy consumption and waste management. We review our energy consumption in conjunction with our utility supplier Target - Reduction in energy usage by 3% per annum * Endeavouring to improve environmental performance where practicable.

Target - Reduction in use of toxic chemicals by 2.5% per annum * Creating management procedures to achieve these improvements.

Target - Continued compliance with ISO regulations * Adopting a good neighbour policy whereby we work with all our neighbours at all of our sites in maintaining and improving the local environment Target - Maintain excellent local community relations * TKS will ensure employees are not only aware of our CRS policy but that they actively take part.

Target - Maintain excellent internal and external communication Legislative compliance and industry standards * TKS will comply with, or exceed, the requirements of relevant environmental legislation, regulations and guidelines * We will comply with, or exceed, industrial standards and good practices * We will, even in the absence of either governmental or industrial standards take all reasonable steps to avoid harm and/or damage to the environment Sustainable manufacturing, energy, and waste management * TKS will attempt to utilize non-polluting technologies, and to minimize energy and materials consumption in design and manufacture of products and processes * We will adopt a positive policy of waste reduction. This involves actively seeking methods whereby less material is used and less material wastage incurred * We will adopt a positive policy of energy reduction. This involves actively seeking methods to reduce our energy consumption. * We will attempt to utilize sustainable manufacturing practices that extend throughout the supply chain Education and awareness

* TKS will provide our customers, employees and other interested groups, where appropriate, with relevant and appropriate factual information about the environmental quality of product, packaging and operations. In this context we seek to establish open, honest and timely communications, and strive to be responsive to their concerns * TKS will promote our environmental activities to our staff and customers, advising them of our concern and our care for the environment. * TKS will expect our suppliers to demonstrate an environmental commitment, consistent with our own, and to co-operate with us in meeting environmental objectives. * TKS shall encourage suppliers and contractors to adopt responsible business policies and practices for mutual benefit. This extends to any outsourced manufacturing Target - All key suppliers to be visited bi-annually to ensure compliance CSR and sustainability: Environmental action Recycling of metal * TKS ensure that all scrap metal, whether base or precious, is recycled by a certificated scrap merchant. This includes all metal clippings, shards and fillings. * We ensure that all gold metal is reclaimed from rinse waters involved in the electroplating process. We also ensure that all precious metal and copper, from wire used to hold products in place, is reclaimed during plating operations.

Recyling of paper and cardboard * TKS ensure that all paper and cardboard waste is separated for collection by the city council.

Recirculation of water * TKS ensure that any process water used during manufacturing is closely monitored. It is also separated from that used for domestic purposes. The quality of the process water in the rinsing tanks used during the plating processes is monitored carefully. More water is not used until the existing water quality has exceeded specified levels.

Energy saving * TKS recently undertook a survey of the existing heating arrangements. This resulted in the replacement of the previous boiler system with more modern condensing gas boilers. * We are currently replacing the lighting in our factories. The old light bulbs are being progressively replaced with more efficient longer life equivalents. * We have introduced an energy survey of half hour usage data. This is then used as an instrument to reduce usage.

CSR and sustainability: Our employees TKS is a family firm that believes in showing a commitment to each and every employee. We remain aware that the calibre of our finished product relies directly 43

upon the craft of those employed by us. To continually produce top quality goods we understand the necessity to invest in ourselves, and more specifically, to invest in our workforce.

This is reflected in our commitment to the recruiting, training, and development of our employees. Our continued dedication to our social responsibilities has certainly contributed to our commercial success. Retaining the loyalty, and thus the dedication, of our employees ensures our high quality benchmark is constantly met.

Equality, diversity and fairness * TKS believe firmly in embracing diversity. We are committed to the principle of equal opportunity in employment all irrelevant of sex, age, disability, sexual orientation, marriage status, race, ethnicity, national origin, or religious belief. * We believe that the wide variety of backgrounds, perspectives and ideas found throughout the company contribute positively to our competitive edge. * TKS shall offer employees clear and fair employment terms and provide resources to consistently motivate, support, and develop employees.

