How Hershey became one of the world’s most ethical companies

10-Jun-2024 - Last updated on 10-Jun-2024 at 15:21 GMT

Hershey recently launched its 2023 ESG report. Image: Getty/davelogan

Employing veterans, building schools and slashing packaging and emissions are just some of the ways the chocolate firm has earned its ESG credentials

Despite high cocoa and sugar prices, Hershey is predicting 2-3% growth in 2024. But, true to its founder’s mission to do well by doing good, the 130 year old chocolate firm is also performing when it comes to its responsible and sustainable practices too.

With respect and integrity described as “business imperatives” the firm received external validation earlier this year when Ethisphere, a company specialising in ethical business practices, named Hershey one of the World's Most Ethical Companies. Similarly, in May, the firm topped the 2024 Fair360 Top 50 Companies list, thanks to its commitment to diversity and inclusion.

And now, as spelled out in its 2023 Environmental, Social, and Governance (ESG) Report published on 4 June, the business is sharing an update on the progress of its global sustainability strategy. Hershey currently has six priority areas: cocoa, responsible sourcing and human rights, environment, people, youth and community. Here’s what it hopes to achieve in each area.

Responsible cocoa sourcing

Hershey has a 12-year commitment to put $500 million into its Cocoa For Good strategy. The chocolatier has carved out initiatives to build resilient and sustainable supply chains. As of December 2023, Hershey has invested 51% of this multi-million amount into its ESG effort. “We deem operational excellence as managing our facilities efficiently and reducing our energy emissions, water footprint, and material waste,” a Hershey spokesperson says. “Our products rely on ingredients that are grown around the world, and our supply chains are dependent on the balance of those ecosystems.”

Establishing sustainable supply chains

In 2023, 73% of Hershey’s US dairy ingredients were sourced from suppliers enrolled in and assessed through its sustainable dairy programmes. By the end of 2024, this is expected to rise to 100%.

Hershey also pursued deforestation commitments by changing the end date of its deforestation and conversion-free commitment from 2030 to 2025.

Protecting the environment

The firm has announced several actions to combat climate change and reduce waste. One of these is minimising greenhouse gas emissions. Hershey states it achieved a 43% reduction in Scope 1 and 2 emissions against a 2018 baseline. Based on its current operations, it’s set to reach an absolute reduction of 50% by 2030.

Hershey’s Scope 1 and Scope 2 comprise approximately 3% of its total emissions, with 97% of total emissions attributed to Scope 3 emissions. Of the company’s Scope 3 emissions, 71.4% relate to Forest, Land and Agriculture (FLAG), while 28.6% are classified as non-FLAG.

Another notable effort in 2023 was eliminating packaging waste and strengthening circularity within its supply chains. The chocolatier phased out over 1.7 million pounds of material by eliminating, redesigning and reducing packaging.

Limiting water usage is also a big environmental push for the company. Since 2022, Hershey says it’s reduced its combined water usage by 20% across all facilities, including a 46% reduction at corporate headquarters. By 2030, against a 2018 baseline, Hershey also aims to achieve a 20% reduction in absolute water use at its priority sites where water is most scarce.

Hershey aims to have all its electricity sourced from renewable and zero-emission sources. By last year it had reached 80% of this target.

“Adopting sustainable practices can create healthier, safer workplaces and communities, reduce our carbon footprint and contribute to a better future for all,” say Ken Soltesz, Director of Environment, Health and Safety.

Championing human rights

In its latest ESG report, Hershey announces the launch of its new human rights framework, the Human Rights Impact Pathway. “Human rights issues must be addressed through a comprehensive approach that gets to the root of systemic issues,” says Maddy Eldredge, Human Rights Analyst, Global Sustainability and ESG. To that end, in spring 2023, the chocolate company launched its Hershey Income Accelerator Program (HIAP). Designed to improve farmer income and livelihoods, the company has given its first cash transfers to 1,850 cocoa farmers. Better financial support for cocoa farmers is part of Hershey’s aim to encourage more sustainable farming practices.

Promoting the wellbeing of children

The chocolatier has teamed up with Côte d’Ivoire’s National Oversight Committee of Actions Against Child Trafficking, Exploitation, and Child Labour (CNS) and the International Cocoa Initiative (ICI) to invest in efforts to advance children's opportunities. Hershey is funding the construction of 12 primary schools in cocoa-producing areas. In December 2023, the first of these schools was opened in Drissapé, Côte d’Ivoire.

Building a community

Within the firm’s organisational structure, Hershey has launched a new leadership development pilot programme called the LSP Leader Accelerator which is designed to promote from within. It also surpassed its 2023 target to recruit more veterans and has implemented pay transparency procedures.