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Honest Company Founder Jessica Alba: Ethics shouldn’t be a ‘marketing ploy’

Max Zahn with Andy Serwer
·4 mins read

A group of CEOs from top companies like Amazon (AMZN) and Apple (AAPL) who pledged last year to expand their corporate mission to include social welfare have fallen short of that commitment amid the coronavirus pandemic, according to a report released on Tuesday.

But companies can still weigh the public good without sacrificing their bottom line, actress Jessica Alba, founder of beauty products and home goods business The Honest Company, told Yahoo Finance’s editor-in-chief, Andy Serwer, on Sept. 17, before that report came out.

“Consumers expect companies to have this type of value embedded in the model,” said Alba, who has become a major advocate for ethical company practices. “It shouldn't just be a marketing ploy; it should just be who you are.”

“You can also expand your margin,” she adds. “You don’t have to be this weird upside-down business model.”

A ‘healthy and sustainable’ business

The Honest Company, a privately owned firm, has grown 25% since the coronavirus outbreak in part due to the development and release of new disinfectant and sanitizing products, Alba said. In May, the company was on pace for more than $350 million in sales for 2020, CEO Nick Vlahos told Vogue Business in May.

“We're really, really focused on making sure that we grow the business in a healthy and sustainable way, even when we are expanding into new product categories,” she says.

The company’s standards feature a “No List,” which includes 2,500 chemicals that The Honest Company declines to include in its products, as well as a commitment to partner with safe and transparent manufacturers, among other measures. These ethical practices give The Honest Company a competitive advantage, Alba said.

FILE - In this March 17, 2015 file photo, actress Jessica Alba poses at the 30th Anniversary Impact Awards Dinner at the Beverly Wilshire Hotel in Beverly Hills, Calif.  Four years ago, Alba co-founded The Honest Company, which sells diapers, baby wipes and laundry detergent. The company rang up $150 million in sales last year, Alba told business network CNBC. (Photo by Chris Pizzello/Invision/AP, File)
In this March 17, 2015 file photo, actress Jessica Alba poses at the 30th Anniversary Impact Awards Dinner at the Beverly Wilshire Hotel in Beverly Hills, Calif. (Photo by Chris Pizzello/Invision/AP, File)

“If we can do anything for business, we can show that you could have a positive impact on the world, you can put health and wellness and sustainability as a value, you can have honesty and transparency as a value,” she says.

“I believe the reason why consumers are choosing Honest over others is because we have those values, not in spite of,” she adds.

Alba spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

Over the years, The Honest Company has faced accusations that it fell short of its vow to keep certain chemicals out of its products while preserving their efficacy. In 2017, the company paid $1.55 million to settle litigation claiming the company misled customers about the ingredients in its laundry detergent and dish soap.

In response to this article's mention of past accusations that the company fell short of its mission, The Honest Company issued the following statement: “Over the last eight years, like every company, Honest has had challenges along the way. However, instead of letting our challenges define us, we’ve learned from them and are moving forward in the right way by driving innovation and real change.”

“We shifted our focus away from building a broad portfolio and back to the core products that drove our initial growth (i.e. baby, beauty and personal care) and introduced processes and procedures to guarantee an even higher degree of safety, quality and effectiveness,” the statement adds.

Since its founding, the company has made philanthropy a core part of its mission, allowing it to donate more than 22 million items so far, Alba said.

“I really feel like our business is the business of the future,” she says. “I hope that we do continue to really have an impact on the way that other companies operate, hopefully in a positive way.”

This article was updated on Sept. 23 with a statement from The Honest Company.

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