Living Room Session: Redefining Recycled

The January Living Room Session, “Redefining Recycled” is the second Living Room session dedicated to the topic of “recycled” precious metals. The Responsible Jewellery Council is in the process of changing the definition of “recycled” for their Chain of Custody standard. New definitions of “recycled gold” and “reprocessed gold” have also been proposed by the Precious Metals Impact Forum, founded by Sabrina Karib. During this session, we talked about the need to reach an industry-wide consensus on the definition of recycled precious metals and discussed the newly proposed definitions as well. You can watch the recording to get a detailed explanation or read a brief summary below.

Why we're discussing "recycled gold" again

Christina T. Miller Consulting and our clients, as well as many other organizations and individuals in the jewelry industry are working towards integrating sustainable practices into jewelry businesses and minimizing the harm caused by the extraction of materials. At the same time, we encourage all jewelers and refiners to be completely honest with their consumers. If something has not been proven to bring a positive change, it shouldn’t be presented as such.

The term “recycled” as it’s generally understood in relation to other recyclable materials implies mitigating harm to the environment and avoiding more . Unfortunately, this is not the case with precious metals because they’re not wasted. In the past, there was hope that the use of recycled gold could help decrease the demand for mining new material. However, we’ve found out that, on the contrary, there recently has been an increase in the extraction of gold. The reason for that is simple: gold is not just a commodity, but also highly tied to financial markets.

It turns out that what “recycled” means in our households or other everyday scenarios and what it actually means in the jewelry industry are not a match. Melting and reusing gold is something that has always been done, now this action just has new labels and implications placed upon it. Reusing gold should remain a part of the conversation around gold, but claiming that it reduces new mining is greenwashing. And claiming that it reduces carbon emissions is questionable and complicated at best at this time. The focus on recycled gold also takes away much needed attention from artisanal and small-scale mining operations.

Currently, the definition of recycled precious metals as written in the RJC’s Chain of Custody standard is in the process of being changed with two additions. As jewelers, this community can share their feedback to help redefine “recycled” into something meaningful and specific for our industry, which would make the term come across as what it really is, without creating confusion or greenwashing.

What should jewelry companies focus on?

If you want to make your jewelry business more sustainable and improve mining practices, CMC recommends focusing on sourcing artisanally-mined gold. Responsible artisanal and small-scale gold mining operations can be run in a way that mitigates harm to the environment, while playing a big role in supporting local communities. We understand that sourcing strictly artisanally mined gold is not always feasible at this time, but we encourage you to do your best to find out where your gold comes from. This will better inform the claims you make and create a more true representation of the material for your clients.

With all this in mind, we want to call on jewelry companies to not make any impact claims about the use of recycled gold, whether that's in relation to greenhouse gas emissions, or in relation to reducing the demand for new mining, which we know has not decreased by the use of recycled gold in consumer products. So by not making any impact claims around recycled gold, we treat it as what it really is: the status quo. And we can help keep the conversation centered around artisanal mining.

Industry groups and standards such as the RJC, LBMA, SCS and many others do not share a single definition of recycled precious metals. Moreover, none of these definitions really match the general public understanding of “recycled”, which is that we are diverting material from a waste stream. The resulting greenwashing detracts from the efforts to improve the industry overall. That’s why this proposed redefinition of “recycled” impacts all of us.

The current definition by RJC and its flaws.

The current definition of “recycled” from the Responsible Jewellery Council (RJC) Chain-of-Custody Standard is ”Precious metals that have been previously refined (including end-user, post-consumer materials, precious metal-bearing products, and scrap and waste metals and materials arising during product manufacturing) and then returned to a refiner or other downstream intermediate processor to begin a new life cycle as ‘recycled material’.” So, basically, precious metals that have been refined at least once no matter what the next step of the material’s journey is, can be called recycled after that first refining.

One proposed change is seeking to add bullion and investment products as well as by-products from the mining of other ore(s) to this definition. Overall,this change could really shorten the timeline from the gold being mined to being called recycled. The following case studies illustrate how this new definition could play out in jewelry company sourcing actions and the claims that they can make around those sourcing practices.

Case study #1: Company A shares in their sustainability report that the amount of recycled gold and silver that they have used in their products was 60% in 2019, 57% in 2020, and 54% in 2021. They also state that because their production volume increased, the supply of recycled metals accessible to them did not meet their demand, hence the decrease in the percentages. In their report published in February of 2022, they state a goal of using 100% recycled gold and silver by 2025. So, in short, the proposed new definition would make it significantly easier to meet this goal by increasing the supply of what is considered recycled.

Case study #2: Company B purchases all of the gold and silver for their products from a specific mine, a copper mine at which gold and silver are considered by-products. In more than one of their annual sustainability reports, they have been able to make a claim of full traceability to the mine of their raw or newly mined precious metals. They also have a stated goal of sourcing 100% recycled metals. With the proposed new definition, they would be able to immediately change their “traceable to the mine" claim for their gold and silver to a “recycled” claim for that same exact material or paradoxically, they could make both claims.

As we can see, the new definition could make it easier for many companies to exploit the term “recycled” for their own benefit. Jewelers, jewelry retailers, and other concerned individuals working within this industry, can come together to influence this process. There will be a second open comment period for the Chain of Custody standard update and we will keep our audience apprised of that when it occurs.

New definition of “recycled” proposed by the Precious Metal Impact Forum.

