MEMO

MEMO

To: Clark Hansen, Chief Executive Officer and Spiritual Innovator of Anima Mundi Development Partners (AMDP)

From: Jenna Brosi, Director of Sustainability Research and Development

Date:  24 July 2015

Re: The Honest Company

As Director of Sustainability Research and Development, my job is to propose ways to expand, improve, and reinvent AMDP’s existing and future ventures that align within our economic, social, and environmental parameters: Triple Bottom Line, Corporate Social Responsibility, Social Enterprise and Carbon Footprint. The Honest Company does just that.

The Honest Company, a trendy health, beauty, wellness, and more corporation, embodies standards that are transforming the way the world thinks about all products while maintaining a conscious awareness of the environment, accounting for their societal impact, and skyrocketing business sales – allowing them to play ball with other reputable corporate juggernauts.

As a reference tool, the following definitions help explain the values our company embodies and thus, what we take into account when considering a potential candidate, such as The Honest Company, to invest in:

Triple Bottoms Line

Embodying the 3 P’s profit, people, and planet to measure the financial, social and environmental performance, and responsibility of a company’s operations (Triple Bottom Line).

• ·       The social bottom line measures long term sustainability of business human capital with the understanding that a business that is a desirable workplace, with loyal customers, and that invests in their societal surrounding will always continue to operate (Sustainability Management System: The Triple Bottom Line).
• ·       Furthermore, the less stress your company puts on the environment and the fewer natural resources you deplete, the longer and more successful your business will be. To measure your environmental bottom line, you need to manage, monitor, and report your consumption, waste, and emissions – with a company-wide emphasis and value on waste reduction and green policies (Sustainability Management System: The Triple Bottom Line).
• ·       Lastly, the economic bottom line measures your company’s capital in terms of how much your business operations effect your surrounding economy. A business that strengthens the economy they participate in and belong to will succeed in the future (Triple Bottom Line).

Factoring in your environmental, social, and economic impacts delivers greater efficiency, makes your company more competitive, and sparks innovation - all drivers of profitability over time. Also, intuitively and morally it makes sense to leave the planet a little better than you found it, to work for a company that operates ethically and acts with integrity, and cares about the people it employs and serves (Why the Triple Bottom Line Matters More Than Ever).

Corporate Social Responsibility

Refers to a the continuing commitment by a business to contribute to their economic prosperity while simultaneously improving the quality of life of the workforce, the community, and the environment at large. Measuring corporate responsibility is done by proactive steps including but not limited to: conscious environmental practice – improve sustainability, philanthropy – donating to money or time to local and national charities, and ethical labor practices – treating employees fairly and ethically (Fallon).

Social Enterprise

Social enterprises are revenue-generating businesses that have two goals: to improve social, cultural, economic, and environmental harmony and to earn revenue. At first look, a social enterprise may operate like a traditional money-driven machine, however social, cultural, and environmental mission are at the center of this business model, while profit and revenue land a supporting role (WHAT IS SOCIAL ENTERPRISE?).

Carbon Footprint

Carbon footprint is defined as the total amount of greenhouse gases produced directly and indirectly to support human activities and the impact we are having on Earth. Carbon footprint is typically measured in tons of greenhouse gas emission – carbon dioxide being the lead emitter. It is essential to reduce our carbon footprint because greenhouse gas emissions have been the main culprit in rising temperatures contributing to global warming. Rising temperatures shifting environmental patterns are affecting habitat, wildlife, vegetation, etc. and can result in irreversible damages to our environment (Morse).

A Warm Welcome for… The Honest Company

Co-founders, a mom named Jessica and a dad named Christopher, wanted to eliminate their frustration, and others, by bringing parents a product that was not only effective but unquestionably safe, eco-friendly, beautiful, convenient, and affordable – because every baby deserves the best they can create for them (The Honest Company). Jessica and Christopher strive to embody all of the qualities in a brand they hold dear – savvy style, sustainability, and extraordinary service and convenience all wrapped in a passion for social goodness, tied with a bow of integrity, and sprinkled with a little cheeky fun according to the two entrepreneurs, not to mention self-dubbed “dreamers” (The Honest Company).

What’s All the Buzz About?

Like most good companies, the Honest Company started to fill the emptiness of a niche market that was not being met. After Jessica Alba suffered illnesses from harsh toxic chemicals in regards to beauty, health, and wellness products, she knew she did not want her children to experience the same. Alas, the Honest Company found its voice in 2011 and its first potential consumer market – babies - to ensure parents have access to non-toxic, eco-friendly, beautiful family products that don’t break the bank and that sure as heck don’t contain toxic ingredients (B Corporation). This young company has made a huge splash in the corporate capital pool in a relatively short amount of time.

According to Forbes, “The Honest Company has experienced an absurd level of growth. In 2012, its first year selling products, it hit $10 million in revenue. By last year it was $150 million, and industry insiders are predicting over $250 million this year. The company is focused on growth over profits, boasting a current valuation to match: $1 billion” (O’Connor).

While the company first started with a focus on diapers, and all things baby, they have now expanded to cover all things health, beauty, and wellness for a wide spectrum of ages and proclaim they are the jack of all trades by recognizing themselves overall as: a lifestyle brand.

