Four Key Takeaways from The Hershey Company 2022 ESG Report

While doubling down on its efforts to become a snacking powerhouse, The Hershey Company is embedding responsible and sustainable practices into its business transformation, as outlined in its 2022 Environmental, Social and Governance (ESG) report released on Tuesday.

“As we continue to act on the most important areas of focus for our business, including responsible sourcing, reducing our carbon footprint and promoting inclusivity, we are continually reminded that our progress and achievements are made possible by our employees, farmers, partners and other stakeholders,” said The Hershey Company CEO Michele Buck in a statement.

Here are four key takeaways from the report:

Eliminating Child Labor & Improving Farmer Livelihoods

Under its Cocoa for Good strategy, launched in 2018, Hershey plans to invest $500 million to positively impact cocoa farming communities by 2030. The investment will go toward improving income resiliency and livelihoods, prioritizing children’s well-being and protecting the environment.

Child labor in cocoa-growing communities is a complex issue often resulting from a mix of poverty, cultural norms and misunderstandings about what constitutes appropriate child work on a farm, according to the report. As part of the company’s commitment to preventing and eliminating child labor, participating farms across the globe are covered by Child Labor Monitoring and Remediation Systems (CLMRS).

In 2022, 72% of the company’s farmers in Côte d’Ivoire and Ghana were covered by CLMRS, on track to reach 100% by 2025. Additionally, Hershey CLMRS found no evidence of forced child labor in those programs.

“It is imperative at Hershey, to move toward a more responsible cocoa supply chain, where human rights are respected,” said Angela Tejada Chavez, head of sustainable sourcing – cocoa, The Hershey Company, in a press release. “It is only through collaboration, supported by appropriate policies, that we will be able to ensure human rights are respected in cocoa communities so that children can grow, play and develop in a healthy and safe environment.”

Most recently, the company in April announced the launch of its Income Accelerator initiative in Côte d’Ivoire. The five-year program will support increased incomes for cocoa farming households through the provision of cash transfers as well as investments in village savings and loan associations.

Reducing Scope 1 and Scope 2 GHG Emissions

As consumer concern surrounding the climate crisis continues to rise, companies across the globe, including Hershey, are working to reduce their environmental impact.

The Pennsylvania-based company is hoping to achieve a 50% absolute reduction in Scope 1 (owned or controlled sources) and Scope 2 (indirect emissions from purchased electricity) greenhouse gas emissions by 2030 against a 2018 baseline.

To achieve this goal, Hershey invested $3 million last year in reporting systems that provide real-time utility usage data for electricity, natural gas and water at all of its facilities in hopes of reducing energy intensity by approximately 10% over the next five years. The systems have been installed in the U.S. and the remainder are slated to be installed at the company’s international facilities by the end of 2023.

Increasing the use of renewable energy is a critical component of the company’s Scope 2 reduction plan. In 2022, 77% of the company’s electricity was sourced from renewable and zero-emission sources. The company also announced a 140-megawatt Power Purchase Agreement with National Grid Renewables for the Copperhead Solar & Storage Project in Falls County, Texas.

The utility-scale solar project, which marks Hershey’s third PPA, is slated to come online in 2024.

Progress on More Sustainable Packaging

In an effort to reduce the potential negative impacts of plastic waste and waste sent to landfills, Hershey plans to make “significant investments” to qualify and convert over 2,000 items across all of its manufacturing facilities to new packaging with updated labels educating consumers on its recyclable components. The company claims it is near completion of eliminating hard-to-recycle PVC from its global packaging portfolio.

Last year, Hershey redesigned its chocolate syrup multi-pack carriers to consist of 100% post-consumer recycled content, eliminating nearly 33,000 pounds of virgin high-density polyethylene annually. Hershey syrup bottles, syrup caps and other PET jars and pails currently make up 17% of the company’s plastic packaging from North American-produced products considered to be recyclable.

By 2030, the company hopes that 100% of its plastic packaging will be recyclable, reusable or compostable.

Diversifying Its Workforce

Through its five-year diversity, equity and inclusion (DEI) framework, dubbed the “Guided By Pathways Project,” the company continues its ongoing efforts to create a more inclusive environment.

In December, Hershey announced its first bilingual manufacturing facility. Through the launch of the company’s “Say Hola” initiative, the plant in Hazleton, Pennsylvania integrated both Spanish and English-speaking employees under one roof.

According to the ESG report, the “Say Hola” program has improved hiring and reduced recruitment costs. Today, more than 90% of applicants have the desired manufacturing experience, compared to 50% prior to the program’s launch.

In 2023, the company plans to expand its partnership with three unnamed military hiring organizations to increase veteran hiring by 4%. Under the guidance of its Veteran Business Resource Group, Hershey joined the National Veterans Business Development Council and donated to Veterans Outreach of PA, a nonprofit supporting homeless veterans.