Our guest at this Living Room Session was Sabrina Karib, the founder of the Precious Metals Impact Forum. Sabrina is a wearer of many hats, including Secretary General of the Swiss Association of Manufacturers and Traders of Precious Metals and Director of Sustainability of the Swiss refinery, Argor-Heraeus. At the same time, she is also pursuing a PhD at the University of Basel on "Reconsidering the effectiveness of existing standards for responsible supply chains of gold."

During the session, Sabrina shared the story about how the PMIF was born:

“There are standards which proved to be efficient for some segments of the value chain. But what was lacking, in my opinion, was rather a global overview and a platform where everyone would come together and address questions together, as a community, as stakeholders of the gold sector rather than as jewelers on the one side and then refiners on the other side and then miners on the other side.

I wanted to bring everyone together and see if there was any added value in having this open dialogue, if an open dialogue could be possible. And I was very happy to see that, yes, there was a need for a dialogue and that people were eager to share their experience and their challenges in a very open and honest manner. And that's how the Precious Metals Impact Forum was born.

… The proposed definition of recycled gold that we are going to show is actually the result of the work of one of these specific working groups that was composed of luxury groups, refiners, NGOs, a variety of members.”

Sabrina explained why the Forum decided to redefine “recycled”.

• First of all, there are several different definitions for recycled gold. So, when a jeweler sells recycled precious metals, it’s not clear what exactly they mean by that.
• Also, with the supply of recycled gold not meeting demand for some brands, it seems that the new RJC definition may have been driven by RJC members who would like to see an increase in what is called “recycled”.

“So the question for us was, "Do we really use recycled gold or are we trying to create recycled gold to claim something different behind that?" … Everyone is pressured to show significant efforts in terms of CO2 emissions, and in this regard, recycled gold is seen as the perfect answer. There's also the question of the risk with human rights. Many brands are keen to turn to recycled gold because they don't want to have to address what they consider to be a risky supply chain by going to freshly-mined gold. But at the end of the day, all gold is mined. So what we wanted to do is to come up with a definition that would actually match the general [definition of] what is recycled"

The PMIF has proposed to break down “recycled” as we see it today into 2 terms:

Recycled gold: recovered from any product containing less than 2% of gold in weight destined to be discarded, and returned to a refiner or other downstream intermediate processor to begin a new life cycle as “recycled gold”. Freshly mined material, including tailings and any wastes and by-products of mining operations are excluded from this section.

Reprocessed gold: Gold produced from any product containing more than 2% of gold in weight with the purpose of changing its state (e.g., bullion melted to create jewelry, jewelry melted to become a bar being sent to a refinery, unsold or used or broken jewelry being melted to create new jewelry or a different type of product, sputtering targets, manufacturing scraps, …).

These proposed definitions put forward by the PMIF are meant to match the public understanding of what “recycled” is. The 2% threshold was based on the philosophy used by the World Customs Organization to define an alloy. So, there are two factors to determine whether the gold is eligible to be recycled: less than 2% of gold in weight, and that it’s destined to be discarded. This is what recycled material is – it's destined to be discarded and then you bring it back to a second life cycle. Of course, we should understand that there are very few quantities of recycled gold by this definition.

The proposed term “reprocessed gold” would include most of the gold which is currently considered recycled. In Sabrina’s opinion, this term is more accurate.

The use of the term “Freshly-mined” gold in the proposed new definition of recycled, refers to “mined gold” as defined by the OECD: "Gold that originates from mines and has never been previously refined". This term was included into the definition to make it clear that all gold is mined, at some point. But we can separate freshly-mined gold from reprocessed or recycled gold.

Other proposed terms such as “repurposed”, “pre-consumer”, and “post-consumer” were also discussed during the session. Sabrina shared that the PMIF had also discussed these topics and ended up not using pre- and post-consumer as differentiators because not all gold-containing products go through the hands of a customer before they have to be discarded (e.g., electronics with a defect) and even what is a consumer product can be unclear (consider bullion)

About the pressures to demonstrate efforts for reducing CO2 emissions in CSR and sustainability reports.

The way that the current and newly proposed definitions of recycled precious metals are written leaves room for inflated claims about positive environmental impact as relayed through GHG emissions reporting. Sabrina also shared her view on this topic:

“You just mentioned the CSR report or the sustainability report of a large brand and it's a challenge that we are all facing right now… The next topic that will be addressed by the PMIF is to try to see if the members of the forum would agree in some kind of harmonization of calculation methods of the CO2 emissions. That's a whole other topic but that's very much related to what we are discussing now. But yes, there is pressure to reduce and we should reduce. There is an urgency and there is a climate urgency that we cannot ignore. But we will not address it by using fake recycled gold. We will simply not.”

We would like to thank Sabrina Karib for sharing her forum’s proposed definitions and her own perspective during our session. We at CMC wanted to highlight the proposed changes to the RJC CoC definition and why we disagree with those changes. We hope to have illustrated that clearly through our presentation. We also present the definitions created by the PMIF so that you may use them as a reference for your own comments or even use the definitions themselves as a comment if they resonate with you and you agree with them. Our main goal is to assist you in being able to submit your comments to the RJC by sharing our own research and thought process as well as the work of PMIF, a multi-stakeholder group. As we mentioned, there will be a second round of open comments to be submitted to the RJC so you can make your contribution to redefining “recycled” precious metals. We will keep our audience apprised of the dates for this second comment period. 

The recording and summary of the previous Living Room Session dedicated to recycled gold are available here.

If you have any remarks or questions for Sabrina and the PMIF, you can reach out at [email protected]