Hershey Company | Interfaith Center on Corporate Responsibility

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<strong>Company:</strong>
<p>Hershey Company</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Food Justice </p>
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<strong>Focus Area:</strong>
<p>Agricultural Sourcing / Supply Chain, Pesticides, Worker Rights, Health & Safety </p>
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<strong>Status:</strong>
<p>Withdrawn for Agreement</p>
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<h2>Resolution Text</h2>
<p><strong>WHEREAS</strong>:  Industrial agriculture applies over one billion pounds of synthetic pesticides annually to farms, directly threatening the resilience and yield stability of agricultural supply chains.[1],[2]  Pesticides decrease soil fertility by killing soil microorganisms vital for nutrient, water, and soil retention. Soil degradation and erosion reduce food security, imposing an estimated loss of $8 billion annually to global GDP.[3] These losses become more material as climate change increases the frequency, and impact to global food companies, of droughts, floods, storms, and heatwaves.  </p>
<p>Agricultural pesticide use can also cause long-term health impacts to farmworkers and fenceline communities, including asthma, cancer, and birth defects, among others, while also resulting in the acute poisoning of 25 million farm workers annually.[4] Further, use of pesticides directly harms biodiversity, including pollinators critical to 35% of crop production, and contributes to air and water pollution.[5] </p>
<p>In contrast, regenerative agriculture is a farming system that reduces mass use of synthetic pesticides and fertilizers, and includes reduced tillage, crop rotation, cover cropping, and natural pest management. These practices, used together, preserve soil health and retain topsoil, while reducing impacts to humans and the environment.[6] </p>
<p>The Rodale Institute reports that regenerative agriculture can sequester more carbon annually than is emitted.[7] Failure to address pesticide dependency, however, diminishes regenerative farming’s potential to sequester carbon and deliver measurable climate and financial returns.[8],[9],[10]</p>
<p>In Hershey’s 2023 ESG report, the company states that it is promoting regenerative agricultural practices in its sugar supply chain, such as use of cover crops and reduced tillage, as part of its climate action plan. However, the company does not identify pesticide reduction as a component of its regenerative program for achieving positive soil sequestration and climate outcomes. The company’s failure to incorporate an essential component of regenerative farming — pesticide reduction — represents an important blind spot for the company and raises the potential for claims of greenwashing.       </p>
<p>In contrast, Hershey’s peers, Lamb Weston, Conagra, and McCain Foods, publicly measure and report pesticide reduction within their regenerative agriculture programs to demonstrate progress and accountability.[11]</p>
<p>In a competitive marketplace that increasingly demands clean food, greenhouse gas reductions, and reduced human and environmental harm, significantly reducing pesticide use as part of a successful regenerative agriculture program can reduce risk for shareholders and our Company, while minimizing harm to stakeholders and ecosystems. </p>
<p><strong>BE IT RESOLVED</strong>:  Shareholders request that Hershey issue a report, at reasonable cost and omitting proprietary information, disclosing the costs and benefits of including pesticide reduction goals as part of a regenerative agriculture program.</p>
<p>[1] https://ehjournal.biomedcentral.com/articles/10.1186/s12940-019-0488-0 </p>
<p>[2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2984095/#:~:text=Heavy%20treatment%20of%20soil%20with,fungi%2C%20then%20the%20soil%20degrades </p>
<p>[3] https://www.sciencedirect.com/science/article/pii/S0264837718319343 </p>
<p>[4] https://pmc.ncbi.nlm.nih.gov/articles/PMC2946087/ </p>
<p>[5] https://newsarchive.berkeley.edu/news/media/releases/2006/10/25_pollinator.shtml </p>
<p>[6] https://regenerationinternational.org/why-regenerative-agriculture/ </p>
<p>[7] https://rodaleinstitute.org/wp-content/uploads/rodale-white-paper.pdf</p>
<p>[8] https://pmc.ncbi.nlm.nih.gov/articles/PMC2984095</p>
<p>[9] https://www.csuchico.edu/regenerativeagriculture/blog/soil-microbes-carbon-sequestration.shtml </p>
<p>[10] https://soilhealthinstitute.org/news-events/nationwide-study-on-30-u-s-farms-shows-positive-economic-impact-of-soil-health-management-systems/ </p>
<p>[11] https://www.lambweston.com/content/dam/lamb-weston/website/en-us/pdf/sustainability/LambWeston_2023_ESG.pdf, p.43; https://www.conagrabrands.com/citizenship-reports/conagra-brands-citizenship-report-2023, p.21; https://www.mccain.com/media/4594/mccain_regenag_framework_2024.pdf.</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Cailin Dendas</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>As You Sow</span></div>
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<strong>Company:</strong>
<p>Hershey Company</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance, Human Rights & Worker Rights </p>
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<strong>Focus Area:</strong>
<p>Child Labor, Proxy Voting Disclosure </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class=”p1″><strong>RESOLVED</strong>: Shareholders request that The Hershey Company disclose the voting results on matters subject to a shareholder vote according to the class of shares, namely differentiating between those shares carrying one voting right and those carrying multiple voting rights, effective beginning at the Company’s 2026 annual meeting of shareholders.</p>
<p class=”p3″>WHEREAS<strong>:</strong></p>
<p class=”p4″>Hershey maintains a dual class structure for its common stock. Its Class B stock has ten votes per share, while its Common Stock has one vote per share. Currently, the Company discloses voting results without any distinction by share class. It is important for those results to be disclosed separately by share class to determine whether the concerns of each type of shareholder are aligned.</p>
<p class=”p6″>Due to the company’s dual class share structure, a minority of shareholders controls most voting rights. As of March 2024, Hershey Trust Company (HTC) controlled nearly 100% of the outstanding Class B stock, giving it 78.8% of the total voting power of the Company’s outstanding voting stock.1 <strong>HTC’s outsized voting power gives it substantial influence or actual control over the management and affairs and over substantially all matters requiring action by our stockholders, and may also delay or prevent a change in control otherwise favored by the other shareholders</strong>.2</p>
<p class=”p8″>It is evident in recent years that holders of both types of shares may not have the same concerns on significant corporate governance and risk oversight matters put to a vote before shareholders.</p>
<p class=”p8″>Specifically, the disproportionate influence insider shares3 have exerted in recent years includes the following:</p>

