Responsible Sourcing Supplier Program
Hershey works with thousands of suppliers and business partners around the world every day. We count on this network of ingredients and packaging suppliers, co-manufacturers, co-packers, indirect service providers and licensees to deliver goods and services to Hershey in a responsible way. We work with suppliers who share our commitment to quality, food safety and to delivering an ethical and sustainable supply chain.
In 2020, we launched our Responsible Sourcing Supplier Program to verify and monitor our Tier 1 suppliers’ compliance to our Supplier Code of Conduct (SCOC). The program supports suppliers’ continual improvement to drive positive and lasting change for our people, the planet and the long-term sustainability of our supply chain through corrective action plans and capability building where needed.
We developed our Supplier Program so that we can engage suppliers of all sizes around the world who may be at very different stages in their responsible sourcing journey. In partnership with human rights NGO Verité, we developed a risk-mapping tool based on our salient human rights issues. We used this tool to assess all our Tier 1 raw material and packaging suppliers, as well as co-manufacturers, co-packers, licensees and labor service providers. We identified a prioritized list of 450 suppliers and manufacturing sites for supplier due diligence, including self-assessment questionnaires, independent third-party audits, and opportunities for capability building and continuous improvement.
Supplier Program Requirements
Enrolled suppliers must:
Acknowledge: Supplier Code of Conduct
The Supplier Code of Conduct sets forth Hershey’s standards and expectations for suppliers with respect to corporate and social responsibility. All enrolled suppliers are required to acknowledge and align with our Supplier Code.
We have published a Supplier Program Guidebook to assist our business partners in understanding and delivering on the expectations of our SCOC and relevant sourcing policies as well as Critical and Zero Tolerance violations. We hope this guidebook will spark more opportunities to partner and collaborate with other industry and country-level actors on training and education on key human rights topics.
The Supplier Program Guidebook can be downloaded in multiple languages: Bahasa Melayu, Chinese, French, Japanese, Korean, Portuguese, Spanish, Tamil and Telugu.
Assess: Self-Assessment Questionnaire (SAQ)
SAQs are an important tool for Hershey to hear directly from suppliers on their own programming efforts and responsible sourcing journeys. The SAQ allows Hershey to understand our suppliers’ business practices and areas for improvement as well as issues that may require follow-up during audits or other assessments. Suppliers in Hershey’s program are required to complete or update their facility’s Sedex SAQ or equivalent on an annual basis. As described in our Supplier Program Guidebook, Hershey prioritizes the Sedex SAQ as Sedex is a leading nonprofit focused on improving ethical performance in corporate supply chains.
Verify: Supplier On-Site Audit
On-site social compliance audits allow Hershey to understand supplier performance and activity —both positive and negative—across the topics of Labor, Health and Safety, Environment and Business Ethics. The audit process opens a dialogue between Hershey and our suppliers for sharing concerns, best practices and where training and investment is needed for continuous improvement.
Our Supplier Program requires suppliers to undergo the Sedex Members Ethical Trade Audit (SMETA) 4-pillar social compliance audit or equivalent by an approved Hershey monitoring firm.
As a member of AIM-Progress, Hershey also supports the process of mutual recognition to reduce audit duplication, fatigue and cost.
Audit performance is assessed and scored based on the number and severity of non-compliance issues identified. Performance scores also drive the frequency of future audit requests.
Remediate: Corrective Action Plan
If an SCOC violation is uncovered during an audit, suppliers are asked to develop a corrective action plan that includes addressing the root cause of the issues and remediating the non-compliance. A follow-up audit, desk-based or on-site, is then required to verify that the violation has been addressed.
Supplier Training and Capability Building
Our Supplier Program Guidebook is designed to assist our business partners in understanding and delivering on the expectations of our SCOC and relevant sourcing policies. In addition, our memberships with Sedex and the Responsible Labor Initiative (RLI) allow us to provide suppliers with a broad range of e-learning opportunities. Finally, through AIM-Progress we are able to partner and collaborate with other industry and country-level actors on training and educational opportunities.