How Ethical Is Pandora Jewelry? A Supply Chain Analysis

How Ethical Is Pandora Jewelry? A Supply Chain Analysis

By
Carla Shaik

Read Time:18 Minutes

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Pandora is one of the world’s most popular jewelry brands, known for their contemporary, hand-finished products. But, much less is known about their ethics and sustainability practices. Diamonds are a girl’s best friend, but how environmentally friendly are the companies that make them? As it’s the world’s largest jewelry maker, we had to ask: How ethical is Pandora jewelry?

Pandora is generally very ethical. They are committed to sustainability and use recycled materials within their own facilities to lessen their environmental impact. However, improvements still need to be made to ensure the ethics of their entire supply chain, including worker rights.

In this article, we will walk you through the steps of the Pandora supply chain, from sourcing materials and the manufacturing process to retailing and recycling. We will analyze each process and determine the ethics of each stage so that you can make informed choices when you buy your next piece of precious jewelry. 

Here’s How We Assessed the Ethics of Pandora Jewelry

The global jewelry market is expected to increase from about $270 billion in 2022 to over $330 billion by 2026. And Pandora is one of the biggest players in the industry, with an annual revenue of around $3.5 billion

Most jewelry is made using a variety of metals that often need to be mined and processed using labor and carbon-intensive processes. To be truly sustainable, a jewelry company needs to ensure that all their materials are sourced responsibly, processed minimally, and recyclable. 

Ethics: the discipline dealing with what is good and bad and with moral duty and obligation”

Merriam Webster

To understand the ethics of Pandora jewelry, we must assess them across their whole supply chain. This supply chain analysis (VCA) is a method used to evaluate each stage’s ethics; from sourcing the raw materials from their suppliers to delivering the final product to you as a customer.

The supply chain stages of Pandora jewelryEach stage’s ethics
Sourcing of Pandora jewelrySupply chain transparency: Pandora appears to be very transparent about their processes. They release a Transparency in Supply Chains Statement every year, which details their actions toward becoming more sustainable. They also screen and monitor all their suppliers.

Sourcing location(s): Pandora is a leader in the drive to use more sustainable metals because they use recycled materials and lab-made diamonds.

Human rights: Pandora has previously failed to publicize the individual mines they source from, which could indicate negative working conditions. However, since 2020, they have taken steps to ensure that forced and child labor are minimized by using recycled materials.

Conflict diamonds: There are no specific examples of Pandora using conflict diamonds in the past but their audit trail has not historically been transparent. Since 2021, the company has committed to using man-made diamonds which eliminates the need for conflict sourcing.

Environmental impact: Pandora mitigates sustainability risks through their Responsible Sourcing Program (RSP), lowering their potential environmental impact. They also use recycled materials in their products rather than sourcing them directly from natural sources.

Societal impact: Pandora has a relatively low societal impact of sourcing their materials because they use a lot of recycled and man-made materials. 
Manufacturing of Pandora jewelryManufacturing location(s): Pandora runs their main crafting centers in Thailand, where they employ over 6,800 people. In 2022, they also announced that they are planning to build a new crafting facility in Vietnam using 100% renewable energy

Transparency vs marketing: Pandora is working to become a fully sustainable and ethical business, aligning with the UN Sustainable Development Goals. They also publish detailed reports every year to lay out their processes, including recycling targets and worker grievances.
Retailing of Pandora jewelryUnethical marketing messages: There is no clear evidence of bluewashing in Pandora’s marketing strategies. They also only sell their products through authorized retailers.

Operational margins: Pandora operates at a 25.5% EBIT margin, which is higher than the average of 15.9% for the luxury sector. Their employee wages are low to average, depending on the country, with Thailand workers receiving less than the average wage.

Life-cycle duration: Pandora states that their jewelry can last a long time but are unable to give an exact time frame, as this can depend on how the jewelry is cared for. All Pandora jewelry comes with a warranty for exchanges up to two years after the purchase date.

As we can see from the chart above, Pandora is working hard to improve their ethics and sustainability practices. However, there are many different processes and materials that go into the production of jewelry which can all result in environmental damage if not used responsibly. So, let’s dive into each individual stage to determine the areas that Pandora can improve on.

