Palm Oil Sourcing

Our Approach to Responsibly Sourced Palm Oil

Sustainably grown palm oil can also reduce pressure on forests and biodiversity, support smallholder farmer livelihoods and improve economic development in palm-growing regions. However, Hershey recognizes that palm oil has impacts to forests, biodiversity and producer communities when not grown or sourced responsibly.

Hershey is committed to the highest standards in responsible and sustainable palm oil sourcing, including our commitment to No Deforestation, No Peat and No Exploitation (NDPE) stated in our Responsible Palm Oil Sourcing Policy. Hershey maintains our commitment to source 100 percent responsibly grown palm oil that is physically certified by the Roundtable on Sustainable Palm Oil (RSPO) and is 100 percent traceable to the mill. We remain committed to achieving 100 percent traceability to the plantation and expect to do this by 2025. We also commit to achieving a verified deforestation-free (VDF) palm supply chain by 2025, while respecting and protecting the human rights of individuals.

We also work with Earthworm Foundation, a nonprofit organization, our supplier partners and the broader industry to assess and address the associated environmental and human rights issues in our supply chain, as we contribute to the responsible and sustainable transformation of the palm sector.

Our Palm Oil Supply Chain

We currently source from nine direct suppliers: AAK, Alianza/Team Foods, Bunge, Cargill, Fuji Oil, Gemini, ISF, Manorama and Wilmar. 100 percent of the palm oil we source globally is Roundtable on Sustainable Palm Oil (RSPO) Mass Balance and Segregated certified. As needed due to lack of RSPO certified palm or palm kernel oil volumes to meet our demand, Hershey purchases RSPO Credits to cover such gaps.

The palm volumes from H1-2024 have originated from mills in eight (8) countries—though most of the palm oil we source is from Indonesia and Malaysia.

As members of the RSPO, we annually report our palm oil volumes in our Annual Communication on Progress report. We also annually disclose how we comply with the RSPO Shared Responsibility requirements through our MyRSPO profile.

Traceability and Risk Mitigation

Palm oil supply chains are complex and often involve multiple tiers of suppliers as well as intermediaries and smallholder suppliers. Supply chain traceability and purchasing certified palm oil enable us to prioritize our due diligence efforts in monitoring and verifying our palm suppliers’ compliance with our NDPE commitments.

Supply Chain Traceability

On a biannual basis, Hershey conducts a traceability exercise with our palm oil suppliers to understand the universe of potential mills and plantations from where the palm we source could have been produced. In this context, traceability is not a chain of custody concept, and does not alone allow the company to identify the specific source of palm oil used in a given Hershey product. Rather, the list of mills and plantations provided by our suppliers – collected in accordance with industry practice and principles adopted by the Palm Oil Traceability Working Group (TWG) of IDH, The Sustainable Trade Initiative – helps us understand the origin of the palm we purchase (including sources that may be considered high-risk), so that we may direct our resources to the locations where they are most needed.

In H1-2024, our direct suppliers reported 100% traceability to the mill (TTM) level – in other words, our direct suppliers could identify all of the mills from which they directly or indirectly purchased palm oil products during that six-month period, both for Hershey and other purchasers. The 975 mills in the lists provided by our suppliers therefore include mills outside Hershey’s physical supply chain.

Hershey is updating how we report traceability to plantation level data for H1-2024. We will report this information soon. Traceability to plantation similarly includes plantations both within and without Hershey’s specific supply chain.

Our partner, Earthworm Foundation, supports us in collating and analyzing these traceability submissions from our suppliers.

We remain committed to achieving 100 percent traceability, through our suppliers, to the plantation level – that is, identification of all plantations from which the reported mills purchase – and expect this to occur by 2025. We recognize the pathway to this goal is complex due to the realities of the palm supply chain, including challenges associated with mapping smallholders.

We provide bi-annual updates on these palm oil tracing efforts on this website and through our annual ESG Report to give stakeholders visibility into our ongoing progress.

Certified Palm Oil

Hershey has been a member of the Roundtable on Sustainable Palm Oil (RSPO) since 2011. By the end of 2014, all of our palm and palm kernel oil purchases for our operations in the U.S. and Canada were 100 percent RSPO Mass Balance-certified palm and palm kernel oil. By the end of 2017, all of our palm oil purchases for Global operations were 100 percent RSPO Mass Balance-certified palm oil and we remain committed to purchasing 100 percent RSPO certified palm and palm kernel oil. We remain committed to purchasing 100 percent RSPO Mass Balance and Segregated certified palm oil. As needed due to lack of RSPO certified palm or palm kernel oil volumes to meet our demand, Hershey purchases RSPO Credits to cover such gaps.

Furthermore, since 2020, Hershey has been a member of the North America Sustainable Palm Oil Network (NASPON), which works to accelerate the uptake of certified sustainable palm oil in North America. Additionally, Hershey has been involved in the Palm Oil Collaboration Group’s Independent Verification Working Group to accelerate effective NDPE commitments with brands, traders, producers and NGOs.

Supply Chain Monitoring and Verification

We expect all of our palm oil sourcing partners (including subcontractors) to be compliant with our Supplier Code of Conduct, uphold our Responsible Palm Oil Sourcing Policy and No Deforestation Policy, and remain compliant to our NDPE position at the corporate-group level.

In addition, to verify that our palm suppliers uphold our standards within their own operations we have enrolled all palm suppliers and their manufacturing sites in our Responsible Sourcing Supplier Program.

As part of this program, all our palm suppliers and sites are required to complete a Self-Assessment Questionnaire, undergo a Sedex Members Ethical Trade Audit (SMETA) 4-pillar audit (or equivalent) and develop corrective action plans to remediate non-compliances.