Health and safety * TKS view health and safety as a primary concern. The risks inherent to manufacturing as an industry ensure this. With this in mind TKS remains proud of its clean record. For us, no accident is acceptable. As a family company accountability is felt throughout the firm, right up to our Chief Executive. * We believe that a safe working environment and high level of protection is a necessity not only for the continued well being of our staff but also for the benefit of our business.

Recruitment * TKS train within the company to try and preserve and maintain our unique skills that are handed down through the generations. * TKS recruit from other companies within this industry centered in Birmingham’s Jewellery Quarter making the most of our regional skills base. * TKS recruit from the School of Jewellery. This is one of the leading schools for jewellery design in the world and is based in the Jewellery Quarter. Two members of our design team are graduates and one of our employee’s lectures their part time and has identified talented individuals for us. * TKS have acquired smaller local companies thus retaining their employees’ skills and specialized equipment.

Training and development * TKS operates a comprehensive training plan as part of our ISO 9001:2008 policy.

This ensures that all of our training procedures are in line with current health and safety legislation.

* Our training procedures are designed to develop employees’ skills through cascade training. We our currently concentrating on developing and expanding our CAD/CAM skills with training courses at specialist manufacturers and in-house development * We have developed close connections with several schools local to both our manufacturing bases: * Small Heath School in Birmingham is highly regarded within the City for its excellence in all aspects of surface design. We currently collaborate on numerous artistic projects and it is intended that some of our skilled employees will work with them on training days. Our eventual aim is to create a dedicated training area within our site where pupils can experience many aspects of our work and can be mentored within a safe and controlled environment. * Exhall Grange Special School, located near our Bedworth factory, is one of several schools in the Bedworth and Coventry area we supply with school and sports uniforms. Our CEO, Fiona Toye, is a Deputy Chairman and corporate governor at the school. We aim to work closely with them to develop projects that will expand their very special artistic skills by using our products and materials.

Both of our factories are popular venues for young people looking for work experience. We attempt to let them experience most areas of manufacturing during their time with us. * Our CEO, Fiona Toye, is also involved in a Jewellery Quarter campaign to develop a recognised training scheme for the industry. It is obvious that this is the only way to secure the future of our industry and retain the skills based traditionally in the Quarter. Initial trainees are soon to being their training that will lead to a qualification from the Goldsmith’s company, recognised and respected the world over. * Fiona Toye, is also Jewellery Quarter Development Trust Board member and on the Regional Princes Trust Committee.

CSR and sustainability: Our social commitments Community & social investment * TKS will endeavour to support and encourage our employees to help local community organizations and community activities in our region. * TKS is determined to maintain strong relations with the local community due to the regional skills base upon which both our Birmingham and Bedworth factories rely. The nature of the company ensures strong community relations. * TKS is actively involved with work done in the Jewellery Quarter through the Jewellery Quarter Development Trust. This is especially important due to us being one of the largest manufacturers in the Quarter. The Trust aims to promote the Quarter as a vibrant place to work, visit & live. We are fully supportive of the new Jewellery Quarter Business Improvement District. * TKS has sponsored trophies to be presented at the 2010 West Midlands Street Games & for the 2010 Birmingham Book Festival. We are keen to support both our local and regional communities. * TKS has consistently and regularly hosted factory tours in Birmingham and last year we worked with Marketing Birmingham to host tours during the Rotary International Convention.

45

* TKS is an enthusiastic member and supporter of the Birmingham’s Civic Society.

We donated an award to the Society and are becoming involved with their Citizenship Initiative that works with Birmingham schools to develop pupils’ involvement and pride in the city. * In September 2011 Small Heath School year 9 pupils completed murals for our Birmingham reception area. * In February 2012 BA jewellery students from Central St Martins School of Art in London visited the Birmingham factory.

- See more at: http://www.toye.com/legal/corporate-social-responsibilitysustainability-policy-and-procedure#sthash.J0nK0sIj.dpuf