The Brand

In 1837, Charles Lewis Tiffany opened the first Tiffany & Company store in New York City, forever changing the jewelry industry. Since its opening, the brand has not only redefined luxury, creating the iconic pieces such as the Tiffany box and the Tiffany Setting diamond engagement ring back in the late 1800s that are still coveted by millions today, but has most notably helped to introduce and lead the sustainability movement within the industry.

Tiffany's Sustainability Values

Tiffany & Company is grounded on creating and providing glamorous jewelry using precious materials that are sourced through responsible and sustainable practices. A combination of factors have led this brand to become the sustainable leader that they are known as today.

The beauty of Tiffany & Co. products are inspired by the beauty seen in the environment. Therefore, the company feels an obligation to protect the source of this inspiration. They realize that if sustainable practices are not enacted today, the environment, and thus their inspiration, will not be available to future generations (Sustainability report 2014).

Sustainability at Tiffany

Tiffany & Co. remains consistent with the brand’s values through several sustainability initiatives that they have enacted in recent years. These initiatives are purposed in not only protecting the environment but humanity as a whole. Some of the most important actions have been created in the area of responsible mining. The detrimental effect mining has on both the environment- and, as a direct result, humanity- has been realized as a major issue in recent years. Practices such as strip mining that are used to source precious stones like diamonds, damage wildlife and agricultural landscapes, which leads to soil erosion that pollutes waterways and perhaps even local water tables as well (Mining impacts 2010).

In order to diminish some of this harm, Tiffany & Co. helped to create the Initiative for Responsible Mining Assurance (IRMA), an organization that provides certification for both environmental and social standards. The criteria for certification are in the areas of environmental management, protection of workers and communities, and revenue transparency, as well as mine location specifications. Tiffany & Co. has specially adhered to these mining specifications by

refusing to mine in “ecologically and culturally significant areas”

(Kanani 2014). For example, the company determined Bristol Bay, Alaska to be one of these significant areas and has refrained and publicly spoken against sourcing precious metals there. Bristol Bay is home to one of the world’s most important salmon fisheries. The use of mines in Bristol Bay would destroy waterways that are essential to both recreational and commercial fishing, leading the company to believe the area should be left unmined (Sustainability report 2014).

Balancing Sustainability and the Luxury Business Model

These initiatives are just a few of the many Tiffany & Co. employs to strengthen their environmental sustainability and social responsibility while also remaining authentic to their values and business model, as well as luxury’s model as a whole. Tiffany’s commitment to sustainability is partially attributed to and in support of the luxury model’s emphasis on timelessness and thus a focus on long term business strategies. Kowalski mentions that the company believes sustainability will become a determinant for consumers’ purchase patterns in the future. He explains that

"effectively meeting that demand will be a source of brand differentiation and ultimately lead to the creation of long-term shareholder value”

(Kanani 2014). In addition, the implementation of sustainability as a strategy for the long-term success of the business also translates into luxury’s stress on value creation over cost saving.

With all the progress Tiffany has made in their sustainable development, the company has been constrained to further innovation due to its conflict with the brand's heritage. While any part of mining has been proven to be detrimental to the environment as well as humanity, the company is unable to cease purchases of materials that require mining due to their long history of supplying precious stones in their coveted jewelry. With the luxury model calling for brands to focus and utilize their heritage, the conflict that true sustainability creates with Tiffany’s history prevents the brand from additional advancement in this area.

Yet another area that Tiffany utilizes sustainability to supplement their business model is in respect to enhancing and safeguarding their brand's reputation. Luxury brands are built upon reputation and aura to support the high gross margins that the industry yields. Any damage to the reputation will erode their elevated position in the minds of consumers, thus eroding their rationale behind these margins. As explained previously this idea has been expressed as a pressing concern and motivation for sustainability practices by Tiffany & Co’s former CEO, Michael J. Kowalski (Kanani 2014). Further pressure is also put upon luxury brands to reach expectations as well as engage in responsible practices due to their position as leaders in society; therefore, making them more susceptible to criticism.

1. Knowing when to use green marketing

Although sustainability is not a major factor in most luxury consumer purchase decisions, many industry experts forecast this to change in the future. The Harvard Business Review found in a consumption study that, “88% of UK and US Millennials and Generation Xers believe brands need to do more good, not just ‘less bad” (Winston 2016). As Millennials and Generation Xers become the new luxury consumer in coming years, environmental sustainability and social responsibility will become a much more important component to luxury brands. With the demand for responsible business practices rising within the luxury industry, Tiffany & Co. may find an opportunity to integrate sustainability into their marketing. With that being said, the company must determine the time at which the level of demand for sustainability presents an opportunity worthwhile to pursue for the luxury brand.

2. Be wary of using the term “sustainability”

With all the buzz sustainability has received in recent years, industry experts believe the word has lost its credibility. Sustainability has simply become a broad word telling consumers that the company or specific product does right by the environment, but lacks a distinctive meaning in the eyes of consumers.

Conscious brands such as Positive Luxury urge companies to

“use far more user friendly and inspiring language that gets the point across”

(McPherson 2014). In order to maximize their effectiveness, brands should make the effort to use words that describe how they are being sustainable in a way that is more relevant to their founding values, personality, and customer base. This is especially important for luxury brands in order to remain consistent with their values and heritage. If/when Tiffany chooses to integrate sustainability into their marketing, they should make sure to use terms that accurately describe to consumers the actions they are taking in a way that is directly in line with the brand’s personality.

4. Improve KPCS process

In addition to their support of countries who comply with the KPCS, Tiffany & Co. also believes the system should be strengthened through stricter definitions and review processes. We recommend that Tiffany & Co. plan their own, improved version of the KPCS process, in order to enhance the tracking of their supply chain. These improvements should include stricter guidelines on required export information, as well as clearer procedures in a variety of areas. For example, although KPCS charges penalties to those who do not comply with regulations, they lack strict rules for allocation of which penalties fit which violations (Moore n.d.). Tiffany & Co. can improve on this by setting strict, pre-determined penalties that match the level of each offense.