42 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 Palm Oil Hershey is involved in the Palm Oil Collaboration Group’s Independent Verification Pulp and Paper Hershey is committed to the highest standards Working Group to accelerate effective NDPE in responsible and sustainable palm oil sourcing, commitments with brands, traders, producers Pulp and paper packaging is integral to including our commitment to No Deforestation, and NGOs. Hershey’s business. We use it as food No Peat and No Exploitation (NDPE) stated in Following our Palm Oil Grievance Process, packaging, wrapping, transportation our Responsible Palm Oil Sourcing Policy. we continue to publicly disclose our Palm and marketing for our beloved brands. In 2021, we maintained our commitment to Oil Grievance Log with monthly updates to Beginning in 2015, Hershey committed source 100% Roundtable on Sustainable Palm increase transparency on NDPE violations to responsibly sourcing virgin fibers and Oil (RSPO)-certified mass balance palm oil and found within our supply chain. As of March 100% recyclable materials for our products. achieved 100% traceability to the mill level. We 2022, we have suspended 18 suppliers in our Since 2017, we have required that 100% remain committed to achieving 100% plantation upstream supply chain for NDPE violations, RSPO-certified of the pulp and paper sourced for our level traceability and expect to do this by none of whom supplied us directly. We have not mass balance palm since 2017 U.S. and Canada operations come from 1 2025. We recognize achieving this goal is yet granted re-entry to any of these suppliers. recycled material or certified mills. complex due to the realities of the palm supply In 2021, we suspended three indirect palm In 2021, we strengthened our chain, including challenges associated with oil operations from our supply chain due to commitments to NDPE and updated mapping smallholders. allegations of potential negative environmental our Responsible Pulp & Paper Sourcing We established a new commitment to achieve impacts. Policy. The updated policy expands a verified deforestation-free (VDF) palm supply We continue to invest in landscape our commitment to sourcing our pulp chain while respecting and protecting the transformation in Indonesia and Malaysia and paper packaging from recycled or human rights of individuals by 2025. Based on through Earthworm Foundation. These on- certified sources for our global supply mill lists from mid-year 2020 to mid-year 2021, the-ground programs focus on the protection chain, as well as to trace 100% of our we verified 51% of the volume as deforestation- and restoration of forests and biodiversity, virgin fiber materials back to the country free through Airbus and Earthworm smallholder inclusion, NDPE capacity building of harvest by 2025. We continue to Foundation’s Starling satellite. Through the and the resilience and livelihoods of local palm- publish our list of pulp and paper Starling satellite with Earthworm Foundation, growing communities. suppliers and mill groups, and in 2021, Hershey aims to improve our verified expanded this to include those that deforestation score and monitors the supply For more information on our palm supply to our global operations. chains of our highest volume suppliers, which supplier engagement, monitoring accounted for approximately 79% of our volume and verification work, and landscape in 2021. We work closely with all our palm transformation project investments, suppliers to investigate deforestation events. visit our Palm Oil Sourcing webpage. 1 Acceptable certification includes: Forest Stewardship Council (FSC), Programme for the Endorsement of Forest Certification (PEFC) and Sustainable Forestry Initiative (SFI).