How Ethical Is the Sourcing of Pandora Jewelry

To determine how ethical the sourcing of Pandora jewelry is, we need to dig into how their products are mined, as well as how transparent they are about their processes. Does the company take steps to ensure miners are treated with respect? Do they only mine materials from sustainable sources? These are some of the things we need to know in order to determine if the sourcing of Pandora jewelry is ethical.

In this next section, we will break down the ethics of Pandora into their transparency, material sourcing, and human rights responsibilities. Then, you can make informed choices to ensure that you are only buying your jewelry from the most sustainable companies. 

How Transparent Is Pandora Jewelry About Their Whole Supply Chain and Production Process

Pandora appears to be very transparent about their processes. They release a Transparency in Supply Chains Statement every year, which details their actions toward becoming more sustainable. They also screen and monitor all their suppliers.

In this section, we break down the ethics and transparency of Pandora’s supply chain and production process:

  • Sourcing raw materials: Pandora works with a small number of direct suppliers for their materials, mostly in and around Thailand. They screen all potential suppliers using a comprehensive risk assessment before committing to working with them. Suppliers are also required to undertake a third-party audit every two years. Furthermore, all the silver and gold they source comes from certified responsible refiners. The company regularly monitors audits of all their suppliers to ensure compliance with their standards. 
  • Distribution centers: Pandora distributes their products worldwide through a number of distribution centers, but predominantly from their center in Hamburg, Germany. Pandora has also been public about their commitments to streamlining their distribution process to keep up with growing demand. For example, 80% of their orders are fulfilled using a ‘pick and pass’ technique, whereas small orders of 5 product lines or less use a batch picking method to ensure efficiency. 
  • Consumer packaging: Pandora actively promotes their commitment to a fully circular process when it comes to the crafting and packaging of their products. For example, their products and packaging are all free from hazardous chemicals. They also require comprehensive records and test certificates from all of their packaging suppliers as proof of quality management.
  • Crafting facilities: Pandora operates two crafting facilities in Bangkok and Lamphun, Thailand, both of which hold the Leadership in Energy and Environmental Design (LEED) Gold building certificate. According to their 2021 report, 89% of their products were crafted at these sites, with 11% of their finished products outsourced. 

In short, Pandora is very transparent about their product sourcing and supply chain. They release a transparency report annually which details all this information.

Where Are Materials for Pandora Jewelry Sourced From

Pandora is a leader in the drive to use more sustainable metals because they use recycled materials and lab-made diamonds.

In this section, we break down the supply process for the main materials used by Pandora; gold, silver, copper, palladium, man-made stones, and mined diamonds. 

In short, Pandora is committed to sourcing ethical materials for all of their products. Even though 29% of their metal does not come from recyclable sources and they still sell mined diamonds, they have made a strong commitment to rectifying these issues.

How Does Pandora Carry Out Their Human Rights Responsibility

Pandora has previously failed to publicize the individual mines they source from, which could indicate negative working conditions. However, since 2020, they have taken steps to ensure that forced and child labor are minimized by using recycled materials.

In this section, we break down the human rights responsibilities and processes used by Pandora to prevent forced and child labor as well as worker safety and appropriate working conditions:

  • Forced labor prevention: Pandora’s annual Transparency in Supply Chains Statement details how they work to prevent both forced labor and child labor. For example, their Supplier Code of Conduct includes basic expectations across key areas such as human rights, working hours, and working conditions. However, in 2018, it was found that Pandora was unable to identify the individual diamond mines that supplied them with their raw materials, despite the mandatory requirement of their suppliers to comply with the Kimberley Process. Today, the company uses gold refiners to provide detailed evidence that they have sourced their diamonds responsibly. 
  • Child labor prevention: In 2017, Pandora failed to provide any details on slavery and trafficking risks associated with gold mining. This is despite the fact that nearly 1 million children were estimated to be working in gold mines that same year. However, today, the company is committed to using only recycled gold and silver which lowers the risk of child labor significantly. They also run independent audits and visit mines where ‘red flag’ practices are identified. 
  • Worker safety: Pandora publishes an annual ethics report that details the non-compliance issues found through their supplier audits. For example, in 2020, Pandora ordered annual third-party audits for 13 of their direct suppliers (30% of their supplier force). The remaining 70% are audited biannually or considered low-risk. This report found that 50% of employee grievances concerned health and safety issues in the workplace. Their Supplier Development team, based in Thailand, is responsible for implementing responsible business practices by working directly with suppliers and supplying them with informal training. 
  • Fair labor practices: According to their annual report, Pandora had 27,000 employees who created 94 million pieces of jewelry in 2021. The company allows both employees and employers to express their grievances through an externally-managed whistleblower hotline. In 2020, 11% of grievances concerned compensation and benefits, and 4% concerned work hours. Furthermore, in 2020, they conducted a human rights impact assessment across their whole supply chain to better understand potential risks and impacts to staff. 

