What Jewelry Professionals Need to Know

CSDDD in Jewelry: Compliance or Competitive Advantage?
The Corporate Sustainability Due Diligence Directive (CSDDD) is here, and it’s set to change how jewelry businesses operate. From ethical sourcing to environmental impact, this EU regulation is not just for big players—it will affect the entire industry. Whether you run a small jewelry brand or work with global suppliers, understanding CSDDD is crucial for staying competitive. Read on to discover what you must know, how it impacts you, and what steps you should take today.

The jewelry industry has always been about craftsmanship, beauty, and exclusivity. But today, every jewelry business must consider a new dimension: sustainability and corporate responsibility. The Corporate Sustainability Due Diligence Directive (CSDDD) is set to reshape the way companies operate, requiring them to identify and mitigate human rights and environmental risks across their supply chains.

If you’ve heard about it but aren’t sure if it applies to you or how to proceed, this article is for you.

The Corporate Sustainability Due Diligence Directive (CSDDD) is a European Union regulation that requires large companies to conduct due diligence on human rights, environmental sustainability, and supply chain ethics. This means businesses will be legally responsible for identifying and mitigating any negative impacts in their value chains, from mining to finished products.

The directive applies to large companies, both in the EU and internationally, based on specific turnover and employee thresholds:

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  By 2027: Companies with 5,000+ employees and an annual turnover of €1.5 billion+.

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  By 2028: Companies with 3,000+ employees and an annual turnover of €900 million+.

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  By 2029: Companies with 1,000+ employees and an annual turnover of €450 million+.

Even if you don’t fall into these categories, CSDDD will still affect smaller businesses because large companies will require suppliers and partners to comply with their sustainability due diligence.

Additionally, non-EU companies with turnover thresholds matching these criteria within the EU market must also comply.

1. Double Materiality Assessment (DMA)

A Double Materiality Assessment is a structured evaluation of how sustainability issues impact your business (financial materiality) and how your business affects people and the planet (impact materiality).

✅ 93% of jewelry companies already conduct financial materiality assessments. ✅ 62% are in the early exploration stage of double materiality, while 39% have started integrating it into their business models.

What This Means for You:

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  You need to assess both how sustainability risks affect your company and how your company impacts sustainability.

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  Stakeholder engagement is essential—companies are now required to consult affected communities, suppliers, and employees.

• Double Materiality is also a legal requirement under the Corporate Sustainability Reporting Directive (CSRD), making it crucial for compliance.

2. Human Rights & Environmental Due Diligence (HReDD)

This part of the directive requires companies to integrate both human rights and environmental considerations into their risk assessments.

🚨 70% of participating jewelry companies are in the early stages of integrating HReDD, but many already conduct environmental due diligence. The challenge lies in aligning this with human rights responsibilities.

Key actions include:

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  Identifying where in your supply chain human rights and environmental risks exist.

• Engaging with suppliers and requiring ethical sourcing policies.

• Establishing a system to prevent and mitigate risks while ensuring ongoing monitoring.

3. Supplier Engagement & Responsible Purchasing

Suppliers play a huge role in compliance. Companies will need to ensure their suppliers meet due diligence requirements.

📌 Most jewelry companies engage their suppliers at least once per year through audits, self-assessment questionnaires, and contractual commitments.

Best Practices for Supplier Engagement:

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  Build relationships with suppliers to gain trust and transparency.

• Provide training on compliance rather than just enforcing rules.

• Regularly assess risks, not just through paperwork, but through on-site visits and third-party audits.

Audits alone are not enough—active supplier training and collaboration are essential.

If you’re wondering whether CSDDD is relevant to your business, here’s why this matters:

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  Legal Liability: Companies failing to comply could face significant fines (up to 5% of their global revenue, depending on national implementation).

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  Market Demand: Consumers are increasingly prioritizing sustainability and ethical sourcing when purchasing luxury goods.

• Competitive Advantage: Early adopters of sustainability practices can position themselves as industry leaders.

🌍 Case study: Swarovski & Pandora

Swarovski has been ahead of the curve, conducting double materiality assessments and integrating sustainability into their corporate strategy. Their 2024 DMA confirmed that their top priorities include climate change mitigation, preserving resources, and promoting fairness in labor practices.

Similarly, Pandora has committed to using 100% recycled gold and silver by 2025, reducing its carbon footprint. Their focus on traceability, responsible mining, and supplier compliance positions them as a leader in sustainability and compliance with emerging regulations.

✅ Assess Your Position: Determine whether your company falls directly under CSDDD or will be affected through partnerships. ✅ Start Implementing Due Diligence: Even small businesses should start tracking sustainability risks and ethical sourcing. ✅ Engage with Your Suppliers: Build relationships and educate them about compliance requirements. ✅ Stay Informed: CSDDD is evolving, and staying ahead will be crucial to maintaining credibility in the market.

🔹 How CSDDD Relates to Other EU Regulations – CSDDD is closely linked to the Corporate Sustainability Reporting Directive (CSRD) and the EU Green Deal, both of which push for greater corporate transparency and accountability.

🔹 Industry Trends in Sustainability – Consumers are increasingly favoring brands that demonstrate a commitment to ethical sourcing, reducing carbon footprints, and supporting fair trade. This shift is influencing major players in the jewelry market.

🔹 Best Practices from Leading Jewelry Brands – Companies like Tiffany & Co., Pandora, and Chopard have been integrating sustainability for years. Learning from their initiatives—such as responsible gold sourcing, carbon neutrality goals, and community support projects—can offer valuable insights.

🔹 Technology & Traceability – Digital tools like blockchain for gemstone traceability are transforming how companies track their supply chains. Staying informed on these advancements can give businesses a competitive edge.

🔹 Potential Challenges in Implementation – While compliance is crucial, companies may face challenges such as cost increases, supplier pushback, and administrative burdens. Preparing for these hurdles in advance can make the transition smoother.

CSDDD may seem like a daunting regulation, but it also presents a great opportunity for the jewelry industry to lead the way in ethical business practices. By integrating sustainability into your business before it becomes mandatory, you’re not just ensuring compliance—you’re future-proofing your brand.

 

Credit: This blog was created thanks to the Watch & Jewelry Initiative 2030 publication. Please visit their website and download the full report here: https://www.wjinitiative2030.org/wp-content/uploads/2025/02/WJI2030-CSDDD-Guidance-Note_Final.pdf