Priority Ingredients and Raw Materials

Each ingredient presents unique sourcing challenges and risks since environmental, social and labor practices vary across commodities and by region. By understanding the risks that are specific to each raw material and region, we can better use our scale and resources to safeguard human rights and protect the people and ecosystems behind the ingredients that make up our iconic, delicious snacks.

Hershey strategically prioritizes our key ingredients and materials (cocoa, dairy, sugar, palm oil, and pulp and paper packaging) so we can target our efforts on those areas where we can make the biggest impact while reducing risks in our supply chain. We aim to address both social and environmental challenges in the communities and ecosystems from which we source our priority ingredients and materials. Our plan and approach for each ingredient considers a number of our material ESG topics, including human rights, farmer livelihoods, GHG emissions, deforestation, biodiversity, water and soil health, as these are often interrelated issues.

How we manage priority ingredients and raw materials

Our priority ingredient management strategies are underpinned by the following principles:

• Supply Chain Traceability: Know the origin of raw materials to improve visibility into our supply chains and understand opportunities for impact.¹
  
• Supply Chain Monitoring And Verification: Communicate our expectations to suppliers and strengthen their sustainability management by using third-party certification and verification schemes to monitor performance and drive continuous improvement.
  
• Origin Transformation: Create measurable, responsible and sustainable transformation by investing in origin-level programs focused on environmental, social and economic issues.
  
• Operational Excellence: Utilize internal processes, policies, training, data, technology and purchasing practices supported by governance.
• External Engagement: Collaborate with external stakeholders to drive systemic change, as companies cannot solve these complex sustainability challenge alone.

* We also have achieved 100 percent certified coconut and cage-free eggs as of December 2022.
¹ Traceability is not a chain of custody concept and does not alone allow Hershey to identify the specific source from where the ingredient comes in a given Hershey product.

Our Priority Ingredient and Material Risk Assessment Approach

We refresh our priority ingredient and material risk assessment as needed to account for changes in our supply chain, e.g., due to mergers and acquisitions, and developments in our human rights and environmental strategies, such as the intersection with nature and water and changes in sustainability risks.

We are committed to advancing our strategies and making investments that mitigate human rights and environmental risks as relevant for all priority ingredients and materials.