A 2022 child labor proposal that received <strong>7.7% </strong>support, but <strong>52.6% </strong>when insider shares were excluded;4
A 2024 living income proposal that received <strong>2.9% </strong>support, but <strong>18.2% </strong>when insider shares were excluded.5

<p class=”p8″>The subjects of these proposals represent significant material risk for Hershey, and independent shareholders’ strong vote support reflects this. Hershey is facing an ongoing lawsuit related to child labor and trafficking in Côte d’Ivoire.6 Hershey also faces significant regulatory risk, as the EU’s recently enacted Corporate Sustainability Due Diligence Directive (CSDDD) will likely require Hershey to implement and report on its human rights due diligence processes within its supply chain, including the effectiveness of such processes, related to child labor, living income, and other human rights issues.7 Failure to comply with the CSDDD’s requirements may result in significant fines (which can be calculated up to 5% of the Company’s worldwide net turnover) and, in some cases, civil liability.8</p>
<p class=”p4″>The disaggregation of voting results by share class would enable Common Stock shareholders to better monitor how responsive Hershey is to issues that non-insider shareholders raise.</p>
<p class=”p5″>Disaggregating votes is also a non-onerous practice Hershey could adopt without undue burden, as evidenced by multiple US companies already having adopted this disclosure as a governance best-practice.9</p>
<p class=”p6″><br>1 https://hershey.gcs-web.com/static-files/7464a531-14f5-47fb-aa2a-18f09b647bcb; HTC also owns a portion of Common Stock.</p>
<p class=”p2″>2 https://www.railpen.com/media/pmcil2eb/icev-report-2023-undermining-the-shareholder-voice.pdf</p>
<p class=”p2″>3 These include management-owned Common Stock and HTC-owned Class B and Common Stock.</p>
<p class=”p2″>4 https://hershey.gcs-web.com/static-files/567f615a-7fd1-4cde-9e91-2ab83e294f0b</p>
<p class=”p2″>5 https://hershey.gcs-web.com/static-files/273ad2b2-7148-4b57-9384-9661fe276e8d</p>
<p class=”p3″>6 https://ecf.cadc.uscourts.gov/n/beam/servlet/TransportRoom?servlet=CaseSummary.jsp?caseNum=22- 7104&dktType=dktPublic&incOrigDkt=Y&incDktEntries=Y</p>
<p class=”p2″>7 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202401760</p>
<p class=”p1″>8 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202401760</p>
<p class=”p2″>9 https://www.sec.gov/Archives/edgar/data/1649744/000119312524146033/d736999d8k.htm; https://www.sec.gov/ix?doc=/Archives/edgar/data/0001050606/000119312523149534/d650502d8k.htm</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Gina Haas</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>American Baptist Home Mission Society</span></div>
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Resolution Details

