What Cocoa Sustainability Means at Hershey

Nearly 70 percent of the world’s cocoa comes from West Africa, and cocoa is a critical and often sole source of cash for millions of smallholder farming families. Unfortunately, these communities face environmental and economic difficulties that present various challenges for West African cocoa farmers. Many typically have low incomes, often at or below the accepted poverty line. Basic infrastructure is minimal or non-existent and land-rights are often poorly defined. Additionally, new cocoa production is frequently expanded by bringing additional land under cultivation rather than increasing crop yields on existing farmland.

Beyond that, severe economic pressure results in children often helping with cocoa activities on family farms, sometimes resulting in too long hours, heavy loads and lack of schooling.

We are committed to eradicating these practices and helping West African cocoa farming communities be sustainable and prosperous.

A Deep Commitment to Responsible Cocoa Sourcing and Driving Systemic Change

Hershey was built on making moments of goodness for people to enjoy – a philosophy and belief that extends across our entire operations and supply chain. This includes ensuring responsible, sustainable practices, from sourcing the ingredients through to how the products are made. That’s why we are deeply committed to creating a truly sustainable cocoa supply chain where:

• The natural habitat in producing countries is protected and new cocoa demand is not met at the expense of the environment
• Cocoa farmers can earn a decent living from growing cocoa
• Children of cocoa farmers can grow into their future potential

Our Sustainable Cocoa Strategy – Cocoa For Good

To achieve these goals, we are focused on:

1. Long-term and comprehensive investment in the most vulnerable cocoa-farming communities to build their capability and resilience, encourage women to share their voice, provide increased opportunities for young people, and diversify incomes to increase quality of life.
2. Partnering with our suppliers to drive improvements throughout the entire supply chain through our commitment to buy only 100% certified and sustainable cocoa and to direct-source 100% of our cocoa in high-risk areas by 2025, building long-term relationships with farmer groups and driving traceability to halt deforestation.
3. Co-creating Public-Private Partnerships between governments, companies, civil society to drive systematic change at a sector-wide level strengthening rural, national and regional policies and economies.

COCOA FOR GOOD

Through our sustainable cocoa strategy, we are:

Nourishing Children through providing nutritional supplements to school children and training community members on nutrition and crop diversification.

Empowering Youth by preventing child labor through awareness raising, investing in school infrastructure and management, providing birth certificates, as well as training for youth in business and life-skills; detecting and remediating instances of child labor through Child Labor Monitoring and Remediation System (CLMRS).

Helping Communities Prosper by paying a premium to farmers for cocoa meeting certification standards; participating in the governments’ Living Income Differential (LID) program; providing tailored farm development plans, training in business skills, providing financial services and setting up voluntary savings and loans systems; creating community action plans; and providing financing for development of cooperatives and community infrastructure such as water pumps, roads and bridges.

Preserving Ecosystems through satellite mapping of all farms to improve tracking of yields and productivity, ensure no encroachment of protected areas, and enable full traceability from farm to cooperative; providing high-quality cocoa seedlings and shade trees, as well as training on agroforestry; creating community-owned natural resource management plans and supporting access to affordable land-titling documentation.

A sneak peek into 2020 Results

Sustainability is serious business and throughout the last few years, we have made significant progress. I’d like to give you a heads-up on what we have been working on in 2020 that is at the forefront of our daily and strategic sourcing decisions:

• By January 2020 we met our target we announced in 2012: our commitment to source 100% certified and sustainable cocoa by 2020. Through certification, we directly support higher incomes for farmers and improve labor and environmental standards. Certification also makes cocoa traceable from certified farmers to the 1st purchase point, the farmer groups.
• In early 2020, we publicly shared who our suppliers are, as well the origins and farmer groups we directly source from. We now use satellite mapping of farms and digital data collection to increase the quality of our data and allow for data-driven monitoring and decision making.
• In spring 2020, we announced expansion of our direct-sourcing supply chain. This will make Hershey’s cocoa from West Africa traceable from certified farmers and farmer groups into Hershey’s supply chain, giving Hershey a clear line of sight into where all its cocoa from West Africa is grown and how it is produced. Through direct, intensified and long-term relationships with farmer groups, these groups will gain more security. It will also allow us to implement by 2025 an active child labor monitoring and remediation (CLMRS) across all our cooperatives in Cote d’Ivoire and Ghana.
• Additionally, with education and nutrition at the core of The Hershey Company, we have also committed to invest $3,000,000 in two new partnerships (2020-2030) in Cote d’Ivoire: the Children Learning and Education Facility (CLEF) - reaching 5 million children with quality primary education – and the Early Learning and Nutrition program (ELAN) – reaching 1.3 million children in less than 5 years.

Supporting Increased Farmer Incomes and Resilience

As we collectively navigate the challenges presented by COVID-19, we have seen that past investments in farmer groups, communities and social infrastructures such as Village Savings and Loans Associations, have paid off. But we have also seen how vulnerable the rural communities we work with still are. This has only strengthened our belief to continue with Cocoa For Good as a company, and motivates me and the Cocoa For Good team daily to bring goodness to our iconic chocolates.