How much of The Honest Company’s revenue comes from haram?

The Honest Company offers baby, personal, and beauty care products.

The company earns its revenue from the following revenue sources:

  • Diapers and Wipes:

Includes diaper bags, diaper creams, and baby diapers and wipes

  • Skin and Personal Care:

Includes makeup products, skincare products, and bath and body products

  • Household and Wellness:

Includes sanitization and cleaning products

The contributions from each of The Honest Company’s revenue segments in their Q2 2021 report were as follows:

Practical Islamic Finance concludes:

None of The Honest Company’s revenue comes from anything inherently haram.

Does The Honest Company rely on interest to operate?

Most Recent Quarter
ended
3/31/2022
Fiscal year
ended
12/31/2021
Fiscal year
ended
12/31/2020
Interest Expense $61 $1,676 $937
Total Operating Expenses $83,264 $355,465 $314,062
Interest Expense /
Total Operating Expenses
0.07% 0.47% 0.30%
*Numbers in thousands, U.S. dollars

Practical Islamic Finance concludes:

Riba is used but not relied upon in The Honest Company, Inc. operations.

What is The Honest Company’s Environmental, Social, and Governance (ESG) impact?

Environment

According to The Honest Company, Honest.com shipments are delivered in 100% post-consumer recycled cardboard.

Social

The Honest Company has a Glassdoor rating of 3.7 out of 5.0 from over 200 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.

Governance

In 2017, The Honest Company agreed to pay $1.55 million to settle a nationwide class action lawsuit claiming it misled buyers about ingredients in its laundry detergent and dish soap.

Given the incident has been settled and there hasn’t been any additional reports of The Honest Company not living up to its name, Practical Islamic Finance is willing to give the company the benefit of the doubt while recognizing that continued monitoring is required.

Practical Islamic Finance concludes:

The Honest Company has a net positive ESG impact.

Comfort Rating

From The Honest Company’s business, financial, and ESG reviews, Practical Islamic Finance rates The Honest Company stock as: 

Comfortable to invest in from a Halal perspective.

Sources

Sustainability Efforts | Honest

The Honest Company Reviews 

The Honest Company Lawsuit 

The Honest Company S-1

The Honest Company Q2 2021 10-Q