The Honest Company’s Values – Similar to AMDP’s

The Honest Company was created in order for Jessica and Christopher to follow their hearts and consciences, with each detail and every decision – that would result in positive impacts (The Honest Company). Here are the standards and values that they hold with the upmost importance:

• ·       Creating a Culture of Honesty – a standard that the Honest Company encourages throughout their staff, stakeholders, and customers.
• ·       Outperform – crafting products that will perform to the highest standards of effectiveness. The Honest Company focuses on minimizing harmful toxins in their products and packaging. Therefore, they source natural, organic, sustainably harvested, renewable, pure raw materials for products, track all the materials, ingredients, and packaging used in their products to help them report and understand trends to reduce toxins and environmental harm, specify and closely monitor the quality-control standards and protocols in their manufacturing to ensure highest quality, cleanliness, and overall product and ingredient integrity (The Honest Company).
• ·       Service Matters – The Honest Company knows how important service is, so they go above and beyond and know that creating an open dialogue with customers provides them with the opportunity to learn the most and only improve. They also ensure the way their product is manufactured, their employee work environments, waste management, energy usage, and much more is held to the highest standards of natural and renewable energy and quality (The Honest Company).
• ·       Sustain Life – knowing they can make an amazing product without harming people or the planet and feeling a tremendous responsibility to protecting the environment and the place we call home. Their vision of health and sustainability is to reduce the ubiquitous presence of toxic chemicals in our natural environment protect natural resources by minimizing waste and maximizing use/reuse, support peace, security, and social justice, and promote diversity and productivity through all facets of life (The Honest Company).
• ·       Pay it Forward – committing themselves to both individual and corporate social responsibility by taking selfless actions that benefit others. Including charitable partnerships, working with advocates on promoting policy changes that better product our children and planet, and supporting the efforts of our employees with paid community service days and direct matches of non-profit donations (The Honest Company). Their charitable work focuses on two specific areas: whole child development of children ages 0-3 and education and skill-training for youth to pursue their dreams (B Corporation). However, The Honest Company extends their corporate reach to include funding nutrition and healthy food and non-toxic cleaning products for schools and childcare centers.

Now Down to Business. Does The Honest Company Have What it Takes? (opinions)

According to Forbes, The Honest Company, supported by Jessica and Co., is outperforming for their age and size. The Honest Company has unlimited access to capital and a very strong balance sheet that is allowing them to expand globally by 2016 (O’Connor). Not only is The Honest Company known for its monthly on-line subscription to goods and services delivered right to your front door, but they are now in upscale “mommy” boutiques as well brick-and –mortar stores such as: Target, Whole Foods, etc. In short – The Honest Company is booming. While The Honest Company started out with the best intentions and integrity, throughout the years they have managed to maintain their honest values and have converted into a single brand that carries its own weight in credibility across all products in the nontoxic universe (O’Connor).

Another source, Biz Women: The Business Journals, points out the value of The Honest Company for their ability to market not only to parents of children, but to all spectrum of ages – feisty millennials included. The way they do this is to focus on their dedication to a cause or a mission to change the world for the better. The Honest Company vows to do just that, which hits just right with millennials who make a purchase or recommend a product based on a company’s efforts toward social good or to support a cause (Burns). The Honest Company actually follows through with that commitment allocating $3 million plus in resources to help young children and families – as they described in their business model explained above.

While there has been hearsay about the validity of “non-toxicity promise” in The Honest Company, no reputable source has reported such a thing, allowing The Honest Company to maintain their eco-friendly, wholly sustainable, and socially responsible legitimacy that they founded and built their company on and continue to prosper and grow from. Investing in The Honest Company would be beneficial for AMDP not only because it’s a company that shares the same values and standards as ours, but because it is a company that is constantly revolutionizing the way people think about eco-friendly and natural products of all health, wellness, and beauty spheres and it will continue to impact millions of people with their global outreach and platform in projected in 2016.

Works Cited

"B Corporation." The Honest Company. N.p., n.d. Web. 25 July 2015.

Burns, Hillary. "The Honest Company, Sseko Designs and Boll & Branch: How 3 Companies Use Social Goodness to Market to Millennials - Bizwomen." The Business Journals. N.p., 27 Mar. 2015. Web. 25 July 2015.

Fallon, Nicole. "22 Great Examples of Socially Responsible Businesses." Business News Daily. N.p., 1 July 2015. Web. 25 July 2015.

Morse, Alyssa. "The Importance of Reducing a Carbon Footprint." LIVESTRONG.COM. LIVESTRONG.COM, 24 July 2010. Web. 25 July 2015.

O'Connor, Claire. "How Jessica Alba Built A $1 Billion Company, And $200 Million Fortune, Selling Parents Peace Of Mind." Forbes. Forbes Magazine, 27 May 2015. Web. 25 July 2015.

"Sustainability Management System: The Triple Bottom Line." Sustainability Management System: The Triple Bottom Line. N.p., n.d. Web. 25 July 2015.

"The Honest Company." The Honest Company. N.p., n.d. Web. 25 July 2015.

"Triple Bottom Line." The Economist. The Economist Newspaper, 17 Nov. 2009. Web. 25 July 2015.

"WHAT IS SOCIAL ENTERPRISE?" WHAT IS SOCIAL ENTERPRISE? N.p., n.d. Web. 25 July 2015.

"Why the Triple Bottom Line Matters More Than Ever." GreenBiz. N.p., n.d. Web. 25 July 2015.