The journey from cocoa bean to melty, chocolatey deliciousness in your s’mores is complicated. But one chocolatier, The Hershey Company, has built a roadmap of responsibility and accountability that corporations worldwide should consider emulating.
The Root of the Problem
Most of our global cocoa supply comes from economically and politically unstable regions known for worker exploitation and harmful agricultural practices. This is a huge problem for The Hershey Company, a global brand built on value-driven ideals.
In the early 2000s, activists and governments began calling out serious ethical issues associated with cocoa production, particularly West African Côte d’Ivoire farm communities with histories of using child and slave labor. The area supplies 70% of the cocoa used by confection companies, including Hershey.
As the largest chocolate manufacturer in North America and a publicly traded company, Hershey’s sustainability practices are under constant scrutiny. The fact that Hershey promotes a “legacy of goodness” probably makes it even more of a target.
When the company came under fire, it had already taken steps behind the scenes to address supply chain integrity. Still, the heightened public criticism put it in the challenging position of having to defend itself.
Founded in Social Responsibility
When Milton Hershey established his iconic chocolate company in 1894, socially responsible corporate practices were far from the norm. Industrial tycoons were building empires with little to no regard for things like working conditions and living wages. The term ESG wouldn’t be coined for another century.
Hershey, having experienced his own hardship, and perhaps also influenced by a rising tide of labor strikes, made employee quality of life a core company value. As milk was a key ingredient, he built his operations in rural Pennsylvania to be close to the region’s dairy farms. It was smart from a supply chain standpoint but difficult for employees and their families.
The area lacked infrastructure, so Hershey built it. He created an entire town around his chocolate operations with affordable housing, modern utilities, schools, parks, a hospital, public transportation, a library, and even a zoo. Employees were well paid and given pensions and health insurance, benefits that were virtually unheard of at the time.
As the Great Depression hit, Hershey refused to cut jobs. Instead, he invested millions to create town improvement projects to keep paychecks flowing. The public works program included a hotel, theatre, stadium, and other structures that turned the town into a tourist destination.
There isn’t much in The Hershey Company’s history about where its cocoa was sourced at the turn of the century beyond some references to Venezuela and Mexico. It is unlikely that anyone paid much attention to working and living conditions in “far-off lands.”
A century later, in a new era of public scrutiny and corporate accountability, The Hershey Company, a business founded on socially responsible values, faced a potential brand and corporate culture crisis.
Commitment, Engagement, & Accountability
Today, The Hershey Company has 21,000 employees and operations in 80 countries. It owns more than 90 candy and snack foods brands that generate $10.4 billion in annual revenue. It is a large, complex business, so it would be easy to assume that change is difficult to implement.
Not so.
When the company was criticized for its cocoa sourcing, the response was immediate and deliberate. Hershey committed to doing better, putting out clearly stated goals for addressing labor and climate-related problems at a systemic level, joining international coalitions, and creating and funding its own programs to improve education, economics, and farming practices.
To demonstrate that commitment, engage stakeholders, and hold itself accountable against its stated goals, The Hershey Company created an extensive reporting structure.
On September 13, 2010, The Hershey Company released its first Corporate Social Responsibility Report in honor of Milton Hershey’s birthday. It provided details on the company’s 2009 financial, environmental, and social metrics.
As of 2023, in addition to its annual ESG report (the 2022 version was 132 pages), Hershey issues four additional impact reports following independent standards recommended by organizations such as the UN Global Compact communication on UN Sustainable Development Goals, and the Global Reporting Initiative (GRI).
While all of that may seem overwhelming, The Hershey Company playbook has a lot of elements that organizations can (and should) replicate.
3 Key Takeaways
1. Clearly stated goals and focus areas
Working toward specific goals is the only way to truly hold an organization accountable. Clearly stating and quantifying objectives demonstrates sincere commitment. Some of The Hershey Company’s stated goals include:
- 100% of farmers producing Hershey’s cocoa volume in Côte d’Ivoire and Ghana are covered by Child Labor Monitoring and Remediation Systems (CLMRS) to prevent, monitor, and remediate child labor by 2025[1]
- 100% of priority ingredients and materials to be responsibly and sustainably sourced (by volume[2]) by 2025
- 50% reduction in Scope 1 and 2 greenhouse gas emissions by 2030
- Eliminate 25 million pounds of packaging by 2030
- By 2025, 47-50% women representation across all employees globally (Hershey reports this has already been achieved)
In addition to listing goals, The Hershey Company publishes detailed narratives on the initiatives that contribute toward meeting them. Its “Cocoa For Good” initiative is just one example – a 10-year, $500 million investment toward improving farming conditions, eliminating child labor, addressing children’s nutrition, and protecting the environment.
2. Transparency
Tracking and reporting on progress against goals and commitments completes the accountability circle. In addition to very detailed ESG reports, Hershey’s makes the information easy to find. A great example is the simple “Progress Against Our Priority Goals” chart. It’s a clear, concise (and dare we say ‘snackable’) way to show its progress and keep stakeholders engaged.
3. Mapping to company values
The Hershey Company has a long-standing history of stated corporate values. They are a touchstone for all the company’s initiatives and reinforce a strong culture and brand identity.
The Hershey Company Core Values:
- Togetherness
- Integrity
- Making a difference
- Excellence
To uphold those values, Hershey anchors all communications around its efforts to address supply chain integrity, DEI, climate change, and global community investment.
When ethical concerns around cocoa production came to light, mapping the company’s response to these values was critically important. Hershey needed to show that it hadn’t lost its way and to rebuild trust among its employees, investors, and consumers.
You would be hard-pressed to find any part of the Hershey website that doesn’t refer to both its values and its sustainability efforts. The two are integrally linked.
Delivering (and reporting) is Hard Work
As Hershey Senior Director, Global Sustainability and Social Impact Jeff King noted, making commitments is easy. Delivering is hard work.
Keeping stakeholders informed and engaged is a critical part of that work.
Hershey’s sustainability, diversity, and philanthropic endeavors are well documented in numerous articles and business school case studies, including deep dives into the cocoa controversy. If you would like to learn more, Auburn University’s The Hershey Company and The Cocoa Controversy is a good one.
We’d also encourage you to take a look at The Hershey Company’s impact reporting. Just a scroll through that section of thehershecompany.com is an education in sustainability communication programs.
The Hershey Company story is complex, but it’s fundamentally a guide for organizations across all industries on how to stay true to your values and ahead of social trends.
If you’re considering integrating sustainability and responsibility more explicitly into your work, reach out, we’re always happy to talk.
[1] Refers to households covered by CLMRS
[2] Percentage by volume of Hershey’s five priority ingredients, subject to change, as sourcing programs evolve.