Company:

Hershey Company

Year:

2024

Issue Area:

Sustainability

Focus Area:

Plastics Pollution, Recycling

Status:

Filed

Resolution Text

WHEREAS: The growing plastic pollution and packaging waste crises pose increasing risks to The Hershey Company. Corporations could face an annual financial risk of approximately $100billion should governments require them to cover the waste management costs of the packaging they produce.1Laws to this effect have significant momentum, having been recently adopted in four U.S. states with additional legislation introduced at the state and federal level.2 The European Union has already enacted a $1 per kilogram tax on all non-recycled plastic packaging waste.3 Additionally, consumer demand for sustainable packaging is increasing.4

A circular economy for packaging, whereby packaging stays in the economy and out of the environment, plays an important role in a net-zero emissions world. Hershey’s acknowledges that its product packaging plays a significant role in reducing its Scope 3 emissions,5yet has taken insufficient action in ensuring its end-of-life packaging is recycled at scale.6

More than 100 leading companies have committed to promoting a circular economy for packaging by acknowledging responsibility for the collection, sorting, and recycling of packaging at end-of-life, a policy known as Extended Producer Responsibility (EPR).7 Hershey’s cites insufficient recycling infrastructure as a barrier to setting new packaging sustainability targets, yet fails to acknowledge and act on its responsibility to improve recycling systems as other companies have done.

In the absence of legislated EPR, companies must voluntarily contribute to improve the collection and recycling of their packaging. Leading estimates find that $17 billion is needed to modernize and expand recycling infrastructure.8 To meet this figure for plastics alone, companies must contribute at least $88 for every metric ton of plastic used.9

Competitor Nestlé and at least 28 other major consumer goods companies make voluntary contributions to expand recycling infrastructure.10 Hershey’s is not known to voluntarily contribute to help ensure its packaging never becomes waste.

Hershey’s also received an “F” grade on As You Sow’s recent report evaluating corporate packaging sustainability in part for its failure to financially support recycling infrastructure and endorse EPR.11

Our Company could avoid regulatory, environmental, and competitive risks by adopting a circular economy approach to packaging and contributing to recycling infrastructure.

BE IT RESOLVED: Shareholders request that the Board issue a report, at reasonable expense and excluding proprietary information, describing opportunities for Hershey’s to support a circular economy for packaging at its end-of-life.

SUPPORTING STATEMENT: The report should assess, at Board discretion:

The reputational, financial, and operational risks associated with failing to promote a circular economy for packaging at its end-of-life;
The potential to increase packaging recyclability and transition to reusable packaging; and
Opportunities to develop policies or goals to endorse EPR and determine an appropriate level of voluntary financial contributions to recycling infrastructure.

1 https://www.pewtrusts.org/-/media/assets/2020/07/breakingtheplasticwave_report.pdf , p. 9

2 https://www.packworld.com/news/business-intelligence/article/22861621/extended-producer-responsibility-legislation-emerging-in-us

3 https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/revenue/own-resources/plastics-own-resource_en

4 https://www.shorr.com/resources/blog/the-2022-sustainable-packaging-consumer-report/

5 https://www.thehersheycompany.com/content/dam/hershey-corporate/documents/pdf/hershey-2022-esg-report.pdf , p. 71

6 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/data-visualization

7 https://ellenmacarthurfoundation.org/extended-producer-responsibility/overview?_ga=2.194255722.613184023.1673367048-710010554.1662564816&_gl=1*18c5mjb*_ga*NzEwMDEwNTU0LjE2NjI1NjQ4MTY.*_ga_V32N675KJX*MTY3MzM2NzA0OC4xNC4wLjE2NzMzNjcwNDguNjAuMC4w

