Louise Mercer, chief experience officer at Everledger.
q&A | TECHNOLOGY
Differentiating diamonds: proving the provenance of precious gems
As consumers’ interest in the ethical provenance of diamonds grows, blockchain technology firm Everledger, after receiving an additional $7m in funding, is strengthening its precious gems traceability offering, with a focus on sustainability and origin stories. Heidi Vella spoke to the company’s chief experience officer, Louise Mercer, to find out more.
Louise Mercer, chief experience officer at Everledger. Image: Everledger
ounded in 2015, Everledger was one of the first blockchain-based technology companies pledging to help eradicate so-called conflict diamonds by securely tracing their origin and journey through the supply chain. Five years on, amidst a global pandemic that has significantly impacted the precious gems sector, the company is hoping to tap further into consumer desire for sustainability and traceability by offering new solutions to help sellers differentiate their diamonds in the market.
In recent months, the company has launched a carbon information and offset platform with US-based Shairu & Atit Diamonds that details the carbon footprint of a diamond’s supply chain, enabling contributors, including miners, to offset their contribution. It has also updated its Everledger Platform with additional features that match supply and demand of stones based on buyers' demands, such as diamond quality, sustainability footprint, and compliance standards. Additionally, it has launched a new WeChat Mini Program e-commerce solution for Chinese retailers to sell diamonds more easily with full transparency of their origin.
Heidi Vella: Since Everledger’s launch in 2015, how has the company grown and impacted the sector, do you think?
It’s been a journey, definitely. We've had significant growth over the last 12 months or so and we have learned a lot. The throughput rate for diamonds on our platform is about 12,000 a day, but we’ve broadened it so we can ingest much more data at scale. At the moment, we're converting all our existing clients into the new platform. It’s a fantastic opportunity for us to increase the scope of our work with the suppliers and it also gives them the potential to connect with new retailers.
We started with diamonds and gemstones, which was really important given the history and challenges facing those commodities, but we are now expanding to other asset types, such as fine wines and batteries. We’ve been working on many projects, including at the consumer end, and it's great that we now have initiatives spanning the full value chain. I think it's fair to say, though, the industry is definitely facing challenges, you can't ignore that.
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How have the challenges presented by Covid-19 affected interest in your technology?
Some businesses are focused on doing what’s needed to get by, while others are saying now is the time to invest in things like our technology, so as markets open back up, they’ve got a point of differentiation. It’s horses for courses and depends on the strength of the balance sheet. But part of the value we're offering the diamonds and gemstones industry is more digital commerce, to convert a bricks-and-mortar store into a digital enterprise that is backed by trust.
I think the way technology is advancing, with augmented reality and virtual reality, retailers want to enhance the customer buying experience. And that is what we do, by ensuring the consumer gets what they paid for, and knows where their gem came from and, importantly, has trust and confidence in that knowledge.
Do you think consumers are more willing to pay extra for sustainability and proof of ethical provenance?
We very strongly believe it's a growing space. That is evidenced anecdotally and in real terms from customers’ experience with their end consumers. It's gone a long way, and I think another Covid-19 impact is a broader awareness of supply chain and origin and where stuff comes from. Sustainability is a massive growth area and evidencing where something originated, for a whole variety of reasons, including peoples’ desire to support certain economies and stories - we’re connected with the Women Miners Association in Tanzania, for example - can set sellers apart.
An early criticism of blockchain technology for precious gem traceability purposes was that it can be difficult to accurately align the real and digital worlds, especially in some of the underdeveloped countries where precious gems are mined. How have you managed this particular challenge?
This is actually where I think blockchain has a lot to offer rather than less. Instead of relying on a single endorsing party that could be compromised, we can send information across the network and search for providers and data that substantiates different aspects and that gives a more complete picture of truth and trustworthiness.
It all comes back to data quality. We spend a lot of time on this and there's different aspects to it. One is just standardisation and normalisation of data sets across industries that have never standardised or normalised before, and that's a challenge. But that then provides at least a common function and language for comparison and searchability.
We apply logic and standard practices and invoke third party auditors to help our customers put their best foot forward. So, you know, if you're lacking a Kimberley Process certificate, if you're lacking a third-party grading certificate, if your data doesn't line up, if your diamond is cut and polished but then gains weight, it will show on the system.
The immutability of record keeping immediately enhances trust and I don’t think blockchain infrastructure has been fully realised yet, I think that will come into play as we scale.
Can you tell us more about your new upgrades and where your focus is headed next?
We have introduced more control for users just starting out. People joining our platform can get their own data in order and prepare themselves to be more discoverable, but keep their data private. Others can either make the data public across the platform or permissioned, which is when a retailer might be searching for a particular type of stone, they discover it, and want to make inquiries they can message that provider and connect with them. We know having more control is quite important for our customers.
Customers can also demonstrate their sustainability credentials, upload their reporting, and offset their own greenhouse gases through our platform. That's another really important aspect for our suppliers to differentiate themselves.
The WeChat Mini Program and Alrosa is key to this; China is a massive market for gemstones and jewellery, and just about everything gets done in China on WeChat. It's contacts and communication, transactions, it's conversational commerce. And so, the ability to trade stones in that environment and to have provenance on demand to substantiate a trade I think builds legitimacy and trust in the market. It's very sensitive to it.
So Chinese consumers are looking for that kind of evidence, they hold certificates in high esteem. Growth in China is a big area of focus for us in the next year or so ahead. For us, as we grow, I think our repertoire of what we'll produce from a recording and dashboard perspective will grow as well and we have several big announcements to make very soon.
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