How We're Delivering Progress on Cocoa Sustainability

Key Takeaways:

• Hershey is committed to improving outcomes for farmers, their families, and the communities throughout our supply chain.
• Through Cocoa For Good, we're creating and participating in programs that surround communities with support that can help them transition out of poverty.
• Our 2021 ESG (environmental, social and governance) Report details how we’re investing in cocoa communities, collaborating across all parts of the cocoa industry, and supporting ESG programs across the company.

Addressing the systemic social and environmental challenges in cocoa communities is a key priority for Hershey. Our Cocoa For Good strategy — and our commitment to invest $500 million in cocoa communities by 2030 as part of that strategy — takes a multi-layered, collaborative approach to disrupting the cycle of poverty in these communities.

Our Cocoa For Good strategy enables Hershey to play a significant role in the industry-wide effort toward making cocoa production, particularly in West Africa, more sustainable. To create the best outcomes for farmers, their families and the communities throughout our supply chain, Cocoa For Good aims to improve farmer incomes and livelihoods, eliminate child labor and improve children’s nutrition, and protect the environment.

Achieving those objectives requires Hershey to invest in a portfolio of programs and work with an array of collaborators and partners — all of which are detailed in our recently released 2021 ESG Report.

Setting high standards and collaborating with peers

As Senior Director of Strategic Sourcing, I lead our sourcing team based in Zug, Switzerland that makes up our Hershey Trading GmbH business unit. Our team works to help Hershey adhere to the rigorous sourcing policies that are designed to ensure safe and quality ingredients produced in compliance with the highest ethical standards. We are responsible for the sourcing, risk management and sustainability relating to the commodity areas of cocoa, vegetable oils and coconut and other tropical crops.

From the time I joined Hershey in late 2020, my team has placed a heightened focus on collaboration across all parts of the cocoa world. Hershey is invested in collaborating with our peers in the confectionery category, as well as with our suppliers, NGOs and other market participants as we recognize that the issues we’re facing in cocoa sustainability aren’t ones we’re able to solve on our own.

In working with our suppliers, for example, Hershey holds them to high standards of integrity and operating principles. All of our suppliers must agree to the Hershey Supplier Code of Conduct before delivering cocoa to us; the Code of Conduct outlines our expectations and guidelines with respect to responsible sourcing including commitments to human rights, the environment, health and safety, business ethics, and the development of a diverse and sustainable supply chain.

But we’re doing more than just ensuring suppliers adhere to our policies; we’re also asking suppliers what it is they’re doing to aid the transformation to broader sustainability. For example, we not only ensure suppliers agree that their operations and work across supply chains do not contribute to deforestation or loss of biodiversity, but we also encourage them to implement their own No Deforestation Policy and commitments to protecting the environment.

Driving sustainability and lifting up livelihoods

In the spirit of collaboration, one of the efforts we undertook in 2021 was to update our data collection and validation processes to align with standards such as the World Cocoa Foundation Monitoring and Evaluation Guidance and the International Cocoa Initiative’s Member Reporting Protocol. Adherence to industry-wide standards helps us increase the accuracy of our measurements and better benchmark our performance against objectives.

We’re on track to meet a number of 2025 commitments, including our goals of having:

• 100 percent of farmers producing Hershey’s cocoa volume in Côte d’Ivoire and Ghana polygon mapped by our suppliers to improve traceability and monitor deforestation. (We’re 46 percent of the way there.)
• 100 percent sourcing visibility into the farmer groups participating in our Cocoa For Good program representing all of Hershey’s cocoa volume in Côte d’Ivoire and Ghana. (We’re 68 percent of the way there.)
• 100 percent of farmers producing Hershey’s cocoa volume in Côte d’Ivoire and Ghana are covered by Child Labor Monitoring and Remediation Systems (CLMRS) to prevent, monitor and remediate child labor. (We’re 62 percent of the way there.)

In 2021, Hershey-supported CLMRS covered nearly 103,000 children — a number we expect to increase to about 125,000 children by 2025. And CLMRS coverage is not the only way we’re directly supporting children in cocoa-growing communities: Through our Energize Learning school feeding program, Hershey distributes ViVi — a highly nutritious peanut-based therapeutic food — to 45,000 children daily in Côte d’Ivoire and Ghana.

Helping children also extends to helping their parents and other family members to lift up their livelihoods. Knowing that poverty is at the root of problems like deforestation and child labor, Hershey supports several programs designed to help cocoa farmers increase income and build resilience.

For example, in 2021 Hershey expanded its support to 102 farmer groups, reaching more than 90,000 farmers. Our support of farmer groups has enabled more farmers to achieve independent verification of their cocoa in compliance with credible sustainability standards, which — in addition to helping Hershey successfully reach our goal of sourcing 100% independently verified cocoa — helps farmers get paid more for their harvests.

We also support farmers in improving their incomes through the creation of farm development plans — with 31,000 such plans provided in 2021 — and help cocoa community members diversify economic opportunities by developing alternative means of generating income, such as soap making and cassava processing. In 2021, more than 2,600 community members received training on alternative income opportunities.

In addition, Hershey directly supports nearly 200 Village Savings and Loan Associations (VSLAs) with 5,879 members, 79 percent of whom are women. VSLAs help bring financial literacy to cocoa communities by empowering them to develop their own savings and manage the funds — creating a virtual cycle of saving and investing in community businesses through loans based on trust among each VSLA’s members.

Continuing to address challenges in cocoa communities

Ultimately, Hershey is committed to improving outcomes for farmers, their families and the communities throughout our supply chain. To do that, we’ve woven sustainability into the core of how we do business through Cocoa For Good — creating and participating in programs that surround communities with the support that can help them transition out of poverty.

We hope you’ll read our 2021 ESG Report for further information on how we’re investing in cocoa communities and supporting ESG programs across the company.