8 https://recyclingpartnership.org/paying-it-forward/

9 https://plasticiq.org/

10 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/ , p. 17

11 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/ , p. 5

Resolution Details

Company:

Hershey Company

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

Child Labor, Deforestation/Commodities Sourcing, Living Wage

Status:

Filed

Resolution Text

RESOLVED: Shareholders urge the board of directors to commission a third-party assessment that produces recommendations for achieving a living income for cocoa farmers in Hershey’s West African supply chain, beyond legal and regulatory matters. Input from stakeholders, including civil society organizations, cocoa farmers, and suppliers, should be considered in the assessment. A report on the audit, prepared at reasonable cost and omitting confidential/proprietary information, should be published on the company’s website within a reasonable time.

SUPPORTING STATEMENT: The assessment may include:
● An assessment of the gap between current income and living income for cocoa farmers in Hershey’s supply chain;
● The effectiveness of current company strategies to reduce this gap;
● Recommendations for achieving living income goals, that include a gender equity approach.

WHEREAS: Systemic poverty in Ghana and Côte d’Ivoire, where 60% of cocoa is produced, is a driving force of child labor, deforestation, and other human rights abuses in the cocoa sector.1 Approximately 1.56 million children engage in hazardous work on cocoa farms in Ghana and Côte d’Ivoire.2 Low farmer income has also been linked to increased deforestation,3 with Ghana and Côte d’Ivoire losing 65% and 90% respectively of forest cover over the past thirty years.4

Exploitative purchasing practices by Hershey and its peers keep local communities in poverty and are criticized as rooted in racial injustice.5 Cocoa farmers are often paid far below the World Bank’s poverty threshold of $2.15 per day.6 In response to low income, cocoa farmers have increasingly replaced cocoa with rubber trees or have sold their cocoa farms to gold mining operations.7 Without effectively addressing living income, the continued existence of the West African cocoa sector is at stake.

Living income8 is a human right that combats inequality and poverty.9 Raising the farmgate price,
through premiums, for example, can significantly help cocoa farmers reach a living income.10
Additionally, coupling higher farmgate prices with long-term purchasing contracts can provide
greater security and resiliency to cocoa farmers.11

Although Hershey has a Living Wage & Income Position Statement, it makes no commitment to
ensuring cocoa farmers earn a living income. The position statement has been criticized for
lacking a “concrete, timebound commitment and accompanying action plan…”12 Hershey’s vague
commitment to promote a living income for cocoa farmers has resulted in a set of initiatives, such
as the Income Accelerator, that are largely ineffective at ensuring cocoa farmers receive a living
income, and in some cases, are undermining it. For example, Hershey was accused of
undermining Ghana and Côte d’Ivoire’s recently implemented Living Income Differentials through
purchasing practices aimed at circumventing it.13

Notably absent from Hershey’s strategy is increasing farmgate prices; price interventions play a
“key role in shifting value to farmers and enabling higher incomes.”14 Additionally, Hershey’s
strategy fails to apply a gender equity approach to address particular challenges women cocoa
farmers face in cocoa-income-generating activities.15

https://iasj.org/wp-content/uploads/2024-Hershey-SH-Proposal.pdf

Resolution Details

Company:

Hershey Company

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Child Labor

Status:

Vote

Vote Percentage:

3.60%

Resolution Text

Resolved: Shareholders request the Board of Directors issue a public report, at reasonable cost and omitting proprietary information, describing if, and how, Hershey’s Living Wage & Income Position Statement and planned implementation steps will put the company on course to eradicate child labor in all forms from the company’s West African cocoa supply chain by 2025. The report should include:

How Hershey plans to achieve 100% sourcing visibility at the farm level of its cocoa by 2025, including through increased transparency, given that 32% of its cocoa volume cannot be traced to the farm level;
Whether and/or how Hershey plans to raise farm gate prices;
How Hershey plans to partner with the Ghanian and Ivorian governments and cocoa industry peers to promote living income for cocoa farmers.

