News: Why LVMH’s Venture Fund is Betting on Lab-Grown Diamonds

Friday, June 17, 2022

Why LVMH’s Venture Fund is Betting on Lab-Grown Diamonds

THIS WEEK IN SUSTAINABILITY: FRIDAY, JUNE 17, 2022

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For years, the mining giants that control the global diamond trade have waged a marketing war against the rise of lab-grown diamonds, supported by the luxury jewellery sector.

Polished campaigns have aimed to frame the traditional diamond industry in a positive light, while executives have dismissed synthetic stones as lower-end baubles.

"Lab-grown diamonds don't have any [history]," Cartier chief executive Cyrille Vigneron said in an interview published in The State of Fashion: Watches and Jewellery report published last year. "They've lost their singularity and lost the fact that they were made by the Earth millions of years ago."

But natural diamonds come with messy environmental and ethical baggage that is increasingly at odds with the values shaping the shopping habits of young consumers. In contrast, lab-grown diamond purveyors have sought to portray themselves as a modern, tech-backed and sustainable alternative.

It's a microcosm of a broader debate playing out across the industry as sustainability becomes a materials battleground and innovations claiming to have a lower environmental impact and more ethical supply chains pose disruptive threats to conventional players.

Now luxury's biggest company, LVMH, is taking a bet on cultivated stones. The group's venture arm, LVMH Luxury Ventures, has taken an undisclosed stake in Israeli lab-grown diamond start-up Lusix as part of a $90 million funding round.

While luxury jewellers like Tiffany, which LVMH acquired last year, remain aloof from cultivated stones, the move is the latest sign that changing consumer attitudes and values are shifting what can constitutes luxury in the modern era.