In short, while Pandora has failed to provide specific human rights issues within their workforce in the past, they now publish annual reports detailing auditing results, including worker grievances. 

Does Pandora Have a History of Sourcing Conflict Diamonds

There are no specific examples of Pandora using conflict diamonds in the past but their audit trail has not historically been transparent. Since 2021, the company has committed to using man-made diamonds which eliminate the need for conflict sourcing.

“Conflict diamonds: diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments”

United Nations
  • Current situation: Since 2021, 100% of the stones used in Pandora’s new products are man-made, so no conflict sourcing is required. 
  • Past problems: Before 2021, Pandora sourced all their diamonds from KGK Diamonds, which is both Best Practices Principles-compliant and Responsible Jewellery Council-certified. Conflict diamonds can be difficult to identify, especially if individual mines can’t be pinpointed. But, KGK Diamonds’s positive reputation has led them to become the preferred buyer of three of the world’s leading diamond miners; one of which created the international Kimberley Process. This was designed to increase transparency and eliminate conflict diamonds from the industry.

In short, Pandora works with the most respected and largest diamond mining companies, one of which helped to create the international Kimberley Process. So, there are no major concerns surrounding the sourcing of conflict diamonds. 

What Is Pandora’s Environmental Impact of Sourcing Their Materials

Pandora mitigates sustainability risks through their Responsible Sourcing Program (RSP), lowering their potential environmental impact. They also use recycled materials in their products rather than sourcing them directly from natural sources.

In short, Pandora is committed to reducing their potential effects on land erosion and natural resources by controlling water and toxic chemical usage. However, fresh water is still used for certain aspects of the manufacturing process, which reduces the ethics of this stage.

What Is Pandora’s Societal Impact of Sourcing Their Materials

Pandora has a relatively low societal impact of sourcing their materials because they use a lot of recycled and man-made materials. 

  • Employment: Pandora is committed to using 100% recycled silver and gold, as well as lab-made diamonds in their products. This is a great step forward, however, nearly 13,000 local people worked in diamond mines across South Africa in 2021 alone. So, if they close, it could have a negative impact on local communities. Conversely, the lab-diamond industry may also force mines to improve their worker standards in order to compete with more ethical industries. 
  • Carbon footprint: Pandora is taking steps to ensure they only use lab-made diamonds which have a carbon footprint of 8 kg per carat. This is just 5% of the carbon emissions created by a mined diamond. They are also rolling out supplier training programs that will help to reduce their value chain emissions by 42% by 2030. However, this is much slower progress than their target to be 100% carbon neutral in their own facilities by 2025

In short, Pandora is committed to becoming a fully circular business that uses 100% recycled energy and materials. However, more work needs to be done to ensure they reach their targets, especially when it comes to reducing their entire value chain emissions. 

How Ethical Is the Manufacturing of Pandora Jewelry

Pandora is working to become a fully sustainable and ethical business, aligning with the UN Sustainable Development Goals. They also publish detailed reports every year to lay out their processes, including recycling targets and worker grievances.

The manufacturing of jewelry involves a wide variety of processes that can impact both the environment and employees. In this section, we break down all the factors in the Pandora manufacturing process that affect their ethical standpoint.

Where Is Pandora Jewelry Manufactured

Pandora runs their main crafting centers in Thailand, where they employ over 6,800 people. In 2022, they also announced that they are planning to build a new crafting facility in Vietnam using 100% renewable energy

In short, Pandora has taken significant action to reduce their environmental impact during the manufacturing process. They are also dedicated to improving opportunities for women. However, they lack a robust diversity and inclusion policy.

How Ethical Is the Retailing of Pandora Jewelry

There is no clear evidence of bluewashing in Pandora’s marketing strategies, which are detailed in their Responsible Marketing Standard. They also only sell their products through authorized retailers.

“Bluewashing: Deceptive marketing that overstates a company’s commitment to responsible social practices.”