Whereas: Hazardous child labor on cocoa farms, which includes using machetes and harmful pesticides, meets the International Labor Organization’s definition of the “worst forms of child labor.”1 Sustainable Development Goal 8.7 calls for the elimination of all child labor by 2025, yet international agreements have repeatedly failed to eradicate hazardous child labor from the cocoa supply chain.2 An estimated 1.56 million children engage in hazardous work on cocoa farms in Ghana and Côte d’Ivoire, where 60% of cocoa is produced.3

Hershey continues to profit from child slavery, despite signing the Harkin-Engel Protocol in 2001. 4 Ghana and Côte d’Ivoire recently implemented a Living Income Differential (LID), deemed largely unsuccessful, in part due to allegations of Hershey and its peers undermining the LID through purchasing practices aimed at circumventing it. 5

While Hershey has a Human Rights Policy and Cocoa for Good strategy, these initiatives have failed to meaningfully address systemic poverty, a root cause of child labor. Hershey’s 2021 Living Wage & Income Position Statement has been criticized for lacking a “concrete, timebound commitment and accompanying action plan to realize it.”6 Investors lack sufficient information to assess how the position statement will help eradicate child labor in Hershey’s cocoa supply chain.

Failure to eradicate child labor exposes Hershey and its investors to financial, legal, systemic, and reputational risks. In 2021, a lawsuit filed on behalf of former child slaves alleged Hershey knowingly profited from the illegal and systematic use of child labor.7 An appeal is currently pending.8 In October 2021, Hershey and the Rainforest Alliance were sued for false and deceptive marketing of chocolate products labeled as “sustainably” or “responsibly produced.”9

Studies show that increased transparency and traceability can increase farmers’ income and help companies substantiate their sustainability claims.10 Hershey’s claim of sourcing 100% “certified and sustainable” cocoa in 2021 does not guarantee its cocoa is slavery-free nor that it is fully traceable to the farm level.11 Hershey’s 2021 ESG report states the company only has “68% sourcing visibility” of its cocoa volume.12

1 https://www.norc.org/Research/Projects/Pages/assessing-progress-in-reducing-child-labor-in-cocoagrowing-areas-of-c%C3%B4te-d%E2%80%99ivoire-and-ghana.aspx; https://www.washingtonpost.com/graphics/2019/business/hershey-nestle-mars-chocolate-child-labor-westafrica/; https://www.ilo.org/ipec/Campaignandadvocacy/Youthinaction/C182-Youthorientated/worstforms/lang–en/index.htm
2 https://unstats.un.org/sdgs/metadata/?Text=&Goal=8&Target=8.7
3 https://www.dol.gov/agencies/ilab/our-work/child-forced-labor-trafficking/child-labor-cocoa
4 https://www.cocoainitiative.org/sites/default/files/resources/Harkin_Engel_Protocol.pdf
5 https://www.latimes.com/business/story/2020-12-01/chocolate-war-cocoa-growers-hershey-mars-ghanaivory-coast; https://voicenetwork.cc/wp-content/uploads/2022/09/220920-Cocoa-Barometer-Living-IncomeCompendium.pdf
6 https://www.thehersheycompany.com/content/dam/corporateus/documents/sustainability/HSY_Living_Wage_Income_Position_Statement.pdf; https://webassets.oxfamamerica.org/media/documents/Business-briefing-Issue-1- V3.pdf?_gl=1*1ei0guo*_ga*MTI5NTI4MjAzNi4xNjM4Mzg5OTk3*_ga_R58YETD6XK*MTYzODM4OTk5Ny 4xLjEuMTYzODM5MDAwNC41Mw..
7 https://www.internationalrightsadvocates.org/cases/cocoa
8 https://ecf.cadc.uscourts.gov/n/beam/servlet/TransportRoom?servlet=CaseSummary.jsp?caseNum=22- 7104&dktType=dktPublic&incOrigDkt=Y&incDktEntries=Y 9https://static1.squarespace.com/static/5810dda3e3df28ce37b58357/t/6181623e5f967e246dd8c416/163586 9247075/RFA+and+Hershey+Press+Release+FINAL+no+logo.docx.pdf
10 https://voicenetwork.cc/wp-content/uploads/2022/10/221017-Transparency-Accountability.pdf
11 https://www.thehersheycompany.com/en_us/home/sustainability/sustainability-focus-areas/cocoa.html
12 https://www.thehersheycompany.com/content/dam/hersheycorporate/documents/pdf/hershey_2021_esg_report.pdf

Measuring Pesticide Use in Agricultural Supply Chains

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