The Honest Company - 1792 Exchange

Rating Overview

The Honest Company is Medium Risk.

The Honest Company, Inc. is Medium Risk. The company often yields to political activism in shaping corporate governance, potentially alienating consumers, dividing employees, and harming shareholders. The company implements race and identity-based policies that replace merit, excellence, and integrity with preferential treatment and outcomes. The company occasionally embraces corporate initiatives that redirect its central focus from business goals to partisan policies and divisive issues at times. This approach fails to safeguard free exercise, free speech, and free enterprise.

Rating Criteria

Corporate Weaponization Risk Levels
Criteria	Risk Level
Cancellations	Medium Risk
Discriminatory Philanthropy	Medium Risk
Employment Protection	High Risk

Corporate Weaponization ⓘ

Corporate Governance and Public Policy Risk Levels
Criteria	Risk Level
Advocacy Bias	High Risk
Funding	High Risk
Political Actions	No Data

Corporate Governance and Public Policy ⓘ

Rating Criteria Detail

Criteria Risk Level Rationale

Corporate Weaponization

Criteria:

Has canceled customers, suppliers, or vendors due to their political views or religious beliefs OR corporately boycotts, divests, or sanctions regions, people groups, or industries.

Risk Level:

Medium

Rationale:

Honest integrates ESG into its business practices. From its 2021 ESG Report: “we will evaluate potential ESG and climate metrics to integrate into our strategy and risk management process” (1). However, the company has not canceled customers, suppliers, or vendors based on political views or religious beliefs (2).

Criteria:

Charitable giving (including employee matching programs) policies or practices discriminate against charitable organizations based on views or religious beliefs.

Risk Level:

Medium

Rationale:

Honest Giving Program guidelines require that organizations abide by its nondiscrimination policy, including on the basis of sexual orientation, thereby excluding some religious charities (1).

Criteria:

Employment policies fail to protect against viewpoint or other discrimination and/or are ideological in nature.

Risk Level:

High

Rationale:

Honest appears to prioritize diversity over merit in its hiring, mentorship programs, promotions and leadership composition. From its Black Lives Matter blog: “Representation matters and moving forward, there is opportunity to create a more diverse Honest family and leadership team, inclusive of more races (specifically the Black community), gender identities, ages and other classifications” (1). From its Community Impact page: “We foster and support a diverse + inclusive environment through our hiring practices, training and development, policies and procedures, communications, community outreach, and throughout our company culture with our Employee Resource Groups” (2). The company does not provide viewpoint protections for its employees (3)(4).

Corporate Governance and Public Policy

Criteria:

Uses corporate reputation to support causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

Honest stated that they believe abortion is necessary to “love living consciously” (1)(2). The company’s former CEO Nick Vlahos signed the CEO Action for Diversity & Inclusion pledge, which includes a commitment to promote DEI through bias education training in the workplace, strategize on DEI programs/initiatives with other signatories, and engage boards of directors when developing and evaluating DEI strategies (3)(4). The company supports DEI within its business practices. From its Community Impact page: “Diversity, equity and inclusivity have been cornerstones of our culture here at The Honest Company” (5).

Criteria:

Uses corporate funds to advance ideological causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

Honest pledged to continue providing abortion access for employees “regardless of where they live” (1)(2). The company has donated $100,000 to the Equal Justice Initiative, a nonprofit that promotes systemic racism and progressive reform (3). Otherwise, there are no publicly known cases of the company using corporate funds to advance ideological causes, organizations, or policies (4).

Criteria:

Uses corporate political actions and/or financial contributions for ideological, non-business purposes.

Risk Level:

N/A

Rationale:

Honest does not operate a PAC or engage in lobbying at this time (1)(2)(3).