Wikipedia Does Pandora Have a History of Sourcing Conflict Diamonds
  • Authorized retailers: Pandora sells their jewelry through over 6,500 authorized retailers across 100 countries and through their own website. They do not authorize any of their retailers to sell their products through auction sites. However, their products are often transported across continents on carbon-intensive cargo ships. 
  • Sustainability governance: Pandora has a 9-member sustainability board that manages and audits operations across supply chain, product, retail, human resources, marketing, and corporate communications, ensuring their compliance. 
  • Responsible marketing: According to their website, Pandora’s responsible marketing committee is responsible for new updates and implementations in the retail sector. However, their responsible marketing standards are fairly vague.

In short, Pandora has a multitude of policies and standards that make sure their authorized retailers adhere to strict guidelines. Many of their policies are vague, which can suggest bluewashing, but their actions to become more ethical have proven otherwise.

How Ethical Are the Profit Margins of Pandora Jewelry

Pandora operates at a 25.5% EBIT margin, which is higher than the average of 15.9% for the luxury sector. Their employee wages are low to average, depending on the country, with Thailand workers receiving less than the average wage.

In short, Pandora has above-average profits compared to the rest of the luxury retail sector. Their employees generally get decent wages but this can be improved.

What Is the Typical Life-Cycle Expectancy of Pandora Jewelry

Pandora states that their jewelry can last a long time but are unable to give an exact time frame, as this can depend on how the jewelry is cared for. All Pandora jewelry comes with a warranty for exchanges up to two years after the purchase date. 

  • Jewelry care and maintenance: Pandora recommends that all their products be checked by a professional once a year. On top of this, they state that you should clean and polish your jewelry regularly with a soft cloth to maintain its shine. Pandora advertises their Pandora Care Kit as the best way to keep their jewelry in good condition.
  • Warranty and repair coverage: Pandora offers a two-year warranty for all their silver and gold jewelry, including those in their Diamonds by Pandora range (lab-grown diamonds). However, parts of wood, glass, leather, and string are only covered for up to one year after purchase.
  • Customer reviews: Pandora states that they aim for the highest level of customer service. However, their customer service and product quality have been criticized on review sites, including the life expectancy of the jewelry. 
  • Recycling: As of 2021, Pandora has reduced the plastic in their jewelry boxes by 75% and uses recyclable products such as paper from ‘well-managed’ forests. Furthermore, Pandora has made a commitment to only use recycled silver and gold in all their jewelry by 2025. Any waste metal leftover is ground down into dust and reformed into new products.

In short, Pandora offers a warranty on all of their products for up to two years after purchase, depending on the materials used. However, customers claim that this can be a difficult process. Pandora uses recyclable materials, lengthening the life expectancy of their products. 

Has Pandora Joined Any Organizations to Showcase Their Social Responsibility

Now, more than ever, it’s important for companies to show awareness of their impact and their commitment to social and environmental responsibility. By joining specific organizations, companies can boost worker morale and give back to the community. Studies have shown that 87% of Americans are more likely to buy from a company that advocates for issues they care about.

Which Organizations Has Pandora Joined That Are Directly Connected to Their Business Organizations

Companies can use their position to improve the lives of vulnerable communities by collaborating with awareness organizations. Pandora has worked with a number of different companies to highlight pressing topics such as breast cancer and climate change. 

These are the organizations that Pandora has collaborated with:

In short, Pandora has partnered with a variety of charities, showcasing their commitment to raising awareness of current issues. They are also members of worldwide sustainability organizations to ensure they constantly stay up to date with sustainability regulations and innovations.

Which Organizations Has Pandora Joined Where They ‘Only’ Contribute Money

Donations to charities and socially responsible organizations are a great way for companies to show their support. However, while these are nice additions, they don’t directly improve the overall ethics of a company because there is generally no further engagement or commitment involved.

These are the organizations that Pandora has donated to:

In short, Pandora has consistently shown their commitment to financially supporting charities across the UK. However, there is less evidence of Pandora broadening their reach to other countries. 

Final Thoughts

Pandora is one of the leading jewelry brands worldwide. They are also committed to becoming a fully circular and sustainable business by using recycled products and creating man-made diamonds. While they show commitment to inclusion and diversity through their charitable donations, they could potentially improve their own policies to make them more concise. This will further protect their employees and reduce the number of grievances made.

Overall, Pandora is leading the way for a more sustainable jewelry industry, which is a commitment that has been backed up by their actions in recent years.

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