41 The Hershey Company | 2021 ESG Report Responsible Sourcing and Human Rights The Big Picture Our Company Cocoa Responsible Sourcing and Human Rights Environment Our People Youth Community About This Report Sugar In 2022, we will initiate an annual survey of our Dairy direct suppliers’ sustainability and responsible In 2021, we worked with our suppliers to trace sourcing practices and management systems. In 2021, we began implementing our implementation of manure storage facilities, our sugar to the mill level and understand if Our aim is to open a dialogue between Hershey responsible sourcing strategy for dairy. We soil health practices, riparian forest buffers it is linked to areas or mills with sustainability and our suppliers for sharing concerns and best ® concerns such as deforestation, water practices and identifying where training and joined the Dairy Sustainability Alliance , an and other efforts to enhance sustainability initiative organized by the Innovation Center on our supplying farms. pollution or the exploitation of workers. For investment is needed. This will be an important for U.S. Dairy, to accelerate progress toward Our work in 2021 included 16 acres of the year 2020, 60% of the sugar we purchased tool for better understanding our suppliers’ common sustainability goals and contribute riparian buffer planted — that’s 4,160 was traceable to the mill and we expect a business practices, areas for improvement and to the long-term viability of the U.S. dairy trees — and over a mile of stream similar percentage of our volumes to be issues to monitor. industry. In doing so, we endorsed the 11 key coverage and fencing constructed, among traceable for 2021. Hershey continues to partner with our sustainability criteria and strategic intents of other projects. This will prevent over To monitor and verify sustainability performance supplier, American Sugar Refining (ASR), to the global Dairy Sustainability Framework. 41,000 pounds of sediment, 2,250 pounds at the mill level and farm level of our sugar implement the “Learn to Grow” programs in We also joined the Sustainable Agriculture of phosphorous and 66 pounds of nitrogen supply chain, we continued to use credible Belize and Mexico that deploy a farmer field Initiative Platform’s Sustainable Dairy from entering waterways feeding the third-party standards and verification school model to help farmers learn about Partnership (SDP). We use this to verify Chesapeake Bay annually. It is also helping mechanisms, including the Bonsucro and Fair and implement more sustainable growing our dairy supply chain’s compliance with sequester 91 metric tons of CO e per year. Trade USA certifications for our sugar cane. In practices. These programs aim to holistically 2 2021, these actions included: our sustainability policies and engage address environmental and social issues facing with our suppliers on their journey toward • Continuing to source 100% Bonsucro-certified the farmers enrolled, including by supporting more sustainable dairy production. The mass balance sugar for our plants in Canada the development of a standard labor contract SDP includes sustainability requirements and Brazil. between the participating cane cutters and that must be met by dairy processors and 80% • Working with our suppliers to increase the cane farmer associations that provide cane to supplying farms as well as an assurance model of our volumes were sourced volume of Bonsucro-certified mass balance mills that supply to Hershey via ASR. In 2021, our with third-party verification and progress from suppliers enrolled in and sugar for our plants in the U.S. and to initiate program in Belize initiated a new phase to help reporting. We have committed to sourcing assessed through the SDP the purchase of some Bonsucro-certified mass farmers adapt to climate change through the 100% of our dairy volumes from suppliers balance volumes for our operations in India. use of technology that enables them to predict enrolled in and assessed through the SDP by changing weather and pest patterns. Training on 2024. At the end of 2021, 80% of our volumes • Purchasing Bonsucro credits to match 100% of best management practices was also provided were sourced from such suppliers. the volumes of conventional sugar purchased to help them respond more effectively to We also help suppliers accelerate their from non-U.S. origins where certified mass these challenges. sustainability efforts by investing with them balance sugar was not available, as well as 20% in field-level interventions focused on our of our total U.S.-produced sugar volumes. priority issues. In 2021, we collaborated with We sourced a total of 62% of our sugar volumes Land O’Lakes, our highest-volume dairy from farms certified or verified to a recognized supplier and a strategic partner, and the sustainability standard or covered by Bonsucro Alliance for the Chesapeake Bay to launch credits. We aim to procure 100% of our sugar a three-year pilot program, Sustainable from sources certified or verified to a recognized Dairy PA. This program aims to reduce GHG sustainability standard covering the farm level emissions and protect water quality across by 2025. For more information, visit our Sugar dairy farms in our Pennsylvania supply chain. Sourcing webpage. Hershey will provide funding to support the