Shopping for the Guilt-Free Diamond

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Some of the impetus for such a system could come from an unlikely source: Hollywood. Leonardo DiCaprio is starring in a new movie titled The Blood Diamond, slated for release in December. Some folks in the mainstream diamond industry are worried that the movie, which is set in the late 1990s when rebel militias seized control of Sierra Leone's diamond mines, selling diamonds to buy weapons they used to slaughter innocent people, will hurt diamond sales.

INDUSTRY COUNTERS

The World Diamond Council, a trade association of representatives from De Beers and other diamond sellers, has launched a marketing campaign—revolving around the Web site diamondfacts.org—aimed at combating concerns among consumers that the movie could raise. The site points to the overall decrease of conflict diamonds in the industry as a result of the Kimberly Process Certification Scheme, which is a voluntary initiative started in 2002 to eliminate the world's conflict-diamond trade.

For their part, Gerstein and Grossberg say they see the movie as a way to push the issue into the mainstream and start a potential boom for their business. They say the Kimberly Process Certification Scheme is a good start but is empty without some type of third-party verification system.

"When there's a source of conflict-free African diamonds, we will definitely source them," says Grossberg. Until then, Brilliant Earth is giving 5% of its profits to the Diamonds for Africa Fund, which raises money to benefit the San Bushmen in Botswana, improve health and education in villages in the Congo, and help children in Sierra Leone affected by conflict diamonds.

CLEAN IN CANADA

All of the diamonds sold by Brilliant Earth currently come from two mines in Canada—Diavik and Ekati, ventures set up in 2003 and 1998, respectively, by existing companies that capitalize on Canada's newfound mineral resources as well as growing consumer concern about the conditions in African diamond mines. Both mines are monitored by the government, and promote environmental sustainability and cooperation with local indigenous tribal groups.

For now, Canada remains the primary source of diamonds that are verifiably conflict-free, despite their premium price, between 3% to 10% more than traditional diamonds. "The challenge Brilliant Earth will face, as all other social enterprises face is: What are the additional constraints that they're putting on themselves for doing business in a positive way? From a pure business play, any time you create some constraints, you have some costs," says Rick Aubry, a professor of social entrepreneurship at Stanford.

The success of Brilliant Earth at least partially depends on the willingness of the consumer to pay the premium.

Gangemi is a reporter for BusinessWeek.com in New York.